The ACA & Exchange: What are the specifics?

1. The ACA & Exchange: What are the specifics? Lisa Chan-Sawin Harbage Consuling, LLC lisa@harbageconsulting.com April 3, 2013

2. Agenda • Overview of the Affordable Care Act • Timeline of provisions impacting children • Health Benefit Exchanges • California’s implementation • Children’s Coverage and the Exchange • The Uncertain Future…

3. Signed in March 2010 Landmark moment: Most significant change since the establishment of Medicare and Medicaid Patient Protection and Affordable Care Act (ACA)Remaking the U.S. Health Care System

4. Majority of changes enacted between now at 2018 Opportunity to enroll 7 million Californians into health coverage Reforming America’s Health Care System

5. Under the ACA, everyone is required to have health care coverage, either through: • Private insurance • Public program like Medi-Cal, Medicare, or Healthy Families • Low and middle income persons are offered subsidies and lower cost-sharing • Tax penalties for no coverage Road to Universal Coverage

6. Insurance Market Reforms

7. Children’s CoverageKey Dates September 23, 2010: Plans may not withhold coverage for children under 19 due to pre-existing conditions • Children’s wellness visits offered with no co-pay • Young adults covered on parent’s plan up to age 26. January 1, 2014:State must transition children ages 6-18 with family incomes between 100% and 133% FPL from HFP to Medi-Cal • State must implement procedures to simplifyMedi-Cal and Healthy Families Enrollment • Exchange coverage begins April 1, 2015:State may transition children eligible for HFP to Medi-Cal or coverage in the Exchange (coverage must be comparable to HFP) Cont…

8. Children’s CoverageKey Dates September 30, 2015:End of new federal CHIP funding October 1, 2015:State may start enrolling HFP-eligible children in the Exchange October 1, 2015:State starts drawing down 88% federal matching for HFP January 1, 2019:MOE for HFP eligibility ends Source: California Healthcare Foundation, 2011 Source: arthritis.org

9. California Key Legislation A number of ACA related bills were passed that: …Requires insurers to provide maternity-related care as a basic benefit starting July 2012. …Provided young adults coverage up to age 26 on their parent’s health coverage. …Establishes a standardized application for Medi-Cal, the Exchange, and county programs. …Prevents insurers from denying coverage or discriminating based on pre-existing conditions. … Improves grievance & appeals process. …Requires individual and small group health plans to cover essential health benefits and ties EHB at the Kaiser Small Group HMO benefit level

10. What is a Health Benefits Exchange?

11. A virtual marketplace for individuals, families and small businesses to buy private health insurance • Increase competition between insurers • Can be State or federally run • The goal of an Exchange is to promote: • Transparency • Competition • Price • Quality What is a Health Benefit Exchange?

12. Applying for health insurance is complicated • Consumer must be able to choose: • Plan • Network • Benefit level • Quality ratings • The Exchange must facilitate enrollment • Real-time eligibility determinations • Single point of entry for all public programs • Coordinate with other enrollment entities • Subsidies blog.myphysicaltherapyspace.com

13. Who can buy insurance in an Exchange?Eligibility and Premium Subsidies • Citizens and legal, permanent residents can purchase coverage in an Exchange • Those with incomes between 133% and 400% FPL qualify for premium subsidies through the Exchange 133% FPL - $15,282/year (individual), $31,322/year (family of 4) 400% FPL - $45,960/year (individual), $94,200/year (family of 4) • Small employers will be eligible to purchase coverage in an Exchange • 50 FTE in 2014, 100 FTE after 2016 • Up to 50% premium subsidy for small, low-wage employers for two years

14. Caps premiums on a sliding scale between 2% and 9.5% of income Individual earning 133% FPL spends no more than $290/year (2% of income) Individual earning 400% FPL spends no more than $8,493/year (9.5 percent of income) • 4 levels of plan benefits (+ catastrophic for young invincibles/financial hardship) • Platinum • Gold • Silver • Bronze • Premiumscannot be varied by any factor except for: • Age (3:1) • Tobacco usage (50%) • Geography • Family Size • Minimum standard for benefits that must be included • Risk adjustment mechanisms to help stabilize the insurance market What do Exchange plans look like?

15. Federal LegislationState Flexibility • ACA included many provisions for Exchange, but left a few key decisions up to the states, including: • Governance • Public, public-private, or private non-profit • State-run or federal, statewide or regional • Size (statewide, regional, multi-state, federal) • Selection of insurance carriers • Relationship/size of employer exchange • Navigators & outreach • Information technology theoutsourcingcompany.com

16. California’s Exchange:

17. California LegislationState Flexibility • SB 900 (Alquist & Steinberg) and AB 1602 (Perez) were signed by the governor on September 30, 2010 creating the California Health Benefit Exchange • California’s Exchange is: • An independent, statewide, public entity; • Free from annual budget appropriation; • Financed by fees on participating health plans; • Governed by an ED and BoD (5 members); • An active purchaser; and • A single point of entry for all types of coverage. • Include a toll-free hotline

