1. Improving the Odds of Success for Insurance Exchange(s) Jon Kingsdale, Ph.D. Executive Director, Mass. Health Connector For the NHPF & AHR January 8, 2010

2. Focus on the Feasible Extremely challenging implementation Cost control harder than coverage expansion Most exchanges have failed Personal bias, as an executive

3. How to Improve the Odds of Success for Exchange(s) Define realistically a limited set of objectives for exchange(s) Acknowledge & compensate for weaknesses in the two bills Resource exchange(s) adequately and provide for their evolution

4. Realistic Objectives Reduce the administrative costs of buying insurance Improve the consumers insurance shopping/buying experience Add price resistance to premium-setting and insurers negotiations with providers

5. Weaknesses in Both Bills Industry Resistance: Adverse Selection: Cost Control Tools: Excl. channel for Non-Group Evolutionary for other market segments Local flexibility/options Option to rate N-G separately Claims-based risk adjustment across each entire rating pool Forego large-group Bid for plan selection Standardize benefits over time Automate

6. Weaknesses in House Exchange Market Sensitivity Regulator vs. Retailer Customer Experience Focus on non-group Delegate & de-centralize Emphasize customer experience Establish few, clear goals Encourage semi-independent agencies & self-funding Minimize policing role Regulate carriers thru DoI Flexibility in plans/benefits Phase-in offerings by segment Run group premiums thru Exch. Dont prescribe transparency Encourage pilots, research

7. Weaknesses in Senate Bill Scale Economies Geographic Portability Consistent Performance Exclusive channel for N-G Develop national utility resources e.g.: website, risk- adjustment tools National health plans Recipricity of regional plans Federal inter-operability standards for states Federal oversight, based on cost & customer service Sharing best practices

8. How to Resource/Evolve Exchange(s) Semi-independent exchange(s), funded by surcharging transactions Clear objectives, flexible means Drive to electronic transactions and audit trails Rigorous evaluation over time