1. Overview of Health Insurance Exchanges, Basic Health Program, and Dual Eligible Integration September 14, 2011 Amy Tenhouse Director of Policy Department of Policy and Government Advocacy

2. Access to health plans with experience serving culturally diverse, low-income populations. Access Low-income populations have unique social and health care needs. Special Needs States must provide high quality of care. Quality Coverage should be affordable with low premiums and cost sharing. Coverage Strategies should promote continuity of care, stable coverage, and the same health plan options for family members. Care Strategy Forcing certain populations into commercial health insurance exchanges will result in care disruption and higher costs of care. Continuity of Care and Affordability 2 Molina Principles for Healthcare Reform Design

3. Health Insurance Exchanges 3

4. Health Insurance Exchanges (HIX)  Clearinghouse that facilitates individual and small business purchase of health insurance.  Web-based system similar to Travelocity or Expedia  Required duties of the individual Exchange: Enrollment and consumer assistance Eligibility determinations for public programs and subsidies Oversight of Qualified Health Plans Administration of the Exchange  Must be self-sustaining by January 1, 2015 4

5. Molina’s Position on HIX IssuePositionWhy Exchange Participation Managed Care  Participation should be optional for Medicaid MCOs.  If they meet federal exchange standards, they should be pre- approved for the exchange.  MCOs have a record of serving low-income folks that will be similar to many exchange customers. Qualified Health Plans (QHPs)  Certification should be selective; NCQA accreditation is a must–have  MCOs with proven success in serving low–income recipients should be prioritized as QHPs  State’s reform design needs to ensure that customers have access to high quality, affordable health insurance options Benefit Packages  QHPs should offer standardized set of benefits in the exchanges and have input into benefit design  Standardized benefits will prevent adverse selection, simplify benefit choices, & help better customer decisions Brokers  Need total transparency on brokers’ fees so customers can make informed choices  Must ensure that brokers don’t steer healthy folks outside the exchange and create adverse selection within it 5

6. Molina’s Position on HIX IssuePositionWhy Administration and Governance Publicly Administered  Exchanges should be public entities –partnership between Medicaid agency & Insurance Commissioner  Certifying QHPs, coordinating govt. subsidized insurance programs, etc. is best done by an entity with prior experience in such matters Governing Board  Should have state Medicaid agency leadership represented  Ensures integration of Medicaid policy and exchange design & function, without which, the exchange would fail Advisory Board  Should have a broad cross section of industry & consumer groups  Advice from broad range of industry experts will lead to better exchange design decisions 6

7. Molina’s Position on HIX IssuePositionWhy Structure Geographic Scope  Should be statewide but plans allowed to serve sub– regions set up to conform with state’s Medicaid regions  Will maximize consumer choice and allow plans that don’t have a statewide presence to be on the exchanges Small Group & Individual HIX  Small group and individual markets should be separated on the exchange  Marketing, outreach, distribution channels, networks are all different for these two groups Large Group Employers  Large employer groups should not be allowed on the exchange in 2017  Exchange is a solution for the individual and small group markets, not a substitute for the large group market 7

8. Molina’s Position on HIX IssuePositionWhy Functions, Responsibilities, & Standards Eligibility Determination  Determine eligibility thru ‘no wrong door’ approach linked to state Medicaid agency eligibility processes  Annual determination & open enrollment  Will help to minimize the churn between Medicaid and the exchange Plan Selection – Market Organizer  Exchange should be “selective contractor”  Customers will receive high quality affordable coverage Premium Administration Premiums  Exchanges should collect premiums  Simpler to consolidate subsidy calculation & premium collection Adverse Selection Protecting against Adverse Selection (AS)  Same rules in or out of the exchange  Monitor marketing in non- exchange markets to stop steerage of the healthy  AS will decrease MCO participation in exchanges and will increase prices and decrease choices for consumers 8

9. HIX State Efforts HIX implementation is at various stages in Molina states: 9 Legislation Introduced and/or passed Working Groups Established Advisory Groups Appointed Federal Exchange Grant Application & Implementation No Action

10. Molina State Implementation of ACA: Exchange Activity in 2011 Enacted Legislation Legislation Vetoed Legislation Died No Legislation Introduced Legislation Pending

11. Basic Health Program 11

12. Basic Health Program Who Is Eligible? 12  Citizens and lawfully present immigrants who: Are ineligible for Medicaid; Have incomes at or below 200 percent of the federal poverty level (FPL); and Lack affordable access to comprehensive employer-based coverage, as defined by the ACA.  Generally, there are two groups: Individuals between 133 and 200 percent FPL Lawfully present immigrants below 133 percent FPL who are ineligible for Medicaid (e.g., legalized within the last 5 years)

13. Basic Health Program Form of Coverage 13  State contracts with health plans or provider networks Competitive bids, multiple options for consumers (if possible)  BH-eligible people may not use the exchange  Premiums no more than what consumers would have paid in exchange  Out-of-pocket cost-sharing at or below certain levels Statute: silver and gold actuarial value levels HHS may say that OOP costs may not exceed levels in the exchange  At least minimum essential benefits  MLR at least 85% Federal payments = 95% of federal subsidies if BH enrollees had been in the exchange

