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PwC overview on health insurance exchanges. These new marketplaces which go into effect in 2014 will form the backbone of the Affordable Care Act and expand health insurance coverage to all Americans.
Citation preview
www.pwc.com/hix
The “101” on the new marketplaces
Health Research Institute
www.pwc.com/hri
PwC Health Research Institute
Table of Contents
Section Slide #Overview and Background 3-5What are Health Insurance Exchanges? 6-9Types of Exchanges 10-14Exchange Enrollment 15Exchange Participation 16-19What’s Next 20
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PwC Health Research Institute
What is a health insurance exchange?The six basic facts you need to know.
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Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
1. The exchanges allow customers to compare private insurance plans in terms of cost, quality and benefits.
2. Each state and the District of Columbia will have an exchange managed by the state, the federal government or a partnership between the two.
3. Open enrollment is Oct. 1, 2013, through March 31, 2014. Coverage begins January 1, 2014.
4. Plans offered through the exchanges will provide services that include ER visits, maternity care, prescription drugs, rehab, hospitalization, and outpatient services.
5. Exchange customers may qualify for subsidies based on a sliding income scale.
6. Insurance plans are organized into five categories: catastrophic, bronze, silver, gold and platinum based on the percentage of costs they cover.
PwC Health Research Institute
The Affordable Care Act (ACA) The ACA was signed into law on March 23, 2010 with the goals of increasing access to healthcare, improving affordability, and improving quality.
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Increase access Health insurance exchanges are designed to cover half of the newly insured The newly insured will have different demographic attributes than the currently
insured Health plans must guarantee issue and renewability of health insurance regardless of
health status
Improve affordability As online marketplaces, exchanges promote price and quality transparency to
increase competition Exchange coverage is subsidized for those who earn between 100% and 400% of the
federal poverty line
Improve quality Health plans must offer essential health benefit standards providing a minimum level
of coverage Exchange health plans will be required to report on quality measures starting in 2016
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
PwC Health Research Institute
ACA implementation hits its stride in 2014
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Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
PwC Health Research Institute
Private exchanges came first and are growingPrivate exchanges present coverage alternatives to employers
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
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Insurer-run model
Individual insurers or groups of insurers operate exchanges to showcase plan
options
Minnesota-based insurer Medica partnered with Bloom Health
Retailer-run model
Companies outside of the health
industry begin selling various
insurance products
Market is still in development by familiar retailers
Third party-run model
External administrator links consumers to plan
choices across multiple insurers
California based CHOICE
Administrators focuses on small
employers
PwC Health Research Institute
State exchange implementation timeline
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October 1, 2013Exchanges open enrollment for new consumers
March 31, 2014Exchanges first enrollment period closes
January 1, 2015Employers must offer health benefits to employees (delayed from 2014)
January 1, 2017Large employers may offer coverage sold through the exchanges. States’ participation is optional.
January 1, 2014Health benefit exchanges fully operational and coverage begins
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
PwC Health Research Institute 8
Common questionsWho is eligible for state health insurance exchanges? Initially, exchanges will be open to individuals buying their own coverage and employees of firms with 100 or fewer workers (50 or fewer in some states).How many exchanges are there? Every state has 2 exchanges – an individual exchange and a small business (or SHOP) exchange although not every state will have their small business exchange up and running next year. What are some key characteristics of the exchanges? Insurance plans are offered by private companies. Information about health plans, including price, benefits, and quality, is
accessible. Health plans provide the same core set of benefits, facilitating side-by-side
comparison. There are 4 tiers of qualifying health plans – bronze, silver, gold, and
platinum.What if my employer already gives me health insurance? Individuals who receive employer-based insurance already can keep their coverage and do not need to enter the exchange.
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
PwC Health Research Institute 9
What is the size of the new exchange market?
2023
Nearly $210B, 28
million members
7 million
members
, 2014
22 millio
n
member
s, 2016
24 millio
n
member
s, 2023
2 million members
, 2014
3 million members
, 2016
4 million member
s,2023
Indi
vidua
l exc
hang
e Small group
exchange
2014About
$40B, 7 M
members
With an estimated 7 million individual members, the exchanges are expected to be worth $40B in premium revenue in 2014.
