HEALTH SEMINAR FOR NEWER LEGISLATORS Display Final 4-24-17 Health Insurance Issues and Health Reforms Richard Cauchi NCSL Health Program Overview State Roles in regulating health care and health insurance Legislative = NCSL Executive agencies/insurance Departments = NAIC History and Recent Issues in Health Reform Health Benefit Exchanges or Marketplaces (impact on your districts) State Mandates and Essential Health Benefits 2017 pending issues for states and insurers Federal Health reforms current law, congressional actions, regulations 1
Health Care Costs 2016 Highlights; Fast Facts from CMS*, published Feb 2017 Private Health Insurance: $1.135 trillion Medicaid: $565.5 billion State Share: $212.2 billion Medicare: $678.6 billion Out of Pocket Spending: $350.5 billion Where the money goes - examples Hospital Expenditures: $1.086.8 trillion Physician and Clinic Services Expenditures: $677.1 billion Prescription Drugs: $340.7 billion And more (see handout) * Centers for Medicare & Medicaid Services http://content.healthaffairs.org/content/36/3/553.full State Laws Set the Stage 199+ million Americans in private or commercial coverage1 40+ years of state insurance regulation 1 US Census Bureau, 2015, 2016 Benefits & Design Enforcement Fines/shutdowns Financial reliability standards Rate Review & Premium approval Consumer protections; appeals State Mandated benefits 2
The Affordable Care Act (Still the current law as of late April 2017) Health Insurance Timeline the state perspective 2010-16 Early Market Reforms Eliminates lifetime and annual caps on benefits Bans preexisting condition exclusions (2010: children; 2014: ages 0 through 64) Expands dependent coverage to age 26 without limitations Requires minimum standard of appeals procedures after an 5insurer denies a claim Requires states to review rate increases Implements new medical loss ratio standards Establishes temporary federal high risk pools 2014-16 Heavy Lifting - Guaranteed issue/renewal Modified community rating (price by age) Ban on preexisting condition exclusions Coverage of essential health benefits Nondiscrimination Health insurance marketplaces Subsidized insurance for 8-9 million Adopted from Kevin Lucia, NCSL webinar 2017-2018 Federal changing roles! New state laws?? Health Insurance Exchange Structures 2016 to 2017 UPDATE: March 2017 Interactive version at www.ncsl.org/default.aspx?tabid=21388 3
Exchange Subsidies 1: how they ve worked 2014-2017: Available when income is up to 400% FPL * 84% received a health premium subsidy (tax credit) 60% paid $0 or less than $125 a month in premiums. 43% had per-person deductibles of $1,000 or more * Federal Poverty Guidelines 2017 Individuals: 100% income = $12,060/year (400% = $48,240 yr.) http://www.commonwealthfund.org/~/media/files/publications/issue-brief/2015/sep/1838_collins_are_marketplace_plans_affordable_tb.pdf Health Exchange Cost-Sharing Subsidies People earning up to 250 % of federal poverty ($30,150 for a single person) = Eligible for added lower cost sharing but only with a silver level plan. Lower federal court ruled they are not funded properly. In 2016, an estimated 2.2 million more could get lower co-pays/deductibles IF chose a silver plan More to come from Brian at NAIC 4
https://twitter.com/accesshealthct The Ultimate Endorsement Mass. Health Connector teams up with Boston Red Sox to build enrollment in new health insurance plans. Other corporate/civic partnerships announced as part of public education campaign (Excerpt from Joan Fallon, Mass Connector- 2010) 5
Results Percent of Population Under Age 65 Uninsured, 2013, 2014, and 2015 2013 2014 2015 <10% (4 states plus D.C.) 10% 14% (18 states) 15% 19% (18 states) 20% (10 states) <10% (11 states plus D.C.) 10% 14% (25 states) 15% 19% (12 states) 20% (2 states) <10% (23 states plus D.C.) 10% 14% (21 states) 15% 19% (6 states) Data: U.S. Census Bureau, 2013, 2014, and 2015 1-Year American Community Surveys, Public Use Micro Sample (ACS PUMS). Health Insurance State Mandates and Essential Health Benefits (EHBs) All Exchanges and almost all individual & small group plans MUST provide coverage for 10 essential benefits: Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including behavioral health treatment Prescription drugs Rehabilitative and habilitative services and devices (Autism, etc.) Laboratory services Preventive and wellness ($0 co-pays) and chronic disease management Children: must include oral and vision care. SUBJECT TO CHANGE BY FEDERAL LAW OR REGULATION 6
