The enrollment period begins today for the health exchanges, or insurance marketplaces, that have been created in conjunction with the Affordable Care Act (ACA). The enrollment period for the exchanges will last through March 31st. All Americans are required to have health insurance coverage by January 1, 2014, but ACA officials have said that those who get coverage by April 1 will not face a penalty. Minnesota is one of 16 U.S. states that opted to create and operate a state-run exchange — called MNsure — as opposed to “defaulting” to a federal-run exchange.
The exchanges are confusing to many of us — businesses included — so I decided to sit down with a couple experts to try and get some answers about the exchanges in general and MNsure in particular. I spoke with Mick Hawton, Vice President of Operations here at Trig Life Services, and Al Hofstede, Vice President of Sales and Consulting at Corporate Health Systems (CHS). CHS is a benefits administration and consulting firm that has been in business for over 25 years. These are their responses.
General exchange questions
Q: What are the health exchanges?
The health exchange is a new marketplace through which small businesses and individuals can find and purchase health insurance plans.
Q: Who runs the exchanges?
That depends. In some states, it’s the federal government (Affordable Care Act). In states with their own exchanges, it is typically run by the state’s Department of Commerce. Some insurance carriers have also set up their own private exchanges separate from the state and federal exchanges.
Q: What will be the biggest change that individuals can expect with the start of these exchanges?
Rates and plans are expected to change. Rates may go up or down and the benefits offered within the plans may change. Also, individuals will see an expanded number of choices for plans, whereas small businesses may see fewer options.
Q: Who stands to benefit most from the exchanges?
The people who will benefit most from the exchanges are the uninsured and “uninsurable,” (unhealthy, in other words) who will gain access to a market to purchase health coverage without facing rejection for pre-existing conditions. In Minnesota, specifically, this will cause some changes to existing programs. For example, the MCHA (Minnesota Comprehensive Health Association) was a pool of uninsured Minnesotans that most people either didn’t know existed, didn’t know how to access or perceived to be unaffordable. MCHA is being phased out and replaced by MNsure. Minnesota General Assistance Medical Care is another public program that will be replaced by MNsure.
Q: Who is most likely to participate in the exchanges?
Small business owners who don’t offer coverage to their employees and individuals without health coverage.
Q: Who is the target market for the exchanges?
The young and healthy. If they enroll, they will help stabilize the premiums for coverage in the exchange by supporting the high claims from the unhealthy.
Q: What factors will cause the exchanges to be successful?
If the young and healthy sign up and pay premiums. This allows the insurance companies to have stable (though not necessarily low) rates.
Q: What factors will cause the exchanges to be unsuccessful?
The young and healthy DON’T sign up or the carrier rates were set too low at the beginning and don’t cover the cost of claims. If rates are set too low, insurance carriers may increase their rates too rapidly over time (making the exchange unaffordable) or even drop out of the exchange altogether.
Q: What do you think will happen if the exchanges don’t hit their expected numbers?
Potentially, “the sky falls,” to put it simply and dramatically. And if the sky falls, then the sky’s also the limit on cost shifting options that may come into play to keep the exchange viable and running. In other words, the funding to the exchanges could be shifted elsewhere. However, programs that were eliminated for the exchange (such as MCHA in Minnesota) can’t just be started back up, so there is a potential for a real loss to long-standing safety nets.
Q: A recent Gallup poll revealed that 2 out of 3 uninsured Americans plan to purchase insurance, but less than half of those plan to use the exchange to do so. Why do you think that is?
It shows a potential lack of trust in the exchange program and possibly the Affordable Care Act in general. However, there are some people who simply prefer to purchase their insurance directly from insurance companies still (and insurance companies prefer that, too).
Q: How integral are the exchanges to the overall success of the Affordable Care Act?
In the political sense, if the exchanges fail, it would be a big blow to the public view of the ACA and would give ammunition to those who would like to see the law repealed or changed drastically. In a more literal sense, the success of the exchanges is critical to the perceived overall success of the Affordable Care Act because part of the law’s success will be measured by how many people gain access to health coverage who were either uninsured or didn’t have access to it previously.
Q: How will the exchange impact employers (small businesses & large businesses)?
