National Association of State Comprehensive Health Insurance Plans Annual Conference September 29, 2011

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1 National Association of State Comprehensive Health Insurance Plans Annual Conference September 29, 2011 Rocky King, Interim Executive Director Oregon Health Insurance Exchange Corporation 1

2 TODAY S CONVERSATION Oregon s health insurance exchange Oregon s challenges Individual and SHOP exchanges Assumptions, questions and risk 2

3 PATH TO OREGON S 2007 Oregon Health Policy Commission recommends an exchange 2008 Oregon Health Fund Board recommends an exchange 2009 Oregon Health Policy Board is tasked with developing a business plan for the exchange 2011 Legislation passed exchange legislation (SB 99) 3

4 SENATE BILL 99 THE Passed Oregon Senate May 4, yeas and 5 nays and 1 absent Passed Oregon House June 3, yeas and 12 nays Signed by Governor June 22,

5 THE Establishes Public Corporation Governed by 9 Member Board Individual and Small Business Consumer Advisory Committee Legislative Advisory Committee 5

6 THE GOVERNOR TAKES Names Interim Exchange Director July 1st Nominates Board of Directors and send names to Senate on Aug 2nd Senate confirms Exchange Board September 22nd First meeting of Exchange Board 6

7 THE CHARGE TO INTERIM Bring up the public corporation Begin developing business plan Start putting the bricks in place Plan for the integration of service delivery transformation initiatives 7

8 THE BOARD 2 Small Business Representatives 1 Large Business Representative 3 Consumer Representatives 1 Provider Representative Director, Oregon Health 8

9 FRAMEWORK Placeholder Mission: Describes the essence of the Exchange while holding a burning match! Get on an elevator on the first floor and describe what the Exchange does before you reach the second floor! 9

10 FRAMEWORK 10

11 FRAMEWORK 11

12 FRAMEWORK 12

13 FRAMEWORK 13

14 FRAMEWORK 14

15 FRAMEWORK 15

16 FRAMEWORK 16

17 FRAMEWORK Employers Department of Consumer and Business Services (DCBS) Consumers: Individuals, Small Businesses Consumers Department of Human Services (DHS) Stakeholder Organizations Oregon Health Authority (OHA) Legislature Oversight Committee Legislature Health Insurance Companies 17

18 CORPORATE What we ve done in 90 days: Initial staff Contracts and procurement By-laws and policies Accounting, payroll and HR Facilities Telephone, Communicationscomputer planning and network systems 18

19 HUMAN RESOURCES AND Bringing talent from the private and public sectors together: Oregon Health Authority DCBS - Insurance Division Consultants Insurance Industry 19

20 HUMAN RESOURCES AND Philosophy of approaching initial work: It s a start-up! Need to be flexible, nimble and responsive Assign people to circles of work 20

21 HUMAN RESOURCES AND The circles of work include: External Relations Board staffing Outreach and Stakeholder Relations Communications 21

22 HUMAN RESOURCES AND Planning, Building and Implementation Plan management, including standards SHOP and individual market exchanges Billing and premium collection Eligibility and enrollment Essential benefits Navigators/agents 22

23 HUMAN RESOURCES AND Information Technology Infrastructure IT Grant implementation Developing business processes 23

24 HUMAN RESOURCES AND Administration Financial management Human Resources Contracting Facilities 24

25 HUMAN RESOURCES AND Still need some specific skills sets moving forward: Benefit design and plan management Communications and marketing Enrollment and billing process development 25

26 THE BOARD INITIAL Corporate implementation By-Laws, ethics and conflict of interest Board work plan and meeting schedule Appointment and charter of consumer advisory committee Board governance Appointment of executive director 26

27 THE BOARD INITIAL Exchange mission, vision and principles Exchange objectives and outcomes short and long term Draft business plan presentation, discussion and drill down Public input, including individual and small employer consumer 27

28 BUSINESS PLAN DUE Key elements of plan: Mission and governance Operations Core competencies Systems Communications Financials Evaluation 28

29 BUSINESS PLAN THE Key phases in the Business Plan Planning Building Testing Implementation Operations Evaluation 29

30 THE BOARD BUSINESS Board decisions and adoption of exchange business plan: December January Business plan presented to joint health care legislative committee: January Presentation to legislature: February legislative session 30

31 CHALLENGES: TIMEFRAMES 31

32 CHALLENGES: TIMEFRAMES Legislature Enacts SB 99 Board Confirmed, Staff Hired June 2011 September February Legislature Receives Business Plan June 2012 January 2013 HHS Certification of State Readiness IT Systems Testing Level 2 Establishment Grant Through 2014 Early SpringBy June IT Systems Fully Operational October 2013 January 2014 Operating and Coverage Begins Open Enrollment Starts January 2015 Financially Self- Sustaining 32

33 EARLY INNOVATOR IT Oregon is one of 5 states to receive and retain Early Innovator IT Grant $48 million Exchange will integrate with Medicaid Breaks down silos 33

34 CHALLENGES: EARLY Creates a seamless and transparent system to be used by three agencies the HIX, DHS and OHA Use commercial off-the-shelf software configuring rather than building Enterprise solution Oracle software suite 34

35 EARLY INNOVATOR IT Accelerates timeframes and creates tensions User Experience Project (Enroll UX 2014) This has to work! 35

36 PROJECT UPDATE SHOP and Individual Market: Created technical assistance workgroup to identify policy issues and develop framework for considering options Group is made up of Exchange staff, consultants, industry experts and carrier representatives 36

37 PROJECT UPDATE Will expand to include small businesses and their employees Will start with SHOP issues, then move to individual market SHOP Exchange 4 Employer Options Defined Contribution Model 37

