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Commonwealth Health Insurance Connector Authority Calendar Year 2010 Affordability Schedule Board of Director’s Meeting March 11, 2010. Agenda. Brief recap of February 11 presentation: Factors considered in developing 2010 affordability schedule options Affordability schedule options

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Agenda

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  1. Commonwealth Health Insurance Connector AuthorityCalendar Year 2010 Affordability Schedule Board of Director’s MeetingMarch 11, 2010

  2. Agenda • Brief recap of February 11 presentation: • Factors considered in developing 2010 affordability schedule options • Affordability schedule options • Introduction of new “graduated” option • Summary of Public Comments • Impact Analysis • Timeline & Next Steps - VOTE

  3. Factors to Consider for 2010 • Federal MoE requirements preclude changes to CommCare enrollee contributions • Changes made to the affordability schedule below 300% FPL would de-link the affordability schedule from the CommCare enrollee contribution schedule • FPL guidelines will remain unchanged until at least March 1, 20101 • CPI declined slightly from 2008 to 2009 • Premiums in Massachusetts projected to increase 7-12% from 2009 - 20102 Sources: 1“2009 HHS Poverty Guidelines Extended Until March 1, 2010,” 75 Federal Register 14 (22 January 2010) pp. 3734-3735. Available online at http://aspe.hhs.gov/POVERTY/09extensionfedreg.shtml 2Weisman, R. (2009, Sept. 16). Health costs to rise again. The Boston Globe, available online at http://www.boston.com/business/healthcare/articles/2009/09/16/health_insurers_plan_10_rise_in_rates/?page=1.

  4. Affordability Schedule Options • Options presented: • Make no changes to affordability schedule • Increase premium contributions by 3.5% a. Across all income categoriesb. Above 300% FPL only • Increase premium contributions by 7%a. Across all income categoriesb. Above 300% FPL only

  5. Affordability Schedule Options • Options presented: • Make no changes to affordability schedule • Increase premium contributions by 3.5% a. Across all income categoriesb. Above 300% FPL only • Increase premium contributions by 7%a. Across all income categoriesb. Above 300% FPL only

  6. Option 1: No changesAffordability Schedule - Individuals

  7. Affordability Schedule Options • Options presented: • Make no changes to affordability schedule • Increase premium contributions by 3.5%a. Across all income categoriesb. Above 300% FPL only • Increase premium contributions by 7%a. Across all income categoriesb. Above 300% FPL only

  8. Option 2a: 3.5% increase across all incomesAffordability Schedule - Individuals

  9. Option 2b: 3.5% increase above 300% FPLAffordability Schedule - Individuals

  10. Affordability Schedule Options • Options presented: • Make no changes to affordability schedule • Increase premium contributions by 3.5% a. Across all income categoriesb. Above 300% FPL only • Increase premium contributions by 7%a. Across all income categoriesb. Above 300% FPL only

  11. Option 3a: 7% increase across all incomesAffordability Schedule - Individuals

  12. Option 3b: 7% increase above 300% FPLAffordability Schedule - Individuals

  13. Affordability Schedule Options:“Graduated” Approach • “Graduated” approach • 0% increase 0 – 300% FPL • 2.5% increase 300.1 – 360% FPL • 3% increase 360.1 – 408% FPL% FPL • 3.5% increase 408.1 - 504% FPL

  14. Option 4: “Graduated” approachAffordability Schedule - Individuals

  15. Public Comments - Summary • Comments received support no changes to the affordability schedule for CY 2010 • Request consideration of current economic climate and financial distress • Recommend that affordability schedule should be tied to a consistent percentage of income spent on premiums • Suggest inclusion of a requirement that adults should not be required to pay more than 10% of income on health insurance premiums • Advise consideration of cost-sharing in addition to premiums

  16. Impact Analysis Analysis presented at February 11, 2010 meeting: • Specific to those with income above 300% FPL • Compared proposed affordability schedules to estimated premium price of lowest cost non-group Bronze plan (as of July 2010) • Option 1 (no change) would result in the most projected categorical exemptions from mandate • Option 3 (7% increase) would result in fewest projected categorical exemptions • In all 4 options, several age/income groups from Cape & Islands projected to be newly subject to mandate in 2010

  17. Impact Analysis • Cohorts newly subject to the mandate under each option (as compared to 2009)

  18. Impact Analysis • Cohorts newly exempt from mandate under each option (as compared to 2009)

  19. Board requested additional information to quantify relative impact of proposed affordability schedule options Available data sources are inadequate to quantify the number of adults in each of the cohorts identified in previous analysis (relying on non-group coverage) Impact Analysis (continued) 19

  20. Impact Analysis (continued) Source: Division of Health Care Finance and Policy (2009, November). Health care in Massachusetts: Key indicators. Boston, MA: Author.

