State Law Resources Conference

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State Law Resources Conference

Randi Reichel, Esq.Vice President, Regulatory AffairsUnitedHealth Group

Affordable Care Act – Implementation Challenges


•ACA Implementation – Challenges Galore:

• Market Rule Changes

• Exchange Timelines

• Funding

• Uncertainty

• Implementation and enrollment

ACA IMPLEMENTATION CHALLENGES -- 2014


Market Rule Changes


1

Expanded Benefits

RatingChanges

Taxes & Fees

1 2 3


• 60-day advance notice of material modifications

• Accountable Care Organization requirements

• Appeals provision fully implemented G

• First medical loss ratio rebates to be paid by August

• New women’s preventive services with no cost sharing G

• Patient-centered Outcomes Research Institute (PCORI) fee ($1 per member/year)

• Quality bonus begins for Medicare Advantage plans

• Summary of Benefits and Coverage (SBC) and the Uniform Glossary

2012• Administrative simplification begins

• Annual fee on medical device sales begins

• Deduction for expenses allocable to the Part D subsidy for “qualified prescription drug plans” eliminated

• Employee notification of access to Exchanges

• FSA contributions limited to $2,500

• High earner tax begins

• PCORI fee increases to $2 per member/year

• W-2 reporting on the value of employer-sponsored health benefits

2013• Coverage for all adult children until age 26

including those that have employer coverage (formerly not covered for grandfathered plans)

• Deductible caps cannot exceed $2k for individual and $4k for family G

• Essential health benefits required for small employers G

• Guaranteed issue and renewability G

• Health Benefit Exchanges• ICD-10 code adoption • Individual & employer mandates • Insurer fee – permanent • Mandatory coverage for clinical trials G

• No annual dollar limits • No pre-existing condition exclusions• OOP limits must comply with OOP limits for

HSA qualified plans G

• Quality of Care Reporting Requirements• Rating restrictions / Adjusted community rating G

• Tax credits and subsidies for individuals and small employers

• Transitional reinsurance fee (2014-2016)• Waiting period limits • Wellness programs

2014

Health care reform timeline

G Grandfatherable provision.Note: some provisions apply only to fully insured business (e.g., MLR and guarantee issue)


Essential Health Benefits Ten required coverage categories1

2

3

4

Out-of-Pocket Maximum New accumulation rules and ceiling

Small group deductible ceiling $2,000 single/$4,000 family

Limited to “Metallic” coverage levels Bronze, Silver, Gold, Platinum

Expanded Benefits

Individual and small group plans must provide Essential Health Benefits Package. Four components of package:


Metallic Coverage Levels

Bronze 60%Silver 70%Gold

80%Platinum 90%

Plan Type %

of the actuarial value of the covered benefits

• These requirements are limited to “Metallic” coverage levels (Bronze, Silver, Gold, Platinum)

Expanded benefits


Rating and market rule changes

8

HUGE MARKET CHANGES…ESPECIALLY FOR SMALL GROUPS

• Small groups move to adjusted community rating where all policyholders’ premiums only vary by location, small age bands and tobacco use

• All plans:– Removal of pre-existing conditions– Guaranteed issue and renewal of coverage– No medical underwriting

For individual and small group markets


Exchange Timelines


• Three “types” of exchanges –

• State exchange

• Federal exchange

• Partnership exchange

• Unique characteristics for each and unique challenges

EXCHANGE TIMELINES


Timeline for Exchanges

By late summer or fall, employers must provide all employees with information about Exchanges.

In 2014–2016, individuals and small group employers can participate.

Beginning 2017, large group employers may be able to participate.

2013 2014 2015 2016 2017


Market influencers: Movement and more movement

Estimates above based on public sources including CBO and Lewin Group publications

•30 million newly insured

80 million potentially switching coverage

20 million purchasing through Exchanges

15 million affected by Medicare increases

StartDoes caller appear

English languageproficient?

Yes

No

Are you in Medicare /Medicaid

Check with your Medicaid Office

eligibility may change 1/1/2014

Engage appropriate assister

No

Are you eligible for coverage from an

employer or union?

Yes Is your income≤ 133% FPL?

Yes Did state expand

Medicaid?

Yes You maybe eligible for Medicaid

No No No

Is yourincome

≤ 133% of FPL?

YesDid state expand

Medicaid?

YesYou may be eligible for Medicaid

Does the employer or union plan coverat least 60 % of

health expenses on average?

No

No

Is family incomebetween FPLand 4 x FPL?

No

Family is guaranteed access to unsubsidized

coverage through Health Insurance Marketplace or

non-group coverage outside of Health

Insurance Marketplace

Would you pay > 9.5% of family income for single

coverage?

