Implementing Commercial Insurance Market Aspects of Federal Health Reform:

A State Perspective Christopher F. Koller Health Insurance Commissioner, State of RI April 30, 2010

Overview

What we are doing now What we need to be thinking about for the future States’ Challenges and Needs

Issues Now

: High Risk Pool Grants ($5 billion – 2010-2013) – For individuals who currently do not have coverage and have a pre existing condition –

Challenges: for states without high risk pool and for guarantee issue states

Commercial Insurance Reforms (Plan years 6 mos. after enactment) – – – – – – No lifetime limits; First-dollar coverage for preventive services No rescissions; Appeals process Dependent coverage up to 26 years of age No Pre-existing Condition Exclusions for Children MLR standards. Rate Oversight

Challenges: Reg promulgation process, communications, fit with existing statutes, implementation, other mkt impacts. Resources

Grants for State Ombudsman National Web Portal

Key Reforms – 2014 Implementation

Market Reforms:  Guarantee Issue and no Pre-existing Condition Exclusions in all markets  Rating Reforms limiting factors to age (3:1), geography, tobacco use and family composition  4 Coverage Tiers based on coverage categories and cost-sharing  No annual limits State-Based Exchanges for Individual and Small Group markets that will provide standardized information on insurance choices and help consumers enroll in plans

State Action for Long Term Reforms:

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(Stages of Grief) Interagency Planning Groups DC Monitoring (use of Membership Assocns) Stakeholder Education and Communication • • • Exchange Planning: Goal setting Commercial and Medicaid interaction Operations Eyes on the prize: Long term vision for local delivery systems (the cost issue) – payment reform, HIT, benefit design etc .

Small Group Premium Variation

HI CA OR WA NV ID AZ UT MT WY NM CO VT NH ND SD NE KS OK MN IA MO AR WI IL MS NY MI PA IN TN AL KY OH GA WV VA NC SC TX LA ME CT NJ DE MD DC MA RI FL AK

*Note: Michigan HMOs and Blue Cross/Blue Shield are restricted to 3.12:1 maximum variation. All others may use 3.96 maximum variation

Community Rating Adjusted Community Rating No Rating Structure Rating Band Variability: 13:1 or less 13.1:1 – 19:1 19.1:1 – 25:1 25.1:1 or greater

Individual Market Rating Rules

HI CA OR WA ID NV AZ UT MT WY NM CO ME ND SD NE KS OK MN IA MO AR WI IL MS IN MI TN KY OH WV PA NY VT NH MA CT NJ DE RI VA MD DC NC SC AL GA TX LA FL AK No Rating Structure Community Rating Adjusted Community Rating Rating Bands Hybrid

Michigan Blue Cross/Blue Shield must use community rating. There is no rating structure for other carriers.

State Needs and Challenges

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• • Federalism made real: Coming into compliance from tremendously different starting points: technical and political issues.

“Grandfathering” of old plans (see briefing sheet). Enormous implications – good politics; bad policy.

New Federal “Partnerships” - HHS OCIIO. Competence is crucial.

New roles Communication and expectations with local stakeholders Resources Resources Resources