1. Presentation to Advisory Council Boston, MA August 25, 2011

2. 1 Review research framework and provide updates on progress Meeting Purpose Introduce Manatt/Mercer Discuss next steps

3. 2 Manatt Health Experience $ States Payers Providers Foundations and Other Stakeholders $

4. 3 Mercer Health Experience Health Exchange Uninsured Health Plan Reviews Actuarial Rate Setting $

5. 44 Transition Planning Leverage the Commonwealth’s strong foundation Ensure compliance with ACA requirements Facilitate integration between MassHealth and the Connector Strengthen the role of the Connector in the Insurance Market The Strategic Plan must:... to successfully support health care delivery system reform in the Commonwealth The Commonwealth seeks to evaluate the options for providing subsidized coverage, Exchange (i.e., Health Connector) structure, and operations in light of federal health reform. Massachusetts is operating major elements of federal health reform and today operates a mature and successful health benefit exchange (HBE).

6. 5 Transition Goals and Priorities Comply with or, seek waiver from, specific ACA requirements related to coverage and eligibility Maximize continuity of coverage from as-is to to-be –Minimize harm to transitioning populations Maximize continuity of coverage among to-be coverage options Leverage federal dollars to provide state fiscal relief Leverage purchasing power of the Connector and MassHealth Identify and optimize administrative simplification opportunities

7. 6 High Level Timeline Exchange must be operational – January 1 Funding Opportunities Reporting Requirements Key Federal Dates State Milestones HHS Exchange Establishment Grants awarded – May 23 CMS to issue initial Exchange and Medicaid eligibility regulations – July, August HHS Approval that Exchange will be operational by 1/1/14 – January 1 State must spend grant funds - September 30 Early Innovator Grant Awards – February 15 (Applications due 12/22/10) Early Innovator Grant period ends – February Exchange must be self- sustained – January 1, 2015 HHS Exchange Establishment Grants RFP – February Final report & Federal Financial Report due – 90 days within project end date Project Kick-Off – June 13 Quarterly report – January Quarterly report – April Quarterly report – July Exchange must be “soft- launched” – July 1 Quarterly report – October CMS to issues second set of Exchange regulations – September HHS Exchange Establishment Grants Level 1 and Level 2 deadline – September 30 HHS Exchange Establishment Grants Level 1 and Level 2 deadline – June 30 HHS Exchange Establishment Grants Level 1 and Level 2 deadline –December 30 HHS Exchange Establishment Grants Level 2 deadline – June 29 HHS Exchange Establishment Grants Level 2 deadline – March 30 2014 Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 Jun 2011 Jul 2011 Sept 2011 Oct 2011 Nov 2011 Dec 2011 Aug 2011 20122013 ACA Sec. 1321(e) provides that HHS will provide assistance to existing Exchanges for coming into compliance with the ACA and a presumption of compliance after this process

8. 7 Research Approach Analyzed State statute, regulations, and administrative guidance: Analyzed Federal statute, regulations, and guidance Developed preliminary gap analysis Conducted key informant interviews Identified policy questions/issues for further research Developing high-level transition roadmap and assessment Developing modeling framework and assumptions JuneJulyAugustSeptember Conduct additional federal and state statutory, regulatory, and administrative guidance research Conduct modeling Evaluate transition options Conduct gap analysis Assess coverage options balancing the interests of multiple stakeholders Present findings and recommendations to Subsidized Insurance Workgroup, Advisory Council, Executive leadership, and stakeholders

9. 8 Individual Coverage Transition Options

10. 9 Findings: As-Is Takeaways Coverage of 98% of Commonwealth residents has been achieved through a patchwork of programs. 98% Programs vary in: Eligibility levels and requirements Benefit packages Cost-sharing Funding sources Responsible agencies/entities 1 2 3 4 5

11. 10 Findings: As-Is Takeaways 400% FPL 300% 200% 100% Children < 1 (35,185) Population Children 1 – 18 (449,687) Parents (191,060) Preg. Women (pending) BCCTP (351) Childless Adults MH (12,511) Childless Adults LTU (88,283) HIV+ (1,262) Indiv. Unempl. Comp (pending) Small Biz Empl. (5,226) Imm. 5 yr Bar (15,474) Imm. GF (pending) Indiv Inelig for MassHealth (195,984) Disabled Adults & Children (20,419) Non- qual Aliens (58,365) Non- qual Aliens Children (26) MassHealth Standard Family Assistance Medical Security Plan MassHealth Essential MassHealth Basic Common wealth Care Bridge Common wealth Care Common wealth Choice MassHealth CommonHealth Family Assistance MassHealth Limited Children’s Medical Security Plan Health Safety Net Insurance Partnership

12. 11 Findings: To-Be Takeaways Transition offers the opportunity to dramatically simplify the patchwork, benefiting consumers and the Commonwealth. MassHealth Basic MassHealth Essential Family Assistance (CHIP) MassHealth Standard Medical Security Plan Insurance Partnership Commonwealth Care Commonwealth Care Bridge Commonwealth Choice MassHealth Benchmark Family Assistance (CHIP) MassHealth Standard Basic Health Plan (option) Qualified Health Plan Health Safety Net

13. 12 Transition from As-Is to To-Be: First Level Assessment As-Is To-Be 2014 Benefit Change Consumer Cost Sharing Change Federal Financial Participation State Financing First level assessment

14. 13 Transition from As-Is to To-Be: Second Level Assessment As-Is To-Be Connector Financial Sustainability Robust Connector Marketplace Efficient Administration of Subsidized and Non- subsidized Insurance Options Leveraging Payment and Delivery System Reform Second level assessment

15. 14 In Summary Effective administration of preferred options is the final question Implications for Connector scale and sustainability Implications of the potentially divergent delivery models in MassHealth (MCO, PCC) and the Connector delivery model (health plans) Balancing scope of benefits, consumer cost-sharing, access to federal financing, and impact on state expenditures Balancing the advantages, disadvantages and risks Final Transition Decisions will be Informed by: Delivery Model Basic Health Program Cost - Benefit Analysis Connector Sustainability Optimizing to advance payment and delivery system reform Purchasing Leverage

16. 15 Conduct additional federal and state statutory, regulatory, and administrative guidance research Conduct modeling Evaluate transition options Conduct gap analysis Assess coverage options balancing the interests of multiple stakeholders Present to Subsidized Insurance Workgroup, Advisory Council, Executive leadership, and stakeholders Next Steps