38 INDIVIDUAL AND SHOP INDIVIDUAL MARKET SHOP SMALL GROUP MARKET 38

39 INDIVIDUAL AND SHOP Other distribution options that compete with Exchange: Internet Based Brokers/Producers Direct Sales Carriers Producer Assisted Direct Sales MEWA s and Association Plans 39

40 INDIVIDUAL AND SHOP Four small employer choices: Traditional: Employees must enroll in carrier and plan selected by small employer $400 $395 $450 $420 $375 $375 $400 $380 $350 $330 $380 $340 $325 $300 $340 $320 40

41 INDIVIDUAL AND SHOP Plan Bundling: Employees may select from carrier selected by small employer and from all plans offered by that carrier $400 $395 $450 $420 $375 $375 $400 $380 $350 $330 $380 $340 $325 $300 $340 $320 41

42 INDIVIDUAL AND SHOP Multiple Carrier/One Plan: Employees may select from all carriers but limited to one benefit plan level selected by small employer $400 $395 $450 $420 $375 $375 $400 $380 $350 $330 $380 $340 $325 $300 $340 $320 42

43 INDIVIDUAL AND SHOP Full Choice: Employees may select from all carriers and from all plans $400 $395 $450 $420 $375 $375 $400 $380 $350 $330 $380 $340 $325 $300 $340 $320 43

44 CHALLENGES: INDIVIDUAL Assumptions: The rules for the small employer market are the same inside and outside the Exchange. The three Federal Risk Adjustment Strategies may need to be supplemented by a SHOP Exchange Risk Adjustment mechanism 44

45 CHALLENGES: INDIVIDUAL Essential benefit plans offered in the SHOP and the Individual Exchange will be the same In Oregon, premium rates and methodology will be approved by the Insurance Division Can the Exchange negotiate rates? 45

46 CHALLENGES: INDIVIDUAL Risks will be pooled by the carrier into one carrier specific pool comprised of the SHOP Exchange and the small employer market outside the Exchange 46

47 CHALLENGES: INDIVIDUAL Questions to consider: Should the requirements for carrier participation in the SHOP be the same as for participation in the Individual Exchange? Should the standards for plans offered in the SHOP Exchange be the same as those offered in the Individual Exchange? 47

48 CHALLENGES: INDIVIDUAL Should there be a limit on the number of plans, within each metal category, that a carrier may offer in the SHOP and the Individual Exchange? Are carriers required to be in both Exchanges? 48

49 CHALLENGES: INDIVIDUAL What are the barriers to a carrier participating in either the SHOP or Individual Market Exchange? What should be the framework for premium calculations under a defined contribution scenario with multiple plans and multiple carriers? 49

50 CHALLENGES: AGENTS AND What should be the role of the agent/broker/producer? Should the agent/broker/ producer work for (be appointed by) the Exchange or, Only sell plans or receive compensation when appointed by a carrier and paid by the carrier? 50

51 CHALLENGES: AGENTS AND If included and appointed by the Exchange, what should be the agent/broker compensation (assume PMPM) and criteria for participation/appointment? Navigators who, what, when and how? 51

52 CHALLENGES: INDIVIDUAL The big risks or questions: If you build it, will they come individuals, small employers and carriers? And if they won t come why? What can be done in design/rules/ framework to encourage participation? Interface and backroom technology will it work? 52

53 CHALLENGES: INDIVIDUAL Too complicated for everyone? How can the SHOP Exchange impact premium trend/ increases or maybe the question is can it impact premium trend/increases? How? Who exactly are the target employers? How many are there and how does the SHOP Exchange measure success? 53

54 RESHAPING THE High Risk Pool Portability Market COBRA Enrollees Small Group Market Uninsured Individual Market Medicaid Expansion Market Reforms 54

55 CHALLENGES: RISK ISSUES Three federal mechanisms: Risk adjustment (starting in 2014) Transitional reinsurance program ( ) Risk corridor program ( ) Three state options: Oregon s Children s Reinsurance Program Oregon Medical Insurance Pool (OMIP) 55

56 CHALLENGES: COMPETING Insurance Consumer Industry Quality Price Standards Choice The Exchange Board 56

57 CHALLENGES: KEY Establish a state exchange or let the federal government do it Fair play in and out of the exchange Governance model Single exchange or separate nongroup or small group exchanges Integrate with Medicaid one portal 57

58 CHALLENGES: KEY Purchasing strategies Quality incentives and transparency Distribution system: Navigator program and insurance producers/brokers Eligibility determination integration with Medicaid Essential benefit levels Qualified health plan standards and criteria 58

59 CHALLENGES: KEY Premium rates and approval Early identification of business processes and testing with insurers Sustainability can the business model stand on its own? 59

60 SO WHAT? None of this presentation makes any sense unless unless we can reduce the trend in medical costs House Bill 3650 Delivery System Transformation 60

61 DELIVERY SYSTEM Medicaid budget shortfalls between 34-40% in Options: Cut reimbursement, reduce those served or change how and what services are delivered Opportunity to drive long-term changes to improve health and lower costs in Medicaid 61

62 DELIVERY SYSTEM Delivery System Transformation Team Local Community Care Organizations Health Integration physical, dental and behavioral health Global budgeting and flexibility Focus on prevention, care coordination, outcomes and quality 62

63 DELIVERY SYSTEM Establish CCO s in first 6 months of 2012 Medicaid contracts with CCO s July 2012 Federal waivers required Commercial Market the Exchange: When and how to incorporate delivery system reform Exchange staff to self-test model by July 2012 CCO s or Health 63

64 QUALITY AND VALUE IN 64

65 BEFORE AND AFTER THE 65

66 66