California Health Benefit Exchange

The ACA & Exchange:
What are the specifics?
Lisa Chan-Sawin
Harbage Consuling, LLC
[email protected]
April 3, 2013
• Overview of the Affordable Care Act
▫ Timeline of provisions impacting children
• Health Benefit Exchanges
▫ California’s implementation
• Children’s Coverage and the Exchange
• The Uncertain Future…
Patient Protection and Affordable Care Act (ACA)
Remaking the U.S. Health Care System
• Signed in March 2010
• Landmark moment: Most
significant change since
the establishment of
Medicare and Medicaid
Reforming America’s Health Care System
• Majority of changes
enacted between now
at 2018
• Opportunity to enroll
7 million
Californians into
health coverage
Road to Universal Coverage
• Under the ACA, everyone is required to
have health care coverage, either
▫ Private insurance
▫ Public program like Medi-Cal,
Medicare, or Healthy Families
• Low and middle income persons are
offered subsidies and lower costsharing
• Tax penalties for no coverage
Insurance Market Reforms
Children’s Coverage
Key Dates
September 23, 2010: Plans may not withhold coverage for children
under 19 due to pre-existing conditions
• Children’s wellness visits offered with no co-pay
• Young adults covered on parent’s plan up to age 26.
January 1, 2014: State must transition children ages 6-18 with
family incomes between 100% and 133% FPL from HFP to Medi-Cal
• State must implement procedures to simplify Medi-Cal and Healthy
Families Enrollment
• Exchange coverage begins
April 1, 2015: State may transition children eligible for HFP to MediCal or coverage in the Exchange (coverage must be comparable to
Children’s Coverage
Key Dates
September 30, 2015: End of new federal
CHIP funding
October 1, 2015: State may start enrolling
HFP-eligible children in the Exchange
October 1, 2015: State starts drawing
down 88% federal matching for HFP
January 1, 2019: MOE for HFP eligibility
Source: California Healthcare Foundation, 2011
California Key Legislation
A number of ACA related bills were passed that:
…Requires insurers to provide maternity-related care as a basic benefit starting
July 2012.
…Provided young adults coverage up to age 26 on their parent’s health coverage.
…Establishes a standardized application for Medi-Cal, the Exchange, and county
…Prevents insurers from denying coverage or discriminating based on pre-existing
… Improves grievance & appeals process.
…Requires individual and small group health plans to cover essential health
benefits and ties EHB at the Kaiser Small Group HMO benefit level
What is a Health Benefits
What is a Health Benefit Exchange?
• A virtual marketplace for individuals, families and
small businesses to buy private health insurance
• Increase competition between insurers
• Can be State or federally run
• The goal of an Exchange is to promote:
Applying for health insurance is
• Consumer must be able to choose:
▫ Plan
▫ Network
▫ Benefit level
▫ Quality ratings
• The Exchange must facilitate enrollment
Real-time eligibility determinations
Single point of entry for all public programs
Coordinate with other enrollment entities
Who can buy insurance in an Exchange?
Eligibility and Premium Subsidies
• Citizens and legal, permanent residents can purchase
coverage in an Exchange
▫ Those with incomes between 133% and 400% FPL qualify for
premium subsidies through the Exchange
133% FPL - $15,282/year (individual), $31,322/year (family of 4) 400% FPL $45,960/year (individual), $94,200/year (family of 4)
• Small employers will be eligible to purchase coverage in
an Exchange
▫ 50 FTE in 2014, 100 FTE after 2016
▫ Up to 50% premium subsidy for small, low-wage employers for two
What do Exchange plans look like?
• Caps premiums on a sliding scale between 2% and 9.5% of income
Individual earning 133% FPL spends no more than $290/year (2% of income)
Individual earning 400% FPL spends no more than $8,493/year (9.5 percent of income)
• 4 levels of plan benefits (+ catastrophic for young invincibles/financial hardship)
• Premiums cannot be varied by any factor except for:
Age (3:1)
Tobacco usage (50%)
Family Size
• Minimum standard for benefits that must be included
• Risk adjustment mechanisms to help stabilize the insurance market
Federal Legislation
State Flexibility
• ACA included many provisions for Exchange, but left
a few key decisions up to the states, including:
Public, public-private, or private non-profit
State-run or federal, statewide or regional
Size (statewide, regional, multi-state, federal)
Selection of insurance carriers
Relationship/size of employer exchange
Navigators & outreach
Information technology
California’s Exchange:
California Legislation
State Flexibility
• SB 900 (Alquist & Steinberg) and AB 1602 (Perez)
were signed by the governor on September 30, 2010
creating the California Health Benefit Exchange
• California’s Exchange is:
▫ An independent, statewide, public
▫ Free from annual budget appropriation;
▫ Financed by fees on participating health
▫ Governed by an ED and BoD (5 members);
▫ An active purchaser; and
▫ A single point of entry for all types of
▫ Include a toll-free hotline
Covered CA has significant work
• Create a functioning insurance marketplace
▫ This includes determining plan design and contracting requirements, such as
networks required, contracting and negotiating rates with plans, assigning ratings and
assessing fees, and coordinating with other state entities
• Develop one statewide electronic application system (CalHEERS)
▫ CalHEERS must use a standardized application form for all health enrollment –
encompassing Exchange coverage, Medi-Cal and Healthy Families
▫ Existing systems and CalHEERS must be able to share information electronically
• Develop programs to help consumers and small businesses apply for
▫ Develop and deliver on a statewide marketing campaign – via mass media, radio, tv,
social media, etc
▫ Establish an application assistance program – have boots on the ground (Navigator or
Assister) to helps individuals and families with choosing plans and apply
▫ Develop and manage a Outreach & Education Grant program – getting the word out
through trusted community sources
• Get Californians Covered!
