Exchange affordability to get summit airing

While most large employers don’t intend to change their health-insurance plans with the opening of the health-benefits exchange Oct. 1, small businesses struggling with the affordability are trying to understand what their options will be on the new exchange.
They’ll get answers at the PBN Summit on the Health Benefits Exchange on Sept. 25. Panelists include Christine Ferguson, HealthSourceRI director; Patrick Canavan, USI Insurance senior vice president; Peter Andruszkiewicz, Blue Cross & Blue Shield of Rhode Island president and CEO; Kathleen Hittner, Rhode Island health-insurance commissioner; and Philip Papoojian, president and chief operating officer of Mereco Technologies Group and chairman of the Smaller Business Association of New England.
Papoojian’s biggest concerns are premium costs and employee literacy about health insurance, which he called “abysmal.” He said there would have to be a “very, very compelling financial case” for him to switch his 32 employees’ current plan.
“We always put the employee ahead,” he said, explaining that he wouldn’t want to add to their financial burdens or responsibilities by asking them to choose their own plans.
Papoojian and other small-business owners have a couple of options. They can keep their current commercial group plans, they can switch to one of the 16 plans that will be sold on the Small Business Health Options Program (SHOP), or they can drop coverage all together and send their employees to the exchange to purchase individual plans.
Brokers will continue to help their clients determine what’s most affordable and best for their employees, Canavan said. They will continue to be paid by carriers at current rates no matter if their clients choose to stay off or go onto the exchange. HealthSourceRI will not be providing brokers with additional compensation for bringing customers to the exchange, but it will provide them with support, Ferguson said. If small businesses choose to obtain a group plan on the exchange, they can opt for the “full choice” model. Under this model, which Rhode Island will be the only state implementing, employers choose a plan and set their monthly contributions – say $100 toward a Blue Cross bronze plan. Their employees can choose that plan or opt to put the employer funds toward a different plan.
Or employers may choose to stop providing health insurance all together if they determine that they and their employees can save money and get better coverage on the exchange. They may provide a monthly stipend or raise salaries so that employees can purchase individual plans on the exchange.
No matter what option employers choose, the way health insurance is provided and how it is paid for is changing dramatically, Andruszkiewicz said. The health-insurance industry is shifting from being a wholesale business where employers buy insurance on behalf of their employees to being a retail business where individuals choose their own plans, he said.
“Employers have been the parents and we’ve all been the children for a long time. And now the parents are letting us out of the nest,” he said.
The result is a larger pool of individual purchasers – Blue Cross’ consumers of their individual product are going to multiply by three or even seven times what they have today – 16,000 people – “overnight,” Andruszkiewicz said. Over time there will be even more growth, he predicted. “How fast that happens is kind of like a crap shoot, we don’t really know yet.”
Employees will have new responsibilities, but they will be able to get help from HealthSourceRI – in person, on the phone, or over email – about coverage and providers, Ferguson said. Ferguson said that half of the 30,000 small businesses in the state offer health insurance, covering about 110,000 lives.
Another 42,000 employees and their spouses are eligible for those employer plans. These lives, plus the 90,000 employees (and spouses) whose small-business employers don’t currently offer health insurance could add up to another 132,000 lives covered.
But since this hasn’t been done before, Ferguson said, she doesn’t know how many will actually participate. And she won’t know for a while, she said, because unlike individual enrollment, which will happen during a set period of time (Oct.1 to March 31), businesses renew their health plans throughout the year.
But Ferguson said that at events she has been hosting for small businesses about the exchange, “at least half” of the employers have been asking, “When can I sign up?”
“I can’t for the life of me find out why a small-businessperson wouldn’t want to do full employee choice unless they felt their employees weren’t up for making the decision,” she said.
“When they come into the exchange and they elect full employee choice the possibility of actually seeing change in the cost and in the system exponentially increases,” she said.
Ferguson wants people to know that the opening of the exchange represents “the beginning” of health care reform in the state. The next phase involves examining the cost and quality of the health plans and health outcomes. Patient-centered medical homes, which aim to transform the delivery of primary care through a team of providers, will play an increasingly important role in the future. •

To attend the PBN Summit on the Health Benefits Exchange, click HERE.

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