Thread: Texas Health exchanges, the next boom in health care, are on the way

Health exchanges, the next boom in health care, are on the way

Mitchell Schnurman
mschnurman@dallasnews.com
Published: 16 March 2013 04:56 PM

The health care industry hasn’t had an opportunity like this in, oh, about half a century. That’s when Medicare started.

This time, millions of new customers are up for grabs and millions more will be in play, because Obamacare is coming to Texas, with or without Rick Perry’s approval.

Last week, Blue Cross Blue Shield of Texas kicked off a statewide campaign to promote open enrollment this fall, when the health exchanges are supposed to launch. The online marketplaces will let shoppers compare insurance and tap into subsidies to help pay for coverage.

A family of four earning up to about $90,000 will be eligible for some help, and if families earn less than $30,000, their contributions will be capped at 2 percent of income. That will mean new options for the uninsured, along with individuals priced out of the market and small businesses frustrated by the costs and complexity.

The subsidies will be so rich that one expert predicts that some small companies will dump low-paid employees into the exchange and use the savings to boost their pay.

Enrollment is expected to start at about 11 million nationwide in year one and build to more than 30 million. If exchanges work well and attract robust competition — proponents have compared them to Travelocity and Amazon — the numbers will swell. With more employers embracing them, enrollment could hit 75 million by 2021, according to the Deloitte Center for Health Solutions.

As the state’s largest insurer, Blue Cross Blue Shield has pledged to offer plans for residents in all 254 Texas counties. Other insurers are certain to follow, albeit much more selectively.

“We’re not just cherry-picking the urban areas,” said Bert Marshall, president of Blue Cross Blue Shield of Texas, which has about 5 million members.

‘Be Covered Texas’

To get an idea of the business opportunity here, up to 4.4 million Texans could be added to insurance rolls if the expansion is a roaring success. That’s the best-case scenario from researchers at Rice University, assuming that the uninsured sign up at the same rate as the elderly in Medicare. Under the most conservative estimate, they project about 1.4 million people would be added.


That wide gap is the reason that BCBS is starting its “Be Covered Texas” campaign now, more than six months before the Oct. 1 enrollment date. It’s also why the federal government extended the initial sign-up period through March 2014 and plans its own awareness campaign. About three-fourths of exchange enrollees will buy insurance for the first time. They’ll need facts and hands-on help for a complex product and application process.

“This is a colossal effort,” Marshall said, adding that local groups will help educate their communities. “This isn’t a one-shot opportunity. We’ll ramp up each and every year.”

While Medicaid expansion faces opposition from lawmakers in Austin, it’s a big part of the market’s growth potential. BCBS, for instance, has a managed care program for Medicaid in eight counties around Austin, and Marshall wants to expand that footprint.

Many insurers haven’t revealed details of their strategy yet, and premium prices in Texas may not be revealed for months. UnitedHealth Group, the nation’s largest insurer, said in January that it was considering entering 10 to 25 exchanges out of a potential 100 nationwide. The top executive said they would hold back until they had greater clarity about the rules and prospects.

“The question is which markets will they play in?” said Bill Copeland, leader of the U.S. insurance practice at Deloitte.

He said Dallas-Fort Worth and Houston will attract all the major national players, because of the potential customers and provider networks. They could have four to six competitors, including smaller offerings with narrow networks.

The big unknowns

For the first time, large insurers are investing heavily in the individual market, even hiring consumer experts to strengthen their efforts. Next year, exchanges are projected to generate at least $50 billion in insurance premiums nationwide and about $200 billion by 2021, according to PwC Health Research Institute.

Whether that’s profitable business remains to be seen. Insurers must take all applicants, regardless of pre-existing conditions. Older customers won’t have to pay more than three times the rate for younger members; today, it’s not uncommon to charge five times more.

If health reform works, insurers will develop tighter, more efficient networks and gain from the expansion. Or young people could ignore the individual mandate and subsidies, and decide not to buy coverage. Then insurers would be stuck with too many sick members.

