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Rhode Island Exchange Planning March, 2012 Deb Faulkner Faulkner Consulting Group 1.

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Presentation on theme: "Rhode Island Exchange Planning March, 2012 Deb Faulkner Faulkner Consulting Group 1."— Presentation transcript:

1 Rhode Island Exchange Planning March, 2012 Deb Faulkner Faulkner Consulting Group 1

2 Agenda  Exchange Context  Exchange 101 What is an Exchange? Who will use Rhode Island’s Exchange? RI Exchange Status  Implications for Employers 2

3 Exchange Context 3 Federal reform, post 2014, envisions affordable coverage for virtually all RIers, through the following elements: Individual Mandate requiring that all Rhode Islanders purchase affordable health insurance Medicaid Expansion to all RI citizens under 133% FPL (childless adults) Commercial Market Reforms Making health insurance accessible to all, leveling the playing field Exchange Offering federally subsidized and unsubsidized coverage for individuals and small businesses

4 RI Health Benefits Exchange 4 Rhode Island Executive Order established the RI Health Benefits Exchange as a division within the Executive Agency Director of DOA Commissioner of Health Insurance Director of Health Small Business Rep Consumer Rep Former Health Insurance Executive Labor Former Delivery Sys Governance Ex-Officio Members E-Commerce Expert Former Insurance Executive Former US Attorney (with hospital system expertise) Physician (not currently practicing) Director of Administration Secretary of EOHHS Director of Health Commissioner of Health Insurance Appointed by the Governor Consumer Rep Small Business Rep Labor

5 Agenda  Exchange Context  Exchange 101 What is an Exchange? Who will use Rhode Island’s Exchange? RI Exchange Status  Implications for Employers 5

6 Why establish an Exchange? 6 Mission The Rhode Island Health Benefits Exchange will serve as a robust resource for Rhode Islanders and Rhode Island businesses to learn about and easily compare the quality and affordability of their health insurance options, enroll in coverage and, if eligible, access subsidies for coverage.

7 RI Exchange Goals 1. Improve the health of Rhode Islanders 2. Achieve near universal coverage 3. Favorably impact health insurance cost trends 4. Favorably impact health care delivery system effectiveness and efficiency 5. Add value to employer health insurance purchasing 7

8 Exchange Web Portal: Massachusetts 8

9 The RI Health Benefit Exchange 9 A robust marketplace for all Rhode Islanders (1) Web Portal: a robust marketplace for all Rhode Islanders to identify health insurance options and purchase coverage Medicaid eligible individuals Subsidy eligible individuals Individuals (self pay – no subsidy) Employees of Small Employers Employees of Large Employers Rhode Islanders seeking Health Insurance (2) Help Rhode Islanders Choose Health Insurance Display insurance options in an easy to understand, highly interactive web page (3) Enroll Determine eligibility, enroll in coverage, & facilitate subsidy

10 Post 2014: Exchange Users Employer-Based Medicaid (1) Individual Shop through Exchange: 901,000 (check affordability, compare prices) Use Exchange to Determine Eligibility: 256,000 Enroll through Exchange: 81,000 Medicaid (1) Ind. Employer-based Source: Preliminary estimates of post-2014 volume, modeled using CPS, DHS, OHIC, ACS and MEPS data and estimates of undocumented immigrants. RI anticipates three categories of Exchange users (1) Medicaid totals do not include 17,000 Medicaid eligibles over 65 who will also use the system. 10

11 Exchange Project Status Achieving our mission requires an aggressive change initiative impacting:  Policy: business policy, practices and processes  Operations: people, roles & organizational structures  Technology: the systems that support the new policies & practices 11

12 Agenda  Exchange Context  Exchange 101 What is an Exchange? Who will use Rhode Island’s Exchange? RI Exchange Status  Implications for Employers 12

13 Implications for Employers  Individual Mandate  Employer Penalties (over 50), Tax Credits (Under 25)  Commercial Market Reforms  Essential Health Benefits  Exchange: SHOP (Small Business Health Options Program) Individual Exchange Key Elements of ACA: Implications for Employers 13

