Health Insurance Exchanges – Opportunities for payers
32 million consumers. That is the projected figure for US uninsured consumers that may be looking to purchase insurance through the Health Insurance Exchanges (HIX) scheduled to launch on January 1, 2014.
Payers need to aggressively formulate a business strategy and align their health products as per the exchanges' criteria for qualified health plans, in order to stay ahead of the market competition. PriceWaterhouseCoopers (Pwc) had conducted a research in late 2011 that identified that the US consumers would rate and value an insurance company's market position based on whether that company is associated with a health insurance exchange or not. Much of this has to do with the strict qualifying criteria established for exchange participating health plans and the fact that the premium rates for the health insurance exchange linked plans would be competitive and relatively affordable as compared to for those selling insurance outside the exchange.
The federal government has allowed states to design their exchanges as per their local markets and consumer needs. Each US state therefore, is likely to have its own set of regulations and exchange participating criteria for health plans. Payers that offer insurance in more than one US states would therefore need to align their plans as per the respective state health insurance exchange criteria.
With the scheduled health insurance exchange launch time line a few months ahead, payers too need to carefully follow the level of health insurance exchange development in various US states and keep track of the possibilities and impacts that exchanges would have on the local markets and market trends.
Payers need to be operationally and technically ready with a strong and flexible system to help them quickly and cleanly align their systems as per the individual state's exchange requirements. Payers need to develop smart business strategies and redesign their products as per the state's local consumer preferences. Payers may benefit from setting up dedicated team of personnel that would be responsible for analyzing and assessing reform or health insurance exchange related market views, observations, projections etc. in order to come up with a well-structured and smart business strategy.
Whether or not the Supreme Court survives the Supreme Court constitutionality decision or not, some US states are steadily charging ahead with their state health insurance exchange implementation plans. It is likely that other states may follow through over the next few years, if states with health insurance exchanges witness high enrollments from payers and consumers. Payers are likely to benefit from keenly observing and analyzing these states in order to stay ahead of the market competition and avail the early bird advantage of associating with these health insurance exchanges with million strong pool of uninsured Americans.
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Author is a well known authority on health insurance Exchange in the US. He is currently looking to expand his expertise in health insurance exchange and health exchanges available.