back to basics: understanding commercial health insurance · 9/20/2018 · 09-20-18 - fft...
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The Texas Association of Health Plans
Back to Basics: Understanding Commercial Health InsuranceSeptember 20, 2018
PATI MCCANDLESS, Vice President of State Health Policy, Health Care Service CorporationBlue Cross Blue Shield of Texas
Evolution of State & Federal Insurance Regulation
Source: New Yorker Magazine
Sources of U.S. Health Care Coverage (2016)
https://www.kff.org/other/state-indicator/total-population/?currentTimeframe=0&selectedRows=%7B%22states%22:%7B%22texas%22:%7B%7D%7D%7D&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
Employer Coverage 49%
Medicaid 19%
Medicare 14%
Other Public (FEP) 2%
Uninsured 9%
Individual 7%
1.7M People in the Texas Individual MarketSlide courtesy of CPPP/Stacey Pogue
Kaiser Family Foundation estimates for 2016 coverage using 2017 Census Bureau's Current Population Survey, March Annual Social and Economic Supplement and CMS February Effectuated Enrollment Snapshot
• About 1.7 million Texans rely on the individual market for coverage (6%)
• Half get subsidies to lower premiums in the Marketplace – 3% (100%-400% FPL)
• Half buy at full cost within or outside of the Marketplace – 3%
Employer49%
Medicaid/CHIP16%
Medicare11% Military/VA
2%Uninsured
16%
Individual Market w/
Subsidy829,400
3%
Individual Market at Full Cost832,700
3%
Individual Market6%
One11%
Two23%
Three67%
Number of InsurersSource: KFF
2018 Texas Marketplace Options• 67% of Texans are
in counties where 3 or more insurers offer Marketplace plans
• 11% of Texans in counties with only 1 Marketplace insurer
• 8 insurers in 2018 Texas Marketplace
Slide courtesy of CPPP/Stacey Pogue
2018 Marketplace EnrollmentPlan Selections during Open Enrollment: %
change2017 2018Texas 1,227,290 1,126,838 -8%
States Using HealthCare.gov 9.2 million 8.7 million -5%
Dip in enrollment for 2018 likely driven by:• Enrollment period cut in half• Ad budget cut by 90%• Enrollment assistance funds
cut by 40%
• Premium increases for middle/upper income
• Confusion about penalty/status of ACA
Slide courtesy of CPPP/Stacey Pogue
Carriers in the Individual Market in Texas(2014-2018)
12 1419
10 8
2
109
13
4
2014 2015 2016 2017 2018
On-Exchange Off-Exchange
Evolution of State/Federal Insurance Regulation States Have Provided Comprehensive Regulatory Oversight of Insurance for Over 170 Years
2017
1850s to Today
McCarran-Ferguson Act
Employee Retirement Income
Security Act(ERISA)
•Mental Health Parity and Other Targeted Laws
•FAILED: Patients’ Bill of Rights
Affordable Care Act (ACA)
20101996-2008199619741945
Health Insurance Portability and
Accountability Act (HIPAA)
Initially the federal government had no involvement, but intervention has increased substantially since 1996
FAILED: Repeal and
Replace
Slide courtesy of CPPP/Stacey Pogue
State & Federal Regulations
StateLicensure
Financial RegulationForm/Rate ReviewNetwork Adequacy
Consumer ComplaintsMarket Conduct
MixedInsurance Market
RulesRating/PoolingBenefit Design
Consumer Protections
FederalRisk
AdjustmentMedical Loss
Ratios
TDI Regulatory AuthorityHeavily Regulated
• Individual plans• Small group insured
plans (2 to 50 employees)
Minimally Regulated
• Large group plans (51 and up)
• Small group level-funded plans
• Student plans• Short term plans• Association health
plans• Government
employee plans
Not Regulated
• Self-funded ERISA plans (federal preemption)
• Federal employees plan (federal preemption)
• Health care sharing ministries (not insurance)
• Farm bureau plans (not insurance)
Texas Commercial Health Insurance Market
PPO
• Most Purchased• Higher Premiums• Out-of-Network
Benefits• Referrals not
Required
HMO
• No Out-of-Network Benefits (Except ER & When Network Provider not Available)
• May Include PCP Referrals
• Individual Market
EPO
• No Out-of-Network Benefits (Except ER & When Network Provider not Available)
• No PCP Referral Requirement
• Individual Market
Consumers’ Rights Before and After the ACAIndividual Market Small Group MarketBefore After Before After
Guaranteed Issue for All Few states √ √ √
Renewal √ √ √ √Pre-Existing Conditions Few (some
limits)√ (prohibition) √ (some limits) √ (prohibition)
Premium Limits Few √ Some √Rate Review Few √ Some √Broad Benefits Few √ Few √Financial Protections Few √ Few √Medical Loss Ratios Some √ Some √
