2017!and!Beyond:!Using!the!ACA! Innovation!Waiver!to!Reach!Minnesota s! Triple!Aim!

Transcription

1 The$Woodrow$Wilson$School$ Graduate$Policy$Workshop$ 2017andBeyond:UsingtheACA InnovationWaivertoReachMinnesota s TripleAim Authors$ LaurenDunn,DanielEdelman,MaryamJanani,EmilyKing,AvitalLudomirsky,AbbyMcCartney, AnnaNinan,EleutheraSa,SethSamelson,RachelVanCleve Project$Advisors$ HeatherHowardandDanielMeuse January$2015

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3 Table$of$Contents$ Acknowledgements$...$2 List$of$Acronyms$...$4 Executive$Summary$...$5 Introduction$...$6 The$1332$Waiver$...$9 Backgroundon1332Waivers...9 OtherStatesandthe1332Waiver...11 Minnesota s$remaining$challenges$...$14 TheCoverageLandscape...14 OpportunitiesforImprovement...14 Using$the$1332$Waiver$to$Achieve$Minnesota s$goals$...$19 OpportunitiesforIncrementalChange...19 OptionA:DHSVDrivenConsolidationofPublicPrograms...28 OptionB:CoverageExpansionthroughtheMarketplace...32 OptionC:CoordinatedPurchasingPath...38 Comparative$Analysis$of$the$Options$...$45 SmoothingtheCoverageContinuum...45 Affordability...46 UniversalityandComprehensivenessofCoverage...46 FinancialFeasibility...47 FeasibilityofAdministrativeCoordination...47 LeveragingDeliverySystemReform...48 Recommendations$...$53 Conclusion$...$55 Endnotes$...$ andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 1

4 Acknowledgements$ Theauthorswouldliketothanktheindividualslistedbelow,whogenerouslyprovidedtheirtime, invaluableinsight,andexpertisethroughouttheresearchprocess.wearealsoindebtedtoandgrateful forworkshopadvisorsheatherhowardanddanielmeuse,whoprovidedguidance,education, mentorship,assistance,andlaughterduringthecourseofthisworkshop.finally,wethankthestaffsof MNsure,Minnesota sdepartmentofhumanservices,andprincetonuniversity swoodrowwilson School,whomadethisprojectpossible. Whilethisreportincorporatesinsightsfromnumerousindividuals,theanalysisandrecommendations aresolelytheviewsandresponsibilitiesofitsauthors. MNsure$ ScottLeitz,ChiefExecutiveOfficer KatieBurns,ChiefOperatingOfficer AllisonO Toole,DeputyDirectorofExternalAffairs DavidvanSant,NavigatorBrokerManager Minnesota$Department$of$Human$Services$ MarieZimmerman,MedicaidDirector NathanMoracco,AssistantCommissionerforHealthCareAdministration SusanHammersten,HealthCareReformImplementationManager AnnBerg,ActingStateMedicaidDirector KarenGibson,Director,HealthCareEligibilityandAccess Minnesota$Department$of$Commerce$ AlyssavonRuden,HealthPolicyAdvisor KristiBohn,HealthActuary Minnesota$Department$of$Health$ Dr.EdwardEhlinger,Commissioner MannyMunsenVRegala,AssistantCommissioner StefanGildemeister,EconomistandDirector,HealthEconomicsProgram AlishaSimon,SeniorResearcher Other$ JenniferDecubellis,AssistantCountyAdministratorforHealthinHennepinCounty,AreaDirectorof HennepinHealth JenniferLundblad,ChiefExecutiveOfficer,StratisHealth LynnBlewett,PrincipalInvestigatorandDirector,StateHealthAccessDataAssistanceCenter JulieSonier,SeniorResearchFellowandDeputyDirector,StateHealthAccessDataAssistanceCenter KelliJohnson,SeniorResearchFellowandCenterDirector,StateHealthAccessDataAssistanceCenter KristinDybdal,SeniorResearchFellow,StateHealthAccessDataAssistanceCenter DebraHolmgren,President,PorticoHealth 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 2

5 JaeYang,CoverageandCareManagementManager,PorticoHealth RebeccaLozano,OutreachProgramDirector,PorticoHealth LizDoyle,AssociateDirector,TakeActionMinnesota MattAnderson,SeniorVicePresidentofPolicyandStrategy,MinnesotaHospitalAssociation JanetSilversmith,DirectorofDepartmentofHealthPolicy,MinnesotaMedicalAssociation JulieBrunner,ExecutiveDirector,MinnesotaCouncilofHealthPlans EileenSmith,DirectorofCommunicationsandPublicRelations,MinnesotaCouncilofHealthPlans LawrenceJacobs,WalterF.andJoanMondaleChairforPoliticalStudiesandDirectoroftheCenterfor thestudyofpoliticsandgovernance,huberth.humphreyinstituteanddepartmentofpoliticalscience, UniversityofMinnesota JohnSelig,DirectorofDepartmentofHumanServices,Arkansas SenatorJoshuaMiller,RhodeIslandStateSenator Dr.JeffreyBrenner,ChiefExecutiveOfficer,CamdenCoalitionofHealthcareProviders;MedicalDirector, CooperAdvancedCareCenter KathleenStillo,ExecutiveDirector,CooperAdvancedCareCenter MarkHumowiecki,GeneralCounsel&DirectorofExternalAffairs,CamdenCoalitionofHealthcare Providers KerianneGuth,ProgramManager,CooperAdvancedCareCenter JonathanVogan,AssociateDirector,FinanceandPerformanceMeasurement,CooperAdvancedCare Center MarshaJohnson,ClinicalTherapist,CooperAdvancedCareCenter 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 3

6 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 4 List$of$Acronyms$ ACA PatientProtection&AffordableCare Act ACO$ AccountableCareOrganization APTC$ AdvancePremiumTaxCredit BHP$ BasicHealthPlan CCIIO CenterforConsumerInformation andinsuranceoversight CHIP$ Children shealthinsuranceprogram CMS CentersforMedicareandMedicaid Services DHS MinnesotaDepartmentofHuman Services DOC$ MinnesotaDepartmentof Commerce EPSDT$ EarlyandPeriodicScreening, Diagnostic,andTreatment ESI$ EmployerSponsoredInsurance FPG$ FederalPovertyGuidelines GMC Vermont sgreenmountaincare HHS U.S.DepartmentofHealthand HumanServices IRS InternalRevenueService IT InformationTechnology MA$ Minnesota smedicaidprogram: MedicalAssistance MAGI ModifiedAdjustedGrossIncome MC$ MinnesotaCare MCO ManagedCareOrganization MMB MinnesotaManagementandBudget QHP$ QualifiedHealthPlan SEGIP StateEmployeeGroupInsurance Plan SHADAC StateHealthAccessDataAssistance Center SIM StateInnovationModel $

