Insurance Market and Medicaid Landscape for 2018 NASTAD Prevention and Care Technical Assistance Meeting — Advancing Health Equity Alexandria, Virginia June 20, 2017 Greg Gierer Vice President, Policy & Regulatory Affairs
Agenda • Repeal/Replace • Immediate Challenges to Market Stability • Policy Options to Promote a Stable Market
AHIP Senate Positioning to Date • Medicaid-Individual Market Linkage Senate Finance Letter • Short-term Individual Market Stability • Adequate Transition Period • Medicaid: Beneficiary Needs, Funding and Flexibility • Long-Term Market Priorities: Individual and Broader Markets Legislative Proposals – Repeal and Replace 4
Immediate Challenges to Individual Market Stability Issue sue Poli licy Imp mplications ations Cost-Sharing Reduction Failure to fund cost-sharing reductions would result in (CSR) Payments significant market disruption and fewer plan choices, significantly higher premiums for 2018, and higher federal spending Enforcement of Individual Lack of individual mandate enforcement would lead to Mandate deterioration of the risk pool and higher premiums for 2018 and beyond (15%-20% higher) Risk Pool Funding Sunset of reinsurance program was a significant factor in 2017 premium increases; re-instating risk pool funding would likely have a stabilizing effect Legislative and Regulatory Legislative/regulatory actions can either bring greater stability or exacerbate current problems Uncertainty Current State of Exchanges 5
Individual Market Stabilization Package: Key Elements Provisions Overview • Expand the age band from 3:1 to 5:1. • Market Rating Rules Retain guaranteed issue and renewability, metal levels, risk adjustment, cost sharing reductions, and other market rule provisions • Create an individual market reinsurance program with $100B in funding Reinsurance Program over ten years ($10B a year) Incorporate 2017 Market • Implement the provisions of the new market stabilization rule Stabilization Rule Implement a “Copper” 50 • Allow health plans to offer a “Copper” metal level variation of 50% AV and allow individuals to use tax credits to purchase “Copper” plans Percent Actuarial Value Plan • Retain the APTCs with age adjusted modifications. Enhance APTCs for Young • Individuals from 18 – 34 receive the same APTC amounts as those Enrollees individuals aged 35 in their rating region Methodological Note: Assumes enforcement of current law and regulations; no large scale changes in market participation. Policy Options to Promote a Stable Market 6
Stabilization Package Modeling Results* Elemen ent Impact mpact Individual market enrollment 7.5% increase (2+ million higher) Impact on uninsured 5.5% decrease (2+ million fewer uninsured) Risk pool Average risk scores decline by about 5% (risk scores decline from 1.35 to 1.28 by 2020) Individual market premiums 14% reduction Federal spending $32.4 billion higher *Avalere modeled cost/coverage impact of stabilization policies over a 5 year period (2018-2022), as compared to current law. Assumes CSR 7 funding and enforcement of individual mandate.
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