ACA UPDATE TAHU SPRING SYMPOSIUM April 17, 2014 Presented by: Mike Rhoads, Deputy Commissioner, OID Rebecca Ross, Agency Liaison, OID AGENDA ACA Update & Issues The Outlook National & Local Dates to Watch TAHU & Navigators 1
ACA Update & Issues Recap of Oct. 1 st -Mar. 1 st, 2014 ACA National Enrollment (source: HHS) 7.1 million in SBM and FFM up to 20% did not pay (7.5M Apr14) 25% ages 18-34 key metric = 40% CBO s estimated ACA NET COST for 2014 $36B ($5B less estimate) * CBO projected for 2015-2024: $1.839T SPENDING on subsidies for exchanges, Medicaid, CHIP and tax credits for small employers, with a partial offset $456B in RECEIPTSfrom penalty payments, excise tax on high premium insurance plans and income and payroll tax revenues. * ACA Oklahoma Enrollment (source: HHS Mar14) Open Enrollment Forecast- 256,000 Oklahomans Enrolled in QHP plan-32,882 or 12.8% of forecast New Enrollees: uninsured or insured? Older enrollees- risk pool problem * Source: Congress of the United States Congressional Budget Office, April, 2014 Costs-Buyer Beware-Many Surprises Still ACA Update & Issues Multiple price points tied to deductible levels and network composition (resulting in higher deductibles/small networks) Morbidity, fees & taxes, big drivers, subsidies- 78% of Oklahomans Big change coming: businesses considering alternatives post 2014 Self funding arrangements in small businesses not traditionally seen Defined contribution arrangements flat $$ to buy what you want 2
ACA Update & Issues CMS March 5, 2014 Announcement Final 2015 Notice of Benefit and Payment Parameters Extended Transitional Policy permitting renewals of ACA noncompliant individual and small group policies until October 1, 2016 (maximum coverage end date Sept. 30, 2017) State makes decision to adopt or reject. Extension options include: For both individual and small group Only individual or only small group For discrete periods, e.g., 2015 only For large groups or associations who would be redefined as small group after January 1, 2016 OID Bulletin No. LH 2014-01(March 26, 2014) - GavecarriersdiscretionbutmustfiletheirtransitionplanbyJuly1 st,2014 - Must apply their plan uniformly across all market segments - Oklahoma Statutes do not address large groups follow CMS guidelines ACA Update & Issues Non-compliant means: no GI or guaranteed renewability, no single risk pool, no EHB, no limits on cost sharing, annual/lifetime limits apply. Extension likely to skim healthier enrollees out of exchanges costs go up inside exchanges. More burden on risk pool management & 3 R s Continued rewriting of ACA for political purposes? 3
Early Trend- A Slow Death Spiral Exchanges skew 22-27% older than uninsured population The Outlook 2014 enrollment of only 25% of 18-34 year olds = insurers losses overall costs would be 2.4% higher than premium revenues What Does It Mean for the 27 Year Olds? 4
What Does It Mean for the 50 Year Olds? The Early On Outlook Carriers In For The Long Haul? A fixable mess, at worst; a major growth opportunity, at best. Wellpoint- bumps will work themselves out Joe Swedish-President CIGNA - still in early innings David Cordani-CEO Aetna - troubling demographics- considering options for 2015 rates Mark Bertolini-CEO Humana - risk mix of members more adverse than previously expected Bruce Broussard-CEO 5
The Oklahoma Outlook Oklahoma QHP s (BCBSOK, CCOK, Global, Coventry - Leadership Discussions) Not about getting a sicker book, it s about whether you priced for it Counting on ACA reinsuranceto mitigate bad risk entering market in 2014 ($10 billion 2014, $6 billion 2015) Concerned with rising insurer fees in 2015 Concerned about 2015 rates-filing deadline May 31 (previously 4/30)- limited morbidity experience. Not complimentary of accounting & enrollment processes at HHS (CMS 2014 fix is by spreadsheet transmission!) Meeting with President Obama 2 nd time President invited all commissioners to the White House (1 st time in Commissioner Doak s tenure) to discuss ACA implementation Key issues NAIC will bring up: Allowing all states to have broader OE for exchanges*. Release 2016 rules for EHB. Collaborate with states to improve data collection and oversight requirements to reduce administrative burden to carriers. Provide assurance that the federal government will not attempt to arbitrarily limit rate increases or set national standards for network adequacy. * Nevada has OE in individual private marketplace all year round with 90-day waiting period. 6