18. Timeline

19. Covered CA has significant work • Create a functioning insurance marketplace • This includes determining plan design and contracting requirements, such as networks required, contracting and negotiating rates with plans, assigning ratings and assessing fees, and coordinating with other state entities • Develop one statewide electronic application system (CalHEERS) • CalHEERS must use a standardized application form for all health enrollment – encompassing Exchange coverage, Medi-Cal and Healthy Families • Existing systems and CalHEERS must be able to share information electronically • Develop programs to help consumers and small businesses apply for coverage. • Develop and deliver on a statewide marketing campaign – via mass media, radio, tv, social media, etc • Establish an application assistance program – have boots on the ground (Navigator or Assister) to helps individuals and families with choosing plans and apply • Develop and manage a Outreach & Education Grant program – getting the word out through trusted community sources • Get Californians Covered!

20. Target Population • Primary Target: California’s 5.3M residents projected to be uninsured or eligible for tax credit subsidies in 2014. • Of the 5.3M eligible to enroll in Covered California: • 2.6M will be eligible for subsidies • 2.7M will not be eligible for subsidies

21. Profile of Target Population

22. Location & Ethnicity of Target Population

23. One Statewide Application System “No Wrong Door” Approach One Standardized Application

24. Outreach, Education and Application Assistance • Community-based grants and the in-person assisters program will reach strategic points of entry where people “live, work, shop, and play.” • Statewide approach to: • Mobilize and educate key influencers • Launch key milestone events • Establish market driven partnerships • Manage educational outreach and enrollment

25. Reaching Eligible Californians “All Hands on Deck”

26. Reaching Eligible Californians “All Hands on Deck”

27. In order to become a QHP, a plan must: • Offer standardized benefits for each “tier” • Confirm the geographic service area and “rating region” • Create a cost proposal by rating region • Describe reforms they will implement, such as patient-centered medical homes, ACOs, narrow network, chronic disease management programs, quality and patient safety initiatives, etc. • Submit a “network map” of “essential community providers” that are contracted to serve the low income population. Plan ParticipationRequirements for Insurers

28. Standard Benefit Design Covered Benefits • Visit to a health care provider’s office or clinic: Specialist visit, other practitioner visit, preventive care/screening/immunization. • Tests: Laboratory tests, x-rays and diagnostic imaging, imagine (CT/PET scans, MRIs). • Drugs to treat illness or condition: Generic drugs, non-preferred brand drugs, specialty drugs. • Outpatient surgery: Facility fee, physician/surgeon fees • Need immediate attention: Urgent care • Hospital stay: Facility fee, physician/surgeon fee • Mental health, behavioral health or substance abuse needs: Mental/behavioral health inpatient services, substance use disorder outpatient services, substance use disorder inpatient services. • Pregnancy: Prenatal and postnatal care, delivery and all inpatient services. • Help recovering or other special health needs: Home health care, rehabilitation services, habilitation services, skilled nursing care, durable medical equipment, hospice service. • Child needs – dental or eye care: Eye exam (deductible waived), glasses, dental check-up (preventive and diagnostic), dental basic services, dental restorative and orthodontia services.

29. Copays & premiums will vary based on the level of the plan (bronze, silver, gold, platinum), with platinum having the lowest copays and bronze having the highest Standard Benefit DesignUnderstanding Trade-offs

30. Trade-offs between Metal Tiers

31. Sliding Scale Pricing

32. Latest Milliman Report

33. Major Exchange Decisions Impacting Children’s Coverage • Stand-alone Pediatric Dental plans: • ACA allows Exchanges to offer pediatric dental benefits, but does not define how the premiums & cost sharing work • Exchange Board voted in August 2012 to offer • Stand-alone Pediatric Vision plans: • Not addressed in ACA • Exchange Board voted in October 2012 to offer stand-alone vision plans pending federal guidance and approval

34. 2013 is a Critical Year • January – Launched Consumer Website • February –Administrative Vendor for SHOP hired • April – Announce Outreach & Education Grantees • May – Assisters Selection begins • June – Plans Selected • July – Service Center Launched • October – Open Enrollment Begins • December – 400,000 people pre-enrolled • January 1, 2014 – Coverage Begins

35. Consumer Friendly Websitewww.CoveredCA.com

36. Issues Moving Forward

37. Achieving enrollment numbers • Educate Consumers • Ensuring access to providers • Bolster the workforce • Improve quality of care • Reform the current fragmented delivery system • Deliver on the triple aim • State Budgetary Issues • Ensure continuity as public programs change Implementing ACA in CAPotential Challenges

38. California Health Benefit ExchangePotential Challenges for Children and Families • Ensuring Access and Continuity of Care: Children who move from CCS to coverage through the Exchange should be assured continued access to pediatric specialists approved by CCS • Ensuring Affordability:Final premium costs dependent on where plan bids fall. • Other options for affordability, such as bridge plans, are also under consideration by state policymakers. • Ensuring Quality: The Exchange should require quality measures specifically for children.

39. Questions/Comments ? ? ? Lisa Chan-Sawin lisa@harbageconsulting.com