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Michigan’s Evolving Health Care Coverage Landscape

Michigan’s Evolving Health Care Coverage Landscape. Overview. Baseline Healthy Michigan Market Rule Changes Health Insurance Marketplace (Exchange) ACO Initiatives Integrated Care for Duals Demonstration. Starting Line- Baseline Coverage Levels.

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Michigan’s Evolving Health Care Coverage Landscape

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  1. Michigan’s Evolving Health Care Coverage Landscape

  2. Overview • Baseline • Healthy Michigan • Market Rule Changes • Health Insurance Marketplace (Exchange) • ACO Initiatives • Integrated Care for Duals Demonstration

  3. Starting Line- Baseline Coverage Levels • In spite of recession and job loss over the last decade Michigan still enjoys higher levels of employer based coverage compared to other states but this continues to erode • Trend began before ACA and would continue absent ACA • Michigan has had lower rates of uninsured than 32 other states

  4. Premiums Have Almost Doubled over Last Decade: Average Annual Premiums for Single and Family Coverage1999-2013 $15,745 • indicates estimate is statistically different from estimate for the previous year shown. • Source: Kaiser/HRET, Employer Health Benefit Survey, 2013.

  5. Premiums Will Continue to Grow – With or Without Reform – The Only Question is: “How Much, How Fast?” Family Coverage Source: HMA, based on: For 2003 and 2013, Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2013; 2020 based on analysis of CMS, Office of the Actuary, National Health Statistics Group, national health expenditures per capita annual growth rate.

  6. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2012. As Costs Increase, Fewer Firms Offer Coverage: Share of U.S. Firms Offering Health Insurance: 2001 and 2012

  7. Michigan Page 1, April 11, 2013.

  8. Michigan’s Uninsured • Uninsured population peaked at 1.2 million in 2009 (12.4% of total state population compared to 15.4% of US population) • By 2011 the uninsured rate had dropped to 11.8% of the population in Michigan primarily due to the ACA provisions allowing young adults to remain on their parents coverage (US at 15.1%) • Almost half of the uninsured (>500,000) have incomes below 100% of poverty

  9. Source: Dreyer, Theresa; Baum, Nancy; Udow-Phillips, Marianne. The Uninsured in Michigan 2013. July 2013. Center for Healthcare Research and Transformation, Ann Arbor, MI

  10. Central Goal of the ACA • Guarantee of access to affordable coverage through 3 basic strategies: • Health insurance marketplaces in each state for individual and small business coverage • Financial help for lower income people to pay for a private plan or Medicaid • Guarantee that if you try to buy health coverage an insurance company cannot turn you down, limit your benefits , charge you a higher price due to your health, or cancel coverage when you get sick.

  11. Overview - Coverage Strategy in the ACA • Employer-based coverage (large groups) • “SHOP” Exchange for Small Employer groups • Health Benefits Exchange (Health Insurance Marketplace) for Individuals: • Tax credits for individuals and families with incomes between 100% to 400% of Federal Poverty Level (FPL) • Cost sharing subsidies for those between 100-250% of poverty • Level of credit/subsidy decreases as income increases • Medicaid for non-elderly with Modified Adjusted Gross Income (MAGI) below 138% FPL (138% FPL in 2013 = $15,856 household of 1, $32,449 household of 4) • CHIP (MIChild) for children through 2019

  12. Michigan Health Care Coverage Safety Net 400% FPL Exchange Subsidies 200% FPL Medicaid/CHIP Children 138% FPL Medicaid Adults 100% FPL 0 Adults Children

  13. Medicaid

  14. Medicaid- Two Major Program Changes • New, nationally uniform Medicaid/CHIP income eligibility standard for non elderly, non disabled individuals (effective January 25, 2014 in Michigan) • Healthy Michigan Plan expands eligibility for Michigan Medicaid to 133%* of poverty and requires program reforms (effective on or around April 1, 2014) * ACA standard 5% income disregard takes this level effectively to 138% of poverty

