Cost/Benefit Analysis of Tribal Sponsorship

1. Cost/Benefit Analysis ofTribal Sponsorship Mim Dixon and Dale Nachreiner Tribal Self Governance Annual Meeting New Orleans, May 8, 2012

2. Opportunity in Affordable Care Act • Opportunity for Tribes • New revenues for Tribe • CHS cost savings • Tribal Sponsorship is a path to realize the revenues and savings. • New tool available to help your Tribe do cost-benefit analysis of Tribal Sponsorship.

3. Tribal Sponsorship • Tribe pays portion of premium for selected individuals to enroll in Health Insurance Exchanges. • Federal funds can be used. • Aggregate payments • One check per month from Tribe • Payment to Exchange, Insurance or TPA • Exchange decides rules for Tribal Sponsorship.

4. TEOC Project • Case Studies of Tribal Sponsorship • 3 Tribes • 2 scenarios for each Tribe • Real numbers • Methodology developed • Focus Group with Tribal Leaders • Cost/Benefit Analysis Tool • www.nativeexchange.org

5. Case Study Results • Small, medium and large Tribes • 6 different scenarios • In every scenario, Tribe had net benefit Range: $65,398 to $4,684,878 • Positive rate of return Range: $1.77 to $5.99 for each $1 spent

6. Results of Focus Group with Tribal Leaders • Health Directors are primary source of information for Tribal decisions about Tribal Sponsorship. • Tribal Councils want Health Directors to present a Tribal-specific proposal. • Health Directors must be well informed about Health Insurance Exchanges.

7. TEOC Cost/Benefit Analysis Tool • ACA provisions guide model • Based on data and assumptions • Tribe fills out questionnaire • Demographics (age) • Census data (poverty levels) • Billing and collection data • Administrative costs • Spreadsheets calculate estimated costs and benefits of 3 scenarios.

8. Affordable Care Act • Insurance companies can base premiums on • Age (3x greater for older people) • This is only factor used in methodology. • This is why age pyramid is needed. • Geographic area • Tobacco use (1.5% higher) • Federal subsidy of premiums • Individual payment limited to % of income • This is why income information is needed.

9. Annual Federal Subsidy of Health Insurance Premiums by Income Level for Individuals

10. Cost Assumptions • Use only people 19-64 years old <19 eligible for Medicaid or CHIP >65 eligible for Medicare • Use only individual premiums • Use Silver plan premium costs • 70 % actuarial value • Kaiser Family Foundation calculator • 138% FPL for Medicaid Expansion • Poverty rates for uninsured active users are same as AI in general population in U.S. Census

11. Revenue Assumptions • Tribes will be providers of services for plans they sponsor. • No co-pays or deductibles for anyone sponsored by Tribe. • Reimbursement for Exchange plans will be between Medicare and commercial insurance rates. • Bill-to-collection ratio same as current commercial insurance.

12. Calculating CHS Savings • 3 year average CHS expenditures • Use number of people eligible for CHS to get savings per person.

13. Administrative Costs Included in Methods • Education and enrollment assistance • Provider contract administration • Billing plan for services provided

14. Cost/Benefit Analysis Tool • Generates 1 page summary table • 3 scenarios for Tribe: • All uninsured active users • Uninsured active users eligible for CHS • Uninsured Tribal members • For each scenario: • Costs • Revenue and CHS savings • Net benefits • Estimated earnings from $1 invested

15. Caution! • These are estimates only. • Affordable Care Act may change. • Supreme Court decision in June • Elections may affect ACA • Federal regulations are still being written • Tribe may want to consider other scenarios.