Affordable Insurance Exchanges

DEPARTMENT OF HEALTH AND HUMAN SERVICESCENTERS for MEDICARE & MEDICAID SERVICES

Center for Consumer Information and Insurance Oversight

December 7, 2011

The material in this presentation should not be viewed as having any independent legal effect, or relied upon as an interpretation or modification of the related proposed rule or statute. Not all issues or

exceptions are fully addressed.

Affordable Care Acto dab e Ca e ct

• In March 2010, Congress passed and the President signed into lawIn March 2010, Congress passed and the President signed into law the Affordable Care Act, which puts in place comprehensive health insurance reforms that will hold insurance companies more accountable, lower health care costs, guarantee more health care gchoices, and enhance the quality of health care for all Americans.

• Many important benefits are already in place, including:– Bans on the worst insurance company abusesBans on the worst insurance company abuses– Cost savings for seniors, families and small and large

businesses– Coverage options for many Americans who have been locked– Coverage options for many Americans who have been locked

out of the insurance market because of a pre-existing condition.• More information on the Affordable Care Act can be found at

healthcare govhealthcare.gov.

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Affordable Insurance Exchangeso dab e su a ce c a ges

• The Affordable Care Act creates Affordable Insurance Exchanges, competitive marketplaces providing affordable health plan options for individuals and small businesses (SHOPs)

• Exchanges will be operational in each State by January• Exchanges will be operational in each State by January 1, 2014

• HHS will run an Exchange on behalf of a State that does not elect to run an Exchange or receive approval to do so by January 1, 2013

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Affordable Insurance Exchangeso dab e su a ce c a ges

• Exchanges are designed for consumers and small• Exchanges are designed for consumers and small businesses.

• They are State-based competitive marketplaces where individuals and small businesses can:– Find information and compare qualified health plans– Determine eligibility for tax credits for private insurance or health g y p

programs like the Children’s Health Insurance Program (CHIP)– Easily enroll in a qualified health insurance plan that meets their

needs.• The Affordable Care Act and the proposed rules build a number of

important consumer protections into Exchanges.

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Five Core Functions of the Exchangee Co e u ct o s o t e c a ge

Consumer Consumer support assistors; education and outreach; Navigator management; Consumer Assistance call center operations; website management; and written correspondence with

consumers to support eligibility and enrollment.

Plan Plan selection approach (e.g., active purchaser or any willing plan); collection and analysis of plan rate and benefit package information; issuer monitoring

Management and oversight; ongoing issuer account management; issuer outreach and training; and data collection and analysis for quality.

EligibilityAccept applications; conduct verifications of applicant information; determine eligibility for enrollment in a Qualified Health Plan and for insurance g y g yaffordability programs; connect Medicaid and CHIP-eligible applicants to Medicaid and CHIP; and conduct redeterminations and appeals.

EnrollmentEnrollment of consumers into qualified health plans; transactions with QualifiedHealth Plans and transmission of information necessary to initiate advanceEnrollment Health Plans and transmission of information necessary to initiate advance payments of the premium tax credit and cost-sharing reductions.

Financial Management

User fees; financial integrity; support of risk adjustment, reinsurance, and risk corridor programs.

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State FlexibilityState e b ty

• States will have significant flexibility to create an Exchange that best fits their needs and is responsive to local market conditionslocal market conditions.

• For example:– Structure of the Exchange;g ;– Qualified Health Plan Selection;– Network Adequacy Standards;– Marketing Standards;– Marketing Standards;– Role of Agents and Brokers in Exchange.

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Timeline for Statese e o States

• Ongoing: Technical assistance from HHS

• Ongoing: Establishment reviews of state progress

• Ongoing: Apply for Establishment Grant Funding (upcoming deadlines are Dec. 30, 2011, March 30, 2012, June 29, 2012)

• Spring 2012: Exchange Approval Application anticipated releaseSpring 2012: Exchange Approval Application anticipated release

• Fall 2012: Start Accepting Exchange Approval Applications

• January 1 2013: Final Exchange approval and conditional approval decisions• January 1, 2013: Final Exchange approval and conditional approval decisions made

• January 1, 2013 – Fall 2013: Ongoing technical assistance and establishment reviews for conditionally approved Exchangesreviews for conditionally approved Exchanges

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HHS Activity/ProgressS ct ty/ og ess

• Proposed Rules issued this Summer on Exchange Functions, Structure, Eligibility, SHOPs, Tax Credits, Qualified Health PlansQualified Health Plans

• Federal funding for States for planning and establishing Exchanges; Early Innovator Grantsg y

• IT Guidance; grantee conferences; Technical Assistance• Federal Procurements to build HHS Exchange (with

& S) STreasury & IRS) and Data Services HUB • Questions and Answers to states

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State ProgressState og ess

• Background research• Background research• Stakeholder consultation• IT gap analysis gap a a ys s• Adoption of governance model• Legislation to create an Exchange• Exchange Establishment grants

– As of November 29, 2011, 28 States and DC have received Exchange Establishment grants from HHSreceived Exchange Establishment grants from HHS

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Goals of the ExchangesGoa s o t e c a ges

E d d C E h ill d i th i di id l• Expanded Coverage: Exchanges will expand coverage in the individual and small group markets by offering high-value health plans, lowering administrative costs, and increasing purchasing power.

• Promoting Competition: Exchanges will be competitive marketplaces• Promoting Competition: Exchanges will be competitive marketplaces with vastly improved transparency and direct comparisons based on benefits, price, and quality.

• Affordable Options: Health plans will be more affordable with financial• Affordable Options: Health plans will be more affordable with financial assistance, including premium tax credits, cost-sharing reductions, and Small Business Tax Credits available for coverage purchased through the Exchange.

• Quality Improvement: Exchanges will drive quality and delivery system reform, while ensuring consumer protections.

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