HIX Are a Marathon, Not a Sprint

The impact of health insurance exchanges will take months and years to assess. December 15, not October 1, is the big date; young invincibles aren't essential yet; and it will be 2015 before the viability of HIX is known.

Open enrollment for the health insurance exchanges is a marathon, not a sprint, and it will take months—and for some aspects, years—to assess the impact.

We've been hearing plenty of reports about long waits for HIX access, server problems, and other delays. But industry observers and stakeholders—who have the proverbial skin in the game—are looking well beyond those early glitches to the impact of HIX over the long term.

"I am certain that things won't go smoothly [at first], but I envision that any glitches will be resolved in the first couple of weeks. By the end of October, I think things will be running smoothly," says Caroline Pearson, vice president of Avalere Health, a consulting group that has studied HIX.

More than 2.8 million people tried to access the federal HIX site, Healthcare.gov, on launch day yesterday. People who don't have health insurance or who have serious health conditions are highly motivated to enroll. If they encounter problems early in October, Pearson expects that they will "come back and try, try again" until they are able to process their application and get enrolled in a health plan.

To take the long view on HIX, I spoke with Pearson, as well as Joe Mondy, spokesperson for Cigna, and Steve Wojcik, vice president of public policy for the National Business Group on Health. Here are some pointers.

Forget October 1, December 15 is the date to mark
That is the day when the enrollment period ends for policies that will go into effect on January 1. Many people will procrastinate or wait to see the initial uptake, so Pearson expects the first weeks of December to be busy ones for HIX.

Mondy agrees. Although Cigna is up and running with its HIX offerings in five states (Arizona, Colorado, Florida, Tennessee, and Texas) he expects potential enrollees to take some time to study the offerings and make their coverage decision. Cigna is providing online and telephone support 24/7 and has developed a five-minute video guide to help with the enrollment process.

The eventual importance of young invincibles
Many people have noted the need to attract so-called young invincibles—those hardy 20-somethings who rarely get sick—to HIX, in order to offset older and sicker enrollees. But Pearson says, "It is important to get healthy people in [HIX] during the first three years, but I don't know if it's that important for the first year."

In the short term, attracting young invincibles is important more in terms of PR than from a risk pool perspective. It is expected that young people will sit out the first year of HIX, which means the initial enrollment could be weighed toward a sicker population with more health needs. To protect health plans from potential losses in serving that population, the federal government has guaranteed risk corridors and reinsurance programs that will be in place for the first three years.

Welcoming newbies to the healthcare system
The millions of uninsured expected to purchase health insurance on the HIX will probably be unfamiliar with the basic mechanics of health insurance coverage. That means training will need to be ongoing. Cigna has developed an extensive education program for this audience and structured its HIX plans to be easy to understand and explain.

In addition, its surveys of potential members revealed that many have never had a family doctor. Mondy says the Cigna networks are primary care–centric. "We want to ease [enrollees] into a very complex healthcare system and help them navigate the system as they engage it."

The long-term viability of HIX
Wojcik says employers that are members of the National Business Group on Health are already familiar with the challenges of open enrollment and benefit changes. "They know there will be bumps in the road" over the short- term with HIX. But if things aren't running smoothly by 2015, "that could be a red flag."

He expects employers to look at what insurers do in the second, third, and fourth years in terms of participation, plans, and premiums. "If HIX can't sustain affordable coverage, if rates increase, or insurer choice is restricted," that will indicate long-term problems.

For now, large employers are eying HIX for their retirees, former employees on COBRA, and their part-time employees who are not eligible for company benefits. HIX rules prevent them from shifting full-time employees to the exchanges. That policy will change in 2017, and Wojcik expects employers to at least take a look then to see if a public HIX might fit in their benefit strategy.

Mondy says Cigna is looking beyond the initial enrollment period to member retention, which has always been a challenge in the individual market. It is expected that HIX will provide a similar type of competitive marketplace for individuals that is now enjoyed by groups. He is concerned, however, that loss leaders may disrupt the market, as individuals focus on the low monthly premiums rather than the full package, which may include high deductibles, copays, and small provider networks.

Extensive membership turnovers within HIX could affect market stability and make it more difficult for health plans to profitably manage members..

The first miles of the marathon
"This is a very heavy lift for everybody. It is much more than just putting a product out there," says Mondy. "That's why we're concentrating on markets we know and have the capabilities to serve. We'll have the opportunity to analyze things as we go along and as the health insurance exchanges mature."