Tag Archive for Exchanges

Will States Sell Ads Like Nevada to Break Even on Health Exchanges?

By law, the online health insurance marketplaces created under the Affordable Care Act (ACA) must be financially self-sustaining by 2015. Most states are planning to pay for their operation by charging a user fee to insurers that sell their plans on the marketplaces, also known as exchanges. But those costs will likely be passed onto the customer, making health coverage under the ACA a little less affordable.


That gave one state, Nevada, an idea: sell advertising space on the exchange’s website to generate some extra revenue.


The state doesn’t yet know exactly how much money banner or pop-up ads could yield for the exchange, but every advertising dollar means a lower price for the people purchasing coverage. Officials are in the process of drafting a request for proposals and hope to have ads on the exchange site by the middle of 2014. Nevada’s marketplace — like others across the country — launches Oct. 1, 2013.


“If we broaden our revenue base, we will have a viably funded exchange. We want to be sure that we don’t just burden the insurance buyer,” says C.J. Bawden, a spokesperson for Nevada’s marketplace, the Silver State Health Insurance Exchange. “The more we can broaden our base, the more we can hopefully lower those charges and lower the price of insurance.”


For now, Nevada is the only state with definite plans to sell ads on its website. Governing surveyed 16 of the 17 state-based exchanges (Idaho was excluded because of its late start) and only three—Colorado, Hawaii and Vermont—said they were considering selling ads in the future.


As for the federal exchange that will sell insurance plans for the 30-plus states that decided not to set up their own marketplace, officials at the U.S. Department of Health and Human Services (HHS) say it won’t sell ads as a revenue source — but there’s nothing stopping the state-based exchanges from doing so.


So why aren’t more of them following Nevada’s footsteps?


Most likely because of the administrative and publicity headaches that might come with selling ads on a political lightning rod like the ACA’s exchange, says Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation.


“States will want to be really careful about the ads that they allow on the exchanges. I suspect that’s why many states have chosen not to allow ads to be sold,” she says. “But as long as the state is really careful, it could be a good vehicle for revenue.”


That’s an issue already weighing on the minds of Nevada officials. Bawden gives the admittedly outlandish example of one of the state’s legal brothels trying to purchase ad space on the exchange.


“Obviously, that’s something we don’t think taxpayers would appreciate,” he says. “It’s easy to imagine the accompanying headlines.”


To avoid such a scandal, Nevada’s exchange is hoping to attract advertising partners who would further its mission of extending health coverage to uninsured Americans. Dental and vision insurance plans, which could supplement the more traditional medical coverage that will be sold on the marketplace, could be obvious targets. The details will be ironed out after the request for proposals is finalized and responses are received.


The relative smoothness (or bumpiness) of Nevada’s experience could inform other states’ decisions, Tolbert says, but there’s another to-be-determined factor: how much it actually costs to operate an exchange. Right now, with the federal government footing the bill, it’s mostly guesswork, but estimates of exchange operating costs range from $25 million to $60 million or more, according to the Kaiser Family Foundation.


If the exchanges end up being more expensive than states expected or if fewer people enroll in the exchanges than anticipated, that could cause officials to return to the idea of advertisements as a revenue stream.


“If it comes down to a choice between significantly increasing the assessments and looking toward other ways to generate revenue, states could be open to trying something new,” Tolbert says.


The Year Ahead in Health Reform: Dylan Scott’s educated guesses about what to expect from the Affordable Care Act in its first year of full implementation.

Exchange enrollment will be (a little) lower than expected. The almost exclusive focus on outreach in the six months or so leading to the exchange openings on Oct. 1 should tell you that even supporters of the law are worried about whether they can get enough people to sign up for coverage. When four in 10 Americans say they don’t know the ACA is still law — and those proportions rise among the low-income people the law is intended to benefit — I think the White House might struggle to reach its goal of 7 million enrollees in the first year. At least five more states will expand Medicaid by 2015. I’m looking to historical precedents on this one. ACA supporters will often point out that nearly half the states didn’t join Medicaid when the program was created in 1965, but almost all of them had within the next few years. I think the prospect of losing another year of 100 percent federal funding for expansion will be too much for at least a handful of states to pass up. The 2014 midterm election complicates this a bit, but there are enough states that were close to expanding this year — Florida, Ohio and Tennessee, to name a few — that it’s easy to see them finishing the job next year. Obamacare will become a little more popular once it’s fully implemented. I’m not expecting conservatives to have a sudden change of heart and embrace the law, but the ACA’s approval and disapproval ratings have hovered in the low 40’s since it was passed, which means that close to 20 percent of people are undecided. That’s a lot of people who could be won over, and 2014 finally brings the most visible parts of the law: the exchanges and the Medicaid expansion. People will actually know other people who are getting health coverage because of Obamacare. I think that starts to turn the tide in the law’s favor.

