“THE IOWA MARKETPLACE (EXCHANGE) IN 2014” CAE Breakfast Meeting Independent Insurance Agents of Iowa September 6, 2013 Jesse A Patton LUTCF, HIA, MHP, FAHM, HIPAAA, EHBA, PHIAS

Coverage expansions to reduce number of uninsured Health insurance reform to improve affordability of coverage Delivery system changes to contain costs and improve quality The Patient Protection and Affordable Care Act

Major Consumer Protections in the Affordable Care Act The Affordable Care Act included many provisions designed to help ensure that consumers have access to effective health care coverage, and to limit their costs. Extension of health insurance coverage to children up to age 26 Expansion of the “guaranteed issue” requirement to ensure that health insurance issuers offer group and individual market policies to any eligible individual in a state, regardless of health status Prohibition on charging consumers a higher premium based on health status or gender Elimination of annual and lifetime coverage limits Prohibition on coverage limitations or exclusions based on pre-existing conditions Prohibition on precluding a qualified individual’s participation in an approved clinical trial, or discriminating against that individual based on such participation Introduction of an 80/20 MLR rule to ensure that at least 80 percent of the premium dollars paid to a health insurance issuer are spent on providing health care

One-year transition period for employer information reporting requirements ► The Administration on July 2 announced that compliance with employer information reporting requirements under IRC §§6055 and 6056 will be mandatory for 2015, rather than for ► IRC §6055: Reporting of enrollment in health coverage by insurers and self-insured employers ► IRC §6056: Reporting of coverage offered by large employers ► The Administration plans to engage with employers, insurers and experts to streamline the ACA’s information reporting requirements. ► The Administration plans to issue proposed rules on the information reporting requirements this summer.

Transition period for employer tax penalties ► As part of the transition period, large employers will not face tax penalties under the ACA’s employer mandate (IRC §4980H) for ► Employer tax penalties will apply beginning January ► The Administration encouraged employers to “maintain or expand health coverage” in 2014.

Key employer provisions remain in effect ► The transition period does not apply to: ► Individual mandate ► Establishment of Exchanges, including availability of premium assistance tax credits and cost-sharing subsidies ► Medicaid expansion ► Insurance market rules such as the prohibition on lifetime and annual limits on essential health benefits, and the coverage of preventive care at no cost ► Prohibition on waiting periods exceeding 90 days ► Exchange notices to employees ► Transitional reinsurance fee & PCORI fee

Health Insurance Marketplaces Beginning in 2014, insurance Marketplaces will allow consumers to look for the plan that is best for them   You might think of these as an Amazon.com for health insurance   Insurance options available at your fingertips  States can design their own Marketplaces or the federal government will run the marketplace  In Missouri, Kansas and Nebraska, the federal government will operate the Marketplace. In Iowa, the Marketplace is operated jointly by state and federal officials  These will be the same marketplaces where members of Congress will choose their health insurance plans

Continuum of Exchange Options State-based Exchange State operates all exchange activities State-Federal Partnership Exchange State operates plan management and/or consumer assistance activities; may determine Medicaid/CHIP eligibility Federally-Facilitated Exchange HHS operates all exchange activities; state may determine Medicaid/CHIP eligibility

States Health Insurance Marketplace Decisions, May 10, 2013 Partnership Marketplace (7 states) State-based Marketplace (16 states and DC) Federally-facilitated Marketplace (27 states) * In Utah, the federal government will run the marketplace for individuals while the state will run the small business, or SHOP, marketplace.

Consumer Assistance Options Available for Getting People Enrolled into Exchange Coverage Navigator Program In-person Assister Program (optional) Website management Education and outreach Call center operations Written correspondence with consumers to support eligibility and enrollment State-based Exchange: States assumes all functions Federally – Facilitated Exchange: HHS assumes all functions State Functions Outreach & Education In-person Assister Program HHS Functions Website Call center Written correspondence Navigator Program

©2010 Steptoe & Johnson LLP Marketplaces A web portal “marketplace” for health insurance Federal Government sets criteria for plan participation and purchaser eligibility provides subsidies for small businesses and individuals sets up Marketplace if a state fails to Individuals (no subsidies for ones offered employer-based coverage, unless that coverage is “unaffordable”) Small Businesses Up to 100 employees, can buy thru Marketplace Employees States each sets up own Marketplace will be involved in premium reasonableness reviews; can approve/reject as provided under state law Self-insured plans not eligible to Participate

Automated Eligibility Processes Facilitate Enrollment into Coverage Through the Exchange or Public Coverage Single Door to Health Coverage Eligibility for Multiple Programs Determined in Real Time Information Provided on Available Plans for Comparison Enrollment Into Selected Plan Plan A Plan BPlan C     John Doe 123 Main Street Health Coverage Medicaid/CHIP Unsubsidized Exchange Coverage Premium Tax Credits

