Health Insurance Exchanges
Issue
The Affordable Care Act (ACA) requires states to establish an Exchange for the individual and small group markets by 2014.
Aetna believes that an effective Exchange marketplace is critical to the success of federal reform and should:
1) Promote consumer choice through a competitive and innovative insurance market. This includes:
- Using market-based prices and not "negotiating" premiums with health plans, that can result in:
- De facto premium price controls for the entire market, because ACA requires the same premiums inside and outside of the Exchange.
- Reduced choice, as only very tightly managed networks would be offered in the market to address premium uncertainty. The Massachusetts’ Exchange currently lacks any PPOs or POS options---yet in the individual market, PPOs represent 83 percent of single coverage nationwide.
- Allowing the market to meet consumers’ and employers’ product needs outside of the Exchange by:
- Preserving choice of distribution and purchase options for individuals and small groups.
- Eliminating all distribution options (e.g., brokers, insurer in-house sales, business organizations, etc.) except the Exchange could result in the loss of customers who do not wish to adapt to a new mechanism.
- Setting transparent standards and accepting all insurers that meet such criteria, including:
- Developing standards with stakeholder input, rather than as part of closed door contractual negotiations that would limit competition and choice.
- Providing insurers with advance notice to develop their products, plan designs, and other related capabilities required by the Exchange.
- Permitting broad insurer participation if insurers meet state and federal requirements, allowing maximum choice for consumers.
2) Minimize market disruption through careful implementation of new federal reforms, such as:
- Implementing initiatives to mitigate adverse selection in the individual and small group markets, including:
- Establishing limited open enrollment periods where individuals could enroll in coverage only during the 30-day period following their birthday.
- Special enrollment periods would be allowed for specific life changes (e.g., marriage, birth of a child, or involuntary loss of coverage, etc.).
- Contracting with state high-risk pools to administer reinsurance and risk adjustment programs.
- This would ensure that insurance products are as affordable as possible so that insurers are not disadvantaged when high-risk individuals enroll in their plans.
- Continuing to offer state high-risk pools and Pre-existing Condition Insurance Plan coverage, as permitted by the ACA.
- For high-risk individuals in the midst of a course of treatment, changing coverage may not be desirable.
- Partnering with other state agencies to advertise and encourage enrollment and compliance with the individual mandate.
- Partnering with DMV could assure that registration/license renewal notices include a reminder of the requirement to obtain health insurance coverage.
- Verifying eligibility for public subsidies and ensuring that eligibility is for a full year.
- Establishing limited open enrollment periods where individuals could enroll in coverage only during the 30-day period following their birthday.
- Limiting the Exchange to small employers only, because:
- Opening the Exchange to larger employers could create adverse selection problems and higher premiums for small employers--- large employers with sicker or older employees would participate in the Exchange, while healthier large groups would choose to self fund.
- Exploring initiatives that maximize flexibility for small employers to help employees buy coverage, by allowing the Exchange to initially:
- Provide services to small employers---the Massachusetts Exchange's struggle with employee choice delayed small employer access to the Exchange for several years.
- Offer simplified health plan enrollment for small employers through a traditional employer choice model, similar to how small employers currently purchase coverage (i.e., employers choose one or more plans to offer their employees).
- Explore employee choice through a pilot program, as well as explore other ways to provide services for small employers to help their employees buy coverage.
3) Establish an efficient regulatory environment that does not add unnecessary administrative burden and expense by:
- Establishing nationally consistent systems and technical specifications for insurers to interface with Exchanges:
- State by state technical standards would increase administrative costs unnecessarily and reduce competition in the Exchanges.
- A standardized national template could include specifications for real-time pricing and enrollment information; insurer collection of premium; and plan comparison information such as display of claims, denials, rates, etc.
- Leaving rate review with the Insurance Commissioner, who already has the authority and experience to regulate insurer solvency and rates.
- The Exchange’s role should not duplicate or impinge on the Insurance Commissioner’s ability to ensure that insurers are financially stable and able to pay claims when they are incurred, so that consumers and providers are not saddled with unpaid medical bills.
- Continuing to allow insurers to bill and collect premium for products sold in the Exchange.
- Turning premium collection over to the Exchange would create an unnecessary administrative expense, and the ACA prohibits wasteful use of funds by Exchanges [Sec. 1511(d)(5)(B)].
- Turning premium collection over to the Exchange would create an unnecessary administrative expense, and the ACA prohibits wasteful use of funds by Exchanges [Sec. 1511(d)(5)(B)].