Demystifying Health Insurance Exchanges

Obamacare’s new health insurance exchanges are scheduled to open for business Oct. 1. But a recent survey shows that nearly 80 percent of those who stand to benefit have no idea what an exchange is or how to get the health insurance subsidies they will offer.


That’s where the private nonprofit Enroll America comes in. The group, which has strong ties to the Obama administration, has been using more than 100 staff and about 3,000 volunteers to go door-to-door and to stage community events this summer to inform people about the opportunities for health care coverage on the exchanges.


Its president, Anne Filipic, announced Monday that the group would focus most of its effort on 10 states with the largest number of uninsured and the lowest level of state-funded outreach: Arizona, Florida, Georgia, Illinois, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania and Texas. All but Illinois have Republican governors.


California was left off of the list even though it has the most uninsured residents and among the highest percentage of uninsured population in the country at 20 percent. But with more than $600 million expected in state and nonprofit funding to support outreach efforts locally, Filipic said her group chose to support California’s efforts rather than launch its own.


“Our focus,” she said, “is on states that do not have a robust infusion of resources.” In the remaining 40 states, the group’s regional directors will be working without staff to support state-led and other local efforts.


When the exchanges open, anyone who does not already have employer-sponsored insurance will be able to comparison shop for coverage and find out whether they qualify for federal subsidies to help pay for their policies. Visitors to federally funded websites and call centers will also find out whether they qualify for Medicaid or the Children’s Health Insurance Program, and they’ll be able to sign up for that coverage immediately. Policies purchased on the exchange will take effect Jan. 1, 2014.


Enroll America stressed that it is not helping people sign up for insurance but informing them of their options. In the 10 target states, Filipic said the goal is to recruit and train volunteers and work with existing organizations, such as schools, churches, community health centers and other groups to build an infrastructure that will spread the word on Obamacare starting now.


The Obama administration is scheduled to announce Thursday how it will dole out $54 million in federal money to hire so-called “navigators” who will help people actually sign up.


This article was originally published by Stateline. Stateline is a nonpartisan, nonprofit news service of the Pew Charitable Trusts that provides daily reporting and analysis on trends in state policy.

Some State Health Exchanges Won’t be Finished by Deadline

Obamacare’s health insurance marketplaces go live on Oct. 1, but some of them won’t quite be finished by then.

People should be able to start shopping for health insurance on Oct. 1, the date set for the online marketplaces (also known as exchanges) to open in the Affordable Care Act. But once they find a plan they like, they might have to wait a few more weeks before making any payments. That’s because several state-based marketplaces say they’ll be busy finalizing the payment functions of the exchange after the website launches.

It shouldn’t be a problem — plans sold on the exchanges start on Jan. 1, 2014, so insurers just need to receive payments by then to begin covering people — but it’s yet another reminder that exchange implementation is happening on an incredibly tight timeline with little room for error.

Officials in Oregon and Washington say they expect to still be finalizing their exchange’s payment functions after Oct. 1. Sue Doby, a senior consultant at Oracle, which is building Oregon’s health exchange, says several exchange features might not be ready until Jan. 1, and the payment process is probably the most important.

“A lot of testing still needs to be done,” she says. “We have to prioritize what pieces of product and code can be deferred.”

Likewise, at Washington state’s health exchange, officials said in an email that they expect to have their payment functions ready during December, which is when the first round of premiums would be due for coverage starting on Jan. 1, 2014.

At least six other states are expected to facilitate premium payments through the exchange, according to StateReforum, which tracks exchange implementation. All of the 30-plus federally run exchanges will have insurers bill their new customers directly. That is one less thing for the U.S. Department of Health and Human Services to worry about, after a recent Government Accountability Office report questioned the Obama administration’s readiness to open the exchanges on time.

But even in states like Rhode Island that plan to have their exchange’s payment features ready for the Oct. 1 launch, there is an acknowledgement that it could be delayed, and officials say the state has done some contingency planning in case that becomes necessary. For example, when the consumer purchases a health plan, they could receive a message notifying them that their coverage will be contingent on the insurer receiving payment and a bill will be sent at a later date.

“Our intent here in Rhode Island is to have the functionality for Oct. 1,” says Brian Keane, who is overseeing the exchange’s technical implementation for Deloitte Consulting. “But we do have a contingency plan, and we may go to one of those other options.”

