California Health Benefit Exchange Overview David Maxwell-Jolly Chief Operations Officer California Health Benefit Exchange March 8, 2012 Child Support

California Health Benefit Exchange2

Sources of Health Insurance Coverage in California

Source: California HealthCare Foundation. SNAPSHOT California’s Individual and Small Group Markets on the Eve of Reform, 2011.


Rising Spending: National Health Spending as a Share of Gross Domestic Product (GDP)

Source: California HealthCare Foundation. California Health Care Almanac: Health Care Costs 101, April 2010.


The Patient Protection and Affordable Care Act

President Obama Signed Into Law Landmark Health Care Reform Legislation

“Today, after almost a century of trying. Today, after over a year of debate. Today, after all the votes have been tallied, health insurance reform becomes law in the United Statesof America…We are a nation that faces its responsibilities and faces its challenges. Here in this country we shape our own destiny…That's what makes us the United States of America.”

– President ObamaMarch 23, 2010


Health Insurance Market ReformsTaking Effect January 2014

• Guaranteed issued• Guaranteed renewability• Prohibition on preexisting condition exclusion• Restrictions on rating variations in premiums

• Family structure• Geography• Actuarial value of benefit• Age (3:1 ratio)• Tobacco use (1.5:1 ratio)

• Prohibitions on waiting periods longer than 90 days• Small group and individual plans must offer “essential health

benefits package”• Limitations on cost-sharing


Shared Responsibility for Health Care: Individuals

• Individuals must maintain minimum essential coverage beginning in 2014• Annual penalty for individuals without coverage

• 2014: the greater of $95 or 1% of income

• 2015: the greater of $325 or 2% of income

• 2016: the greater of $695 or 2.5% of income

• Exemptions from penalty• Those for whom the lowest cost plan options exceeds 8% of income

• Those with incomes below the tax filing threshold

• Religious objections

• American Indians

• Those without coverage for less than 3 months

• Undocumented immigrants

• Incarcerated individuals


Affordable Coverage Choices

• Refundable premium tax credits for individuals purchasing on Exchange who have incomes between 138% and 400% of Federal Poverty Level (FPL)

• Reduced cost-sharing limits for individuals purchasing on Exchange with incomes between 138% and 400% of FPL

• Small business tax credits through 2015• Fewer than 25 FTE employees and average wages under

$50,000• Full credit available if 10 or fewer FTE employees and average

wages under $25,000• Employer must pay at least 50% of premium cost• 2010-2013: Credit up to 35% (25% if tax-exempt employer)• 2014-2015: A credit is available to small business for the first 2

years it offers employee a plan through an Exchange


Shared Responsibility for Health Care: Employer’s Participation

• Employers with 200+ employees must auto-enroll all new full-time employees

• Employers with 50+ full-time employees that do not offer coverage and have at least 1 employee who receives a premium assistance tax credit (income up to 400% of FPL) must pay a penalty of $2000 per full-time employee

• If employer does not offer coverage but 1+ employees receives tax credit, must pay a penalty that is lesser of $3000 for each employee getting credit or $2000 per full-time employee

• First 30 employees are exempt from penalty


Expansion of Public Programs

• Medicaid eligibility expanded to 138% FPL and to all non-elderly, non-pregnant individuals (states may include more)

• Federal assistance for the added coverage• Medicaid eligibility will use the same tests as

Exchanges – modified AGI with no asset tests• Expanded federal support for CHIP


Timeline for California Health Benefit Exchange


California Health Benefit ExchangeVision and Mission

The vision of the California Health Benefit Exchange is to improve the health of all Californians by assuring their access to affordable, high quality care.

The mission of the California Health Benefit Exchange is to increase the number of insured Californians, improve health care quality, lower costs, and reduce health disparities through an innovative, competitive marketplace that empowers consumers to choose the health plan and providers that give them the best value.


