Health exchanges are projected to be the conduit for up to 38 million people obtaining health coverage – a huge market opportunity for payers who participate and a threat for those who cannot compete effectively. The recently solidifying requirements and the prospect of changes in the coming years create uncertainty and yet opportunity for those prepared to meet the market with flexibility, speed, and in this year, the considered basics to compete.
This year, thoughtful payers are focused on the basics to participate, survive, and position themselves to thrive in the future. As states finally embrace and/or tweak federal guidelines, the timelines to connect to exchanges and efficiently manage enrollment, claims requirements, and billing are highly compressed. Identifying partners who bring deep understanding of the exchange requirements and the operational implications is critical to meeting the October 1 requirement.
Complexities such as varying expectations of member information maintenance as well as billing requirements such as Advance Payment Tax Credits and cost sharing reductions require new levels of sophistication and automation. In addition, providing coverage to individuals has historically been more resource intensive than doing so for employer groups. In order to efficiently maintain high levels of member satisfaction, payers will need to ensure that members get their questions answered quickly the first time. Implementing technology and processes that arm representatives with the right answers and automate new member onboarding are critical to achieving the administrative and operational efficiencies required to make this lower-margin, higher-volume individual insurance business successful.
Learning the ins and out of working with government programs and pursuing both compliance and differentiation at the same time will be a new experience for many commercial payers pursuing this market opportunity. The critical decisions to thriving in the exchange market are to come based on the initial view of the 2014 experience, expected changes to state and federal guidelines, and better appreciation for the opportunity in this new market. Flexibility to meet what promises to be a fluid marketplace is critical, and this flexibility may be constrained by aging core administrative and enrollment solutions.
Older systems are more difficult to integrate with newer web-based technologies and tend to lack the automation and flexibility required to efficiently service individuals. Newer platforms introduced in recent years provide more capacity to adapt via configuration versus code changes and are more likely to quickly incorporate new features and requirements driven by early exchange lessons. Adopting such systems will likely be critical to serving the potential flood of new individuals entering the market.
From our work with payer organizations of all sizes, it is clear that payers are investing in exchange with the clear knowledge and foresight that change will be the norm. Leveraging modern platforms to maximize efficiency and contain administrative costs is the basic price of entry. Competing, succeeding, and thriving for the long-term will be a matter of the right partner to bring expertise and modern integrated platforms that are quick to implement and adapt.
Sidharth Bathia, HIX Business Analyst and Philip Spinelli, Sr. VP of Sales, both of ikaSystems also contributed to this report.