Mississippi Insurance Department 1001 Woolfolk State Office Building 501 North West Street Jackson, Mississippi · 39201

A History of Health Insurance Exchanges Not a new concept Idea was born in the 1970’s 1990’s “Hillarycare” introduced “buying co-ops” Republicans hated it Early 2000’s Heritage Foundation came up with a health insurance exchange concept Looked very similar to a “buying co-op” Included individual mandate Democrats hated it 2006 Massachusetts created the Massachusetts Health Insurance Connector Authority under Governor Mitt Romney Based on Heritage Foundation exchange concept 2

A History of Health Insurance Exchanges 2009 Utah launched its health insurance exchange Designed for small employers only; represents a market-driven solution 2010 Democrats borrowed the Exchange concept and inserted it into PPACA Republicans hated it In Mississippi: The concept of an exchange is accepted across party lines as good public policy Governor Haley Barbour advocated for a market-based, consumer-oriented exchange for 3 years prior to the passage of the Affordable Care Act We are trying to fulfill that vision by creating a state-based market-driven solution Only % of Mississippians have a good understanding of what services an exchange actually provides 3

What is an Exchange? Essentially, an Exchange is a marketplace for major medical insurance. A one-stop shop for health insurance -- similar to Travelocity, Expedia, and Priceline. This is perhaps an underestimate in that the Exchange: Will be a massive undertaking; Will provide many services beyond simply offering different insurance products for sale; The web portal comparison piece is just the “tip of the iceberg.” 4

Two Types of Exchanges Individual Health Insurance Exchange 5 Small Employer Health Insurance Exchange Individuals & families may purchase qualified coverage through Qualified Health Plans Purchaser may be eligible for premium subsidies—based on income level Small businesses with up to 100 employees may purchase qualified coverage Premium subsidies are not available through the SHOP exchange (tax credits are available for qualified employers) States may choose to operate two separate exchanges or combine into a single mechanism

Exchange Functions Certify and decertify plans to be sold on the Exchange Operate a toll-free customer service hotline Maintain a website to provide standardized information on plans Use a standardized format for presenting coverage options Inform individuals of eligibility for Medicaid, CHIP, etc. Make available a calculator to determine the actual cost of coverage Provide a rating system for plans available through the Exchange Collect premiums for plans sold through the Exchange and forward those premiums to the carrier Operate separate Exchanges for individuals and for small employers Manage the movement of individuals inside and outside the Exchange and between the individual and small employer Exchange Establish a “Navigator” program to assist consumers in enrollment Develop a risk adjustment program to appropriately distribute among carriers the costs associated with high-risk individuals 6

Mandated Exchange Functions 7 7 Portal / Web site Enrollment and Eligibility Interface Enrollment and Eligibility Interface Carrier 1 Carrier 1 Carrier 2 Carrier 2 Carrier 3 Carrier 3 Health Plan #1 Health Plan #1 Plan Comparison Interface Health Plan #2 Health Plan #2 Health Plan #3 Health Plan #3 Administration Interface Communication Interface TREASURY HOMELAND SECURITY HOMELAND SECURITY IRS HHS SOCIAL SECURITY Verify Citizenship Verify Income Tax Credits Verify Residency STATE Medicaid STATE Medicaid Eligibility Reporting Subsidies Cost Reduction CUSTOMER SERVICE Notifications Pay Premiums Employee or Consumer Employee or Consumer Billing or Invoices Employee or Consumer Employee or Consumer Admin, Life Events, etc. Customer Service ONLINE CALCULATOR Display Total Costs ONLINE CALCULATOR Display Total Costs Health Plan #4 Health Plan #4 Carrier 4 Carrier 4 State Insurance Agency Certify, Recertify Decertify Health Plans State Insurance Agency Certify, Recertify Decertify Health Plans Navigator Guidance Data Service Hub Data Service Hub FISCAL AGENT FISCAL AGENT RISK ADJUSTMENT

Minimum Requirements for the Exchange By January 1, 2014, each state shall have in place an operational health insurance exchange to sell individual and small group major medical policies. By January 1, 2013, the Secretary of Health & Human Services (HHS) will determine whether each state will have an effective mechanism in place to run an Exchange by January 1, 2014, and if not, then the Federal government will step in to run the Exchange for the state. Only qualified health plans certified by the Exchange may be offered through the Exchange. 8

