Wednesday, June 29, 2011

Small Business Owners May Really Like Health Insurance Exchanges Built Off The Utah Model

The Disease Management Care Blog attended a local health reform education session that was sponsored by an area business journal.  While the audience of several hundred included a number of providers, brokers, health insurers, consultants, tax advisers and accountants, there was a critical mass of business-owners.  The DMCB watched them closely. 

To the DMCB, it was clear that they paying very close attention.  Their ears really perked up when they heard one speaker discuss the lessons of the Utah Health Insurance Exchange (HIE).  It was a well organized presentation.

Recall HIEs are on-line web-portals that help individual consumers shop for health insurance.  They portray and can also sort the various insurance options, their premium amounts, other basic information about coverage and - if the consumer chooses to actually buy insurance - collect the application (also on-line), confirm eligibility, determine whether any subsidies apply and then issue a policy. The Affordable Care Act encourages States to start exchanges as part of health reform.  You can read more about them here.

The Utah Exchange got a head start prior to the ACA. In contrast to its more famous cousin in Massachusetts, it is limited to employers with between two and fifty employees who are using a "defined contribution" benefit approach.  Under this system, the employer applies for admission to the exchange and provides a pretax dollar amount to the employees, which they can use to individually buy insurance on the exchange.  If the dollar amount doesn't cover the full cost of the insurance, the employee is responsible for coming up with the difference. Enrollment never closes, no one can be denied coverage, individual self-employed business owners (and their spouses) are not eligible to participate and part-time employees working two or more jobs can pool their employer contributions.  Six commercial insurers (along with two health savings account vendors) are participating with over 100 employer groups and 3000 people.

There were five things that may be of interest to DMCB readers:

1) No word on whether exchanges will list information about the availability of disease or care management programs or if their network contains a critical mass of patient centered medical homes.  If any readers one way or another please share. 

2) No, the Utah Exchange didn't appear to have any impact on the cost of insurance.  Duh.

3) While relatively modest in terms of the total number of persons serviced, the background computing technology necessary to collect the information, determine eligibility and issue an insurance policy is extremely complex.  Utah started working on this in 2005 and it took years with some hiccups to get it right.  As a result, the likelihood that well-functioning exchanges will be up and running in the remaining 48 States by the ACA target date of 2014 is about as great as Mitt Romney shaving his head and growing a goatee.

4)  The DMCB asked the speaker if the State or Federal government could use the threat of exchange "delisting" to surreptitiously regulate or even badger health insurers, as described here.  Her response was no, at least in Utah, because there's language in the enabling legislation that forbids using the Exchange to "regulate" insurers.  Um, right.

5) At the conclusion of the meeting, the DMCB chatted with a small business owner with $800,000 in health insurance costs.  He can't wait for a Utah style exchange to drop into Pennsylvania so he can push his employees into a defined benefit individual market faster than President Obama can say "no tax breaks for corporate jets!"  Is this an unintended consequence that will put another nail in the coffin of employer-sponsored insurance?  Stay tuned!

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