medicaid and health insurance, galen benshoof - slc 2015
TRANSCRIPT
Galen Benshoof, Senior Program ManagerNovember 2015
Realizing the Promise of the ACA: Implementation of State Health Reform
1
Overview
The ACA’s third open enrollment period
Refinement of the marketplaces
Medicaid expansion: current state of play
1332 waivers: what’s the big deal?
2
Third open enrollment period
• Began November 1, 2015 and runs through Jan 31, 2016• So far, mostly smooth sailing
Third open enrollment period
• Pre-OEP3, 17.6 million people had gained coverage as ACA took effect
• 10.5 million uninsured are still eligible for Marketplace coverage
Third open enrollment period
Exchange decisions by state
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New HampshireMassachusettsRhode IslandMichigan
California
Nevada
Oregon
Washington
Arizona
Utah
Idaho
Montana
Wyoming
Colorado
New Mexico
MaineVermont
New York
North Carolina
South Carolina
Alabama
Nebraska
Georgia
Mississippi Louisiana
Texas
Oklahoma
Pennsylvania
Wisconsin
Minnesota North Dakota
Ohio
West Virginia
South Dakota
Arkansas
Kansas
Iowa
Illinois Indiana
Alaska
Tennessee
Kentucky Missouri
DelawareNew Jersey
Connecticut
Virginia Maryland
FloridaHawaii
DC
KEY
SBM federal platform
State-based Marketplace (12 + DC)
Defaulted to healthcare.gov
Partnership Marketplace
Insurance marketplaces
• Healthcare.gov has stabilized– Massive gains in some states during first two years
• Will lower enrollment states improve this year?
– Improved customer experience: provider directories, drug formularies, and out-of-pocket cost calculator
Insurance marketplaces
• State exchanges have also stabilized– Most seeing increased plan choice and
competition– On the path to financial sustainability– 2.0: greater focus on health insurance literacy and
decision support tools– California a model for active purchasing?
• But challenges remain– State exchange establishment grants have ended– Some co-op insurance plans have dissolved– Rate increases– Renewals– Tax reconciliation– Hardest to reach population
Insurance marketplaces
• Continued march to full expansion• States are seeing savings in uncompensated care,
behavioral health, criminal justice, and more• Some remaining states will push envelop on
waivers• Possibility of retrenchment in a small number of
states– Michigan, Arizona, Arkansas
Medicaid expansion
Medicaid
California
Nevada
Arizona
Utah
Idaho
Montana
Wyoming
MaineVermont
New York
North Carolina
South Carolina
Alabama
Nebraska
Georgia
Mississippi Louisiana
Texas
Oklahoma
Pennsylvania
Wisconsin
Minnesota North Dakota
Ohio
South Dakota
Kansas
Iowa
Illinois
Tennessee
Missouri
DelawareNew Jersey
Connecticut
Massachusetts
Virginia Maryland
Rhode Island
Hawaii
New Hampshire
Not Expanded Medicaid (20)
Alaska Expanded Medicaid (29 + DC)
West Virginia Colorado
New Mexico
Oregon
Washington
Michigan
Arkansas
Kentucky
Washington, DC
Medicaid expansion decisions as of June 2015. Montana has passed legislation to implement an alternative expansion; waiver is pending with CMS.
Iowa
Alternative Medicaid Expansions (6)
Indiana
Alternative Medicaid expansions
Features of alternative Medicaid expansions
Premiums
Cost Sharing
Health Savings-Like Accounts
Healthy Behavior Incentives
Connecting to Work
Benefits and Coverage
Premium Assistance
1332 waivers
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States may not waive non-discrimination provisions prohibiting carriers from denying coverage or increasing premiums based on medical history. States are precluded from waiving rules that guarantee equal access at fair prices for all enrollees.
• Section 1332 builds on bipartisan ideas in health reform
• 1332 waivers are a way for states to expand and refine their systems of private insurance coverage
• To fund their reforms, states can receive the aggregate amount of federal funds that otherwise would have gone to tax credits and cost-sharing reductions
What can be waived?