What Will a Federal Exchange Look Like? Medicare.gov Will not be tailored to the specific needs of Mississippians “Cookie cutter” exchange for all states that fail to create their own Exchange Federal government may pick two to three national carriers for the Federal Exchange. The Federal government will have sole authority to regulate the insurance plans sold through the exchange to the exclusion of each state’s traditional role in insurance regulation. The Federal government may utilize existing state regulatory agencies to implement law without additional funding or opportunity for input; States will still pay for the Federal exchange. Federal government will regulate health insurance in Mississippi. Federal government will determine eligibility for Medicaid and may withhold funding if a State refuses to enroll individuals that the Federal Exchange deems eligible. 9

Likely State Scenarios in 2014 Three Primary Categories States making significant progress (5-10 states) Will be certified as “approved” Will likely still rely on Federal processes for some functionality States making some progress (30-35 states) Will be certified as “conditionally approved” Will be considered state-federal “hybrid” States making little or no progress (5-10 states) Will have a Federally-facilitated Exchange May continue to work toward a state-facilitated exchange 10

Mississippi Based Exchange States have the right of first refusal to operate an Exchange. Federal Exchange is the fallback. 11

“For Mississippians, By Mississippians” 12

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Mississippi Comprehensive Health Insurance Risk Pool Association The enabling legislation for the Risk Pool is found in Mississippi Code Annotated et seq., 1972 as amended. Subsection (2)(p) specifically states: (2) The association may: (p) Serve as a mechanism to provide health and accident insurance coverage to citizens of this state under any state or federal program designed to enable persons to obtain or maintain health insurance coverage. Section (3) states: (3) The commissioner may, by rule, establish additional powers and duties of the board and may adopt such rules as are necessary and proper to implement Sections through

Mississippi Comprehensive Health Insurance Risk Pool Association The Association is operated by a nine-member board of directors, as stated in Section (2)(a). The board of directors consists of: Four (4) members appointed by the Insurance Commissioner. Two (2) of the commissioner’s appointees shall be chosen from the general public and shall not be associated with the medical profession, a hospital, or an insurer. One (1) appointee shall be representative of medical providers. One (1) appointee shall be representative of health insurance agents. Three (3) members appointed by the participating insurers, at least one (1) of whom is a domestic insurer. The Chair of the Senate Insurance Committee and the Chair of the House Insurance Committee, or their designees, who shall be nonvoting, ex officio members of the board. 15

Exchange Advisory Board & Subcommittees The Commissioner of Insurance issued Bulletin on October 18, 2011, which established an Exchange Advisory Board & Advisory Subcommittees. The Advisory Board will assist the Department of Insurance as it develops rules, regulations, and policy governing the Exchange. The Advisory Board and Subcommittees consist of members representing the following stakeholder groups: 16 A) Educated health care consumers B)Individuals & entities with enrollment experience C) Advocates for hard-to-reach populations D) Small businesses & self-employed individuals E) State government agencies F) Federally-recognized tribes within the State G) Public health experts H) Health care providers I) Large employers J) Health insurance issuers K) Health insurance agents & brokers holding current licenses

