Reform by Any Other Name
Healthcare Reform Panel
Prescription for Change
Not a Bitter Pill
Cut Out the Middle Man
AUDIENCE QUESTION: Is there an individual part of Avenue H, or is it just for small employers?
CONNER: There is an individual exchange available today. So if you go to AvenueH.com, you will find that we have a section for individuals and families. We have taken a little bit different approach on it, on how we have managed it in the past couple of years. Rather than over-facilitating the process, we let the market work itself and just create more of a farmers market approach where everyone that was selling an individual policy, whether it was a broker or direct to the carrier or some other web type broker, could put, for lack of better words, a table in the park and sell their produce. They can put their website up on our site and then when you come in and apply, you can choose between whether you go agent, direct or use one of the web brokers; do the application and then you can do plan comparisons and see the rates and the plans and make a choice from there.
AUDIENCE QUESTION: Can you talk about why you decided not to offer the individual plans for the exchange?
CONNER: As you can all imagine, it’s a hotly political issue on how to address this. From a state perspective, we were kind of divided on whether or not we should do the individual and the small business markets. Everyone had been pretty well grounded on the fact that we were going to do a small business exchange because that was the approach that we had agreed to four years ago, and we wanted to continue to do that and service that market.
From an HHS perspective, there were a lot of late decisions about how the individual market needed to be set up. There was a huge amount of cost associated with doing it. All of the simplicity of the streamlined application wasn’t necessarily streamlined. And it was, from our perspective, a very difficult thing to do in the time period in which we had to do it. And we wanted to see if the Feds actually can pull all of those components together and make it be successful. And if they are successful in doing that, then we have an opportunity to pull that back in the state and continue with that process.
But you can imagine, there’s a lot of regulations that have been coming down day after day. It’s been very hard to get our arms around what the regulations are and how do we actually put a plan together that’s going to be effective. If we are going to do it we want to do it right and make sure it’s a great consumer experience for everybody.
AUDIENCE QUESTION: What is the estimate in the individual market for premium increases due to the Affordable Care Act?
REIMANN: I have heard ranges as low as 20 to 30 percent, but as high as 100, 200 percent. Obviously we will know by October 1st when open enrollment begins. Anywhere in between, but I would expect on that lower end. But still, for most individuals, they are going to experience an increase. Some people will have a decrease—those individuals in small groups that have really high rates today, they may see a drop in what they pay.
You need to determine if you are a large or small employer, because things definitely impact you differently. You have different challenges ahead of you. As a small group, you have less control now of what your actual premium looks like. It is very prescriptive about how community rate has to work.
MODERATOR: Can you define community rating so people understand why that is a change from what we do today?
REIMANN: Today, for small employers and individuals, some of the main tools we use when you underwrite, a lot of that is based upon an individual or group’s health. And you are rated accordingly. In the individual market, if you have certain health conditions you may be determined to be uninsurable and you can move into programs like the state’s high-risk pool, HIP Utah, or the federal high-risk pool.
Those mechanisms go away in 2014, and community rating is really based upon a few factors: age, demographics. You can use tobacco use, but it has to be offered in conjunction with a wellness program. Even family, for example—it’s very prescriptive how we apply family rating. You can only apply a rate for the three oldest children younger than age 21. So the additional children don’t have a charge.
So rating is completely turned around on what it traditionally looks like. You have rates up here and rates at the bottom. Everyone is going to average out to a community rate. Of course, those variables that I described will affect what you pay, as will the plans that you select. So if you want a higher-deductible health plan, you may pay a little bit less. But of course you’ve got some more risk as far as what your cost sharing may be. And then there are a lot of fees that will be covered, as well.
MODERATOR: Talk about essential health benefit plans. Is there intent to use that in the commercial market?