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
PwC Health Research Institute 10
Three types of state exchangesOverview What are
HIXs?Types of
HIXsExchange
EnrollmentHIX
Participation
What’s Next
Federally Facilitated Partnership State-Based
# of States* 27 7 16 + Washington
D.C.
Description
The federal government runs the state’s exchanges
Some states run the SHOP while the federal government oversees the individual exchange Other states review health plans while the federal government builds and maintains necessary IT infrastructure such as exchange websites
States run their own exchanges More money is available for outreach and enrollment for state-based exchanges
*Numbers as of September 3, 2013.
PwC Health Research Institute 11
States on the frontline of ACA implementation
*To view updates to the map visit: http://www.pwc.com/us/en/health-industries/health-research-institute/index.jhtml
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
PwC Health Research Institute 12
What types of plans can I buy on the exchanges?
Catastrophic
• Minimal coverage plan
• Only available to people age 30 and under
Bronze
• 60% AV*
Silver
• 70% AV*• Every
insurer must offer a silver plan
Gold
• 80% AV*
Platinum
• 90% AV*
*AV= Actuarial value. In simple terms, this is the percent of health costs paid for by the plan. The higher the AV, the more the consumer pays in premiums.
$80 $100 $200 $300 $400
Sample FULL PRICED monthly premiums
Qualified health plans (QHP) are offered by an issuer that is licensed by the state and in good standing
QHPs must cover essential health benefits QHPs agree to charge the same premium rate whether offered directly
through the exchanges or outside of the exchanges
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
PwC Health Research Institute 13
The Essential Health BenefitsEvery qualified health plan is required to offer benefits in the following categories:
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
Ambulatory patient services
Emergency services
Preventive, wellness &
chronic disease mgmt
Hospitalization
Pediatric services
Maternity & newborn
care
Mental health &
substance use disorder
services
Prescription drugs
Rehabilitative &
habilitative services and
devices
Laboratory services
PwC Health Research Institute 14
Subsidies are available based on incomeIndividuals applying for coverage through the exchanges who make between 100%-400% of the Federal Poverty Level will be eligible for federal subsidies to purchase coverage.
Household Size 100% FPL 400% FPL
1 $11,490 $45,960
4 $23,550 $94,200
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
SUBSIDYINCOME
Min
imum
Sub
sidy
100% 400%Federal Poverty Level
Income Family Size
Subsidy Amount
and defines your
PwC Health Research Institute 15
Exchange enrollment: Navigators, IPAs, and CACsFederal government has defined 3 roles for education and enrollment “helpers
Navigator In-Person Assister (IPA) Certified Application Counselor (CAC)
Role
Conduct outreach activities to raise awareness about exchanges. Additionally, assist individuals with preparing electronic and paper applications to determine eligibility.
Assist individuals with preparing electronic and paper applications to determine eligibility.
Assist in educating individuals about Medicaid, CHIP, and plans sold through the exchanges.
