erkenbrack - ncsl

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Steve ErkenBrackPresident & Chief Executive OfficerRocky Mountain Health Plans

National Conference of State Legislatures - Spring Forum 2013 May 4, 2013

Medscape / WebMD Insurer Ratings Report 2011

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SOURCE: Medscape is part of WebMD’s Health Professional Network: WebMD is the leading provider of health information services, serving consumers, physicians, healthcare professionals, employers and health plans.

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2011 Milliman Medical Index

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America’s Health Care Prices

Source: International Federation of Health Plans 2012 data a global insurance tradeSource: International Federation of Health Plans 2012 data - a global insurance trade association that includes more than 100 insurers in 25 countries — releases survey data showing the prices that insurers are actually paying for different drugs, devices, and medical services in different countries. And every year, the data is shocking. Washington Post March 2, 2013

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Source: International Federation of Health Plans 2012 data - a global insurance trade i ti th t i l d th 100 i i 25 t i l d tassociation that includes more than 100 insurers in 25 countries — releases survey data

showing the prices that insurers are actually paying for different drugs, devices, and medical services in different countries. And every year, the data is shocking. Washington Post March 2, 2013

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15 Drivers ― Health Care Costs

• Statutes that shift costs orraise costs, not lower costs

• Fee for serviceC t hiftraise costs, not lower costs

• Pharmacy • IT: segmentation, not integration• Regulatory dysfunction • Inefficiency of coverage by Silo

• Cost shift• Aging• Malpractice• Provider monopolies • Integration of Care (e.g. Autism)

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• Technological advances• Overuse of Hospitals / Emergency

Departments

• Nursing underuse / misuse • Greed

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Summary Comparison of Hospital Payment Levels in Colorado

1.8

2.0

2.31 ~~

Charges

Private Payer

MedicarePaym

ent-

to-C

ost

Rati

o 1.31

0.75 0.65

Cost

0 4

0.6

0.8

1.0

1.2

1.4

Medicaid

1.6

1.8

3.1%1.13

Self-P

OtherGovt.

0.59

© Ingenix, Inc. 13

Percent of Hospital Cost

47.8% 27.9% 10.8%

0.0

0.2

0.4

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Pay

8.1%

Source: The Lewin Group analysis of Colorado Hospital Association data.

Medicare Projection

10,000 baby boomers will turn 65 everyday for the next 18 years.everyday for the next 18 years.

Source: An updated study by the Urban Institute, The Aging Baby Boom: Implications for Employment and Training Programs, June 1997, by Stacy Poulos and Demetra Smith Nightingale. 14

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Medicare is unsustainable now(percent of GDP, projected)

3.2

4.5

7.3

3

4

5

6

7

8

0

1

2

2008 2020 2035

Source: Medicare Trustees Report:, 2009.

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Payment Reform is Imperative

+ 40%Medicaid Expenditure Growth SFY2009 – 2012

(In Billions)$4.0

$2.8

$3.0

$3.2

$3.4

$3.6

$3.8

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$2.0

$2.2

$2.4

$2.6

2008-09 2009-10 2010-11 2011-12

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Exchange Focus: Access

Colorado Uninsured: 800,000Avenues to Access:

--Premium Subsidies: 300,000--Medicaid Expansion: 200,000--Existing Safety Net: 300,000

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2010 2011 2012 2013 2014

Medical Loss Ratio

PPACA Timeline (abbreviated)

Exchanges Health Federal High Risk Pool Medical Loss Ratio (MLR) requirements

Medicare Part D Gap

Exchanges – Health Insurance Market Places

Essential Health Benefits

Standard Plan Labels

Guaranteed Issue

Penalties – employer and individual

Federal High Risk Pool

Healthcare.gov internet portal

Small business tax credit

Immediate Health Insurance Reforms:Dependent coverage to 26No lifetime limitsR t i t d l

Premium tax credits

Medicaid eligibility expansion

Restricted annual maxPreventive servicesEmergency servicesAccess to pediatricians Access to OB/GYNsAppeals No pre-ex for kids

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What is the Colorado Health Benefit Exchange?

