Health Plans Braced for Open Enrollment

As the second open enrollment period for health insurance exchanges kicks off, carriers face a range of challenges, from ongoing information technology woes, which may affect policy renewals, to potentially explosive growth.

For health plans, challenges in the second year of the public insurance exchanges feature something old and something new.

Last fall's nearly disastrous rollout of the federal government's exchange website, HealthCare.gov, has carriers casting a wary eye on the 2015 open enrollment period, which is slated to begin Nov. 15 and end Feb. 15.

Chris Johnston, associate VP of new business and consumer solutions at Detroit-based Health Alliance Plan, says that technology remains a top HIX concern on several fronts. The performance of the revamped HealthCare.gov website is a prime worry, he says: "How stable is it?"

Last fall, the Centers for Medicare & Medicaid Services scrambled to fix dozens of major flaws in the website. The agency brought in a new chief executive, Kevin Counihan and has been fine-tuning HealthCare.gov ever since.

On Friday, CMS released a mammoth amount of exchange data, including detailed information on insurance policy premiums. A preliminary analysis conducted by Washington, DC-based Avalere Health LLC found premium rates vary widely across the country but the average premium increase is modest compared to historical rate hikes in the individual market.

Avalere examined premiums for a key benchmark policy, the second-lowest priced silver plan, in the 34 states that use HealthCare.gov as their exchange portal. For those silver plans, the average premium increase for a 50-year-old nonsmoker is 3%.

CMS recently announced a "window-shopping tool" designed to help individuals review information about HIX insurance policies offered in their state before open enrollment begins. The tool enables consumers to compare plans, covered benefits, and physician and hospital networks.

Even if HealthCare.gov performs well for new enrollees, Johnston says CMS is facing a new technological challenge—policy renewals.

"We are on daily and weekly calls with CMS [along with] other plans across the country. They are new to this; we've been at this for years. They are learning. They're going to have to figure out how to renew people."

There are big issues for consumers who opted to authorize automatic renewals when they signed up last year, Johnston says. The problem is "they don't remember if they selected anything."

HAP is urging individuals who purchased 2014 health insurance policies to go back to HealthCare.gov and shop for new 2015 policies. Johnston says changes in income could affect subsidies available to individuals through the exchanges and there are new plans being offered in exchanges across the country, which "could be a better fit," Johnston says.

New York-based PricewaterhouseCoopers has been tracking 2015 HIX premium rates since the summer, featuring the consultancy's findings with an interactive map. Ceci Connolly, managing director at PwC's Health Research Institute, echoed Johnston's advice to consumers. "Simply auto-enrolling in your existing plan may not be the best choice in 2015. We are seeing wide variation in premiums, so it really pays to shop around," she said this week.

Enrollment is just one side of the HIX technology challenge, data is another. Health plans are still getting shaky information on beneficiaries from CMS, he says. "We need accurate information on who was enrolled in our plan. We're still having some problems."

Aetna is also highlighting "back-end" technology concerns.

"Certain functionality gaps still exist, adding to member confusion as they seek out other ways to make changes to their information. For example, members are using CMS Customer Service to request effective date changes that should be able to be processed through the website," the insurer said in an email exchange.

Consumer Education Efforts
This year, health plans are taking new approaches to educating consumers. "Last year, because it was the first year, we really didn't know what to expect," Johnston says, and HAP focused much of its consumer education efforts on Michigan's low-income population.

"This year, we're doing more with advertising," he says, citing newspaper, radio and television campaigns.

Minneapolis-based United Healthcare has launched its own online tools to help individuals navigate HIX enrollment, a company spokeswoman said this week. "Our tools, Health4Me and myHealthcare Cost Estimator, are available to help individuals navigate open enrollment and understand how to use their health insurance benefits to become and stay healthier, as well as how to save on their healthcare costs."

The industry's trade association, America's Health Insurance Plans, has circulated two infographics to help its members explain the enrollment process to consumers. One infographic is targeted at new enrollees and the other is designed to help individuals renew their HIX health coverage.

Reading the 2015 Tea Leaves
Growth appears to be the key word in the 2015 HIX market.

"This will be a growth year, so for the exchanges and the plans and healthcare providers, the challenge in 2015 is serving many millions more newly insured," PwC's Connolly says. "Health insurers and clinicians need to get a deeper understanding of this new customer base, their health status, and how they interact with the healthcare system."

Health plans are banking on HIX growth, she says. "What is perhaps most notable in the second year is the growth in participation by health plans. We count 77 new carriers competing in 2015. At least four states have double the number of offerings from last year. This suggests that the industry sees real opportunity in the exchanges and is pursuing these new customers."

UnitedHealth says it has doubled its participation in the public exchanges from about a dozen exchanges last year.

Private health insurance exchanges also are poised for growth, Johnston says, noting that HAP is participating in several private exchanges such as iSelect and Michigan's Insurance Marketplace.

"This has really opened up a whole new market as far as the [private] exchanges go," he says, which generally target the group market. "You can feel the momentum starting to ramp up," he says. "New ones are calling us every day."

Most private exchanges feature a "defined contribution" model in which an employer caps the amount of money it gives workers to spend on health insurance premiums. Then workers get a choice of policies with a range of premiums. "It's one way you can control the healthcare 'spend,'" Johnston explains.

Aetna says private exchanges appear destined to outpace the public exchanges. "Public exchanges can play a vital role in increasing access for individual consumers; however, the sustained success of HealthCare.gov depends on a fully functioning website that can support consumers through the enrollment process and for ongoing changes that occur during the plan year."

"When that happens, we believe public exchanges can complement the existing competitive marketplace, including private exchanges, which we believe, over time, will serve a much broader portion of the population."