Transcript The New Health Insurance Marketplace

The New Health Insurance
Marketplace
Impact of the ACA on the S.C. Health
Insurance Marketplace
Presentation Overview
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This presentation:
is designed to provide a basic overview
of the ACA and its implementation in SC.
 is not a comprehensive overview of the
law or the state’s implementation
activities.
 provides a highlight of the more
significant provisions of the law and their
impact on insurance regulation and
South Carolina insurance markets.
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What is the ACA?
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The Patient Protection and Affordable Care Act ("PPACA";
P.L. 111–148, 124 Stat. 119), and its companion
amendment, the Health Care and Education
Reconciliation Act of 2010 ("HCERA"; P.L. 111-152, 124
Stat. 1029), are collectively, the "Affordable Care Act" or
"ACA.”
The ACA makes a number of changes to the U.S. health
care system, many of which directly affect insurers and
employers in their role as sponsors of group health plans
offered to current and former employees, and their
dependents.
The ACA also altered many other facets of the U.S.
health care delivery and payment system, such as
Medicare, Medicaid, and community health services.
What is the legislative
purpose of the ACA?
 Increase
the number of
Americans with health
insurance
 Ensure that coverage meets
certain minimum thresholds
How does the ACA accomplish its
legislative purpose?
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Require most Americans to purchase health insurance
coverage or pay what the ACA calls a "penalty," which
the Supreme Court deemed to be a tax (the "Individual
Mandate"),
Prohibit insurance companies from denying coverage to
those with preexisting conditions or health issues (i.e.,
guaranteed issue),
Prohibit insurance companies from charging unhealthy
individuals higher premiums than healthy individuals
(i.e., adjusted community rating), and
Provide avenues for Americans to acquire health
insurance that provides a minimum basic level of
coverage.
Where do you go to find coverage
in the new marketplace?
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The current avenues for acquiring coverage are:
 For individuals under 65 and small businesses, from the individual
health insurance market inside and outside the "American Health
Benefit Exchanges" ("Exchanges"),
 for persons age 65 or over or disabled, through Medicare,
 through Medicaid or CHIP for persons who meet state eligibility
requirements,
 for "full-time" employees of "Large Employers" (i.e., generally
employers with 50 or more employees) through their employer, to the
extent their employer elects to "play" under the Large Employer
mandates,
 TRICARE
 Veteran’s Health Insurance Program
 Grandfathered Plans
 Other government programs
 State high risk pools
Many individuals will be eligible for coverage under more than one of these
avenues and will be able to choose what is the best value for them.
What will SC’s health insurance
market consist of?
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Private health insurance market
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Individual market
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Exchange
Outside the exchange
Group
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Large Group
Small Group
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Exchange
Outside Exchange
Medicare
Medicaid
TRICARE
When will the ACA take
effect?
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Some provisions took effect immediately upon
enactment March 23, 2010.
Others took effect within 90 days’ of enactment.
Other provisions such as the immediate market reforms
took effect on September 23, 2010.
Other provisions took effect in 2012 and 2013. They
include women’s preventive health mandates,
reductions to flexible spending accounts, annual limits
restrictions, etc.
Provisions such as guaranteed issue/renewal and preexisting exclusion prohibition, adjusted community
rating, essential health benefits will take effect in 2014.
The next slide shows the implementation schedule.
Implementation Timeline
2010
2011
2012 2013 2014 2015
2016 2017
Temporary High Risk Pool Program
Temporary Reinsurance Program For Early Retirees
Immediate Reforms:
•Extended Dependent Coverage
•No Lifetime Limits
•Internal/External Review
•Restricted Annual Limits
•No Pre-Existing Conditions for Children
•Restrictions on Rescission
•Disclosure of Justifications for Premium Increases
•First Dollar Coverage of Preventive Services
Medical Loss Ratios with Rebates
Market Reforms
•Guaranteed Issue
•No Pre-Existing Condition Exclusions for Adults
•Rating Rules
•Essential Health Benefits Plans
•No Annual Limits for Essential Benefits
Exchanges
Subsidies
Individual/Employer Mandates
Co-Op Plans & Multistate Plans
Risk Adjustment
Individual Market Reinsurance Program &
Risk Corridors
2010
2011
2012 2013
2014 2015
2016
2017
What changes are already in
place?
Several changes are already in place:
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Lifetime dollar limits on essential health benefits aren’t allowed. Annual
dollar limits on essential health benefits are being phased out by
January 1, 2014.
The appeal procedures available to consumers are different.
Insurers can’t deny coverage to children younger than 19 years old
because of a pre-existing condition.
