Government-sponsored health insurance exchanges and the resulting consumer-oriented marketplace may transform the individual and small-group market.
Many states have begun to develop the health insurance exchanges mandated by the Patient Protection and Affordable Care Act (PPACA).
In doing so, they have been guided by the detailed regulations developed by the Department of Health and Human Services (HHS). Beginning with an open enrollment period in October 2013 — and with an implementation date set for January 1, 2014 — government-sponsored health insurance exchanges will introduce a new way of comparing and purchasing health insurance coverage for individuals and small businesses.
The intent of these exchanges is to expand coverage and increase affordability.
States have the option to operate separate individual and small-group exchanges for employers or combine into one exchange. States also have the option to set the size of the small-group market to 50 or fewer employees or 100 or fewer employees.
By 2016, the size of the small-group market must be set up to 100 employees. Beginning in 2017, states may allow exchanges to offer options to employers with larger groups of employees.
With the potential to introduce millions of new customers in the years to come, payers need to consider the capabilities required to qualify for participation and compete effectively.
Our series, 5: insights for executives, explores the questions: