Presentation on theme: "2012 Annual Meeting Association of Counties"— Presentation transcript:
1 2012 Annual Meeting Association of Counties Rebecca TernesDeputy CommissionerNorth Dakota Insurance Department
2 Healthcare Reform Overview Supreme Court RulingEmployer Health Insurance RequirementsHealth Insurance ExchangeEssential Health BenefitsWhat’s Next for Healthcare Reform?
3 Supreme Court Ruling 5-4 split vote Congress can tax people with enough income that choose to go without health insurance.The Federal government does not have the power to force people to buy insurance but it does have the power to impose a tax on those without health insurance.The mandate was important to avoid adverse selection.States cannot lose federal funding for Medicaid programs if they do not expand.
4 Current U.S. Employer Health Insurance Market Half of businesses with 3-9 workers provide health insurance73% of businesses with workers provide health insurance98% of businesses with 200+ workers provide health insuranceAbout 1 in 4 business owners are uninsured in U.S. which makes them individual buyersSource: Kaiser Family Foundation Policy Insights, September 28, 2012
5 Employer health insurance requirements in 2014 More than 200 employees—must auto enroll employees (opt-out)More than 50 employees—must provide essential coverage or pay penalties50 or fewer employees—exemptCounting employees will be different
6 Employer cost vs. benefit analysis Pay for employeeinsuranceGood willCompetitive benefit structureIncentivizing better health of employees and reducing costsTax credits for employers with up to 25 employeesPay the penaltiesSave moneyOne less business decision, less hassle keeping everyone happyAllow employees to buy in or out of Exchange
7 Health Insurance Exchange Individual and small-business (SHOP) Exchange must exist (can be combined)Exchange in every state by Jan. 1, (operational by October 1, 2013)State-based ExchangePartnershipFederally-facilitated ExchangeOutside market remains intact— grandfathered and nongrandfathered
8 Exchanges must: Facilitate comparisons and purchases Administer subsidiesProvide standard comparative infoRate plans on cost and qualityCertify individual mandate exemptionsCoordinate with Medicaid and CHIPEstablish Navigators programBe operational by October 1, 2013 and fully functioning by January 1, 2014
9 SHOP Exchange Traditional employer model or Employee choice Employer enrolls and makes choice of plan(s) for employeesorEmployee choiceEmployer chooses benefit level (metals)Employee picks which insurer and which plan within metal categoryDefined Contribution only
10 ND’s Exchange statusApplied for and received $1 million Exchange Planning GrantCompleted study in December 2011Bill in 2011 regular session to plan for implementationBill in 2011 special session for state-based Exchange—failed 64-30Leaves us with a Federally Facilitated Exchange for nowFinal decision date is November 16, 2012
11 Essential Health Benefits (EHB) Will have to be included in nongrandfathered plansIndividual and small group marketsIn and outside of the Exchange, Medicaid benchmark and benchmark-equivalent and basic health programs
12 Essential Health Benefits (EHB) Items and services in 10 categories:Ambulatory patient servicesEmergency servicesHospitalizationMaternity and newborn careMental health, substance abuse disorder servicesPrescription drugsRehabilitative and habilitative services and devicesLaboratory servicesPreventive, wellness, chronic disease managementPediatric services, including dental and vision
13 EHB timelineMarch 31, 2012: determine potential plans from four options:Largest plan by enrollment in any of the three largest small group insurance products in the stateAny of the largest three state employee health benefit plans by enrollmentAny of the largest three national FEHBP plans by enrollmentLargest insured commercial non-Medicaid HMO
14 EHB timelineSeptember 30, 2012: recommend to the Secretary of HHS the state’s benchmark planSecretary will determine if the plan:Meets 10 category requirementsReflects typical employer planAccounts for diverse needsEnsures there are no incentives to discriminateEnsures compliance with Mental Health Parity ActProvides states a role in defining EHBBalances comprehensiveness and affordability
15 EHB benchmark planShould a state not choose a benchmark plan, the default plan would be the small group plan with the largest enrollmentApproved plan will be the benchmark for and HHS intends to review and update EHB for 2016 and beyond.
16 EHB decision implications EHB is thought of as a floor—insurers may add to the benefits and price accordingly, but they cannot take benefits awayBasic plan vs. rich planPricing increasesPremium valueInsurer competitionNetwork adequacy
17 EHB decision implications Choosing a richer planLikely to cause insurers to request premium rate increasesAffordabilitySpecific coverage may cause a plan to be more or less expensive (e.g., fertility benefits vs. laboratory services)May force employers and individuals to purchase insurance they do not want or need
18 EHB decision implications Choosing a basic planPossible market disruption—ND plans are traditionally fairly richSmall employers may terminate previous, richer plans for cheaper basic plansAllows insurers to design unique plans to competeMore variation for employers and individuals shopping in or out of the Exchange
19 ND’s status Analysis Legislative hearings Commissioner sent in a benchmark submission on September 28ND recommendation was the Sanford Health Plan plus the CHIP pediatric dental and vision benefitsHHS Secretary will now publish choices, take comment and make final decision.Date???
20 What’s next for Healthcare Reform? Lots of work for insurers to get ready for 2014Complex decisions for employers, employees and individual health insurance consumersTraining for agents and agenciesInsurance Department to work with the ExchangeNDDHS Medicaid to work with the ExchangeContinued implementation of market reformsElection Results? Congressional action?