The ACA and Health Insurance Exchanges (Marketplaces)

Transcription

1 The ACA and Health Insurance Exchanges (Marketplaces) AHA Governing Councils and Committees Presentation by Beth Fuchs, Ph.D., Principal Health Policy Alternatives, Inc. September 16, 2013

2 Preliminaries Exchanges = Marketplaces In your state, they may be called something else Covered California Access Health CT DC Health Link KYNect Maryland Health Connection Cover Oregon Now With first open enrollment October 1 st, new information emerging daily 2

3 Overview Overall Context for Exchanges Exchange Functions, Types, State Elections Essential Health Benefits, Actuarial Value and Cost- Sharing Limits Affordability Programs Illustrative Exchange Premiums; Plan Offerings Implications and Challenges Additional Information (Consumer Assistance Entities) 3

4 Exchanges are One Key Element of Major Changes being Implemented this Year, Effective for 2014 Insurance market reforms Guarantee issue, no pre-ex Rating rules Benefits Essential Health Benefits Cost sharing standards Affordability Medicaid-lowest income Sliding scale tax credits, cost-sharing subsidy Coverage provisions effective 2014 Shared responsibility Individual mandate/ tax Large employer freerider penalty (delayed) Exchange Organize individual, small group insurance market; Administer subsidies; Place to shop, enroll 4

5 Regulatory Environment for Exchanges These rules apply to insurance sold in and outside of Exchange Fair Health Insurance Premiums Health status and gender not used to set premiums; limit on age rating Guaranteed Availability Coverage must be offered to all comers, with limited exceptions, during enrollment or special enrollment periods Single Risk Pool Issuers cannot use separate risk pools to charge certain customers higher rates Guaranteed Renewability Coverage must be renewed for all policyholders, with limited exceptions Adapted from CMS, Health Insurance Market Rules, Rate Review,

6 Exchange/Marketplace Functions Organized as governmental or not-for-profit entities Two Exchanges (can be merged into one) Individual Small Business Health Options Program (SHOP) - employers of fewer than 100 (50 at State option) through 2016; states can bring in larger employers in 2017 Certify/decertify health plans as QHPs (including elements such as network adequacy and essential community providers) QHPs offer variants of the state essential health benefits (EHBs) at designated metal levels of cost sharing Typical commercial plans, especially Blues, in this market; others Medicaid/Medicare managed care plans entering market 6

7 Exchange Functions Cont d Provide consumer support for enrollment decision/provide for enrollment in QHPs in the Exchange Also Multi-State Plans (phased-in) Make eligibility determinations for individuals: for enrollment in Exchange for premium tax credits, cost-sharing subsidies for Medicaid/CHIP, with state options Data exchange with federal agencies Operate SHOP 7

8 Types of Exchanges State elects type can change in 2015 or after State Exchange: fully state operated under federal standards (with significant discretion given to states) Federally-Facilitated Exchange: if state fails to create an Exchange and the federal government has to operate it, at least in initial year 2014 Partnership model (with some of each) Some states not operating own Exchange received HHS approval to conduct health plan management functions (e.g., Kansas, Montana, Nebraska, Ohio) Helps retain states traditional role as primary insurance regulator Variations on the theme Utah and Miss: Federal gov t to operate individual Exchange and state to operate SHOP Exchange 8

9 Status of the States Exchange Decisions for 2014 State-based Exchange: 16 states + DC have declared Partnership Exchange: 7 states are planning for a Partnership Exchange Federally-Facilitated Exchange: 26 states currently default to the Federally-Facilitated Exchange Kaiser Family Foundation, State Health Facts, May 28,

10 Exchange Models: Clearinghouse v. Active Purchaser (2014) Clearinghouse Active Purchaser Not Yet Determined State- Exchanges CO, CT, DC, HI, ID, MD, MN, NV, UT, WA CA, MA, NY, OR, RI, VT KY, NM Federally- Facilitated All NA NA Six state-based Exchanges identify as active purchasers, which can entail negotiating premiums and or contracting only with selected plans. Others, such as Maryland, have also pursued an aggressive approach to negotiating with plans The rest, including the FFEs, will be more passive clearinghouses. Source: Kaiser Family Foundation, May 28,