17 Exchange Advisory Board & Subcommittees Membership EDUCATED HEALTH CARE CONSUMERS EXPERIENCE IN ENROLLMENT HARD TO REACH POPULATIONS SMALL BUSINESSES & SELF-EMPLOYED INDIVIDUALS PUBLIC HEALTH EXPERTS HEALTH CARE PROVIDERS HEALTH INSURANCE ISSUERS HEALTH INSURANCE AGENTS & BROKERS LARGE EMPLOYERSSTATE GOVERNMENT AGENCIES/DIVISIONS FEDERALLY- RECOGNIZED TRIBES Geroldean Dyse Sherry Abraham Michael Jones Linda Dixon Rigsby Dr. James P. Almas Bucky Murphy Susan Martindale Signe Jones Roy Mitchell Sannie Snell Nancy Stewart Corey Wigging Tammy Bullock Scott Stanford Bryan Lagg Keri Abernathy Therese Hanna Kimberly Hughes Katrina Reynolds Kim Stonecypher Dr. Margaret Gray Dr. Grayson Norquist Kim Hancock Kurt Hellmann Angela Ladner Rims Barber Debbie Ferguson Mary Werner Kay Trapp Jill Bishop Dr. Philip Marler John Reed Marilyn Douglas Thomas Montgomery Sandi Munden Robert Pugh Lee Ann Griffin* Kristy Simms Dr. Morris Hamilton Robert Morris Dr. Jasmine Chapman Beth Dickson Myrtis Small Mitch Morris Dr. Joe Files Gary Ben Bill Oliver Stephanie Barnes Taylor* Dr. Richard Conn Dr. Kristi Henderson Mary Mixon Dr. Lenito Sinay Dr. Frank Reese Keith Heartsill David Elliott Michael Neuendorf Dr. Gail Megason Ann Bishop Dr. Thomas Joiner Dr. Owen Evans Dr. Donald Seago Larry Walker Dr. R.A. Foxworth Stephen Nichols Dr. Tammy Sims Mike Birdsong Dr. Marc Mitchell Dr. W. R. Webb Dr. Claude Brunson Dr. Richard deShazo J. Michael Estes Lorraine Washington Terry Trigg Daniel M. Harrison Emily Lewis Mike Carney Patty Collins Wally Davis Joel Jasper Dudley Wooley Steve Armstrong Doug Henley Cindy Hamman Preston Francis Scott Bingham Dan Gibson Lawrence Kissner Charles Pace Michael Bailey Kyle Godfrey Jeff Album Clinton Mayes Teresa Planch Elizabeth C. O’Keeffe Dr. Michael Patterson John T. Newsome Jerri Avery Dr. Randy Easterling Rita Rutland

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Federal Funding Opportunities Through 2014 Level I: Single-year funding only Period of performance is up to one year post-award Available only through 2012 States may apply through June 29, 2012 Level II: Multi-year funding Period of performance is from date of award through December 31, 2014 Available through 2014 States may apply through June 29,

Federal Funding Opportunities Post

Barriers To Implementation Overall lack of certainty 2012 Elections Constitutional challenges Lack of timely guidance from HHS 1,968 new or expanded powers given to the Secretary of HHS Lots of red tape Heavy technology lift Systems development Strained public/private sector resources—not enough vendors Tough statutory timelines Agreement among state officials Stakeholder buy-in 24

United States Supreme Court Individual mandate is upheld as constitutional The penalty for noncompliance with the mandate is a tax Medicaid expansion is coercive to states and therefore unconstitutional 25

Essential Health Benefits Only qualified health plans offering Essential Health Benefits and certified by the Exchange may be offered through the Exchange. HHS issued guidance on Essential Health Benefits on December 16, MID will review plans and determine whether they meet the requirements set for qualified health plans. 26

Essential Health Benefits The guidance released on December 16, 2011, sets forth the intended regulatory approach of HHS, which allows states to select an existing health plan to set the “benchmark” for the items & services to be included in the Essential Health Benefits package. The four benchmark plans are: One of the three largest small group plans in the state; One of the three largest state employee health plans; One of the three largest Federal employee health plan options; The largest HMO plan offered in the state’s commercial market. HHS intends to require that a health plan offer benefits that are “substantially equal” to the benchmark plan selected by the state and modified as necessary to reflect the 10 categories of coverage listed by PPACA. 27

EHB: Ten Categories of Coverage PPACA Section 1302 sets out ten categories of coverage that must be included in the Essential Health Benefits package: 1) Ambulatory patient services; 2) Emergency Services; 3) Hospitalization; 4) Maternity and newborn care; 5) Mental health and substance use disorder services, including behavioral health treatment; 6) Prescription drugs; 7) Rehabilitative and habilitative services and devices; 8) Laboratory services; 9) Preventive and wellness services & chronic disease management; 10) Pediatric services, including oral & vision care. 28

2014 Reforms Prohibition of pre-existing condition exclusions Guaranteed issue Rating rules: No health status 3:1 maximum age rating 1.5:1 tobacco use Single risk pools in individual and small group markets Individual mandate Employer responsibilities 29

The Future of the Law: 2012 Elections Who will occupy the White House? Is “effective” repeal by Executive Order possible? If President Obama is re-elected then PPACA will be implemented by using all means necessary Who controls the House and Senate and to what degrees? Is actual repeal possible? Will statutory timelines remain? If Republicans get Senate, House & Presidency, then through “reconciliation” process (same process used in the Senate to pass PPACA) the funding for many PPACA programs can be stopped. This will do nothing to stop some major reforms (such as guaranteed issue & community rating) from going into effect and this could cause major problems. 30

Mississippi Insurance Department Commissioner Mike Chaney Aaron Sisk · (601)