7 Executive$Summary$ Section1332oftheAffordableCareActgivesstatestheopportunitytowaivecertainrequirementsofthelaw andbuildprogramsthatprovideaffordable,comprehensivehealthcareininnovativeways.minnesota s DepartmentofHumanServicesanditshealthinsuranceMarketplace,MNsure,haveexpressedinterestin usingthe1332waiverstoadvancehealthreformintheirstate.thisreport,draftedbygraduatestudentsat thewoodrowwilsonschoolofpublicandinternationalaffairsatprincetonuniversityandbasedupon extensiveinterviewswithhealthsystemstakeholdersinminnesotaaswellasindependentresearch,provides asetofrecommendationsforthedirectionhealthcarereformcouldtakeundera1332waiverprogram. WhileMinnesotaisanationalleaderonseveralhealthcareindicators,thereareanumberofareaswhereit coulduseawaivertoimprovetheprovisionofcare.theinsurancemarketforindividualsbetween0%and 400%ofthefederalpovertyguidelines(FPG)isapatchworkofprograms,andchangesinlifesituationcan leadanindividualto churn betweenprogramswithdifferenteligibilitycriteria,costs,providernetworks, andadministrativeprocedures.thestatehasmadeprogressondrivingdeliverysystemandpaymentreform, buthasyettoscaleupitspromisingpilotprograms.whileminnesota suninsuredrateisquitelow,hundreds ofthousandsofpeoplearestillwithoutcoverage.inevaluatingoptionsforreform,weasksixquestions:does theoptionsmooththecoveragecontinuumforindividuals?makecaremoreaffordable?helpthestateoffer comprehensive,universalcoverage?isitfinanciallyfeasible?administrativelyfeasible?doesitallowthe statetodrivedeliverysystemreform? Thestatecanbeginbymakinganumberofincrementalchangesthatarenotspecifictoanyparticularglobal visionofreform.itcanenhancecurrentprogramsbymakingfurtherinvestmentsinservicedelivery alternatives,webvbaseduserexperience,andnavigatorprograms.programalignmentcanbeimproved throughstandardizeddefinitionsofincomeandhouseholdandconsistentenrollmentproceduresandincome verificationsystems.thestatecanfixthefamilyglitchandcanexpandcoverageamongimmigrant communities.finally,minnesotacanshapechoicearchitectureonmnsuretonudgeindividualsintohigherv qualitycoverage. The1332waivercanalsobeusedmoreambitiously.Weoutlinethreepotentialpathsthatthestatecouldgo downinpursuingitsgoals.alloptionsaimtosmooththecostcontinuumforindividuals,mitigatechurn,and spurdeliverysystemreform,buttheytakeverydifferentapproaches. OptionA reliesonpublicprograms, andwouldrestoreminnesotacareto275%fpg,withdeliverysystemreformlargelydrivenbystate procurement. OptionB takesamoremnsurevcentricapproach,andwouldreplacethecurrentbasic HealthProgramforthe138%V200%FPGpopulationwithsubsidiesforqualifiedhealthplans.Additional subsidieswouldbeprovidedforpeopleupto275%fpg,anddeliverysystemreformandcostcontrolwould bedrivenbyactivepurchasing.finally, OptionC wouldmaintainthecurrentprogramboundariesat138% FPGand200%FPG,butwouldimplementvariouscarrierregulationstoeasetransitionsbetweenprograms. WeconcludethateitherOptionAorOptionBwouldbesthelpMinnesotaachieveitshealthcaregoals,and thatthedecisiontopursueapublicpathoraregulatedmarketpathshouldultimatelybeaphilosophicalone. Itiscrucialtochooseonepathortheother.OptionC,whichwouldinstitutionalizethecurrentcoverage patchwork,doesnotmaximizeleveragefordrivingreform. 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 5

8 Introduction$$ HealthreformistraditioninMinnesota.Thestatehaslongbeenattheforefrontofeffortstoimprove quality,lowercosts,expandcoverage,andcoordinatecare.itishometothenation sfirsthealth maintenanceorganizationsandwasoneofthefirststatestotakeadvantageoffederaldemonstration waivers,creatingapioneeringpublicinsuranceprogramforworkingfamilies.in2008thelegislature passedasetofinitiativesthatlaidoutapathtopaymentreform,investedinpublichealth,and introducednewtransparencymeasures. 1 The2010AffordableCareAct(ACA)takesthesereforms nationwideandoffersnewtoolsforminnesotatopursueitstripleaimofimprovingpatientexperience andpopulationhealth,whilereducingpercapitacosts. Theyear2017bringsanotheropportunity.Section1332oftheACAmakesavailable innovationwaivers thatwillallowstatestowaivemanyofthelaw srequirementsanddeveloptheirowndeliveryand insurancesystems,allwhilereceivingthesameleveloffederalsubsidiesthatwouldhavegonetothe state sresidents.theminnesotadepartmentofhumanservices(dhs)andmnsurehaveexpressedan interestinusinga 1332 or 2017 waivertocarveoutauniquepathforhealthreforminminnesota. Thisreportexploresthepossibilitiesthatsuchawaivercouldunlock. Inourresearch,wespoketoindividualsrepresentingfourteenMinnesotaorganizations,including governmentagencies,advocacygroups,andresearchinstitutions.whileeachofferedaunique perspectiveonthecurrenthealthsystem,certaincommonthemesemerged.minnesota seffortsto providecomprehensiveanduniversalcoveragehaveledtoaverylowuninsuredrate,butalsocreateda patchworkofprogramswithnumerouschurnpoints.stakeholdersacrossthestatewantamore coherentandseamlesscontinuumofcoverage. Inaddition,werepeatedlyheardthatMinnesotaiscommittedtoreformingdeliveryandpayment systemstoimprovethequalityandlowerthecostsofcare.thestatehasdevelopedinnovativemodels ofcaredelivery,butthereisstillalongwaytogobeforethesenewmodelsarewidespread.many stakeholdersexpressedinterestinusingthenextroundofhealthreformtoexpandthedeliverysystem reformsnowunderwayinmedicalassistance(ma),minnesotacare,medicare,andprivateinsurance.at thesametime,theyremindedusthatanychangesmustpromotetheaffordability,comprehensiveness, anduniversalityofhealthcareinminnesota. ThisreportreflectsthegoalsandprioritiesofMinnesota shealthreformexpertsaswellasourown researchonminnesotaandotherstates.itbeginswithbackgroundonthe1332waiversanddiscusses otherstates waiverplans.itthengoesontooutlinewhatweheardfromstakeholdersinminnesota. Wesummarizetheweaknessesofthecurrentsystem,andwelistsixprinciplesthatwebelievetobethe prioritiesforminnesota shealthcaresystemgoingforward.thesixprinciplesserveasdecisioncriteria whenweweighoptionsforreformagainstoneanother. Wethenmakeourrecommendations.First,wepresentasetofreformsthatwebelieveMinnesota s leadersshouldmakeregardlessofwhetherorhowtheyusea1332waiver.thesefixesrangefrom 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 6

9 administrativereorganizationstoadjustmentsofthesubsidyscheduleforlowvtomiddlevincome families.manyofthesechangescanbefeasiblyaccomplishedwithouta1332waiver. Thethreeoptionsthatfollowaremoreambitious.Eachoptioninvolvessignificantchanges(and,we believe,improvements)tothestatusquo,andeachpositionsthestatetocontinuetoleadinhealth reformeffortsinthedecadestocome.finally,weusethedecisioncriteriageneratedfromour conversationswithminnesotastakeholderstoevaluateeachoptionandsuggestacourseofaction. ThisisanexcitingtimeforhealthreforminMinnesota.Duetothestate spioneeringandsustained investmentsovertheprecedingdecades,itshealthsystemisamongthebestinthenation.inthenext fewyears,minnesotawillhavetheopportunitytomakefurtherstridesinquality,efficiency,and innovation.thepathitchoosescoulddeterminethedirectionofamericanhealthcareforyearstocome. 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 7