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States may request waivers from HHS and the Treasury Department of certain requirements of the Affordable Care Act (ACA), effective 01/01/2017
Individual Mandate1
States can modify or eliminate the tax penalties that the ACA imposes on individuals who fail to maintain health coverage.
Employer Mandate2
States can modify or eliminate the penalties that the ACA imposes on large employers who fail to offer affordable coverage to their full-time employees.
Benefits and Subsidies3
States may modify the rules governing covered benefits and subsidies. States that reallocate premium tax credits and cost-sharing reductions may receive the aggregate value of those subsidies for alternative approaches.
Exchanges and QHPs 4
States can modify or eliminate QHP certification and the Exchanges as the vehicle for determining eligibility for subsidies and enrolling consumers in coverage.
ACA § 1332(a)(2)
What can’t be waived?
16
Guaranteed Issue
States may not waive fair play rules
States may not waive non-discrimination provisions prohibiting carriers from denying coverage or increasing premiums based on medical history. States are precluded from waiving rules that guarantee equal access at fair prices for all enrollees.
What are the statutory guardrails?
17
A state waiver application must satisfy four criteria to be granted
The waiver must provide coverage to at least as many people as the ACA would provide without the waiver.
Scope of Coverage 1
ACA § 1332(b)(1)
The waiver must provide coverage that is at least as “comprehensive” as coverage offered through the Exchange.
Comprehensive Coverage2
The waiver must provide “coverage and cost sharing protections against excessive out-of-pocket” spending that is at least as “affordable” as Exchange coverage.
Affordability3
The waiver must not increase the federal deficit.
Federal Deficit4
Not a “super waiver”
ACA speaks about a coordinated waiver process that would include 1115 and Medicare waivers in conjunction with 1332. This lead many to refer to Section 1332 as an opportunity for “super waivers.”
HHS has clarified that Section 1332 Waivers are specifically and only for those statutes and related regulations that are expressly waivable under Section 1332. Waivers under Section 1115 and/or CMMI’s Medicare Waiver authority must be separately approved under their own authorities and guidelines.
1332 waiver challenges
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Steps in waiver process
State Consider state goals and
determine if 1332 waiver is desirable
Have sufficient state authority to implement the waiver
Draft waiver application
Hold pre-application hearing
Include in waiver application:o Actuarial/economic analyseso Implementation timeline o Ten-year budget plan
There is no deadline for submitting a waiver application and states may submit prior to 2017
ImplementationHHS and Treasury
Deem the waiver application complete
Conduct federal notice and comment period
Review the application within 180 days of determining it is complete
Approve or reject the waiver application
Waivers implemented in 2017 or later
Quarterly and annual reports submitted to Treasury and HHS
Waiver renewals begin no later than 2022 because the term of waiver may not exceed five years
Stakeholder engagement
The most compelling ideas for innovation may emerge after state officials and key stakeholders come together and forge consensus around the needs of their public programs and commercial insurance markets.
Hawaii’s 1332 taskforce may be a model for other states wanting to ensure all options are considered in a public and transparent way through their engagement of stakeholders in a review of available options.
Sample 1332 implementation timeline
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Start 6 Months Year 1
Consider state goals and policy priorities for 1332 waiver
3 Months60 Days Year 6Year 2
Engage key stakeholders
Hold required pre-application hearing
Submit waiver application to HHS and
Treasury
Application approved by HHS and TreasuryImplementation Begins (if Year 1 falls after January 1, 2017)
Begin submitting quarterly reports
Begin submitting annual reports
Waiver is renewed
Secure state authority early in the process
This assumes a 6 month review &
approval process by HHS & Treasury; some
waivers may take considerably longer
Moving forward with a 1332 waiver
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Identify state goals
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Important to align broad goals and targeted objectives
Lower the uninsured rate?
Does the state want to….
Move to value based purchasing?
Consolidate and integrate various programs?
Address a marketplace glitch?
