Update on Health Insurance Exchanges

Mark Lutes, a Member of the Firm in the Health Care and Life Sciences practice, in the Washington, DC, office, wrote a brief thought leadership piece about health insurance exchanges.

Following is an excerpt:

It may be axiomatic but the success of any exchange is contingent on its value proposition. ACA exchanges need to prove their value to individual consumers and small businesses and private HIXs to employers in the tier of the market they seek to serve.

Decisions an exchange makes as to required benefits will influence whether it will be offering financially attractive products and can attract a broad range of consumers or employers into the risk pools. Also, each exchange's success in the "art" of risk adjustment will heavily influence its value proposition and thus its sustainability.

We have a new generation of exchanges that will be wrestling with risk adjustment. Watch the market participant's confidence in those mechanisms as a leading indicator of the success of any given exchange.