Federal Health Reform in Tennessee

May 30, 2013

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Agenda• Strategic Planning and Innovation Group• Uninsured• Insurance markets changes• Exchange implementation status• Medicaid expansion status• Update on Navigators/In-Person Assisters• Questions

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Strategic Planning and Innovation Group

1. Payment Reform

Governor led

Pay for value instead of volume

State innovation model design grant

2. Cover Tennessee

Adjust CoverTN, AccessTN, CoverKids, and CoverRx for the 2014 policy context

3. Insurance Exchange

Monitor the federal insurance exchange, assist TN stakeholders

Payment Reform

• The new initiative is Governor-led, multi-payer, will change the way physicians are paid (episode-based payment), and improve population health.

• TN received a State Innovation Model grant from Centers for Medicare and Medicaid Services to design a comprehensive payment reform plan.

Design states (16 grants, $~1-3M each)

Pre-testing states (3, $~1-3M each)

Testing states (6 grants, $~45M each)

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Cover Tennessee Programs

1. CoverTN – partnership between the state, employers and individuals to make insurance affordable for lower-income workers, closed to new enrollment (~16,000 lives)

2. AccessTN- state’s high-risk pool, premium assistance closed to new enrollment (~2,800 lives)

3. CoverRx- pharmacy assistance program for those without access to prescription drug coverage (~ 55,000 lives)

4. CoverKids- state’s CHIP program up to 250% FPL (~59,000 lives)

*The majority of this is Medicaid, but also includes other public programs: CHIP, other state programs, Medicare and military-related coverage. The federal poverty level for a family of three in 2011 was $18,530. Numbers may not add to 100% due to rounding. SOURCE: KCMU/Urban Institute analysis of 2012 ASEC Supplement to the CPS.

United States Uninsured

47.9 Million Uninsured

266.4 Million Nonelderly

Employer-Sponsored Coverage Uninsure

d

State and Federal

Programs*Private Non-Group

Health Insurance Coverage of the Nonelderly, 2011

Income

≤138% FPL (51%)

139-399% FPL

(39%)

≥400% FPL

(10%)

Tennessee UninsuredApproximately 9% of the state’s 6.3 million residents are uninsured (CBER, 2012)

21.9 to 24.3

24.4 to 26.8

26.9 to 29.3

29.4 to 31.8

31.9 to 33.9

Proportion of Uninsured Non-elderly Adults under 400% FPL by County

SOURCE: U.S. Census Bureau, Small Area Health Insurance Estimates, 2010

Tennesseans ages 18-34 are a disproportionate share of the uninsured

Age Total Population Uninsured Population# % # %

<17 1,490,000 24% 83,000 9%18-24 594,000 10% 158,000 18%25-34 800,000 13% 217,000 24%35-44 838,000 13% 168,000 19%45-54 907,000 15% 166,000 19%55-64 788,000 13% 100,000 11%65+ 832,000 13% 4,000 <1%Total 6,248,000 100% 897,000 100%

SOURCE: U.S. Census Bureau, American Community Survey, 3-year estimates 2009-2011

Age Distribution by Insurance Status in Tennessee

The typical uninsured Tennessean has a high school education or less

Educational Attainment

Total Population (>25 years ) Uninsured Population (>25 years old)

# % # %

Less than high school graduate

663,000 16% 168,000 26%

High school graduate or GED

1,388,000 33% 275,000 42%

Some college or associates degree

1,134,000 27% 156,000 29%

Bachelor’s degree or higher

980,000 24% 56,000 9%

Total 4,169,000 100% 655,000 100%

Educational Attainment by Insurance Status in Tennessee

SOURCE: U.S. Census Bureau, American Community Survey, 3-year estimates 2009-2011

Most uninsured Tennesseans are members of working families and have low incomes

SOURCE: U.S. Census Bureau, Current Population Survey, 2010-2011

Family Work Status, Nonelderly Uninsured Population in Tennessee

A majority of the state’s uninsured will be eligible for subsidized Exchange coverage

% FPL Total Uninsured (Ages 18 to 64) %

<99 259,000 32%

100-138 110,000 14%

139-249 226,000 28%

250-399 133,000 16%

400+ 77,000 10%

Total 805,000 100%

SOURCE: U.S. Census Bureau, American Community Survey, 3-year estimates 2009-2011

Income Distribution by Insurance Status in Tennessee

What does Federal Health Reform do?

• Health Insurance Market Reforms• Individual Mandate• Employer Penalties• Health Insurance Exchanges• Medicaid Expansion

Insurance Market ChangesToday 2014

Medical underwriting Denials for those with higher risk

Guaranteed issue No denials based on health status

Exclusions and riders Pre-existing conditions are not covered

Full coverage All conditions covered on day one

Rating factors Premiums adjusted for age, tobacco,

geography, health, gender, etc.

