1
Commonwealth Choice the Health Connector
ExchangeDesign Issues Lessons
LearnedKevin CounihanChief Marketing
OfficerMA Conference on National Reformand
State ExchangesJanuary 21, 2010
2
Agenda

1. Overview
2. Enrollment in Health Connector Exchange
3. Preliminary Design Issues for Exchanges
4. Lessons Learned

3
Commonwealth Choice Roles of Health Connector
4
Commonwealth ChoiceRole of Health Connector

• Complex Roles
• Regulator
• Minimum Credible Coverage (MCC)
• Affordability Schedule
• Section 125 Regulations
• Procurement
• Health Plans
• Seal of Approval Benefit Plan Designs
• Subconnector administration
• Distributor
• On-line Distribution and Enrollment
• Broker support

5
Commonwealth Choice Role of Health Connector

• Establish and administer Commonwealth Choice, a
  commercial insurance exchange
• Evaluate and recommend health plan offerings
• Standardized benefit plans provide Seal of
  Approval
• Provide more affordable coverage options (small
  group/non-group market merger)
• Facilitate access to unsubsidized access to
  coverage for
• Individuals earning above 300 of FPL
• Part-time employees
• Young adults (age 18 26)
• Small groups (1 50 ees)

6
Commonwealth Choice Role of Health Connector
(cont.)

• Make Policy Decisions as Authorized by Health
  Reform law
• Educate individuals, employers, brokers/
  consultants about law and Connector products
• Digital Marketing
• Search Engine Marketing
• Pay-per-Click
• Social Networks

7
Commonwealth Choice Exchange and Target Markets
Small Employers
Non-Group
Subsidized Uninsured
Other?
8
Commonwealth Choice Unsubsidized Marketplace
for Non- Small-group
9
Enrollment Process
Vince

• Age 37
• Lives in Shrewsbury
• Uninsured
• Wants Non-Group, Single Coverage

• Wants Good Value in Insurance Purchase
• Sensitive to Monthly Costs
• Wants MD Choice
• Wants Easy Access to Information

10
Decision Support Tools
Vince
Health Plan Choices

• What benefits do I want?
• How much do I want to spend?
• Location of MDs/hospitals

• Plan A
• Plan B
• Plan C
• Plan D

Sub-Connector
Online Vince
Health Plan A

• Selects Health Plan A
• Completes Online Enrollment
• Picks a PCP
• Pays 1st Month Premium

• Collects Premium
• Sends Vinces Enrollment Information to Health
  Plan A

• Processes Vinces Enrollment
• Issues Vince ID Card to EOC
• Prepared to Pay Claims

11
Starting List of Design Issues

• 1. Carrier Bidding Selection
• - Managed Competition
• - Transparency
• - Long-term Relationships

12
Starting List of Design Issues

• 2. Benefits Specification
• - Market Research
• - Encourage Innovation
• - Standardize for Easy Comparison
• - Manage Change

13
Starting List of Design Issues

• Remember Customer Needs
• - Comprehensive coverage
• - Understandable benefits (I bought what?)
• - Affordable cost
• - Reduce insurance jargon, (where possible)

14
Starting List of Design Issues

• 4. Administrative Functions
• - Outreach Marketing
• - Eligibility Determination
• - Enrollment Premium Billing
• - Customer Service
• - Appeals

15
Likely Functions of Exchanges

• 1. Offer Coverage for Target Market Segments
  (non-group, small group, other?)
• 2. Specify Plan Designs Coverage Tiers for
  unsubsidized coverage
• 3. Contract with Sell Health Plans
• 4. Education, Outreach Marketing
• 5. Oversee/Ensure Risk Adjustment
• 6. Ensure Compliance with Benefit Offering Rules
  and Requirements
• - Benefits determined by Feds (MCC?)
• - States must reimburse Feds for extra costs
  due to mandates beyond MCC

16
Potential Value of Exchanges

• Protecting/representing enrollees
• Prudent purchasing of health insurance
• Choice managed competition
• Scale economies in distribution

17
Lessons Learned

• Hire Staff who Know Health Insurance Business
• Communication Never Ends
• Minimum Coverage / Affordability
• For Consumers, Keep it Simple ? Less More
• Nurture Stakeholder Relationships
• Leverage Public/Private Practices