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Take care along with coverage in the Health Insurance Exchanges

Affordable care is the goal for both enrollees and health plans participating in the exchanges. While exchanges will help health plans capture a larger market share, will they be able to reduce the overall healthcare costs?

Public exchanges bring in lots of tax benefits, premium subsidies, and models like defined contribution to provide low cost coverage to the uninsured population. However, with the provision to cover pre-existing conditions and increased competition, it will become more difficult for health plans to manage costs incurred to engage and service members.

Adverse selection, which increases the number of claims and associated costs, limits the ability of exchanges and participating health plans to contain the rising cost of care. Permanent Risk-Adjustments Mechanisms, introduced to address adverse selection, increase complexity and overheads for health plans and may not be very effective. Despite the costly and time consuming upgrades to core actuarial processes as advocated by the permanent risk adjustment mechanisms, health plans remain uncertain if the premiums setup will be sufficient to cover costs or not. This uncertainty increases premiums for specific plans. And, once the exchanges start supporting large employer groups, the cost control mechanisms would become more complex. Even if the risk adjustment mechanisms are made more effective to ensure stability of variable medical costs across uneven population, they will still remain a post-facto solution to curb costs. Is there a proactive solution then for cost containment?

Obama's reform vision of reduced costs and improved care requires a reformed care coordination process, harmonized with the health insurance exchanges. Providers, along with payers, need to take responsibility for cost containment. Care pricing models need to be reformed. Though exchanges have stringent plan certification process that focuses on provider cost and quality data, there is no mandate supporting the wellness programs and the value based care pricing models that are part of PCMH, ACO, and P4P programs. If preventive and proactive care initiatives such as these were associated with exchange plans then reform would encompass both cost and quality!

Provider payment reform and new reimbursement care delivery models need to be linked with exchange based plans. In addition, plan designs incorporating value based benefits can definitely incentivize patients to be compliant with the care process, enabling improved outcomes.

 Research suggests that one of the biggest lessons from Swiss insurance exchange is that care purchasing models are as important as network adequacy, cost, and quality data. The QHP approval process can take care of this. For high-risk populations attracted by the exchange, QHPs can be required to support wellness and care management programs (e.g., diet, life style and medication management) which would address the needs of the high risk population. At the same time, plan benefits can reward healthy behavior through seasonal initiatives or perks. Exchanges can encourage pricing negotiations between payers and providers and support innovative contracting models in QHPs.

ACOs and PCMH have already proven their models with millions of cost savings; why not apply them mandatorily in exchanges and make the exchanges efficient, sustainable, and capable of providing effective care along with coverage?


Nice thought... I agree that health plan need to embed care management services in the exchange plans. I believe that the full suite of services available for employer-based insurance may not be offered or affordable for individuals buying from exchanges. However, a basic scaled-down version of care management programs should be baked into the medical plans. This would definitely help contain cost and promote healthy lifestyle. Even if not mandated, I think every health plan will realize the importance and implement them.

Health Insurance Exchanges are best thing happened to humans. Really a systematic life can make life more easy.. we must enj benefits which are surrounding us in the form of these deals.

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