Avalere Health
An Inovalon Company
Insights

Jun 01, 2013

Three Critical Factors for Exchange Success

Avalere estimates that exchanges will enroll 8 million individuals and families in 2014, growing to 26 million in the next decade.

The viability of exchange markets will depend on three critical success factors:  

  • Choice: One of the first metrics by which to judge exchange markets will be healthy plan participation. Early indications suggest that most exchanges will include strong plan participation, including both regional and national carriers and non-profit or provider-sponsored plans.
  • Cost: Consumers in exchanges will be price-sensitive, and restricting premiums in this market will be essential for health plans to drive enrollment. One of the ways plans will keep premiums down is by building networks with high-value, efficient providers that help them control utilization and costs among exchange enrollees. A second strategy plans will use to manage costs is controlling access to prescription drugs.  Minimum formulary coverage will vary greatly by state based on essential health benefit rules.  
  • Consumers: States, the federal government, and private stakeholders face a daunting challenge to educate the public about their new coverage options and how exchanges will impact them. The faster younger and healthier lives enroll, the more functional exchanges will become.

This Insight was excerpted from the June issue of American Health & Drug Benefits. For more information, contact Caroline Pearson.

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