America's health consumers are five months away from the government's grand health insurance exchange experiment. The idea of an insur ance exchange isn't new, but it's never been done on such a large scale, and some wonder if the exchanges aren't too much too soon.
Connecticut, which aims to "set the standard for state health exchanges," is one of 18 states running a state-based HIX, called Access Health CT. Its CEO, Kevin Counihan, a veteran healthcare industry leader, says his state's HIX won't be perfect, but it will be ready, and so will its Small Business Health Options (SHOP) program, despite receiving federal permission to delay SHOP until 2015. Counihan recently spoke with HealthLeaders Media about Connecticut's HIX.
HLM: Why is Connecticut moving forward with its SHOP exchange when the federal government has told states they could delay the program?
KC: We had planned to offer this as part of a federal requirement, so we built that into our business plan. I come from that SHOP/vendor world, so I knew firms that we could outsource to [that] would be more efficient than if we were to have our system integrators build it from scratch.
Most of the state-based exchanges are building this from scratch and I believe that, at least for our state, that was probably not the most efficient move. We could get up and running faster and cheaper by outsourcing, which is frankly, our operations strategy in general. So because of that planning, we were able to do it and it just seemed there was no reason not to offer it.
HLM: Are you afraid the small business owners will not be there without the weight of the federal government making it known that SHOP is an option?
KC: Not really. The reason why is because the small business market, like so much of the insurance business, is really driven by brokers, and the brokers are the most trusted advisor to small businesses on insurance purchasing. They're going to be the one business will turn to when they ask if this program is right for them, and they're very influential in the purchasing process.
HLM: Does outsourcing a large portion of Access Health CT's exchange make sense for Connecticut because it is a small state?
KC: No. It's really more of a strategic decision. We, on our team, believe that value rests more in marketing and outreach relations with health plan and product designs than it does with operational issues. Our goal is to look at focusing on those competencies that we think add value for our target market of individuals and small businesses, and outsource those things where we don't think we add as much value.
HLM: What kind of outreach will Access Health CT do?
KC: Our sense is that this push is best made as reasonably close to open enrollment as possible. The reason for that is because it's not a sexy purchase, like buying an iPhone, or a smartphone, or a car, or some new electronic gadget.
It's a category that, for a lot of people, they find it dull, expensive, and they associate it with less than good things. With health insurance, there's this thought that 'I'm only going to use it when something bad happens'. We're taking a consumer products approach to the marketing of the exchange, which means that we are looking at brokers, navigators, and in-person assisters as very valued distribution channels. We also think that's appealing to population segments, whether they be racial, ethnic, geographic, or other.
It's probably the most effective way we can make our message known, supported by an appropriate spend on media around sponsorships, around corporate affiliations, and around services that are going to make our exchange attractive to individuals and small businesses.
All the exchanges have got a key advantage, which is that we are the only channel for people to access tax subsidies. We think roughly 80% of our membership is going to come in that way. But, it may not necessarily stay that way, because I personally think that exchanges are a megatrend.
They enable defined contribution models for employers, so we're going to see the 401k of health insurance. So, given that model, we're looking at consumer marketing as segment-based, and to be frank, I'm going to see if we can start developing messaging in tandem with some of our neighboring states. A fear that I have is that with media market overlap, a Massachusetts message can be different for us than the Connecticut message, but the buy in Springfield, Mass., is going to spill over into Hartford, Conn. And vice versa and [we] run the risk of message confusion to enrollees.
On media purchasing, I think there's much better opportunity if several of the states come together and buy media together. We can get much better deals than if we buy it on our own. I think there are a lot of different ways we can be efficient, a lot of ways we can unify our messaging.
HLM: How confident are you that these exchanges will be up and running for open enrollment? And do you think that states, like yours, who are running their own HIX will be ahead of the curve?
KC: I really don't know the answer to that. It's a very complicated question. To be frank, we have got enough [of a] challenge getting our own state-based exchange up, and I'm much more aware of what our peer states are doing than the partnership states of the fully federal states.
Connecticut is going to be up and running on 10/1. Is it going to be running perfectly? No. Will we have contingency plans for it? Yes. I do think that this is a three-year project being moved into 10 months, and I got called by a pretty low level person at the White House about two months ago asking what they could do to help.
I said, "Give us another year." The integrated eligibility piece is very complex. It's never been done before like this. I'm very pleased with the progress we've made.
HLM: Do you have qualified health plans ready and willing to participate?
KC: We've received nonbinding letters of intent from five health plans. We're waiting to see by the end of April who firmly commits. It's a very complicated decision. Our strategy has been to be very collaborative with the plans. We don't believe in being top-down heavy or highly prescriptive, so we brought them in early to look at things such as eligibility formatting and data submission guidelines, and they've appreciated it.
That goes a long way in terms of building partnerships with [them]. We view ourselves as fundamentally a distribution channel that encourages informed choice, ease and simplicity of shopping, and a means to leverage our enrollment to start helping promote the discussion of lowering costs. So, if we had three to four health plans commit, I'd be very happy, and I think we'll get there.
Jacqueline Fellows is a contributing writer at HealthLeaders Media.