Health Insurance Exchanges
“Jump ball” for health plans
The advent of mandated government-sponsored health insurance exchanges is expected to create a marketplace disruption larger than that of Medicare Part D in its inaugural year. State-level exchanges have the potential to transform traditional individual and small group health insurance. Commencing with the open enrollment period in late 2013, these new, consumer-oriented, price-transparent exchange markets are anticipated to be a competitive “jump ball” for health plans.
Across the country, many health plans are looking at the range of potential market scenarios and preparing for change at the state or sub-state level. As health insurance exchanges are intended to serve the individual geographic markets, it is likely that some exchange markets will be more attractive than others. Under any market scenario, however, health plans may struggle to compete effectively in exchange markets without reconfiguring their product offerings and lowering their cost structures.
Right now, it's anybody's game. But if market share proves to be as sticky for health insurance exchange products as it has been for Medicare Part D, early winners may have an advantage for years to come. Health plans should start preparations now by identifying their objectives for participating in exchange markets and by conducting a market entry evaluation to determine if they have the right mix of capabilities and products to appeal to their desired consumer segments.