In the 166 pages of health insurance exchange rules published by the Department of Health and Human Services last March, one provision came as a pleasant surprise to some private HIX firms -- section 155.220, letting public exchanges contract with "web-based entities" to market and sell qualified health plans.
"It was kind of out of the blue. No one had heard about it before," said Alan Cohen, co-founder and chief strategy officer at the Buffalo-based exchange firm Liazon. Since then it's garnered quite a bit attention. "Web-based entities wasn't even dry on the paper before people started calling them WBEs," Cohen said.
The WBE option -- which isn't found in the Affordable Care Act and, HHS said, originated from stakeholder suggestions -- lets public exchanges certify private exchanges, brokers or agents as web-based entities or so-called alternative enrollment channels.
It's a way for public exchanges to reach more consumers, having brokers and private HIXs market and sell qualified health plans, in addition to the public exchange's own website and outreach efforts. It's also represents a business opportunity for private exchanges in the absence of a health insurance voucher system some had hoped for.
eHealth, the Mountain View, Calif.-based parent company of eHealthInsurance, was one of the stakeholders suggesting the idea of web-based entities, said Bob Hurley, eHealth's senior VP of carrier relations. For one thing, he said, considering that financial sustainability and enrollment will be the two main challenges for public exchanges, having a variety of marketing channels could only help. Also, "It just didn't seem fair that subsidy-eligible consumers had to go to a state-based exchange and couldn't go to a private exchange."
Hurley said eHealth is talking with a few states considering the WBE option. While there's still "a fair amount of opaqueness" on how exactly the process would work, basically the WBE would be certified by public exchange boards and interface with their administrative and IT systems and perhaps the health plans' systems.
It's not clear to what extent the WBEs would be able to access Internal Revenue Service records to determine premium subsidy eligibility, but the idea is that consumers would get at least an approximation of their subsidies they would or would not get.
The WBEs would have to market all the health plans available on the public exchange without favoring any one in particular. The premium fees insurers pay would be the same whether the plans are sold through the exchange or the WBEs, which would receive some form of compensation.
If WBEs are selling all the same plans as the public exchanges, what's the point? "Many doors, one destination," is the phrase Hurley likes to use. "Building it and they will come, I do not think that will work," Hurley said, referring to the enrollment challenges that will ultimately decide the success of public HIXs.
"The more discussion that takes place around health insurance, guaranteed issue and an open window -- that education and noise is good for anybody in that market," Hurley said. "Our goal is to try to attract those people that are online and want to transact online.
"We're used to having to attract consumers. We built the platform and we understand how to reach consumers. That's why we're an advocate of states adopting WBEs. You have to build it and find them."
Some ACA defenders and progressive consumer activists might see the push for WBEs as an attempt to voucherize public HIXs. But Washington and Lee University law professor Timothy Jost, who's also a consumer advocate at the National Association of Insurance Commissioners, is cautiously supportive of the idea.
"Anything that expands the market for exchanges is basically a good idea," Jost said. "I don't have any problem with WBEs if the display architecture is the same as the public exchange, and if consumers are offered all the plans and the consumer has the option to go through the exchange or through the broker."
[See also: HIXs, HIEs and industrialization of healthcare]
Liazon's Cohen is bullish on all things insurance exchanges and also defined-contribution plans, and he likens the WBE option to Medicare Advantage. "Different carriers have to meet some substantial requirements to be able to offer Medicare Advantage products," which are then sold through agents, brokers and exchanges.
Cohen, like Hurley, thinks WBEs could be significant cost-savings advantage to public exchanges. "Regardless of what kind of resources you have, it costs a lot of money to market, sell and transact insurance, and all these exchanges are starting to realize that they're going to have to charge these big fees."
How many private HIXs aside from eHealth are pursuing WBE partnerships with states remains to be seen. Liazon is sitting back and watching. "Whether or not it's a business opportunity for an organization like Liazon, I think it certainly is an interesting opportunity for private entities," he said. "I think that it's hard to build a business plan around this, since it's only a recommendation by the HHS so far. This is just guidance, saying you can do this."