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Healthcare Reform November 14, 2014
C. Burke King
President
Anthem Blue Cross and
Blue Shield
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Individual Market
Consumer Profile Highlights
December Membership
Average Subscriber Age 39; age band 45-54(28%)
Family Type * more families with children
Female 49%
Income < 400% FPL ** 31%
New 2014 Applicants
Average Subscriber Age 45; age band 55+ (33%)
Family Type more couples w/o children
Female 52%
Income < 400% FPL 68%
- Post reform consumers are older, lower income, more ethnically diverse and likely female; On Exchange consumers also have higher proportion of couple w/o kids
* Single is still the predominant family type ** Income from Dec mbrship was estimated from external KBM data
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Individual MarketWhat’s New for 2015?
Big
Bang!
Jan. 1, 2015
Open
Enrollment
Nov. 15, 2014 –
Feb. 15. 2015
Renewal
Notice
Virginia
requires a
75-day
renewal
notice
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2014 Trends Observed
• 2014 Small Group market size is shrinking quickly due mainly to greater dumping
• 2014 Small Group market size revised down 10% from previous estimates
• Small Group dumping likely continues or accelerates although impact by state/region varies.
• The Individual market will continue to grow from Uninsured buying and Group dumping
• Uninsured reduction not known
• Uninsured will continue to buy as Exchanges are more organized and more carriers are entering the market: The effectiveness of the individual penalty increases as it grows
• Minimal shifts in all other segments
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2014 Key Learnings &
Implications for 2015
• The 2014 open enrollment period resulted in a great deal of confusion
as there was much regulatory instability and the exchanges did not
function efficiently.
• We expect many of the operational issues to stabilize in 2015. We do
still expect some degree of regulatory uncertainty as the first year tax-
time reconciliation could create additional abrasion for consumers
who might have chosen differently if they better understood the tax
implications of their 2014 plan choice.
• As the 2015 open enrollment period begins, we expect to see some
degree of consumer confusion as renewal cycles will begin to
converge and consumers attempt to understand their available
options, ultimately leading to increased shopping activity.
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Small Employers can offer medical and dental plans through the
Small Business Health Options marketplace on healthcare.gov
• Employee Choice available for 2015
• Enrollment for 1-1-2015 will begin Nov. 15 and ends Dec. 15
• All enrollment, billing, and payments will be handled by or through SHOP
SHOPWhat’s New for 2015?
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Employer Mandate RefresherBeginning in 2015
Number of employees
No penaltyNo penalty
49 or fewer50 +
Continue to offer
coverageDrop coverage
Minimum value &
affordable
Pay $2k penalty
per FTE
minus first 30
Drop coverageContinue to offer
coverage
50-99
delayed to
2016
Yes – avoid
penalty
No – pay $3k
penalty per
employee that
gets subsidy
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How are Employers
Preparing?
Cost Shifters Fence Sitters Innovators
Strategy is to
quickly decrease
employer cost in
varying degree of
approaches
Wait & see attitude,
taking small actions
that are not
sustainable long-
term strategies;
ultimately become
Cost Shifter or
Innovator
Providing Health
Care for the long-
term; Tools and
Capabilities to
reduce costs and
engage employees
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Questions??