Friday, November 22, 2013

3 Reasons Health Insurance Exchanges Will Continue Floundering in 2014 (Part 1/3)

Last December I offered 3 reasons why I thought the deployment of health insurance exchanges (HIX) would flounder in October 2013. Now I’m going to share 3 more reasons why I believe health insurance exchanges will continue floundering into 2014 and likely beyond. Here’s reason #1:

Reason 1 –Enrollment Transaction Processing Generates Widespread Heartburn

By law, health insurance exchanges are the system of record for all enrollment transactions originated by a consumer to a qualified health plan (QHP.) The 834 Benefit Enrollment and Maintenance transaction is used by HIX’s to submit new enrollments, changes to enrollment and disenrollments to QHP’s. Unfortunately, there are not any clear operating rules defining how the 834 is to be used for the myriad of new enrollment, change enrollment and enrollment termination transactions that result from the life events a consumer will experience. Moreover, the 834 transaction was never widely adopted across the healthcare industry. Most QHP’s and 3rd parties use their own variation of the 834 transaction to process key enrollment events into their backend systems.

So far, 834’s have trickled out of the exchange and once the flood starts (assuming it ever does), the variability in how QHP’s have implemented their 834 handling will surface.

Note: Operating Rules for enrollment will not even be finalized until July of 2104 and not effective until January 2016.

Then Life Events Occur

After initial enrollment, all subsequent enrollment changes must be originated through the exchange, not the QHP. So when someone loses their job, gets a job, has a child, or has some other life event they need to go back to the HIX and make their required changes. And the 834 exchange process between the HIX and QHP starts over again.

Currently the business rules and edits associated with effecting these changes are largely performed by the QHP. Any incomplete or incorrect data must be caught by the QHP. Then the QHP has to work with the consumer and HIX to correct the issues. It’s not clear there are sufficient automated edits and controls in place to handle the wide range – but common – enrollment scenarios. 

So m belief is that these enrollment issues will create undue heartburn and lead to other issues as 2104 unfolds. I will describe these other issues in subsequent posts.

For more information on health insurance exchanges and other health IT topics, be sure to follow me on Twitter.

Friday, November 15, 2013

Early Enrollment – Why is it Supposed to be Slow?

Earlier this week, attorney and health care blogger David Harlow made a post titled “Health Exchange Enrollment: Speed of Light or . . . Molasses.” Harlow suggested that people need to “cool their jets” about the low numbers of ACA enrollees because “early enrollment is supposed to be slow” - apparently because that’s the way it was in Massachusetts back in 2006-2007.

So early enrollment in the ACA is supposed to be slow in 2013 because the experience in Massachusetts was ‘slow’ in 2006? Seriously? These two roll-outs hardly seem comparable:

1. The ACA has been touted all over the media for 3-4 years now.  One cannot watch TV, read anything anywhere, listen to the radio, browse the web and/or drive anywhere without being inundated with information about the benefits of enrolling in Obamacare. Moreover, the ACA was front and center through last years presidential election and a high-visibility Supreme court case.

2. Hundreds of millions of dollars in paid marketing/advertising has been spent on the ACA. An equal or larger amount of exposure has been provided via supportive main stream media.

3. Internet access and technologies supporting awareness and enrollment are way more ubiquitous now – nearly a decade later - than when MA was being implemented in 2006.

4. ACA subsidies benefit those up to 400% FPL – Massachusetts up to 300%.

So far, only the easy to deploy and no-cost/low-cost parts of Obamacare have been implemented: primarily kids on their parent’s plan, elimination of pre-ex on children and removal of lifetime limits. As Harlow states, current ACA enrollee counts are likely dominated by the long-uninsured and under-insured. Yes, it’s still early, human nature is to procrastinate and a turnaround might occur. Maybe. But given the above, the overall low number of enrollees these first 6 weeks, the remaining as yet widely un-publicized issues and the challenge getting the “young invincibles” to enroll, the belief that the Obamacare death spiral may have officially begun is probably not be the fantasy Harlow makes it out to be.

We’ll all know in the next couple months.