Health Insurance Exchange Model Delaware Health Care Commission Meeting April 5, 2012
Agenda • Health Benefits Exchange Objectives • Feasibility Analysis • Approach • Considerations and Inputs • Exchange Enrollment Estimates • Defining Sustainability • Exchange Model Options Analysis • Federal Partnership – Plan Management • Federal Partnership – Consumer Assistance • Communications Strategy • Next Steps
DE Health Benefits Exchange Objectives • Improve access to affordable insurance coverage to individuals and small businesses for their employees. • Ensure financial sustainability of the Exchange. • Implement an Exchange model that harmonizes with the Delaware broker community. • Leverage existing relationships with consumer advocates and community partners. • Consider all models for decision making including state-based, regional and federal options.
Exchange Feasibility Analysis Approach • Determine population estimates to be served by the Exchange • Analyze alternative options: • State-based Exchange – Partially Outsourced • State-based Exchange – Fully Outsourced • Federally Facilitated Exchange • Plan Management Partnership Option • Consumer Assistance Partnership Option • Evaluate options based on available information • Defining Sustainability based on Affordability
Exchange Feasibility Analysis Considerations and Inputs • Stakeholder feedback gathered through public forums, focus groups and other stakeholder outreach activities • Other States’ Approaches – Met with Maryland, Rhode Island, NESCIES Consortia, Kansas, and other states through Center for Consumer Information and Insurance Oversight’s (CCIIO’s) Low Population States Summit (HI, MT, NH, VT, RI, DC, ND) • Initiated collaborative dialogue with the CCIIO leadership team
Exchange Enrollment Estimates • Given the inherent uncertainty of any one Exchange enrollment projection model, several approaches were analyzed to estimate enrollment for Delaware. • Review of national studies by: • Urban Institute, • RAND (small group only), and • Families USA (subsidy population only) • Application of models used by four other states (North Carolina, Illinois, Oregon, and Wyoming). States were chosen based on availability of data and methodology.
Exchange Enrollment Estimates • National studies projected Delaware’s enrollment between 50 – 60k. However, for each state, national estimates were substantially higher than enrollment projected by the individual state. • National estimates did not include a timeline for enrollment. • Projections may more accurately reflect 2019 enrollment, rather than 2014-2016 • Applying the methodology of NC, IL, OR, and WY resulted in an average enrollment estimate of ~35,000 lives (2015). • More than 60% of Exchange population is expected to enroll as an individual rather than through their employer
Defining Sustainability PPACA identified a maximum allowable Out-of-Pocket expense for consumer participating in the Exchange
Defining Sustainability Based on Affordability Monthly Premium cost per individual based on Family Size • On a PMPM basis, the maximum premium per month will be as low as approximately $21PMPM (net subsidy) and as high as $343PMPM • The Federal Exchange will be limited by this ceiling for any charge to enrollees in the exchange, inclusive of administrative cost PMPM = Per Member Per Month
Exchange Model Options Analysis • Delaware’s low expected enrollment creates risk for financial sustainability. • As a result, all available options were analyzed for financial and operational feasibility. Other Considerations: • State costs associated with the Federally Facilitated Exchange (FFE) model account for coordination of services and reporting among DHSS, DOI, and the Attorney General’s office in support of Exchange operations. • A state based Exchange would require the State to invest in ramp up costs • The FFE will not charge states for participation – sustainability model is structured on user fees for offering plans in the Exchange. • The FFE provides economies of scale to share costs across a larger population (other states) that are not available with a state based Exchange.
Federal Partnership – Plan Management • Plan Management Functions would include the following: • Plan selection; • Collection and analysis of plan rate and benefit package information; • Ongoing issuer account management; and, • Plan monitoring, oversight, data collection, and quality analysis. • Under a partnership model, DE would select plans, collect data, and manage plans on an ongoing basis • HHS would coordinate with DE on plan oversight, including consumer complaints and issues with enrollment reconciliation, in order to ensure seamless inclusion of plan data into other Exchange functionality
Federal Partnership – Plan Management Reasons to Retain Plan Management: • Maintains the role of primary regulator of insurance companies, provides flexibility in addressing market issues, and ensures that all issuers operating in Delaware are in compliance with state laws • Maintains enforcement authority over questionable business practices • Extends/complements the work done today by DOI to review and manage commercial carrier plans offered in DE markets • Maintains strong relationship with carriers • Ensures the Qualified Health Plan (QHP) definitions/certification process does not discourage participation in the DE market • Leverages the System for Electronic Rate and Form Filing (SERFF) tool used in DE today to provide the systemic tool to meet the needs of Plan Management at minimal cost ($22k for access to enhanced system; transactional fees for operations).
Federal Partnership – Consumer Assistance • Current guidance on the Consumer Assistance model more clearly defines the separation of duties between DE and HHS than the Plan Management model guidance. • Under this partnership, DE would: • Operate all in-person assistance activities, • Manage the Navigator program, and • Conduct and manage all outreach and education. • HHS would: • Operate the call center, • Manage the website, and • Manage written correspondences regarding eligibility and enrollment.
Federal Partnership – Consumer Assistance Reasons to Retain Consumer Assistance: • Provides hands-on assistance to consumers with issues related to insurance • Leverages existing stakeholder network that has proven successful in other DE consumer outreach campaigns • Maintains strong relationship with consumer advocates, providers, and community partners • Allows the state to manage outreach activities to best meet the needs of DE consumers • Controls Navigator, broker and producer activity related to the exchange • Provides greater flexibility to respond to local consumer issues • Retains control of consumer appeals • Leverages our existing community-based resources and broker/agents to support the additional consumer assistance functions
Communications Strategy • Communication Objectives: • Ensure open and transparent communication to all project stakeholders, both internal and external, and the general public. • Align communications policies with current DHSS policies to ensure proper clearance and timely dissemination of materials. • Support two-way communication such that feedback from stakeholders and the general public may be received and reviewed on an ongoing basis. • The Health Care Commission is the primary venue for sharing information with the public and media regarding the HBE. Additional communication tools that will be leveraged include: • HCC meetings and website • Email list serve • HBE Inbox • Stakeholder meetings
Communications Strategy • Delaware has also taken a lead role in communicating with CCIIO about issues facing “low-population” states. • The State has contributed input, analyses, and information to CCIIO through regular meetings and participation in CCIIO sponsored work groups • As the State progresses in planning for an Exchange, communications regarding activities, decisions, and milestones will be escalated to the Health Care Commission and focused on engaging the general public.
Next Steps • Work collaboratively with CCIIO to: • Define integration points with FFE and State business processes that affect consumer customer service • Understand user fee model when further guidance is proposed • Inform the design of the FFE to best meet the needs of Delawareans • Define detailed business process models for Plan Management and Consumer Assistance • Establish policies and procedures for operational activities • Complete market analysis to understand the affect of ACA on migration across individual and small group markets
Public Consulting Group, Inc. 148 State Street, Tenth Floor, Boston, Massachusetts 02109 (617) 426-2026, www.publicconsultinggroup.com