Hartford Business Journal

20 Hartford Business Journal • April 20, 2015 www.HartfordBusiness.com help — paid or not. Why reinvent the wheel?" One major opportunity that awaits, Wadleigh said, is if the Supreme Court rules this summer that residents in states using the federally run insurance exchange can no lon- ger receive premium subsidies. That would likely force some of the 34 states currently using the federal exchange to create their own insurance marketplaces; Connecticut would be in an ideal position to offer up its expertise, business practices and technology. Wadleigh said several states have con- tacted him about that possibility. And Access Health already has experience assisting other exchanges. It was paid over $200,000 last year, for example, to provide training and operational support to Maryland, after that state's exchange was dogged by technology glitches and other shortcomings. Maryland also adopted the same computer code Con- necticut used for its online platform. Several Access Health employees traveled there to train staff. The assistance proved effec- tive, said Carolyn Quattrocki, executive direc- tor of the Maryland Health Benefit Exchange. This year, the Maryland exchange nearly doubled its enrollment in qualified health plans and saw consumer satisfaction increase significantly, Quattrocki said. "We wouldn't have been as successful without the assistance from Connecticut," Quattrocki said. Deals with other states are in the works, Wadleigh said, but he declined to elaborate, citing political sensitivities. Most states inter- ested in Connecticut's exchange want the expertise, business processes and technol- ogy, but not the Access Health brand. That's why Wadleigh is pushing a bill that recently passed through the Insurance and Real Estate Commit- tee that would allow Access Health to establish subsidiar- ies that make it easier to sell its services to other states. The bill also would give Access Health the abil- ity to offer additional products such as vision benefits or life insurance. Currently, federal regulations prohibit state-run exchanges from offering additional lines of business, unless they are provided through a separate legal entity. With 107,000 customers currently on Connecticut's exchange, there is significant opportunity to cross-sell various insurance lines, Wadleigh said. "We want to work with brokers and car- riers to sell these products," Wadleigh said. Not all lawmakers, however, are con- vinced an expansion of Access Health's busi- ness makes sense. State Sen. Kevin Kelly (R-Stratford), who voted against the subsidiary bill, said he's con- cerned it could put taxpayers at risk, especially since Access Health is a quasi-public entity. "What if we don't do it right and costs start to overrun?" Kelly said. "How are we going to ensure state taxpayers won't be put on the hook in the future by these ancillary subsidiaries." Financial issues Access Health is pursuing new revenue streams to safeguard its long-term financial health. As of Jan. 1, the federal government essen- tially shut off its money spigot to state-based exchanges, meaning they have to become self- sustainable. Access Health CT received about $150 million in federal funding since its incep- tion, and still has about $20 million left to spend. After that, however, the exchange is on its own. Wadleigh said Access Health is currently one of the few state-based exchanges that is self-sustainable. That's because it generates revenue through a 1.35 percent premium assessment charged to virtually all small- group and individual- market insurers in the state, even if they don't offer health plans on the exchange. The assessment raises about $25 million in annual revenue. The exchange also gets reimbursed about $30 million from the federal government for its Medicaid development and enrollment servic- es. Right now Access Health, which is a not-for- profit entity, breaks even but Wadleigh said they need to develop more of a financial cushion, including about a $10 million reserve so they can continue to reinvest in the organization. Rather than increase the premium assess- ment further (under federal law it can go as high as 3.5 percent), which would likely mean higher premiums for customers, Wadleigh said the smarter option is to seek out new revenue streams. The exchange is also working to reduce expenses by at least 25 percent. About 80 per- cent of the exchange's budget goes toward its call-center and IT maintenance/operations, but Access Health is trying to renegotiate contracts with its two major vendors. It cur- rently pays Virginia-based Maximus about $18 million to $20 million to run its call cen- ter; Deloitte collects $8 million to $12 million for IT-development and production support. Wadleigh said the exchange paid a premium on its original contracts with both because it had to move quickly to get its online market- place up and running in about a year's time. The deal with Maximus, for example, was negotiat- ed in just three months; a similar contract done in the private sector would take a year or longer. There are also opportunities to shave costs and find new efficiencies by collaborat- ing with other exchanges. Wadleigh said he's been talking to other states about forming regional/group purchasing organizations. Several collaborations are being dis- cussed, but Wadleigh said it's too early for him to comment. "We are eager to share our experiences, but also build on best practices to make us all sustainable," Wadleigh said. n from page 1 CT could benefit from SCOTUS ruling State Sen. Kevin Kelly (R-Stratford)

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