ESTIMATES OF SOURCES OF HEALTH INSURANCE IN CALIFORNIA FOR 2014

Transcription

1 ESTIMATES OF SOURCES OF HEALTH INSURANCE IN CALIFORNIA FOR 2014 The California Health Benefits Review Program (CHBRP) responds to requests from the California Legislature to estimate the medical effectiveness, and the marginal public health and cost impacts of proposed state health insurance benefit mandates or repeals. 1 This brief presents projections of health insurance enrollment for California s population in These projections serve as the basis for CHBRP s 2014 Cost and Coverage Model, which is used to provide estimates of the marginal change in benefit coverage, utilization, and cost for benefit mandates proposed in The Affordable Care Act and CHBRP s Estimates CHBRP has adapted its baseline Cost and Coverage Model to anticipate the dramatic changes to the California health insurance markets that will occur as a result of the Affordable Care Act (ACA) effective January 1, These changes, such as the expansion of Medi-Cal, the individual mandate to purchase health insurance, and the entrance of a subsidized marketplace Covered California where individuals can purchase coverage, will significantly affect the composition and organization of California s health insurance marketplace. 2 Figure 1. Analysis timeline for benefit mandates proposed in January-February 2013 March-April 2013 January 2014 CHBRP completes Cost and Coverage Model, projecting 2014 enrollment. CHBRP analyses completed. Major provisions of ACA take effect. Benefit mandate legislation introduced. Benefit mandate legislation takes effect, if passed. The exact distribution of Californians among health insurance market segments under the ACA is unknown at this point; however, lawmakers will still consider benefit mandate bills in the 2013 legislative season for this undefined marketplace. In order to analyze bills in the 2013 Legislative season, CHBRP s estimates must first project California s health insurance market on January 1, 2014, before subsequently estimating the marginal impact of a proposed mandate onto the post market. CHBRP s 2014 baseline enrollment projections assume market shifts under the ACA have already taken effect, before estimating the marginal impact of any proposed benefit mandates. 1 The California Health Benefits Review Program (CHBRP) was created by AB 1996 in CHBRP s authorizing statute is available at: 2 Effective January 2014, the Affordable Care Act (ACA) also dictates minimum benefit coverage via EHBs and preventive services mandates, which took effect in While this also affects CHBRP estimates, the purpose of this brief is to show enrollment by market segment. 1

2 CHBRP Estimates of Marginal Impacts of Benefit mandates could affect segments of the health insurance market differently, depending on: Regulator: Which laws health insurance plans or policies must follow; Funding Type: Whether health insurance is publicly or privately funded; Payer: Whether health insurance is purchased as part of a Large Group (51+ members), Small Group (2-50 members), or as an individual, directly from the insurance company. Status: Whether the health insurance plan or policy is grandfathered (in existence before the ACA was signed into law) or non-grandfathered. Therefore, CHBRP s Cost and Coverage Model for 2014 breaks the health insurance market into these segments in order to later estimate the marginal effects of proposed mandates on each of these segments. California Insurance Marketplace Characteristics in 2014 Insurance Status by Regulatory Agency Benefit mandates passed in California are written into one or two sets of laws: The Health and Safety Code, enforced by the Department of Managed Health Care (DMHC); and, The Insurance Code, enforced by the California Department of Insurance (CDI). Only state-regulated plans or policies are subject to state benefit mandates. As a result, in order to determine the cost impact of a benefit mandate, CHBRP must determine how many Californians are enrolled in DMHC-regulated plans and CDI-regulated policies. 3 CHBRP projects: DMHC- or CDI-regulated: In 2014, CHBRP projects that 25.5 million Californians will be enrolled in state-regulated health insurance; 21.8 million in DMHC-regulated plans and 3.7 million in CDI-regulated policies (Figure 2). Neither: An additional 9.5 million Californians will be enrolled in health insurance that is regulated by other public entities, such as the federal government or local entities. None: Finally, 3.7 million Californians will remain uninsured, and therefore not be regulated by any government entity. 3 The federal government also regulates health insurance, such as Medicare, Veteran s Administration, and certain segments of Medicaid. Federally sponsored health insurance is not subject to California benefit mandates. Californians lacking health insurance, by definition, do not have plans or policies on which to impose a mandate. 2