Yes


No

Yes

NoYes

You can choose employer plan coverage

or Health Insurance Marketplace coverage

with a tax credit

You can choose employer plan coverage or may be able to buy non-group coverage

outside of Health Insurance Marketplace

No

Yes

You are guaranteed access through

Health Insurance Marketplace and

eligible for tax credit

Are you a citizen or legal resident?

Yes

NoYou may purchase non-

group coverage outside of

Health Insurance

Marketplace

Are you a citizen or legal

resident?

Yes

No

Yes

4/1/2013

Discussion Draft

No

Yes

You can chooseemployer plan

orunsubsidized coverage in

Health Insurance

Marketplace or

go to the outside

non-groupmarket

Are you

a citizen

or legal

resident?



Yes

No



No


employer or union?


Yes You maybe eligible for Medicaid

No No

Is yourincome

≤ 133% of FPL?

YesYou may be eligible for Medicaid



No

No


No


coverage?

Yes


Yes

NoYes



with a tax credit



Yes




Are you a citizen or legal resident?NoYou may

purchase non-group coverage

outside of Health



resident?

Yes

No

Yes

4/1/2013

For use in states that HAVE expanded Medicaid Discussion Draft

Yes



Health Insurance

Marketplace or

go to the outside

non-groupmarket

Are you

a citizen

or legal

resident?

No

No





Yes





Yes

No



No


No No

Is yourincome

≤ 133% of FPL?



No

No


No






coverage?

Yes


Yes

NoYes



with a tax credit



Yes




Are you a citizen or legal resident?

Yes

NoYou may purchase non-

group coverage outside of

Health Insurance

Marketplace


resident?

Yes

No

Yes

4/1/2013

For use in states that have NOT expanded Medicaid Discussion Draft

Yes



Health Insurance

Marketplace or

go to the outside

non-groupmarket

Are you

a citizen

or legal

resident?

No

No


employer or union?





• Refer Medicaid Customers to XXX-YYY-ZZZ*• Refer Medicare Customers to State Health Insurance Assistance Program

(SHIP) at AAA-BBB-DDD, or to other Medicare support number as determined by the DOI.*

You maybe eligible for Medicaid • Refer Medicaid Customers to XXX-YYY-ZZZ *

Engage appropriate

assister• Refer Medicaid Customers to XXX-YYY-ZZZ *

You can choose employer plan or

unsubsidized coverage in Health Insurance Marketplace or go to

the outside non-groupmarket

• Refer Customers to appropriate Assister at XXX-YYY-ZZZ *

• How will DOI refer customers to the Health Insurance Marketplace or to other agency, entity or individuals, such as navigators, agents and brokers to ensure consumer has access to Health Insurance Marketplace products and possible tax advantages?




You may purchase non-group coverage

outside of Health Insurance

Marketplace

• How will DOI refer customers to the private market outside of the Health Insurance Marketplace?

* States will have to determine when, how and to which agency or entity with regard to conducting “soft handoffs”

Discussion Draft

4/1/2013


Taxes and Fees


Taxes & Fees

PCORI Fee

Insurer Fee

Transitional Reinsurance Fee

Excise Tax

to help fund the Patient-Centered Outcomes Research Institute

to fund Health Insurance Exchanges

to stabilize individual and small group markets

on rich benefit coverage


Taxes and fees at a glance


Excise Tax

Projections based on analysis of study by Oliver Wyman & AHIP 2012


Taxes and fees at a glance, continued


Excise Tax

Projections based on analysis of study by Oliver Wyman & AHIP 2012


Estimated pricing impacts


Excise Tax

Many consumers and employers will face substantial price increasesIllustrative

Individual Market Premium Increase *

Small Group Market Premium Increase **

Large Group Premium Increase

10%Avg Rate Increase10%

Avg Rate Increase: 10%

Guaranteed Issue and Rating Rules0 - 100%

Taxes/Fees3.8%

Product15 - 30%

Avg Rate Increase10%

Employer Movement2-3%***

Product6 - 10%


Community Rating -25% to 25%

Taxes/Fees3.8%

10%

Product3 to 5%



Taxes/Fees3.8%

10%

25% to 200% -5% to +50% 15% to 20%

Pre-Reform Post-ReformPre-Reform Post-Reform Pre-Reform Post-Reform

Reform Compliance drives significant price increases.

Community Rating causes significant disruption for

many groups.

Incremental Increase to rates beginning in 2013 to cover taxes,

fees and benefits.* Before the impact of reinsurance credits and any applicable premium subsidies. Reflects a range for the majority of policies; actual results

could be outside this range. ** Reflects the majority of groups in states with moderate underwriting flexibility prior to 2014. Actual results could be outside this range.*** Represents the impact of small employers dropping coverage or changing their renewal date in response to 2014 premium changes.


Uncertainty


Questions?

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