addressing risk
DESCRIPTION
Addressing Risk. Brian Webb National Association of Insurance Commissioners September 2011. PPACA Implementation Timeline. 2010. 2011. 2012. 2013. 2014. 2015. 2016. 2017. Temporary High Risk Pool Program. Temporary Reinsurance Program For Early Retirees. Immediate Market Reforms: - PowerPoint PPT PresentationTRANSCRIPT
Addressing Risk
Brian WebbNational Association of Insurance Commissioners
September 2011
PPACA Implementation Timeline
2010 2011 2012 2013 2014 2015 2016 2017Temporary High Risk Pool Program
Immediate Market Reforms:•No Lifetime Limits•Restricted Annual Limits•Restrictions on Rescission•First Dollar Coverage of Preventive Services
Medical Loss Ratios with Rebates
Exchanges
Subsidies
Individual/Employer Mandates
Market Reforms•Guaranteed Issue•No Pre-Existing Condition Exclusions for Adults•Rating Rules•Essential Benefits•No Annual Limits for Essential Benefits
Risk Adjustment
•Extended Dependent Coverage•Internal/External Review•No Pre-Existing Conditions for Children•Disclosure of Justifications for Premium Increases
Individual Market Reinsurance and Risk Corridor Programs
Temporary Reinsurance Program For Early Retirees
Co-Op Plans & Multistate Plans
33
2014 Market Reforms2014 Market Reforms• Guaranteed IssueGuaranteed Issue• No Pre-Existing Condition Exclusions for AdultsNo Pre-Existing Condition Exclusions for Adults• Rating RulesRating Rules
– No health statusNo health status– 3 : 1 maximum variation for age3 : 1 maximum variation for age– 1.5 : 1 maximum variation for tobacco use1.5 : 1 maximum variation for tobacco use
• Single Risk Pool RequirementSingle Risk Pool Requirement• Essential Benefits PackageEssential Benefits Package• Individual MandateIndividual Mandate• Employer ResponsibilitiesEmployer Responsibilities
44
ME
NY
PA
NH
CT
VT
MA
NJ
VA
NC
SC
GA
FL
WV
KY
ALMS
MIWI
MN
IA
HI
AK
KS
NE
ND
SD
MO
IL IN
TX
MT
ID
NVUT
WY
CO
NMAZ
CA
OR
WA
LA
AROK
OH
MD
DE
RI
Community Rating
25.1:1 or greater
Small Group Premium Variation
DC
Adjusted Community Rating
Rating Band Variability:
No Rating Structure 19.1:1 – 25:113.1:1 – 19:113:1 or less
*Note: Michigan HMOs and Blue Cross/Blue Shield are restricted to 3.12:1 maximum variation. All others may use 3.96 maximum variation
TN
Rating Schemes
55
ME
NY
PA
NH
CT
VTMA
NJ
VA
NC
SC
GA
FL
WV
KY
TN
ALMS
MIWI
MN
IA
HI
AK
KS
NE
ND
SD
MO
IL IN
TX
MT
ID
NVUT
WY
CO
NMAZ
CA
OR
WA
LA
AROK
OH
MD
DE
RI
Rating BandsHybridMichigan Blue Cross/Blue Shield must use community rating. There is no rating structure for other carriers.
Individual Market Rating
DC
Adjusted Community RatingCommunity RatingNo Rating Structure
Addressing RiskTemporary?•Reinsurance•Risk Corridors
Ongoing:•Single Risk Pools•Risk Adjustment
Risk AdjustmentParticipants:•Non-grandfathered individual•Non-grandfathered small group•Inside and outside the Exchange
Establishment:•State may establish if state operates Exchange•HHS will establish if state does not
Addressing Risk:Risk Adjustment (Ongoing)
$$
$
$
Risk
Risk Adjustment: NPRMMethodology:•HHS will develop a methodology – similar to Parts C and D in Medicare•A state may use alternative, if certified by HHS•HHS-certified alternatives may be used by other states•HHS methodology will be published in a Federal Notice of Benefit and Payment Parameters – with public comment•State alternative must be published in a state Notice of Benefit and Payment Parameters
– Must include factors, weights, data collection strategy, and nay adjustments to determine actuarial risk
Risk Adjustment: White PaperQuestions:•Choices in developing a risk adjustment model
– Prospective or concurrent or mix?•Options for calculating and balancing payments and charges
– “Baseline premium” and budget neutrality•Issues created by permissible rating factors•Methods for dealing with different benefit levels•Accounting for other payments and reforms
Conclusion
Next Steps•Comments on NPRM due Oct 31st
•Comments on White Paper ongoing•Part of state planning discussions•Discussions at the NAIC
Questions?
Brian Webb Jolie MatthewsManager Senior Health & Life
CounselHealth Policy and Legislation [email protected]@naic.org 202-471-3982202-471-3978
Josh GoldbergHealth Policy and Legislative [email protected]