Frost & Sullivan: Looming Health Insurance Exchange Deadline Emphasizes Ongoing IT Challenges

MOUNTAIN VIEW, Calif., Aug. 1, 2013 /PRNewswire/ -- One of the single most important determinants of success or failure of the present administration's vision of healthcare reform, or the Patient Protection and Affordable Care Act (PPACA), is the establishment of a Health Insurance Exchange (HIX) in each state. PPACA mandates begin October 1, 2013, providing all Americans the ability to shop online for health insurance on state- or federally-managed HIXs. Nearly seven million Americans are expected to enroll in health plans of diverse values by this period, with plans becoming effective January 1, 2014.

As noted in Frost & Sullivan's ongoing coverage of the HIX market, carrying out the plan is a massive undertaking, as each state must connect with federal agencies to determine the applicant's eligibility for federal subsidies and Medicaid. This requires the Internal Revenue Service (IRS) to validate income based on tax returns and the Centers for Medicare and Medicaid Services (CMS) to verify if the applicant is enrolled in Medicaid or similar programs.

For more information on this research, which includes Health Insurance Exchanges: Part 1: The Opportunity Spectrum from Private to Public HIX as part of an ongoing series, please email Jennifer Carson, Corporate Communications, at [email protected], with your full name, company name, job title, telephone number, company e-mail address, company website, city, state and country.

The Department of Health and Human Services (HHS) termed this colossal, impending HIX the "data-hub," which is facilitated through the marketplaces. HIX is intended to connect major federal agencies, each state, hundreds of insurance companies, and millions of citizens, some of whom are seeking healthcare coverage for the first time.

"The creation of HIXs across the country will generate a newly functional and interoperable health information super highway for sharing data," noted Frost & Sullivan Connected Health Senior Analyst Patrick Riley (@Patrick_FrostHC). "This leads to a proliferation of tethered business opportunities."

So far, HHS has spent almost $400 million creating this digital pathway. According to the most recent Government Accountability Office (GAO) report (July 2013), the administration will need an additional $2 billion to establish and operate the federal HIX in 26 states.

However, HIX participation at the state level is still very much undetermined, despite the abundance of opportunities. In total, 34 states have elected not to participate in overseeing a HIX. Consequently, per the PPACA, the federal government will manage it for them.

Potential participants require a contingency plan for the eventuality of a doubling, or even tripling, of the number of applicants. They also demand more concrete data about the level of complexity of the application and the type of assistance available to users.

Should the IT components not be fully operational in time for the HIXs to go live, the contingency plans must provide adequate backup. Some of these potential plans include training social service and small business groups to serve as navigators during the enrollment process and deploying a well-staffed call center to handle online consumer queries. HIX agencies will also be well served by fostering strong relationships with health insurance carriers to aid in the seamless on-boarding of new families and individuals with health insurance.

"Once these enrollment and eligibility processes are successfully tested, many Americans who have never enjoyed health insurance benefits will have access to care," noted Riley. "States such as New York that are doing everything possible to employ their state-run HIX are already experiencing high returns."

Frost & Sullivan's four-part market insight series on the HIX market in the United States is available through Frost & Sullivan's Connected Health Growth Partnership Service program, which covers markets including health IT, telehealth, remote monitoring and mHealth.

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Contact:
Jennifer Carson
Corporate Communications – North America
P: 210.247.2450
F: 210.348.1003
E: [email protected]

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