3 25.0 Figure 2: Health Insurance by Regulatory Agency in M 20.0 People (in Millions) M M 3.7M 0.0 DMHC CDI Neither None Subject to State Not Subject to State Insurance Status by Funding Type and Payer Type Proposed benefit mandates could affect health insurance plans and policies differently, depending on whether they are public or privately funded, and who is paying for them. Therefore, CHBRP further segments publicly and privately funded health insurance by payers (Figures 3 and 4). Publicly funded: Publicly funded health insurance is purchased or paid for by public sector buyers, such as the state or local agencies through the California Public Employees Retirement System (CalPERS) for its employees. Publicly funded health insurance is also paid for by public programs, such as Medi-Cal, subsidized coverage in Covered California, and Medicare. CHBRP projects 15.4 million Californians will have publicly funded health insurance in CHBRP includes those individuals with subsidized health insurance in Covered California as publicly funded. Publicly funded payers include: o CalPERS o Medi-Cal o Covered California (subsidized) o Medicare 3

4 o Veteran s Administration Privately funded: Privately funded health insurance 4 is paid for with private funds by large and small employers for their employees, or individuals purchasing health insurance directly from health insurance companies. 5 CHBRP projects 19.6 million Californians will have privately funded health insurance in Private funded payers can be segmented into: o Large group (51+) o Small group (2-50) o Individual market Figure 3: Health Insurance by Funding Type in Publicly Funded* 7.4M People (in Millions) Privately Funded 14.4M Publicly Funded* 1.0M Publicly Funded 7.0M 0.0 Privately Funded 2.7M Privately Funded 2.5M Uninsured 3.7M DMHC CDI Neither None Subject to State Not Subject to State * Individualswith subsidized coverage in the exchange are counted in publicly funded. 4 Privately funded health insurance that is not state regulated includes plans where employers assume the full risk of medical costs, or self-insured plans. 5 A segment of small group and individual purchasers will also obtain unsubsidized health insurance through Covered California, but through private funds. 4

5 Figure 4: Health Insurance by Payer Type in CalPERS HMO, Medi-Cal Managed Care Uninsured People (in Millions) M* 11.3M 1.0M* 0.5M CalPERS PPO, Medi-Cal FFS, Medicare, Other 7.0M Publicly Funded Large Group Small Group Individual M 0.9M 2.5M 1.3M Self-Insured 2.5M 3.7M DMHC CDI Neither None Subject to State Not Subject to State * Individualswith subsidized coverage in the exchange are counted in publicly funded. HMO = Health Maintenance Organization PPO = Preferred Provider Organization FFS = Fee-for-Service Privately Insured and Nongrandfathered Plans and Policies Plans or policies in existence before the ACA was signed March 23, 2010 are grandfathered and therefore exempted from many changes required under the law. 6 Some requirements of nongrandfathered plans include: Coverage of specific preventive services without cost sharing; Restrictions on cost sharing for emergency services; Coverage of ten essential health benefits (EHBs). 7 Additionally, states will be required to defray the cost of benefit mandates beyond the ten EHBs for enrollees who purchase health insurance in Covered California. 6 A grandfathered health plan is defined as A group health plan that was created or an individual health insurance policy that was purchased on or before March 23, Plans or policies may lose their grandfathered status if they make certain significant changes that reduce benefits or increase costs to consumers ( 7 The essential health benefits categories are: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse services, including behavioral health treatment, prescription drugs, rehabilitation and habilitation services and devices, laboratory services, preventive and wellness services and chronic disease management, pediatric services, including oral and vision care. 5

6 CHBRP s Cost and Coverage model, therefore, differentiates between grandfathered and nongrandfathered plans and policies, given the potentially distinct impacts proposed mandates could have on each segment. Overall, 21.3% of all enrollees with state-regulated health insurance in the privately funded market will be in grandfathered plans in 2014, while 78.6% will be in nongrandfathered plans. The percentage of enrollees in grandfathered to nongrandfathered plans and policies varies by market segment and regulator (Figures 5, 6, and 7). 100% Figure 5: Percentage of Enrollees in Privately Funded and Nongrandfathered Plans and Policies by Market Segment in % 54.0% 60% 80.3% 92.6% 40% 20% 46.0% 0% 19.7% 7.4% Large Group Small Group Individual Note: Data from CHBRP's Annual Enrollment and Premium Survey, Fall 2012 is used to project the percentage of nongrandfathered to grandfathered enrollees in privately funded plans in Excludes self-insured plans, Medi-Cal Managed Care and CalPERS. Includes individuals in the subsidized exchange. Non 6

7 14 Figure 6: Number of Enrollees in Privately Funded and Nongrandfathered Plans and Policies by Market Segment in People (in Millions) M M 1.6M 2.3M 0.3M 1.3M Large Group Small Group Individual Note: Data from CHBRP's Annual Enrollment and Premium Survey, Fall 2012 is used to project the number of nongrandfathered to grandfathered enrollees in privately funded plans in Excludes self-insured plans, Medi-Cal Managed Care and CalPERS. Includes individuals in the subsidized exchange. Non 16 Figure 7: Number of Enrollees in Privately Funded and Nongrandfathered Plans and Policies by Regulator in People (in Millions) M M 3.1M 0.8M 0 DMHC CDI Note: Data from CHBRP's Annual Enrollment and Premium Survey, Fall 2012 is used to project the ratio of nongrandfathered to grandfathered enrollees in privately funded plans in Excludes self-insured plans, Medi-Cal Managed Care and CalPERS. Includes individuals in the subsidized exchange. Nongrandfathered 7

