Sent: Tuesday, April 03, 2012 6:03 PM
Subject: Health Care Reform Bulletin #4
Thank you to all of you who have been involved in the conversation. From the suggestion of new ideas, asking of questions all the way to correcting inaccuracies in some of the content, it is clear that Businessolver employees are passionate about learning and helping their clients.
Correction from previous bulletins – In Bulletin #2 (Four Major Issues), the Supreme Court heard arguments about Medicaid and not Medicare. Kudos to Cheryl Weise for catching the error.
Exchanges
One of the key tenants of the PPACA legislation is the individual mandate which requires all Americans to be enrolled and covered in a medical insurance plan. In order to create a method for everyone to be covered by a plan, the law allows for the creation of exchanges, a marketplace for learning about and electing medical insurance plans.
For those who like videos, you can learn more by watching this video (1:05 minutes) from the Robert Wood Johnson Foundation. If you would prefer to read, this blog post from St Luke’s provides a non technical perspective of exchanges.
Private or Public Exchanges
Public
The original plan was to create one single exchange to allow all Americans the option of purchasing health care insurance individually instead of purchasing through their employer. This quickly became a large controversy as each state has their own Department of Banking and Insurance with separate rules and requirements. The resolution was to allow for public state run exchanges. There are efficiencies gained and savings found by allowing individuals and small employers to be grouped together and provided a small set of standardized plan options. Currently, there are two states run exchanges (Utah and Massachusetts) with more states launching in the near future.
Private
The other option is an exchange run by a private non public entity that has specific criteria based on geographic location, industry vertical or other variable. Currently, there are over 100 private exchanges in use today with PEOs (Professional Employers Organization) being the most popular of exchanges. PEOs allow groups to join their exchange plan as long as the meet the underwriting minimums. This allows for a balanced risk pool (see the previous bulletins).
There are brokers who are looking to create their own exchanges. AON, ACS and Mercer are either launching or have an exchange in place today. Some are focused on certain verticals while others are focusing on certain groups of people (retirees or part-time employees) NelsonHall has an article on private exchanges that is worth reading.
Pros and Cons
There are a number of pros and cons for exchanges with a lot still unknown. This article from the Buffalo Bulletin provides a great understanding of the reason for the creation of exchanges and the outcomes being seen by employers. The key to making exchanges work is the implementation of the plan and proper risk management controls. The jury is still out (literally) on their future but they will have some value regardless of the decision by the Supreme Court.
Have a question, thought or insight? Send me an email at jgallic@businessolver.com and I will use it help educate everyone!
Correction from previous bulletins – In Bulletin #2 (Four Major Issues), the Supreme Court heard arguments about Medicaid and not Medicare. Kudos to Cheryl Weise for catching the error.
Exchanges
One of the key tenants of the PPACA legislation is the individual mandate which requires all Americans to be enrolled and covered in a medical insurance plan. In order to create a method for everyone to be covered by a plan, the law allows for the creation of exchanges, a marketplace for learning about and electing medical insurance plans.
For those who like videos, you can learn more by watching this video (1:05 minutes) from the Robert Wood Johnson Foundation. If you would prefer to read, this blog post from St Luke’s provides a non technical perspective of exchanges.
Private or Public Exchanges
Public
The original plan was to create one single exchange to allow all Americans the option of purchasing health care insurance individually instead of purchasing through their employer. This quickly became a large controversy as each state has their own Department of Banking and Insurance with separate rules and requirements. The resolution was to allow for public state run exchanges. There are efficiencies gained and savings found by allowing individuals and small employers to be grouped together and provided a small set of standardized plan options. Currently, there are two states run exchanges (Utah and Massachusetts) with more states launching in the near future.
Private
The other option is an exchange run by a private non public entity that has specific criteria based on geographic location, industry vertical or other variable. Currently, there are over 100 private exchanges in use today with PEOs (Professional Employers Organization) being the most popular of exchanges. PEOs allow groups to join their exchange plan as long as the meet the underwriting minimums. This allows for a balanced risk pool (see the previous bulletins).
There are brokers who are looking to create their own exchanges. AON, ACS and Mercer are either launching or have an exchange in place today. Some are focused on certain verticals while others are focusing on certain groups of people (retirees or part-time employees) NelsonHall has an article on private exchanges that is worth reading.
Pros and Cons
There are a number of pros and cons for exchanges with a lot still unknown. This article from the Buffalo Bulletin provides a great understanding of the reason for the creation of exchanges and the outcomes being seen by employers. The key to making exchanges work is the implementation of the plan and proper risk management controls. The jury is still out (literally) on their future but they will have some value regardless of the decision by the Supreme Court.
Have a question, thought or insight? Send me an email at jgallic@businessolver.com and I will use it help educate everyone!
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