California Health Benefit ExchangeValues

Consumer-focused

At the center of the Exchange’s efforts are the people it serves, including patients and their families, and small business owners and their employees. The Exchange will offer a consumer-friendly experience that is accessible to all Californians, recognizing the diverse cultural, language, economic, educational and health status needs of those we serve.

AffordabilityThe Exchange will provider affordable health insurance while assuring quality and access.

CatalystThe Exchange will be a catalyst for change in California’s health care system, using its market role to stimulate new strategies for providing high-quality, affordable health care, promoting prevention and wellness, and reducing health disparities.

Integrity

The Exchange will earn the public’s trust through its commitment to accountability, responsiveness, transparency, speed, agility, reliability, and cooperation.

PartnershipThe Exchange welcomes partnerships, and its efforts will be guided by working with consumers, providers, health plans, employers and other purchasers, government partners, and other stakeholders.

ResultsThe impact of the Exchange will be measured by its contributions to expanding coverage and access, improving health care quality, promoting better health and health equity, and lowering costs for all Californians.


Exchange GovernanceIndependent Public Entity

Board Members

Diana Dooley, Board Chair and Secretary of the California Health and Human Services Agency, which provides a range of health care services, social services, mental health services, alcohol and drug treatment services, income assistance and public health services to Californians

Kim Belshé, Senior Policy Advisor of the Public Policy Institute of California, former Secretary of California Health and Human Services Agency, and former Director of the California Department of Health Services

Paul Fearer, Senior Executive Vice President and Director of Human Resources of UnionBanCalCorporation and its primary subsidiary, Union Bank N.A., Board Chair of Pacific Business Group on Health, and former board chair of Pacific Health Advantage

Robert Ross, M.D., President and Chief Executive Officer of The California Endowment, previous director of the San Diego County Health and Human Services Agency from 1993to 2000, and previous Commissioner of Public Health for the City of Philadelphia from 1990 to 1993

Susan Kennedy, Nationally-recognized policy consultant, former Deputy Chief of Staff and Cabinet Secretary to Governor Gray Davis, former Chief of Staff to Governor Arnold Schwarzenegger, former Communications Director for U.S. Senator Dianne Feinstein, and former Executive Director of the California Democratic Party


Visions for California’s Health Benefit Exchange

Price LeaderThe Exchange drives lower premiums; it is a cost-focused store and offers the most competitively priced health plans.

Service CenterThe Exchange is a consumer destination; it is a consumer-friendly, one-stop shop with broad choices on plan design, accessible information, and strong customer service.

Source: “California’s Health Benefit Exchange: The Future Envisioned,” California Healthcare Foundation, August 2011.

Change AgentThe Exchange is catalyst of finance and delivery reform; establishing incentives to encourage innovation and improvement in the cost, quality, and efficiency in health care delivery.

Public PartnerThe Exchange is closely aligned with Medi-Cal and Healthy Families partnering to adopt an array of policies that align to improve the health status and health care outcomes of low-income, high-need individuals.


Major Issues before the California Health Benefit Exchange

• Business, Operations, and Financial Sustainability• Enrollment & Information Technology• Stakeholder Consultation• Research and Analysis• Communication Support; Research and Marketing, Outreach,

and Education• Assisters Strategy• Health Plan Management and Delivery Reform• Small Business Health Options Program (SHOP) • Essential Benefits• Basic Health Plan• …and many more


Qualified Health PlansAffordable Care Act Requirements

• Qualified Health Plans will be certified by Health Benefit Exchanges

• Must provide Essential Benefit Package

• Insurer must offer at least one plan at Silver level and one at Gold level


Uninsured, by Employment Status and Firm Size


Total Uninsured: 7.2 Million


Individual Purchasers, by Employment Status and Firm Size


Total Individual Purchasers: 2.2 Million


Individual California Enrollment by Carrier



Timeline for California Health Benefit Exchange


For More Information:

Visit our website athttp://www.hbex.ca.gov

And join our listserv

Documents

California Health Benefit Exchange Overview David Maxwell-Jolly Chief Operations Officer California Health Benefit Exchange March 8, 2012 Child Support