Download - State Law Resources Conference
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 1
State Law Resources Conference
Randi Reichel, Esq.Vice President, Regulatory AffairsUnitedHealth Group
Affordable Care Act – Implementation Challenges
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 2
•ACA Implementation – Challenges Galore:
• Market Rule Changes
• Exchange Timelines
• Funding
• Uncertainty
• Implementation and enrollment
ACA IMPLEMENTATION CHALLENGES -- 2014
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 3
Market Rule Changes
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 4
1
Expanded Benefits
RatingChanges
Taxes & Fees
1 2 3
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 5
• 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)
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 6
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:
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 77
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
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 8
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
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 9
Exchange Timelines
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 10
• Three “types” of exchanges –
• State exchange
• Federal exchange
• Partnership exchange
• Unique characteristics for each and unique challenges
EXCHANGE TIMELINES
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 11
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
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 12
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
Is family incomebetween FPLand 4 x FPL?
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?
StartDoes caller appear
English languageproficient?
Yes
No
Are you in Medicare /Medicaid
Engage appropriate assister
No
Are you eligible for coverage from an
employer or union?
Yes Is your income≤ 133% FPL?
Yes You maybe eligible for Medicaid
No No
Is yourincome
≤ 133% of FPL?
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
Would you pay > 9.5% of family income for single
coverage?
Yes
Is family incomebetween FPLand 4 x FPL?
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
Yes
You are guaranteed access through
Health Insurance Marketplace and
eligible for tax credit
Are you a citizen or legal resident?NoYou may
purchase non-group coverage
outside of Health
Insurance Marketplace
Are you a citizen or legal
resident?
Yes
No
Yes
4/1/2013
For use in states that HAVE expanded Medicaid Discussion Draft
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?
No
No
Family is guaranteed access to unsubsidized
coverage through Health Insurance Marketplace or
non-group coverage outside of Health
Insurance Marketplace
Yes
Check with your Medicaid Office
eligibility may change 1/1/2014
StartDoes caller appear
English languageproficient?
Yes
No
Are you in Medicare /Medicaid
Engage appropriate assister
No
Yes Is your income≤ 133% FPL?
No No
Is yourincome
≤ 133% of FPL?
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
Is family incomebetween FPLand 4 x FPL?
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
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
For use in states that have NOT expanded Medicaid Discussion Draft
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?
No
No
Are you eligible for coverage from an
employer or union?
Check with your Medicaid Office
eligibility may change 1/1/2014
Check with your Medicaid Office
eligibility may change 1/1/2014
• 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 are guaranteed access through
Health Insurance Marketplace and
eligible for tax credit
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
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 17
Taxes and Fees
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 18
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
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 19
Taxes and fees at a glance
Transitional Reinsurance Fee
Excise Tax
Projections based on analysis of study by Oliver Wyman & AHIP 2012
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 20
Taxes and fees at a glance, continued
Transitional Reinsurance Fee
Excise Tax
Projections based on analysis of study by Oliver Wyman & AHIP 2012
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 21
Estimated pricing impacts
Transitional Reinsurance Fee
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%
Avg Rate Increase10%
Community Rating -25% to 25%
Taxes/Fees3.8%
10%
Product3 to 5%
Avg Rate Increase10%
Avg Rate Increase10%
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.
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 22
Uncertainty
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 23
Questions?