Small businesses (less than 50 full-time equivalents) have the option to purchase a group plan through the exchange (or directly from an insurance carrier) or dissolve their plan entirely; they are not required to provide coverage to employees and will not be charged penalties.
Large businesses, on the other hand, are required to provide coverage to employees working 30 or more hours per week. Right now, their only penalty-free option is to continue their current coverage. If they dissolve their plan, offer a plan that is considered “unaffordable” or offer a plan below the minimum value outlined in the Affordable Care Act, they will owe a penalty. Eventually, large businesses will also have the option to purchase plans through the exchange.
Q: How will MNsure and other exchanges impact employer-sponsored health coverage for employees?
Outside of the ACA imposing fees on employer-sponsored plans to support the law, employees may or may not see any changes to their benefits. There are significant opportunities for change at some point, but right now it depends on the size of the employer. Small businesses have the option to purchase health coverage through the exchange and may begin doing so. Large businesses don’t have this option and will likely continue their current coverage for the time-being.
Q: What are the conditions for a Qualified Health Plan (QHP) offered through the exchanges?
Qualified health plans have to include coverage for the essential health benefits and meet other requirements outlined in the Affordable Care Act (no exclusion for pre-existing conditions, preventive care coverage, etc.). Also, plans offered outside of exchanges have to be similar to plans offered through the exchanges.
Questions about MNsure
Q: What is MNsure, and how is it different from other exchanges?
MNsure is a state-run exchange rather than a federal-run exchange or partnership. There are only 15 other states currently offering state-run exchanges. MNsure also has lower rates than the other exchanges.
Q: Who is coordinating MNsure?
MNsure staff, ACA staff, Minnesota Department of Commerce, insurance carriers, etc. MNsure staff handles the day-to-day operations.
Q: Why did Minnesota decide to create its own exchange rather than go through the federal exchange?
Minnesota has a long history of providing diverse health insurance options and being a thought leader in the healthcare industry. In many cases, Minnesota has opted to work on healthcare projects independently at the state level, sometimes before they were even happening at the federal level. So, it isn’t surprising to see Minnesota take an independent course to make decisions and plans in an effort to meet our state’s needs.
Q: What will be considered a “success” for MNsure?
If MNsure is funded appropriately in order to cover all claims and create stable rates starting in year one, that would definitely be considered a success for the program.
Q: What are the pros and cons of MNsure?
There are many perceived pros and cons, but it’s all conjecture at this point; time will tell how everything plays out. However, one “pro” that we can see for individual consumers is that MNsure provides them with a centralized location to view insurance options.
Q: How do individuals and employers access MNsure?
Through MNsure’s website (mnsure.org) or over the phone: 1-855-3MNSURE (1-855-366-7873).
Q: Are all possible insurance plans offered through MNsure?
No. Insurance carriers have the choice to participate or not. If a carrier submits their rates to the MN Department of Commerce and the DOC either rejects their plan rates or does not receive them by the deadline, that carrier is not allowed to participate in MNsure. On the other hand, some carriers have elected not to participate or are waiting to see how the exchange does before deciding whether or not to participate. The motivation for carriers to participate in the exchange is the potential for higher enrollment, but they do have to pay a percentage of the premiums they receive through the exchange back to MNsure.
Q: What is the role of the “navigator” with MNsure?
Navigators are access points or resources to help individuals and employers navigate their options in the exchange. They can’t make recommendations — only licensed agents can do that — but they are certified with MNsure and can answer questions about plans (eligibility, coverage etc.).
Q: What is the question you get asked the most from employers regarding MNsure?
“Is it really going to be cheaper and lower costs?” The answer to this really depends on the individual circumstances; there are multiple sources of funding that have to be considered in order to compare cost savings. Regardless, there are both short-term and long-term consequences for decisions that are made now, and we don’t yet know the future costs associated with MNsure.
To learn more about MNsure or begin enrollment, go to mnsure.org. To learn more about the Affordable Care Act, visit their website at healthcare.gov. You can also use this helpful tool to determine your options and help you decide whether or not to enroll in an exchange.
If you’re an employer with 50 or more employees, we encourage you to attend an upcoming ACA seminar for large businesses on October 10th sponsored by Corporate Health Systems to learn more about how MNsure will impact your organization. Click here to register for this event on Trig’s website.
Photo sources: mn.gov, Wikimedia Commons