College Health Insurance/Benefit Plans Post Affordable Care Act. May 29, 2013 Boston, MA

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1 College Health Insurance/Benefit Plans Post Affordable Care Act May 29, 2013 Boston, MA

2 Presenters Cindy McGahey Director of Finance & Administration University of New Hampshire Diane Plumly Director of Student Health Insurance, Office of Student Life The Ohio State University

3 Objectives Discuss implications of the Affordable Care Act (ACA) on student health insurance/benefit plans and programs Identify strategies moving to adapt to the environment Note: ACHA advises that you consult your own institution's legal counsel, risk management office, health insurance plan administrator, or other appropriate institutional officials in determining the insurance plan design and details for your institution's college students.

4 Timeline 3/21/12 Final Rules for Student Health Insurance released 6/28/12 US Supreme Court upholds the ACA 9/23/12 Summary of Benefits and Coverage released 1/30/13 Draft Federal Regulations released designating self-funded student health plans as Minimum Essential Coverage 2/22/13 Final Regulations announced for Health Insurance Market Rules/Rate Review and Standards Related to Minimum Essential Benefits

5 Extending Coverage for Young Adults (Age 26 Rule) Effective for health plan years beginning on or after September 23, 2010 Young adults are allowed to stay on their parent s plan until they turn 26 years old. (In the case of existing group health plans, this right does not apply if the young adult is offered insurance at work.) Source: healthcare.gov

6 Insurance Program Enrollment System Classifications Ohio State International Voluntary Positive Forced Negative Loose Restrictive Right of Mandatory Check-off Answer Check-off Waiver Waiver Refund Ohio State Domestic Source: Hodgkins Beckley Consulting LLC l Steven L Beckley and Associates Inc For definitions go to

7 Enrollment Trend Insurance Requirement Age 26 Rule

8 1705 1, , ,000 Ohio State University Comprehensive Student Health Insurance Plan Enrollment by Age Autumn 2009 to Autumn ,800 1, ,400 1, , Number of Students 1,200 1, , , , , , Autumn Autumn Autumn Age *Based on Autumn 2009 and Autumn 2011 and Autumn 2012 enrollment. AU09 age as of 9/16/2009. AU11 age of 9/14/2011. AU12 age as of 9/24/12.

9 Enrollment From to plan years: Total plan enrollment decreased 3.1% Undergraduate: 1.7% Graduate: 5.2% Professional: 10.0%

10 Enrollment by Residency Autumn 2009 DOMESTIC INTERNATIONAL Autumn 2012 DOMESTIC INTERNATIONAL 26% 39% 74% 61%

11 Benefits Essential Benefits - Mental health - Emergency care - Prescription drugs Preventive Services - Physical Exams - Screening Tests - Immunizations Contraceptive Coverage

12 Impact on SHI Dollar Limits Replace with visit limits Preventive Care Potential cost shift to plan if SHC moves to billing fee-for-service in lieu of health fee covering these services Student plans may need to add dental and vision benefits for dependent children Contraceptive Coverage Variation among carriers

13 Annual Maximum Timeline for Minimum Levels SHI Individual Market $100,000 $1,250, $500,000 $2,000, Unlimited Unlimited

14 Pre-existing Condition Limitations Timeline to Remove SHI Individual Market < 19 yrs < 19 yrs < 19 yrs None None None

15 Taxes Taxes and fees will impact cost of plans going forward No final regulatory rules and guidance issued about how the taxes will be calculated and paid Consensus is that insured premiums will need to increase about 4% because of the fees and taxes

16 Taxes (2) Health Insurer Fee (Insured plans only) Ongoing, beginning in 2014 Annual fee to offset premium subsidies and tax credits Transitional Reinsurance Program Contribution Temporary, Fund state non-profit reinsurance entities

17 Taxes (3) Patient-Centered Outcomes Research Fee Temporary, Used to fund clinical outcomes effectiveness research High-Value Plan Tax Ongoing, 2018 and beyond Fee assessed on high-premium health plans

18 Health Insurance Market Rules/Rate Review Student health insurance coverage is not subject to the single risk pool requirement of the ACA Rate charged by an issuer offering student health insurance coverage may be based on a schoolspecific group community rating Student health insurance coverage is exempt from the guaranteed availability and the guaranteed renewability requirements of the Public Health Service Act Permissibility to rate by age, gender, residency, grad/undergrad, etc.? Source: Patient Protection and Affordable Care Act;Health Insurance Market Rules; Rate Review 45 CFR Parts 144, 147, 150, 154 and 156 [CMS-9972-F]

19 Self-Funded SHI Plans Qualify as minimum essential coverage As such, students enrolled in selffunded plans won t incur shared responsibility payment penalty Not subject to ACA requirements Regulation at state level, not by Health and Human Services Source: Patient Protection and Affordable Care Act; Exchange Functions: Eligibility for Exemptions; Miscellaneous Minimum Essential Coverage Provisions [CMS-9958-P]

20 Self-Funded SHI Plans Moving to self-funding is a cost strategy to reduce administrative costs, not lower benefit levels Self-funded plans can provide quality coverage which meets ACA and is cost competitive ACHA Standards apply to both fully insured and self-funded plans Risk of self insuring is significant

21 UNH SHBP s Compliance Plan maximum removed in Originally had a $1 Million maximum Preventive Care covered at 100% if care received at Health Services Eliminated contraceptive coverage co-payment Now cover immunizations

22 Medicaid Expansion

23 Medicaid Access Challenges Student Health Center s participating provider status with Medicaid plans With Traditional Medicaid, many services including primary care and behavioral health are steered to community health centers There is difficulty finding providers who accept new patients on traditional Medicaid Medical Managed Care provider networks: Also presents difficulty in finding providers who are accepting new patients

