Health Plans are Already Preparing to Participate in Health Benefit Exchanges, KPMG Poll Finds

NEW YORK, Nov. 8, 2012 /PRNewswire/ -- Spurred by the individual health insurance mandate and the prospect of adding thousands to their rolls, a majority of health insurance leaders say their organizations are already preparing or implementing plans to participate in health insurance exchanges, according to the results of a poll conducted by KPMG LLP, the U.S. audit, tax and advisory services firm.

More than two thirds of health plan business leaders who participated in the KPMG webcast poll in September said they had analyzed the operational impacts and developed a plan of action to become exchange ready (39 percent), or had started implementing required changes and are on schedule to meet the October 2013 open enrollment deadline to participate in an exchange (29 percent). Additionally, 17 percent said they had analyzed customer opportunities and developed a market specific product strategy. Eleven percent said they had not started planning to enter an exchange but intend to participate. Just seven percent said they don't intend to participate in an exchange.

"Clearly, health plan leaders are increasing their focus on the retail side of operations and are moving to put into place the operational pieces required to participate in an exchange and interact directly with consumers," said Joe Parente, advisory principal with KPMG's Healthcare practice. "They are also taking a much closer look at their networks and redefining their strategy to be more competitive."

In fact, in findings from other KPMG survey research, over 75 percent of health plan leaders indicated that they see their biggest growth coming from consumer-directed or high deductible plans.

"Health plans need to focus on differentiating themselves to attract the individual market and small group employers that will likely migrate to exchanges," said Cynthia Ambres, a principal, physician and U.S. member of the KPMG Global Healthcare Center of Excellence "Strategically, insurers need to decide at what level they want to go after the individual market, and how they distribute their products to as many outlets as possible, including state health benefit exchanges, a federally facilitated exchange, private exchanges and direct commerce sites."

Part of the Patient Protection and Affordable Care Act (PPACA) of 2010, the individual health insurance mandate requires virtually all Americans to obtain minimum health insurance coverage or pay a penalty. The health insurance exchanges, also mandated by PPACA, will allow the uninsured to obtain affordable healthcare coverage. By Oct. 1, 2013 states are required to have formed new organizations to operate the exchanges, including hiring and training staff, and implementing business processes and IT systems.  The exchanges must be operational by Jan. 1, 2014. So far, only slightly more than a dozen states and the District of Columbia have enacted authority to establish state-based health insurance exchanges.

In conjunction with a leading health plan trade association, KPMG in September conducted a webcast on health insurance exchanges, Preparing for Exchanges: Key Insights from States to Help Health Plans Prepare and Operationalize. The results reflect responses from more than 130 health plan administrators who self selected to participate in the webcast poll. Respondents consisted of senior members of these organizations who have awareness of, or responsibility for, their organizations' IT or finance programs.

About KPMG LLP

KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International.") KPMG International's member firms have 145,000 people, including more than 8,000 partners, in 152 countries.

SOURCE KPMG LLP