1. 1 Safety Net Health Plans and Health Insurance Exchanges National Association of Public Hospitals Annual Conference September 20, 2011 Jennifer Babcock

2. Agenda  ACAP Survey Results – January 2011  What Keeps Us Up At Night Churn Tax Reconciliation Other?  The 2014, The Affordable Care Act, and Safety Net Health Plans Hopes and Aspirations Reality The Long, Hard (And Rewarding) Road Affordable Care Act Opportunities 2

3. ACAP Survey Results January 2011 3

4. How important is it for your plan to participate in the state insurance Exchange? 4

5. Has your plan participated in the state’s planning process for the development of an Exchange? 5

6. To what extent are you concerned that the following might prevent your plan from participating in the Exchange? Major Concern Minor Concern Not a Concern Not Sure Number of Plans Reserves201083 Accreditation1611 4 Licensing611213 Uncertainty of risk adjustment211704 Uncertainty of reinsurance918104 System changes161465 Network adequacy1019102 State statutory restriction81499 6

7. What Keeps Us Up At Night 7 Reconciliation of taxes Eligibility churn

8. Eligibility “Churn” in Exchange & Medicaid: The Problem in 2014  Medicaid Within 6 months, 40% of Medicaid enrollees will experience coverage disruption After 1 year, 38% no longer Medicaid-eligible; 16% more will have lost and regained eligibility  Exchange Within 6 months, 30% of adults will experience disruption in Exchange eligibility After 1 year, 24% no longer eligible; 19% more will have lost and regained eligibility Source: Rosenbaum & Sommers, “Issues in Health Reform: How Changes May Move Millions Between Medicaid and Insurance Exchanges,” Health Affairs, February 2011 8

9. Tax Reconciliation for Low-Income People  Premium tax credits provided in advance and reconciled at end of tax year.  Individuals who received excess advance premium tax credits (based on projected income) must repay (based on actual annual income). Repayments capped.  Hardship for individuals and families.  Impact on ‘goodwill’ toward Exchanges. 9

10. 2014, The Affordable Care Act, and Safety Net Health Plans 10

11. Hopes & Aspirations  New Business Opportunity!  Meeting the needs of low-income health care consumers in new commercial coverage environment! 11

12. Hopes & Aspirations  Most ACAP plans are considering service to health insurance Exchanges.  States understand the value of Medicaid plans serving as Qualified Health Plans.  KFF Profile of Medicaid Managed Care Programs in 2010: Eight states considering requiring Medicaid plans to serve Exchange. Seven states considering requiring Exchange plans to serve Medicaid. Source: http://www.kff.org/medicaid/8220.cfmhttp://www.kff.org/medicaid/8220.cfm 12

13. Reality  Stiff competition: For State & Federal policies that encourage participation by Safety Net Health Plans For Exchange business.  New commercial functions will be required, including premium collection, marketing, customer service, others.  Major Stumbling Blocks: Risk Adjustment/Reinsurance Reserves Accreditation Network Adequacy 13

14. The Long, Hard (And Rewarding) Road  Asking the right strategic questions; considering how existing lines of business will be impacted by ACA changes in 2014 Medicaid expansion to 16-25 million individuals Medicare SNPs Other?  Opting to enter Exchange…How? Independent Qualified Health Plan CO-OP Part of multi-state option Partnership with other community-based plans  Building reserves, capacity, functions 14

15. But at the end of the road… Opportunities!  Medicaid expansion to 16-25 million individuals  Exchange coverage plus substantial subsidies  Basic Health Program 15

16. Thank You! Jennifer McGuigan Babcock ACAP 202-204-7518 jbabcock@communityplans.net 16