Navigating the ACA Exchange Environment: A Customer Perspective

June 21, 2011

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Topics of Discussion

• Introductions

• Health Insurance Exchanges (HIXs/Exchanges) in operation and in the Affordable Care Act (ACA)

• Impacts on Community-Affiliated Plans and Lessons Learned

• What’s happening now—and looking forward

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Introductions

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Bringing Innovation to a Changing Payer Market

• Support the creation of a sustainable insurance marketplace for individuals, employers, and employees

• Help payers navigate uncertainty by identifying opportunities and risks

• Support alignment of core business functions with the Exchange environment

• Provide policy and technology consulting to state governments

• Help commercial and Blue Cross Blue Shield customers transition to a consumer-centric model

• Facilitate Web-based transactions among all constituents to strengthen relationships

We support more than 100 insurers, and the only operating Exchange in the industry, with standard and custom solutions.

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Dell Services Capabilities From product support to business solutions, we help our customers achieve their business outcomes.

• Document Management

• Data Capture

• Knowledge-Based and Transaction Processing

• Contact Center

• Engineering Services

Business Process

Business Process Services

Consulting

• End User

• Data Center

• Enterprise Architecture

• Data Center Infrastructure

• End-User Computing

• Data Management

• Business Continuity/ Disaster Recovery

IT Consulting

• Strategy and Transformation

• Organizational Change Management

• Process Reengineering

• Supply Chain Management

• Customer Relationship Management

Business Consulting

• Hardware Warranty

• ProSupport

• Accidental Damage

• Value-Added Services

Support

Support Services

• Custom Development

• Testing

• Applications Management

• ERP and Industry Applications

• Business Intelligence

• Modernization

Applications

Applications Services

Infrastructure

• End User

• Data Center

• Network

Configuration and

Deployment

• Virtual Desktop

• Virtual Data Center

• X-as-a- Service (Platform, IT, Mgt. S/W, Apps, Software)

Cloud Services

• End User

• Data Center

• Hosting

• Information Assurance

• Network

Infrastructure Managed Services

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Denver Health & Hospital Authority

Mission

To provide access to the highest quality of health care, whether for prevention or acute and chronic diseases regardless of ability to pay.

“Level One Care for All”

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Denver Health & Hospital Authority

• Academic, community based, integrated health system, located in Denver, Colorado

• Political subdivision of the State of Colorado

• Since 1860, DHHA has served as Colorado’s “safety net” healthcare system and has provided care to Denver’s most vulnerable populations

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Denver Health Medical Plan, Inc.

• Established in 1997 as a non-profit HMO, a wholly owned subsidiary of Denver Health & Hospital Authority

• Created to fill a need for affordable healthcare

• Product portfolio includes: Commercial, Medicare, Child Health Plan Plus and Medicaid Choice

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Health Insurance Exchanges in both operation and the Affordable Care Act (ACA)

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Changes to Healthcare We are currently facing the greatest changes to healthcare in more than a generation and Exchanges are at the heart of those changes.

New records regarding the number of covered lives

New member demographics

New channel partners

New market mechanism

New product designs

New rules for managing members

New budget hit for states

Health Insurance Exchange

11 Confidential Services

Initial Health Insurance Exchange Implementation Timeline

2010 2011 2012 2013 2014 2015 2017

HHS to certify states on-target for Exchange operation; Exchanges go live for open enrollment

Ban on large-group participation ends

Federal subsidy for Exchange operations ends

Exchanges go-live for full operations; Individual and Employer mandates and low-income tax credits begin

Plan and Engage Design and Build Certify and Launch Operate and Sustain

Innovator grants awarded; Level I and II build grants announced; Initial vendor RFPs out

Establishment of non-profit insurance co-ops to compete with commercial plans

$1M planning grants awarded; Initial guidance from CMS

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Goal of the Exchange Create a sustainable insurance marketplace for individuals, employers and employees

Create

Sustain

Insurance

Marketplace

Individuals

Employers/ Employees

• Launch a multi-channel (paper/phone/web) marketplace, with all necessary front and back-end infrastructure

• Develop an approach that is attractive to all stakeholders and is easy to use, meets federal and state requirements and generates sufficient revenue

• Certify plans as meeting Exchange coverage and access requirements

• Support (and even drive) competition among plans and provide a choice to consumers (individual and small group members) and employers

• Use competition to promote choice, quality of plans and providers while reducing costs

• Use competition to promote choice, quality of plans and providers while reducing costs

• Make it easy for employers to contribute to and support their employees’ health

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What is an Exchange and Who Comes Closest Today?