A state’s inability to process payments on Oct. 1 might delay HHS’s decision to officially approve the exchange, but that doesn’t mean they won’t be allowed to open. All 18 state-based exchanges are currently conditionally approved and must receive final approval from HHS, but can be launched with only conditional approval, according to HHS.

“The secretary can allow states to operate their exchanges under conditional approval while they finalize components of their exchange,” an HHS aide said in an email.

This story was originally published by GOVERNING.com.

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Can Sports Teams Help Inform the Public About Health Exchanges?

It’s a Wednesday night in Boston, and Amy O’Leary is out at Fenway enjoying a Red Sox game and hoping for another year like 2007. That’s when the team won the World Series, sweeping the Colorado Rockies in four games.

It’s also the year that Massachusetts started requiring nearly all residents to have health insurance — and the Red Sox helped to get the word out about it. They let the state set up booths at games to explain the new law to fans, and the Massachusetts Health Connector ran ads on Red Sox broadcast networks.

O’Leary remembers it well. “I think it made sense. People feel like they know the players,” she says. “I think that sports teams in general can be messengers of good information to a wide variety of people.”

Now that other states are opening health insurance marketplaces, they’re trying the same strategy. Myung Kim is outreach director for Colorado’s new health insurance marketplace, Connect for Health Colorado.

“People who care about being healthy, our young adult population, are big watchers of the sports shows, and we know are going to be an important population for us to reach,” Kim says.

Colorado is targeting young people — many of whom are uninsured — to help balance the insurance pool under the Affordable Care Act. Young people generally use fewer health services so their premiums will help the insurance companies cover the medical needs of older, sicker beneficiaries.

So the state is running television ads during Rockies baseball games that show people buying a health policy and then celebrating as if they’d just won sporting event. The voiceover in the ads says, “Connect for Health Colorado, because when health insurance companies compete, there’s only one winner: You.”

But while Colorado follows Massachusetts’ lead on advertising its new insurance marketplace, it is one of only 15 states independently setting up its own exchange. The federal government is fully or partially at the helm of the insurance exchanges in all the other states.

Mandy Cohen, with the federal Department of Health and Human Services, says it can be tough to reach young people who may not currently value having health insurance.

“We also know that they’re most heavily marketed to, so it’s really hard to break through to this group,” Cohen says. “We know we had to put an extra emphasis on the 18-to-35 year old cohort.”

But when the White House reached out to pro baseball, NASCAR and other sports organizations to discuss marketing partnerships, some Republicans called a foul. Senate Minority Leader Mitch McConnell sent the leagues a letter saying they, “risk damaging (their) inclusive and apolitical brand(s)” by promoting the federal health care law.

That didn’t happen in Boston, says Red Sox Vice President Charles Steinberg.

“We didn’t have negative feedback,” says Steinberg. “In American democracy we debate issues and we come to resolution and we pass laws. And those laws are designed to benefit the people. So when you can be a communicator of the laws of the land, you believe that you’re helping people.”

Still, the White House as of now has cancelled at least some of its meetings with sports leagues about potential partnerships.

In Colorado, the ads running during Rockies TV broadcasts haven’t stirred up any controversy. But they might not be home runs either.

The same night O’Leary was in Boston, Joan Ringel was at the Rockies game. She’s seen the ads on TV and says it’s kind of hard to even tell what they are selling.

“You wouldn’t know that that is Colorado’s exchange for the Affordable [Care] Act,” Ringel says. “I didn’t think they explained clearly that people need to pay attention to the exchange when it’s time to sign up.”

Open enrollment for Obamacare insurance starts in October — World Series time. The White House is hoping sports fans will also think of it as a chance to benefit from the Affordable Care Act.

This story was originally published by Kaiser Health News.

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States to Offer Additional Subsidies on Health Exchanges

At least three states plan to offer additional subsidies next year for health coverage purchased on Obamacare’s health insurance marketplaces, on top of the federal tax subsidies offered as part of the health reform law.

Officials in Massachusetts, New York and Vermont are considering various state-funded subsidy packages, although they differ in their scope and generosity. It is yet another reminder that, while much of the debate over the Affordable Care Act (ACA) centers on states that are refusing to implement the law, some are going beyond what Congress prescribed back in 2010.

New York and Vermont have one thing in common: They both currently offer Medicaid coverage to people above 138 percent of the federal poverty level, the new Medicaid eligibility threshold under the ACA in states that decide to expand the program. So those people above that line who currently receive Medicaid will instead purchase health coverage through the marketplaces, also known as exchanges, starting next year. The additional state subsidies are intended to make sure that being insured isn’t more expensive for that population when they move to the exchange, state officials say.

