Healthcare Reform Update Kim Holland Executive Director, State Affairs Health Insurance Exchange Summit West November 4, 013
150 Years of State Based Regulation States have been the primary regulator of insurance companies, products and market activity Solvency oversight Licensure of companies and agents Consumer protections The ACA adds HHS, OPM and Exchanges to the regulatory regime
Exchanges: An Idea Years in the Making 1970s Idea of managed competition introduced; health care considered possible fertile ground 1990s The Health Security Act introduced. Provided for universal coverage, individual and employer mandates, and managed competition within a budget through buying co-ops 000s Heritage Foundation introduced health insurance exchange concept; idea was similar to buying co-ops. Designed to help achieve the goals of universal coverage; provided for individual mandate and specified venue for insurance purchase Massachusetts and Utah launch state health insurance exchanges 010 PPACA passed and signed into law; provides for insurance exchanges to be established in every state
Brief Overview of PPACA 3 Pillars of the Affordable Care Act Delivery Reform Accountable Care Organizations (ACO) Innovative demonstration projects (bundled payments, medication management, nursing facility transitions, etc.) Quality metrics Medicaid Expansion Up to 138% FPL* Insurance Market Reforms Individual and Employer Mandates Guarantee Issue and Community Rating Essential Health Benefits (EHB) Federal premium subsidies up to 400% FPL** Health Insurance Exchanges
Major Reforms Spread Over Many Years 010 011 01 013 014 Initial insurance reforms Patient protections Web portal Small employer subsidy National highrisk pool Medical loss ratio rebates Tax law changes (HSAs, FSAs, HRAs, MSAs) Uniform terms in coverage summaries Limit on FSA contributions HHS decides whether to operate Exchanges in certain states Initial open enrollment period for Exchange States enact implementing legislation Exchanges Individual & employer mandates Essential Benefits Major insurance reforms Risk mitigators Medicaid expansions
Insurance Exchanges and the ACA Purpose Online marketplace that enables individuals to shop, compare, and enroll in a health insurance plan Operator State-Based Exchange (SBE) State-Federal Partnership/Hybrid Federally Facilitated Exchange (FFE) Models Open Marketplace Selective Contractor Active Purchaser
Five Core Functions of an Exchange Plan Management* Customer Assistance Eligibility Enrollment Financial Management Health Plan qualification process Collection and analysis of plan rate and benefit information Plan management, monitoring and oversight Data collection and analysis for quality In-person assistance* Education and outreach* Navigator management* Call center operations Website management Written correspondence with consumers Connect eligible applicants to Medicaid and CHIP Accept and verify applications Eligibility for enrollment and subsidies Redeterminations and appeals Enrollment of consumers into QHPs Transactions with QHPs Transmission of information necessary to initiate advance payments of the premium tax credit and cost-sharing reductions User fees Financial integrity Support of risk adjustment, reinsurance, and risk corridor programs *Functions available for partnership: 1. Plan Management, and/or.designated consumer assistance functions
014 Exchange/Marketplace Development 17 SBE (Cond. Approved) 7 SPE (Cond. Approved) 6 FFM 1 Awaiting final HHS response SBE - State Based Exchange SPE - State Partnership Exchange FFM - Federal Facilitated Marketplace MPM - Marketplace Plan Management - FFM & Non-Enforcement States Source: State Affairs/OPR, Blue Cross Blue Shield Association Last updated April 9, 013
Plans Available in Exchange Must be a Qualified Health Plan Provides Essential Benefits and is licensed (states may require QHPs to cover benefits beyond the Essential Health Benefit requirements, but must assume cost of such mandates) Must incorporate market reforms including rating rules, network adequacy, etc. Levels of Coverage Bronze (covers 60% of actuarial value of benefits) Silver (covers 70% of actuarial value of benefits) Gold (covers 80% of actuarial value of benefits) Platinum (covers 90% of actuarial value of benefits) Catastrophic (high deductible plan for young)
Number of Carriers on Exchange by State 8 11 1 4 1 3 3 5 16 4 3 13 9 8 3 4 4 6 4 1 6 1 10 7 3 3 4 4 5 8 5 3 3 5 11 5 9 3 5 3 10 FFM Federal Facilitated Marketplace SBE State Based Exchange Hybrid SB SHOP / FF Individual Exchange SPE State Partnership Exchange * Numbers reflect that issuers are grouped to parent companies
Small Group (SHOP) Exchange Small Group Defined as 1 100 Employees State may elect to define as 1 50 until January 1, 016 State may elect to combine non-group and small group markets Choice 014 PY, SHOP must allow employer to choose coverage level, may offer one (or more) QHPs (FFSHOP one QHP) 015 PY and after, SHOP must allow employer to choose coverage level and employees choose from all QHPs offering at that level, may allow employer to offer employees one or more QHP (FFSHOP- employer may choose to offer all QHPs at level or one QHP) Tying provision requires issuers with 0+% small group market share to offer plans on SHOP if they offer products on individual exchange SHOP responsible for billing, collection and remittance of premium to QHP issuers
State Activity on ACA s Medicaid Expansion WA ME CA OR NV ID AZ UT MT WY CO NM ND SD NE KS OK MN IA WI IL MO AR MS MI OH IN WV KY TN AL GA SC NY PA MD VA NC VT NH RI CT NJ DE DC MA Trad. Expansion Law: 18 Alternate Expansion*: 3 Pending Bill: TX LA FL Done with Executive Authority: 6 Gov. Supports Expansion: 5 Source: State Affairs, BCBSA, 10//13 * Alternate schemes require expansion population (100 133% FPL) to buy private products on Exchange; waivers needed.
Practical Realities There is very little time This is very complicated; many agencies; governance has been poor; and politics hasn t helped This involves very sensitive information The public is confused and skeptical Blue Plans believe that Americans should have access to affordable high quality healthcare. Therefore, we continue to do all we can to help people get enrolled.