Exchange Participation
• Federally-facilitated exchange• Federal/state partnership
exchange• State-based exchange
• Federal/state partnership exchange
• State-based exchange (optional)
• Federally-facilitated exchange
• Federal/state partnership exchange
• State-based exchange
Training Requirement
• Navigators must be certified, which requires initial web‐based training of up to 30 hrs
• Annual recertification
• Must complete comprehensive training
• Must complete comprehensive training
Funding
• Federal government provided 105 grant applicants in federally- facilitated and partnership exchanges with $67M in navigator grants
• State-based exchanges will provider navigator programs with grants from their exchange budgets
• State-based programs will apply for exchange establishment grants to fund IPAs
• Not Applicable
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
nWhat’s Next
PwC Health Research Institute
HIX Participation
Insurance companies’ participation in exchanges*INSURER PERSPECTIVENational carriers participating:• Blues plans will be offered in at least 36
states (but not in Iowa, Mississippi, and South Dakota) in 2014
• Big national insurers are offering plans in 8-11 states including: Aetna , Wellpoint (incl. Anthem), Coventry, Humana , and Kaiser
National carriers delaying participation or not participating:• Wellmark won’t be selling their blues
plans (mentioned above) in Iowa or South Dakota until 2015
• Aetna has withdrawn participation in 8 states in which it originally planned to participate
Minimal ParticipationStates that have announced only 1 or 2 carriers:
• Alaska • Hawaii• Maine • Mississippi
• New Hampshire • Oklahoma• Rhode Island• Vermont
Maximum Participation
States with the most carriers (between 13 and 19):• Colorado• Michigan• New York
• Oregon• Wisconsin
STATE PERSPECTIVEWhile most states with high participation are state or partnership exchanges, Wisconsin and Florida, both FFEs, had 13 and 9 plans announce participation, respectively.
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Overview What are HIXs?
Types of HIXs
Exchange Enrollment What’s
Next
*Non-exhaustive, snapshot as of Sept. 2, 2013
PwC Health Research Institute 17
How will exchanges impact insurance companies?Exchanges demand a shift in the insurance business model that will look and feel more like a retail experience. This will require competition on price and service offerings, focus on population management, knowledge of consumer preferences, and consumer engagement.
Price will be a leading factor in
consumer decision making
As consumers become more sophisticated
insurers will need to differentiate through quality, benefits and customer experience
47% of consumers are
willing to pay extra for ancillary
services
HIX ParticipationOverview What are
HIXs?Types of
HIXsExchange
Enrollment What’s Next
PwC Health Research Institute 18
How will exchanges impact providers?Exchanges will lead to a broad coverage expansion that can offer a financial boost for hospitals that are currently under a financial squeeze. To gain an edge at a time when money is tight, hospitals must target the right audience, plug into local networks, and rethink the role of outreach.
Hospital DSH and Medicare payments are declining – new paying customers
are the answer
Through outreach and education; state, community and local groups can help to publicize new plan
options
Only 9.5% of the 105 navigator grants distributed went to hospitals or medical
centers
HIX ParticipationOverview What are
HIXs?Types of
HIXsExchange
Enrollment What’s Next
Source: Health Research Institute Analysis
PwC Health Research Institute 19
HIX Participation
Race to October 1st Sectors participating in healthcare exchanges have been preparing for the October 1st launch in varying ways:
Insurers•Choosing which states exchange to offer coverage in•Negotiating with provider networks•Ensuring technological components are ready to communicate with state exchanges•Determining the most cost effective plan pricing
Providers•Partnering with community health organizations on outreach and enrollment •Pursuing CAC designation and training financial counselors
Pharma•Identifying ways to retool their efforts to enroll participants in their prescription drug assistance programs
New Entrants
•Tax preparers using their experience with the federal tax system to educate individuals about the ACA’s personal financial implications•Technology contractors partnering with the federal government to implement federal data hub
HIX ParticipationOverview What are
HIXs?Types of
HIXsExchange
Enrollment What’s Next
PwC Health Research Institute 20
What’s Next
What’s Next? - 2014 & BeyondThe number of insurance
companies and consumers participating in exchanges will be watched closely to determine the
health of the market
Large employers explore private health insurance exchanges
Non-traditional players look to capitalize on new opportunities
due to exchanges (i.e. retail pharmacies & web brokers)
In 2017, employers may be allowed to send employees to exchanges to obtain coverage
In 2018, the Cadillac tax, a tax on high cost insurance policies,
takes effect
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
n
PwC Health Research Institute 21
What’s Next
For More Information
HRI website
Overview What are HIXs?
Types of HIXs
Exchange Enrollment
HIX Participatio
n
www.pwc.com/hri
HRI Regulatory Centerhttp://www.pwc.com/us/en/health-industries/health-research-institute/hri-regulatory-center.jhtml
HIX Reportwww.pwc.com/us/hix