14. Molina’s Position on Basic Health Program 14 States should consider the Basic Health Program (BHP) for lower–income segments of exchange eligible groups The BHP can provide more comprehensive and affordable care for the low– income populations than what would be available to them on the exchanges BHP can offer a complete set of benefits as well as cost sharing mechanisms Bottom line: BHP option is an ideal alternative to the exchanges for covering low–income individuals

15. Reasons for Adopting Basic Health Program  Greater enrollment, more stable coverage as families stay together  BHP could smooth out the “cost–sharing shock”  Cost–sharing in the BHP would mitigate concerns about reduced preventive care and poorer outcomes for the low– income population  Provides states with more leverage in its direct purchases of coverage by allowing it to now buy on behalf of additional covered lives  A potential place to seamlessly absorb some of the children who will be impacted if CHIP funding is not extended after 2015 15

16. Reasons for Adopting Basic Health Program  States could invest unused funds into additional services including the ones that they fund with state $$ today.  Alternative for states looking to save previous expansions of Medicaid programs beyond minimal Federal levels or their locally developed programs for those above 133% of FPL  Supports safety net providers through higher reimbursements and retaining their patients  Medicaid/CHIP MCOs can easily extend services to BHP members based on their experience, cost, readiness, and knowledge of this population 16

17. Molina State Implementation of ACA: Basic Health Plan Activity in 2011 No Legislation Introduced Legislation Pending Existing Program prior to ACA

18. Basic Health Program State Efforts  Most Molina states have not begun to establish/consider BHP implementation. California is exception. Washington has existing program.  We have drafted BHP legislation that can be used in lobbying efforts. 18

19. Dual Eligible Integration 19

20. Federal Medicare-Medicaid Coordination Office “Office of the Duals”  Focuses on improving Coordination between Medicare and Medicaid for dual eligibles  Will help to coordinate contracting and oversight functions by states and CMS  Focus in three major areas: Program Alignment Data and Analytics Models and Demonstrations 20

21. Federal Medicare-Medicaid Coordination Office  To date, Coordination office initiatives include: State demonstrations to integrate care for dual eligibles Integrated care resource center available to all states Initiative to align the Medicare and Medicaid Programs Medicare data for dual eligibles for states Demonstration program to test financial models to support state efforts integrate care for duals Reducing preventable hospitalizations among nursing facility residents 21

22.  State Demonstrations to Integrate Care for Duals: Integration Grants of up to $1 million each were awarded to 15 States to design new integrated care models. Grants awarded to four Molina Healthcare states: CA, MI, WA, WI 22 Federal Medicare-Medicaid Coordination Office

23. Status of Demonstration Grants Within Our States DHCS will initially implement integrated care pilots in four counties. At least one of the pilots will be managed by a County Organized Health System and at least one pilot program will be within California’s Two-Plan County Model. Major stakeholder meetings in May 2011, Oct 2011 and March 2012. Timeframe: RFP’s -Oct 2011, Announcement of Pilot Sites and Contractors -March 2012, Launch Pilots -Last quarter of 2012. Molina Healthcare of California State Medicaid program will serve as designated oversight entity. State will contract with MCOs, ACOs, SNPs and other capitated entities to manage and coordinate care on a local level. Delivery model: Robust care coordination program, health homes with a single care coordinator and comprehensive provider network. Statewide process for stakeholder input during Summer 2011. Timeframe: Implement proposal in April 2012. Molina Healthcare of Michigan 23

24. 24 Phase I: Focused on chronic care management initiatives already serving Washington Medicaid patients. Phase II: Explore how Medicaid managed care can better serve dual eligibles. Phase III: Finalize models, set up integrated managed care systems for duals, and analyze shared savings opportunities. Timeframe: Phase I- 2012, Phase II-July 2012, Phase III- Late 2012- 2013, Fully integrated systems for duals statewide- 2017. Molina Healthcare of Washington State to function as designated oversight entity. State will contract with existing PACE/Partnership organizations and like entities. Goal: One entity to be responsible for all acute, primary and long term care services and provide care coordination. Timeframe: Planning through June 2012, Pilot in 3-4 sites- July 2012, and establish additional demonstration sites -Jun-Dec 2013. Molina Healthcare of Wisconsin Status of Demonstration Grants Within Our States

25. Financial Models to Support State Efforts to Integrate Care for Duals  CMS seeks to test two financial models to better align the financing of the Medicare and Medicaid Programs. Capitated Model: A State, CMS, and a health plan enter into a three-way contract, and the plan receives a prospective blended payment to provide comprehensive, coordinated care. Managed Fee-for-Service Model: A State and CMS enter into an agreement by which the State would be eligible to benefit from savings resulting from initiatives designed to improve quality and reduce costs for both Medicare and Medicaid.  State Medicaid Director Letter released on July 8, 2011  Letter of Intent due to CMS on October 1, 2011  Target implementation date is 2012 25