8 Data Sources CHBRP s Projected 2014 Cost and Coverage Model integrates multiple sources in order to estimate the impact that health insurance benefit mandates will have on the health insurance marketplace as it will exist in The data used for this model represents the best available information in Fall Health Insurance Subject to State Mandates o California Employer Health Benefits Survey provides information on whether employer-sponsored health insurance is self-insured, and therefore not subject to state regulation. o CalPERS provides administrative data on employees enrolled in HMOs or selfinsured plans. o Department of Health Care Services (DHCS) provides data on beneficiaries enrolled in a Medi-Cal Managed Care Plan, and therefore subject to state mandates. o CHBRP s Annual Enrollment and Premium Survey provides information on whether plans are regulated by the Department of Managed Health Care (DMHC) or California Department of Insurance (CDI). Californians with publicly and privately funded health insurance o The California Simulation of Insurance Markets (CalSIM) 8 is used to estimate health insurance status of Californians aged 64 and under in CalSIM is a microsimulation model that was created to project the effects of the Affordable Care Act on firms and individuals. o The California Health Interview Survey (CHIS 2011) 9 is used to estimate the number Californians aged 65 and older, and the number of Californians dually eligible for both Medi-Cal and Medicare coverage. o CalPERS provides administrative data on the total number of employees enrolled. o Department of Health Care Services (DHCS) provides data on beneficiaries enrolled in a Medi-Cal Managed Care Plan, and therefore subject to state mandates, or are insured on a fee-for-service basis. Enrollees by health insurance category and firm size 8 CalSIM relies on data from the Medical Expenditure Panel Survey (MEPS) Household Component and Person Round Plan, the California Health Interview Survey (CHIS) 2009, and the California Employer Health Benefits Survey. UC Berkeley Center for Labor Research and Education and UCLA Center for Health Policy Research. Methodology & Assumptions, California Simulation of Insurance Markets (CalSIM) Version 1.7, June Available at Accessed October 19, CHIS is a continuous survey that provides detailed information on demographics, health insurance coverage, health status, and access to care. CHIS surveyed approximately 23,000 households and was conducted in multiple languages by the UCLA Center for Health Policy Research. See for additional information. 8

9 o CalSIM provides data by firm size. o CHBRP s Annual Enrollment and Premium Survey provides further detail, by firm size, for state-regulated plans or policies, and whether enrollees are in grandfathered or nongrandfathered plans or policies. Individual market o CalSIM provides enrollment figures for those who purchase health insurance directly from carriers, or subsidized individual coverage from Covered California. o CHIS 2011 is used to estimate the number Californians aged 65 and older. o CHBRP s Annual Enrollment and Premium Survey provides further detail on state-regulation of individual plans and policies, and whether individuals are enrolled in grandfathered or nongrandfathered plans or policies. 9

10 Table 1: CHBRP Estimates of Sources of Health Insurance in California, 2014 Publicly Funded Age DMHC-regulated Not state-regulated Total Medi-Cal ,143, ,000 4,003, ,685,000 1,631,000 3,316, ,000 32,000 49,000 Medi-Cal, formerly , , ,000-32,000 Other public All 259, ,000 Dually eligible All 671, ,000 1,058,000 Medicare & Medi-Cal Medicare All (non Medi-Cal) 3,505,000 3,505,000 CalPERS ,000-1, ,000 2,000 6, CalPERS ,000 62, , , , , ,000 11,000 29,000 Privately Funded Health Insurance Age Non- Non- Total Self-insured All 2,518,000 Individually purchased, Subsidized Exchange Individually purchased, NonSubsidized Exchange and Outside DMHC-regulated CDI-regulated ,000-48,000 68, , ,000 1,365, ,500-3,500 5, ,000 23,000 72,000 57, , ,000 15, ,000 37,000 1,260, ,000-2,000 1,000 5,000 Small group , ,000 14, ,000 1,050, ,000 1,609,000 37, ,000 2,715, ,000 17,000-10,000 29,000 Large group ,000 2,487,000 9, ,000 3,273, ,647,000 6,433,000 24, ,000 8,466, ,000 68,000-4,000 89,000 Uninsured Age Total , ,232, ,000 California's Total Population 38,744,000 10