Target Population
• Primary Target:
California’s 5.3M residents
projected to be uninsured or
eligible for tax credit subsidies
in 2014.
• Of the 5.3M eligible to enroll
in Covered California:
▫ 2.6M will be eligible for
▫ 2.7M will not be eligible for
Profile of Target Population
Location & Ethnicity of Target Population
One Statewide Application System
“No Wrong Door” Approach
By Mail
One Standardized
Outreach, Education and
Application Assistance
• Community-based grants and the in-person
assisters program will reach strategic points of
entry where people “live, work, shop, and play.”
• Statewide approach to:
Mobilize and educate key influencers
Launch key milestone events
Establish market driven partnerships
Manage educational outreach and enrollment
Reaching Eligible Californians
“All Hands on Deck”
Reaching Eligible Californians
“All Hands on Deck”
Plan Participation
Requirements for Insurers
• In order to become a QHP, a plan must:
Offer standardized benefits for each “tier”
Confirm the geographic service area and “rating region”
Create a cost proposal by rating region
Describe reforms they will implement, such as patientcentered medical homes, ACOs, narrow network, chronic
disease management programs, quality and patient safety
initiatives, etc.
▫ Submit a “network map” of “essential community
providers” that are contracted to serve the low income
Standard Benefit Design
Covered Benefits
• Visit to a health care provider’s office or clinic: Specialist visit, other practitioner visit,
preventive care/screening/immunization.
• Tests: Laboratory tests, x-rays and diagnostic imaging, imagine (CT/PET scans, MRIs).
• Drugs to treat illness or condition: Generic drugs, non-preferred brand drugs, specialty
• Outpatient surgery: Facility fee, physician/surgeon fees
• Need immediate attention: Urgent care
• Hospital stay: Facility fee, physician/surgeon fee
• Mental health, behavioral health or substance abuse needs: Mental/behavioral health
inpatient services, substance use disorder outpatient services, substance use disorder
inpatient services.
• Pregnancy: Prenatal and postnatal care, delivery and all inpatient services.
• Help recovering or other special health needs: Home health care, rehabilitation services,
habilitation services, skilled nursing care, durable medical equipment, hospice service.
• Child needs – dental or eye care: Eye exam (deductible waived), glasses, dental check-up
(preventive and diagnostic), dental basic services, dental restorative and orthodontia
Standard Benefit Design
Understanding Trade-offs
• Copays & premiums will vary based on the level of the plan
(bronze, silver, gold, platinum), with platinum having the lowest
copays and bronze having the highest
Trade-offs between Metal Tiers
Sliding Scale Pricing
Latest Milliman Report
Major Exchange Decisions Impacting
Children’s Coverage
• Stand-alone Pediatric Dental plans:
▫ ACA allows Exchanges to offer pediatric dental benefits, but
does not define how the premiums & cost sharing work
▫ Exchange Board voted in August 2012 to offer
• Stand-alone Pediatric Vision plans:
▫ Not addressed in ACA
▫ Exchange Board voted in October 2012 to offer stand-alone
vision plans pending federal guidance and approval
2013 is a Critical Year
• January – Launched Consumer Website
• February –Administrative Vendor for SHOP hired
• April – Announce Outreach & Education Grantees
• May – Assisters Selection begins
• June – Plans Selected
• July – Service Center Launched
• October – Open Enrollment Begins
• December – 400,000 people pre-enrolled
• January 1, 2014 – Coverage Begins
Consumer Friendly Website
Issues Moving Forward
Implementing ACA in CA
Potential Challenges
• Achieving enrollment numbers
▫ Educate Consumers
• Ensuring access to providers
▫ Bolster the workforce
• Improve quality of care
▫ Reform the current fragmented delivery system
▫ Deliver on the triple aim
• State Budgetary Issues
▫ Ensure continuity as public programs change
California Health Benefit Exchange
Potential Challenges for Children and Families
• Ensuring Access and Continuity of Care: Children who
move from CCS to coverage through the Exchange
should be assured continued access to pediatric
specialists approved by CCS
• Ensuring Affordability: Final premium costs dependent
on where plan bids fall.
 Other options for affordability, such as bridge plans,
are also under consideration by state policymakers.
• Ensuring Quality: The Exchange should require quality
measures specifically for children.
Lisa Chan-Sawin
[email protected]

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