Monday, 18 October 2021

State-Based Marketplaces 2.0 – Part 1: The Coming Expansion in Access, Affordability, and Value


The Affordable Care Act (ACA) survived its third challenge at the Supreme Court on June 18, 2021, by a 7-2 vote, signaling that Obamacare is here to stay. With a divided Congress and a Biden administration challenged by multiple urgencies, there is little hope for national legislation to address healthcare’s access, cost, and quality deficiencies comprehensively. 

Despite this lack of dramatic progress or sweeping change at the federal level, reformers need not lose hope. Quietly, state-based marketplaces are making health insurance provision more accessible, affordable and effective. 

A Biden Administration’s executive order signed in January 2021, reopened the federal health insurance marketplace to individuals seeking to purchase or modify health insurance policies. The fifteen state-based marketplaces (SBMs) followed suit by enacting their own versions of this special enrollment period.

The Administration’s $1.9 trillion American Rescue Plan, enacted on March 11, 2021, includes a narrow but powerful provision that temporarily grants premium subsidies to higher-income Americans and reduces premium costs for lower-income Americans.  The “Build Back Better Act” currently moving through the House of Representatives would make these subsidies permanent. It would also provide funding for more experimentation with state-based health insurance affordability programs.

These new policies align with measures undertaken by many SBMs during the past eight years to improve the quality, affordability, and marketability of their health insurance offerings. In this decentralized, real-world way, SBMs have operated as experimental policy laboratories to assess programming modifications for stabilizing local markets, expanding consumer choice, increasing access to vital healthcare services, and lowering premiums. 

Successful SBM innovations have demonstrated that insurance marketplaces can adapt and thrive by responding to consumer preferences. By expanding to more states, adopting proven remedies, and more effectively overseeing plan sponsors, SBMs can provide even more Americans with access to the affordable health and wellness services they need.


Enacted in 2010, the ACA introduced guidelines and provided start-up funding for SBMs. The legislation’s aim was to create affordable health insurance options that Americans lacking health insurance coverage could purchase on market-based exchanges.

Inspired by Massachusetts healthcare reform (aka “Romneycare”), the framework built on non-ACA purchasing cooperatives offering “small group” health insurance plans. The new marketplaces enabled individual consumers to purchase ACA-compliant health insurance coverage online. The ACA also provided income-based subsidies for qualified enrollees. 

The ACA’s designers believed that most states would develop their own marketplaces. They established, a federally operated alternative, to provide access to ACA plans in states that chose not to create SBMs. 

Political resistance impeded the widespread adoption of SBMs at the outset. Yet, SBMs have not only thrived in the years since they are now poised to expand. Kentucky, Maine, and New Mexico are launching their own state-run marketplaces this fall for operation in Plan Year 2022. Others, including Virginia, will likely follow. 

Source data:  Kaiser Family Foundation,%22sort%22:%22asc%22%7D

SBMs operate as marketplaces for insurers to compete in offering plans that meet ACA-regulated standards. SBMs also promote enrollment, pool risk to lower premiums, and facilitate comparison shopping.


Including, 12 million consumers have enrolled in market-based plans for the calendar year 2021, an increase of 600,000 from 2020. Over 3.8 million of the 12 million enrolled through SBMs. The vast majority of enrollees (including 88% of the consumers enrolled through receive some financial assistance in the form of subsidies.

Despite the increased enrollment, more than 30 million Americans remain uninsured and 43.4% of the population has inadequate health insurance coverage. The number of uninsured people in America declined significantly with the implementation of the ACA in 2014, then began to rise in 2017 as the Trump Administration reduced support for enrollment. 

The pandemic-related economic shutdown seemed likely to balloon the ranks of the uninsured. Instead, employer-based coverage largely held and many who found themselves suddenly uninsured secured coverage through Medicaid or marketplace health plans. 

The extension of the open enrollment period and the enhanced subsidies have facilitated enrollment in SBMs and this year. For an estimated one million people, marketplace health plans provided a critical safety net.


Despite the charged political debate since the ACA’s passage, SBMs have shown great promise and resilience. Many SBMs have adopted targeted solutions to make health plan premiums more attractive and affordable. Some have enabled consumers to shop and compare plans more easily. Others have included reinsurance, enhanced subsidies, and/or individual mandates that strengthen the risk pool and help to reduce prices.

Different approaches among states can lead to drastic differences in the affordability and attractiveness of health plan offerings. Minnesota’s decision to offer reinsurance to insurers with health plans on its SBM lowered its 2021 monthly benchmark rate to $292. Across the state line in Wisconsin, the monthly benchmark rate jumped to $782. The 2021 national average benchmark premium is $443 per month.

