“Commonwealth Choice” & the Health Connector Exchange:
Design Issues & Lessons Learned
Kevin CounihanChief Marketing Officer
MA Conference on National Reformand State Exchanges
January 21, 2010
2
Agenda
1. Overview
2. Enrollment in Health Connector Exchange
3. Preliminary Design Issues for Exchanges
4. Lessons Learned
3
Commonwealth Choice Roles of Health Connector
Regulator Procurement
Distributor
4
Commonwealth ChoiceRole of Health Connector
Complex Roles:• Regulator
– Minimum Creditable Coverage (MCC)– Affordability Schedule– Section 125 Regulations
• Procurement– Health Plans– Seal of Approval Benefit Plan Designs– “Subconnector” administration
• Distributor– On-line Distribution and Enrollment– Broker support
5
Commonwealth Choice –Role of Health Connector
• Establish and administer Commonwealth Choice™, a commercial insurance “exchange:”– Evaluate and recommend health plan offerings – Standardized benefit plans & provide Seal of Approval– Provide more affordable coverage options (small group/non-
group market merger)
• Facilitate access to unsubsidized access to coverage for:– Individuals earning above 300% of FPL– Part-time employees – Young adults (age 18 – 26)– Small groups (1 – 50 ees)
6
• Make Policy Decisions as Authorized by Health Reform law
• Educate individuals, employers, brokers/ consultants about law and Connector products
• Digital Marketing– Search Engine Marketing– Pay-per-Click– Social Networks
Commonwealth Choice –Role of Health Connector (cont.)
7
Subsidized Uninsured
Small Employers
Other?
Non-Group
Commonwealth Choice Exchange and Target Markets
8
Commonwealth Choice: Unsubsidized Marketplace for Non- & Small-group
9
Enrollment Process
Vince
•Age 37•Lives in Shrewsbury•Uninsured•Wants Non-Group, Single Coverage
•Wants Good Value in Insurance Purchase•Sensitive to Monthly Costs•Wants MD Choice•Wants Easy Access to Information
10
•What benefits do I What benefits do I want? want?
•How much do I How much do I want to spend?want to spend?
•Location of Location of MDs/hospitalsMDs/hospitals
•Plan APlan A•Plan BPlan B•Plan CPlan C•Plan DPlan D
•Selects Health Selects Health Plan APlan A
•Completes Completes Online Online EnrollmentEnrollment
•Picks a PCPPicks a PCP•Pays 1Pays 1stst Month Month
PremiumPremium
•Collects PremiumCollects Premium
•Sends Vince’s Sends Vince’s Enrollment Enrollment
Information to Information to Health Plan AHealth Plan A
Online Vince: Sub-Connector
Vince Decision Support Tools: Health Plan Choices:
•Processes Processes Vince’s Vince’s
EnrollmentEnrollment•Issues Vince ID Issues Vince ID
Card to EOCCard to EOC•Prepared to Pay Prepared to Pay
ClaimsClaims
Health Plan A
11
Starting List of Design Issues
1. Carrier Bidding & Selection
- “Managed Competition”
- Transparency
- Long-term Relationships
12
Starting List of Design Issues
2. Benefits Specification- Market Research
- Encourage Innovation
- Standardize for Easy Comparison
- Manage Change
13
Starting List of Design Issues
3. Remember Customer Needs:
- Comprehensive coverage
- Understandable benefits (“I bought what?”)
- “Affordable” cost
- Reduce insurance jargon, (where possible)
14
Starting List of Design Issues
4. Administrative Functions
- Outreach & Marketing
- Eligibility Determination
- Enrollment & Premium Billing
- Customer Service
- Appeals
15
Likely Functions of Exchanges
1. Offer Coverage for Target Market Segments (non-group, small group, other?)
2. Specify Plan Designs & Coverage Tiers for unsubsidized coverage
3. Contract with & Sell Health Plans
4. Education, Outreach & Marketing
5. Oversee/Ensure Risk Adjustment
6. Ensure Compliance with Benefit Offering Rules and Requirements- Benefits determined by Feds (MCC?)- States must reimburse Feds for extra costs due to mandates
beyond MCC
16
Potential Value of Exchanges
1. Protecting/representing enrollees
2. Prudent purchasing of health insurance
3. Choice & “managed competition”
4. Scale economies in distribution
17
Lessons Learned
• Hire Staff who Know Health Insurance Business
• Communication Never Ends
• Minimum Coverage / Affordability
• For Consumers, Keep it Simple → Less = More
• Nurture Stakeholder Relationships
• Leverage Public/Private Practices