Exchange Board Won’t Negotiate
by Christine Stuart | Nov 29, 2012 4:06pm
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(6) Comments | Commenting has expired
Posted to: Health Care, State Capitol
The Health Insurance Exchange Board unanimously voted Thursday against actively negotiating with health insurance companies that want to offer their plans in the new virtual marketplace called the exchange.
The decision made health care advocates mad and satisfied health insurance companies who were against the idea of active purchasing.
As a compromise, the board agreed not to rule out the idea of negotiating price with the plans it will offer through an online portal starting in 2014.
That was “disappointing” to Ellen Andrews, executive director of the Connecticut Health Policy Project.
“They don’t inspire confidence,” Andrews said of the board after the four-hour meeting.
She said the board completely neglected to address the idea of affordability, which she argued is easily achieved through negotiations. Right now, small businesses and individuals purchasing health insurance in the open market have little or no ability to negotiate.
The exchange has the ability to negotiate and it passed, Andrews said.
The board also voted to increase the numbers of plans it offers, which Andrews and some members of the board said will only confuse consumers.
The staff of the Health Insurance Exchange recommended against negotiating with insurance carriers. It argued that the population of people coming into the virtual marketplace is unknown and the marketplace itself will take care of the competition.
Budget Secretary Ben Barnes, who also co-chairs the board, said underlying the argument about whether to negotiate is people’s lack of confidence in the market to get the best rate for the consumer.
He said the exchange makes significant changes and creates a whole different type of marketplace. He said it’s unclear at the moment exactly what the new marketplace will mean so he’s comfortable with studying it into the future.
State Healthcare Advocate Victoria Veltri was conflicted.
“My ideal position would be to negotiate out of the box, but as I said to everybody I’m not going to win that vote,” Veltri said.
Veltri doesn‘t buy the argument that the insurance carriers are ignorant when it comes to the risk associated with the population of people it would be covering.
“I do think the plans know what the population is coming in,” Veltri said.
But even if exchange was able to negotiate during the first year, the state law creating it requires that the insurance carriers go to the state Insurance Department for approval of the rates. So even if the exchange board negotiated a rate the Insurance Department could accept or reject it.
Andrews called the issue “laughable.” She said all the board needs to do is encourage the legislature to make a technical revision that cuts the Insurance Department out of the equation.
Veltri said she would have no problem seeking a technical clarification that allows insurance carriers to negotiate directly with the exchange.
“I think it ties the hands of the exchange of being an active purchaser by saying it has to go to the Insurance Department,” Veltri said.
If the state wants to allow the insurance carriers to innovate with plan design and delivery models, “why would we want to tie the hands of the exchange and not let it negotiate,“ Veltri wondered.
Health Exchange Board CEO Kevin Counihan said he thinks what the board passed Thursday gives it flexibility to see what changes need to be made to state laws if the exchange wants to negotiate.
“I think first we need to check the statute and see what kind of flexibility the exchange board has. Frankly, I don’t think that’s clear at all,” Counihan said.
He said the Insurance Department tells us not to worry about it because rate review is in their purview.
He expects the issue to be investigated and brought back to the board for discussion.
Meanwhile, Counihan was breathing a sigh of relief Thursday that the board decided more questions about the minimum requirements the insurance carriers have to meet to participate in the virtual marketplace.
“If we had missed this deadline it absolutely would have hurt our ability to meet the October 2013 deadline,” Counihan said.
By Oct. 2013, the state must have the virtual marketplace up and running so consumers can enroll before Jan. 1, 2014.
Tags: Victoria Veltri, health insurance exchange, marketplace, health plan, Kevin Counihan, dh
(6) Comments
posted by: Noteworthy | November 29, 2012 7:00pm
The basis of the Exchange Board and the Exchange itself is to help make sure every consumer has affordable insurance. What the board has voted to do is to limit itself to collecting insurance policies and put it on a website. Seriously, that’s the best we can do with all the millions? I’m seriously underwhelmed.
posted by: Noteworthy | November 29, 2012 7:01pm
I will also add, that if there is a lack of confidence by consumers in the Exchange - it is well founded. This aggregate website will sow confusion not understanding or even the belief that requiring health insurance is a good concept.
posted by: lkulmann | November 30, 2012 9:10pm
The CT State Insurance Department is an agency designed to oversee Insurance in CT. The Exchange is just another type of insurance provider that needs close monitoring. If only the CT State Medicaid was in their radar we wouldn’t have such a huge budget deficit in CT. CT State Medicaid is managed by the CT DSS and it is just hemorrhaging $$$$...The Exchange is just bait for corrupt state ‘leaders’ who are tapping off taxpayers money only to blame it on the poor and disadvantaged.
posted by: miketcha | December 1, 2012 11:54am
Looking forward to the invisible back of the hand health insurance marketplace being set up in the Insurance capital of America.
This sounds like the federal government’s decision not to allow medicare to use their purchasing power to negotiate for lower drug prices. So much for our faulted free market place ideology
posted by: Hoosier@CT | December 4, 2012 4:33pm
In the first place, Connecticut should not set up their own Health Care exchange. Accepting this tenant of the “Affordable Healthcare Act”, automatically penalizes businesses in the state by charging them all an extra $2k in taxes that is not charged in those states that don’t set up their own Health Care Exchange. These Exchanges should be setup by the federal government so that the federal government absorbs the cost and finally comes to the realization (as should all citizens) that the Government should not be in this field (health care insurance).
