State health insurance exchanges to create $595M market by 2015

Vendors who get involved early would have access to future opportunities tool, Input report says

While the estimated $595 million market for state insurance clearinghouses to be developed under the health reform law is not a large amount for 50 states, vendors who get involved will likely have access to a pool of related opportunities in later years, according to a new report.

States are expected to create online state health insurance exchanges under the new law to give consumers access to data allowing them to compare insurance benefits, quality and rates as well as links to enrollment systems. The systems are to be up and running by 2014.


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Total state and local spending on the exchanges is expected to reach $595 million in 2015, Input market research firm said in the Nov. 10 report.

While that averages only about $12 million per state, vendors who get involved now are likely to benefit from additional contracts down the road, Input said in the report.

“While they do not represent high-dollar-value opportunities, these exchanges represent the first major new initiative in state-based health care services since the SCHIP [State Children’s Health Insurance Program] was launched in 1997,” the Input report said. “Moreover, opportunities in this area will position vendors in proximity to major health care cost-containment efforts for programs such as Medicaid.”

Input advises contractors to monitor states that are moving forward quickly in the implementation process, as they will serve as the models for future opportunities.

"The requirement for exchanges to be launched by 2014 opens the door for numerous opportunities," Amanda White, author of the report and Input analyst for social services and health care. "More funding is expected to be released over the next two years, and contractors should work on systems that are seamless and have the ability to integrate with existing programs and eligibility systems. Contractors will be needed to assist in planning, actuarial consulting, technical and policy consulting, business processing, call centers, and system implementation."

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

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