11 Exchange Enrollment Projected to Start at 7 Million and Reach about 25 million Exchange enrollment estimated to be about 7 million in 2014, increasing to about 22 million by 2016 and 25 million in 2018 More than 80 percent of enrollees estimated to be eligible for slidingscale tax-credits About 3 million estimated to be in small business (SHOP) Exchange Congressional Budget Office, May, 2013 Baseline 11

12 Essential Health Benefits (EHBs): Apply in individual and small group (<100) market (not just Exchanges) State discretion in identifying base benchmark plan: Most States (45): base benchmark plan is largest product in small group market State information at: Resources/ehb.html Must supplement to cover 10 categories in ACA: Ambulatory care, emergency services, hospitalization, maternity/newborn care, mental health and substance use disorder services, including behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, pediatric services, including oral and vision care 12

13 Nearly All States Will Have an Existing Small Group Plan as Their EHB Benchmark in 2014 Corlette, Sabrina et al, Implementing the Affordable Care Act: Choosing an Essential Health Benefits Benchmark Plan, March 2013, 13

14 Actuarial Value (AV) and Cost Sharing Plans offering EHB must meet cost-sharing standards Limits on maximum out-of-pocket (MOOP) costs for EHB: $6,350 for an individual, $12,700 for a family for 2014 Certain AV levels (the so-called metals levels) Bronze: Silver: Gold: Platinum: 60% AV 70% AV 80% AV 90% AV Small group plans also must limit deductibles Cost-sharing limits only apply to in-network Cost-sharing amounts are reduced on sliding scale basis under affordability programs 14

15 More on Actuarial Value AV -- percentage of total allowed cost of benefits paid by the plan, versus by consumer through cost sharing For ACA -- AV is a general summary measure of a plan s generosity If plan offering EHB has no cost sharing at all it pays 100% of the cost of all EHBs its AV = 100 AV of 70 = on average, plan pays 70% of the cost of benefits; enrollees pay 30% as some form of cost-sharing AV has nothing to do with the percent of premium paid by consumer, or relative generosity of its payment rates to providers 15

16 Insurance Affordability Programs: Overview Medicaid (State option) for lowest income (income up to 133 percent of the federal poverty level) Income-related sliding-scale subsidies for those purchasing coverage in the Exchange with income above Medicaid but below specified percentages of the federal poverty level (FPL) Advance-payment premium tax credits Cost-sharing subsidies (increases in AV) Reductions in the maximum out-of-pocket limit on costsharing 16

17 Status of State Decisions about Medicaid Expansion, as of September 3, (24 states plus District of Columbia), including CA, moving forward 4 states are still debating the policy 22 states are not moving forward at this time 17

18 Sliding-Scale Premium Tax Credit Limits Premium as a Percent of Income Applicable percentage table, 2014 Household income as percent of FPL Initial percent Final percent Less than 133% 2.0% 2.0% 133% - 150% 3.0% 4.0% 150% - 200% 4.0% 6.3% 200% - 250% 6.3% 8.05% 250% - 300% 8.05% 9.5% 300% - 400% 9.5% 9.5% FPL: 2013: $11,490 for 1 person, $23,550 for family of 4 Applicable percentages increase in the future by statutory formula; the percentage increases on a sliding scale between the initial and final percentage within each income category Tax credit amount set in each Exchange based on premium for second-lowest bidding silver plan (70% AV) If consumer selects higher priced plan, they pay higher premium Advance payment, with reconciliation on tax return Example: family of 4 at 150% of FPL ($35,325), choosing second-lowest priced plan: pays 4% of income, or $116/month Remainder subsidized through tax credit Note that all pay some premium 18

