A Blue Cross and Blue Shield of Nebraska Presentation

Healthcare Reform: The Next Healthcare Reform: The Next StepsSteps

Kurt Genrich Kurt Genrich EHA Plan AdvocateEHA Plan Advocate

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Topics Covered

• What to expect on regulationsWhat to expect on regulations

• TimelineTimeline

• Focus on Focus on Near Term Near Term ChangesChanges

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Key Provisions: Insurance Reforms/Plan Requirements

• Review of Review of “unreasonable” “unreasonable” ratesrates

EnactmentEnactment

• Federal high risk Federal high risk pool (HRP)pool (HRP)

• HHS web portalHHS web portal

• Early retiree Early retiree reinsurancereinsurance

Sept 2010+

• For kids: No pre-ex For kids: No pre-ex * * , GI, GI

• Dependent coverage to 26Dependent coverage to 26**

• Not Currently on: 9/01/11Not Currently on: 9/01/11

• Limits on rescissionsLimits on rescissions

• Internal/external appealsInternal/external appeals**

• MLRs (80% individual/ MLRs (80% individual/ small group; 85% group)small group; 85% group)

• No lifetime limitsNo lifetime limits**

• No preventive cost-sharingNo preventive cost-sharing**

• Patient protectionsPatient protections**

2014

• GI/CRGI/CR

• No Pre-ex No Pre-ex

• Age band (3:1)Age band (3:1)

• Risk adjustmentRisk adjustment

• ExchangesExchanges

• Employer Employer penaltiespenalties

• Individual Individual mandatemandate

* Impact all plans

Plan YearsPlan Years Beginning Beginning

3/23/10 June/July ’10

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Long Term Highlights

• Largely maintains employer-based system

• No new government-run plan

• ERISA protections maintained for self insured plans

• Maintains state regulation under federal framework of rules for insured business

• Individual Responsibility

Long Term Provisions (2014) Long Term Provisions (2014) ---Quick Overview ---Quick Overview

• Individual Mandate (2014)Individual Mandate (2014)

– Penalties: $95 in 2014, phasing up to greater of $695 or 2.5% of Penalties: $95 in 2014, phasing up to greater of $695 or 2.5% of incomeincome

– Premium Subsidies for those under 400% FPLPremium Subsidies for those under 400% FPL

• Medicaid Expanded to 133% FPL. (State option before that.)Medicaid Expanded to 133% FPL. (State option before that.)

• Employer Responsibility. No Employer Mandate, but “Free Rider” Employer Responsibility. No Employer Mandate, but “Free Rider” penalties if a company’s employees take subsidies or access the penalties if a company’s employees take subsidies or access the exchange exchange

• ExchangesExchanges that will broker qualified plans, provide customer assistance. that will broker qualified plans, provide customer assistance.

• Co-opsCo-ops – non profit member run insurers. – non profit member run insurers.

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Grandfathered PlansGrandfathered Plans

• ““Grandfathered Plans” -Certain provisions of reform Grandfathered Plans” -Certain provisions of reform will not apply to plans issued prior to effective date will not apply to plans issued prior to effective date 3/23/10. 3/23/10.

– A Plan does not lose grandfather status merely by virtue of A Plan does not lose grandfather status merely by virtue of adding new employees or dependents. Statute is silent as to adding new employees or dependents. Statute is silent as to adding late enrollees. adding late enrollees.

– Unclear what could cause a Plan to lose grandfather. Unclear what could cause a Plan to lose grandfather. • Major revisions to the plan? Mergers? Regs needed. Major revisions to the plan? Mergers? Regs needed.

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Key TermsKey Terms

““Essential Benefits”Essential Benefits”– A comprehensive set of benefits to be defined by HHS A comprehensive set of benefits to be defined by HHS

– Scope must be equal to “Typical Employer Plan.” as Scope must be equal to “Typical Employer Plan.” as determined by CMS actuary following survey. determined by CMS actuary following survey.

– Must include at a minimum: Must include at a minimum: • Ambulatory, Emergency services, Hospitalization, Maternity, Ambulatory, Emergency services, Hospitalization, Maternity,

Mental and substance, Drugs, Rehabilitative and habilitative Mental and substance, Drugs, Rehabilitative and habilitative services and devices, Lab, Preventive and wellness and DM, services and devices, Lab, Preventive and wellness and DM, and Pediatric services including oral and vision care. and Pediatric services including oral and vision care.

