Transcript Health Insurance Exchanges: What Your State Needs to Do
Health Insurance Exchanges:
What Your States Need to Do
• • • •
What You Need
Exchange for the individual market and a SHOP exchange • One exchange or two?
Exchanges will serve as • Regulatory body • Subsidy administrator • Enrollment portal • Informational portal Federal grants for establishing exchange will begin in March 2011 HHS issuing more guidance on structure of exchanges through 2011 • Including what are essential benefits
October, 2010
Exchange Timeline
HHS awards first round of planning and establishment grants to states
January, 2011 – March, 2012
States authorize exchange through legislation
January, 2013
HHS determines if state is willing and able to establish exchange by January, 2014
November, 2013
Exchange begins selling health insurance
January, 2014 January, 2015 2017
State exchange must be fully operational Exchange must be self-sustaining State
may
open exchange to large groups (>100)
Developing the Website Portal
• • • Secretary is required to operate and maintain an internet portal and assist states in developing and maintaining theirs Directs qualified individuals and employers to… • Standardized information on qualified health plans • Eligibility determination • Premium tax credit or cost-sharing reductions eligibility Still waiting on further guidance
Website Examples: Massachusetts
Website Examples: Massachusetts
Website Examples: Utah
Website Examples: Utah
Website Examples: Wisconsin, prototype
Website Examples: Wisconsin, prototype
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Governance Structure
Bricks and Mortar Approach • Establish new governance structure • Might duplicate existing state government functions Utilize existing state regulatory authorities • Department of Insurance • State Medicaid/CHIP Offices Non-Profit Entity Most state exchanges will be governed by a Board representing stakeholders and policymakers.
Financing: Start Up Grants
• State Government financing • In July, HHS provided $50 million in grants to help states start the planning process • In January, HHS announced a second round of grants to help states to continue implementation • States will have multiple opportunities to apply for funding as they progress through Exchange establishment • Exchanges must be financially self-sustaining by 2015
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Financing: Ongoing Operations
State options to finance Exchanges after 2015: • Massachusetts imposes a 4 percent assessment on exchange participants • Utah assists only small groups offering defined contribution coverage, and does not impose a levy on enrollees • Additional Fees: • Exchange participants • All consumers • State Government Financing • Increase burden on state budgets • Expand the Individual Mandate penalty • Additional penalty state collects to finance exchange • States may explore assessments on carriers
Pooling
• • • • PPACA requires insurers to pool all individual members in one risk pool and all small employer group members in another • Currently carriers keep the two pools entirely distinct State exchange can determine if they want combined risk pools or separate Individual market benefit from larger risk pool?
• PPACA contains mechanisms that ensure adequate sized pools in all markets Massachusetts combination experience resulted in higher premiums • 2007-2008: premiums in small group grew 5.8%
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Plan Selection
Negotiator vs. Facilitator Models • Negotiate with plans to lower rates • Exclude plans with bids that are “too high” or benefits that are inadequate • Greater standardization and easier to compare plans Facilitate a marketplace- more or less “file and use” • Exchange does not manage plan selection • Greater plan design flexibility and better able to compete with the non-exchange market
Questions & Comments
Contact Us
Adam Brackemyre [email protected]
703.276.3808
Danielle Jaffee [email protected]
703.276.3839
Brooke Bell [email protected]
703.276.3818
Michael Keegan [email protected]
703.276.3809
Russ Childers [email protected]
229.924.7617
Ken Statz [email protected]
440.546.8330
Health Insurance Exchanges:
What States Are Doing
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Existing Exchanges: Massachusetts
Massachusetts Health Insurance Connector established in 2006 Separate legal entity from the state • Massachusetts Connector Authority • 10 member board, with a spot specifically reserved for a member of the Massachusetts AHU Financed through premium surcharges on Commonwealth Care and Commonwealth choice products Individual Mandate • Penalty assessed based on income and cost of the lowest priced Commonwealth Care plan Employer Mandate • Offer coverage or a “fair share” contribution
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Existing Exchanges: Massachusetts
Connector open to: • Individual Market, “nongroup” • Small Group (2-50) • Limited large group: all employers establish section 125 plans for employees not eligible/offered group coverage Four Product Tiers: • Bronze- low premium, higher cost-sharing • Silver- moderate premiums, moderate cost-sharing • Gold- high premiums, low cost sharing • Young Adult Plans (YAP)- special low-cost and low benefit coverage for those up to age 26 Merged small group and individual market pools • Same risk pool inside and outside of connector for each carrier
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Existing Exchanges: Utah
Controlled by Office of Consumer Health Services, part of the Governor’s Office of Economic Development • State retains budgetary control and authority Connector serves as an informational portal • “Travelocity” model Exchange open to: • Small group (2-50) • No individual market- links individuals to carriers, producers and an insurance plan comparison chart • Launching a large group pilot program this year Does not administer additional programs
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Existing Exchanges: Utah
Exchange functions to allow small employers to offer defined contribution plans • Employer contributes specific amount and employee free to choose plan for themselves • Allow employees to pull money from multiple sources • Individuals can carry plan with them if they change jobs No employer or individual mandate No set product levels or plan choices Small group risk pool combined for inside and outside of the exchange
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Developing Legislation
States will likely pass legislation to create the exchange during the 2011 legislative session • States need to provide a business model to HHS in 2013 Legislation Currently introduced in: • AK, AZ, DC, HI, MD, NJ*, NH, MS TX NAIC and NAHU models currently circulating NAIC model very straightforward to what PPACA outlines Leaves several areas vague for states to determine • States can adapt for their existing markets and insurance laws No two exchanges will look the same
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Key Differences in the NAHU Model
Definition of “Health Insurance Producer” • Establish a producer as an individual licensed to sell health insurance in a state Navigators and their qualifications • Enrolling individuals in a qualified health plan requires you be licensed and regulated by the State and the Commissioner • Includes all individuals affiliated or employed by an entity facilitating enrollment • Still allows Navigators to serves as informational resource
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Key Differences in the NAHU Model
Governance Structure • Public-private partnership • Establish Exchange Board of Directors • Representation: • 3 persons affiliated with state authorized health insurers • 2 licensed health insurance producers • • 3 representatives of the general public 1 state Medicaid representative • Insurance commissioner or his/her designee Duties • Board accountable to the Insurance Commissioner
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What States Are Currently Doing
Nebraska • Working on developing a business model before legislation • Develop structure, financing, authority Texas • Rep. John Zerwas introduced HB 636 • Bill tracks the NAIC model, but requires 3 of the 5 voting board members to have insurance background • Establishes “Navigator” program consistent with PPACA Ohio • Received grant from the Robert Woods Johnson Foundation in 2008 • State Coverage Initiative tasked to look at way to cover more Ohio consumers • Recommendations included many PPACA-related reforms
Questions & Comments
Contact Us
Adam Brackemyre [email protected]
703.276.3808
Danielle Jaffee [email protected]
703.276.3839
Brooke Bell [email protected]
703.276.3818
Michael Keegan [email protected]
703.276.3809
Russ Childers [email protected]
229.924.7617
Ken Statz [email protected]
440.546.8330