Health Insurance Premiums (using latest $$) Average Premiums for Employer-Sponsored Health Plans 2016 (combined employer and employee contributions) Individual Coverage $536.25/month Family Coverage $1,512.00/month (KFF/HRET Employer Survey Sep 2016) Average Marketplace Premiums Nationwide, Individuals (2017) Bronze plans $256/month (minus subsidies for most who are 100% to $400% FPL) Silver plans $314/month Gold plans $369/month Platinum plans $441/month Premium rate review & state approval 46+ states, the District of Columbia, and 3 US territories have Federally- Approved Rate Review programs. + AL-2016 7
What s Next? State Opt-outs, Challenges & Court Cases 22 states have statutes (2011-2015) to block some state involvement No individual/employer mandate, essential benefits, marketplaces. Block state collection of fines or marketing. Several provisions do not include a state role > a protest vote. See NCSL handout for details What s Next? 2017 FEDERAL PROPOSALS???? Many Unknowns Federal plans evolving, could be changed..? 8
Health Insurance Markets During a Time Of Change: The Nuts & Bolts B R I A N W E B B A S S I S T A N T D I R E C T O R F O R H E A L T H P O L I C Y N A T I O N A L A S S O C I A T I O N O F I N S U R A N C E C O M M I S S I O N E R S What Regulators Are Seeing Carriers Pulling Out of the Exchanges Service Areas With Only One Carrier Fewer Coverage Options (some only HMOs) Unstable Premiums Commissions Being Eliminated Lower Uninsured Rate Access for Vulnerable Populations 9
The Underlying Problems There Are Systemic Issues that Must Be Addressed Unsustainable Cost Growth (cost and utilization) Unstable Risk Pool Unreliable Funding Uncertain Regulatory Environment Federal Actions in 2017? Legislative Repeal Replace Amend Regulatory Stabilize Markets State Flexibility Improve Regulatory Environment Waivers Lawsuits 10
State Actions in 2017, or 2018? Oversight and enforcement of 2017 policies Review and approve policies for 2018 (begin March) Monitor need for state law and regulation changes in response to federal actions Consider state options through waivers and increase state flexibility Questions? Brian Webb Assistant Director for Health Policy NAIC 202-471-3978 bwebb@naic.org 11
State-Initiated Ideas Re-emerge, 2017 For 10-20 years, individual states have enacted less known health insurance strategies and programs. Since the 2016 election, several of these ideas have made headlines again, as core items for 2017. Adult Dependent health coverage using parent family health plans; NCSL report; High Risk Pools to provide coverage for previously uninsurable individuals with pre-existing health conditions. NCSL history. HSAs (Health Savings Accounts): NCSL report. Out-of-State Purchase of Health Insurance. NCSL tracking What s Next? Federal Section 1332 Innovation Waivers An Opportunity for States to Pursue Own Brand of Health Reform?? In 2017, HHS Secretary Price encouraged renewed use of section 1332 of the ACA, inviting states to find alternative ways to meet the coverage goals of the law while staying within its fiscal constraints. What May Be Waived? States may propose alternatives to four pillars of the ACA : Benefits and Subsidies. States may modify the rules governing covered benefits, as well as the subsidies that are available through the marketplaces. Marketplaces and Qualified Health Plans. States may replace their marketplaces or supplant the plan certification process with alternative ways to provide health plan choice, determine eligibility for subsidies, and enroll consumers in coverage. The Individual Mandate. States may modify or eliminate the requirement. The Employer Mandate. States may modify or eliminate the requirement. See Text of HHS Letter is in NCSL Toolkit - 4/21/17- Adopted from NCSL & The Commonwealth Fund 12
(Proposed) Options for Legislatures health insurance & coverage Hold an oversight briefing or hearing on Marketplace results Consider legislation to define or refine the insurance department s power to regulate (networks, premiums, brokers) Examine cost containment innovations Compare your state to your neighbors What changes will affect 1) access 2) affordability 3) quality of health care? Consider a Section 1332 type-waiver specific to your state Will you need a special session or workgroup or Blue Ribbon Task Force to respond to federal changes in time? 13