Nearly all adult children up to age 26 are eligible to remain on a
parent’s health insurance policy, regardless of the child’s marital status,
financial dependency, enrollment in school, or place of residence.
Insurers must cover preventive services. There can be no cost-sharing
for preventative services if delivered by an in-network provider.
What changes are already in
place, cont’d?
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Consumers have more access to information about proposed rate changes.
Medical loss ratio standards limit how much of premium dollars insurers
can spend on administrative expenses.
All insurers must use a standardized Summary of Benefits and Coverage
(SBC), which should make it easier to understand what a plan does and
does not cover. Consumers get the SBC after purchase of the coverage.
Small businesses that provide health care for employees can apply for a
tax credit.
Persons with Medicare prescription drug coverage receive a rebate to help
cover the cost of the “donut hole.” This “donut hole” should be totally
phased out by 2020.
ACA made subsidized coverage available in every state for people with preexisting conditions who can’t find coverage in the private market.
However, because there’s not enough money, no new enrollments in this
PCIP program are being accepted.
What changes will take
effect on January 1, 2014?
For Small Group and Non-Group Coverage Sold or Renewed
on or after 1/1/2014:
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Guaranteed Issue
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No Pre-Existing Condition Exclusions
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Adjusted Community Rating & Single Risk Pool for Each
Market
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Essential Health Benefits & Cost-Sharing Must Meet
Actuarial Value Levels
These apply inside and outside of an Exchange
Note: Different rules apply to grandfathered plans
How will my coverage be impacted by the ACA?
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Every plan sold or renewed in the individual and small group
market after January 1, 2014, must include all the benefits in a
“benchmark” plan – a plan chosen for the state based on
coverage currently available in the state – and will cover services
in the following categories:
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Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substance abuse 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
These are known as the essential health benefits.
Different rules apply to grandfathered plans.
Where can consumers get information about
health insurance coverage in South Carolina?
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Consumers may continue to shop for insurance in the
South Carolina insurance marketplace (private market
outside the exchange).
Health insurance will also be available to consumers
through the federally-facilitated health insurance
exchange. (Call Center:1-800-318-2596)
Consumers may also contact their agent for assistance in
finding coverage.
Consumers may also contact the South Carolina
Department of Insurance for general information on
insurance coverage issues (DOI: 1-800-768-3467).
Consumers may also contact their insurance company.
What are exchanges? Can I still
purchase coverage through my agent?
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Exchanges are the central mechanisms created by the health reform bill to
help individuals and small businesses purchase health insurance coverage.
On October 1, 2013, an Exchange in every state will begin enrolling
individuals and small businesses into qualified health plans.
The Exchange, operated by the federal government, will provide information
to consumers about their coverage options and what assistance is available
to them.
The Exchanges will also administer the new health insurance subsidies and
facilitate enrollment in private health insurance, Medicaid, and the Children's
Health Insurance Program (CHIP).
The federal law does not require anyone to purchase health insurance
through the Exchange, though subsidies will only be available for plans sold
through the Exchange. You will be able to purchase this coverage right on
the Exchange’s website or through your agent if he or she is approved to
sell Exchange plans.
If you would rather buy other health insurance through an insurance agent
or broker, you will be free to do so. Coverage will also be available in the
market outside the Exchange.
What role will the FFE have in the South
Carolina health insurance market?
The FFE is one segment of the South
Carolina health insurance market.
 It is a marketplace where insurers can
shop and compare insurance products but
is not the sole market for health insurance
products.
 The FFE will be responsible for issues
related to its operation. It will not have
any general oversight of the South
Carolina health insurance market.
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Does the South Carolina
Department of Insurance
regulate the FFE?
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No, but the South Carolina Department of
Insurance regulates the insurers and other
entities that may offer products through the FFE.
The Department approves the forms and rates
and regulates the solvency of these insurers.
An insurer cannot offer products through the FFE
unless it is licensed by the South Carolina
Department of Insurance.
The multi-state plan is the exception. The Office
of Personnel Management has primary regulatory
Can an insurer offer a health insurance
product at a cheaper rate outside the FFE?
Generally, no. If an insurer is selling
products inside and outside the FFE, the
rates and coverage must be the same.
 This does not affect plans sold outside the
Exchange or grandfathered plans.
 Grandfathered plans are not subject to all
of the ACA mandates, but grandfathered
plans cannot be sold or marketed through
the Exchange.
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Where do I go for help if I have
a problem with an insurer?
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Generally, you would file a complaint about the
conduct of an insurance company or agent with
the South Carolina Department of Insurance. You
may submit that complaint online at
http://www.doi.sc.gov or fax it to: (803) 737-6231
or email: [email protected] or call 1-800768-3467.
Complaints about the operation of the FFE will go
to the FFE.
