Essential Health Benefits and Health Insurance Exchanges: What Are States Up to So Far?

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1 Essential Health Benefits and Health Insurance Exchanges: What Are States Up to So Far? Sonya Schwartz, JD Program Director, National Academy for State Health Policy National Health Council Washington Representatives Retreat November 29, 2012, Annapolis, Maryland

2 An online network for health reform implementation What is NASHP? What is State Refor(u)m? Independent academy of state health policymakers working together to identify emerging issues, develop policy solutions, and improve state health policy and practice. A forum for constructive work across branches and agencies of state government on critical health issues facing states. Online peer-to-peer learning and discussion Exchanging reform ideas Posting, organizing, and sharing useful state resources Mapping states progress in implementing health reform

3 Quick Look at My Presentation Where are States on Essential Health Benefits? Implications? Key State Issues in Proposed Rule Scope of EHB and Implications State benchmark plan choices Commercial v. Medicaid benchmark choices Where are States on Health Insurance Exchanges? Implications? Key Deadlines Where states stand so far Governance models and implications Key Policy Issues Plan Certification/ Active Purchasing Initial Implications

4 EHB Proposed Rule: Key State Issues Proposed rule cemented policy framework in bulletin and FAQ States now have a little more time until December 26, 2012 to make a benchmark plan decision If a state does not select a benchmark plan, the default benchmark plan is the largest small group plan in the state For 2014 and 2015, states do not have to defray the costs of state-mandated benefits included in a benchmark plan The benchmark plan states select will go into effect for plan years 2014 and HHS intends to reassess in the benchmark plan process for 2016

5 State Progress on Benchmark Plans 27 states have recommended or submitted a commercial market benchmark plan 12 states were awaiting further federal guidance at the time of September 30, 2012 deadline Note: Based on a chart, State Progress on Essential Health Benefits, statereforum.org. State activity is based on resources shared publicly on State Refor(u)m as of October 25, 2012.

6 Plan Types Selected Plan Type Small Group Plan HMO Plan State Employee Plan Other State Recommendations/Selections Arkansas, California, Colorado, District of Columbia, Delaware, Hawaii, Illinois, Kansas, Kentucky, Massachusetts, Mississippi, New Hampshire, New Mexico, Nevada, New York, Oregon, Rhode Island, Virginia, Washington Connecticut, Michigan, North Dakota, Vermont Arizona, Maryland, Utah Nebraska* (* high deductible HSA option submitted to HHS)

7 Supplemental Benefit Plans Pediatric Dental Most states selecting to supplement with CHIP benefits Pediatric Vision All states with supplemental selecting FEDVIP so far Habilitative Services Proposed rule gives two options for health insurers if the benchmark does not include and the state does not determine habilitative benefits ( (4)) 1. Parity by covering habilitative that are similar in scope, amount and duration to benefits for rehabilitative services 2. Decide which habilitative services to cover and report on coverage to HHS California defined habilitative in legislation

8 EHB Scope and Implications What is it Examples Public Oversight Examples ACA opportunity Covered Services The list of services to be paid for & limits placed on number of services/visits Usually broad and vague inclusions and very specific exclusions EHB definition State Mandates MH Parity Medicare and Medicaid Standardized, rational, sustainable definitions through EHB process Benefit Design Benefit Administration Terms and conditions of coverage Medical Necessity Cost sharing Network limitations Prior Authorization State law coverage minimums Federal law Precious metals, external appeals Public Contracts Exchange terms Standardized oversight through exchanges and Medicaid managed care How those terms and conditions are administered Claims Payment rules Plan Policies and Procedures Medical Management guidelines Medical Necessity determination State Law UR certification Internal Appeals, prompt payment Federal Law External appeals Industry standards - NCQA QHP certification in exchanges.

9 Commercial v. Medicaid Benchmark Commercial Market Benchmark Plan Options Medicaid Benchmark Plan Options Federal EE Plan State EE Plan Commercial HMO 1 of 3 largest by enrollment Standard Blue Cross/Blue Shield 1 of 3 largest by enrollment Any generally available in the state concerned The largest in the state s commercial market by enrollment The largest commercial, non- Medicaid HMO in the state Small Group/HHS Secretary Approved One of the largest small group plans in the state by enrollment Small group not an option but the Secretary can approve other benefits that provide appropriate coverage for the population to be served

10 Key EHB and Exchange Deadlines December 14, 2012 December 26, 2012 February 15, 2013 Jan. 1, 2013 Oct. 1, 2013 Jan. 1, 2014 Dec. 31, 2014 Letter of intent and blueprint for state exchange due Benchmark plan decision or default due Letter of intent and blueprint for state-partnership due Deadline for conditional approval from HHS to operate state-based exchange Open enrollment on exchange Exchange operations and coverage begin Federal funding for exchanges expires

11 State Options for Running Exchange State Run Statewide, regional or sub-state? Individual and small business exchanges together or separate? Federal-State Partnership State takes on consumer assistance? State takes on plan management? State takes on both consumer assistance and plan management? Federally Run What is a state s role here? Regulating insurance? Educating consumers? Referring to Federal exchange?

12 Snapshot

13 Governance Models for State-Run Exchanges New or existing state executive branch agency under the governor Kentucky, New York, Rhode Island, Vermont, West Virginia, Utah* Quasi-governmental entity California, Colorado, Connecticut, District of Columbia, Maryland, Oregon, Washington, Nevada, Massachussetts* Non-profit organization Hawaii *Utah and Massachusetts set up exchanges prior to the ACA

14 Exchange Plan Certification Requirements ACA ensure a sufficient choice of providers include within health insurance plan networks essential community providers provide information to enrollees and prospective enrollees on quality measures offer at least one silver level and one gold level plan charge same premiums for plans inside and outside the exchange provide essential health benefits Final Rules adhere to any additional state or exchange requirements for QHPs justify rate increases provide information in a number of categories including enrollment, disenrollment and claims pay applicable user fees

15 State Exchanges: Key Policy Decisions Outreach and Education Financing/ Sustainability Plan Rating System State Details: statereforum.org/ exchange-policydecisions Eligibility Systems SHOP Premium Aggregation/ Billing Plan Certification

16 Active Purchasing Explicitly prohibited Not addressed Not prohibited Expressly allowed Colorado Hawaii Unclear: Iowa, New York, Kentucky, Mississippi, Minnesota Nevada West Virginia Rhode Island Washington California Connecticut District of Columbia Massachusetts Maryland Oregon Vermont

17 Implications : We Have to Get all 3 Models Right! State Exchange Risks Operational risks that it won t launch well, and residents will be unhappy. Financial risk that it won t be financially self-sustaining by 2015 and cost the state money Better to let other states go first and then design it when the road is easier to travel down State Exchange Benefits Integrating health insurance exchange into health care system goals and overall state coverage/ health strategy State might be held accountable even if Feds are running it Basic operational concern about Feds running something with big effect on your state Will the Feds be ready? Jan 1 might look more like exchange beta, with some delays and data flow issues to improve, but they have known for a long time that they need to be ready!

18 Ask Questions and Post Info in Online Discussion. - Exchange Charts and Map - Policy Decisions, Governance, Blueprint and Map - alyses/topic/312 - EHB Chart - alyses/topic/346 - Exchange Discussion Thread: cussions/insurance-exchanges - EHB Discussion Thread: cussions/essential-healthbenefits

19 My Contact Info Sonya Schwartz, JD Project Director, State Refor(u)m Program Director, National Academy for State Health Policy statereforum.org/user/sonyaschwartz

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