Washington State Health Insurance Pool 2009 WAHU Symposium Presenter: Anne Mackie Executive Assistant
Today’s Topics • The role of the high-risk pool in today’s market • The Standard Health Questionnaire (SHQ) • Information about WSHIP – the organization, benefit plans, and rates • Why Agents are important!
Remember when the individual market collapsed… • 1999-2000 – Most carriers stopped selling new individual products due to rapidly increasing claims losses • Consumers scrambled to find coverage • 2000 – Health Insurance Access Act was significantly amended with hopes of bringing carriers back into the market
Past Legislative changes • 2000: New legislation allowed enrollment in WSHIP for people living in a county where individual coverage is not offered • 2000: Medical underwriting approved for individual market, using the Standard Health Questionnaire • 2007: RCW 48.41 modified to allow WSHIP to offer more choices in products – HSA plan, limited benefit plans with lower rates
WSHIP’s role today • Provides access to health insurance coverage to all residents of Washington who are denied health insurance – the “safety net” • Provides comprehensive coverage to those unable to obtain it through group or individual coverage • Maintains a healthy individual market by screening out the 8% sickest, which… • Helps to keep individual market rates lower
WSHIP’s role today (cont.) • Individual market enrollment growth, since implementation of the Standard Health Questionnaire for medical underwriting: 2000 = 120,647 to 2007 = 279,329 Percent increase since 2000 = 132% • Efficiently and effectively covers high risk people
2008 Individual market enrollment Total individual market applicants = 99,197 Number / percent accepted for coverage = 94,539 (95.3%) Number / percent rejected for coverage = 4658 (4.7%) Number / percent rejected enrolled in WSHIP = 843 (18.1%)
Efficiency For 2008: • Administrative ratio was low – 6% • Care management programs – $2.3 million savings on closed cases • Provider network – $14.5 million savings • Pharmacy savings – $7.7 million • Medicare SPAP savings – $7.2 million
Effectiveness • Scores from the Standard Health Questionnaire help to identify WSHIP enrollees who can benefit from state-of-the-art care management programs • One local care manager • Case management improves timely and appropriate use of benefits and community resources • Disease management educates & facilitates enrollee’s self-management
Effectiveness (cont.) In 2008 WSHIP added four disease management categories for a total of six: • HIV/AIDS • Depression • Diabetes • Asthma • Coronary artery disease (CAD) • Congestive heart failure (CHF)
Standard Health Questionnaire • A 33-page “short form” with 218 conditions • 99,197 people took the SHQ in 2008 51,987 “online” version 47,210 “paper” version • It is the standardized “tool” for Washington individual market underwriting
Who develops the SHQ? • State law mandates WSHIP Board of Directors to be responsible for “…the form and content of the standard health questionnaire and the method of its application.” RCW 48.41.060 • An independent actuary must certify that the questionnaire identifies the 8% of persons who are the most costly to treat who are under individual coverage in health benefit plans
Standard Health Questionnaire • SHQ must be recertified every 18 months • SB5777/HB1713 – Bills in Legislature, now, to expand time period – every 36 months, which will save limited resources • For recertification, carriers selling individual products must submit five years’ claims data (medical and Rx) • WSHIP’s own claims data also included • Actuary analyzes data
Standard Health Questionnaire • Claims data processed through the Episode Treatment Group (ETG) software to assign each claim to an “episode of care” (ETG) • Prospective risk score is attached to each ETG using cost relativities • Risk weights are used to calculate a “predictive” risk score for each individual
“Off hand, I’d say you’re suffering from an arrow through your head, but just to play it safe, I’m ordering a bunch of tests.”
