Transcript Improving the Odds of Success for Insurance Exchange(s)

Improving the Odds of
Success for Insurance
Exchange(s)
Jon Kingsdale, Ph.D.
Executive Director, Mass. Health Connector
For the NHPF & AHR
January 8, 2010
Focus on the Feasible
• Extremely challenging implementation
• Cost control harder than coverage
expansion
• Most exchanges have failed
• Personal bias, as an executive
How to Improve the Odds of
Success for Exchange(s)
• Define realistically a limited set of
objectives for exchange(s)
• Acknowledge & compensate for
weaknesses in the two bills
• Resource exchange(s) adequately and
provide for their evolution
Realistic Objectives
• Reduce the administrative costs of buying
insurance
• Improve the consumer’s insurance
shopping/buying experience
• Add price resistance to premium-setting
and insurers’ negotiations with providers
Weaknesses in Both Bills
• Industry Resistance:
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• Adverse Selection:
• Cost Control Tools:
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Excl. channel for Non-Group
Evolutionary for other market
segments
Local flexibility/options
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Option to rate N-G separately
Claims-based risk adjustment
across each entire rating pool
Forego large-group
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Bid for plan selection
Standardize benefits over time
Automate
Weaknesses in House Exchange
• Market Sensitivity
• Regulator vs. Retailer
• Customer Experience
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Focus on non-group
Delegate & de-centralize
Emphasize customer experience
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Establish few, clear goals
Encourage semi-independent
agencies & self-funding
Minimize ‘policing’ role
Regulate carriers thru DoI
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Flexibility in plans/benefits
Phase-in offerings by segment
Run group premiums thru Exch.
Don’t prescribe transparency
Encourage pilots, research
Weaknesses in Senate Bill
• Scale Economies
• Geographic Portability
• Consistent
Performance
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Exclusive channel for N-G
Develop national “utility”
resources e.g.: website, riskadjustment tools
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National health plans
Recipricity of regional plans
Federal inter-operability
standards for states
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Federal oversight, based on cost
& customer service
Sharing best practices
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How to Resource/Evolve
Exchange(s)
• Semi-independent exchange(s), funded
by surcharging transactions
• Clear objectives, flexible means
• Drive to electronic transactions and audit
trails
• Rigorous evaluation over time