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2012 Annual Meeting Association of Counties

2012 Annual Meeting Association of Counties. Rebecca Ternes Deputy Commissioner North Dakota Insurance Department. Healthcare Reform Overview. Supreme Court Ruling Employer Health Insurance Requirements Health Insurance Exchange Essential Health Benefits What’s Next for Healthcare Reform?.

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2012 Annual Meeting Association of Counties

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  1. 2012 Annual MeetingAssociation of Counties Rebecca Ternes Deputy Commissioner North Dakota Insurance Department

  2. Healthcare Reform Overview • Supreme Court Ruling • Employer Health Insurance Requirements • Health Insurance Exchange • Essential Health Benefits • What’s Next for Healthcare Reform?

  3. Supreme Court Ruling • 5-4 split vote • Congress can tax people with enough income that choose to go without health insurance. • The Federal government does not have the power to force people to buy insurance but it does have the power to impose a tax on those without health insurance. • The mandate was important to avoid adverse selection. • States cannot lose federal funding for Medicaid programs if they do not expand.

  4. Current U.S. Employer Health Insurance Market • Half of businesses with 3-9 workers provide health insurance • 73% of businesses with 10-24 workers provide health insurance • 98% of businesses with 200+ workers provide health insurance • About 1 in 4 business owners are uninsured in U.S. which makes them individual buyers Source: Kaiser Family Foundation Policy Insights, September 28, 2012

  5. Employer health insurance requirements in 2014 • More than 200 employees—must auto enroll employees (opt-out) • More than 50 employees—must provide essential coverage or pay penalties • 50 or fewer employees—exempt • Counting employees will be different

  6. Employer cost vs. benefit analysis Pay for employee insurance • Good will • Competitive benefit structure • Incentivizing better health of employees and reducing costs • Tax credits for employers with up to 25 employees Pay the penalties • Save money • One less business decision, less hassle keeping everyone happy • Allow employees to buy in or out of Exchange

  7. Health Insurance Exchange • Individual and small-business (SHOP) Exchange must exist (can be combined) • Exchange in every state by Jan. 1, 2014 (operational by October 1, 2013) • State-based Exchange • Partnership • Federally-facilitated Exchange • Outside market remains intact—grandfathered and nongrandfathered

  8. Exchanges must: • Facilitate comparisons and purchases • Administer subsidies • Provide standard comparative info • Rate plans on cost and quality • Certify individual mandate exemptions • Coordinate with Medicaid and CHIP • Establish Navigators program • Be operational by October 1, 2013 and fully functioning by January 1, 2014

  9. SHOP Exchange • Traditional employer model • Employer enrolls and makes choice of plan(s) for employees or • Employee choice • Employer chooses benefit level (metals) • Employee picks which insurer and which plan within metal category • Defined Contribution only

  10. ND’s Exchange status • Applied for and received $1 million Exchange Planning Grant • Completed study in December 2011 • Bill in 2011 regular session to plan for implementation • Bill in 2011 special session for state-based Exchange—failed 64-30 • Leaves us with a Federally Facilitated Exchange for now • Final decision date is November 16, 2012

  11. Essential Health Benefits (EHB) • Will have to be included in nongrandfathered plans • Individual and small group markets • In and outside of the Exchange, Medicaid benchmark and benchmark-equivalent and basic health programs

  12. Essential Health Benefits (EHB) • Items and services in 10 categories: • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental health, substance abuse disorder services • Prescription drugs • Rehabilitative and habilitative services and devices • Laboratory services • Preventive, wellness, chronic disease management • Pediatric services, including dental and vision

  13. EHB timeline • March 31, 2012: determine potential plans from four options: • Largest plan by enrollment in any of the three largest small group insurance products in the state • Any of the largest three state employee health benefit plans by enrollment • Any of the largest three national FEHBP plans by enrollment • Largest insured commercial non-Medicaid HMO

  14. EHB timeline • September 30, 2012: recommend to the Secretary of HHS the state’s benchmark plan • Secretary will determine if the plan: • Meets 10 category requirements • Reflects typical employer plan • Accounts for diverse needs • Ensures there are no incentives to discriminate • Ensures compliance with Mental Health Parity Act • Provides states a role in defining EHB • Balances comprehensiveness and affordability

  15. EHB benchmark plan • Should a state not choose a benchmark plan, the default plan would be the small group plan with the largest enrollment • Approved plan will be the benchmark for 2014 and 2015. HHS intends to review and update EHB for 2016 and beyond.

  16. EHB decision implications • EHB is thought of as a floor—insurers may add to the benefits and price accordingly, but they cannot take benefits away • Basic plan vs. rich plan • Pricing increases • Premium value • Insurer competition • Network adequacy

  17. EHB decision implications • Choosing a richer plan • Likely to cause insurers to request premium rate increases • Affordability • Specific coverage may cause a plan to be more or less expensive (e.g., fertility benefits vs. laboratory services) • May force employers and individuals to purchase insurance they do not want or need

  18. EHB decision implications • Choosing a basic plan • Possible market disruption—ND plans are traditionally fairly rich • Small employers may terminate previous, richer plans for cheaper basic plans • Allows insurers to design unique plans to compete • More variation for employers and individuals shopping in or out of the Exchange

  19. ND’s status • Analysis • Legislative hearings • Commissioner sent in a benchmark submission on September 28 • ND recommendation was the Sanford Health Plan plus the CHIP pediatric dental and vision benefits • HHS Secretary will now publish choices, take comment and make final decision. • Date???

  20. What’s next for Healthcare Reform? • Lots of work for insurers to get ready for 2014 • Complex decisions for employers, employees and individual health insurance consumers • Training for agents and agencies • Insurance Department to work with the Exchange • NDDHS Medicaid to work with the Exchange • Continued implementation of market reforms • Election Results? Congressional action?

  21. North Dakota Insurance Department 1-800-247-0560 insurance@nd.gov www.nd.gov/ndins

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