November 9, 2015 | Rosemarie Day

Flat Exchange Growth May Cause Plans, SBEs to Evaluate Strategies

Carrier Mix is Changing:
“While some carriers will exit markets, others might move in. And some carriers might opt to sell coverage in only certain markets rather than statewide,” says Rosemarie Day, president of Day Health Strategies and former chief operating officer of the Massachusetts exchange. “The mix of carriers is changing….While we’re losing some [Community Operated and Oriented Plans], we are gaining some other categories of carriers in the exchanges, including Medicaid, provider-based, and national carriers,” she tells HEX. “Carriers now have more data with which to make pricing decisions,” says Day. “They have more tools to use to stay in the marketplace. As a result, we’re seeing an overall increase in premiums being charged this year for refiled plans, but we’re still seeing some new, low-cost options if consumers are willing to shop and switch health plans.”

SBEs May Need to Boost Fees:
Day says she expects the remaining state-based exchanges (SBEs) will “make every effort” to be self-sustaining, through some combination of reducing their expenses and increasing fees. HHS charges a 3.5% user fee for health plans sold by federally facilitated exchanges (FFEs) through Many states have lower fees. To reduce costs, she suggests that SBEs might look for ways to share costs with the Medicaid program, because many of their operations serve both exchange and Medicaid populations. “As for moving some processes to the FFM, I think we won’t see much more of that. It is not cheap – there are many transition costs. And, the remaining state-based exchanges have made a significant investment in their IT infrastructure,” she says. Several SBEs that were struggling financially (e.g., Nevada, Oregon and Hawaii) have already cut their losses. “Most of the rest have made enough progress that I think they will stick it out and get the technology to work,” says Day.

Read more at Inside Health Insurance Exchanges: hex1115b