About half of insurance customers spend less than $1,000 a year, while 5 percent spend more than $45,000 annually, said John McCracken, health care management professor at the University of Texas at Dallas. In the exchanges, they’ll have to cover them all.

“I don’t think this is going to be a golden age for insurers,” he said.

Unless they figure out how to manage it.

Health exchanges, the next boom in health care, are on the way | Dallasnews.com - News for Dallas, Texas - The Dallas Morning News

Health Insurance Exchanges Likely To Offer Wide Choice

Mar 14, 2013
NBC News reports the exchanges may offer an "overwhelming" array of plans to choose from to people who have not purchased insurance before. Other media detail how the federal government is attempting to streamline the enrollment process and how states are racing to meet deadlines to set up the marketplaces.
NBC News: Health Insurance Exchanges: Be Ready To Be Overwhelmed
Twenty-four states now have been approved to set up their own health insurance exchanges, just seven months before people can start to enroll. That leaves the federal government to run 26 exchanges according to its own rules. No one's quite sure yet what they will look like, but it's becoming increasingly clear that many of them, at least, will provide an overwhelming range of choices for millions of people who may never have had to choose health insurance before (Fox, 3/13).
Kaiser Health News: Capsules: Dick And Jane Sign Up For The Exchange
Signing up for health insurance is intimidating — even if you know you might get some help paying for it. The federal government is trying hard to come up with a way to make the process a bit more palatable — about as simple as, say, doing your taxes online (Gold, 3/13).
Kaiser Health News: Capsules: Colorado Sets Its Exchange Fee
The price of policies in Colorado's health insurance exchange will include a 1.4 percent fee to help fund exchange operations. The state's exchange board voted to enact the fee Monday. Board Chairwoman Gretchen Hammer characterized it as lean compared with the 3.5 percent fee the federal government is expected to tack on to policies sold in states that are not setting up their own exchanges (Whitney, 3/13).
The Washington Post: Small-Business Health Exchange Mandate Will Go To D.C. Council
A District board is moving full steam ahead with a controversial plan to require small businesses in the city to purchase their employee health insurance through a government exchange (DeBonis, 3/13).
The Associated Press: Nonprofit Insurance Exchange Plan Clears State House
The state House on Wednesday approved an Idaho-based, nonprofit insurance exchange, a provision of President Barack Obama's health care overhaul that inflamed passions of lawmakers during seven hours of debate. The vote was 41-29. All 13 Democrats but a minority of House Republicans, 28 GOP lawmakers, backed the plan pushed by Gov. C.L. "Butch" Otter to use about $30 million in federal grants to build Idaho's own insurance exchange (3/13).
HealthyCal: Spreading The Word About California's Health Care Exchange
California's new health insurance marketplace — part of federal health reform — is preparing a massive information blitz to let state residents know about their new options for buying coverage. The health benefit exchange, called Covered California, will start enrolling members in October of this year for insurance coverage that will begin next January (Potter, 3/14).
MinnPost: Three Major Health Exchange Hurdles Remain As Legislators Rush To Meet Deadline
Democrats are racing to come together on Minnesota’s most significant health reform in the last half-century, with just days remaining before the deadlines start rolling in. Health insurance exchange backers say they need to wrap up serious differences in the exchange legislation between both legislative chambers by midnight Wednesday to get the bill to the House floor on Thursday, which has been the goal (Nord, 3/13).

This is part of Kaiser Health News' Daily Report - a summary of health policy coverage from more than 300 news organizations.

RI health exchange in middle of 'steady build'

By ERIKA NIEDOWSKI
Associated Press / March 17, 2013


PROVIDENCE, R.I. (AP) — The director of the new state health insurance exchange being created as part of the federal health overhaul says that it is on track to begin enrolling Rhode Islanders this fall and that it should offer patients a larger role, additional choice and more affordability in their health care.

Christine Ferguson said the exchange — an online insurance marketplace designed to help individuals and small businesses buy health coverage — is in the middle of a ‘‘steady build.’’ That includes everything from the technology needed to allow people to enroll online to the outreach that will be done to get people to use it.

