Emphasizing the Change in the Exchange

At the Exchange board meeting last Friday, much of the discussion was on developing a strategic vision of the Exchange. After presentations of different concepts and models (should it focus on being a price leader? providing excellent service? driving quality and delivery system changes?), the Board was asked what words should be used to describe the Exchange, what are guiding principles and values, and what are measures of success.

Here’s our initial thoughts to the discussion, that we sent to the Exchange board at info@hbex.ca.gov –it may not be the “poetry” that was requested in the Friday discussion, but it provides a sense of what we would like to see the Exchange become:

In describing the Exchange, it’s useful to be explicit about the problem that health reform in general, and the Exchange in specific, is attempting to solve: the broken individual insurance market. While over half of Californians get their coverage through an employer, and a third through one form of public program or another, the rest are left to the individual market. And of those nearly 10 million Californians, only a minority actually end up getting coverage: the number of uninsured (6-7 million) dwarfed the number of people who bought coverage as individuals (2-3 million).

The individual market is the least efficient, most expensive way to get coverage. It leaves individuals all alone at the mercy of the big insurers, in a costly, complex and confusing marketplace. The numbers all indicate the individual market is fundamentally broken.

While the Affordable Care Act makes changes throughout the health system, it is the individual market–and to a similar extent, the small group market–where the most radical reforms are made, and thus the Exchange is the heart of health reform. While it is correct that the Exchange is not responsible for the whole of health reform, it also important to recognize that health reform cannot fulfill its promise if the Exchange is not successful.

The Exchange is not just a place to buy and sell health insurance. Arguably the most important job of the Exchange is to seamlessly ensure that people get the subsidies they need and entitled to, in order to better afford health coverage. It should be a trusted source of information. It should remove the barriers that currently exist to coverage, including:
* access: creating a working market for all Californians, including those with pre-existing conditions, or those with limited English skills, or other barriers.
* affordability: ensuring that subsidies are available and easily sought and gained; and that the Exchange negotiates the best value for your dollar.
* adequate: vetting products to provide security that what they are buying is of value, and will provide the economic security they seek.
* administratively simple: making it is easy to make apples to apples comparisons, make a quick and informed decision about coverage, get the subsidies needed to make it affordable, and sign up.

The Exchange should empower people to make decisions that are right for them, but it should be their partner and ally in world that can be costly and complex. The Exchange should be the “HR Department for the rest of us” who don’t work for a large employer which negotiates on their behalf, which troubleshoots and makes inquiries to the insurer when there’s a problem and gets a response quickly because of their status, which vets products, weeds out high-price, low-value plans, and provides at least a handful of good, no-lose choices. The Exchange should make the process seamless, easy, and hassle-free.

If the critique of the individual market is that it leaves individuals (and small businesses) all alone with no market power, the Exchange is the ally and the equalizer. It should be explicitly seen as on the side of consumers, to help them through this process.

The Exchange should be a one-stop shop, but that does not mean it should be a one-time experience. Whether for someone getting subsidies–who will get those subsidies on a regular basis, even when their income fluctuates–to the person who may jump in and out of the Exchange on a regular basis, the Exchange should have an ongoing two-way relationship with its members.
* At one level, the Exchange should be as a trusted, reliable source of objective information, uncompromised by the industry, with a distinct identity from the insurers.
* And if the Exchange is truly going to negotiate on behalf of its consumers, it needs to have a variety of mechanisms to take input from them; from broad surveys of membership to a specific partnership with consumer and community organizations.

The Exchange should be multicultural, to deal with the diversity of California and the specific needs of the various communities and populations that are served by it. The Exchange is likely to be a majority Latino, and its communications should reflect that. Even beyond language access and cultural competency, the Exchange is going to need to deal with clientele in different circumstances: Few private firms or government agencies have a clientele that includes all of the following: young people starting out their careers, early retirees; low-income working families; small business owners; new divorcees; seasonal and temporary workers; highly-educated independent consultants; middle-income workers between jobs; etc. The Exchange will need to be open to all comers, but mindful and responsive to the specific circumstances that bring them in.

A major barometer for the Exchange–both for us and for the media and political watchers, is enrollment. The Exchange should have a goal of mass enrollment on day one, January 1, 2014, using pre-enrollment and other strategies to ensure we get Californians covered on day one, and maximize federal funding coming into our state, our health system, and our economy. If the Exchange acts early and strategically, it can have two million Californians getting coverage on opening day.

A broader goal is for the Exchange is to be the transformed marketplace of what the current individual insurance market is not: open, organized, transparent, seamless, affordable, accessible, consumer-friendly purchasing pool, where insurers are actually competing on cost and quality, rather than on avoiding risk. Fixing the broken market will help change the underlying incentives that will drive the needed change in the rest of the health system.

Health Access California promotes quality, affordable health care for all Californians.
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