Questions about Medicaid issues will go to
SCDHHS.
Do we know what products will
be offered in the South Carolina
Health Insurance Market?
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We have just completed the Department’s review of
products that will be offered through the FFE. The
review of those products had a July 31st deadline. CMS
will make information about the products and rates
available around October 1, 2013.
We are in the process of reviewing products that will be
offered in the market outside the exchange.
The Department has received a number of filings to
market products outside the Exchange. These filings
continue to come in.
What is the name the FFE?
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The official name of the FFE is
the Health Insurance Marketplace for individuals
and families and
 The Small Business Health Options Program
(SHOP) for small businesses.
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Both are federally operated.
 Contact Information:
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www.healthcaremarketplace.gov/marketplace
1-800-318-2596
What types of plans will be
available through the FFE?
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Health plans sold through the FFE will be required to meet comprehensive standards for
items and services that must be covered. To help consumers compare costs, plans
available through the FFE will be organized in four tiers, or four levels of generosity of the
cost-sharing that each plan includes:
Bronze level –The plan must cover 60% of expected costs across a standard
population. This is the lowest level of coverage.
Silver level – The plan must cover 70% of expected costs across a standard population.
Gold level –The plan must cover 80% of expected costs across a standard population.
Platinum level – The plan must cover 90% of expected costs across a standard
population. This is the highest level of coverage.
Also, a catastrophic plan will be offered, and will cover the same services. But, its
coverage will be slightly less generous than the Bronze level plans. A catastrophic plan
may be a less expensive option for those who are eligible: only young adults
under 30 and individuals who have a hardship exemption from the individual
mandate are allowed to purchase catastrophic plans. Premium tax credits and
cost-sharing reductions are not available for catastrophic plans.
Stand-alone dental plans are available through the FFE. These plans can also be certified
by the feds as providing the pediatric dental EHBs for sale outside the Exchange.
We anticipate having stand-alone dental products available in the market outside the
Exchange.
What insurance companies will offer
coverage through the FFE?
The FFE website will include a list of the plans
available for sale on or after October 1, 2013.
 Four companies applied to offer Qualified
Health Plans (QHPs) in South Carolina. They
have not yet been approved by HHS/CMS.
 HHS/CMS will let them know whether their
applications to be a QHP has been approved
during the first week of September.
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Can a person take benefits
out of a plan?
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No, consumers can’t take benefits out of a plan,
but they may be able to add extra coverage. At a
minimum, every health plan on and off the FFE
must provide coverage for all of the essential
health benefits the ACA requires. Even though a
person may not need every benefit in a plan,
plans must cover all of the essential benefits to
share risk across a broad pool of consumers and
be sure all benefits are available for everyone.
This also helps to protect people from risks they
can’t always predict across their lifetimes.
What are the preventive
benefits?
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Items or services recommended with an A or B rating by the U.S. Preventive Services
Task Force
Immunizations recommended by the Advisory Committee on Immunization Practices of
the CDC
Preventive care and screenings for infants, children and adolescents supported by the
Health Resources and Services Administration
Preventive care and screenings for women supported by the Health Resources and
Services Administration per the August 1, 2011 guidance:
 well-woman visits
 screening for gestational diabetes
 HPV DNA testing
 counseling for sexually transmitted infections
 counseling and screening for human immune-deficiency virus
 contraceptive methods and counseling*
 breastfeeding support, supplies and counseling
 screening and counseling for interpersonal and domestic violence
A complete listing of recommendations and guidelines can be found at:
www.HealthCare.gov/center/regulations/prevention.html
This all sounds so complicated… who
will help consumers navigate the new
system?
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Navigators
State Assisters
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Application Assisters (Counselors)
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Primarily in hospitals and clinics
Volunteers with training and certification
Agents and Brokers
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Listed on the Exchange
Commissions Paid by Insurers
Appointment Issues
What is stand alone dental coverage and can
it be sold in the Exchange?
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Stand-Alone Dental plans may be sold
inside and outside the Exchanges
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Not required to follow market rules; they
are excepted benefits
Stand alone dental benefits can be
certified by the feds to provide the
pediatric dental coverage required as a
part of the EHB package
What is a CO-Op Plan?
 Federal government will foster the creation of
qualified nonprofit insurers
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Loans for start-up costs
Grants to help meet solvency requirements
Unobligated funds cut off in fiscal cliff deal
CO-OP loans granted to plans in: IL, AZ, CO, CT, IA, NE, KY, LA,
ME, MD, MA, MI, MT, NV, NJ, NM, NY, OH, OR, SC, TN, UT, VT,
WI
 Must be governed by majority vote of members
 Profits must be used to reduce premiums, increase
benefits, or improve quality of care
 Must be licensed by state and follow state insurance laws
 Consumers’ Choice Health Plan is the name of the CO-OP
in South Carolina.