19 Cost-sharing is Reduced for Those with Income up to 250% of Federal Poverty Level Income-related cost-sharing reductions, 2014 Standard silver plan Income as % of FPL AV MOOP: self/family 70 $6,350/ $12, % 94 $2,250/$4, % 87 $2,250/$4, % 73 $5,200/$10, % 70 $6,350/ $12,700 For individuals with income up to 250% of FPL: the AV is increased (costsharing reduced), and the maximum out-ofpocket (MOOP) limit is reduced Note: even at lowest income levels, there is costsharing, and MOOP limits of up to $2,250/$4,500 FPL 2013: $11,490 for 1 person, $23,550 for family of 4 19

20 Illustrative Monthly QHP Premiums State (Before Subsidies) Lowest Cost Silver Plan* Lowest Cost Bronze Plan Age Age 40 Age 60 Age 25 Age 40 Age Los Angeles, CA $176 $224 $475 $147 $188 $398 Indianapolis, IN $229 $291 $618 $196 $250 $531 New York City $359 $359 $359 $308 $308 $308 Richmond, VA $181 $230 $488 $134 $170 $361 *Lowest cost plan for person age 25. Other insurers may offer lowest cost plans for other age cohorts. NY s rates are the same because they do not adjust rates for age. Cynthia Cox et al., An Early Look at Premiums and Insurer Participation in Health Insurance Marketplaces, 2014, Kaiser Family Foundation, September

21 Illustrative QHP Premiums With and Without Subsidies 2014 Monthly Premium for a Single 25-Year-Old at 250% of Poverty [8.5% of income ($28,725) = $193 per month] 2nd Lowest Cost Silver Plan before Subsidies 2nd Lowest Cost Silver Plan After Subsidies Lowest Cost Bronze Plan Before Subsidies Lowest Cost Bronze Plan After Subsidies Los Angeles, CA $200 $193 $147 $140 Indianapolis, IN $232 $193 $196 $157 NY, NY $390 $193 $308 $111 Richmond, VA $199 $193 $134 $127 Note: Premiums are capped at 8.05% of income for an individual at 250% of poverty. Source: Cynthia Cox et al., An Early Look at Premiums and Insurer Participation in Health Insurance Marketplaces, 2014, Kaiser Family Foundation, September

22 Preview of QHP Offerings As of early September, 17 states + DC had reported (11 state Exchanges, 7 FFEs) Cynthia Cox et al., An Early Look at Premiums and Insurer Participation in Health Insurance Marketplaces, 2014, Kaiser Family Foundation, September 2013,

23 Exchanges: Overall Timeline October 1: open-enrollment begins December 15, 2013: deadline for QHP selection in order to qualify for January 1, 2014 coverage effective date January 1, 2014 coverage begins January 15, February 15 and March 15 deadlines for plan selection for enrollment in following month March 31, 2014: open-enrollment ends 23

24 Exchanges: Reinforcing the New Provider/ Purchaser Environment Variant of managed competition model QHPs: incentive for low premium, especially to attract those with tax credits (~ 85% of likely enrollees) Premium tax credit tied to 2 nd lowest price silver (70% AV) plans ACA takes away selected underwriting, pricing, cost-control and design tools plans have used in small group, individual markets Result: QHPs in Exchanges turning to other cost control devices: networks, provider pricing, utilization controls Reinforces comparable pressures on providers from larger employers, Medicare and Medicaid Standardized FFS approaches and payments will be increasingly unattractive Incentives for new arrangements among providers and with payers to lower total cost growth 24

25 Implementation Challenges Will FFEs be ready? SHOP Exchanges likely to be of limited value in FFE states for 2014 where there is no employee choice option How will FFEs work with anti-aca states? Exchange functions ACA insurance reforms Will eligibility and enrollment systems be ready and secure? Premium and cost sharing subsidies One stop eligibility determinations (links with Medicaid/CHIP) Plan enrollment Coverage transitions, special enrollment periods Will there be sufficient number/range of plan options to attract enrollment? Will premiums be affordable? 25

