State healthcare insurance exchanges: Key questions
By Peter Luyckx
Milliman today identified a series of considerations for states, health plans, and employers as they look toward the 2014 state exchange implementation deadline set forward in the Patient Protection and Affordable Care Act (PPACA) and reiterated in regulations issued by the U.S. Department of Health and Human Services (HHS) on July 11.
“The exchange regulations provide clarification on some points while leaving many questions open,” said Cathy Murphy-Barron, Milliman principal and consulting actuary.
“The possibility that exchanges could serve a larger role in the rate review process introduces questions about interaction between state insurance departments and exchanges. Perhaps most importantly from an actuarial perspective, we are still awaiting regulations on essential benefits and other key aspects of pricing, which will be pivotal in dictating the design of plans in the exchange. So while we know more today than we did last week, there are still many unknowns and various questions for states, plans, and employers to consider as they plan for the exchange paradigm.”
Some of the questions that still remain include:
- How firm is the deadline?
- How will essential benefit regulations shake out?
- What rating role will be played by exchanges?
- What about smaller insurers?
- How will federal exchanges operate?
- What should we expect from Navigators?
- How will exchanges interact with CO-OPs?
- What does success look like?
These questions will need to be answered before states can establish the proper exchange governance framework, before health plans can begin to establish their approach to rating, and before employers can make purchasing decisions. To add additional complexity, the answers to some of these questions may vary from one state to another or otherwise be influenced by local dynamics, including the existing regulatory environments in each state and geographic cost variation.