  15. “Healthy Michigan Plan” Expands Coverage, Adds Personal Responsibility for Prevention • Expands coverage to 133% FPL • Requires beneficiary accounts to pay for incurred health expenses (2-5% of income) • Creates financial incentives (through reduced cost sharing) for beneficiaries to adopt healthy behaviors • Expands “Health Plan Performance” Incentive Pools to reward health plans for enforcement of cost sharing and wellness actions

  16. Healthy Michigan Cost Sharing • Copays will apply to all Healthy Michigan Plan beneficiaries, regardless of income. • Once enrolled, no copays for first six months, but the Health Plan calculates what the copays would have been, based on services used. • After each 6 months, the Health Plan recalculates an average monthly copay amount. • Beneficiary pays average monthly copay to the “MI Health Account”

  17. Healthy Michigan Plan “MI Health Account” • All Healthy Michigan Plan beneficiaries will have a “MI Health Account” • Beneficiaries are required to contribute, but not to fully fund their account. • Medicaid will also partially fund • Individuals between 0-100% of FPL to pay a monthly amount based on previous 6 months experience, recalculated every six months. • Individuals between 100-133% of FPL to pay monthly amount, based on previous 6 months experience, plus a monthly amount based on their annual income

  18. Healthy Michigan Plan: Cost Sharing • Cost sharing can be reduced if health plan attests that enrollee demonstrates healthy behaviors • Certain actions would negate cost sharing reductions • E.g., inappropriate use of the ER or failure to pay co-pays. • At end of year, any balance in the account will roll over to the next year to offset future contribution requirements

  19. Requires Two Federal Waivers Waiver 1 • Amendment to Adult Benefits Waiver (ABW) • Authorize expansion to eligible individuals between 100-133% of poverty • Authorize establishment of MI Health Accounts and cost sharing provisions Waiver 2 • MDCH Required to file by 9/30/2015 • Will include Healthy Michigan provisions related to increased cost sharing for enrollees having coverage beyond 48 consecutive months

  20. Healthy Michigan Plan Enrollment • Number of eligibles as estimated by MDCH • @ 600,000 • Number of eligibles likely to enroll in Years 1 and 2 • 320,000 in Year 1 • 450,000 in Year 2 • Number enrolled as of April 15, 2014 • 109,228 ( includes ABW who were rolled over as a group)

  21. Source; HMA, based on CMS, Office of the Actuary, 2013. Projected Impact of the ACA on U.S. Health Coverage, 2013 – 2016 – 2022: Medicaid to Expand by 30% Millions of Americans 381 360 347

  22. Insurance Market Reforms- 2014 • All policies sold both on and off the Exchange must include Essential Health Benefits (10 specific categories of service) • Ambulatory services • Emergency care • Hospitalization • Maternity and newborn Care • Mental health and substance use disorder services • Prescription drugs • Rehabilitative and habilitative services • Laboratory services • Preventive and wellness services and chronic disease management • Pediatric services including oral and vision care

  23. Insurance Market Reforms • Guarantee Issue • Elimination of pre-existing condition exclusions for adults • Eliminates annual and lifetime dollar limits • Limits on rating factors (family size, geography and tobacco use)

  24. Michigan Health Insurance Marketplace • Federally Facilitated Marketplace (FFM) • This means we use www.healthcare.gov and are affected by all the problems with the website rollout • State (DIFS) performs plan management functions • State lost out on $21 million of outreach and education funds when the Legislature rebuked governor Snyder’s proposal to operate a State Partnership Exchange

  25. 12 Companies In Michigan Individual Market * CO-OP United Healthcare is offering coverage in SHOP Exchange only

  26. National Health Insurance Marketplace Enrollment

  27. MI Health Insurance Marketplace Enrollment • Enrollment as of March 1, 2014 as reported by HHS: • 313,644 were eligible to enroll in a Marketplace plan • 187,057 were eligible to enroll in the Marketplace with financial assistance • 144,587 actually selected a Marketplace plan • March 31, 2014 enrollment: • ????????

  28. What We Don’t Know about Michigan Marketplace Enrollment • Do gender, age and metal tier selection numbers follow national data or do we differ? • Which carriers did consumers choose? • Which specific Qualified Health Plans did they choose? • How important was price sensitivity? • How did narrow network products prefrom? • What is the county breakdown for the enrollment? • Were people who signed up previously uninsured? • How did decision to allow people to keep non compliant plans affect enrollment?

