Affordable Care Act AMERICAN HEALTH BENEFIT EXCHANGES Delaware

Affordable Care Act AMERICAN HEALTH BENEFIT EXCHANGES Delaware Health Care Commission October 7, 2010

EXCHANGE BASICS • State Based • Individuals and small business employees find and compare insurance options – Small Business Health Options (SHOP) – Individuals – May be combined • Help comply with individual mandate • Must be up and running Jan. 1, 2014

EXCHANGES MUST • Certify “qualified health plans • Toll free telephone number • Web site with standardized, comparative information on health plan options • Provide employees choice of plan options • Electronic calculator to determine cost and amount of any premium tax credit

EXCHANGES MUST • Provide initial and annual open enrollment periods • Assign ratings to plans on relative quality and price • Inform consumers of Medicaid/CHIP eligibility and enroll if eligible • Use uniform enrollment form

EXCHANGES MUST • Certify any exemption from individual mandate • Notify US Treasury of those exempt • Information to employers on employees who cease coverage in qualified health plan • Publish costs of licensing, admin costs, money lost to fraud/abuse

EXCHANGE MUST • Establish Navigator program – Educate consumers – Facilitate enrollment – Referrals to consumer assistance program • Consult with stakeholders, including – – – Educated health care consumers Entities w/ experience in facilitating enrollment Small business & self-employed Medicaid Advocates for enrolling hard to reach populations

STATES DECIDE • Establish a state-based Exchange • Join in a regional Exchange with other states • Allow US DHHS to operate an Exchange within a state • How to manage insurance markets – Merge non-group and small group? – Plan conduct in and out of the Exchange

STATES DECIDE • Where the Exchange resides – Within existing state agency? – A new separate state agency? – Quasi-state agency? – Private non-profit – More on this later…. .

STATES DECIDE • How Exchange is governed – State Employees of existing or new state agency? (Utah) – Overseen by an independent board? (Mass) • Who appoints Board • Relevant experience of Board • Transparency of activities – Relationship and applicability of state administrative processes

STATE CONSIDERSATIONS • Roles of various state agencies in the Exchange – IT needs and IT agencies – Medicaid/CHIP eligibility/enrollment – Insurance information and Dept. of Insurance • How goods and services will be procured • How intersection between Exchange products and public programs operate

IT CONSIDERATIONS • Interface with Medicaid/CHIP • Ability to enroll those eligible into Medicaid/CHIP • Ability to identify subsidies for consumers who qualify • Web portal design • Standard format to compare price & quality • Data transfer to IRS

SCOPE AND FINANCING • How many lives will enroll in the Exchange? • How many plans will be offered in the Exchange? • What is the real nature of small group and non-group markets in DE? • How should the Exchange finance itself? – Must be self-sufficient by 1/1/15

KEY DATES • Sept. 2010 Award of planning grant • Spring 2011 Notice – Implementation • Jan. 1, 2013 States inform; Sec’y HHS decides if will be ready 1/1/14 State Exchanges become operational • Jan. 1, 2014

EXCHANGE GOVERNANCE OPTIONS • Affordable Care Act says very little: • “An Exchange shall be a governmental agency or nonprofit entity that is established by a State. ” • Options to be weighed through planning process; DHCC decisions important

STATE AGENCY Existing or new • What the Exchange will do may help drive decision – “Market organizer” – Active purchaser – Use purchasing to drive system change • E. g. Transform how plans reimburse providers

STATE AGENCY ADVANTAGES – Direct link to other state administrative activities – Enhanced ability to coordinate with other state activities – May work better with “market organizer” approach – Potential to coordinate with other state health purchasing strategies

STATE AGENCY DISADVANTAGES • Unlikely that any one state agency has expertise necessary to operate Exchange – Medicaid lacks expertise in insurance market – Dept. Ins primary role regulatory, not marketing – State employee benefit agencies lack knowledge of small and non-group markets

STATE AGENCY DISADVANTAGES • Active purchaser Exchanges may need to be nimble and move quickly • Procurement may slow down process • Employment rules may place limits on hiring strategies • Close proximity may cause decisions to be politicized

QUASI-GOVERNMENT OR INDEPENDENT AGENCY • Advantages • Possible exemption from procurement regulations • Possible exemption from personnel regulations • Less potential for decisions to be politicized • Board composition can bring wide variety or skills and viewpoints; access to business expertise

QUASI-GOVERNMENT OR INDEPENDENT • Disadvantages • Potential challenges communicating with state agencies • May require more time and resources for start-up • Without careful consideration of Board composition conflict of interest issues arise

PRIVATE NON-PROFIT • Advantages: – Greater flexibility in decision-making – Less Chance for politics to influence • Disadvantages – Isolation from state gov’t presents carriers to coordination/communication – Potential legal issues if Exchange performs government function (eligibility for Medicaid)