Close Close
ThinkAdvisor

Life Health > Health Insurance > Health Insurance

3 ways to grade the third PPACA open enrollment period

By Allison Bell

X
Your article was successfully shared with the contacts you provided.

The Patient Protection and Affordable Care Act (PPACA) public health insurance exchange system came back to sales life Sunday.

The exchanges that use the U.S. Department of Health and Human Services’ (HHS) HealthCare.gov system and the surviving state-based exchanges will be selling qualified health plan (QHP) coverage for 2016 during a third annual PPACA major medical open enrollment period that’s set to last from now until Jan. 31, 2016.

Regulators, insurers and exchanges developed the enrollment calendar system, which is really a limit on when people can buy coverage without jumping through hoops, to keep consumers from seeing the PPACA restrictions on medical underwriting as an invitation to wait until they get sick to pay for coverage.

The deadline for coverage that starts in January is Dec. 15 in 46 states and the District of Columbia, according to the ACASignups.net blog.

California’s Covered California exchange has organized a promotional bus tour.

Some states that have given up on trying to run their own enrollment systems and shifted to HealthCare.gov are still doing what they can to get residents to get covered.

Nevada Health Link, for example, is promoting a prescreening tool site and in-person assistance tools that offer detailed exchange helper contact information.

Some exchanges are making a point of talking up agents and brokers. Your Health Idaho is telling consumers that certified agents and brokers can help them choose coverage for free.

Connect for Health Colorado is using social media to promote a video featuring Mary Heidbrier, a broker and National Association of Health Underwriters (NAHU) member who is a partner at MLJ Insurance Services.

See also: 3 important things PPACA exchanges are saying about you

Two years ago, exchange managers had to face a torrent of computer system glitches.

A year ago, the exchange teams had to compete for public health program time and money with the effort to stop Ebola.

This year, the exchange teams have to cope with being familiar. They aren’t that new. They probably won’t be dysfunctional enough to be hilarious. Consumers expect them to pay claims on time and resolve enrollment problems reasonably smoothly.

How should exchange watchers grade the new open enrollment period? For three ideas, read on.

Tulips

1. Can the public exchanges and the exchange plans flower more or less on their own?

The public exchange system will probably end the current year with about 9.1 million QHP enrollees, up from 6.3 million a year ago. Andy Slavitt, the acting Centers for Medicare & Medicaid Services (CMS) administrator, has estimated that the exchange system may end up with 10 million QHP enrollees at the end of 2016.

But the real question may be not so much how many QHP enrollees the system ends up with as how easily it can attract enough consumers to keep insurers interested in stocking its shelves with products.

PPACA exchange support funding is running out, and the PPACA reinsurance program, a program that’s supposed to use a broad-based insurer fee to protect individual health insurance issuers against part of the cost of covering enrollees with catastrophic health programs, is set to expire at the end of 2016.

Republicans in Congress have objected loudly and often to the idea of letting a paragraph of PPACA stay in force, but the Obama administration has not bothered to float even doomed proposals to ask Congress for more exchange funding or for any other help for the exchange system. 

In some markets, the exchanges offer QHPs from many issuers. But, in many markets, the number of issuers is small enough that their top executives could get together in a small care plan.

Policymakers may start to ask whether spending the money to run a Web-based public health insurance supermarket in the hope of attracting new competitors that never arrive is a good way to use that money. 

But executives at the big, publicly traded insurers still seem to like the exchange concept. They have expressed some concern about competitors’ pricing during conference calls with securities analysts, but they’re talking about the exchanges during earnings calls. What they’re not talking about during the earnings calls is agents and brokers.

Electronic market

2. Can the public exchanges hold their own against the private exchanges?

It’s not clear whether some private exchanges have progressed much beyond the vaporware stage, but Towers Watson & Company (NYSE:TW) has justified the argument that private exchanges are a thing by adding “Exchange Solutions” information to its quarterly earnings releases.

The company’s exchange program is reporting $22 million in net operating income for the third quarter on $118 million in revenue, up from $14 million in net operating income on $86 million in revenue for the third quarter of 2014.

In some states, public exchanges might be able to have positive net operating income totals of their own. In other states, even public officials who like the exchange concept might start to prefer doing business with a private exchange that generates extra money to doing business with a public exchange that drinks taxpayers’ money.

See also: How private exchanges are trying to stand out 

Homeless man on beach

3. Can the public exchanges compete with Medicaid and Basic Health Plans?

New York state has followed Minnesota’s lead and set up a PPACA Basic Health Plan (BHP) program.

A state with a PPACA BHP can use its bargaining power to offer low-income residents a choice of several different low-cost, high-value plans.

In New York, the Essential Plan costs either $20 per month per person or nothing. It has no deductible. In New York City, eligible residents have a choice of eight different carriers.

In many other states, Medicaid managers are offering low-income residents a choice of plans from private issuers.

Medicaid managers may find that sending low-income and moderate-income residents a BHP or Medicaid managed care plan options list is cheaper and easier than running a public exchange.

If agents, brokers and insurers like the idea of courting low-income and moderate-income consumers through a subsidized private exchange, rather than leaving those consumers to special programs and focusing on higher-income consumers, this may be the year when they have to make that preference known.

See also: Feds flesh out big new PPACA program

Image: A Florida resident looks for recyclables. (TS/Gregory Witczak)