  21. Additional Impact Analysis: ESI Approach* • Differences between proposals: • Families at 300-400% FPL projected to be subject to the mandate only under Option 3a or 3b (7% increase), using DHCFP mean contribution • ~275,000 adults age 18-64 in this cohort • Individuals and couples at 250-300% FPL subject to mandate only under Option 3a and 3b (7% increase), using AIM avg contribution • ~126,000 adults age 18-64 in these cohorts 21 *Included in the reference slides section of this presentation are more detailed slides summarizing the approach and the associated limitations of this analysis.

  22. Timeline and Next Steps

  23. Reference Slides

  24. Option 1: No changeAffordability Schedule - Couples

  25. Option 1: No changeAffordability Schedule - Families

  26. Option 1: No changeImpact on application of mandate at >300% FPL • Projected increase in number of age/income categories exempt from individual mandate compared to 2009 (using projected July 2010 premiums) Note: For these analyses the findings regarding application of the mandate are based on a comparison of the proposed affordability schedule to the estimated premium price for the lowest cost non-group plan for that particular cohort as of July 2010. If an individual, couple, or family with this same demographic profile had access to ESI or some other form of subsidized insurance such that their insurance premium contribution is less than the non-group premium price estimated in these analyses, this “exemption” may not apply.

  27. Option 2a: 3.5% increase across all incomesAffordability Schedule - Couples

  28. Option 2a: 3.5% increase across all incomesAffordability Schedule - Families

  29. Option 2b: 3.5% increase above 300% FPLAffordability Schedule - Couples

  30. Option 2b: 3.5% increase above 300% FPLAffordability Schedule - Families

  31. Option 2: 3.5% increaseImpact on application of mandate at >300% FPL • Projected changes in age/income cohorts subject to mandate compared to 2009 Note: For these analyses the findings regarding application of the mandate are based on a comparison of the proposed affordability schedule to the estimated premium price for the lowest cost non-group plan for that particular cohort as of July 2010. If an individual, couple, or family with this same demographic profile had access to ESI or some other form of subsidized insurance such that their insurance premium contribution is less than the non-group premium price estimated in these analyses, this “exemption” may not apply.

  32. Option 3a: 7% increase across all incomesAffordability Schedule - Couples

  33. Option 3a: 7% increase across all incomesAffordability Schedule - Families

  34. Option 3b: 7% increase above 300% FPLAffordability Schedule - Couples

  35. Option 3b: 7% increase above 300% FPLAffordability Schedule - Families

  36. Option 3: 7% increaseImpact on application of mandate at >300% FPL • No projected changes in age/income cohorts subject to mandate compared to 2009 in Central MA; changes for Cape & Islands and Western MA as shown below Note: For these analyses the findings regarding application of the mandate are based on a comparison of the proposed affordability schedule to the estimated premium price for the lowest cost non-group plan for that particular cohort as of July 2010. If an individual, couple, or family with this same demographic profile had access to ESI or some other form of subsidized insurance such that their insurance premium contribution is less than the non-group premium price estimated in these analyses, this “exemption” may not apply.

  37. Option 4: “Graduated” ApproachAffordability Schedule - Couples

  38. Option 4: “Graduated” ApproachAffordability Schedule - Families

  39. Option 4: “Graduated” ApproachImpact on application of mandate at >300% FPL • Projected changes in age/income cohorts subject to mandate compared to 2009 Note: For these analyses the findings regarding application of the mandate are based on a comparison of the proposed affordability schedule to the estimated premium price for the lowest cost non-group plan for that particular cohort as of July 2010. If an individual, couple, or family with this same demographic profile had access to ESI or some other form of subsidized insurance such that their insurance premium contribution is less than the non-group premium price estimated in these analyses, this “exemption” may not apply. 39

  40. Additional Impact Analysis: ESI Approach • Methodology: • Specific to those with access to ESI • Compared proposed affordability schedules to average enrollee contributions for ESI 40

  41. Additional Impact Analysis: ESI Approach (continued) • Methodology (continued): • Identified which family type/income cohorts may be exempt from or subject to the mandate under each affordability standard proposal (based on average contribution considered) • Used Census data to estimate the total number of adults in each family type/income cohort in Massachusetts (regardless of insurance coverage type) 41

  42. Additional Impact Analysis: ESI Approach (continued) Limitations: • Analysis relies on measures of average enrollee contributions and does not account for dispersion • Enrollee contributions are from 2009 and do not account for on-going premium growth • Census data are from 2000 • Population has grown since that time • Results refer to the ENTIRE population in a given cohort

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