No wrong door to enrollment

2014 Marketplaces The ACA Streamlines Enrollment Processes, Making it Easier to Obtain Coverage Dear ______, You are eligible for… Data Hub $ # Multiple Ways to Enroll Use of Electronic Data to Verify Eligibility Single Application for Multiple Programs Real-Time Eligibility Determinations Medicaid CHIP Exchange HEALTH INSURANCE

Finding the right health plan  Once an account is created, the website offers:  A comparison tool to evaluate policies  A calculator to estimate each plan’s:  premiums  co-payments  deductibles  maximum out-of-pocket costs  Filtering options to let the user narrow the choices based on specific criteria  The most relevant plans are presented first, based on the applicant’s answers  Key data listed with links to plan details

Call Center launched in June TTY/TDD line for hearing-impaired callers:  Helps with wide range of questions, including:  Health insurance and how it works  Premium assistance and health care affordability programs  Steps to take now to get ready for open enrollment beginning Oct. 1  General inquiries, such as “I have insurance. How will I be affected?”  After Oct. 1, the call center will help with:  Filling out the application  Plan selection  Assistance is Available 24/7 in English and Spanish  Help in 150 other languages is available Marketplace Call Center

NOTE: The June 2012 Supreme Court decision in National Federation of Independent Business v. Sebelius maintained the Medicaid expansion, but limited the Secretary's authority to enforce it, effectively making the expansion optional for states. 138% FPL = $15,856 for an individual and $26,951 for a family of three in The ACA Medicaid Expansion Fills Current Gaps in Coverage Adults Elderly & Persons with Disabilities Parents Pregnant Women Children Extends to Adults ≤138% FPL* Medicaid Eligibility Today Medicaid Eligibility in 2014 Limited to Specific Low-Income Groups Extends to Adults ≤138% FPL*

With Medicaid ExpansionWithout Medicaid Expansion Up to 100% of povertyMedicaidUnsubsidized % of poverty*MedicaidExchange % of povertyExchange >400% of povertyUnsubsidized NOTES: Poverty Level is $11,170 for a single person and $23,050 for a family of four *Medicaid eligibility cut off is 133% FPL, however 5% of income is disregarded, making the threshold 138% FPL SOURCE: Kaiser Family Foundation How People Get Covered

Annual premium amount paid by policy holder and premium tax credit Annual Premium Amount and Tax Credits for a Family of Four Under the Affordable Care Act, 2014 Notes: For an family of four, policy holder age 40, in a medium-cost area in Premium estimates are based on an actuarial value of Actuarial value is the average percent of medical costs covered by a health plan. FPL refers to federal poverty level. Source: Premium estimates are from Kaiser Family Foundation Health Reform Subsidy Calculator, Required premium payment by policy holder Premium tax credit Contri- bution capped at 3.3% of income Contri- bution capped at 4.0% of income Contri- bution capped at 6.3% of income Contri- bution capped at 8.05% of income Contri- bution capped at 9.5% of income $32,326$35,137$46,850$58,562$70,275$117,125 Full premium = $12,130

Affordable Health Plans  Expected contribution to insurance premiums, silver-level plan  For an individual: Reduction in Consumer’s Expected Approximate Out-of-Pocket Portion of Annual Income % of FPL Contribution Monthly Premium Maximum Total costs  $13, * 2% of income $23 2/3 6%  $16, % $47 2/3 6%  $20, % $86 2/313%  $25, % $155 1/227%  $31, % $ %  $40, % $ %  Incomes below 250% of the poverty level qualify for lower co-pays and deductibles * This level of income would be eligible for Medicaid in states that expand their programs in accordance with the Affordable Care Act

Affordable Health Plans  Expected contribution to insurance premiums, silver-level plan  For a family of 4: Reduction in Consumer’s Expected Approximate Out-of-Pocket Portion of Annual Income % of FPL Contribution Monthly Premium Maximum Total costs  $28, * 2% of income $47 2/3 6%  $33, % $97 2/3 6%  $41, % $177 2/313%  $52, % $317 1/227%  $64, % $ %  $82, % $ %  Incomes below 250% of the poverty level qualify for lower co-pays and deductibles * This level of income would be eligible for Medicaid in states that expand their programs in accordance with the Affordable Care Act

Maximum Limits on Health Insurance Exchange Subsidy Repayments, by Income Level Note: Repayment amounts reflect current law. Individuals and families with income greater than 400% FPL are required to repay the full amount of advance payment received. Source: Public Law April 14, 2011,