• ““Qualified Health Plan” –one that is certified to have all Qualified Health Plan” –one that is certified to have all the Essential Benefits with cost sharing at tiers of the Essential Benefits with cost sharing at tiers of Bronze (60%) to Platinum (90%), or Catastrophic for Bronze (60%) to Platinum (90%), or Catastrophic for under age 30. under age 30.

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The “2010” ProvisionsThe “2010” Provisions

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1. No Preexisting Exclusion for Children

2. Dependent Coverage to 263. Rescissions Restricted

4. No discrimination in favor of highly compensated

5. Early Retiree Reinsurance6. Rate Review

7. Medical Loss Ratio8. Internal & External Appeals9. Emergency out of network

10.PCP/ Pediatrician Choice11.OB/ Gyn direct access

12.Lifetime Dollar Limits Prohibited

13.Annual Dollar Limits Restricted14.Coverage & Cost Sharing

Disclosure Requirements15.Preventive w/ no cost sharing16.Continued Application of State

Mandates

1a. No Preexisting Exclusion for Children,1a. No Preexisting Exclusion for Children,1b. Guar. Issue for Children 1b. Guar. Issue for Children

1a) No pre-ex exclusions in plans for individuals under 1a) No pre-ex exclusions in plans for individuals under age 19. age 19.

1b) Guarantee Issue for Children= no denial of 1b) Guarantee Issue for Children= no denial of contract due to health. Regs expected soon. contract due to health. Regs expected soon.

Applies to Grandfathered Group Plans, but not Applies to Grandfathered Group Plans, but not Grandfathered Individual Plans. Grandfathered Individual Plans.

Effective plan years beginning 6 months after date of Effective plan years beginning 6 months after date of enactment. enactment.

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2. Dependent Coverage to Age 262. Dependent Coverage to Age 26

• • Plans that provide dependent coverage must continue to make Plans that provide dependent coverage must continue to make coverage available until a child turns 26. Tax law adjusted coverage available until a child turns 26. Tax law adjusted accordingly. accordingly.

• • HHS to define by regulation the dependents to which this applies.HHS to define by regulation the dependents to which this applies.

• • Applies to all markets. Applies to all markets.

• Applies to grandfathered plans. Applies to grandfathered plans. – But for grandfathered group health plans until 2014, may cut off if the But for grandfathered group health plans until 2014, may cut off if the

dependent is eligible to enroll in an employer-based plan other than such dependent is eligible to enroll in an employer-based plan other than such grandfathered plan.grandfathered plan.

• • • Effective for plan years starting 6 months after enactment.Effective for plan years starting 6 months after enactment.

• Dependents who currently aren’t on coverage, can join effective Dependents who currently aren’t on coverage, can join effective 9/1/11.9/1/11.

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3. Rescissions Restricted3. Rescissions Restricted

•Rescissions are prohibited except in the case of fraud Rescissions are prohibited except in the case of fraud or intentional misrepresentation of material fact. or intentional misrepresentation of material fact.

•Requires prior notice to the enrollee. Regulations are Requires prior notice to the enrollee. Regulations are likely to require also notice to DOI and/or HHS.likely to require also notice to DOI and/or HHS.

•Applies to all markets, Applies to all markets, including grandfathered plans. including grandfathered plans.

•Effective for plan years starting 6 months after Effective for plan years starting 6 months after enactment. enactment.

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4. No Discrimination in Favor of Highly 4. No Discrimination in Favor of Highly CompensatedCompensated

•The nondiscrimination rules that were previously The nondiscrimination rules that were previously applicable only to self-insured health plans are applicable only to self-insured health plans are extended to non-grandfathered fully insured health extended to non-grandfathered fully insured health plans. This requirement will include both eligibility and plans. This requirement will include both eligibility and benefits tests. benefits tests. 

•A $100-per-day excise tax penalty will likely replace A $100-per-day excise tax penalty will likely replace the current tax consequences for non-compliance the current tax consequences for non-compliance

•Effective for plans years starting 6 months after Effective for plans years starting 6 months after enactment. enactment.

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5. Early Retiree Reinsurance5. Early Retiree Reinsurance

•HHS will establish a temporary reinsurance program within 90 HHS will establish a temporary reinsurance program within 90 days to assist employment-based plans covering early retirees days to assist employment-based plans covering early retirees and their dependents. and their dependents.

•Reimburses EMPLOYER for 80% of claims $15k-90K per retiree. Reimburses EMPLOYER for 80% of claims $15k-90K per retiree. Plan must use proceeds to lower employer and retiree costs. Plan must use proceeds to lower employer and retiree costs.

