Why Health Insurance Exchanges Unnerve CFOs

Karen Minich-Pourshadi, October 1, 2012

With health insurance exchanges mandated to launch in 2014, the government has awarded its next round of Affordable Insurance Exchange Establishment grants in an effort to get these programs up and running on schedule. The money is intended to give states the flexibility and resources to create new health insurance marketplaces.

But healthcare CFOs remain wary of the potential financial ramifications of these state-run commercial payer plans, with some calling it "scary" or a "game-changer."

Many industry experts believe organizations that face greater uncompensated care stand to fare better with health insurance exchanges (HIX), as the uninsured will now have some coverage. However, for those healthcare organizations with few uninsured and small Medicare and Medicaid populations and greater amounts of commercial insurance, exchanges stand to hurt the bottom line.

"For us, we have very little Medicaid, very little uninsured, and we have 40% commercial insurance, which is going to now get paid at Medicare or Medicaid rates," says Mary Ann Freas, CFO at Southwest General Health Center, a private, nonprofit, 354-bed hospital located in Middleburg Heights, Ohio. Freas was one of several CFOs who spoke about insurance exchanges while attending the HealthLeaders Media CFO Exchange, an invitation-only event held in September at Kiawah Island, SC.

"We've worked so hard to get our payment rates up to a par with some of the other larger organizations that have a lot of market power in Cleveland, and now [those healthcare organizations] are saying they're going to create our own exchanges. We could be looking at huge reductions in reimbursements from exchanges, and that's what's scary," she says.

Karen Minich-Pourshadi Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media. Twitter

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