10 Part%I:%The$1332$Waiver 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 8

11 The$1332$Waiver$ Background$on$1332$Waivers$ Understanding$the$1332$Waiver$ Section1332oftheACAallowsstatestowaivecorerequirementsofhealthreformlegislationinorder toexperimentwithalternativepathstoachievingtheaca sgoals.thissectionreviewstheknown opportunitiesandconstraintsaffordedbythewaiver,theapplicationprocess,andpossibilitiesunder explorationbyotherstates. Provisions(that(may(be(waived( UnderSection1332,statescanproposemodificationstothefollowingelementsoftheACA: 2 The$qualified$health$plans.$Statesmaychangetherequirementsforqualifiedhealthplans(QHPs), includingthedefinitionofessentialhealthbenefits,limitsoncostvsharing,rulesforparticipating plans,andthemetallevels. 3 Forexample,astatemightexpandaccesstoleaninsuranceby introducinga copper planat50percentactuarialvalue. 4 Bycontrast,astatecould withouta waiver choosetolimitrelianceonlowvactuarialvvalueinsurancebyeliminatingbronzeplans. 5 The$health$insurance$Marketplaces.$StateshavetheoptiontomodifyoreliminatetheMarketplace system.forexample,statescouldwaivespecificrequirementsbyextendingaccessbeyondcitizens andlawfulresidentsorbycappingthesmallgroupmarketat50employees. 6,7 Theycouldalsomake broaderchanges,suchasreplacingthemarketplacewithaprivateexchange,allowingthepurchase ofsubsidizedcoverageoutsidethemarketplace,oreliminatingtheprivatemarketoutsidethe Marketplace. 8 Tax$credits$and$costZsharing$reductions.$Statesmightmodifytherulesconcerningtheprovisionof costvsharingandpremiumsubsidies.forexample,statescouldsmoothcostvsharing cliffs, tietax creditstoqualitymetrics,eliminatethefamilyglitch(seepage26),orchangetheincomelimitsfor subsidyeligibility.inconjunctionwithan1115medicaidwaiver,statescouldalterthepremiumand costvsharingscheduletosmoothdifferencesbetweenpubliccoverageandthemarketplace. 9 The$employer$mandate.Statesmayadjustoreliminatepenaltiesforlargeemployerswhodonot offercoveragetotheirfullvtimeemployees.forinstance,astatemightintroduceexemptionsfor midvsizedemployers,changethedefinitionofcoveredemployees,adjustthelevelofqualifying coverage,orpotentiallyeliminatethemandatealtogether. The$individual$mandate.Statesmayadjustoreliminatethetaxpenaltyforindividualswhogo withouthealthcoverage.forexample,astatemightexpandornarrowmandateexemptionsor implementlateenrollmentpenalties. 10 Waiver(Constraints( Generally,waiverproposalsneedtoprovidesimilarcoverageoutcomesintermsofbothqualityand quantityatequalorlessercost.specifically,proposalsundersection1332areconstrainedbythe followingcriteria: 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 9

12 Affordability:$Proposalsmustprovidecoveragethatisatleastasaffordableasitwouldbeunderthe originalprovisions,includingprotectionsagainstexcessiveoutvofvpocketspending.theprecise measuresofaffordability(e.g.premiums,costvsharing,totalexpectedcost)havenotbeenspecified.$ Comprehensiveness:Proposalsmustprovidecoveragethatis,ataminimum,ascomprehensiveas Marketplacecoverage.ThechiefactuaryattheCentersforMedicare&MedicaidServices(CMS) mustcertifyestimatesofcomprehensiveness.whetherthiscalculationwillbebasedonbenefit categoryoractuarialequivalenceisstillunclear.$ Scope$of$coverage:ProposalsmustprovidecoveragetoatleastasmanypeopleastheACAwould haveintheabsenceofawaiver.themethodbywhichthiswillbecalculatedhasnotbeenspecified.$ Federal$deficit:Proposalscannotincreasethefederaldeficit. 11 $ ThefollowingprovisionsoftheACAcannotbewaived:guaranteedissue,communityrating,andnonV discriminationregulations. 12 Application(Process( Priortosubmittinganapplication,statesmustdemonstratethattheyhavetheauthoritytoenacta waiverandhavesolicitedpublicinputonthedesignoftheirwaiver.statescaneitherenactanewlaw thatprovidesforthewaiverorrefertoauthorityunderexistinglawintheirproposal. 13 Statesmust(1) holdapublichearingafterdraftingthewaiverproposal;(2)collectandrespondtocommentsafterthe applicationissubmitted;and(3)holdannualpublicforumsonthewaiverfollowingapproval. 14 Theapplicationitselfmustincludeactuarialandeconomicanalyses,animplementationtimeline,anda tenvyearbudgetplan.followingsubmissionofacompleteapplication,thedepartmentsofhealthand HumanServices(HHS)andtheTreasuryhave180daystoapproveorrejectthatapplication. Applicationscanbesubmittedatanytime,thoughproposalscannotbeimplementeduntilJanuary1, 2017.Ifawaiverisapproved,thestatemustsubmitquarterlyandannualreportsonthewaiverprogram tohhsandthetreasury.waiversarerenewable,buttheirinitialdurationcannotexceedfiveyears. Funding Fundsthatwouldotherwisegotowardssubsidizingresidents purchaseofinsurancethroughpremium taxcreditsandcostvsharingreductionsonthemarketplacecanberedirectedtothewaiverprogram. 15 Theprocessforcalculatingtheamountoffundingintheabsenceofthewaivedprovisionsisunclear,but willtakeintoaccounttheexperienceofotherstates. WaiverCoordination ThetextofSection1332callsforthecreationofacoordinatedstatewaiverapplicationprocessthat wouldenablestatestosubmitasingleapplicationformultiplewaivers.inotherwords,a1332 applicationcouldbecombinedwithsection1115medicaidwaiversaswellasmedicarewaivers.note that1332doesnotactuallyexpandwaiverauthorityovermedicaidormedicare,andexisting boundariesforwaiversstillapply. 16 Apotentialbenefitofasingleapplicationisthatstatesmaybeabletoestimatethecombinedfinancial impactoftwowaivers.hhscouldthenconsiderthewaiversintandemwhendeterminingwhetherthe 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 10

13 Section1115waiverisbudgetneutralandwhetherthesection1332waiverincreasesthefederal deficit. 17 UnansweredQuestions ManyquestionsremainunansweredbytheoriginaltextofSection1332.Someexpertsanticipatethat furtherinstructionsfortheapplicationprocesswillbereleasedinthespringof2015,butthefederal governmenthasyettoannouncesuchplans. Other$States$and$the$1332$Waiver$ HawaiiandVermontarebothtentativelyworkingtowardsa1332waiverapplicationtoachievetheir respectivehealthcoveragegoals.severalotherstates,includingarkansasandoregon,arealsowell positionedtoapplyforwaivers. Arkansas$ Arkansashasalsoestablisheditselfasaleaderinreforminnovationandiswellpositionedtoapplyfora 1332waiver.Arkansas sexisting1115waiverenablesittofundaprivateoptionmodelformedicaid users.a1332waivercouldincreaseaccesstoprivatehealthinsuranceandreducetheburdenonpublic programs.giventhepotentialforcombinedbudgetneutrality,a1332waivermayofferabipartisan approachtocoverageexpansionthroughaprivatevinsurancebasedapproach.underthearkansas HealthCarePaymentImprovementInitiative,thestatehasalreadymadeprogress,movingtowardsthe creationofpatientvcenteredmedicalhomes,healthhomesforindividualswithcomplexneeds,andan episodevbased paymentanddeliverymodel. 18 Hawaii$ Hawaiihasexpressedinterestinpursuinga1332waiver,inpartduetothedesiretopreserveits1974 employermandate,whichismoreexpansivethantheacaprovisionandhashelpedbringuninsured ratesbelow10percentinthestate.in2014,hawaiipassedlegislationcreatingastateinnovation WaiverTaskForcetoexploreoptions.InitsOctober2014meeting,theTaskForceagreedapotential waivershouldpursuethegoalofuniversalcoverageandaccessandshouldpreservehawaii semployer mandate.waiverdevelopmentsubcommitteeshavebeensetuptoexploreoptionsrelatedtopremium rating,stateagencyinformationtechnology(it)collaboration,resourceallocationforreform,and metrics. 19 Oregon$ Oregonisalsowellsituatedtopursuea1332waiverthroughitscreationofMedicaidcoordinatedcare organizations,withincentivestosupportpopulationhealthoutcomes. 20 In2009thelegislaturecreated theoregonhealthpolicyboardandtheoregonhealthauthority,whichhavetheabilitytocoordinate publicpurchasingofinsuranceforpublicemployees.thestateisseekingtodevelopcommon contractingstandardstoimprovequality,performance,andcostveffectiveness.ultimately,oregon intendstocreateuniformityinbenefitdesignsanddevelopaplanforvaluevbasedpurchasing andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 11