PPACA Requirements for American Health Benefit Exchange (AHBE—Individual) Utah Mass

Provide both an individual and a small group insurance exchange website (or portal)

Certify health plans that participate in the Exchange

Present plan options in a standardized way (i.e., Platinum, Gold, Silver, Bronze)

Provide web resources (i.e., cost calculator) and toll-free call center support to users

Administer the exemption process for individual mandates

Determine eligibility and enroll applicants in Medicaid/SCHIP

Determine eligibility for new tax credits and cost-sharing reductions for persons with income 100-400% FPL

Facilitate advance payments by Treasury to insurers of individual premium assistance tax credits

Determine if employer-sponsored insurance is “affordable,” and if individuals with access to employer-sponsored coverage are eligible to purchase insurance via the Exchange

Receive and process “free choice” vouchers for employees with unaffordable employer-sponsored coverage

Operate a consumer assistance (or “Navigator”) program

Report user and employer data to Treasury

Generate sufficient revenue to be self-sustaining by 2015

Fully meets Mostly meets Partially meets Minimally meets Does not meet or NA

Currently meets or performs a similar function:

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States will Use Flexibility from CMS to Tailor the Exchange that Best Meets Their Needs

Light Pragmatic Robust

• Lighter regulatory role • More “free market” by

promoting economic growth

• Satisfied with level of competition and quality

• More developed policy infrastructure

• Thinking beyond traditional (e.g., regional exchange)

• Highly developed policy and regulatory model

• Tradition of leadership and oversight

• Use to promote policy goals

• May receive waiver to create a simpler vision

• Primarily aggregates information

• Limited services to plans and members

• Some market management

• Commercial, off-the-shelf and low-risk solutions

• Remains flexible due to political shifts

• Active purchaser of insurance

• Standardized products • Robust functionality • Substantial support for

education and outreach

Sta

te

En

vir

on

me

nt

Exc

ha

ng

e

Ch

ara

cte

rist

ics

Utah? Maryland? California &

Massachusetts

Exchange Development Maturity Model

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Every Exchange will Go Through Some Version of Four Primary Phases

• Pass legislation • Assess capabilities

and market • Create road map

to 2014

• Select vendors • Design

architecture • Create standards • Develop risk

adjustment

• Obtain federal readiness

• Certify plans and products

• Engage consumers

• Market Exchange • Serve members • Monitor/regulate

performance

Phase 1: Plan & Engage (2011)

Phase 2: Design & Build

(2011-2013)

Phase 3: Test, Certify & Launch

(2012 – 2014)

Phase 4: Operate & Sustain

(2013 – 2014+)

• Provide input • Assess impact to

membership • Assess market/

characteristics of newly insured

• Provide input to design and architecture

• Create internal process/system change roadmap

• Make participation decisions

• Begin marketing • Prepare for

operations

• Enroll and serve members

• Receive and reconcile payment

Cri

tical A

cti

vit

ies

for

Exc

han

ge

C

riti

cal A

cti

vit

ies

for

Pla

ns

Impacts on Community-Affiliated Plans and Lessons Learned

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Payers Should Explore Opportunities and Challenges that Range from the Operational to the Strategic

People

• Understanding each other’s worlds

• Managing stakeholders

• New members that may be significantly different from current customers

Process

• Administrative simplification

• Plan certification

• Member enrollment

Technology

• New integration partners (e.g., federal government)

• New integration points

• New shopping portals

Strategy

• Rethink channel & distribution strategy

• Product portfolio

• Re-balance risk portfolio

• Re-define business model

This is a significant opportunity to collaborate and join with states eager to test new strategies and reduce risk — take control now, or take the chance of losing it for good

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New Opportunities Are Created By Exchanges

Growing Existing Markets

• Individual members: – Newly insured

(subsidized and unsubsidized)

– Shift from employer-sponsored to individual

– Medicaid growth – Volume – States shifting to

managed care

• Small business: – Add coverage to

capture tax subsidies – Identify newly defined

contribution opportunities

Entering New Markets

• New lines of business: – Extend product

portfolio up or down the market

• New Populations: – Different member

types (family, invincibles)

• New geographic markets – Within the same state – New states

Engaging New Channels

• Self-service via the Exchange – Individuals shopping

for coverage – Small businesses

offering coverage, often for the first time

• Navigators helping individuals and small businesses shop

• Brokers via the Exchange

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Exchanges May Provide Opportunities to Reduce Costs

Enable and encourage self-service through Exchange web portal

Move more members to standard HIPAA transactions

Advocate for default enrollment within your products instead of churn when

changes in members’ life circumstances drive eligibility category shifts

Create products to ease transition across membership / subsidy categories

Align internal processes to support new members and shifts in eligibility

• Brokers • Employers • Individuals

• Support Exchange’s effort to seamlessly enroll members

• Lower cost of member acquisition • No “disenrollment” costs • Continue to recoup investment in medical

management

• Similar benefits • Similar networks

• Opt-out for electronic communications (e.g., paperless EOBs)

• Membership card updates • Eligibility inquiries from providers

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Significant Investment May Be Required to Operate in the HIX Environment Each plan should carefully assess its own corporate structure inclusive of operational, financial, and regulatory environment prior to committing to an Exchange.