Analysts, administrators, and policymakers are studying these different approaches to better understand the factors influencing the elasticity of demand in state and federal marketplaces. The results can be striking. 

One study showed that the existence of individual mandates in state-based marketplaces increases the likelihood that individuals will purchase health insurance policies, regardless of financial penalties.  Other studies confirm that individual tolerance for higher premiums increases with a greater perceived need for health insurance, as occurs with factors such as poor health and older age. Such priorities increase demand for health insurance and reduce price elasticity. 

That said, a standardized menu of affordable options increases consumer sensitivity to price. States can adopt an evidence-based approach by using this type of knowledge to tweak program offerings and make them more attractive to marketplace consumers. 

SBMs monitor each other’s strategies closely, often adopting innovations appropriate to local needs. By using an evidence-based approach, they can make their offerings even stronger. Progress will also stimulate interest in other states for developing their own marketplaces. As noted above, SBMs’ collective success has already influenced several traditionally red and purple states, including Kentucky, Maine, New Mexico, and Virginia, that are now implementing their own SBMs.

With political headwinds now turning into tailwinds, SBMs are finding it easier to enact modest but practical structural improvements that can make their marketplaces even more robust and attractive. Growth will continue as more product offerings come to SBMs, consumers gain more choices, value-driven transactions increase, health outcomes improve and system-wide costs decrease.


The ACA gives states the flexibility to implement SBMs and encourage private sector participation. The federal government is responsible for establishing coverage standards, financing subsidies, and operating the platform. But it faces some challenges when it comes to innovating.

By contrast, states can be nimble. They can tailor program offerings to meet market demands and dynamics. Factors influencing program design could also include the state’s urban/rural mix, the size of its employer base, the payer mix, social determinants of health, demographics, and cultural attributes. This ability to accommodate market preferences and other factors validates the federalist approach that the ACA takes in granting SBM program design to the states.

This flexibility avoids the “one-size-fits-all” approach incorporated within the federally run marketplace. By tailoring their SBMs to local circumstances, the states have become vital engines of experimentation and innovation for advancing the overall effectiveness of the nation’s healthcare marketplaces.

With enhanced program design and expansion to more states, along with support from the Build Back Better Act, SBMs are well-positioned to serve as a catalyst for meaningful healthcare reform. Not all progress is revolutionary. As SBMs have demonstrated, evolutionary improvements in benefit design, enrollee engagement, risk management, and outreach enable millions of American consumers to gain affordable access to high-quality care.

For additional detail, please see a summary of these and many other state actions to support access to health insurance coverage from the Commonwealth Fund: 

Rosemarie Day is the founder and CEO of Day Health Strategies (, a consulting firm dedicated to transforming the US healthcare system.

David Johnson is the CEO of 4sight Health, a thought leadership and advisory company working at the intersection of strategy, economics, innovation, and capital formation.


1 Andrews, M. (2021, February 15). As Biden Reopens ACA ENROLLMENT, are you eligible to sign up or switch HEALTH PLANS? NPR.

2 Kliff, S. (2021, January 16). One sentence In Biden stimulus Plan reveals his health care approach. The New York Times.; American rescue PLAN Act funding breakdown. NACo. (2021, July 29).  


4 Finegold, K., Conmy, A., Chu, R. C., Bosworth, A., & Sommers, B. D. (2021, February 11). TRENDS IN THE U.S. UNINSURED POPULATION, 2010-2020.   

5 Collins, S. R., Gunja, M. Z., & Aboulafia, G. N. (2020, August 19). U.S. health insurance coverage in 2020: A looming crisis in affordability. Health Coverage Affordability Crisis 2020 Biennial Survey | Commonwealth Fund.

6 COVID enrollment period. ACA Signups. (n.d.).   

7 Minemyer, P. (2021, May 24). Average benchmark premiums for ACA exchange Plans decline again IN 2021: Report. FierceHealthcare.,fell%20by%201.7%25%20for%202021

8 Saltzman, E. (2017). Demand for Health Insurance: Evidence from the California and Washington ACA Marketplaces. University of Pennsylvania Scholarly Commons. 

9 Abraham, J., Drake, C., Sacks, D. W., & Simon, K. I. (2017, July 24). Demand for health insurance marketplace plans was highly elastic in 2014-2015. NBER.

