Where is the Health Insurance Exchange Today?

Utah Health Exchange History

Utah is ahead of the game in some respects regarding health reform. In 2006,  then Governor Huntsman realized Utah was failing its citizens in the realm of affordable health insurance. According to a report done by United Way of Salt Lake, health insurance was one of factors that contributed greatly to Utahn's financial instability. Considering this issue, a work group of community leaders and a legislative health reform task force collaborated to find solutions. One approach to financial stability was found in the use of a Health Insurance Exchange, roughly modeled by the state of Massachusetts. And thus, was born the Utah Health Exchange. Originally it was designed to be a:
     
"Conservative, market-driven framework for reform that will enhance individual responsibility and consumer choice while improving overall quality and access."

Watch this short video released by the Utah Health Exchange discussing the intended features and benefits narrated by Lt. Gov. Greg Bell in January...

According to the Utah Health Exchange website, the mission is:

 "To provide Utahn's with a one-stop shop to help them be more in control of their health, health care, and health financing decisions. When it is fully implemented, it will be the central launching point to guide consumers to the information they need, including finding the right health insurance program and learning more about cost and quality. The end goal is to help consumers make better choices."

                                                             

Signing of the exchange.
Photo by Stacey Earle.

The exchange formally opened on August 2009 for the individual/family product market as well as a limited launch for the small group market. The small group market was designed for insurance to be bought as a defined contribution health plan where the employer dedicates a fixed amount toward benefits and the employee can choose what coverage they want. The individual/family product market is basically a page of information within the exchange website detailing places people can look for health insurance, such as eHealth Insurance. It also lists several local producers(insurance companies). Unfortunately the Utah Health Exchange is not focused on the individual/family market right now. So, a quick Google search could basically return the same information. The Utah Health Exchange merely conglomerates the information into one convenient location.

The small group launch was one step forward and a couple steps back. As with any project without blueprints, mistakes will be made. Unfortunately, enrollment was low(only 11 of 99 original employers enrolled), costs were not lower and the application process was difficult for most. The number one reason people dropped out was because of cost. According to Patty Conner, Director of the Utah Health Exchange, money was tight and man power was low. (See Patty's bio here). But the staff over at the Office of Economic Development, where the Utah Health Exchange is housed, have vowed to get it right.

What Does the Exchange Look Like Today?

*As of April 1st, 2011 42 employers are enrolled covering approximately 3,000 lives. 20% of those were previously not covered.
*Ongoing enrollment rather than the traditional twice a year.
*The technology is getting fixed to create a better ease of use with a consumer approach.
*The large employer group market(over 50 employees) is not allowed into the exchange.
*They received a $1 million, federally funded, exchange planning grant. They are using these funds on:

1. Technology
2. Improving the individual market
3. Creating transparency tools
4. Designing a call center, also known as the Customer Interactive Solution for consumers, producers, brokers or anyone trying to navigate the exchange.
5. Getting insurance brokers trained.

*Employer participation is growing.

 
The staff at the exchange are busy, very busy, trying to solve the issues of cost containment and lack of enrollment and technology woes, all while only two staff also run the day-to-day operations

Can they do it?

Continue coming to the Exchange Learning Network as we follow the unfolding of Utah's largest health reform efforts to date.

A Word From A Broker

A key player in the Utah Health Exchange and health care reform in general are health insurance producers, otherwise known as brokers. Right now they are trying hard to understand the complexities of the current state of their business. The health insurance industry has stayed fairly constant over the years, with very few major changes. They now are facing the largest modification to their industry in history.

Todd Steinicke, Davis Pacific Insurance, Speaking at an ACA 

Event

I recently had the opportunity to sit down with a local health insurance agent here in Utah to get his view on all things reform. He wished to stay anonymous. He has been in the business for 13 years, working for a company that has been around for 30 years. He opened up regarding his feelings on the federal health reform as well as Utah's strategy and the health insurance exchange.

I asked how he felt about these changes in health care reform and had much to say. He had major concerns about his commission structure. He pointed out that at the federal level, as of January 1, 2011 insurance companies are now required to spend between 80-85% of their operating costs on actual care, leaving the other 15-20% available for administrative costs(referred to as the Medical Loss Ratio or MLR). He states that insurance brokers are arguing this is doing  only one thing-reducing their commissions. The purpose of MLR is to ensure that insurers are spending more money on care and instead of that happening, they are just cutting brokers commissions.

