Washington Health Benefit Exchange Premium Aggregation Business Case

Transcription

1 Washington Health Benefit Exchange Premium Aggregation Business Case Exchange Board Meeting December 18, 2014 Jason Leung, Cambria Solutions Inc. Karli Stander, Cambria Solutions Inc.

2 Contents 1. Methodology 2. Business Case Findings Industry practices Required system changes Risk analysis Projected Timeline & Costs 3. Stakeholder Feedback 4. Q&A 2

3 Methodology: Purpose & Approach Identify whether WAHBE can adopt a financially and organizationally sustainable alternative business model that improves the quality of enrollment and payment data, thus improving interactions with carrier business partners and members. Define Desired Outcomes Evaluate Options Gather Evidence Analyze Risk Conduct Stakeholder Outreach 3

4 Methodology: Options for Evaluation Option 1: HBE Retains Premium Aggregation HBE continues to aggregate payments Option 2: Transition HBE to Initial Payment Facilitator HBE facilitates initial payment, carriers collect monthly payments Option 3: HBE does not accept payments for Individual Market Refer all payments directly to carriers Option 4: Third Party Administrator processes payments Third Party Administrator collects premiums and pays carriers 4

5 Contents 1. Methodology 2. Business Case Findings Industry practices Required system changes Risk analysis Projected Timeline & Costs 3. Stakeholder Feedback 4. Q&A 5

6 Industry Practices All states with small group marketplace aggregating premiums for SHOP Comparison of State Exchange models: States Original Design Payment Processing Method Current Process WA Premium aggregator Premium aggregator RI, VT, MA Premium aggregator Premium aggregator using TPA NV Premium aggregator FFM CT, MN Premium aggregator Enrollees pay issuer directly MD, Washington D.C. Initial payment facilitator Enrollees pay issuer directly CA, CO, HI, ID, KY, NM, NY, OR, & All FFM States Enrollees pay issuer directly Enrollees pay issuer directly 6

7 Required System Changes: Discontinuing Premium Aggregation No on/off switch Required changes to Healthplanfinder for Individual market: Allow separation of qualified dental plans from health plans No payments accepted by Exchange Discontinue grace period monitoring and associated automated actions Create new file types to be received from Carriers No changes to SHOP market 7

8 Risk Analysis: Discontinuing Premium Aggregation Risk level was evaluated for severity and volume of impact, then adjusted for probability (based on historical data, other state exchanges, and stakeholder input). Impacts considered for each risk include carrier dissatisfaction, customer dissatisfaction, operational costs, and Exchange reputation. Retain Premium Aggregation Remove Premium Aggregation Implementation Issues due to System Changes Short Timeframe for Implementation Change Management Increased Administrative Costs to Carriers Increased Customer Premiums Delayed Enrollment Processing Populating 1095 Tax Forms, IRS Reporting Data Loss at Cutover High Med Low Low Med High RISK LEVEL 8

9 Projected Costs & Timeline Cost Model: Premium Aggregation Options Initial Costs (2015) Ongoing Biennium Costs (7/2015 6/2017) Average Annual Cost (3-year) Total Option 1: Retain Premium Aggregation $650k $16.0m; $8.0m $16.6m Option 2: Transition to Initial Payment Facilitator $4.6m $7.3m $4.0m $11.9m Option 3: No Payments Accepted for Individual Market $4.5m $5.6m $3.2m $10.1m Option 4: Third Party Administrator $5.5m $14.2m $7.2m $19.7m Timeline for Implementation of Premium Aggregation Alternative Activities Nov Dec Jan Feb Mar Apr May June July Aug Sep Oct Nov Ongoing Releases MPS Development Functional design, LOE Technical Design Development & System Test User Acceptance Testing Carrier Testing Go/No-Go Decision MPS Go-Live Open Enrollment 10

10 Contents 1. Methodology 2. Business Case Findings Industry practices Required system changes Risk analysis Projected Timeline & Costs 3. Stakeholder Feedback 4. Q&A 10

11 Stakeholder Feedback: Executive Summary Key Takeaways: Majority of carriers prefer to take ownership of invoicing and payment processing Carriers acknowledge necessary operational and system changes, assumed associated costs not prohibitive to Exchange participation Emphasized importance of HBE focus on accurate and timely eligibility and enrollment information Concerns around customer confusion, ease of use, and effective communication in the event of process changes Implementation of carrier system adjustments may take up to 9 months 11

12 Stakeholder Feedback Carrier Participation in Other State Exchanges Ability to Bill & Collect Premiums Payment Types Average Payment Processing Time Implementation Timeframe Grace Period Timeframe: Non-APTC Projected Rate Increases? Preference on Premium Aggregation #1 8 States Yes All except ACH Transfer 1 Day 2-3 months 30 days No Enrollees pay issuer directly #2 7 States Yes All 3 Days 4-6 months 30 days No Enrollees pay issuer directly #3 N/A No N/A N/A 3 months min. N/A Yes Premium aggregation by Exchange #4 2 States Yes All 1 Day 2-3 months 20 days No Enrollees pay issuer directly #5 2 States Yes All 1 Day 1-2 months 30 days No, assuming lower carrier assessment fee Enrollees pay issuer directly #6 3 States Yes All except Credit Card, E-Check 1 Day 1-2 months 30 days No Enrollees pay issuer directly #7 N/A No N/A N/A Unknown N/A Unknown Premium aggregation by Exchange #8 N/A Yes ACH Transfer, Paper Check, Money Order 1 Day 4-6 months min. N/A Yes Premium aggregation by Exchange #9 6 States Yes All except E- Check 2 Days 6-8 months 30 days No Exchange premium aggregation IF current issues resolved #10 1 State Yes All 1-4 Days 2-3 months 30 days No Enrollees pay issuer directly #11 N/A Yes All 2 Days 6-9 months 30 days No, assuming lower carrier assessment fee Enrollees pay issuer directly 12

13 Contents 1. Methodology 2. Business Case Findings Industry practices Required system changes Risk analysis Projected Timeline & Costs 3. Stakeholder Feedback 4. Q&A 13

14 Appendix

15 Initial Cost Inputs Cost Model Inputs Payment-related change requests Change request to modify/remove premium aggregation functionality Ongoing Cost Inputs Staffing (Operations, Finance, IT Staff) Accounting system Document imaging for checks Invoice-related printing services Payment processing fees (ACH bank fees, Key Bank fees, Credit card fees) Call Center costs Additional Considerations 3% annual cost increase Costs dependent on enrollment volume incorporated latest enrollment projections 15

16 INCOMING INCOMING Required System Changes: Retain vs. Remove Premium Aggregation Retain Premium Aggregation Create account, determine eligibility Process enrollment & payment Separate batch job Process monthly invoices, payments Separate batch job Monitor grace periods Process changes, as needed Carrier Enrollment Info Payment Info Eligibility Payment Info OUTGOING As of Release 2.0 Remove Premium Aggregation Create account, determine eligibility Process enrollment & payment Process changes, as needed Carrier Enrollment Info Payment Info Eligibility Enrollment Info Payment Info OUTGOING Process invoices, payments Monitor grace periods 16

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