14 Vermont$ VermontwasconsideringusingthewaivertoachieveitsgoalofauniversalandunifiedsingleVpayer healthcaresystemundergreenmountaincare(gmc).aswasenvisioned,gmcwouldredirectaca subsidiestooffergoldvlevelbenefitplans,coveringapproximately90percentofstateresidents.gmc soughttolowercoststhroughreducedfraudandabuse,administrativesimplification,anddelivery systemreform,withsavingssupportinguniversalcoverage.medicare,medicaid,andchipweretobe foldedintoasingleadministrativesystemwhilemaintainingcurrentbenefits. 22 Legislationin2012called forthecreationofasinglevpayerplanandpursuitofa1332waiver,andvermonthasbeeninmeetings withcmssinceearly2013.untildecember2014,vermontwasworkingonamodeltodefinefederal fundingandrequiredstatefinancing,withthegoalofsubmittingafinalproposalbyearly2015and beginningconsultationswiththepublic. 23 Unfortunately,themodelrecentlyshowedthattheproposed planwouldrequireanadditional$2.5billioninrevenuewithinthefirstyearalone,necessitatingan increaseinpayrolltaxesof11.5percentandincometaxof9percent.withthesenumbersinmind,on December17,2014,GovernorPeterShumlinannouncedhewoulddelaysingleVpayerhealthcare system. 24 $ 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 12

15 Part%II:%Minnesota s*remaining(challenges 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 13

16 Minnesota s$remaining$challenges$ The$Coverage$Landscape$ Minnesota slongstandingcommitmenttothehealthofitsresidentshasledtooneofthehighestrates ofinsurancecoverageinthenation. 25 In2014,95percentofallMinnesotans,including93percentof adults,hadhealthinsurance. 26 Ofthetotalpopulation,56percentwereinsuredthroughtheiremployer, 16percenthadMedicare,15percenthadMA,andonepercenthadMinnesotaCare.Sixpercentofthe populationpurchasedprivate,individualinsurance,includinglessthanonepercentviamnsure. 27 EstimatesoftheearlyimpactoftheAffordableCareActfoundthatMinnesota suninsuredratefellby 41percentbetweenSeptember2013andMay2014,reachinganallVtimelow.Thisdeclinewaslargely drivenbyenrollmentinma,whichin2014extendedcoveragetoadultswithoutdependentchildrenand allowedeligibilitydeterminationviaashareditsystem. 28 Opportunities$for$Improvement$ Despiteprogressinexpandingaccesstoinsurance,expertswespokewithinMinnesotasawanumberof opportunitiestoimprovecontinuityandaffordabilityofcoverageandcare. Eligibility$Changes$ Minnesotansfacedisruptionsincoverageandcarewhentheirincomeandeligibilitychange.A patchworkoffreeorsubsidizedhealthinsuranceprogramsisavailabletominnesotansbetween0%and 400%FPG.Changesinincome,age,orpregnancystatuscancauseenrolleestoshiftbetweenMA, MinnesotaCare,andtheMarketplace.Asaresult,enrolleesmayfacesteeppremiumhikes,findthat theirpreferreddoctorsarenotpartoftheirnewnetworks,orfailtoreapplyforinsuranceandlose coveragealtogether. Inadditiontothepotentialforonepersontochangeeligibilityovertime,parentsandchildrenareoften coveredunderdifferentprograms.infamiliesearningbetween133%and275%fpg,childrenare eligibleforma,whileparentsmustpurchaseminnesotacareoraprivatemnsureplan. 29V30 Anationalstudyofpeopleearningbetween100%and200%FPGfoundthat38percentofthoseinitially belowthe138%fpgmedicaidcutoffhadincomesabovethecutoffoneyearlater.similarly,24percent ofthoseinitiallyabovethecutoffdroppedbelowitafteroneyear. 31 Althoughthestudylooksonlyatthe 100% 200%FPGrangeandMinnesotaVspecificdataisnotavailable,itseemslikelythatalargenumber ofminnesotanschangeprogrameligibilityfromyeartoyear.theseminnesotanswillbeaffectedby differencesinpremiumcostsandprovidernetworksbetweenprograms.$ Affordability$Cliffs$ Minnesotansalsofacesharpchangesinaffordabilityastheyshiftfromoneprogramtoanother.Before 2014,MinnesotaCarecoveredadultsupto250%FPGandparentsupto275%FPG.Inordertoaccess significantfundingundertheaca,thestatemodifiedminnesotacaretoconformtofederalstandards forabasichealthprogram(bhp),includingcappingeligibilityat200%fpg.minnesotansbetween200% and275%fpgmaynowshopforqhpsonmnsure;somewillqualifyfortaxcreditsandcostvsharing 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 14

