State exchange models confound insurers


Health insurers are in for a roller coaster ride as they prepare for the fragmented regulatory landscape of different rules for each state-run health insurance exchange.

There is much variability within just the first six states to receive approval to operate an online insurance marketplace. The states--Colorado, Connecticut, Maryland, Massachusetts, Oregon and Washington--are split down the middle on whether their exchange participation criteria will be open or strict, reported Bloomberg.

The Connecticut exchange, for example, is taking a strict approach, requiring that all participating insurers include at least 90 percent of the state's federally funded clinics in their networks. Insurers also must commit to selling plans in its marketplace for at least two years. Conversely, the Maryland exchange is open to any insurer that meets the minimum federal rules.

"The challenge is it's all new," Kim Holland, executive director for state affairs at the Blue Cross Blue Shield Association, told Bloomberg. "We have a really, really short period of time in order to get everything done."

BCBSA and other insurers are concerned that certain measures could establish "an unlevel playing field," she said, adding that "anything that would create market variation or lack of consistency would be problematic."

America's Health Insurance Plans advocates for an open exchange, claiming it "will maximize choice and competition for consumers and employers," Robert Zirkelbach told Bloomberg.

But the Massachusetts exchange, which has been operating since 2006, has added insurers despite its stricter structure that requires the companies offer certain benefits. "We work very closely with all of our insurers to structure rules that empower consumers but make it as easy as possible for insurers to work with us," said Glen Shor, executive director of Massachusetts Health Connector. "It is a delicate balance to strike."

The varying exchange approaches is one reason why UnitedHealth is still researching its exchange options. "Given the regulatory variation from state to state--and many states have not yet formalized their exchange models--we have not yet made any decisions about where we will be offering our health plans through the exchanges," UnitedHealth Spokesman Daryl Richard told Bloomberg.

To learn more:
- read the Bloomberg article

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