If the law is overturned, he says policymakers who like the exchange concept will encourage its private market development over the more regulated model now in place.
Scenario #2: Individual mandate is struck down but the ACA stands
This is a worrisome option for insurers. Rich predicts that if the individual mandate were to disappear and guaranteed issue were to remain, then "health insurance prices will sky rocket."
If both the mandate and guaranteed issue disappear, he expects that consumers will need more help in making their healthcare purchases. He sees private exchanges as filling that gap. Consumers, he says, would be open to different shopping experiences and insurance carriers will be in a position to be more creative in their product offerings such as bundling and offering discounts to keep consumers engaged in the HIE over the long term.
Condeluci notes that one of the goals of healthcare reform is to make the individual market more functional. If the mandate is struck but guaranteed issue and community ratings remain, he contends that private HIEs could become something of a "safe harbor" for consumers and small groups to navigate the market, especially if the exchanges include education tools and decision support systems.
Condeluci doesn't expect the group market to be affected if the individual mandate is struck down. If prices increase, then private exchanges could be "an appealing option" for employers who want to move from a "one-size-fits-all insurance benefit model" to a defined-contribution model, which allows employers to simply subsidize coverage. The exchanges would take on everything else associated with the coverage.
Scenario #3: The ACA is upheld
This scenario would be the green light for private exchanges to accelerate development, says Sanjay Singh, CEO of hCentive, a healthcare technology provider. "I see hundreds of these exchanges developing. The floodgates will open."
When he was with the Senate Finance Committee, Condeluci says he worked with Sen. Grassley (R-Iowa) and Sen. Baucus (D-MT) to develop a model for the exchanges. "We wanted to model the exchanges after private exchanges with private market solutions as opposed to what became part of the law."
If the Affordable Care Act is upheld, he says there may be some concern that the private exchanges will compete with public ones. Condeluci says it's more likely that states will view the private exchanges as an additional distribution channel and develop partnerships with the private exchanges. "They can tap into those exchanges in order to get more people covered by health insurance."