+ Health Insurance Exchanges: The Political And Policy Context MARKETPLACES! By Susan Dentzer Senior Policy Adviser, The Robert Wood Johnson Foundation Presentation to the Health Insurance Exchange Summit November 4, 2013
+ This Presentation at a Glance Health insurance exchanges/marketplaces: Snapshot of current performance Key decisions on Affordable Care Act design and implementation, plus politics, have had consequences in exchange operation and insurance rates The ACA experiment is far broader than exchange functionality Important to keep in mind what s gone wrong and what s gone right Where we go from here
+ Federal Regulatory And State Legislative Decisions And Their Consequence: Complexity
+ Standing Up Exchanges Sort of
16 States and DC Will Run Exchanges in 2014, 7 States Conditionally Approved for Partnership Insurance Exchange Operational Model WA ME OR CA NV ID AZ UT* MT WY CO NM ND SD NE KS OK MN WI IA MO AR IL MS NY MI PA OH IN WV VA** KY NC TN SC GA AL VT NH MA CT NJ DE MD D.C. RI State-Run (17) Likely State-Run SHOP (1) AK TX LA FL Partnership (7) Federal (21) HI Federal Marketplace Plan Management (5) ource: Avalere State Reform Insights, March 12, 2013. UT will not pursue a state-run individual exchange but continues to request HHS certify its existing small group exchange, Avenue H. *VA has indicated they will perform plan management functions and QHP certifications but has not received HHS approval like the other arketplace Plan Management states (KS, MT, NE, and OH). Avalere Health LLC
+ State Exchanges: Some Faring Better
+ Pace of enrollment to date But: 41 days left until December 15 147 days left until March 31
+ Factors in Healthcare.gov Startup: the short list Delays relative to Supreme Court case as many states watched from sidelines Surprise that so few states elected to set up exchanges and federal exchange had to be so large Decision to entrust CMS/CCIIO with exchange operational issues No congressional appropriations for setting up federal exchange; money taken from Prevention and Public Health Fund; $300 million probably insufficient No general contractor retained to whom all other contractors/subcontractors would report
+ Factors in Healthcare.gov Startup: the short list All major technology projects always at risk of not working; ask health information technology vendors/customers Issues with CGI Federal; would a larger and more consumer-oriented tech company have done better? Delays some deliberate in releasing proposed regulations and specifications Inadequate time allotted for testing and retrofitting Late decision to turn off the website's "anonymous shopper" feature, and requirement to fill out an application before users could view plan options decision made to pare back functionality to encourage ease of use, which ultimately backfired Decision not to allow direct enrollment now being revisited Politics, politics, politics including decision to stick with Oct. 1 startup date despite concerns on functionality And more
+ Exchange Work That Had to Be Done Governance Legal Authority Stakeholder Input Plan Benefit Design Plan Selection Strategy Plan Rating Systems Provider Network Standards IT Infrastructure Billing Procedures Website and Call Center Outreach and Education Financing Fiscal Integrity Not obvious this was going to be weak link
+ State Exchanges Working Well Began With More Limited Functionality
+ Health Insurance Exchanges Plan Work That Had To Be Done
+ Exchange Models in Governance and Plan Management Governance: Quasi-governmental (e.g., CA, CO, CT, MD, MA, NV, NM) versus state-run (KY, NY, RI, VT) Active purchaser model (e.g., CA, MA, NY, OR, RI, VT), vs. clearinghouse model (e.g., CO, CT, DC, HI, MD, NV, RI, WA) Integration with other state programs Blend individual and SHOP exchanges or keep separate? Decide role of navigators and assisters No discernible patterns as yet in operational readiness from these factors
Reality Check: Exchanges Will Begin (At Best) With A Small Share Of The HI Market
+ Exchanges: National Bingo On Health Premiums Age???? Sex?? State an active Purchaser??? Competitive Insurer Market?? Gender?????? Tobacco User? Competitive Provider Market?? Overall Premiums Generally Lower Than Predicted But Not For Everybody! Broad Provider Network?? Narrow provider network??
Federally Facilitated Exchange Plans in States Lowest Silver 2 nd lowest Silver Lowest Bronze $310 $328 $249 Premiums before tax credits more than 16 % lower than projected by Congressional Budget Office and others Average of 53 plans choices per state Average 8 carriers per state ~1 of 4 carriers in individual market for first time ~1 out 4 new entrants in the market ~1 out 3 incumbents are not in Exchange
Premium variability within states: Example of California
+ Premiums matter but it s also the coverage Strengthened consumer protections, including guaranteed issue End of annual and lifetime limits Limitations on consumer cost sharing
+ High Cost-Sharing Exchange plans at lower tiers impose high cost-sharing requirements on individuals before they reach their outof-pocket maximums. Source: Avalere Health More than double the average deductible in an employer-provided plan
+ Plan Cancellations for Lack of Compliance With Law Estimated 12 million individual insurance policies now in effect Estimates of those non-grandfathered health plans that are now to be cancelled: range 30%-50% What consumers are finding: premiums for new plans and their out-of-pocket costs are higher, lower or about the same, net of any subsidies
+ Short-term prospects Healthcare.gov: we ll know by end of month The story of information technology: One step forward and two steps back, or the reverse Direct enrollment: some states (VT) already going there; feds looking into this to determine feasibility Extension of open enrollment period or delay on penalty enforcement possible
+ The Big Unknowns How many enrollees in exchanges and expanded Medicaid, and who? Health status? Utilization? What will risk pools look like? Risk adjustment - workable? Pressure going forward on premiums and provider prices? Which way? Impact on provider transformation? Impact of provider consolidation? Churn between Medicaid and exchanges? And more
+ Will The Theory of Managed Competition Prove Out? How will competition among insurance plans play out in exchanges? How will competition affect premiums? Evidence to date about role of plans in reducing costs isn t compelling Delivery and payment reform may be primary levers of cost reduction Will publicity now given to variation in rates drive change? What role will exchanges have in increasing focus on plan and delivery system quality?
+ Other Operational Issues Sustainability of operational funding for exchanges over time Consolidation into regional exchanges? Consolidation into federal exchange? (For now, not likely!)
+ The Long Road Ahead?
The Persistent Parade Of Pseudo-Horribles Better brace yourselves for a whole lotta ugly comin at you, Followed by a never-ending parade of stupid! --Motormouth Maybelle (Queen Latifah) in Hairspray
+ The End