17 reductionstohelppayforcoverage.evenwithfederalhelp,however,thosetransitioningfrom MinnesotaCaretotheMarketplacecanexpecthigherpremiumsandlessgenerouscostcoverage. MinnesotaCareenrolleesat200%FPGpaya$50monthlypremium,withnominalcopaysandmonthly deductibles. 32,33 Incontrast,Minnesotansat201%ofFPGareeligibleforplansonMNsurethathave higherpremiumsandcostvsharing.a40vyearvoldnonvsmokeratthisincomelevellivinginthetwin Citiescouldpurchaseasilverplanfor$125orabronzeplanfor$82permonthafterthefederal subsidy. 34 MinnesotaCare sactuarialvalue theportionofmedicalcoststheprogramwillpayforon average isestimatedatover96percent. 35 AsilverQHPhas70percentactuarialvalue(73percentwith costvsharingreductions)abronzeplan60percent. HighercostVsharingintheQHPsisarealconcern.Researchindicatesthatevenwhenpeoplehavehealth insurancecoverage,theymayfindthecostofcareunaffordable.inarecentsurvey,27percentof Minnesotansbetweenages18and64saidtheyhadforegoneneededhealthcareduetocost. 36 While theaca staxcreditshelplowvincomeconsumersaffordmonthlypremiums,costvsharingassistanceis onlyavailabletothosewhopurchasesilvervlevelplans. Provider$Networks$ Minnesotansmayfacedisruptionsinaccesstopreferredprovidersastheyshiftbetweenprograms. Unfortunately,statisticsontheextentofthesedisruptionsare,toourknowledge,unavailable.Toour knowledge,therearenostatisticsonthenumberofminnesotanswholoseaccesstotheirpreferred providerswhentheirprogrameligibilitychanges.minnesotahasfewnarrownetworkscomparedto otherstates,althoughsomeexist. 37,38 Atleasttwocarriers,UCareandMedica,createdMNsureplansto mirrortheirminnesotacareproducts,butmanyconsumersleavingminnesotacarein2014choseother, lowervcostplansinstead. 39 Inruralareaswithfewproviders,allhealthplansmayneedtocontractwith allproviderstomeetnetworkadequacyrequirements,andnetworksmayoverlapalmostcompletely. 40 InproviderVdenseareas,however,consumersmayhavetoresearchnetworksorchooseahigherVcost plantokeeptheirproviders. The$Remaining$Uninsured$$ AlthoughMinnesota suninsuredrateisalmost50percentlowerthanthenationalaverage,stakeholders remaincommittedtoexpandingcoverage. 41,42 In2014,6.7percentofadultsaged18to64and4.9 percentofallminnesotans,orapproximately264,000people,lackedhealthinsurance. 43,44 Although detaileddemographicinformationabouttheuninsuredisnotavailablefor2014,pastsurveysshowthat uninsuredminnesotansaremorelikelytobelowvincome,nonvwhite,nonvusvborn,unmarried,andin poorerhealthcomparedtothepopulationasawhole. 45 In2013,theuninsuredwere60.9percentwhite, 20.2percentHispanic,11.1percentblack,7.6percentAsian,and3.6percentAmericanIndian. 46 After ACAimplementation,upto12percentoftheremaininguninsuredmaybeundocumentedimmigrants withoutaccesstopublicinsuranceprogramsormnsurecoverage. 47 $ MNsure$and$BHP$Funding$ MNsureandMinnesotaCarewillbothseemajorshiftsandsomeuncertaintyintheirrevenuesources overthenextthreeyears.thefederalcciiograntthatprovidesover60percentofmnsure s andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 15

18 revenuewillexpirein2016.somewhatoffsettingthatloss,mnsure srevenuefrompremium assessmentswilltripleby2017duetoanincreaseinthepercentwithheld.toaccommodateitslower budget,mnsureplanstoreduceexpendituresacrosstheboard,mostsignificantlyontheitsystem. 48 MinnesotaCare,meanwhile,beginsreceivingfederalBHPfundingin2015asitsMedicaidwaiverfunding ends.expendituresnotcoveredbybhpfundingwillneedtocomefromenrolleepremiumsandthe state shealthcareaccessfund,whichisfundedlargelybythe2percentprovidertax.state expendituresonminnesotacareareprojectedtomorethandoubleby2017duetorisingenrollment andmanagedcarerates;asaresult,thehealthcareaccessfundwillbe$62millionindeficitin FederalBHPfundinghingesonthesecondlowestcostsilverplanonMNsure;lowpremiumsonMNsure meanlessfederalfundingandhigherstateoutlays.projectionsfor2015bhpfundingwererevised upwardwhenpremiumsincreased10percentover2014levels,butgainswereoffsetbythelarge numbersofnewenrolleesinthemetroregion,whereratesarelowest. 50 Delivery$System$Reform$ Minnesotaisanationalleaderandearlyadopterofmanydeliverysystemreforminitiatives. Publicandprivatepayersandprovidernetworksareexperimentingwithsharedsavings contractssuchasaccountablecareorganizations(acos),includingthreemedicareacosand ninemedicaidacos.suchcontractsnowapplytoaboutonevsixthofmaenrolleesandbetween onevthirdandtwovthirdsofcommercialplanenrollees. 51,52,53 StatelawrequiresallpayerstomakecoordinationVofVcarepaymentstoprimarycareclinics certifiedas healthcarehomes, encouragingclinicstafftotakeresponsibilityforthewellvbeing oftheirpatientsbetweenvisits,includingcoordinatingmentalhealthandsocialservices. 54 AllclinicsandhospitalsparticipateintheStatewideQualityReportingMonitoringSystem, makingclinicvbyvcliniccomparisonpossibleforcertainprocessandoutcomemeasures,suchas optimaldiabetescare. 55 HennepinHealth,aMedicaidHMO,isdemonstratinghowinvestmentsinhousing,social services,andpreventivementalhealthandmedicalcarecanimprovepatients healthandsave thestatemoneyoncareforhighvriskpatients. Minnesotahasoneofthehighestratesofelectronichealthrecordadoptionnationally,thanks toalegislativemandate. 56 Still,manyoftheseinitiativesareintheirinfancy.Althoughsharedsavingscontractsareinplacefora significantnumberofpatients,onlytwotosevenpercentofparticipatinghealthsystems revenuesare affected.differentpayersalsomeasureandrewarddifferenthealthoutcomes,creatingconfusing signalsforproviders. 57,58 Indeed,formostmedicalconditionsandprocedures,qualitymeasuresdonot yetexist. 59 WhileHennepinHealthhasbeensuccessfulatintegratingmedicalcare,behavioralhealth, andsocialservices,otherhealthsystemsareattheverybeginningofthelearningcurve. 60 Onehundred ninetyprimarycareclinicshavebeencertifiedashealthcarehomes,butthefirststudyoftheirimpact hasyettobereleased. 61 A2008initiativetoreportqualityandcostmeasuresforindividualdoctors(in additiontoclinics)wassuspendedduetoproviderconcernsthatratingsbasedondevidentifiedpatient recordscouldnotbeverified. 62 Finally,MNsurehasthestatutoryauthoritytoselectplansbasedon 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 16

19 criteriasuchasqualityandvalue,buthasyettotakethisstep. 63 $ Decision$Criteria$ Laterinthisreport,werateeachwaiveroptionaccordingtothefollowingsixcriteriabasedontheprioritieswe heardfromdhs,mnsure,andotherstakeholdersduringinterviews. 1.(A(smooth(continuum(of(coverage(from(0%(to(400%(FPG( Doestheoption(a)eliminatepremiumcliffs,(b)reducethenumberoftransitionpointsatwhichpeoplemaylose coverage,(c)allowpatientstokeepprovidernetworkswhentheirincomechanges,and(d)keepfamilymembers onthesameinsuranceplan? 2.(Affordability( Undereachwaiveroption,isthecostofinsurancecoverageaffordableforconsumers?Willinsuredconsumersbe abletoaffordtheoutvofvpocketcostsofcareundertheirplans? 3.(Universality(and(comprehensiveness(of(coverage( CantheoptionimproveinsuranceaccessfortheremainingfivepercentofMinnesotanswhoareuninsured?Canit improvethecomprehensivenessofthebenefitsoffered? 4.(Financial(feasibility( Istheoption(a)costVneutraltothefederalgovernment,and(b)affordablefortheStateofMinnesota? 5.(Administrative(feasibility( Doestheoptionrequireadifficultadministrativetransition,andonceestablished,willitbedifficulttosustain? 6.(Leveraging(delivery(system(reform( Howwilltheoptionaffectstateeffortstocontrolhealthcarecosts,improvequality,andpursuecurrentreform initiatives,includingaccountablecareorganizations,healthcarehomes,andeffortstointegratesocialservices andmentalhealthcareintothemedicalsystem?$$ 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 17

