������������������������������������� ������������������������������������� The Texas Association of Health Plans 1332 Waivers: State Flexibility to Improve and Stabilize the Individual Market October 11, 2017 PATI MCCANDLESS, VP STATE HEALTH POLICY Health Care Services Corporation
������������������������������������� ������������������������������������� Agenda • ACA Overview – 2014 Changes • Where do Texans get coverage? • What went wrong – why did carriers exit the market? • 1332 Waivers and State Flexibility – improving the market
������������������������������������� ������������������������������������� Affordable Care Act – 2014 Big Picture Changes • Guarantee issue in individual market; no exclusions for preexisting conditions; may not discriminate on the basis of health status • Individual and small group plans must cover Essential Health Benefits; rating reforms (community rating; 1 to 3 ratio) • Premium assistance for health plans purchased on exchange (100% to 400% FPL) • Medicaid expansion below 133% (optional for states) • Individual mandate – subject to tax penalty if fail to obtain coverage; hardship exemption heavily used • Employer penalties • New Health Insurance Tax/Fees 3
������������������������������������� ������������������������������������� Source of Health Plan Coverage National Texas 2% 2% 6% 7% 9% 15% 49% 50% 14% 11% 19% 16% Employer Medicaid Medicare Uninsured Nongroup/individual Other
������������������������������������� ������������������������������������� Source of Health Plan Coverage – Texas Stats • OR, put another way…… • 50% of Texans are covered by their employer • 6% are covered by an individual health plan • 16% are covered by Medicaid or CHIP • 11% are covered by Medicare • 2% - other (Military, VA) • 15% - uninsured (down from 22% in 2013) 5
������������������������������������� ������������������������������������� Gap in Coverage for Adults in States that do not Expand Medicaid under the ACA
������������������������������������� ������������������������������������� Texas ACA Snapshot as of 2/17 • 963k Texans enrolled in exchange plans in 2017 • Around 86% are eligible for APTCs • 604k Texans eligible for CSR benefits – 63% • Texas did not expand Medicaid; approximately 766k Texans in the coverage gap • Texas Medicaid covers children, very low income parents, pregnant mothers, elderly, blind, and disabled; does not cover childless adults 7
������������������������������������� ������������������������������������� Premium Costs for Individual Coverage • Texas premium for 40-year-old non-smoker 2017 • $288 • $88 after subsidy if income $30,000 • Contrast with Texas High Risk Pool Average Monthly Premium in 2013 – $666 • Texas pool created in 1997 – funded by insurer assessments and member premiums – insurer for those with preexisting conditions • 2013 – covered 26k enrollees; $100M industry assessments 8
������������������������������������� ������������������������������������� Contrast with Premium Costs for Employer Coverage • 2017 average premium employer coverage • Individual • $6,690 per year OR • $557 per month • Family coverage • $18,764 per year OR • $1564 per month • 2017 employee contributions: • Individual – 18% of premium or $100 per month • Family – 31% of premium or $484 per month 9
������������������������������������� ������������������������������������� Industry Losses and Co-op Insolvencies • Industry losses in the billions • Most large national carriers exited the on exchange individual market – Aetna, Cigna, United, Humana; regional carriers – Scott & White • Only 7 of 23 co-ops remain – Land of Lincoln in Illinois latest casualty; co-ops in MD and NM filed suit against HHS due to issues with risk adjustment formula; no Texas co-op • 5 States have a single carrier in 2017 – Alabama, Alaska, Oklahoma, South Carolina and Wyoming • Many rural areas across the country only have one carrier – BCBSTX was the only carrier in 95 Texas counties in 2017 10
������������������������������������� ������������������������������������� Why Did Carriers Leave the Exchange? • Industry wide steep financial losses in first 3 years -- the marketplace did not perform as expected with fewer and less healthy enrollees • Experts expected the market to stabilize within 3 years, which is why two of the risk mitigation programs -- reinsurance and risk corridors -- were limited to 3 years. Not clear how long it will take to stabilize…. • Reasons for the losses include higher-than-expected medical costs and utilization and regulatory requirements that discourage continuous coverage 11
������������������������������������� ������������������������������������� What Went Wrong? • Transitional plans – “if you like your health plan, you can keep your health plan;” 11/2013 CMS guidance allowed for renewal of ACA noncompliant plans beyond 2014 • Web site problems – the exchange web site failures delayed initial open enrollment – many individuals did not enroll until late spring 2014; 2015 premium rates were required to be filed in May of 2014 without sufficient claims experience • Ongoing timing issues – 2016 was the first year plans had actual claims experience on which to base rates • MLR – no incentive to price too high due to federal MLR requirements 12
������������������������������������� ������������������������������������� Requirements that Discouraged Continuous Coverage • Open Enrollment – now runs from 11/1 to 12/15 for 1/1 coverage; prior open enrollment was 11/1 through 1/31, allowing members to enroll for a 3/1 effective date and pay for 10 months of premium • Special Enrollment Periods (SEP) - Number/scope of SEPs, no requirement for prior coverage, not validated prior to enrollment (presumptive eligibility) • Three Month Grace Period - 3-month grace allows members to discontinue premium payments without cancellation; exchange allows re- enrollment without paying; 84% of Texas exchange enrollees are eligible for tax credits and subject to the 3-month grace period. • New administration NBPP rules tightened open enrollment and special enrollment periods 13
������������������������������������� ������������������������������������� Other Issues • Third-party payment – provider-related charities paying for premiums in the individual ACA market to enhance reimbursement (provider fee schedules typically higher than Medicare/Medicaid programs); • High ER costs and expansion of Free-Standing Emergency Rooms 14
������������������������������������� ������������������������������������� 2018 Premiums Impacted by Continued Uncertainty • CSR Funding – uncertainty around federal funding for cost sharing reduction benefit (which covers copays for lower income enrollees 100 to 250% of FPL) • Individual Mandate – uncertainty around continued enforcement of the individual mandate • 2018 Premium Impact – Kaiser Foundation reported: • CSR – 2 to 23% rate increase on silver plans • Individual mandate –1 to 20% rate increase 15
Recommend
More recommend