•Program Sunsets on 1/1/14. Funding $5B. HHS may terminate Program Sunsets on 1/1/14. Funding $5B. HHS may terminate early if funding runs out. early if funding runs out.

•Retirees must be 55 or older, not Medicare-eligible, and not active Retirees must be 55 or older, not Medicare-eligible, and not active employees at an employer with a plan. Available to grandfathered. employees at an employer with a plan. Available to grandfathered.

•To participate plans must implement programs to generate cost-To participate plans must implement programs to generate cost-savings for individuals with chronic and high-cost conditions.savings for individuals with chronic and high-cost conditions.

•EHA is currently making application on behalf of our members for EHA is currently making application on behalf of our members for the reinsurance.the reinsurance.

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6. Rate Review 6. Rate Review

• In 2010, HHS to establish a process for “reviewing” increases in In 2010, HHS to establish a process for “reviewing” increases in health plan premiums and require plans to justify increases. health plan premiums and require plans to justify increases. “Review” does not appear to include approve or deny. That “Review” does not appear to include approve or deny. That remains with state. remains with state.

• Requires states to report on trends in premium increases and Requires states to report on trends in premium increases and recommend whether, once exchanges are in place, certain plans recommend whether, once exchanges are in place, certain plans should be excluded from the Exchange based on unjustified should be excluded from the Exchange based on unjustified premium increases. premium increases.

• Provide grants to states to support efforts to review and approve Provide grants to states to support efforts to review and approve premium increases.premium increases.

• N/A to grandfathered plan. N/A to self insured groups. N/A to grandfathered plan. N/A to self insured groups.

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7. Medical Loss Ratios7. Medical Loss Ratios

• • Loss Ratio Reporting. Required for plan years starting Loss Ratio Reporting. Required for plan years starting 6 months after enactment. Makes required reports 6 months after enactment. Makes required reports available on the HHS website.available on the HHS website.

• • Rebates. Rebates. Requires rebates by insurer to enrollees for MLRs below Requires rebates by insurer to enrollees for MLRs below

required levels starting in 2011. required levels starting in 2011.

Sets MLRs of 80% in the individual and small group markets Sets MLRs of 80% in the individual and small group markets and 85% in the large group market. and 85% in the large group market.

Certain “activities the improve health care quality may be Certain “activities the improve health care quality may be counted same as claims. counted same as claims.

• Applies to Grandfathered plans. n/a to self insured. Applies to Grandfathered plans. n/a to self insured.

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8. Internal & External Appeals8. Internal & External Appeals

• • Internal AppealsInternal Appeals

– Initially use current DOL process, for non group use state Initially use current DOL process, for non group use state law. Regs to follow.law. Regs to follow.

• • External Review. External Review. Requires plans in all markets to:Requires plans in all markets to:– Comply with state external review requirements that, at minimum, include the Comply with state external review requirements that, at minimum, include the

protections in the NAIC’s External Review Model Act; orprotections in the NAIC’s External Review Model Act; or

– For states without an external review process (Nebraska), minimum For states without an external review process (Nebraska), minimum standards established by HHS.standards established by HHS.

• • n/a to Grandfathered plansn/a to Grandfathered plans. . Effective plan years starting 6 Effective plan years starting 6 months after enactment. months after enactment.

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9. Emergency Services9. Emergency Services

• • Requires plans to cover emergency services without Requires plans to cover emergency services without prior authorization or regardless of network status.prior authorization or regardless of network status.

• • Requires Requires equivalent cost-sharing equivalent cost-sharing for network and non-for network and non-network providers.network providers.

• • Uses a “prudent layperson” definition of emergency Uses a “prudent layperson” definition of emergency medical condition.medical condition.

• • n/a to Grandfathered plann/a to Grandfathered plan

• • Effective for plan years starting 6 months after Effective for plan years starting 6 months after enactment.enactment.

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12. Lifetime Dollar Limits Prohibited12. Lifetime Dollar Limits Prohibited

• Prohibits lifetime limits.Prohibits lifetime limits.

• effective for plan years starting 6 months after effective for plan years starting 6 months after enactment. enactment.

• ““Per beneficiary” annual or lifetime limits are Per beneficiary” annual or lifetime limits are permissible only for items and services that are not permissible only for items and services that are not part of the essential health benefits.part of the essential health benefits.

• Applies to all marketsApplies to all markets

• Applies to grandfathered plans. Effective Plan years 6 Applies to grandfathered plans. Effective Plan years 6 months after enactment. months after enactment.