What is a multi-state plan? Does South
Carolina have one?
U.S. Office of Personnel Management (OPM) contracts with
insurers to offer at least 2 plans in each state (at least
one a non-profit)
 Contracting process similar to the Federal Employees
Health Benefit Plan (FEHBP)
 Insurers must be licensed in every state in which they
operate
 Must be in at least 60% of states in first year; 70% of
states in second year; 85% of states in third year; and
all states in fourth year
 Not required to cover entire state unless required by
state
 Plans must comply with state rules and regulations, if they
exist.
 Multi-state Plans are not approved to sell on the FFE by
the DOI, but it is anticipated that there may be a multistate plan operating in SC.
How will the insurance market
change?
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The ACA introduces new commercial standards such as
 Elimination of lifetime limits
 Prohibition on pre-existing condition exclusions
 Removal of cost-sharing for preventive services
 Health insurance plans must offer coverage on a
guaranteed issue/renewal basis
 Plans must offer essential health benefits
 New rating standards
 New benefit requirements
ACA introduces the Exchange as a new distribution channel
Federal/State Regulatory
System
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There is a dual regulatory system for health
insurance
States are still considered the primary regulators of
the insurance market (exception MSPs)
However, federal government has authority to
enforce the ACA if states do not
Effectively coordinating regulatory roles will be one
of the challenges
Effectively communicating with stakeholders so they
understand how to navigate the system will be key
What does the ACA say
about enforcement?
Public Health Service Act
Sec. 2723 [42 U.S.C. 300gg–22.] ENFORCEMENT.
(a)
STATE ENFORCEMENT.—
(1)
STATE AUTHORITY.—Subject to section 2723{2724}, each State
may require that health insurance issuers that issue, sell, renew,
or offer health insurance coverage in the State in the small or
large group markets individual or group market meet the
requirements of this part with respect to such issuers.
(1)
FAILURE TO IMPLEMENT PROVISIONS.—In the case of a
determination by the Secretary that a State has failed to
substantially enforce a provision (or provisions) in this part with
respect to health insurance issuers in the State, the Secretary shall
enforce such provision (or provisions) under subsection (b) insofar
as they relate to the issuance, sale, renewal, and offering of
health insurance coverage in connection with group health plans
or individual health insurance coverage in such State.
Federal Enforcement Actions
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Penalties
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The maximum amount of penalty imposed
under this paragraph is $100 for each day for
each individual with respect to which such a
failure occurs
No penalties if “reasonable diligence” found
Administrative review
Judicial review
Deny Exchange Participation
What should I do if my insurer
wants to rescind my coverage?
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If your insurance company “rescinds,” or retroactively
cancels, your health insurance coverage, it is now
required to provide advance notice of its intention to
do so, and may only do so if you committed fraud or
made an intentional misrepresentation of an important
fact. If your insurer notifies you that it wants to
rescind your policy, and you have not done either of
these things, request more information from the
company. If you are not satisfied with their
explanation, immediately contact the South Carolina
Department of Insurance to file a complaint.
What is the individual mandate
and how does it affect me?
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Mandate: Beginning January 1, 2014, Americans must
purchase health insurance or pay a tax if they do not
You are exempt from the mandate if:
 You have insurance thru your job or purchase
insurance on your own
 You have coverage through Medicare, Medicaid, CHIP,
VA, TRICARE, Indian Services, etc.
 You would have to spend more than 8% of income on
the cheapest health insurance plan
Please consult your tax professional
because new tax rules also may apply
What is the current status of
Exchange products?
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Most states have either approved or
disapproved Exchange product submissions.
Plans are now going through the Plan Preview
phase. Plan preview began on August 8 and
will continue through August 16th. Insurers
have until August 16th to request changes. Data
submissions are due by August 23, 2013.
Plan Preview gives issuers the opportunity to
review their products as they will appear on the
Exchange website and make changes as
approved by CMS.
What regulatory trends do
we see?
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We see some evidence of
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Market consolidations
 Insurer
consolidations
 Provider mergers and other consolidations
Some reliance on exclusive provider
organizations/networks
 Focus on individual plans v. family plans
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We anticipate that the individual market
will grow
 Differences between the individual and
small group market will disappear.
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What are the regulatory
goals?
To effectively perform our regulatory
responsibilities
 To work with other regulators, so that
we may assist consumers in
understanding the new insurance
marketplace.
 The DOI, SCDHHS, other agencies
are working together to make the
transition to the new marketplace as
smooth as possible for consumers.
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Thank You