Implementation of the new healthcare law is right around the corner and insurers will soon have to deal with health insurance exchanges. The undeniable fact is that exchanges will become a key part of the U.S. health insurance market--no matter who is in the White House in 2013, or what happens to the Patient Protection and Affordable Care Act of 2010.
For insurers, exchanges will mean millions of new customers and billions in new spending. The money will funnel through online state exchanges, which will allow customers to competitively shop for insurance.
As recently reported in Wide World of Work, some insurers are spending considerable sums on marketing, technology and risk analysis before the law kicks into high gear. Carriers are tooling up their smart-phone claims apps, consumer advertising and shopping systems, allowing patients to find better and more price competitve caregivers. Many insurers are still "running the numbers" as they consider what to offer and which medical providers they’ll use for specific markets.
“For the insurance company, this becomes an opportunity, but it also represents a risk,” said Brett Graham, a consultant at Leavitt Partners. “Are there insurance companies saying, ‘Whoa, this is coming too fast, we don’t have information and we’re going to sit this out’? It may be too early to answer that question.”
WellPoint, the country’s second-biggest health insurer and owner of Blue Cross franchises in more than a dozen states, expects to sell through exchanges. The company seeks to sell directly to consumers through state exchanges and private exchanges offered by employers. Wayne DeVeydt, WellPoint’s CFO recently said, “You are going to have to market in a more retail environment—something that this industry hasn’t had to do historically. And branding is going to become even more relevant. This year alone, WellPoint is spending almost $50 million in branding for the Blue Cross Blue Shield brand and we would expect those branding dollars would continue.”
WellPoint and Aetna are expected to buy Medicaid managed care companies to seize the opportunities opening up by the Affordable Care Act’s Medicaid expansion. By also creating marketing channels for exchange plans, Wellpoint and Aetna will be able to offer plans in both Medicaid and exchanges.
Blue Shield’s Stephen Shivinsky noted some of the challenges faced by his company. “There’s a health reform team that has been working on this for 18-plus months. It’s a massive effort on our part. How do you migrate our current product portfolio to what the new portfolio is going to look like?” asked Shivinsky.
For the average consumer, making the transition from what they have now to shopping for what they need in online exchanges may get complicated. "Not everybody is going to be able to independently hop on an online program," said Joan Cleary, who heads the Minnesota Community Health Worker Alliance. "Some people are going to need these warm connections." Warm connections are the human helpers officially known as "navigators" in the health care law. Their role at this point is still a bit fuzzy.
As you can see, there’s still a lot of daylight between insurance companies and how exchanges will dovetail with their operations. For more detailed information, you can review BoozCo-Emergence-Private-Health-Insurance-Exchanges
Photo courtesy of MorgueFile.com
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