Product Development

• Actuarial Support

• Regulatory submissions

• New product set-up (EOC, Contracts, etc.)

Marketing & Sales

• New channel set up

• New market segment communications

• Market outreach to uninsured

• Existing customer education

Operations

• New member set up

• Sending / Receiving HIPAA Transactions

• Benefit / Claims Payment Set –Up

Med Mgmt / Care Delivery

• Capacity management

• ER Triage development

• Medical home integration

Finance / Contracting

• Receiving / reconciling individual payments

• Revised / expanded provider contracting

• Reinsurance

Quality / Reporting

• HEDIS

• CAHPS

• NCQA (if required for participation)

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To be Successful, Plan Leaders Must Engage a Variety of Stakeholders

Health Insurance Exchange

State Government

Federal Government

Internal Stakeholders

Local Stakeholders

Exchange Vendor(s)

Brokers Members

Providers Employers

Plan Internal Stakeholders:

• Marketing & Sales

• Community Relations

• Product Development / Actuarial

• Operations

• IT

• Compliance / Legal

• Finance

• Medical Management

• Clinical Delivery (if appropriate)

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Churn Movement of members between eligibility categories/subsidy levels

Customer Service Continuity between call centers

Outreach Educating newly insured on how to use insurance

Risk Adjustment & Product Design Sustainable approved products

Biggest Challenges Identified at the Connector

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Lessons Learned from Massachusetts

• Plans tend to have lots of iterations – need to work from defined benefits while at the same time trying to innovate

• Don’t expect the Exchange to build around you

• Need to meet them halfway, and sometimes further

• Likely to be mostly healthy, but do not know how to use insurance

• Education and outreach, in partnership, will be critical

Overly Complex Plan Design

Unwillingness to Change

Siloed Customer Service Models

Misunderstanding the Newly Insured

• Understand what the Exchange governance model is trying to achieve

• Understand the challenges Exchange leadership/staff face

Undervaluing the Relationship

• There will be multiple challenges under the new model: they need to be solved together

• Leverage both call centers and web portals

What Plans Should Be Doing Now

Engage

Educate

Evaluate

Prepare

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What’s Happening Now—and Looking toward the Future

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What to Expect Over the Next Six Months

Continued uncertainty

Unpredictable implementation

progress at federal and state

level

State-specific agendas and

hybrid solutions are emerging

Heightened levels of

engagements and scrutiny

Helping small businesses and

job growth

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Planning for the “What Ifs” Helps Reduce Risk What if all or part of the Patient Protection and Affordable Care Act (PPACA) is blocked sometime between now and 2014?

Ways the law could be significantly “impeded”

• Defunded by GOP Congress

• Partially repealed or key provisions declared unconstitutional

• Fully repealed or entire law declared unconstitutional

What still exists if the law is impeded?

• Rising healthcare costs • Significant uninsured/

underinsured population • Stagnant quality • Badly fragmented

subsidized care/insurance • Powerful hospital/ACO

groups going directly to employers

• Strong political support for Exchanges on both sides at a national and local level

Ways an Exchange can still help

• States: – Provide an easy way to

apply subsidies – Encourage innovation by

carriers – Provide a counterweight to

consolidating hospital groups/ACOs

• Plans: – Capture a potentially very

attractive risk pool – Attract employers with

defined contribution health plans

– Grow share to increase leverage with providers

– Manage churn with appropriate “gap” products

How We Can Help?

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Dell Services Bringing Innovation to a Changing Health Payer Market

• Administrative application and outsourcing services

• More than 40 million members supported

• Business process services

• Implement open source technology solutions to increase efficiencies

• Aid disease management

• Help commercial and BCBS customers transition to a consumer-centric model

• Facilitate web-based transactions among all constituents to strengthen relationships

We support more than 100 insurers - and the only operating individual Exchange in the industry - with standard and custom solutions.

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Next Steps • Contact the Dell Services Payer Team with questions:

– Andrew_Arends@dell.com or

– LuAnn_Gohn@dell.com

– Industry thought leadership: › Conference speakers (www.dell.com/speakers-bureau)

› Future webinars

– Insight

– Strategy

– Execution

• Attend the National ACAP meeting – The Fall Health Insurance Exchange Meeting, October 12-13,

Houston, TX

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Key Takeaways

This is potentially the biggest change in healthcare since 1965

There are both opportunities and risks for health plans in this change

The impacts of change will be felt across the health plan

Key implementation decisions will have to be made before political uncertainty is resolved

Plans can participate in this change or have it thrust upon them

Thank You LeAnn Donovan (303) 602-2001 LeAnn.Donovan@dhha.org

Karl Haught, Jr. (303) 602-2004 Karl.HaughtJr@dhha.org

Andy Arends (630) 708-2521 Andrew_Arends@dell.com

Download this presentation at www.slideshare.net/dellservices