With a year-end deadline looming, health Insurance companies who want to participate in PPACA's state-run exchanges have to be ready for anything.
State heath insurance exchanges are a key component of the Patient Protection and Affordable Care Act (PPACA), but many states are taking a wait-and-see approach as PPACA is challenged in the Supreme Court, presidential candidates are vowing to overturn it, and the Obama administration is issuing new rules for guidance. With a year-end deadline looming, health Insurance companies who want to participate in state-run exchanges have to be ready for anything.
Assuming PPACA survives its legal challenges, by Jan. 1, 2013, the administration will determine whether each state is ready to run its own exchange or should use the yet-to-be-created federal insurance exchange starting in 2014. So far, only 12 states and the District of Columbia have passed legislation with the intent of creating state-based health insurance exchanges, according to the National Conference of State Legislatures.
Just this week, the U.S. Department of Health and Human Services issued rules to give states some flexibility in running their exchanges. The rules also give another year for states that need help implementing an exchange by the original deadline.
The uncertainty and delays mean health insurance companies need to be prepared - from both a technology and internal process perspective - to join into whatever form the exchanges take.
“From a technology and process perspective, it’s already late,” says Jordan Battani, a principal researcher in CSC’s Emerging Practices Group. “There will be a mad scramble. There should be mad scrambling now. Insurance companies should get good at that mad scramble. Given the progress made to date, it’s difficult for me to see how it can all be accomplished in time to meet the 2014 deadline.”
But even if the state governments aren’t ready doesn’t mean payers need to be idle. Battani says a lot of activity in the commercial health insurance sector already looks a lot like an exchange, specifically in terms of online brokerages that use web-based portals. Insurers can use those experiences to build the processes and technologies needed to participate in state or a federal health insurance exchange.
“Payers should be thinking of exchanges as sales channel with or without health reform,” Battani says. “A lot of plans will say they have an online function, but the next generation is for your heath plan to participate in an online marketplace where they’re being compared and contrasted with other plans. To do that cost-effectively, you need to make it as automated as possible. Right now, there’s not a lot of automation on the back end.”
With or without the government-run exchanges, the move toward online marketplaces if rife with opportunity.
“The health plan that figures out how to move products and meet customer needs like Amazon - a simple interface, good value, make it easy to buy - the world’s their oyster,” Battani says.
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