He said most brokers he knows agree regarding the commission reduction, saying that because of all the changes, commissions are being “squeezed.” He thinks insurance carriers are used to operating a certain way and aren't ready to change their business administrative cost strategy. The easiest way for them to be in line is to reduce insurance brokers commissions. In his experience, due to this new business model, many insurance providers are now going to a flat-rate commission rather than the standard percentage.

Over the last decade there has been a consistent rise in health insurance premiums with insurance providers and brokers being the beneficiaries. According to a Kaiser Family Foundation study done in 2008 to look at the trend in health care premiums, the increase has been anywhere from 90% to 150% in the last decade in the United States. In 2009 alone, national annual premiums averaged a 5.5% increase. Read the report here. In Utah specifically, from 1999-2009, there was a 113% increase in employer-sponsored insurance premiums according to the National Bureau of Economics and only a 44% increase in wages.

If premiums rose dramatically, commissions did as well if the percentage pay structure was the norm. Is this new flat-rate fee a way for the market to come back to reality and self-adjust? Or is this just another example of insurance companies taking advantage of the health care market?

He also had much to say regarding the Utah Health Exchange. He mentioned that the exchange is also utilizing the flat-rate commission structure for paying brokers who bring clients into the exchange. Brokers are currently being paid $37 per month per covered employee participating in the exchange. One aspect of the exchanges model, using a defined contribution, he said has three problems with it.

1) It is hard getting enough employees involved for participation levels. 

Currently a business wanting to join the exchange must have at least 75% of their employees on-board. The defined contribution can be any amount from zero and up. When employers don't contribute a dollar amount it is tough to get enough people on-board so the other employees who want coverage can actually get it.

2)In the current Utah Health Exchange model employees are often making bad choices on their health plans. 

The exchange currently does not require employees or employers to use a broker. (Although the consumer will not pay more if they do.)This, in his personal experience, led to one of his clients to choose a Health Savings Account plan when he thought he was getting a traditional health insurance plan. The broker offered several times to come to the place of business and advise the employees, but they never wanted the help. When claim time came, the employee became so infuriated that it was not going to be covered he complained to the Better Business Bureau that his insurance company had not given him the correct information.

3)Prices on premiums went up. Some of the premiums he saw go up 35%.
He said in his experience consumers won't generally pay more than 5-10% per more for added services.

Unfortunately, he did not have much good to say regarding the exchange. He said, “I look at the exchange as something we have to do, not want to.” But, he also mentioned he is becoming less against it as changes are being made to address some of these issues.

This is just one brokers opinions regarding the recent changes in health care. But, it is information to take note of. Health care reform is changing people's lives, including those who are in the industry trying to make a living. The Exchange Learning Network is here so anyone who has a voice can be heard. It is also designed to ask tough questions and hopefully get tough answers with an end result of our state creating comprehensive health care reform that is affordable to all citizens.

Are you a broker with comments, complaints or praises? If so, continue coming back to the Exchange Learning Network and get involved.

HEALTH INSURANCE EXCHANGE 101

One of the main components of the Affordable Care Act (ACA) is the requirement for each state to develop a health insurance exchange that must be functional by January 1, 2014. It was announced last year, but what is it really all about? How will it affect you?

The ACA is designed to help create a  new competitive private health insurance market- through state-run health insurance exchanges- that will give millions of Americans and small businesses access to affordable coverage, and the same choices of insurance that members of Congress will have. A HEALTH INSURANCE EXCHANGE is essentially meant to be a marketplace for high-value coverage that will be:

• User-Friendly
• Transparent
• Stable

It will also:

• Allow individuals to compare plans within their state based on price and quality.
• Allow individuals and small business owners to pool their purchasing power to negotiate rates.

According to HealthCare.Gov, a federal government website managed by The U.S. Department of Health and Human Services, the health insurance exchange is designed to:

• Lower Costs: Exchanges will increase competition among private insurance plans through greater comparative shopping and more informed consumers. They will also provide small businesses the same purchasing power in exchanges as large businesses.
• Provide One-Stop Shopping: The exchanges will make purchasing health insurance easier by providing eligible consumers and businesses with tools to compare benefits, pricing and quality. Americans who choose to use them will also have access to a wide range of customer assistance benefits- including information about prices, quality, and physician and hospital networks-to help make the best choice for themselves, their families or their employees.
• Create Greater Benefits and Protections: Exchanges will create a health insurance marketplace that will allow employers and consumers to choose from plans offering high quality benefits. Individuals and families purchasing health insurance through exchanges may also qualify for tax credits and reduced cost-sharing depending on their income.

