The next Obamacare open enrollment period begins three months from now — and for health insurance plans there's plenty that needs to happen between now and then.
"Without a doubt, there are still challenges that both sides [insurers and the Obama administration] are working through," says Karen Ignagni, president of America's Health Insurance Plans, the trade group that represents insurance carriers — from Aetna and Cigna to hundreds of small, local plans — in Washington.
Ignagni expects that the health insurance exchanges can enroll 13 million people during the next sign-up period, the number that the Congressional Budget Office has projected for 2015. But it will be difficult: there are still back-end functions of Healthcare.gov that haven't been built — and convincing the consumers who sat out last year's open enrollment to buy plans for 2015 will be a big lift.
Ignagni and I spoke last month about what comes next for the Affordable Care Act, the parts of Healthcare.gov that hasn't yet been built and the biggest challenges of the 2015 open enrollment season. What follows is a transcript of our conversation, edited for length and clarity.
Sarah Kliff: The first open enrollment is over. Where are your members, how are they processing what happened over the last six months, and how are they thinking about the next open enrollment period?
Karen Ignagni: There are three buckets of things. One is the operations work that our members and we are doing with the agency to finish the 2014 exchange build, the functionality that is not built yet but needs to be before the end of the year.
The work that's being done now to build the infrastructure for the three Rs [risk corridors, risk adjustment and reinsurance], that's going to be very important and that's going to be needing to be tested and built in time for that transmission of that information to be made.
There's an issue right now that someone has a baby, gets divorced or get married, all those life-changing circumstances are being done by hand by the plans. That functionality needs to be built before we go into open enrollment.
The next thing we're working on is the issue of reconciliation of the data, making sure as we go into the next open enrollment season the exchanges and plans have the same data in terms of who is there and who is not. They're doing some preliminary reconciliation but there will be a large one towards the end of the year.
SK: Is there a way to ballpark what percent of this work has been done, and how HHS is doing at finishing this work? What are the most important things that need to happen?
KI: I do think that the work that our members have been doing and their operation leaders really give us a stronger platform going into 2015. Without a doubt, there are still challenges that both sides are working through, to make sure we get the work being done by hand now, all the life changing events, to have the ability to do that electronically.
Both sides have that objective. To achieve efficiency in a market you need to make sure those things work electronically.
As we move into 2015, we want to make sure the subsidies are able to come electronically to the plans. That is in the process of being built. There's been very good progress made in that regard.
SK: Those things that are being done by hand right now, is your expectation they will be largely automated by next open enrollment?
KI: Yes. And there's a lot of hard work going on to make that happen but on the industry side and in the agencies. I think that hard work is going to be very fruitful and I think we'll get to the resolution of these operational issues towards the end of the year. I think that's going to be very important for open enrollment.
SK: When you think about 2015, it's a shorter enrollment period, but your plans have also done this once. Does it seem harder, easier, or totally different?
KI: I think you've got two things going on. One is to finish the 2014 build and get all that functionality working and, at the same time, process a very large number of people in a very short period of time. And then encourage people, who have not yet joined the system to join. That's the rationale for some of our new thinking [around allowing more catastrophic plans to be sold on the exchange] about how do we give them a path in.
They're in two categories. One group is thinking, I'm healthy and I don't need to purchase insurance but if a catastrophe happens they won't be covered, and they face a problem in respect to medical bankruptcy. Category two are the people who had wanted to move into the new market — how do we give them a pathway that they will perceive as affordable and accessible?
That's why we want to come out early with some thinking, so we could be in dialogue with the administration and Congress and other stakeholders. These are two categories of folks who it will be very important to get into the system.
SK: One critique of the catastrophic-type plans you all have suggested is that they don't offer enough coverage, and they could still leave people vulnerable to medical bankruptcy. Why are those products that the government should allow to be sold on the exchanges?
KI: In the old market, people who purchased individual insurance coverage made the decision to purchase on their own. They by and large wanted to choose a lower monthly premium, and higher deductible and higher out-of-pocket costs. That's what people preferred because they wanted to minimize their monthly outlays. Assuming and knowing there are a number of people who stayed in the old market, I think that's their prism.
People who have made those critiques haven't noticed three things. One, there are subsidies available for people. Two, there are limits on annual and lifetime expenditures. Three, having nothing gives you no protection against medical bankruptcy. We're talking about the people who, if they're in that category of having no coverage, giving them an opportunity in.
SK: Some of the research I've seen on these plans suggests that, in order to make the numbers work you would need a deductible upwards of $6,000. Is that really financial protection?
KI: There's a way to reduce deductibles by leveraging the new payment models we have, the disease management and care coordination and all of the other tools we have at our disposal.
Number two, whatever a deductible is that's your limit and then you're protected versus having a $100,000 hospital where you have absolutely no protection and a lifetime of debt. What we're trying to do is introduce thinking early. If people have a better idea about how to solve this problem, we're certainly anxious to hear it.
SK: Do you find people are receptive to the idea, in terms of health care community?
KI: We've found a number of people who are receptive on both sides of the political aisle and people in different stakeholder groups. We will offer this with the idea of, let's start if are there other ways to solve this problem. I want to beat the dead horse: we want to hear other thoughts about that. But there are these two categories of folks we have to bring into the system.
SK: There has been a lot of concern about health plans on the exchange having fewer hospitals and doctors participating in them, the type of plans that are called narrow networks. Do you see them getting narrower, with less choice for consumers, or remaining the same size? Do your members have a sense of whether people like those plans because they have lower premiums, or frustrated with the lack of choice?
KI: To the extent you're using high-value networks you can minimize deductibles, you can minimize your out of pocket costs that works to your beneficiary's advantage.
The second thing people tell us is that if they are choosing themselves, they feel comfortable and absolutely want to have these options. Consumers like having the choice themselves. An employer isn't choosing, a government agency isn't choosing, they're choosing.
What we are working very hard to do is develop the tools, like cost calculators, to give people a sense of what they would spend in-network versus out-of-network. This is why the point we made earlier about getting a lot of the functionality done by hand at the exchange, getting it automated is crucially important, so we can take the people on the customer service lines doing things by hand and get them back to providing that support in terms of how do the networks work.
We are in the retail, consumer choice market now. Things have changed significantly and the plans are changing, to make sure we can provide that support for our customers.
SK: The Congressional Budget Office projects that 13 million people will gain health insurance through the exchanges next year. Does that seem like a reasonable and attainable figure?
KI: I think its definitely within reach. It's going to be very important for the functionality to work, and make sure that shoppers have the support systems they expect. Our plans are going to be starting very early on enrollment activities, particularly for people who haven't yet gotten into the system. All signs point to the fact that the exchange, the front door that had so many problems on October 1 will work well this year, so that's encouraging.
A lot of what we've been talking about is the backend which is important to making the system work but isn't necessarily what consumers see.