Mark Lutes Quoted in Article About Small Carriers Who Participate in State Insurance Exchanges

Inside Health Insurance Exchanges

Mark Lutes, a Member of the Health Care and Life Sciences practice in the Washington, DC, office, was quoted in an article titled "For Small Carriers, Exchanges May Open Door to New Markets."

Following is an excerpt:

Small carriers that participate in state insurance exchanges could find new opportunities to compete with larger competitors, particularly if they have experience in individual products and/or Medicaid. Moreover, the exchanges could create an opportunity for small carriers to enter new markets.

The reform law requires HHS to develop a rating system for health policies offered through the exchanges. The ratings are likely to be based on premiums as well as on payment policies and practices, enrollment and disenrollment

levels, claim-denial rates, financial soundness of the company, medical loss ratios and member satisfaction surveys.

Scale will ultimately dictate price, and that is a key advantage for large carriers. So if small insurers aren't able to compete on price, they might be able to set themselves apart on quality, suggests Mark Lutes. "I don't think that small is inherently beautiful. On the other hand, if you're a small player, you need to create a better mousetrap in terms of care management," he says.