Here is a quick video explaining the exchange idea....

Quick Facts:

*Starting in 2014, members of congress will have to purchase health coverage through these marketplaces.

*2 states already running exchanges: Utah(visit the Utah Health Exchange) and Massachusetts (visit the Connector)

*States' costs of designing their exchange will be fully funded by the federal government through 2015.

*Standardized forms will be used.

*It will also be tied in with public programs like Medicaid.

As each state rolls out plans for their exchanges, more people will start to understand how they work. Until then, continue following the Exchange Learning Network for all things exchange, both locally here in Utah as well as nationally.



The Exchange Learning Network is back!

The Exchange Learning Network, on online forum to discuss the ins, outs, failures and success' of the Utah Health Exchange is back. It was designed to be interactive with posts from insurance brokers, employers and employees as well as anyone we see fit to help sort out the myths and facts surrounding the Utah Health Exchange.

We took quite a break, but don't worry...we haven't been bored! A lot is changing in the great state of Utah regarding health care reform. So, stay tuned. We have much more exciting news regarding all things surrounding the Utah Health Exchange to come. We are ready to dig our heels in and get to work ensuring the Exchange Learning Network can serve as a resource for those writing the policies for the UtahHealth Exchange, those running it, as well as those trying to navigate it.

UHPP Applies to Join the Exchange

Background

On September 1, after a very informative meeting with broker Davis Pacific Insurance, the Utah Health Policy Project decided to sign up for the re-launch of Utah's Health Insurance Exchange. Davis Pacific Benefits was able to answer our questions and to provide assurance around this initial stage of the application process. We learned there’s no risk to employers and employees from filling out the initial application. Employers have until September 15 to take this first step on the Exchange website: http://www.exchange.utah.gov/. The health questionnaire will be reviewed by 1-2 randomly assigned underwriters from one of the carriers participating in the Exchange. If UHPP can accept the new rates and terms, the nonprofit’s employees will be able to make their selection of plans starting on November 1.

As the person who manages UHPP’s money, I can't say that I'm entirely at peace with the whole exchange idea. I operate with the mindset of, "if it ain't broke, don’t fix it." Since UHPP started offering health insurance in 2006, our broker has been able to score us good premiums for a decent benefit package. Over the past 3 years our premium increases have been minimal, but that's not to say the entire staff has been entirely happy with the benefits available…


Since Exchanges are here to stay, we figured, why not join? We want to to see if the program really does provide employees with better choices at a reasonable cost. So here is the UHPP's experience, from day one, enrolling in the Exchange.

Step 1: Employer Application Process

I went to the Exchange site here, a simple page that breaks down the basics of enrolling. I found clear information and additional information about the application process, defined contribution, working with a "producer," (a fancier term for broker) etc. I also like how this page lists the participating carriers: SelectHealth, United Healthcare, Regence, and Humana.

To start the employer application, I had to click on a link that brought me to the login page for employees. Since the UHPP has yet to enroll, I had to click on another link to register as an employer. Quite a few clicks to get to the right place, but not too bad.

Due to the paperwork requirement, I must have started the registration process at least 3 times. The Exchange site provides a list of everything you need to complete the registration, and while I am a reasonably organized individual when it comes to paperwork, this enrollment page does not offer the opportunity to save for a later time.

You need to have everything ready to go, all at once.

Note to new employer applicants: get all your information scanned and in one place—before you apply! Information I did not have on hand: Our broker’s license # and their Health Equity ID #. I also had to download a form from the site to my desktop, fill it out, and upload it again. This too timed out my registration, so I had to start over again. All the information that was requested was nothing too personal; social security number, date of birth, etc.

Aside from the paperwork, the employer application was a piece of cake. Not long after clicking the SUBMIT button, I received an email from an underwriter with United Healthcare, who kindly asked for a wage statement that I failed to upload.

When the application was completed, I wasn't really informed as to when employees can shop around for insurance, other than it can take up to two weeks to receive notification that UHPP has met all the requirements, that we've been given the green light to join the Exchange.

So now we wait… are you waiting too?

What was your experience like? If you are an employer, broker or “producer” considering the Exchange for your employees, please consider joining the Exchange Learning Network (ELN). The ELN is an interactive blog discussion group for employers (like UHPP) who want to give their employees more choice of plans and decent benefits but only if the price is right (for employers and employees). ELN participants will have the opportunity to share their experiences (positive or negative) and pose questions to UHPP, Exchange administrators, and brokers.

by UHPP Operations & HR Manager Stacey Earle