Exchanging An Industry

One year from now, it is estimated that 12 million Americans will be purchasing health insurance through a new marketplace known as a “health insurance exchange”.  A great deal has been written about exchanges since the passage of the Affordable Care Act but little is still known as to exactly how they will operate. 

Currently, states are deciding if and how they will participate in the development and operation of their own state’s health insurance exchange.  In the majority of states, these decisions are highly political as each party battles in defense of their belief system.  Politics aside, this decision is not a simple “yes” or “no”.  If states decide to participate they must define in which manner and to what extent.  States deciding not to participate in an exchange will be relinquishing all power and decision-making to the Federal Government.  

The Department of Health and Human Services (HHS) granted their second extension last Thursday in the hopes more states will join the 16 already committed to participate.  It is not a secret that the Federal Government was hoping for greater state participation. 

Meanwhile, the Affordable Care Act requires enrollment into the exchanges to begin in 11 months.  The clock is ticking and the majority of states have yet to signal whether they will participate or not.  Once the decisions are made, the (most likely online) infrastructure that drives the exchanges will need to be built to interface with thousands of providers, millions of consumers, up to 10 different carriers and various pharmaceutical companies.  Each state (or HHS on behalf of each state) must also develop a website, call centers and consumer outreach to enable widespread participation.  The most complex and lengthy development phase will be a data linkage to federal databases to identify who is eligible for enrollment and subsidies. 

The amount of work ahead is overwhelming and the timetable to implement grows shorter each day.  I wonder what the Vegas odds are on full exchange compliance by January 1, 2014?  The reality is that we should be prepared for additional roll-out delays.  In a world addicted to the efficiency of drive-thrus, I hope we opt for more thoughtful and thorough solutions as we transform 17% of the country’s GDP.