Health Reform and the Minnesota Health Insurance Exchange

1. Health Reform and the Minnesota Health Insurance Exchange ANNA ODEGAARD SEIU

2. Today’s Agenda Health Reform Overview Minnesota Health Insurance Exchange Critical Decisions Q & A

3. Three Questions: 1. What are some problems with our current healthcare system? 2. Who benefits in our current healthcare system? 3. Who makes decisions in our current healthcare system?

4. Health Reform Overview

5. The ACA regulates the insurance industry to protect patients. Eliminates exclusions for pre-existing conditions Extends dependent coverage up to age 26 Eliminates lifetime and annual limits on benefits Prohibits rescission Guarantees comprehensive benefits Protects you from unreasonable rate increases

6. The ACA Eliminates Exclusions for Pre-existing Conditions Before the ACA, insurers could: Refuse to insure you if you were already sick Charge you more for insurance if you were sick Refuse to pay for conditions you had before buying insurance Now, plans that cover children can no longer deny coverage or charge more for sick children. Starting in 2014, these protections will be extended to Americans of all ages.

7. The ACA Extends Dependent Coverage up to Age 26 Your children can join or remain on your plan even if they are: Married Not living with you Attending school Not financially dependent on you Eligible to enroll in their employer’s plan 2.5 million young people have already gained coverage due to this provision.

8. The ACA Eliminates Lifetime & Annual Limits on Benefits Before the ACA, many health plans set: Lifetime limits Annual limits You were required to pay the cost of care over those limits. Under the ACA: Lifetime limits are already prohibited Annual limits will be phased out by 2014

9. The ACA Prohibits Rescission Except in Cases of Fraud. “Rescission” means cancelling your insurance. Before the ACA, an insurer could rescind your coverage at any time if you made a mistake on your application. Now, an insurer can’t rescind your coverage because you made an honest mistake.

10. The ACA Guarantees Comprehensive Benefits. Starting in 2014, all insurance plans in the individual and small group market must cover “Essential Health Benefits” in ten categories: Ambulatory services 6. Prescription Drugs Emergency services 7. Rehab services Hospitalization 8. Laboratory services Maternity and Newborn care 9. Preventive/Chronic Disease Mental health and substance use 10. Pediatric services

11. The ACA prioritizes prevention. The ACA requires health plans to cover some preventive services at no cost, including: Blood pressure, diabetes and cholesterol tests Well-child visits from birth to age 21 Some cancer screenings Flue and pneumonia shots Many others (see healthcare.gov for full list)

12. The ACA Protects You from Unreasonable Rate Increases “The nation’s major health insurers are barreling into a third year of record profits… Yet the companies continue to press for higher premiums, even though their reserve coffers are flush with profits and shareholders have been rewarded with new dividends.” -New York Times, “Health Insurers Making Record Profits as Many Postpone Care.” May 13, 2011.

13. The ACA Protects You from Unreasonable Rate Increases The ACA can’t prevent premium increases. But it does: Grant $250 million to states to fight unreasonable rate increases Require insurers to submit justification for rate increases over 10% Require plans in the Exchange to submit all rate increases for review

14. The ACA requires most people to buy health insurance. This is called the Individual Mandate. This spreads risk over a larger and healthier population. It means insurers can afford the cost of other reforms (like covering people regardless of their health status) without raising everyone’s premiums. It also means tax payers won’t have to cover cost of uncompensated care.

15. Something to be very proud of

16. And a whole lot of other stuff

17. Health Reform in Minnesota: Critical Decisions

18. Health Reform: Critical Decisions Will Minnesota adopt full Medicaid Expansion? What will happen to the MNCare population?

19. Health Reform: Critical Decisions Minnesota should adopt full Medicaid Expansion to 138% of the Federal Poverty Level. Individual: < $15,000 Family of 4: < $32,000

20. Health Reform: Critical Decisions Federal Funding for full Medicaid Expansion: 100% first 3 years 98% next 3 years 90% after 2020

21. Health Reform: Critical Decisions The Basic Health Plan: Minnesota should take this opportunity to improve on the MNCare program for those up to 200% FPL. Basic Health Plan should make insurance affordable for everyone in the MNCare population.

22. Minnesota Health Insurance Exchange

23. What is an Exchange?

24. What is an Exchange? • An Exchange is an online marketplace for health insurance plans. • Exchanges will: • make health insurance more affordable and more accessible • enable people to make more knowledgeable choices about their health insurance

25. What is an Exchange? On the Exchange web site you can: Determine eligibility Compare health plans Enroll in a public or private health plan

26. What is an Exchange? 1.2 million Minnesotans will use the Exchange by 2016: • Individuals who don’t get insurance through their employer because it’s not offered or not affordable • Employees of small businesses • People who are eligible for public health insurance programs

27. Why do we need a Health Insurance Exchange?

28. Consumer-friendly features Insurance will be more affordable: • Premium tax credits • Cost-sharing subsidies • Small business tax credits

29. Consumer-friendly features Premium Tax Credits for people with household income up to 400% of the Federal Poverty Level: • Individuals: up to $45,000 • Family of 4: up to $92,000 Cost-sharing subsidies for people with household income up to 250% of the Federal Poverty Level: • Individuals: up to $28,000 • Family of 4: up to $58,000

30. Consumer-friendly features Tax credits for small businesses: • < 25 employees • < $50,000 average salary

31. Consumer-friendly features Insurance will be more accessible: • Single streamlined application • Real-time eligibility determination • Plan comparison tools

32. Minnesota Health Insurance Exchange: Critical Decisions

33. Critical Decisions Will the Exchange be an Active Purchaser? How will the Exchange be governed? How will the Navigator system work?

34. Critical Decisions A Clearinghouse Exchange allows all health plans that meet minimum federal standards to be offered on the Exchange. An Active Purchaser Exchange leverages the collective purchasing power of all Exchange enrollees to strike a better deal with insurers.

35. Critical Decisions An Active Purchaser Exchange can • Negotiate for lower prices and better coverage • Establish a competitive bidding process • Offer a manageable number of health plans

36. Critical Decisions California requires its Board to engage in Active Purchasing: “The board shall seek to contract with carriers so as to provide health care coverage choices that offer the optimal combination of choice, value, quality, and service.” -California AB 1602

37. Critical Decisions How will the Exchange be governed?

38. Critical Decisions Of the 16 states that have Exchanges: • 7 prohibit representatives of insurers or brokers from serving on the Board of Directors • 6 allow or require representatives of insurers or brokers to serve on the Board of Directors • 3 have not addressed this issue

39. Critical Decisions The Navigator Program

40. Critical Decisions The Navigator program should serve: • 300,000 previously uninsured • People with language or culture barriers • People with disabilities • People who haven't been able to afford insurance

41. Critical Decisions: Full Medicaid Expansion to 138% FPL Basic Health Plan for MNCare population Active Purchaser Exchange Conflict-free Exchange Board Community-Based Navigator Program

42. Q & A

43. Anna Odegaard anna.odegaard@seiuhealthcaremn.org