  29. Source; HMA, based on CMS, Office of the Actuary, 2013. Impact of the ACA on U.S. Health Coverage, 2013 – 2022: Marketplaces Increase in Private Coverage Millions of Americans

  30. Characteristics of Uninsured Adults in Michigan After ACA Note: Analysis is based on "Who will be Uninsured After Health Insurance Reform", March 2011. Authors: Matthew Buettgens, Urban Institute, and Mark Hall, Wake Forest University. Data is for North Central Region.

  31. Observations • Most significant health care legislation since Medicare in 1965 • Massive undertaking that will take years to settle out • Portions of the law already successfully implemented • Need time to truly assess the success and problems associated with implementation • Choosing health care coverage is a complex decision for most consumers

  32. Observations • Mid course decisions to delay employer mandate, some functions of SHOP, requirement to move to compliant plans, and broader exemptions to the individual mandate have an effect but teasing it what and how much will be difficult • Issuers have maintained wide variety of plan designs in Health Insurance Marketplace • Employers moving to private exchanges. Unclear how this may impact SHOP • Key questions to be answered are: • Are new people enrolling in health plans? • Are the numbers of uninsured falling?

  33. Where Do We Go from Here? • Difficult to sort out real issues vs. noise in the current political climate • Fixes will be necessary, but dangerous to look at isolated pieces of insurance market. This is a complex tapestry. • Continued and increased attention to quality and cost • Narrow networks and different payment systems for care delivery • Need for consumer education is paramount!

  34. The Long View But I have promises to keep, and miles to go before I sleep, and miles to go before I sleep - Robert L. Frost

  35. Accountable Care Organization • Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their patients. • The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. • Medicare offers several ACO programs: • Medicare Shared Savings Program—a program that helps a Medicare fee-for-service program providers become an ACO. Apply Now. • Advance Payment ACO Model—a supplementary incentive program for selected participants in the Shared Savings Program. • Pioneer ACO Model—a program designed for early adopters of coordinated care. No longer accepting applications.

  36. How are ACOs Different? • Not about sub capitation • FFS with shared savings is the predominant model • Partnership of providers • Physician led at governance and patient level • Focused on population health as the strategy to hold down costs • All about care coordination • Following patients into the community

  37. What Did We Know When ACA Recognized ACOs? • “ ACO Conundrum: Everybody Wants In the Game but Nobody Knows the Rules”- AIS, Health Reform Week, 7/1/2010 • “ACOs are a lawyers and consultants dream. Everybody wants to form one and they don’t know what it is and neither do I.”- Noah Rosenberg of Rosenberg Kaplan speaking at the 6/8/2010 ACO Summit in Washington DC

  38. What Do We Know Now? • Concept of physician led health care has been around for a very long time • Has been promoted at various times, but innovations either are local or get kidnapped. • In prior iterations holding full financial risk has become a problem • Good tools for coordinating care and measuring performance are essential

  39. MI Health Link • Michigan’s integrated care for Medicare Medicaid eligibles demonstration • Capitated Model • Three party contracts with health plans • Separate rates from Medicare and Medicaid • Must provide up front savings to CMS and State • Quality Withhold ( 1% in Year 1, 2%in year 2 and 3% in year 3)

  40. Michigan Picture • Roughly 220,000 dual eligibles • 46,746 dual eligibles enrolled in Medicaid Managed Care (3/2014) • $3.7 billion in state Medicaid spending in 2010 • >$4billion in Medicare spending in 2010 • Uncoordinated care with poor outcomes

  41. MI Health Link • Memorandum of Understanding with CMS signed 4/3/2014 • Will be implemented in 4 regions • Region 1 (Upper Peninsula) • Region 4 ( 8 counties in southwest Michigan) • Region 7 (Wayne county) • Region 9 (Macomb County) • Enrollment phased in by region with Region 1 and 4 beginning in January, 2015

  42. MI Health Link Health Plans

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