March 18, 2013
When Towers Watson acquired Extend Health last year, there were many unknowns in the health care world: the Supreme Court decision on the Affordable Care Act was still ahead of us, as were the fall elections of 2012. Were we concerned about uncertainty for our companies and those we work with? Of course – but the combination of Extend Health, the nation’s leading Medicare exchange, and Towers Watson, a global leader in professional services, gave us the vision to chart a path into an uncertain future.
OneExchange is the culmination of that vision. It begins a new chapter in our company’s history at the same time that our nation takes a huge turn in its own health care history. Forged in the early winds of the pending reform storm, OneExchange is a single destination that offers many solutions.
As they were a year ago, many employers are looking at ACA’s potential impact on their health care benefits and asking: “What’s the right path?
In answer to this question, I can say two things:
- It’s complicated. You knew that – But did you know that’s a good thing? There are more options now than you, your employees and your retirees have ever had in the past. Some will work better for certain populations than others, but there’s a way to figure that out.
- You don’t have to do this all at once. You don’t have to pull the trigger on a massive set of health benefit changes right now. You can get there one step at a time.
With OneExchange, Towers Watson is using the Extend Health platform to deliver an exchange model that transcends a one-size-fits-all approach. It’s agile in the variation in delivers and nimble in its response to the evolving health care marketplace.
ACA changes things on many levels for employers. The parameters are neither simple nor clear, and the answer will not only be different for each company, it could be different within each company.
Figuring out the impact and how to respond strategically to it means taking into account many factors: how many employees, the hours they work, how much they earn, what benefits they get now, what competitors offer and more.
To increase the difficulty of solving this equation, key market-defining elements like final regs on essential health benefits and the costs of new health plans being designed for 2014 – all mission-critical to driving choice and value for employees on any exchange – are yet to be announced.
Not until these unknowns fill in over the course of 2013 will the value of an exchange become fully known.
Before making health benefits changes, employers should be able to look at scenarios modeled on known conditions. They need knowledgeable advice and insight that lets them make the right decisions at the right time.
That’s why OneExchange’s solutions will be triggered as these market-defining elements come into play. Not before. This will enable employers to leverage the seismic shift that’s just around the corner.
OneExchange gives employers a command central for analyzing and strategizing their health care benefits decisions now – and the advice and solutions they need to chart their course to tomorrow.
Rather than being a year of big, sudden change, we believe that 2013 will be the year that large employers take a good look but not a big leap.
At stake for employers is the trust of their workforce – the ability to recruit and retain employees – as well as sheer operational productivity and their reputation in the eyes of the public – all factors with bottom line impacts.
Fast forward a few years and corporate officers looking back on these next few years will want to be able to say, “We weathered the changes, came out whole and are in a better place. As important – so are our people.” By charting a course via OneExchange, we believe leaders of major employers today will also be able to say, “We did the right thing.”
February 21, 2013
Corrections Appended: February 26, 2013
1. Routine Care, Unforgettable Bills
When Sean Recchi, a 42-year-old from Lancaster, Ohio, was told last March that he had non-Hodgkin’s lymphoma, his wife Stephanie knew she had to get him to MD Anderson Cancer Center in Houston. Stephanie’s father had been treated there 10 years earlier, and she and her family credited the doctors and nurses at MD Anderson with extending his life by at least eight years.
Towers Watson Announces OneExchange for full- and part-time employees and pre-65 and Medicare retirees
January 31, 2013
OneExchange combines the strengths of Extend Health’s exchange platform with Towers Watson’s expertise in health benefit design and strategy.
As part of employers’ health care reform (or ACA) implementations, OneExchange will let employers leverage a single exchange with solutions for some or all of their active and retired employee populations: full-time, part-time, early retirees and Medicare-eligible retirees.
January 30, 2013
The genesis of the Medicare exchange market offers some good insights about what things could look like after the seismic shift that’s coming to the rest of the insurance market in 2014.
The law changes. In 2003, the Bush administration enacted the Medicare Prescription Drug, Improvement and Modernization Act (MMA), creating a thriving market for guaranteed-issue medical and prescription drug plans that could finally be compared head-to-head.
Companies and insurers engage. In 2005, one of the Big Three auto manufacturers challenged Extend Health to get better rates on Medicare plans than it could: In the close radius of the company’s headquarters, it had good enough sway, but having to rent networks in retiree destinations from Florida to Nevada meant its group plan was less efficient than the burgeoning individual Medicare market.