Massachusetts is slightly different, though the principle is the same: That state’s 2006 health reform law, which served as a model for Obamacare, included more generous subsidies than the federal law. So the state-funded subsidies on the exchange will help offset any difference in cost once the federal subsidies kick in next year.

“The concern for some states is that the subsidies in the exchanges… just aren’t good enough to enable folks to enroll,” says Jennifer Tolbert, who tracks exchange implementation for the Kaiser Family Foundation. “These states are looking at ways to improve the affordability of that coverage so more people will enroll.”

Vermont is planning to provide state-based subsidies to people with incomes between 138 percent and 350 percent of the federal poverty level (the federal subsidies go to 400 percent of the poverty level, roughly $46,000 for an individual) because those people currently qualify for Medicaid. The subsidies would offset the cost of premiums by another 1.5 percent on top of the federal subsidies. About 40,500 Vermonters are expected to receive the additional assistance, at a cost of $2.9 million to the state in 2014.

The state would also pay insurers to reduce both the deductible and out-of-pocket maximums of exchange coverage for those people. For example: someone making between 200 and 250 percent of the poverty level currently has a deductible of $500 for Medicaid, but that would increase to $1,900 for a private plan under the ACA. The state would therefore pay the difference for someone to purchase a plan with a $700 deductible. For someone making between 300 and 350 percent of the poverty line, the state would pay to lower their deductible from $1,900 to $1,500.

“In our state, Medicaid expansion really means Medicaid contraction,” says Mark Larson, commissioner of the department of Vermont Health Access. “When we thought about transition to 2014, we had a question of how do we maintain an affordability standard that we’ve already achieved in Vermont. What we attempted to do was maintain as close to the standard that we already had.”

The proposal in New York would function similarly to Vermont’s plan for premiums, though it would apply to a narrower income bracket. New York currently covers working parents with incomes up to 150 percent of the poverty level under Medicaid, so the state subsidies would apply to people between 138 percent of the poverty level and 150 percent.

Massachusetts extended Medicaid coverage (administered through private managed care plans) to individuals and families making up to 300 percent of the poverty level under its 2006 law; about 200,000 people were insured as a result. The 2006 law’s subsidies for that coverage were more generous than what the ACA will provide next year, however, so the state plans to offer state-funded subsidies to keep the cost of coverage the same for people up to the 300 percent threshold. As in Vermont, the size of the additional subsidies will be based on a sliding scale. State officials expect 150,000 people to qualify for the state subsidies, which are estimated to cost $120 million.

“We had a lot of success in our state with our first reform, and we expect that this will maintain the coverage gains that we’ve gotten to date,” says Candace Reddy, Massachusetts’s assistant secretary for health care finance.

Similar proposals were weighed to some degree in Connecticut and Maryland before being discarded. Connecticut Gov. Dannel Malloy proposed sending parents currently enrolled in Medicaid with incomes between 138 and 185 percent of the poverty line to the exchange and then providing premium assistance for their new coverage. But the legislature rejected Malloy’s plan, opting instead to keep those people on Medicaid.

The idea of additional state-funded subsidies was also floated briefly in Maryland, though nothing formal was ever introduced.

“I would say it would be a possible consideration for the future, but we’re locked into what we’re doing for year one,” says Joshua Sharfstein, Maryland Secretary of Health and Mental Hygiene.

The approach Massachusetts, New York and Vermont are taking makes some sense because concerns about the affordability of exchange coverage are very real, says Caroline Pearson, who tracks state ACA implementation for Avalere Health, an independent consulting firm.

According to a recent Avalere analysis, patients with incomes of 350 percent of the poverty level and below who reach the out-of-pocket maximum allowed under the ACA would be considered “underinsured” based on the percentage of their income that they could end up spending on medical costs, even with the available federal subsidies. For example: the study found that people making 300 percent of the poverty level could still spend up to 20 percent of their income on health care, while the underinsured threshold is 10 percent.

Therefore, the additional subsidies that these states are considering could help offset those costs and make it more affordable for people to enroll in the exchanges and purchase coverage, Pearson says.

“The subsidies still leave a bit to be desired. They still leave a lot of out-of-pocket costs,” she says. “It’s a pretty big deal for patients in these states if they get additional subsidies, but the question is: Can they sustain it?”

This story was originally published by GOVERNING.com. Photo courtesy of Shutterstock.

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