COVERED CALIFORNIA: THE GOOD, THE BAD & THE UNDEFINED FOR CHILDREN WITH SPECIAL HEALTH CARE NEEDS

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1 1 COVERED CALIFORNIA: THE GOOD, THE BAD & THE UNDEFINED FOR CHILDREN WITH SPECIAL HEALTH CARE NEEDS Ann-Louise Kuhns President & CEO California Children s Hospital Association

2 Health Care Reform: The Basics 2 Patient Protection & Affordable Care Act Expanded Coverage Insurance Reforms Payment Reforms

3 Expanded Coverage in the Insurance MarketPlace 3

4 4 Expanding Coverage By Changing the Insurance Marketplace Create federal and state health exchanges US Population Provide subsidies to purchase health insurance in those exchanges/marketplaces Establish coverage parameters for health insurance companies Expand eligibility requirements for Medicaid Require individuals to purchase and employers to provide health insurance coverage Source: Congressional Budget Office.

5 Premium and Cost-share Subsidies 5 Deductible Copayment Coinsurance Premium Subsidies Reduces the amount you pay for a premium The higher your income, the lower your subsidy Cost-share Subsidies Reduces annual limit on costshares Reduces actual cost-shares

6 Insurance Exchanges 6 Mandated by the healthcare reform law Organized and competitive market for buying insurance Primarily serve individuals and small businesses with <50 employees 2 types: federal- and state-run

7 Coverage Rules: Essential Health Benefits 7 Essential Health Benefits Ambulatory patient services Emergency services Hospitalizations Maternity and newborn care Mental health and substance use disorder services, including behavioral health treatment Prescription drugs Rehabilitative and habilitative services and devices Laboratory services Pediatric services, including oral and vision care Preventive and wellness services and chronic disease management California s benchmark plan is Kaiser Small Group California Law Exceeds Federal Requirements Source: Kaiser Family Foundation. What the Actuarial Values in the Affordable Care Act Mean.

8 Coverage Rules: The Metal Plans 8 Bronze Product 60% actuarial value Silver Product 70% actuarial value Gold Product 80% actuarial value Platinum Product 90% actuarial value Source: Kaiser Family Foundation. What the Actuarial Values in the Affordable Care Act Mean.

9 9 Covered California: How This Looks in Practice

10 10 Covered California: Out-of Pocket Example for Silver Plan

11 Covered California: Enrollment 11 Subsidized vs. Unsubsidized Enrollment Unsubsidized 12% Subsidized 88% Total Enrollment: 1.4 million

12 Covered California: Enrollment 12 Platinum Plan 5% Gold Plan 6% Enrollment by Metal Tier Bronze Plan 26% Silver Plan 63%

13 Covered California: Enrollment by Age and older 55 to 64 Age Less than to 25 As of March 31, 2014 less than 78,000 children were enrolled in the Exchange 45 to to to 44

14 Expanded Coverage through Medi-Cal 14

15 Medi-Cal Expansion 15 Original Medi-Cal Low-income pregnant women Children Low-income Medicare beneficiaries ACA Expansion Anyone 138% of the federal poverty level (FPL) Benchmark benefit package that meets the essential health benefits

16 California s Medi-Cal Expansion 16 Medi-Cal Enrollment in January 2014: 9.39 million DHCS Estimates that an additional 1.3 million people enrolled in Medi-Cal between October 1, 2013 and March 31, 2014.

17 Other Health Insurance Reform Designed to Enhance Consumer Protections 17

18 Health Insurance Reform Provisions 18 Establishes coverage eligibility reforms Limits insurers rate-setting autonomy Sets maximum out-of-pocket (MOOP) limits; bans annual and lifetime limits Expands covered services to include preventive and wellness programs

19 19 Reformed Coverage Eligibility Requirements Guaranteed issue Insurance companies must offer a policy (coverage to any for applicant individuals regardless with of health status or other factors pre-existing conditions) Young adults up to age 26 are allowed to stay to on age their 26 parents insurance plan Dependent coverage extended

20 Premium Rate-setting Limitations 20 Rate Reviewing All premium rate increases must be justified Government officials may reject proposals Rating Bands Given the lowest premium amount, the highest premium amount can only be a certain percentage more Medical Loss Ratio (MLR) The MLR is a ratio of premiums and cost-shares to the cost of delivering medical care

21 21 Other Limitations on Health Insurance Companies Maximum out-ofpocket (MOOP) established Ban on annual and lifetime limits

22 Expanded Covered Services 22 Preventive Services Wellness Programs

23 23 Rules Apply Differently to Different Market Segments

24 Payment Reforms 24

25 Payment Reform Provisions 25 Independent Payment Advisory Board (IPAB) Patient-Centered Outcomes Research Institute (PCORI) Shared savings: Accountable Care Organizations (ACOs) Bundled or global payments Value-based purchasing

26 26 Children with Special Health Care Needs Issues to Consider

27 CSHCNs: A Diverse Population 27 4 Million children in California 50% in Medi-Cal 10.6% with special health care needs 52% of CA CSHCN have two or more chronic conditions. 16% of CSHCN in California have 4 or more conditions. 175,000 children in CCS (yearly avg.) Dozens of conditions and a wide range of complexity.

28 28 Even Before Reform, Care for CSHCNs Fell Short

29 The Promise of Reform 29 Care Coordination Improved Outcomes Cost Savings Does this model work for CSHCN?

30 30 Quality of Public Programs is Variable or Hard to Measure

31 31 Reform Implementation Has Been Bumpy Mostly On Process Medi-Cal dual eligible adult transition to managed care: Communication issues with stakeholders about benefits and changes to services. Capitation rate inadequacies/health plan solvency issues. Barriers to care resulting in delays of critical health care services. Healthy Families Transition to Medi-Cal: Loss of ABA Therapy Covered California: Early criticism regarding lack of outreach to Latinos

32 Political Dynamics Are Changing 32 Health reform efforts and financial pressure on government are radically reframing the terms of the social contract between the state and the disabled community Changing reimbursement models emphasize value and cost containment Pressure to move to managed care models across payer types and populations The ACA has changed the political dynamic

33 Strategies for Cost Containment 33 Threaten Systems of Care Covered California Plan Designs: Out-of-pocket costs (copays for specialty care) can be high Prior authorization requirements for specialty care Extensive tiering and aggressive formulary management Narrow networks Jury is out on whether this is working for special needs populations

34 Ecosystem for Children with Special Health Care Needs: The Challenges of Reform Children s Hospital Specialty Care Clinic Pediatric Specialist HMO permits referrals only for cases determined too difficult for preferred providers Primary Care HMO Care Management Family Schools Child HMO Preferred Ancillary Support Contractors County Social Services Subacute Care HMO Preferred Subcontracting Medical Group (for specialty care) HMO Preferred Hospital

35 Next Steps 35 Monitoring Network Adequacy Exchanging information on what is working and what is not Developing consensus on metrics for CSHCNs postreform