10 It’s worth noting that states that establish their own marketplaces can recapture the user fee that they must pay to the federal government for participating in This is a sizeable assessment that can save states millions of dollars. See: Schwab, R., & Volk, J. A. (2019, June 28). States looking to run their own health insurance marketplace see opportunities for funding, flexibility. States Looking to Run Own Insurance Marketplace     

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Friday, 15 October 2021

Walmart Picks Transcarent: Tullman on First ‘Everyday Low Prices’ Offer for Self-Insured Employers


Walmart is looking to scale its healthcare business in a brand-new way: setting its sights on self-insured employers. Today the retail giant announced a go-to-market partnership with Transcarent that will make its “everyday low price” prescription drugs and healthcare services available to self-insured employers for the very first time. Transcarent’s Executive Chairman & CEO Glen Tullman drops in to give us the inside story on the deal with Walmart, what it means for the industry, and how it could once-and-for-all ignite the ‘disruption of the payer’ that we’ve been waiting for since JP Morgan, Berkshire Hathaway, and Amazon came together to found Haven.

Transcarent and Glen are hell-bent on re-making the healthcare payment model by eliminating as many middlemen as possible, reshaping the health and care experience along the way. So, what does this partnership with Walmart mean for that mission and for Transcarent? Is this “THE Deal” we’ll look back on as the one that catapulted Transcarent into a new phase of growth? Remember when Glen’s last company, Livongo, shot into the stratosphere after its deal with CVS Health? I ask Glen if he’s running the same play in a much bigger game and finally concede: Transcarent is NOT a healthcare navigator!

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#Healthin2Point00, Episode 235 | Walgreens Health + VillageMD & CareCentrix, plus more deals

Today on Health in 2 Point 00, Noom launches a mental health offering, Noom Mood, Headspace partners with Waze to offer meditation while you drive, and we have one for the Press Release Hall of Fame where Dario Health announces a major partnership with a major national health plan— but doesn’t say who it is. We have some massive deals on Episode 235: Walgreens launches Walgreens Health, acquires a controlling stake of VillageMD, AND acquires a majority stake of CareCentrix; Intelerad acquires Ambra Health for $250 million; Mindbody acquires ClassPass; and Sprinter Health gets $33 million – even though their business model makes no sense. —Matthew Holt

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Thursday, 14 October 2021

#Healthin2Point00, Episode 234 | An M&A and shedloads more money!

Today on Health in 2 Point 00, the word is SHEDLOAD. On Episode 235, Jess and I talk about the scoop on an M&A and shedloads more money in today’s health tech funding climate. First up, Lark gets $100 million, bringing its total to $185 million. How much more money can we throw at a chronic condition management platform? Next, Scottish remote patient monitoring company Current Health gets acquired by Best Buy. TrialSpark raises $156 million, working on developing drugs via their clinical trials software, Twin Health raises $140 million to run clinical trials in silico in “digital twins,” and virtual care GI company Oshi Health gets $23 million. —Matthew Holt

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THCB Gang Episode 67 – Thurs October 14 1pm PT-4 ET

Joining Matthew Holt (@boltyboy) on THCBGang today will be THCB regular writer Kim Bellard (@kimbbellard); patient safety expert and all around wit Michael Millenson (@MLMillenson); and privacy expert and entrepreneur Deven McGraw (@HealthPrivacy);

You can see the video below & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

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Wednesday, 13 October 2021

Get Ready for Deepfakes


The Tom Cruise TikTok deepfakes last spring didn’t spur me into writing about deepfakes, not even when Justin Bieber fell so hard for them that he challenged the deepfake to a fight.  When 60 Minutes covered the topic last night though, I figured I’d best get to it before I missed this particular wave.

We’re already living in an era of unprecedented misinformation/disinformation, as we’ve seen repeatedly with COVID-19 (e.g., hydroxychloroquine, ivermectin, anti-vaxxers), but deepfakes should alert us that we haven’t seen anything yet.  

ICYMI, here’s the 60 Minutes story:

The trick behind deepfakes is a type of deep learning called “generative adversarial network” (GAN), which basically means neural networks compete on which can generate the most realistic media (e.g., audio or video).  They can be trying to replicate a real person, or creating entirely fictitious people.  The more they iterate, the most realistic the output gets.  

Audio deepfake technology is already widely available, and already fairly good.  The software takes a sample of someone’s voice and “learns” how that person speaks.  Type in a sentence, and the software generates an audio that sounds like the real person.  

The technology has already been used to trick an executive into sending money into an illicit bank account, by deepfaking his boss’s voice.  “The software was able to imitate the voice, and not only the voice: the tonality, the punctuation, the German accent,” a company spokesperson told The Washington Post.

One has to assume that Siri or Alexa would fall for such deepfaked voices as well.  

Audio deepfakes are scary enough, but video takes it to another level.  As the saying goes, seeing is believing.  A cybercrime expert told The Wall Street Journal: “Imagine a video call with [a CEO’s] voice, the facial expressions you’re familiar with. Then you wouldn’t have any doubts at all.”  