26 Implementation Challenges Will people come? Will risk pools be viable and sustainable? Or will Exchanges/QHPs be victim to significant adverse selection? Will enrollment outreach be robust enough to reach eligible individuals and small businesses, including those with federal premium subsidies? Will Navigators be in place? Will agents/brokers encourage Exchange/QHP enrollment Will SHOP Exchanges be successful in attracting smaller employers? Will provider access be available to those with coverage? Will the Exchanges allow for smooth transitions from Medicaid to private insurance and back for those experiencing changes in income, employment? How can states with FFE eventually transition to state-run Exchanges? 26

27 Charity Care & Bad-Debt Exposure Continues While number with coverage likely to increase by about 25 million, providers face financial constraints About 30 million remaining uninsured Medicaid an increasing source of coverage with limited payment rates Cost-sharing in Exchanges and in employer policies remains Cost-sharing continues to increase under traditional employer policies Cost-sharing can be substantial even with minimum essential coverage While maximum out-of-pocket cost limits in place, costsharing remains in the plans in the Exchange 27

28 Charity Care & Bad-Debt Exposure Continues: More Reasons Other policies, such as grace periods, pose risks: ACA provides 90 day grace period for non-payment of premiums Insurers can pend claims for last 60 days and ultimately not pay At least for 2014, federal regulations may allow for larger group plans with significant benefit limits Skinny health plans that may exclude such benefits as hospital care State law loopholes E.g., Possibility of limited duration plans 28

29 Over Time, the Number of Uninsured is Projected to Decline by About Half Sources of Coverage, Non-Elderly in Millions Congressional Budget Office, May, 2013 Baseline Medicaid and Exchange coverage increases, and the net number of uninsured declines by about 25 million. That still leaves about 30 million uninsured. The undocumented (cannot get coverage in Exchange or through Medicaid) Those in States that have not expanded Medicaid Those who could get coverage but opt not to enroll, including those exempt from tax penalty 29

30 Federally Facilitated Marketplace: 30

31 Websites for State-Based Exchanges California - Colorado - Connecticut - D.C. - Hawaii - Kentucky - Maryland - Massachusetts- Minnesota - New Mexico - New York - Oregon - Utah - Vermont - Washington

32 Additional Information 32

33 Consumer Assistance Entities Navigators Non-Navigator Assistance personnel (in-person assisters) Certified application counselors (CACs) Agents and brokers Also Call Centers State Consumer Assistance Programs

34 Role of Navigators Help consumers fill out applications to find out if eligible to enroll in coverage through Exchanges/ Marketplaces or qualify for ACA premium tax credits and cost-sharing assistance, Medicaid or CHIP Help with enrollment in coverage Refer to appropriate state agencies if eligible for Medicaid/CHIP Provide outreach and education to raise awareness about the Marketplace Services must be free to consumers Non-Navigator assistance personnel same functions but only exist in state based or state partnership Exchanges

35 Role of Certified Application Counselors Can be staff or volunteers of CHCs, hospitals, health care providers and certain types of social service agencies and governmental entities Fill same roles and responsibilities of Navigators but aren t responsible for conducting outreach and education or helping small businesses get coverage Provide free information to consumers about insurance affordability programs and coverage options Assist consumers in applying for coverage and insurance affordability programs in the Exchange Help facilitate enrollment in coverage

36 Summary of Roles and Responsibilities of Consumer Assistance Entities HHS, Navigator Training Training Overview,

37 Barriers to Outreach/Enrollment Assistance Funding limits Federal dollars stretched to cover many more FFEs than anticipated and in more negative climate State laws (examples) Missouri: prohibits public employees from helping people enroll Ohio: excludes any organization or person that receives payments from a healthcare payer for any purpose from being designated as a Navigator, Georgia, for example, must be licensed as an insurance navigator; other states Navigator final rule: Navigator licensing, certification, or other standards prescribed by the state or Exchange should not prevent the application of the provisions of title I of the ACA. Congressional oversight House Energy & Commerce Majority 51 (out of 104) federal grantees asked to submit detailed information and report by Sept 13 th (Grantees in AZ, FL, GA, IN, LA, MO, NJ, NC, OH, PA and TX)* *

38 Consumer Assister Resources Navigator Training Application be a Certified Application Counselor