Tuesday, December 1, 2009

Making Sure The Rolls Are Filled

By Marilyn Werber Serafini  

Gary Lauer

Chairman and CEO of eHealth Insurance

Health care reform legislation before Congress promises to get insurance coverage to most of the nation's 47 million uninsured people. But Gary Lauer, chairman and CEO of eHealth Insurance, a large online insurance broker, worries that policymakers aren't paying enough attention to enrollment strategies. He's particularly concerned that the House-passed legislation would require people who receive premium subsidies to buy their insurance through an exchange-type entity, and that cutting out brokers such as eHealth, or keeping subsidized people from going directly to insurance carriers, could hamper enrollment.

The following are edited excerpts from a recent interview with Lauer.

NJ: Why not require all people who receive premium subsidies to buy their coverage through an exchange-type entity? Both the House-passed and Senate committee bills would create such entities for individuals and some others to access insurance policies. They would subsidize premiums for people earning up to 400 percent of the federal poverty level [about $44,000 annually for an individual].

Lauer: Trying to put everyone in one place or through one funnel, we think, would sub-optimize the promise of the legislation. One of the measures of this legislation's success or failure is going to be the number of people who end up being covered. If you pass this legislation and promise to get 31 million people covered, and you don't get close to that, I don't think you are going to be able to call that a success. People should be able to use health care subsidies and access coverage in a variety of ways. They may choose to do it through an exchange that's in their state, or through an insurance carrier, or they may choose to do it through eHealth.

NJ: Can the government meet its enrollment targets?

Lauer: The hard part is to get these people enrolled. Of the people who are uninsured, it's estimated that someplace between 8 [million] and 12 million of them today are eligible for Medicaid or the State Children's Health Insurance Program but aren't enrolled. You have to ask the question why they aren't enjoying the benefits and the coverage that they could have. People want choices. I think in this legislation we're going to see a lot of regulation of products and so on, and people may then want to have some choice of how they access these products and how they're supported through these products. To have effective enrollment you're going to have to have more than just the government exchange. I think we've proven that with SCHIP and Medicaid.

NJ: Would eHealth and other brokers be able to sell insurance to subsidized individuals under pending reform legislation?

Lauer: There is language in [Senate committee legislation], and we believe it allows us to operate as a complement and in parallel to [an exchange]. The Senate bill has language that would allow agents and brokers like us to allow individuals to use the subsidies to buy outside of an exchange. In the House bill the door is open to buy health insurance outside of the exchange, but it's less clear right now in terms of being able to use subsidies.

NJ: Would buying insurance through an exchange be cheaper than it would be if an individual went to eHealth or directly to an insurance carrier?

Lauer: It looks like there's going to be no advantage in health care prices because insurance is going to be even more regulated than it is today -- and already it's pretty highly regulated.

NJ: What is your experience with competition among insurers participating in eHealth?

Lauer: Carriers are competing with one another for share of market. But prices haven't necessarily dropped. Having one place where all these health insurers compete with one another is not necessarily what can bring down costs. We haven't seen that.

Lauer: I think if we have a bit of competition for the consumer experience, the more people are going to get enrolled. It's that simple. I want to operate eHealth in parallel to those exchanges so people in the states can have a choice. They can get their qualified health insurance in the state exchange, they can go to eHealth, or they can go to CareFirst directly in Virginia because they just want to deal with them directly. And our feeling is, let's let people make those choices. When they have those choices, when they have these different access points, I am 100 percent certain we're going to get more people involved and covered.