Extend Health built a network of national and regional carriers that offered retirees the same or better individual Medicare coverage at the same or better cost than their former group plan. And at the same time, made the company’s costs predictable and sustainable – no longer driving double-digit rate increases for that employer.
Now Extend Health powers retiree coverage at all of the Big Three and many other auto industry employers along with companies in every sector.
Health care consumers reap the benefits. Six years before MMA was passed, almost half of all retirees from large companies had access to health coverage through their former employers [see EBRI study, Figure 2], but that number took a nosedive due to the skyrocketing costs of offering health care. Six years after MMA was enacted, the number finally leveled off and may even be starting to trend back upward, thanks at least in part to the path offered by private Medicare exchanges.
In today’s fragmented market, individual consumers without an employer to negotiate on their behalf pay the most for health insurance. However, in a guaranteed-issue coverage world (like Medicare today) insurers sharpen their pencils to reach individual consumers through an exchange because it effectively becomes a “super-pool” consisting of everyone within a defined geographic area – providing a critical mass of consumers larger than that of any single employer.
What we’ve seen in the development of the Medicare market gives us reason to believe that a truly agnostic exchange – not a closed single-carrier environment or one that simply switches employers from defined benefit to defined contribution funding – is the practical meeting ground for consumers, employers, insurers and the storm of health care reform changes to come in the next year.
Employers have a lot of big decisions to make about health benefits in 2014. But despite headlines filled with state and federal exchange readiness count-downs, for large employers, many of those decisions don’t have to shake the foundations of their health benefit strategies right away. As employers get ready for the coming seismic shift in health care, their top concern is going to be doing the right thing to meet the needs of their workforces and businesses.
And the right thing is not easy to figure out:
- It depends on regs and health plan options that haven’t been fully defined yet.
- It depends on which employee population they’re looking at, both active and retired.
- It depends not just on the calendar day that exchanges flip the on-switch but more importantly on when certain health care reform changes begin to mature.
I anticipate that, come 2014, employers’ adoption of exchanges for some employee populations could look something like the hockey stick trajectory seen in the 1980s with history of corporate 401(k) adoption: Soon after the law changed in 1978, a handful of employers began a move to the new model, but three years down the road, about half of employers were already offering or thinking of offering a 401(k) and the numbers increased by leaps and bounds in the years after that.
In my next blog post, I’ll be talking more about employers’ needs this year, considerations for how to do the right thing and resources they can turn to for solutions.
- Employment-Based Retiree Health Benefits: Trends in Access and Coverage, 1997‒2010, Employee Benefit Research Institute (EBRI)
- History of 401(k) Plans: An Update, EBRI
- Exchanges Part 1: Everyone wants in, Extend Health blog
- Exchanges Part 2: What to look for and what to look out for, Extend Health blog
December 15, 2012
On December 6th, New Jersey Governor Chris Christie vetoed a bill that would have created a health insurance exchange for his state under President Barack Obama’s signature healthcare reform law. Leading up to the states’ December 14 deadline to declare whether they would run their own exchange, many have interpreted state decisions to operate their own exchanges – or not to – along political lines.
I talk about state exchanges with Dan Gorenstien in his Marketplace piece, “States must make health care decisions,” and with Alex Wayne in his Bloomberg.com article, “Insurers Face Jumbled Market With Health Exchange Rules.” But the decisions we are seeing now are much less political, than practical. Here’s why.
First, health insurance exchanges are the law of the land based on last summer’s Supreme Court decision on the constitutionality of the Patient Protection and Affordable Care Act (PPACA or ACA) and cemented by President Obama’s re-election. There will be no repeal of Obamacare. That political window has now closed.
Second, under ACA, a state can choose to have the federal government run its health insurance exchange either on an interim basis or indefinitely. So residents of New Jersey, Tennessee and other states that are leaving it to the Feds will have access to individual health plans on January 1, 2014 through a health insurance exchange. They will be covered.
Here’s why the move is practical. I know from running the nation’s largest private Medicare exchange for the last eight years that building an effective exchange does not happen overnight. It is time consuming and costly, with many moving parts.
There is the underlying technology and the crucial relationships with the health insurers that will offer plans in the exchange. There is the initial consumer outreach, education and support while consumers are evaluating and choosing plans and enrolling. There are the complex eligibility requirements that some individuals must meet to receive federal subsidies. Lastly, there is the reality that the newly insured will move between company, Medicaid and individual coverage at frequencies never before seen or managed.
Not knowing the details of what it will take to build and run an exchange or how much it will cost, Christie, Haslam and others feel it’s best to let the federal government run it for now. And they can revisit the decision in the future.