Affordable Care Act - Insurance Reform• Guarantee issue – can’t deny coverage• Preexisting conditions protections• Premium assistance for individual coverage (100% to 400% FPL)• Medicaid expansion below 133% FPL (optional for states)• Individual mandate – subject to tax penalty if fail to obtain
coverage – revised to $0 as of 2019 (Congress changed in 2017)• Employer penalties • Health Insurance Tax/Fees
Coverage Gap – Non Medicaid Expansion States
Premium Costs for Individual Coverage• Average Texas premium for 2018 exchange plan
– $543 per month– $79 average premium for those with APTC
• Contrast with Texas High Risk Pool Average Monthly Premium– Average premium around $650 in 2013 (last year of operation)– Texas pool created in 1997 - insurer for those with preexisting
conditions– 2013 - covered 26k enrollees– $100M - funded by insurer assessment
Premium Costs for Employer Coverage• Average Premium Employer Coverage - 2017
– Individual• $6,690 per year OR $557 per month
– Family coverage• $18,764 per year OR $1563.67 per month
• Employee Contributions - 2017:– Individual – 18% of premium or $100 per month– Family – 31% of premium or $484 per month
*https://www.kff.org/report-section/ehbs-2017-summary-of-findings/
ACA: Enforcement & Implementation• Wholesale Adoption (CA, CO, WA)
– Expanded Medicaid & State Based Exchange – State Enforcement & Plan Management
• Partial Adoption (AZ, AR, IL, W VA)– Expanded Medicaid & Federal Exchange – OR – No Medicaid Expansion/FFE/Partnership– State Enforcement
• Complete Rejection (TX, OK, WY, MS)– No Medicaid Expansion & Federal Exchange– No Enforcement
HIPAA: Three Levels of State & Federal InteractionState Enforcement Legal authority under state law to enforce federal
requirements
State/Federal Collaborative Arrangement
No legal authority to enforce federal requirements, but is willing to monitor compliance with federal requirements, handle consumer complaints, and seek voluntary issuer compliance If an health plan refuses to comply, the state will refer the case to CMS for enforcement
Federal Enforcement
CMS will enforce federal requirements in a state if:• The state notifies CMS it lacks legal authority or• CMS makes a determination that the state is not
substantially enforcing federal requirements
State & Federal Enforcement Status
State/Federal Collaboration
State
Federal
* CMS enforces most federal requirements in Missouri, but Missouri performs rate review consistent with federal standards.
White House
Department of Health Human Services (HHS)
Secretary Alex Azar
Centers for Medicare & Medicaid Services (CMS)
Administrator Seema Verma
Center for Consumer Information and Insurance
Oversight (CCIIO)Director Randy Pate
Deputy Director Jeff Wu
Department of Labor (DOL)
Department of the Treasury (Treasury)
Federal Regulators
• HHS issues insurance market and Exchange rules
• Many other rules are jointly issued by HHS, DOL, and Treasury under a decades-old consensus process
Major Texas Health Insurance Legislation• 1995 - Texas Patient Protection Act (emergency care mandate; disclosure;
vetoed by Gov. Bush) • 1996 – Patient Protection Act rules passed by TDI • 1997 - Texas enacted HIPAA statutes (provides for funding of the Texas high risk
pool) HB 1212 and HB 710; TDI Patient Protection Act rules codified• 1997 – SB 386 Managed Care liability statute passed • 2007 - SB 1731 Transparency bill - disclosure effort to address surprise balance
billing• 2009 - HB 2256 Mediation bill + PPO Network Adequacy • 2011 – HB 1772 – EPO plans• 2011 to 2013 – major TDI PPO rule update
Major Texas Managed Care Related Legislation• 2015 – SB 481 - expansion of mediation – applies to PPO only • 2017 – SB 507 – expansion of mediation to all out of network emergency care• Mandated benefits – every legislative sessionProvider Related:• Prompt Pay
– 1999 HB 610 first prompt pay bill– 2001 HB 1826 vetoed by Governor Perry– 2003 SB 418 current prompt pay statutes– 2007 SB 1884 prompt pay amended to correct formula for underpayments– 2009 HB 2064 prompt pay amended to create risk pool subsidy program– 2015 HB 1433 – coalition supported reform bill to reduce litigation (died in committee)
• SB 130 (1999) -original “Silent PPO” Bill passes• SB 1468 (1999) physician collective bargaining bill • SB 822 (2013) – Silent PPO
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