Maryland’s federally mandated health insurance exchange should be a public, government-run agency with a board tasked with overseeing its operations, according to a state task force.
Beth Sammis
That determination from members of the Maryland Exchange and Insurance Markets Workgroup, including co-chairman Beth Sammis, Maryland’s insurance commissioner, does not square with the health insurance agents’ vision for the exchanges.
In two studies prepared for health insurance agents and third-party administrators, as well as in comments over the last year, health insurance agents and brokers in Maryland have consistently called for the state to expand the role of the private health insurance delivery system, not create a new public delivery mechanism.
For health insurance agents and brokers, a public system could signal the end of their role in selling health insurance products.
But the workgroup, part of Gov. Martin O’Malley’s Maryland Health Care Reform Coordinating Council, says a public system should be established. That public system should facilitate sales of individual and small-group insurance policies, something the state’s three third-party administrators, or TPAs, already handle.
Health insurance exchanges must be set up in all states by January 2014, as part of the sweeping federal health reform law passed in March. In Maryland, O’Malley appointed the council to address all of the implications of federal health reform, and the exchange and insurance markets workgroup is one of the subcommittees involved in looking ahead.
Three TPAs – BenefitMall, Group Benefit Services and Kelly & Associates Insurance Group – already facilitate the shopping and administration of health insurance in the state, having spent, according to their chief executives, millions in infrastructure costs, including technology, to support the health care delivery system. All three pledged earlier this year a commitment to IFAwebnews.com that they would do what is necessary to handle the needs of the state health exchange.
Anirban Basu, an economist and CEO of the Sage Policy Group in Baltimore, Md., suggested two days before the workgroup’s report was issued that the existing TPA system is “capable” and doing “the same as the exchanges” during a presentation to the Baltimore and Greater Washington chapters of the National Association of Health Underwriters.
“If you don’t take advantage of the TPAs,” Basu said, “then the calls will come to the government. You will have to explain.”
Basu, who is investigating the economic impact of health insurance agents and their work on the state’s budget, said at least 1 million calls about insurance plans and millions more emails are transmitted each year to the TPAs regarding health insurance.
“Many in the legislature want to build health exchanges from scratch,” Basu said. “But when you have a $1.6 billion [state budget] deficit, you don’t have that luxury.”
Earlier this year, the health insurance industry commissioned the two studies looking at the role TPAs could play in health exchanges in Maryland.
Maryland’s existing system, which connects health insurance companies to consumers through general agencies and insurance brokers, “has evolved into a unique sales structure that centralizes administrative processes for small groups and achieves many of the functions of an exchange in the private market,” according to the report released by Avalere Health, a Washington, D.C.-based advisory services company. The study was funded by BenefitMall, a Dallas, Texas-based general agency and third-party administrator operating in Maryland.
The second report, prepared for the Maryland Association of Health Underwriters and the Maryland chapter of NAIFA, also argued for the role of TPAs. The report says Maryland’s private-sector system, the result of 1993 small-group insurance reform, is more efficient public-policy approach to marketing and selling health insurance in the state.
“With regard to the establishment of an insurance exchange, the capabilities of the intermediaries reviewed in this report revealed that Maryland is well-positioned to leverage the existing private sector infrastructure rather than expend scarce public resources to establish a new public entity to help organize and structure the market, enhance transparency, improve competition and subsidize the purchase of commercial [health] insurance,” the NAIFA-MAHU report said.
The workgroup’s recommendation went to the full council, which could, but isn’t likely to, alter the recommendation.
Md. workgroup, brokers disagree on setup of health insurance exchanges via IFAwebnews .