Identify barriers and strategies
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Eligibility standards differ across programs
Potential barriers
Participating providers change based on program
Large cost sharing increases on small income changes
Disruption to existing state roles/responsibilities
Align eligibility requirements
Strategies for overcoming barriers
Align standards across QHPs and Medicaid MCOs
Smooth the cost sharing continuum
Convene interagency taskforce
States relying on healthcare.gov
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New HampshireMassachusettsRhode IslandMichigan
California
Nevada
Oregon
Washington
Arizona
Utah
Idaho
Montana
Wyoming
Colorado
New Mexico
MaineVermont
New York
North Carolina
South Carolina
Alabama
Nebraska
Georgia
Mississippi Louisiana
Texas
Oklahoma
Pennsylvania
Wisconsin
Minnesota North Dakota
Ohio
West Virginia
South Dakota
Arkansas
Kansas
Iowa
Illinois Indiana
Alaska
Tennessee
Kentucky Missouri
DelawareNew Jersey
Connecticut
Virginia Maryland
FloridaHawaii
DC
KEY
States Relying on HealthCare.Gov (38)
State Based Marketplace (12 + DC)
38 states relying on healthcare.gov face additional challenges and constraints in using 1332
States considering transitioning to HealthCare.Gov should factor in the potential loss of flexibility in developing 1332 waivers for state specific innovation
As the impact on healthcare.gov increases, challenges increase
Healthcare.gov state confines
27These confines represent the current state of HealthCare.Gov, future improvements may
allow for more state flexibility in 2017 and beyond
Feasibility
Impact on healthcare.gov
LOW
HIGH
HIGH
Individual and Employer Mandate
Marketplaces and QHPs
Benefits and Subsidies
Plan design
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A state may modify or eliminate specific features of plan design required by the ACA
Maximum amount of cost-sharing which can be incurred under a plan
Limitations on Cost Sharing1
Limit on deductible for health plans offered on small group market
Limitations on Employer Coverage2
QHPs must be certified, provide EHB, offer at least a silver and gold plan, same rates on and off Exchange, and not include group health plans
Limitations on QHPs3
Catastrophic plans must provide for full EHB coverage once an individual has incurred cost-sharing above the annual limitation
Catastrophic Coverage4
ACA § 1301(a)(1), 1302, (b)(1)(B), 1302(c)(1), (c)(2)
Waiver Examples:•Allow consumers to purchase catastrophic coverage regardless of age or exemption status •Decrease annual maximums on deductibles to reduce cost sharing burdens
Exchange framework
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ACA § 1311(d)(4)
A state may to waive discrete functions of an Exchange, or eliminate the Exchange
Waiver Example: •Replace individual exchange with direct enrollment and web brokers
Small business health options program
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ACA § 1311(B)(1)(B)
Waiver Examples: •Eliminate SHOP and allow tax credits to be used with any licensed insurer•Replace SHOP with private exchange that meets minimum standards
A state may eliminate the SHOP or change the requirements of SHOP to allow more individuals to enroll SHOP coverage
State Exchanges must establish a SHOP for small
employers to enroll employees in coverage
Coverage standards
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A state may tailor their Exchange to the state’s needs through waiving specific standards of the Exchange
Any individual who lives in the Exchange area, is not incarcerated, and is a citizen, or lawfully present may enroll in a QHP
Coverage for qualified individuals1
The Secretary will require an Exchange to provide for an annual open enrollment period and special enrollment periods
Open Enrollment Periods2
Each Exchange rates QHPs on the basis of quality and price and provides rating on their website
QHP Quality3
QHPs will use a standard format to present their health plan’s benefits
Presenting Benefits4
ACA § 1312(f), 1311(c)
Waiver Examples:•Move open enrollment to tax season (*Note: may not be possible outside Exchange)•Revise quality rating standards (could avoid disruption if done before federal program implemented)
Advance payments of the premium tax credit
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Internal Revenue Code § 36B (c)(1)(B), (c)(2), (d)(3)(B)
APTC Amount
Income between 100 – 400 percent FPLNot eligible for Medicaid or other MECIncome below 100% FPL who is ineligible for Medicaid as a result of being an alien lawfully present in the United StatesNot eligible for employer sponsored coverage or eligible for employer sponsored coverage which is not affordable (exceeds 9.5% of household income) or does not meet minimum value (covers less than 60% of cost of benefits).
