Starting in 2014, brokers in some states may offer state Exchange qualified health plans via broker websites or “private exchanges” that let consumers compare coverage and weigh costs and benefits among health plans. In California, that would give brokers access to as many as 4 million uninsured Californians. Under rules proposed March 12 by HHS the exchanges can now also be offered by companies such as California based eHealth, the biggest online retailer of health plans, and closely held rivals such as HealthcareShopper.
“It’s going to put these private exchanges on steroids,” said Cindy Gillespie, head of health-care policy at McKenna Long & Aldridge LLP, a Washington law firm that advises brokers. “It’s no longer going to be a marketplace exclusive to the state-run exchanges, and that’s a game-changer, big time.”
States Have Final Say
The HHS regulations require private exchanges to offer all plans available in a state that meet the ACA standards for affordability and coverage. They also forbid the use of rebates or giveaways that might steer buyers to particular carriers. Each state gets the final say on whether to include private exchanges in the system. States will still have to keep certain functions for themselves, such as determining who meets income guidelines for the federal subsidies.
The administration’s proposal is an acknowledgment that some states may miss the deadline to have a marketplace up and running by 2014. In Republican-run states where officials have opposed the law, the option may prove politically popular as well. The path of least resistance may be to rely on the private exchanges to do all of the front-end work.
Private Exchanges and Brokers
The increasing focus on consumer-driven health care leads us to believe that private exchanges could provide huge opportunities for health benefit advisers in 2014 and beyond. Private exchanges are particularly attractive in conjunction with defined-contribution plans. If employers provide an annual stipend to their employees and release them into public insurance exchanges, the result is a complete loss of business for the broker. A private exchange connects the employees with plan options that the employer stands behind, supporting employees while still protecting the bottom line. Private exchanges can keep brokers and agents in the business of providing innovative solutions to their clients and their employees.