This makes practical sense. The states that will run their own exchanges from day one have been working on them for more than a year. For example, California was the first state to declare that it would run its own and appears to be further along than any other.
For New Jersey and others, at this time, it is the right move. That could change next year as more information about the success of the first state exchanges becomes known to the governor and state legislative leaders.
Governor Christie is right: This is a practical – not political – move.
- States must make health care decisions, Marketplace
- Insurers Face Jumbled Market With Health Exchange Rules, Bloomberg
- Map: Is Your State Building A Health Exchange?, Kaiser Health News and PBS Newshour
In today’s Bloomberg Businessweek’s Politics & Policy section, Devin Leonard writes on several Republican-headed states that are making some tough decisions on their states’ exchanges right now.
After health care reform was upheld by SCOTUS this summer, many states decided to wait until the election, leaving themselves precious little time to prepare for announcing whether they would run their states’ own exchanges if Obama won.
So as I point out at the end of Leonard’s story – Obamacare: For State Republicans, It’s Decision Time – give it a minute.
The afterglow of the elections will fade away along with the pre-election rhetoric on repeal and replace. Even though states that were on the health care reform offensive will be starting behind the curve – they’ll get there.
You have to ask, does the Governor Perry really want the Federal government running the Texas exchange? “Not for long,” is the most likely answer.
Look to states on the Federal exchange to start setting up bridge strategies to take their exchanges over. Many decisions will be based on their own state-specific circumstances.
States will also be getting a second cut at rebuilding their Medicaid IT infrastructure through its expansion. They’ll get to upgrade legacy systems developed in the Vietnam era, some of which are running on COBOL. There have already been some signposts that officials of states not initially signing on to the Medicaid expansion may be campaigning for it to relieve the pressure they’re now under, like in the Dallas–Fort Worth area.
Once we get past the optics of saying they’re against Obamacare, I believe that even Republican-led states will get there. There’s nothing like a new year to put a different spin on things.
In 2013, I expect that states currently holding out on running their own exchanges will take a fresh look and consider starting a legislative process to build, own and control their own.
- Obamacare: For State Republicans, It’s Decision Time, Bloomberg Businessweek
- Texas counties consider going it alone on Medicaid expansion, The Washington Post
November 20, 2012
Exchanges are the new vehicle for health care reform changes coming down the road, and the on-ramp is coming right up
With elections and this past summer’s SCOTUS decision behind us, the major events that could have altered the macro course of the Patient Protection and Affordable Care Act (PPACA or ACA) are behind us.
The health care providers, insurers and those closely tied to getting health care benefits into the hands of consumers – particularly employers – now face a series of milestones, not all clearly defined, through Jan 1, 2014 – when 30 million previously uninsured Americans could begin new health care coverage – and beyond.
Just how these different interests– consumers, insurers, providers and the law – converge is where the rubber meets the road.
Circle these dates on your calendar
- Dec 14, 2012 – States can declare whether they will run their own state health care exchange, let the Feds run it for them or partner with the Feds.
- 2013 –Medicare payroll tax increases for higher-wage employees. Employee pre-tax contributions to health flexible spending accounts get capped at $2,500.
- Feb 15, 2013 – States must declare if they would prefer to partner with the Feds
- March 1, 2013 – Employers must notify employees of exchange-based coverage options
- Fall 2013 – State and private health benefit exchanges will be operational for people to begin signing up for new Jan 1, 2014 health plan start-dates.
- 2014 – The mother lode of rules comes online: individual mandate, play-or-pay mandate, premium and cost-sharing subsidies, Medicaid eligibility expanded in some states and additional group health plan mandates.
- 2016 – Sales of health insurance across state borders permitted if neighboring states agree.
- 2017 – States can choose to open exchanges to large employers.
- 2018 – Cadillac tax kicks in.
Pieces of the regulatory puzzle that have to be filled in
- Just out today – Proposed rules on essential health benefits, guaranteed issue and employment-based wellness programs were published by Health and Human Services.
- Full-time vs. part-time – More specifics distinguishing full-timers and part-timers will be clarified for the purpose of applying penalties for not offering health benefits.
- Premium tax credit – How this will be calculated by the IRS.
Stay tuned for a shift in focus in these areas
- Fix-it – Look for a PPACA-fix bill to be proposed in early 2013. There are some provisions that will need to be adjusted, where costs or incentives don’t necessarily promote the best behaviors.
- Look for adjustments in how health savings accounts and health reimbursement accounts are capped and taxed.