The exchanges, which are being rolled out in every state, are a centerpiece of the federal Affordable Care Act, the biggest addition to the social safety net in the U.S. since Medicare and Medicaid in 1965 and an attempt to get coverage to about 30 million Americans who lack it.

‘‘At a time over the last 20 years when everything’s been contracting at the state level, we’re talking about creating some new capacity,’’ Ferguson said in a recent interview with The Associated Press. ‘‘I think that that offers us a wonderful opportunity.’’

Rhode Island is one of 18 states building its own exchange and is using about $74 million in federal funds. The new health care law requires most individuals to have insurance as of Jan. 1, provides subsidies to help pay for it and penalizes those who don’t get it. Businesses with 50 or more employees also will be required to offer coverage, or likewise face a penalty.

State officials say about 126,000 Rhode Islanders are uninsured in a population of just over 1 million — about 12 percent. Through the exchange and an expansion of Medicaid, the government program that provides health coverage for low-income individuals, Rhode Island hopes to eventually achieve near universal coverage.

Ferguson did not offer a timetable for reaching that goal. She stressed that, even with the sweeping federal legislation and the creation of the exchanges, change in the health care system will not come all at once — and, instead, will be ‘‘evolutionary.’’ Over time, she said, reforms supported by the exchange should help shift the dynamic in a health care system that is driven more by insurers than patients.

‘‘We need to create an environment where individuals are the ones that are picking the options, and that’s going to tell us a lot about what people’s expectations of the health care system are,’’ said Ferguson, who served as Rhode Island’s human services director from 1995 to 2001 and was public health commissioner in Massachusetts under former Gov. Mitt Romney. ‘‘Right now the health care system is not a reflection of what people want, it’s a reflection of what payers want.’’

The so-called individual mandate to purchase insurance — which was challenged all the way to the U.S. Supreme Court — will take some getting used to, Ferguson said.

‘‘It’s going to take some time to get with the program and to understand what they have to do,’’ she said. ‘‘Frankly, they’re going to make economic decisions about whether it makes more sense for them to pick up coverage or take the penalty — that’s human nature,’’ she said. ‘‘I think that if we do a good job and are able to offer options to them that make sense, I think they'll pick it up.’’

Donald Nokes — president of the Rhode Island Business Group on Health and past vice chairman of the State Health Exchange Board — said the jury is still out on the exchange because it’s early.

Nokes, the founder of NetCenergy, an IT company with about 30 employees, said he is cautiously optimistic that small business employees will be able to get more tailored coverage through the exchange — better than a ‘‘one size fits all’’ plan he can offer — at a competitive cost.

But he’s also concerned about how much federal money is being spent to build the exchange and how it will be marketed to small businesses so that they will use it.

Nokes, who used to offer 100 percent company-paid coverage but says skyrocketing costs forced him to have employees cover 40 percent, said the Business Group on Health still has many questions about the exchange.

‘‘What we hope to do is do the vetting, understand it better and take a position,’’ he said.
　

http://www.boston.com/news/local/rhode-island/2013/03/17/health-exchange-middle-steady-build/vF5XZaKpLqUoj8qmHsiWiK/story.html

Mar 18, 2013, 1:17pm CDT MN lawmakers pass health-insurance exchange bill



Katharine GraysonStaff reporter- Minneapolis / St. Paul Business Journal

The Minnesota Senate on Monday passed a bill creating a state-run health-insurance exchange, and the legislation is now headed to Gov. Mark Dayton's desk, Minnesota Public Radio reports.
Dayton is expected to sign the bill. The Senate passed the bill along party lines, with 39 DFL legislators voting for it, and 28 Republicans opposing it.
Health-insurance exchanges, a key component of President Barack Obama's health care law, will allow individuals and small businesses to shop for health coverage online.
The state legislature had to pass a bill creating the exchange in order for it to be up and running by October.
The bill moved rapidly through the DFL-controlled house and senate.
　

　

http://www.bizjournals.com/twincities/news/2013/03/18/mn-legislature-passes-health-insurance.html