The Oklahoma Outlook (continued) Oklahoma QHP Suggestions for D.C. Keep families together under unified coverage. Keep network adequacy at state level. Involve industry and regulators before decisions are made and announced. IT roadmap transparency to ensure functionality. Extend the Insure Oklahoma Program beyond the current year. Incentives for healthy to enroll during OE. Health Care Update Oklahoma Legislature HB 2508 (Cox): Voted Do Pass from Senate Appropriation 4.2.14 Creates the Medicaid Sustainability and Cost Containment Act. Requires rules to implement reduced provider rates, prior authorization for all non-generic pharmaceuticals, decreases the number of premiums allowed for Medicaid enrollees, limit reimbursement to six emergency room visits and implements a study to evaluate potential cost savings of competitive bidding. SB 1495(David): Dead pursuant the rules. Directs OHCA to develop and implement a statewide, integrated managed care plan for the provision of services currently provided under the Oklahoma Medicaid Program. Insure Oklahoma: During her State of the State address, Gov. Fallinreinforced her commitment to seek an extension of Insure Oklahoma. However, she also highlighted her continued opposition to accepting federal dollars for any form of Medicaid expansion or alternative program. 7
Estimated Cost of Medicaid Expansion 2014 ACA Dates To Watch March 31 st Open enrollment ENDED in all Markets. Deadline for the uninsured to avoid a fine. Maximum 3 months w/o coverage (Exception: Apply by 3.31 to be effective 5.1, no penalty will apply during Jan-Apr). Website crashed on March 31 st leaving website DEAD for 4 hours! Again, White House EXTENDED enrollment period due to website problems interfering with sign-ups. Those who were in line would have until April 15 th to enroll or if you had extenuating circumstances you could qualify for a Special Enrollment Period, i.e, abused spouses. Longer for paper applicants. The Administration exempted from the penalty those whose existing health insurance coverage was cancelled because of ACA (for 2014 Tax Returns). Market Black-Out April 1-Nov 15 No new ACA compliant policies sold in eitherfederal exchange or private market (unless income changes or qualifying life event Special Enrollment Period). 8
Who is Avoiding the Fine? 2014 ACA Dates To Watch April 15 th No worries yet until you file your 2014 Tax Return in 2015: Those without insurance won t owe penalties until 2015. Tax return will ask health insurance information. Insurers will send 2014 confirmation of coverage notices to taxpayers. Reconciliation of 2014 premium subsidies done in 2015. Most exemptions require a federal exchange letter of specific exemption see www.healthcare.gov 9
2014 ACA Dates To Watch Nov 4 th Midterm elections will be yet another referendum on the health-care law passed in 2010. Should the GOP gain control of both chambers of Congress, it would be 2 more years of current administration veto attempts to undermine the law. Nov 15 th 2 nd Annual Open Enrollment for 2015 begins (and ends February 15, 2015). Americans can sign up again to buy ACA compliant comprehensive medical insurance or switch to another plan. What Will Businesses Do? 10
What Will Obamacare Look Like in 2024? TAHU and Navigators OID Bulletin 2013-09 August 15, 2013. Sent to all Navigator entities prior to Open Enrollment. Message to Navigator entities Stay in your lane if you are not licensed under OPLA -36 OS 1435.1 et seq. Prototype for other state regulations. Navigator Bill HB3286 (Mulready). - - passed House Floor 4.16.14, going to Senate. - requires Navigators to register with OID, undergo a background check and take at least 4 hours to education. There is a registration fee and fines for noncompliance. 11
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