20 Part%III:"Usingthe$1332Waiver'to'Achieve' Minnesota s*goals 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 18

21 Using$the$1332$Waiver$to$Achieve$Minnesota s$goals$ Opportunities$for$Incremental$Change$ ThissectiondescribesthreeareaswhereMinnesotacaninvestinshortVrunchanges:(1)enhancements tominnesota scurrentpoliciesandprograms;(2)technicalchangestobetteralignprograms;and(3) affordabilityimprovementsforcertainpopulations. Alloftheseincrementalchangescanbeimplementedalongsideanyofthethreeglobalreformoptions presentedinthefollowingthreesections(p.28v41).werecommendmakingtheseadjustments regardlessofwhich,ifany,ofthreereformoptionsminnesotachoosestopursue.someofthese changes,particularlyinthesecondtwocategories,willrequirea1332,1115,orjointwaiver.theyare thusbestconsideredinthecontextofamoreambitiousglobalwaiverapplication. Category$1:$Enhancements$to$Minnesota s$current$policies$and$programs$ Build(on(Successes(of(the(Minnesota(Accountable(Health(Model( MinnesotaisaleaderinservicedeliveryreformandisreceivingfundingfromtheStateInnovation ModelGrantthroughOctober2016totestitsgrowingaccountablehealthmodel. 64 Thestateshould continueprioritizingthetestingandexpansionofservicedeliveryalternatives.sinceitisuncertain whethercmswillprovideathirdroundoffunding,minnesotashouldconsiderintegratingitsservice deliveryreformneedsintoafuturefederalwaiverapplication. 65 Improve(the(DHS(and(MNsure(WebOBased(Consumer(Experiences( TheMNsurewebsiteexperiencedabumpystartduringthe2013launchoftheMarketplace. 66 In2014, thewebsitewasmarkedlyimproved,thoughsomeglitchesremained. 67,68 Regardlessofothermeasures takentoimprovethehealthinsurancesystem,mnsureshouldcontinuetoensureadequateitfunding, allowingforwebsiteenhancementsthatpromoteeaseofuse.examplesforadditionalimprovements includecreatingautomaticinformationtransferofmnsureenrolleestotheirinsurers,simplifyingtherev enrollmentprocessforbeneficiarieswhoseincomeorcircumstanceschange,andconductingcustomer satisfactionsurveysthatelicitadditionalfeedback. 69 Use(Navigators(for(Reenrollment(Processes(and(Health(Insurance(Literacy( TheAssisterNetworkisalreadyanimportantresourceinMinnesota.However,federalestablishment fundsandnavigatorvspecificgrantsthatfinancethisprogramaretemporary,anditwillbeuptothe statestocontinuefundingtheprogram.navigatorswereusedintheinitiallaunchoftheacatoassist individualsinthetransitiontothenewsystem.however,theyremainimportantgiventhat:(1)changes broughtbythe2017waivermayrequirenavigatorassistance;(2)newconsumersunfamiliarwith MNsuremayenterintothemarket(e.g.bygraduatingfromtheirparents insuranceatage26);(3) Consumersarestilladjustingtothenewsystemandmayneedassistanceinunderstandingreenrollment proceduresthroughthenearvterm;and(4)mnsurecanusenavigatorstoencourageconsumersto shop duringreenrollment. 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 19

22 Togaugethesuccessofthenavigatorprogram,MNsureshouldconsiderconductingasurveysimilarto thehealthinsuranceliteracysurveybytheamericaninstituteforresearch. 70 Nationalsurveysalready indicatethatmanyconsumersarenotinformedaboutthevariousformsoffinancialassistancefor healthinsurance. 71 Thestudycouldidentifyareaswhereconsumerunderstandingisstilllackingand informnavigatortraining.forinstance,amultivtieredtrainingwouldgeneratenavigatorsatdifferent levels:newassisters,advancednavigatorswhohavedeeperexpertiseineligibilityissues,andexpertinv housenavigatorswhoprovidesupporttoassistersworkingdirectlywithfamilies. 72 Asindividualsbecomefamiliarwithreenrollmentprocedures,navigatorscanalsoexpandtheirservices andprovidecontinuingeducationaroundtheuseofhealthinsurance,includinghowtointerpreta healthplan sbenefitsandhowtoselectaprovider.continuingtheassisternetworkprogramand expandingtheroleofnavigatorswillrequireadditionalfundinginthecomingyears,and,giventhe unpredictabilityoffederalfinancing,itmaybenecessarytoseekstateandprivateresources. Active$Purchasing$Authority$and$Choice$Architecture$ MNsurecanuseactivepurchaserauthorityandchoicearchitecturetohelplowVincomeconsumerslookbeyond stickervpricepremiumsandpicktheplanthatisbestforthem. ThereisevidencethatconsumerstendtooverweightpremiumsandunderweightoutVofVpocketcostswhen consideringthecostofinsurance. 73 Therearetwobehavioralexplanationsforthis.First,whilepremiumsare relativelysimpletounderstand,deductibles,copays,andcoinsurancecanbeopaquetoconsumers. 74 Second, lowervpremiumplansallowconsumerstodeferhighpaymentsuntillater,whichisattractivegiventhehuman tendencytodiscountfuturelosses. 75 Whilethepreferenceofmanyconsumersforlowerlevelsofcoverageisunderstandable,itisfrequently suboptimalforthem.morecomprehensivecoverageallowsconsumerstosmooththecostofhealthcareoverthe courseofayearandavoidfinancialshocks particularlyimportantforfamilieswithoutsignificantsavings. Premiums(and(Metal(Level(Choice( Minnesota smarketplaceofferedthelowestpremiumsinthecountryin2014.despitesignificantrateincreasesin 2015,premiumsforbenchmarksilverandbronzeplansintheTwinCitiesremainamongthelowestforallmajor metropolitanareas. 76 InthefirstmonthofMNsure sopenenrollmentfor2015,34percentofqhpenrolleesoptedforbronzeplans, whichcarrythehighestoutvofvpocketcostsatanactuarialvalueof60percent.in2014,25percentofminnesotans enrollinginqhpschosebronzeplans,comparedto20percentnationwide. 77,78 Consumersbetween200%and 250%FPGareeligibleforfederalcostVsharingreductionsonlyiftheyenrollinsilverplans,butnotiftheyenrollin plansinothermetaltiers. Affordablepremiumsareattractivetoconsumers,butpremiumsareonlyonepieceofthetruecostofcoverage. OutVofVpocketcosts,whicharehigherinlowermetaltiers,offsetthebenefitsoflowpremiums. CostOSharing(Subject(to(a(Deductible( Inastudyof15states,Minnesota smarketplaceplansfor2014werefoundtohavethehighestdeductibles,at $4,061onaverage. 79 Furthermore,theplansonMinnesota smarketplacetendedtosubjectawidervarietyof servicesanddrugstothedeductiblethanthenationalaverage.in95percentofplansonmnsure,forexample, 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 20

