Risk Adjustment Key to Competition Within Health Insurance Exchanges

Current exchanges, like the one in Massachusetts, illustrate the pressures payers are already experiencing.

Last month Massachusetts sent letters to four large insurance firms urging them to offer low-cost medical plans for small businesses or face legal sanctions.

The insurers balked because the state capped rates that could be charged at 2009 levels, and insurers are claiming they will lose money. While Massachusetts presses on, one thing is clear: More exchanges are coming.

Health plans, government agencies, employers, and providers all have a stake in what happens next, and its the smartest, most data-savvy players who will come out ahead.

Population health tools have been both promoted and dismissed by health plans and employers. With risk-selection off the table, population health management might be one of the few cost savings strategies that health plans have left. Data management is a big emphasis, but so is working effectively with members and employers to get real action from this information. The results could not only improve the bottom line for payers, but also enhance the health and satisfaction of members.