As is often the case, the porn industry is an early adopter of the new technology.  Last month MIT Technology Review reported on a site that allows someone to upload a picture of a face, and see that face morphed into an adult video.  The impacts on innocent victims are horrifying.  

That particular site (which Technology Review now says is no longer available) was not the first such porn site to use the technology, probably didn’t have the most realistic deepfakes, and won’t be the last.  Sadly, though, deepfake porn is far from the biggest problem we’re likely to have with the technology. 

We’re going to see mainstream actors in movies that they never filmed.  We’re going to see dead actors in new movies.  We’re going to see deepfaked business executives saying all sorts of ridiculous things (Mark Zuckerberg may already be a deepfake).  We’re going to see politicians saying things that make their opponents look good.  

Martin Ford, writing in Market Watch, warns: 

A sufficiently credible deepfake could quite literally shift the arc of history—and the means to create such fabrications might soon be in the hands of political operatives, foreign governments or just mischievous teenagers.

Hany Farid, a Cal Berkeley professor, told NPR: “Now you have the perfect storm.  I can create this content easily, inexpensively, and quickly, I can deliver it en masse to the world, and I have a very willing and eager public that will amplify that for me.”

Similarly, technology consultant Nina Schick, who has written a book on deepfakes, told 60 Minutes: “the fact that AI can now be used to make images and video that are fake, that look hyper-realistic. I thought, well, from a disinformation perspective, this is a game-changer.”

Imagine what the COVID misinformation crew could do with a deepfake Dr. Fauci.

He has been, in many ways, the face of modern medicine and science during the pandemic.  There are countless hours of video/audio of him over the last eighteen months.  He’s usually been right, sometimes been wrong, but has done his best to follow the science.  COVID-19 skeptics/deniers constantly parse his words looking for inconsistencies, for times when he was wrong, for any opportunity to challenge his expertise.

With deepfakes, we could have him telling people not to bother with masks or even vaccines.  His deepfake could tout unproven and even unsafe remedies, and denounce the FDA, the CDC, even President Biden.  Heck, they could have President Biden attacking Dr. Fauci and praising Donald Trump (conversely, of course, a deepfake Trump could urge vaccine mandates).  

We struggle now to find the best health information, about COVID and anything else that worries us about our health.  We look for credible sources, we look for reputable people’s opinions, and we use that information to make our health decisions.  But, as Ms. Schick said on 60 Minutes, deepfakes are “going to require all of us to figure out how to maneuver in a world where seeing is not always believing.”       

That will not be easy.

We’re just starting to realize how deepfakes may impact healthcare.  In a recent Nature article, Chen, et. alia warned: 

…in healthcare, the proliferation of deepfakes is a blind spot; current measures to preserve patient privacy, authentication and security are insufficient. For instance, algorithms for the generation of deepfakes can also be used to potentially impersonate patients and to exploit PHI, to falsely bill health insurers relying on imaging data for the approval of insurance claims46 and to manipulate images sent from the hospital to an insurance provider so as to trigger a request for reimbursement for a more expensive procedure.

The authors believe that there is a role for synthetic data in healthcare, but say: “it is urgent to develop and refine regulatory frameworks involving synthetic data and the monitoring of their impact in society.”

So it is generally.  The technology for detecting deepfakes is improving but, of course, so is the technology for creating them.  It’s an arms race, like everything with cybersecurity.  As Ms. Schick pointed out on 60 Minutes, “The technology itself is neutral.”  How it is used is not.

She also believes, though: “It is without a doubt one of the most important revolutions in the future of human communication and perception. I would say it’s analogous to the birth of the internet.”

I’m not sure I’d go that far.  

Doctored audio/video has been with us for pretty much all of the time we’ve had audio/video; deepfake technology just takes it to a new, and more convincing, level.  We still haven’t figured out how to use the internet responsibly, and, if they do nothing more, deepfakes remind us that we’d better do so soon.  

Kim is a former e-marketing exec at a major Blues plan, editor of the late & lamented, and now a regular THCB contributor.

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Tuesday, 12 October 2021

#Healthin2Point00, Episode 233 | Another $2B in deals, including Devoted’s whopping valuation

Today on Health in 2 Point 00, we’re thinking about changing our name to Health in 2 Billion 00. Devoted Health confirmed its $11 billion valuation, bumping it to $12 billion after you count the additional $1.2 billion coming in. Now onto the other 2 billion in deals, BetterUp raises $300 million in a Series C, bringing their total to $569.8 million for performance coaching and resilience training. Honor is growing fast – it raises $370 million ($300M of that is debt), bringing their total to $625M. Elemy, formerly called Sprout, raises $219 million, for children’s behavioral health. Finally, MindMaze raises $125 million, bringing their total to $235 million, working on gamifying digital neurotherapeutics. —Matthew Holt

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