24 Medicaid Advocacy Increase in number of Medicaid eligible students Students need a plan that is portable and provides coverage in the state the are attending school Can Medicaid dollars fund student insurance plans? Improved access to care Montana, Minnesota, Connecticut

25 Cost Comparison Illustration Medicaid Plan* OSU SHI Potential Cost Savings PMPM $273 M/ $383 F $192 $ 81 M/ $191 F Annual Cost $3,274 M/ $4,596 F $2,300 $974 M/ $2,296 F Total premium $6,690,000 $3,910,000 $2,780,000 (for 1,700 Students) Sources: Autumn 2010 Student Information System, The Ohio State University *Mercer - Fiscal Impact of the Affordable Care Act on Medicaid Enrollment and Program Cost. February 13, M, F

26 18% of Domestic Students covered under Ohio State s Student Health Insurance report individual/family income levels that would qualify for Medicaid Another 15% may qualify for tax subsidy in the exchange, in the absence of other health benefits coverage. Source: Estimate provided by Office of Student Financial Aid, The Ohio State University. Note: Income & eligibility criteria for financial aid and Medicaid assistance are not identical

27 Exchanges

28 Insurance Marketplace Open Enrollment begins October 1 One application Marketplace Consumer Application Coverage Effective January 1, 2014 Messaging will focus on cost: You can find out if you are eligible for a $0 or low cost health insurance premium Inclusion of student health plans on the exchanges is questionable and may be a state to state decision

29 By steering younger, healthier individuals into this market the cost of premiums for non-subsidized students are going to increase substantially, especially for younger males. Exchanges Level the playing field by incentivizing individuals to purchase insurance through an exchange. One of the greatest incentives is access to the tax credit/subsidy only available through an exchange.

30 Exchanges It is anticipated that as a result, these individuals will choose low premium plans with high deductibles and out-of-pocket cost sharing or choose to not be insured and pay the tax penalty. This places our students at greater risk and is contrary to the goals of low cost, low out-of-pocket, and high quality our SHI plans are designed to achieve.

31 Exchange Plans High deductible plans will be available - mirrors trend in employer plans Must provide essential health benefits May not meet school s requirements Student health concerns that they would equate to essentially no coverage for preventive or primary care

32 Application for Health Coverage & Help Paying Costs Application: Family/household income driven Single Adults application - Don t have dependents and cannot be claimed as a dependent on someone else s tax return - Not offered employer insurance Appears to have a residency requirement Automatic renewal up to 5 years

33 Catastrophic Plan Eligibility is restricted to either (1) young adults under age 30 prior to the start of the plan year or (2) individuals who have been deemed exempt from the individual mandate The plan provides the essential health benefits after the insured has met a deductible which must be equal to the maximum annual out of pocket limit for High Deductible Health Plans (HDHP) as defined by the IRS for the given plan year The deductible does not apply to at least three primary care visits

34 Catastrophic Plan Catastrophic coverage is not designed for day-today medical expenses such as doctor visits, prescription medicines or even emergency room visits. It is designed to cover excessive medical bills that occur above the limit that you would be able to manage financially. Covered California will provide catastrophic coverage for those up to age 30, or those individuals who can provide a certification that they are without affordable coverage or are experiencing hardship Source: coveredca.com

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37 Covered California Exchange Sample Monthly Rates by Region

38 Covered California Exchange Sample Monthly Rates by Region

39 Remaining Questions Tax Credits and Subsidies Students who are eligible for enrollment in self-funded plans are not eligible for credits and subsidies Students who are eligible for enrollment in fully insured plans are eligible for credits and subsidies International students eligibility for tax credits and subsidies

40 95% of individuals with household income between 139% and 200% FPL purchasing individual insurance in 2017 will elect to use the exchange Source: Milliman

41 Other Issues to Consider Will schools open enrollment in January and months following due to Exchanges and Medicaid expansion Raise awareness of SHI availability with navigators, non-navigator assistance personnel, and certified application assister/counselors Short-term limited duration insurance plans not bound by ACA requirements will still be available

42 Other Issues to Consider Rules for your institution as an employer of students General trends in employer plans related to eligibility and cost share - spouse coverage not mandated - increasing premium contribution for dependents

43 67% of uninsured and 68% of low-income say they do not understand how the ACA will impact their lives Source: Kaiser Family Foundation 90% of Americans are not aware that the Health Insurance Marketplace will open this fall. Source: Princeton Survey Research Association International

44 Parent Survey 98% of parents had input into their student s choice to purchase or waive the school sponsored plan 58% did not compare costs or benefits

45 Parent Survey Factors influencing the decision to purchase health insurance for their student in order of importance: 1 st Premium cost 2 nd Types of benefits offered 3 rd Out of pocket costs 4 th Pre-existing condition 5 th Proximity of providers to campus

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47 Conclusions Overall, there is a low awareness by students and parents about health care reform Expect a media blitz flooding students with options Many student health insurance plans will compare favorably to those available on the exchanges Recent legislation demonstrates recognition of student health insurance plans as a valuable option for students

48 Conclusions Having Federal mandate doesn t mean that all students will have adequate health coverage Need to advocate at state level for recognition of quality student health plans Develop materials to show that student health plans are a good deal Transition and impact will continue to evolve

49 Conclusions Schools should be prepared to address - the quality of their plans - how their plan compares to those offered thru exchanges - the reasons for having an insurance requirement

50 Resources ACHA.org Updated ACHA Standards for Student Health Coverage ACHA Medicaid Primer Updated ACHA Affordable Care Act Student Health Insurance FAQs Healthcare.gov

51 Presenter Contact Information Cindy McGahey Diane Plumly