Individual responsibility  Beginning in 2014, individuals can choose to:  carry health insurance, or  pay a fee to offset the cost of treating the uninsured  Qualifying coverage: Medicare, Medicaid, Veterans’ coverage, Tri-care, employer coverage, private insurance  The fee is the greater of:  $95 per person in the household or 1% of your income that exceeds the tax filing threshold in 2014  $325 per person or 2 percent of income in 2015  $695 per person or 2.5% of income in 2016 and thereafter  Maximum per household is the income percentage or 3 times the flat fee  The flat fee for each child is half the adult amount

Sources of enrollment help  Navigators  Navigators are eligible for grants from Marketplace funds  They must provide community outreach and education programs  They are agencies or individuals trained to work with the uninsured and the underinsured and with employers buying health benefits for employees  Key groups that Navigators will work with include:  Young people who may never have had health insurance  The self-employed, many of whom previously could never afford insurance  Vulnerable populations, including  Low-income groups  Non-English-speaking populations  People with disabilities  Workers between jobs  To ensure that their advice is impartial, Navigators cannot accept compensation directly or indirectly from any health insurer  Navigators will be listed on the Marketplace website under “Find Local Help”

Sources of enrollment help  Application Counselors  Receive the same training as Navigators, must pass the same test  Counselors are certified by the organization they work or volunteer for  Most counselors are likely to be staff and volunteers of organizations with a business interest or a social mission to get people insured  Organizations designated as Application Counselors will be listed on the Marketplace website under “Find local help”  Counselors must show applicants all insurance options available  To ensure unbiased advice, counselors cannot accept compensation directly or indirectly from a health insurer

 Licensed health Insurance agents and brokers  Paid by insurers  Must undergo training on:  website enrollment  Marketplace affordability programs  Medicaid options  security of personal information  Brokers and agents represent certain insurance companies and are not required to show applicants all insurance options Sources of enrollment help

The fall campaign  A tremendous effort is under way by both public and private organizations to help people enroll  A few examples:  $63 million for Navigator organizations across federally run Marketplaces  $1.33 million in Missouri  $600,000 each in Kansas, Iowa and Nebraska  Individual grants were awarded in late-August 2013  $150 million for Community Health Centers to enroll clients  $2,947,351 awarded in Missouri  $1,633,928 awarded in Kansas  $1,474,583 awarded in Iowa  $678,562 awarded in Nebraska

Six Health Insurance Companies will Sell Plans on Iowa Health Exchange CoOportunity Health, Gunderson Health Plan, Avera Health Plans, Health Alliance Midwest, Sanford Health and Coventry Health Care of Iowa CoOportunity Health and Coventry will provide statewide individual insurance coverage plans. CoOportunity intends to offer statewide small group plans as well Gunderson and Avera will offer both individual and small group plans in specific regions and Avera and Sanford will exclusively sell small group plans

2014 – Product Framing Plus catastrophic plan offering for individuals younger than 30/financial hardship The benefit requirements listed above for exchange plans will also apply to Individual and small group fully insured plans sold outside of the exchanges

Essential Benefits Defined in 2014 Section 1302(b) defines essential health benefits to include: Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and Substance use disorder services Prescription drugs Rehabilitative and habilitative services and devices Laboratory Services Preventive and wellness services and chronic disease management Pediatric services, including oral and vision care

TierActuarial Value DeductiblePatient Coinsurance Out-of-Pocket Limit Bronze 160%$4,37520%$6,350 Bronze 260%$3,47540%$6,350 Silver 170%$2,05020%$6,350 Silver 270%$65040%$6,350 NOTES: SOURCE: Kaiser Family Foundation Illustrative Plan Designs for Single Coverage

Minimum Plan Value Calculation Large Employer Qualified Health Plan (QHP) Test – Does the plan pay for at least 60 percent of the cost of benefits? IRS has created a “minimum value” (MV) calculator to be used for calculating the actuarial value (AV) of these plans to confirm qualified health plan (QHP) status Rather than being based on EHBs, the larger employer plan MV calculator would consider the costs of four general categories of services: 1.Physician and mid-level practitioner care; 2.Hospital and emergency room services; 3.Pharmacy benefits 4.Laboratory and imaging services

Large Employer's Plan The IRS has come up with three sample plan designs that large employers could use to meet the minimum-value standard: A plan with a $3,500 integrated medical and drug deductible, 80 percent plan cost- sharing, and a $6,000 maximum out-of-pocket limit for employee cost-sharing. A plan with a $4,500 integrated medical and drug deductible, 70 percent plan cost- sharing, a $6,400 maximum out-of-pocket limit, and a $500 employer contribution to a health savings account (HSA). A plan with a $3,500 medical deductible, $0 drug deductible, 60 percent plan medical expense cost-sharing, 75 percent plan drug cost-sharing, a $6,400 maximum out-of-pocket limit, and drug co-pays of $10/$20/$50 for the first, second and third prescription drug tiers, with 75 percent coinsurance for specialty drugs.

Questions