Standard Health Questionnaire • Work is underway for October 1, 2009, recertified questionnaire • A public process – input provided by: • Agents (12 provided comments) • Carriers • WSHIP Board • OIC and interested parties
Standard Health Questionnaire • An industry “workgroup” reviews all feedback • 80+ items on the SHQ “feedback” list for 2009 recertification • Board “Tool” Committee reviews / approves recommendations; forwards to the Board • Committee chaired by (one of your own): Bill Perkins, CEO, GHB Insurance, Olympia (Governor-appointed agent rep to the Board)
SHQ not always used Exception 1: if eligible for Medicare
SHQ not always used Exception 2:Your medical insurance ended during the last 90 days for any of the following reasons: a. You have used up all of your available COBRA coverage b. Your former employer, who provided you with health coverage, gone out of business while you were on COBRA coverage c. You changed residences from one part of Washington state to another part where your current health plan is not offered
SHQ not always used Exception 3: You are adding a newborn, or adopted child (regardless of age) during the last 60 days who you want to add to your existing policy New issue:Coverage for 25 year-old dependent (RCW 48.44.215) – to be included in revised SHQ for October 2009
SHQ not always used Exception 4: You have been covered by a group health plan that is exempt from COBRA including church plans, for at least 24 continuous months, and: • You will lose coverage under that plan within the next 90 days • You lost coverage within the past 90 days
SHQ not always used Exception 5:Your doctor or other health care provider stopped being a part of the provider network on your current individual medical plan, and… a. Your doctor or provider is on the new health plan you are applying for, and b. You must have had some service from that provider during the 12 months before he or she left your current health plan, and c. You must submit your application to the new health plan within 90 days from the day your provider left your current health plan's network.
SHQ not always used Exception 6: You have been enrolled in the Washington State Basic Health Plan (BHP) for at least 24 continuous months and… a. You will lose your BHP coverage within the next 90 days, or b. You lost your BHP coverage within the last 90 days
New Exemption SHQ issues • Economic downturn causing more businesses to cancel group health insurance • How does this affect the rules for who must take the SHQ? • How might COBRA rules be affected? • Working with the OIC for clarification on SHQ Exemption rules
More about WSHIP • Enrollment growth • 2,333 in 2002 • 3,397 in 2008 • Growth stunted by • Lack of awareness about the Pool by people who are eligible • Concern about premium costs; lack of awareness about lower-cost plan options Agents can help!
More about WSHIP • 2008 Enrollment = 3,397 • Evergreen Health Insurance Program (EHIP), serving HIV/AIDS clients = 920 enrollees (or 28% of WSHIP’s enrollment) • Average age = 49 • 24% enrolled in Medicare due to age or disability • 75% of Medicare enrollees under age 65
More about WSHIP • Individual premiums are: • 110% - 150% higher than “comparable” individual plans in the market (this is law) • Not nearly high enough to pay the actual costs. • The difference between premiums and total costs is made up through “ASSESSMENTS”
How WSHIP is funded • Because WSHIP premiums can be no higher than 150% of comparable commercial plans… • And enrollees are the sickest and most costly… • Premiums paid by enrollees have averaged 32% of total costs of coverage over past five years • The difference is paid by the carriers. They are ASSESSED their proportionate share of the cost based on their share of the general health insurance market in Washington state
Funding continued… Who gets assessed? • “Member Plans” selling health insurance (group or individual). This includes all: • HMOs (Group Health) • Service Contractors (Premera, Regence) • Commercial Insurers (Aetna, United) • Multi-employer Welfare (Timber Products) • Stop-loss Carriers/UMP (Safeco, State plans) (Special deal – ten cents on the dollar) • Life, dental, long term care, disability income and Medicare Advantage coverage excluded.
Funding continued… • WSHIP assessments become part of the premiums paid in the individual and group markets. • Assessments in 2008 were about $40.7million. • This works out to be about $1.12 per month, for each person insured in the individual and group markets (roughly 3.6 million people).