23 consumerswouldhavetopaytheentirecostofallemergencydepartmentvisitsuntiltheymettheirdeductible, comparedto53percentofplansnationwide.highvdeductibleplansarenotinherentlybad,butconsumersneedto understandandplanforthepotentialcostsinordertoavoidfinancialhardship. 100% Figure$1.1:$Percent$of$2014$Silver$Plans$with$Cost$Sharing$Subject$to$ Deduc]ble$by$Type$of$Care/Drug,$Minnesota$and$US$ 80% 60% 40% 20% 0% MN US average Source: GeographicalPatternsinCostSharinginSilverPlans. RobertWoodJohnsonFoundation.November2014.Web. Implications(for(LowOIncome(Minnesotans( AMinnesotantransitioningfromMinnesotaCaretotheQHPsmightlookfortheplanonMNsurewiththelowest premium.atwincitiesresidentat201%fpgcouldpurchasethefairviewucarechoicesbronzeplanfor$82per monthafterapremiumsubsidyof$58andnocostvsharingassistance.ifthisconsumerendsupwithan unexpectedhospitalstay,shecouldenduppayingthefullinvnetworkdeductibleof$5,000.themostshemight havetopayoutofpocketoverthecourseoftheyearisthefederallimitof$6,600,or28percentofherincome. 80 HighVdeductibleplansrelyonconsumershavingafinancialcushion,whichmaynotbemanageableforlowVincome Minnesotans. Implications(for(MNsure(and(DHS(funding( TheACA sfinancingmechanismsmakeitadvantageousforstatestonudgeenrolleestowardadequatecoverage.in amarketwhereconsumersshopandplanscompetebasedonpremiumalone,minnesotamissesoutonanumber ofbenefitsoftheaca.forexample,whenlowvincomeconsumerschoosebronzeplans,theyforfeitthefederal costvsharingreductionsavailableforsilverplans. LowerVthanVexpectedpremiumandcostVsharingassistanceareparticularlyproblematicgivenMinnesota spursuit ofalternativecoverageprogramsundertheaca.minnesotacare sfederalfundingisbasedonthepremium assistancetheeligiblepopulationwouldhavereceivediftheyhadenrolledinthemarketplace.a1332waiver wouldbefinancedsimilarly. Strategies(for(MNsure:(Active(Purchaser(and(Choice(Architecture( MNsurecouldemploytwostrategiestohelpconsumerschooserealisticallyaffordableplansin2016open enrollment.activepurchaserandimprovedchoicearchitecturearealreadyontheboard sagendaforthecoming year,andwerecommendmovingforwardwithboth. 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 21

24 A. First,MNsurecouldexerciseactive$purchaser$authoritytostandardizecostVsharingstructureswithin metallevelsandtoexcludeplansthatarejudgedunaffordableormisleadingtoconsumers.forexample, themassachusettshealthconnectorrequiresstandardizedcostvsharingstructuresforover80percentof itsplans.annualdeductibles,outvofvpocketmaximums,andcopaysareconstantacrossplansineachof sevenmetalcategories(platinuma/b,golda/b/c,silver,andbronze). 81 Thisstandardizationallows consumerstocompare applestoapples andusepremiumsasareliableindicatorofaffordability. 82 MNsurecouldtakeasimilarapproachtostandardization,excludingcostVsharingstructuresthathavehigh hiddencostsandposefinancialrisksforlowvincomeconsumers. B. Second,MNsurecouldstructureitschoice$architecturetohelpconsumersunderstandthetruecostof care,encouragethemtolookbeyondpremiums,andguidethemtowardsilverplansiftheywouldbenefit fromfederalcostvsharingreductions.ratherthanstandardizingcostvsharing,mnsurewouldemploywebv baseddecisiontoolstoguideconsumerstowardaffordableplansanddiscourageshoppingonpremiums alone. 83 MNsure scurrentdesigndoeshighlighttheimportanceofcostvsharingbyaskingconsumerstoindicate themaximumannualdeductibletheywouldbecomfortablewithandprovidingalinkformore information.atthesametime,amessageonthemnsurewebsite s Findaplan pagestates, Ifyouare lookingforalowerdeductibletheplanwillcostmore. 84 Thislanguagemayimplytoconsumersthattotal costisdeterminedbypremiumsratherthanbythecombinedpremiumandcostvsharingstructure,and maynudgethemtowardlowervpremiumplans.thewebsitecouldinsteademphasizethatthepremiumis onlyoneaspectoftotalcosts,flagtheriskofunexpectedspendingonhighvdeductibleplans,andmake premiumslessprominentintheinitialplanpresentation. Forconsumersbetween201%and250%FPGwhoareconsideringbronzeplans,MNsurecouldtakeextra caretohighlightanyoutvofvpocketcostssubjecttothedeductibleandindicatethatcostvsharing reductionsareonlyavailableforsilverplans. Category$2:$Technical$Changes$to$Better$Align$Programs$ AlthoughDHSandMNsurecoordinatewell,therearedifferencesbetweenthepublicandMarketplace insurancesystemsthatcauseconfusionforconsumers.thetechnicalchangesproposedherewould createasmootherconsumerexperienceatchurnpoints.somemayrequirea1332,1115,or coordinatedwaivertobeimplemented. Implement(Annual(Projected(Income(Across(All(Programs(for(Continuing(Eligibility(Determination( MAcurrentlyasksconsumerstodeterminepointVinVtimeincome,whileMinnesotaCareandthe Marketplaceuseannualprojectedincome. 85,86 Usingonestandardacrossprogramswillpromote continuityofcoverageandpredictabilityofhealthcarecostsforfamilies.betweenthetwooptions, annualprojectedincomemayprovideamoreaccuratepictureofafamily sfinancialstatus,especially forthosewhoseearningsareseasonal. 87 Asafirststep,Minnesotashouldconsiderusingprojectedannualincometoassesscontinuingeligibility forma,anoptionprovidedtostatesundertheaca. 88,89 Oncethisisimplemented,DHSwillbebetter positionedtojudgewhetherprojectedannualincomeshouldbeusedtoassesseligibilityforallma enrollees,achangethatmightrequireawaiver.questionstoconsiderwhenexpandingprojected 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 22

25 annualincomeinclude:(1)whatisthepotentialformiscalculationsorfraudwhenusingprojected income?(2)whatwillbethefinancialrecourseforindividualswhoundervcalculatetheirincomesand areeligibleforma?(3)arefamilieswithongoingmaeligibility,andthuspotentiallynewapplicants, abletoaccuratelyestimatetheirprojectedincome? Create(Consistent(Enrollment(Procedures(Across(Public(Programs( Thelagtimebetweenapplicationandenrollmentdatedifferbetweenprograms,causingconsumer confusionandgapsincoverageatthechurnpoints.medicalassistanceprovidescoverageretroactively tothefirstdayofthemonthandisavailableuptothreemonthsbeforethemonthoftheapplication, whileminnesotacarebeginsthemonthfollowingreceiptofthepremium. 90,91 MedicalAssistance s retroactiveapproachandlackofdelayregardingpremiumpaymentprovidescontinuouscoveragefor longer.thus,wesuggestthatminnesotacareconsideradoptingthisprocedure.itshouldbenotedthat shiftingminnesotacare sprocedurestowardsthegenerousretroactiveenrollmentofmawilllikely increasecosts.furthermore,neitherprogramisalignedwiththemarketplace,wherecoveragebegins onthefirstofthemonthafterenrollmentduringanopenorspecialenrollmentperiod. Implement(Uniform(PostOEligibility(Verification(of(Income(Across(Programs( MedicalAssistancerequiresthatconsumerssubmitalldocumentation,includingincome,citizenship, andimmigrationstatuses,beforedeterminationofeligibilitycanbemade. 92 MinnesotaCareandthe MarketplaceallowforpostVeligibilityverificationandprovideforagraceperiodof95daysforreceiptof documentation. 93 Aligningtheseverificationproceduresacrossprogramswouldpromoteadministrative easeanddecreaseconsumerconfusionatchurnpoints.werecommendanallowanceforpostveligibility verificationinmasothatconsumerscanreceivecoveragequicklyandexperiencesmoothtransitionsat churnpoints.inordertocontrollossesduetofraudanderror,themarketplaceallowanceperiodmay beshorterthanminnesotacare s:forinstance,60daysinsteadof95days. Utilize(Uniform(Household(Definition(Across(Programs( TheMarketplace,MA,andMinnesotaCareallusedifferenthouseholddefinitions.Ingeneral,the MarketplacedefinesahouseholdbasedontaxfilingstatusindeterminingAdvancePremiumTaxCredit (APTC)eligibility,whilethepublicprogramsalsoconsiderlivingarrangementsandtherelationshipsof memberswithinahousehold. 94 Dependingonthedefinitionused,familymembersmayhavedifferent FPGcalculations,makingthemeligiblefordifferentprogramsdependingonthedefinition. 95 Thisleads toconfusionforfamiliesandanadditionaladministrativeburdeninattemptingtomanagethree definitions. a Giventheproblemswithdifferingeligibilityandtheadditionaladministrativeworkthis a Thefollowingarethreeexamplesinwhichdefinitionsarenotaligned:MAaccountsfortheincomeofboth unmarriedparentsineligibilitydetermination,whilethemarketplaceonlyincludestheincomeoftheparentthat claimsthechildasadependent;minnesotacareconsiderstherelationshipofastepvparenttoastepvchildthatofa parentalrelationship,whilemaonlydoessounderspecificcircumstances;andminnesotacareistheonlystate healthprogramthatconsidersguardianshipindetermininghouseholdsize.[source:minnesotahealthcare ProgramsManual.MinnesotaDepartmentofHumanServices.December2014.Web.26December2014.] 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 23

