For anyone curious about the logistics that will go into setting up the new health insurance exchanges that will become active in 2014, this Denver Post article is an excellent overview. The article notes that the 2011 legislature will have to pass a bill to set up basic guidelines for the exchange, and a governing structure to oversee the process. There will be monthly committee meetings to hash out the details, and once you start to ponder all of the questions that still remain unanswered, it’s clear why it might take a few years to get the exchange up and running.
It remains to be seen whether Colorado’s exchange will be bare-bones or robust, and how much regulation the state will enact in terms of what policies will be offered and what benefits will be mandated. My guess is that Colorado will opt for significant regulation and mandates, with a high priority on consumer protections. The state has taken several measures over the last few years to expand public health insurance and regulate the private health insurance market. Maternity coverage will be standard on individual health insurance policies as of Saturday, and the state also took action to ensure that premiums will be gender neutral as well. Colorado also opted to take an active role in running the new state high risk pool, GettingUSCovered, in addition to the existing high risk pool, CoverColorado. The Colorado Division of Insurance and lawmakers in the state have made health insurance and access to health care a priority for quite some time, and it makes sense that they will put a great deal of effort into the state’s health insurance exchange too.
There are a lot of unanswered questions about how the exchanges will work, and it will be interesting to see what Colorado comes up with. The next three years will no doubt be quite busy for the people who will be instrumental in setting up the exchange.
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Michael Kingsdale, former executive director of the Massachusetts Connector stated the obvious. The primary mission of an exchange is to sell insurance. If it doesn’t enroll enough people, it fails.
To succeed, the Colorado exchange will need to enroll massive numbers of people in a very short period of time. It will open its doors for business in 2014 and by 2015 must, under federal law, be self sustaining. The creators of the exchange (legislators, regulators and insurers) would be well served to embrace two concepts:
1. Engage smalll business in the exchange as quickly as possible. They can bring a rapid influx of non-subsidized participants to the party.
2. Employ the services of brokers to steer business to the exchange. Compensation to brokers is small price to pay for success.
Without these two measures, the exchange will be find it very hard to enroll suficient participation. (Checkout the problems PCIP is having). Additionally, any particpation the exchange may attract will be highly subsidized and adversely selected. The possibility of breaking even in one year without the help of samll business and brokers is remote at best.