- Expect health insurers to be more vocal on the Feds minimizing the health care premium tax and on states taking up ACA’s Medicaid expansion.
- At issue in the Senate will be the Independent Payment Advisory Board (IPAB) and the medical device tax among other negotiations.
- Providers take on new gravitas in the cost arena – Accountable care organizations will be going full-steam ahead. Over 80% of the ACOs created to date have been created by hospital and doctor groups, which could signal a shift in control away from the health insurance carriers to providers. The jury is still out on whether ACOs will lower total health care costs, but hospitals are certainly now incented to hold down preventable readmissions and hospital acquired conditions.
- Entitlement reform – Medicare will continue to evolve according to the plan laid out in the ACA and will be a big part of talks during grand bargain negotiations in 2013. With both sides of the political spectrum far apart on reform, this will be interesting.
Stay tuned for a shift in focus in these areas
As these timeline, rule and structural developments start coming online, there will be a lot to keep track of and many calculations to make. I pay close attention to these and will write on new trends in the health care and insurance space as they break.
- Obama administration moves forward to implement health care law, ban discrimination against people with pre-existing conditions
- Maine May Warm To ‘Obamacare’ After Democratic Sweep
- Post-election flood of ‘Obamacare’ rules expected
- Health Insurers Are Shifting Focus to Costs, Ignagni Says
- Boehner Suggests GOP Will Target Specific Pieces of Health Care Law
- Improvements sought for health insurance law
October 23, 2012
Recently I spoke with Marianne McGee of Healthcare Info Security about security considerations for health care exchanges.These range from regulatory requirements, technology best practices, the interests of employers who use exchanges to deliver a health insurance solution to their workers, retired or present, and most importantly the experience of the health care consumer.
All these requirements and interests are critical, and with the right focus, they can all be accomplished in a way that creates a premium experience for the ultimate user of the exchange – the consumer.
In this podcast, I speak with Marianne about
- Technological considerations, including the trifold data security standards of the technology, banking and health care industries, which we have implemented on the Extend Health exchange.
- User experience considerations, particularly the importance of designing robust consumer authentication that secures consumers’ accounts and personal health information.
- Thoughts on the challenges that lie ahead for the state exchanges now developing their platforms and consumer interfaces.
September 18, 2012
With talk of health care exchanges on the rise, savvy employers who have been using private Medicare exchanges like Extend Health for years are ahead of the game in getting ready for 2014.
This month has seen a swath of real life examples of employer learnings and results from transitioning health care benefits for retirees to an exchange:
- On the Microsoft in Health blog: Nevada’s Success in Deploying a Private Medicare HIX is an interview with James Wells, executive officer of the Public Employees’ Benefits Program in Nevada.
- Cover story for HR Executive magazine: “The ‘Grand Experiments’: Are corporate exchanges the answer to soaring healthcare costs?” examines Eastman Chemical’s experience with an exchange and what companies and HR professionals can look forward to from exchanges as health care reform rolls out.
- Feature article in Employee Benefit News:“Employers get sneak peek at health care exchanges” focuses on what state exchanges can learn from companies like International Paper and Oak Ridge National Labs who are using a private exchange today.
We are proud to say that all of these employers have used the Extend Health Medicare exchange.
For regular commentary on developments and trends in health care, insurance, and technology, follow @brycewatch and @ExtendHealth on Twitter and check out http://www.extendhealth.com.
Extend Health has just launched a new tool in our suite of industry-leading exchange features. BenefitView™ is the first real-time, interactive Medicare exchange dashboard for employers.
There are a lot of moving pieces when moving to the individual market on an exchange. BenefitView gives companies transitioning to the Extend Health exchange more insight into how their retired employees are doing than ever before.
BenefitView is Extend Health’s GPS for a smooth transition, giving employers a clear view of retiree enrollment status at every point in the process. It lets us both work together more effectively to make sure no retiree is left behind. It’s like inviting employers to sit down at one of our internal monitoring stations and giving them the password to look up whatever measures they want: how many retirees have received communications, how many have made and competed appointments, how many have enrolled and how long it all took.
It’s an unprecedented level of access and transparency, and we know from employers who have come to us from other exchange platforms that it’s more than some providers know about their own process, let alone can share with employers.
Find out more about BenefitView in the HR trade publication Employee Benefit News article “Retiree Medicare exchange previews improved transparency” and on the Extend Health blog “New BenefitView Dashboard Lets Employers Track Retirees’ Medicare Enrollment Progress.” See an online demo of BenefitView.