14 Next Steps 14 Less than 18 months from today - need fully operational exchange  Fall 2012  “Operational Readiness”  January 2013  Achieve certification  Summer 2013  Soft Launch  October 2013  Open enrollment begins  December 2014  Exchange Establishment funding ends  December 2015  Medicaid funding (90% federal match) ends

15 Backup 15

16 Exchange Principles Exceptional Customer Experience Simplicity Affordability Flexibility Transparency Fiscal Prudence Alignment with other governmental health reform initiatives Catalyst 16

17 Small Employer Tax Credits 17 Small employers will need to purchase insurance through the SHOP Exchange to access tax credits.  Who is Eligible Employers with <25 employees with average wages of up to $50,000  Amount of Credit Sliding scale up to 50% of the amount they contribute toward insurance premiums  SHOP Requirement (after 2014) In order to receive the credit after 2014, small employers must purchase through the state’s SHOP Exchange.  Timing Credits are available starting in Employers may only receive the credit for 2 years after Source: Health Policy Brief: Small Business Tax Credits, Health Affairs, Jan 14, 2011, Robert Wood Johnson Foundation

18 Employer Penalties  Who Businesses with 51 or more FTEs  Penalty $2,000 per employee (excluding the first 30 employees) if they do not offer coverage for employees who average 30+ hours per week. 1  Coverage Must cover at least 60% of the actuarial value of the cost of benefits.  Affordability Requirement Employee’s premium cannot exceed 9.5% of their household income.  If not, employees may purchase insurance on their own through the exchange using tax credits.  Employers will either pay $3,000 per employee receiving the tax credit, or $2,000 per employee excluding the first 30 workers (whichever is less). 18 Beginning in 2014, some small businesses may have to pay a penalty if they do not offer affordable coverage. 1 Note that there is no penalty for part-time employees not offered coverage. Source: Kaiser Family Foundation employer penalty flowchart

19 Individual Mandate  Who is exempted from the requirement to purchase insurance?  Religiously opposed to acceptance of benefits from a health insurance policy  Undocumented immigrants  Persons who are incarcerated  Members of an Indian tribe  Income below the threshold requiring filing a tax return ($9,350 - individual, $18,700 - family)  Anyone who has to pay more than 8% of income for health insurance, after taking into account any employer contributions or tax credits.  What insurance coverage is acceptable?  Medicare/Medicaid/CHIP  TRICARE or veteran’s health program  A plan offered by an employer  Insurance bought directly that is at least at the Bronze level  A grandfathered health plan in existence before the health reform law was enacted  What is the penalty for not having insurance? 1  2014: $95/adult, $47.50/child ($285 family max) or 1% of family income, whichever is greater  2015: $325/adult, $162.50/child ($975 family max) or 2% of family income, whichever is greater.  2016 and Beyond: $695/adult, $347.50/child ($2,085 family max) or 2.5% of family income, whichever is greater. After 2016, penalty amounts are increased annually by the cost of living The penalty is pro-rated by the number of months without coverage, though there is no penalty for a single gap in coverage of less than 3 months in a year. The penalty cannot be greater than the national average premium for Bronze level coverage in an Exchange. Source: Kaiser Family Foundation individual mandate flowchart

20 Context: Commercial Reforms  Young adults on parents’ coverage  Pre-existing condition protections  New restrictions on rate factors  “Essential benefits” Making health insurance accessible to all, leveling the playing field 20

21 Starting Point 21 Source: Census Bureau American Community Survey 2009, RI Medicaid, Commercial insurance data as reported to OHIC, Large Group/SI includes both carrier reported data and additional subscribers based on ACS data for total privately insured population. Under 65 RI Population: Current Health Insurance Status Total = 901,000 (1) Medicaid total does not include 17,000 eligibles over 65. (2) Chart uninsured total based on ACS 2009 data. ACS data for 2010 shows 126,000 uninsured, mostly at lower incomes.

22 Work to Date: Policy 22  Populations Served  How Best to Serve Individuals  How Best to Serve Small Businesses

23 Work to Date: Operations  Detailed workplan for operationalizing RI’s Exchange by 2014  Business requirements  Business process design focused on efficiencies across agencies, improved consumer experience 23

24 Work to Date: Technology  Translating business requirements into technical requirements  Technology “Gap Analysis”  New England Collaborative – Innovator grant 24

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