An open, competitive marketplace soon to be called Connect for Health ColoradoConnect for Health Colorado

for individuals and small employers to:

Compare information regarding cost and qualityShop health plan features containing the same base benefitsDetermine eligibility for and access new federal financial

assistance, based on incomeassistance, based on incomeSupport the health coverage decision-making processCall, text or sit down with trained representative for helpEnroll in a health plan

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Features of the COHBE Marketplace

An open, competitive marketplace soon to be called Connect for Health ColoradoConnect for Health Colorado

Serving individuals, families and small employers with 2-50 employees

A new way to shop for health insurance

The sole access to new federal financial assistance, based on ,income

A separate non-profit, committed to Colorado mission

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What COHBE will not be

Not a replacement for the current market or brokers

Not engaged with negotiating rates between carriers and providers

Not part of Medicaid

Not a new government health care system

Not a State agency or regulatory body

Does not pull funding from Colorado General Fund

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Comprehensive Coverage

Federal law requires health plans sold to individuals and small businesses inside and outside of COHBE to provide, at a minimum, the following categories of services (essential health benefits):Ambulatory patient servicesEmergency ServicesHospitalizationMaternity/newborn care Mental health/substance abusePrescription drugs Rehab/habilitative services and devicesLaboratory services yPreventive and wellness care/chronic disease managementPediatric services, including oral and vision care

Please visit www.getcoveredco.org for more specific details about services provided

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Standard Plan Labels: Cost Sharing Design

Small group and individual plans sold inside and outside of the Exchange will be “labeled” based on member cost sharingExchange will be labeled based on member cost sharing.• Bronze • Silver • Gold• Platinum• Platinum• Catastrophic – only available for people under 30

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Small Employers

-Marketplace will provide small group plan options to Colorado employers with 2-50 employees

-Employers with up to 100 employees can be served in 2016-Employers can set benefit budget-Employers can provide greater choice to workers-Employees can use benefit allowance to shop for health plans-Small business tax credits will be available (up to 50% of premium) for

employers with 2 25 employees earning on average $50 000 or lessemployers with 2-25 employees, earning on average $50,000 or less-Other value-added services will be provided, like payment aggregation,

management tools and ability to use brokers

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Individuals Marketplace is for Coloradans who currently buy insurance on their

own, who are uninsured, or don’t have access to affordable coverage through large employer

Online shopping, with assistance by phone and in-personInsurers compete for your business

Health plans will provide more comprehensive coverage

Customers can access new federal financial assistance to lower Customers can access new federal financial assistance to lower premiums, co-pays and deductibles

Several ways to shop: browse health plans, estimate savings, or apply online for federal financial assistance

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The Exchange and Subsidies

Starting in 2014, everyone must have health coverage.

Tax credits for premiums

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Tax credits for premiums and subsidies for out-of-pocket costs

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Cost Reductions for Individuals and Families

Financial help to reduce the cost of premiumsFinancial help to reduce the cost of premiums– Individual earning between $15,282 to $45,960/year– Couple earning between $20,628 to $62,040/year– Family of 4 earning $31,322 to $94,200/year

Tax credit applied up-front by IRSTax credit is higher for Coloradans ages 55-64Financial help to reduce out of pocket costs (co pays and Financial help to reduce out of pocket costs (co-pays and

deductibles)Individuals earning $15,282 to $28,725/year Family of 4 earning $31,322 to $58,875/year

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Example

-Bill is a 40 year old male making $30,000 per year-Bill enters the marketplace through the website and applies for p g pp

assistance paying for his coverage.-Bill qualifies for $166 per month in premium reduction (tax credit).-Bill shops for and compares health plans with the same base

benefits.-Bill finds a plan that costs $375 per month. The tax credit brings

his total cost to $209 per monthhis total cost to $209 per month.

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Two Roads to Fiscal Balance

CUTS

RE‐ALIGNINCENTIVES

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CUTS

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Grand Junction, ColoradoA Health Community That Works

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Quality and Medicare Spending

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The 12 Lodestars of Healthcare Reform

• Access (not just Coverage) • Evidence Based Medicine

• Quality

• Stability / Portability

• Health Care Home

• Home Health

• Palliative & Hospice Care

• Public Safety NetMedicaid - Medicare - CHP+

• Preventive Care

• Disease Management

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• IT

• Individual Responsibility

Reform Restructures Relationships

Hospital

Patient

p

Office based CliniciansInsurer

Community

Government34

Community

Source: Len Nichols PhD. Director of the Center for Health Policy Research and Ethics at George Mason University

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Mesa County experienced lowest costLast two year of life forMedicare Beneficiaries

Grand Junction, COGrand Junction, CO $16,380 $16,380 National AverageNational Average $25,376 $25,376 90th Percentile90th Percentile $31,346 $31,346 50th Percentile50th Percentile $21,856 $21,856 10th Percentile10th Percentile $18,117 $18,117

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erkenbrack - ncsl

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