The state’s fledgling health benefits exchange continues to gather momentum toward a 2014 launch.
California won a $39 million federal grant in August to develop a state-run health benefits exchange to make it easier for individuals and businesses to comparison-shop for healthcare plans. The state laid the legislative groundwork for an exchange in 2010 in connection with federal healthcare reforms set to take effect in 2014.
But challenges remain.
“Making it easy for users is not simple to do,” said Kevin Counihan, president of Orange-based Choice Administrators Exchange Sol-utions.
Choice develops benefit exchanges in the private sector and intends to bid for some support-services work the California program recently put out for proposals.
Building a statewide exchange is an “enormous systems integration challenge,” said Gillian Hayes, assistant professor of informatics at the University of California, Irvine’s School of Information and Computer Sciences.
“You’re talking about everyone who provides health insurance in the state,” Hayes said. “They all have proprietary information and all of that has to be put together to make the exchange work.”
The seemingly Sisyphean task is an opportunity for private-sector firms to shine, Counihan said.
“Both private and public exchanges will have distinct and growing roles in the future,” he said.
The California Health Benefit Exchange aims to be self-supporting, once operational.
“We need to have a financial model that supports our operations by delivering value to the consumers that need our services,” said Peter Lee, who was appointed executive director of the exchange in August.
“Many states are not focusing in on the nuances of sustainability,” Counihan said. “They just don’t understand that fundamentally they’re running a business.”
Continued Progress
The state exchange is designed to service household incomes within 133% to 400% of the poverty line—or $29,000 to $88,000 annually for a family of four—and small employers with less than 100 employees.
Individuals earning less than $29,000 annually will be steered toward Medi-Cal, a state- and federally funded health insurance program.
Lee said start-up work on the exchange has been moving ahead “thoughtfully, but very rapidly.”
The five-member exchange board of the California Health Benefit Exchange made several additional leadership appointments in November: David Maxwell-Jolly as chief operating officer, Sharon Stevenson as general counsel and David Panush as government-relations director.
The appointments “support the continued rapid implementation steps the board has undertaken since its first meeting,” Lee said.
“We have launched a broad stakeholder engagement process and are beginning the development of new information technology systems that will support enrollment in the exchange and public programs,” he added.
The first round of federal grant money is expected to support development of the exchange through August 2012.
The exchange will apply for a second-phase federal grant in June, Lee said.
Growing Trend
Hayes compared exchanges to travel websites that allow users to browse, comparison-shop and purchase flight tickets or room accommodations.
“When you start to see aggregators in the travel business, suddenly the airlines are competing in a different way,” she said.
Implementing benefit exchanges represents a “seismic shift” in healthcare, Counihan said.
“America’s a country that likes choices,” he said. “Americans like the freedom to pick what’s best for them. Exchanges are going to help enable that change.”
For Lee, the California exchange is “part of a broader fabric of assuring” access to healthcare.
“As of 2014, there’s a new world of health care for every single Californian,” he said. “It’s part of our job as the exchange to communicate that.”