EligibilityIncome Level Premium as Percent
of Income
Up to 133% FPL 2% of income
133 – 150% FPL 3 – 4% of income
150 – 200% FPL 4 – 6.3% of income
200 – 250% FPL 6.3 – 8.05% of income
250 – 300% FPL 8.05 – 9.5% of income
300 – 400% FPL 9.5% of income
Tax credit is difference between premium of second lowest cost silver plan (SLCSP) available to family and amount described above
Waiver Examples:•Simplify APTC with a full credit up to 200% FPL, medium credit to 300% FPL, and low credit to 400% FPL. •Align update of poverty line for FPL calculations between Medicaid and Exchange. •A state might be able to respond to an adverse King ruling by waiving “Established by the State”
States may also modify the ACA APTC scale and eligibility criteria
Smoothing the cost continuum
33
Consumers at the margins of IAP eligibility face significant premium and cost-sharing increases with minimal income increases
0% 100% 200% 300% 400%
CHIPeligibility levels vary by state
Medicaideligibility levels vary by state
Stre
amlin
ed E
ligib
ility
an
d En
rollm
ent S
yste
m Payment and Delivery
System Reform
Basic Health Planat state option
Premium Tax Credits andCost Sharing Reductions
Medicaid to QHP/APTC cliffNew York State
34
Medicaid (138% FPL)
QHP (139% FPL)
Difference
Annual Premium
$0 $564 $564
Deductible $0 $0 $0
Prescription $1 - $3 $6 - $30 $5 - $27
Specialty Visit $0 $20 $20
Hospital Stay $25 $100 $75
Maximum Out of Pocket
$200 $1,000 $800
*New York’s Medicaid Program and New York’s Second Lowest Cost Silver Plan (94% AV) for an Individual in New York City in 2015
Medicaid to QHP/APTC cliffArkansas
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Medicaid (138% FPL)
QHP (139% FPL)
Difference
Annual Premium $0 $564 $564
Deductible $0 $150 $150
Prescription $4 - $8 $4 - $8 $0
Specialty Visit $10 $10 $0
Hospital Stay $140 $140 $0
Maximum Out of Pocket $754 $754 $0
*Arkansas’ Private Option/ Second Lowest Cost Silver Plan (94% AV) for an Individual in Little Rock 2015
• Smooth out the cost curve across Medical Assistance (Medicaid), MinnesotaCare (Basic Health Program), and MNsure (state-based exchange)• Current affordability cliffs mean that some families who
experience a small increase in income could see a much larger decrease in their subsidies and increased cost-sharing. •MN wants to implement more gradual, predictable
system• Recently-created Health Care Finance Task Force
currently examining the issue
1332 example: Minnesota
• Trying to balance ACA implementation with keeping the best of what states had pre-ACA•HI has had a popular and effective employer mandate
for 40 years•Now trying to retain comprehensiveness of coverage
under new ACA framework•HI requested to waive SHOP (small business exchange)
and related provisions of the ACA to avoid conflicting requirements and reduce administrative costs• First state to post a 1332 proposal for public comment
1332 example: Hawaii
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WA
OR
CA
NV
ID
MT
WY
UTCO
AZ NM
TX
OK
ND
KS
NE
SD
AR
MO
IA
MN
GA
TN
MS AL
LA
MI
OHINIL
WI
FL
PA
VA
ME
NY
WV
NCKY
SC
AK
NH
VT
NJ
DEMD
HI
CT
MARI
Current 1332 activity
Waiver proposal is public (1)Authorizing legislation passed (5)
Legislature considered bills (3)Public discussion underway (1)
Galen BenshoofSenior Program Manager
RWJF State Health Reform Assistance Networkstatenetwork.org
Thank you!