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13. Annual Dollar Limits Restricted, 13. Annual Dollar Limits Restricted, eventually prohibited. eventually prohibited.

• Before 1/1/14, annual limits for the essential health Before 1/1/14, annual limits for the essential health benefits allowed only as determined by HHS to benefits allowed only as determined by HHS to ensure minimal impact on premiums. Regs neededensure minimal impact on premiums. Regs needed

• Effective 1/1/14, Effective 1/1/14, prohibitsprohibits annual limits on the dollar annual limits on the dollar value of essential benefits. value of essential benefits.

• Applies to new plans in all markets and to Applies to new plans in all markets and to grandfathered group plans. NOT to grandfathered grandfathered group plans. NOT to grandfathered individual plans. Effective 6 months after enactment.individual plans. Effective 6 months after enactment.

• • “• “Per beneficiary” annual or lifetime limits are Per beneficiary” annual or lifetime limits are permissible for items and services that are not part of permissible for items and services that are not part of the essential health benefits. the essential health benefits.

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14. Coverage and Cost-Sharing 14. Coverage and Cost-Sharing Transparency and Disclosure Requirements Transparency and Disclosure Requirements – Filings w/ HHS, DOI – Filings w/ HHS, DOI

Plans in all markets must submit the following information to HHS Plans in all markets must submit the following information to HHS and the state insurance commissioner, and make it available to and the state insurance commissioner, and make it available to the public: the public:

• claims payment policies and practices, periodic financial claims payment policies and practices, periodic financial disclosures, enrollment/disenrollment data, data on claims denial disclosures, enrollment/disenrollment data, data on claims denial and rating practices, information onand rating practices, information on

• cost sharing and payments for non-network coverage and cost sharing and payments for non-network coverage and information on enrollee rights).information on enrollee rights).

• Information to be upon request; at minimum, such information Information to be upon request; at minimum, such information must be available through an Internet website.must be available through an Internet website.

• Effective for plan years beginning on or after 6 months after Effective for plan years beginning on or after 6 months after enactment. n/a to grandfathered plans.enactment. n/a to grandfathered plans.

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15. Preventive Services with no Cost-Sharing15. Preventive Services with no Cost-Sharing

• Evidence-based items/services with a rating of “A” or “B” in the Evidence-based items/services with a rating of “A” or “B” in the current recommendations of the USPSTF. current recommendations of the USPSTF.

• Immunizations recommended by CDC with respect to the Immunizations recommended by CDC with respect to the individual involved.individual involved.

• Evidence-informed preventive care and screenings provided for Evidence-informed preventive care and screenings provided for the comprehensive guidelines of HRSA for infants, children and the comprehensive guidelines of HRSA for infants, children and adolescents.adolescents.

• Additional preventive care and screenings provided for in Additional preventive care and screenings provided for in guidelines supported by HRSA.guidelines supported by HRSA.

• • Permits HHS to develop guidelines permitting plans to utilize Permits HHS to develop guidelines permitting plans to utilize “value-based insurance designs.”“value-based insurance designs.”

• • Applies to all markets. Effective for plan years starting 6 months Applies to all markets. Effective for plan years starting 6 months after enactment. n/a to grandfathered plans. after enactment. n/a to grandfathered plans.

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16. Continued Application of State Benefit 16. Continued Application of State Benefit MandatesMandates

• State Benefit Mandates. Continues to apply state benefit State Benefit Mandates. Continues to apply state benefit mandates to insured coverage outside of Exchanges. mandates to insured coverage outside of Exchanges. (PPACA § 1312(d)(2)). (PPACA § 1312(d)(2)).

• States can mandate additional benefits inside Exchanges but States can mandate additional benefits inside Exchanges but they must make payments to cover the additional costs for such they must make payments to cover the additional costs for such benefits for those that are subsidy eligible. Requires these state benefits for those that are subsidy eligible. Requires these state payments to be made directly to individual enrollees or to the payments to be made directly to individual enrollees or to the health plans in which such individuals are enrolled. health plans in which such individuals are enrolled.

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Other – Internet PortalOther – Internet Portal

• 7/1/10 HHS Internet Portal to help individuals and 7/1/10 HHS Internet Portal to help individuals and employers identify affordable coverage. employers identify affordable coverage.

• Likely to include premiums, availability, benefitsLikely to include premiums, availability, benefits

• HHS Development already underway. HHS Evaluating HHS Development already underway. HHS Evaluating what plan data is available. what plan data is available.

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The End The End

• Questions? Questions?

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