Modified community rating Premiums adjusted for age, tobacco and

geography only

State benefit mandates States set varying requirements

“Essential health benefit” Quasi-national standard

Market concentration A few companies control most of the

market in Tennessee and other states

New competition National plans and new players enter

market

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• Premium competition• Reinsurance, risk corridors (temporary)• Age bands for older people• No gender rating for women

• Increasing cost of health services, lack of wellness• Unknowns: Uninsured health needs, take-up rates

• Rich “essential health benefit” • Age bands for young people• No gender rating for men

Insurance Market Changes: Effect on Rates

What is an Insurance Exchange?

• A method for buying insurance such as a web portal or toll-free call center.

• Allows consumer comparisons of multiple plans

• Multiple existing private examples

• Two existing state examples: Utah and Massachusetts

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What is a PPACA Federal Marketplace?

• Eligibility Engine: Enables consumers to qualify for public programs (Medicaid and CHIP), tax credits, and cost sharing reductions

• Market stabilization policies (through reinsurance, risk adjustment, and risk corridors)

Federal Premium Assistance Tax Credits

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Income Limit

Annual Income Level by Household Size

1 2 3 4

100%FPL $11,170 $15,130 $19,090 $23,050

138%FPL $15,415 $20,879 $26,344 $31,809

150%FPL $16,755 $22,695 $28,635 $34,575

200%FPL $22,340 $30,260 $38,180 $46,100

250%FPL $27,925 $37,825 $47,725 $57,625

300%FPL $33,510 $45,390 $57,270 $69,150

400%FPL $44,680 $60,520 $76,360 $92,200

What will the Exchange look like?

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www.ux2014

.org

www.ux2014

.org

The Future of Eligibility Determinations

Dear ______,You are eligible for…

DataHub

$

#

Multiple Ways to Enroll

Use of Electronic Data to Verify

Eligibility

Single Applicationfor Multiple Programs

Near Real-Time Eligibility

Determinations

MedicaidCHIP

Exchange

HEALTH INSURANCE

Exchange Portal Process

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1. Sign in and enter household information

2. Apply for health coverage

3. Compare health plans

4. Confirm plan selection

5. Pay carrier first months premium

Tennessee will have a federally-run Exchange

As of May 25, 2013SOURCE: Kaiser Family Foundation State Health Facts

Partnership Exchange (7 states)State-Based Exchange (16 states + DC)

Federal Exchange (27 states)

WY

WI

WV

WA

VA

VT

UT

TX

TN

SD

SC

RI PA

OR

OK

OH

ND

NC

NY

NM

NJ

NH

NV NE

MT

MO

MS

MN

MIMA

MD

ME

LA

KY KS

IA

IN IL

ID

HI

GA

FL

DC

DE

CT

CO CA

ARAZ

AK

AL

Current Medicaid/CHIP Eligibility Categories

SOURCE: Kaiser Commission on Medicaid and the Uninsured and the Georgetown University Center for Children and Families, 2013.

Medicaid/CHIP Eligibility Threshold, January 2013

NOTE: Ten states (CT, IL, ME, MA, MN, NJ, NY, RI, VT, WI) and DC offer coverage to parents at or above 138% FPLSOURCE: Kaiser Commission on Medicaid and the Uninsured and the Georgetown University Center for Children and Families, 2013.

Medicaid Eligibility Levels for Working Parents of Dependent Children as of January 2013

138%

SOURCE: The Advisory Board Company. As of May 24, 2013

Tennessee is pursuing an Alternative Model for Medicaid Expansion

Not participating Expansion (20 states)

Participating Expansion (26 states & DC)

WA

OR

WY

UT

TX

SD

OK

ND

NM

NV NE

MT

LA

KS

ID

HI

CO CA

ARAZ

AK

WI

WV VA

TN SC

OH *

NCMO

MS

MN

MI

KY

IA

IN IL

GA

FL

AL

VT

PA

NY

NJ

NHMA

ME

DC

CT

DE

RI

MD

Pursuing Alternative Model (4 states)

*Ohio is also exploring alternative options

Who will help people enroll in new coverage options?

• Navigators

Required in every state Exchange

Paid with federal funds in Partnership and FFE states ($54M)

• In-person Assistors

Optional, except for consumer partnership Exchanges

• Certified Application Counselors

Volunteers, do not receive state or federal funding

Hospital staff, non-profit organizations, faith-based organizations

• Brokers

To the extent permitted by a state, brokers will continue to enroll consumers in coverage and will be reimbursed by issuers

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Federal Navigator Grants ($54M) by State

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Community Health CentersAdditional Funding for Outreach

• This month HHS announced an additional $150 Million for community health centers to provide in-person enrollment assistance to uninsured

• Available to CHCs in ALL states through HRSA

• New funds available for CHCs to hire new staff, train existing staff, and conduct community outreach events and other educational activities.

• CHC staff will be trained to help consumers understand coverage options, determine eligibility, and enroll.

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Questions?

Julia HarrisJulia.Harris@tn.gov