26 creates,werecommendusingacoordinatedwaivertostandardizehouseholddefinitionacrossma, MinnesotaCare,andtheMarketplace. Category$3:$Affordability$Improvements$ Use(a(Waiver(to(Resolve(the( Family(Glitch ( UndertheACA,ifanindividualreceivesanofferofemployerVsponsoredinsurance(ESI),onlythecostof individualcoverageisconsideredintheirs sdefinitionof affordable. Thosewithan affordable ESI offerarenoteligibleforaptcsonthemarketplace.forsome,thecostofindividualesicoveragemaybe affordablebutthecostoffamilycoverageisnot.thesefamiliesarethenunabletopurchaseaffordable Marketplacecoverage.Thisproblemisreferredtoasthe familyglitch. 96 Minnesota s1332waiver applicationcouldincludea familywaiver, similartosenatoralfranken sproposedfamilycoverage ActofJune ThiswouldallowfamilymembersinthissituationtoreceiveAPTCsforwhichthey werepreviouslyineligible,ensuringthatchildrenandspouseswhodonothaveaccesstoaffordableesi throughafamilymembercanaccessaffordableinsurancethroughmnsure.suchanamendmentto currentregulationswouldrequireafederalwaiverandadditionalfundsforthesubsidies. Expand(Affordable(Coverage(for(Currently(Ineligible(Immigrants(( Inordertoexpandcoveragetothelastfivepercent,Minnesotamayneedtosupportthoseineligiblefor publicinsurance,includingundocumentedimmigrants. MostnonVcitizensareintheincomerangesrequiredtoqualifyforMAorAPTCs. 98 However,even lawfullypresentimmigrantsaresubjecttorestrictions,includingafivevyearwaitingperiodforma. Stateshavetheoptiontowaivethisprovisionforchildrenandpregnantwomen,butnotforother adults. 99 InMinnesota,lawfullypresentnoncitizensupto200%FPGareeligibleforMinnesotaCare, lawfullyvpresentpregnantwomenandchildrenregardlessofdateofentryintotheunitedstatesare eligibleforma,andundocumentedpregnantwomenareeligibleforcertainmaservices. 100,101 Lawfully presentimmigrantsareeligibletopurchaseqhpsandreceiveaptcswithoutawaitingperiod. UndocumentedimmigrantsareexcludedfromboththeMedicaidexpansionandMarketplacecoverage atanationallevel.somestates,however,usetheirownfundstoprovideexpandedcoveragefor noncitizens.forexample,illinois,newyork,andwashingtonallusestatefundstoprovideformsof medicalassistanceforchildrenregardlessofimmigrationstatus. 102 By2016,210,000individualsinMinnesotaareexpectedtoremainuninsured,with12percentbeing undocumentedimmigrants. 103 Thestatemaywanttoconsiderprovidingaffordablecoverageto noncitizensby:(1)expandingmaeligibilitytoalldocumentedimmigrantsregardlessofentrydate;(2) expandingfinancialsupportthroughma,minnesotacare,ormnsureaptcstochildrenwhoare undocumented;and/or(3)expandingfinancialsupportthroughma,minnesotacare,ormnsureaptcs toallundocumentedimmigrants. Minnesotamayneedtorequesta1332and/or1115waivertobypassthefederalrestrictionson undocumentedimmigrantparticipationinma,thebhp,andthemarketplace.fundingtosubsidize coverageforthispopulationwouldneedtocomefromthestate. 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 24

27 Smooth$the$Premium$and$CostZSharing$Schedule$to$Minimize$Cliffs$ Foranyofthethreeoptionsthatfollow,werecommendthatMinnesotaincludeinitswaiverapplicationa proposaltosmoothpremiumandcostvsharingcliffsalongthe0% 275%FPGspectrum.Theeligibilitythresholds andvehiclesforsubsidizedinsurancewilldifferacrosstheoptions,butthecommitmenttoprovidinganaffordable, smoothcontinuumofcoverageisconstant. Table2.1showsthechangesinpremiumandactuarialvalueacrossthe138%and200%churnpointsfor2015.The mostsignificantcliffforbothpremiumsandcostvsharingisat200%fpg,betweenthecurrentminnesotacareand QHPguidelines.Thissectionpresentsafewalternativestothisdisjointedsystem.Thesesimplyservetoillustratea fewdirectionsthestatecouldpursueifitwouldliketocreateasmoothercontinuumofpremiumsandcostv sharingforlowvincomeresidents. Table$2.1.$2015$Premiums$and$actuarial$value$for$MA,$MinnesotaCare,$and$QHPs$$ for$a$25zyearzold$nonzsmoker$in$the$twin$cities$ 2015$ Silver$QHP$ Bronze$QHP$ Federal$Requirements$ %FPG$ Premium($) 104,105 AV (%) 106 Premium ($) AV (%) Premiumas percentofincome (%) 107 0$ $ $ $ $ $ $ AV (%) 108 TheshapeofarevisedpremiumandcostVsharingschedulewillhingeontheavailabilityofstateandfederal funding.minnesotacouldseek,forexample,tomaintaincurrentpremiumsandcostvsharingforthoseunder200% FPG,providingassistancetothoseabovetheclifftohelpeasethetransition.MinnesotaCarepremiumswere reducedeffectivejanuary2014inordertocomplywithanticipatedbhprequirementsandimproveaffordability. 109 Inordertopreservethislevelofaffordabilityinthepublicplanswhilealsoprovidingassistancetothoseunder 275%FPGcurrentlyshoppingontheMarketplace,Minnesotawouldneedtosecuresignificantadditionalfunding forpremiumassistancebeyondwhata1332waivercanprovide.onewayminnesotacouldpartiallyoffsetthe decreaseinpremiumsistoslightlyincreasecostvsharingforportionsofthepopulationcurrentlyonpublicplans withover96percentactuarialvalue. Premium(Smoothing( WerecommendthatMinnesotacreateamorelinearslidingscaleofpremiumsacrossthe0% 275%FPGspectrum. Inparticular,weproposehavingpremiumsincreasemoregraduallybetweenMAandMinnesotaCareandbetween MinnesotaCareandtheQHPs.Figure2.1mapsthecurrentpremiumschedulefora25V,40V,and60VyearVoldnonV smokerlivinginthetwincities,accordingtotheirincomelevelandeligibilityforma,minnesotacare,orasilver QHP. 2017andBeyond:UsingtheACAInnovationWaivertoReachMinnesota stripleaim 25