In the throes of headlines that feed either supporters or critics of the Affordable Care Act, it is time to take a look at innovation in progress. Let’s take a look at the states that have established their own state-based exchanges (SBEs)[1] to deliver quality, affordable health care to millions and bolster the march toward a delivery system that produces better and higher value care to individuals and populations. Reports that compare enrollment and renewal numbers among the SBEs and the federally facilitated marketplace (FFM) obscure important contexts, including whether the states have previously expanded coverage, the prevalence of employer-sponsored coverage, and the state’s economic health. Though still very much in their adolescence and not without bumps, SBEs have demonstrated a number of successes that illustrate an ability to be agile and responsive to their state’s opportunities and challenges. Examples of innovation can be found in the ways that SBEs: 1) are able to coordinate on the ground with Medicaid; 2) connect with their customers and potential customers during open enrollment and in special enrollment periods; 3) influence their local health care markets; 4) develop and deploy innovative technologies to improve the shopping and business functions; and 5) plan for a sustainable steady state.
Coordination with Medicaid
Coordination between exchanges and Medicaid leverages opportunities afforded to both by health reform. Many states worked closely with Medicaid and built integrated eligibility systems, allowing individuals eligible for Medicaid to enroll through the state-based marketplace portals. States also used the marketplace call centers and consumer assistance programs to sign-up new Medicaid enrollees. Kentucky prioritized Medicaid-marketplace coordination from the start and used an integrated eligibility system, shared contact center, and their assister program enrolled individuals into both Medicaid and marketplace. The state enjoyed enormous enrollment success during the first open enrollment period, citing its integrated system as one reason for this success. Other states such as Colorado, Connecticut, and Washington took smaller, but still significant steps, like training marketplace contact center staff to assist Medicaid-eligible callers.
Consumer Support and Outreach
The SBEs are best positioned to connect with state residents and to develop tailored marketing campaigns and educational opportunities that meet the needs of local consumers. One example of innovation in customer outreach was the development of in-person enrollment centers in Kentucky, Rhode Island, Connecticut and Colorado. These states recognized that certain customers would benefit from a physical location where they could obtain help and have questions answered. Colorado had more than ten in-person locations operating during the final days of the second open enrollment period. At these centers customers could receive support from Certified Brokers and Health Coverage Guides (Certified Application Counselors) and sign-up for coverage on the spot.
Influencing Local Insurance Markets
State-based exchanges also have a unique capacity to affect their insurance markets for the good of consumers by employing certain policy levers. Ten SBEs used an active purchasing model, negotiating with plans on premiums and/or provider networks or selectively contracting with certain insurers to bring value to consumers. Other states and the FFM used a clearinghouse model, believing competition would bring down price. An early study on the exchanges’ first year showed that active purchasing did not lower premiums for consumers, but given that it takes issuers and markets time to respond and that this is only one study, it’ll be interesting to compare these approaches as they ripen. All SBEs faced many issues during start-up—including sharing concerns about the number of insurers and plans that would choose to participate—and may not have been as active in their purchasing efforts as they would have liked.
However, the same study found that SBEs using a clearinghouse model had lower premiums compared to the FFM and State Partnership Exchange (SPEs)[2], which used the same clearinghouse model. The authors speculate that this could be due to SBEs having greater engagement, political will and the infrastructure to engage in plan management activities, like monitoring premiums and network adequacy, compared to states that did not set up their own marketplaces. SBEs can also have greater local authority around enrollment activities, which could have also led to more competition for enrollees among plans.
Displaying quality data and information on consumer satisfaction on marketplace websites allows consumers to compare plans on these factors and help guide plan selection, and can ultimately help drive the quality of health care that’s delivered. All states must implement the federal quality rating system, and display quality and consumer satisfaction data for marketplace plans in 2016 (for 2017 open enrollment), but nine SBEs made quality or consumer satisfaction information available in 2014. SBEs also employed decision support tools helping to display the required quality data in consumer-friendly ways and are actively working on improvements. California is one example of a state that put quality data on their marketplace website in the first year. The early experiences of displaying quality data from these leading states, as well as consumer experience using these data to inform plan selection, may be very informative to implementing the federal rating system next year.
State-Based Exchange Technology Innovations
Web-based portals for health insurance enrollment, high-functioning technological platforms, and innovative IT solutions are vitally important to the success of the states in enrolling customers through their insurance marketplaces. Some SBEs have excelled in developing dynamic and responsive technology to enhance consumers’ enrollment experience. States have developed consumer assistance avatars, phone-based enrollment applications, plan finders, and cost calculators to improve the consumer experience and facilitate widespread enrollment. Kentucky’s SBE, kynect, has developed a mobile app for the individual market, is developing a mobile app for the SHOP market, has launched a customized portal for its broker and navigator community, and continues to enhance its website and IT platform. As states develop better websites that simplify consumer enrollment these enhancements can be leveraged by other SBEs and the federally-facilitated marketplace.
Planning for Sustainability
As of January 1, the SBEs no longer have access to additional federal support for the operations of their marketplaces and are required by law to be self-sustaining. For 2015, states are using a variety of funding mechanisms to support the SBEs, which range from assessments on plans offered on the exchanges (generally in the form of a per member per month fee), to assessments for plans both on and off exchange, to state support through budget appropriations. In planning for longer-term sustainability, SBEs are looking at creative ways to both raise revenue and reduce costs. In recent weeks a number of SBE leaders gathered to discuss avenues for reducing costs through shared services. NASHP will continue to explore both mechanisms for SBE sustainability in a future blog post.
Conclusion
State-based exchange states represent some of the nation’s leaders in health care innovation, and through their exchanges, they have the opportunity to influence the development of insurance products and help reduce cost. These states also serve as laboratories for innovation, as the work each does in health insurance literacy and consumer engagement can be shared across the country. As the exchanges move toward maturity, there will be continued improvement and spreading of best practices.
Sarabeth Zemel, Tamara Kramar, and Allison Wils contributed to this blog.
[1] Also known as state-based marketplaces (SBMs)
[2] A State Partnership Exchange is a hybrid model in which a state operates certain functions of the FFM. The SPE “enables states to assume primary responsibility for carrying out certain activities related to plan management, consumer assistance and outreach, or both.” (January 3, 2013 US DHHS Guidance at pg. 3)
