Health benefits exchange and county health plans: A market analysis

Issue: The Patient Protection and Affordable Care Act of 2010 enacted health insurance reforms which dramatically affect County and local health plans. These health plans focus their plan offerings on low-income and under-served populations, a group which is impacted directly by the expansion of federal programs and the creation of State-based Health Benefits Exchanges. County and local health plans need to understand and prepare for the upcoming changes. Description: A market analysis was performed on the potential implementation of Health Benefits Exchange entry at a County-commissioned health plan in California. Analysis included: 1) Researching and synthesizing key provisions relevant to the health plan; 2) Identifying potential impacts of these provisions; and 3) Evaluating potential operational options in response to select provisions. Lessons Learned: Health plans providing benefits to under-served populations will be impacted by State Health Benefits Exchanges and consideration should be given to offering products within the Exchange. The current offerings and existing capabilities of the health plan meet many of the requirements for participation. However, the health plan will need further expertise in plan design based on actuarial value, competitive marketing strategies and a larger provider network to promote success within the Exchange. Recommendations: County and local health plans should further their analysis of Health Benefits Exchange entry to include careful consideration of the health plan mission, locally specific data about potential members and their health care needs, and capability for competition within the exchange especially with regard to network capacity and benefit offerings.