Funding continued… • WSHIP received federal grants to help cover losses and bonus grants to fund premium reductions • In 2006 = $2.4 million ($1.5m for operational losses; the balance for premium subsidies) • In 2008 = $1.6 million ($1m for operational losses; the balance for premium subsidies)
Funding study proposed 2009 Legislative proposal by WSHIP Board: • Solicit funds to study options for equitable, stable, and broad-based funding sources for the operation of the pool • Report findings, recommendations appropriatelegislative committees
WSHIP Organization • WSHIP Board of Directors • Executive Director • Benefit Management, Inc. (BMI) – Plan Administration • First Choice Health Network • Medco (Pharmacy Benefit Manager) • Qualis Health (Care Management)
Application Process • Person applies for private coverage • Carrier application, along with the SHQ, are submitted to the carrier for scoring • Carrier has 15 business days after receipt to process/score and send notice of rejection • If carrier rejects, the rejection notice is sent to applicant along with a separate WSHIP application packet
Carrier Rejection The only way to get WSHIP coverage is if a carrier first rejects the applicant
WSHIP Enrollment Packet Application is 9 pages Section I – Agent Information !!! Packet includes: Eligibility information Summaries of Benefits (all plan options) Rate charts Low-income application Appeals & Grievance Policy Online at: www.wship.org
WSHIP Non-Medicare Plans Standard Plan - 410 enrollees in 2008 Deductibles: $500, $1,000, or $1,500 • 80/20 coinsurance • Three-tiered Rx copays, that vary with deductible • “Passive PPO” overlay, First Choice Network (WA, OR, ID, MT & Beechstreet nationally)
Non-Medicare Plans (continued) Preferred Provider Plan - 2,034 enrollees Deductibles: $500, $1000, $2500, $5000 • First Choice Health Network (WA, OR, ID, MT & Beechstreet nationally) • 80/20 network coinsurance; 40% non-network • Three-tiered Rx copays that vary with deductible
Non-Medicare Plans (continued) HSA Qualified PPO Plan - 60 enrollees • Deductible $3,000 (medical and Rx) • 80/20 network coinsurance; 40% non-network • 20% Rx coinsurance • Combined medical and Rx out-of-pocket expense limit (individual): $5,250 network; $10,500 non-network
Non-Medicare Plans (continued) Limited Preferred Provider Plan “A”– 3 enrollees • Deductible: $1,500 • 80/20 network coinsurance; 40% non-network • Rx 50% non-preferred brand; 30% brand; $10 generic copay; Rx maximum $3,000/year • Reduced benefits for: • medical supplies/equipment; • reduced visits/days for rehab therapies, skilled nursing facility, spinal manipulations.
Non-Medicare Plans (continued) Limited Preferred Provider Plan “B”– 11 enrollees • Deductible: $1,500 • Coinsurance: 20% network; 40% non-network • Rx 50% non-preferred brand; 30% preferred brand; $10 generic copay; Rx maximum $2,000/year • Reduced benefits: No maternity benefit; • reduced medical supplies/equipment allowance; • reduced visits/days for rehab therapies, skilled nursing facility, spinal manipulations.
“There’s really no need for confusion with this Medicare stuff. Page 95, section 33, paragraph L in the instructions quite clearly says…”
Medicare Advantage Proposed Legislation • Limit WSHIP enrollment for new Medicare-eligible persons to only those who do not have access to a reasonable choice of comprehensive Medicare Part C plans • Must have access to at least three different HMO or PPO carriers in their county of residence • Plan options must include coverage at least as comprehensive as a Plan F Medicare supplement plan combined with Parts A and B
Medicare Advantage Proposed Legislation (continued) • Access to a stable provider network in place for at least two years • Easily accessible provider directories either online or hard copy • If no plan includes the provider from whom health care services were received in the past twelve months, not considered reasonable access
Medicare Plans Medicare Basic Plan – requires enrollment in Parts A & B - 190 enrollees • No deductible • Secondary to Medicare Parts A & B - acts as a Medicare wraparound • No coinsurance for benefits covered by Medicare • 20% coinsurance for other benefits • Coverage for Part B Rx drugs; no coverage for Part D Rx drugs
Medicare Plans (continued) Medicare Basic Plus Plan – 603 enrollees • Closed to new enrollment. • Must be enrolled in Medicare Parts A, B, and D. • Pays 100% of deductible, copay, and coinsurance for Medicare benefits. • Enrollee pays 20% of benefits not covered by Medicare.
WSHIP Premiums By law, monthly premiums can be: • No higher than 150% of the “comparable” commercial plans, except… • Network Plan (PPO) can be no higher than 125% of the “comparable” commercial plans A, and • NO premiums can be lower than 110%
2009 Non-Medicare Premiums • Standard Plan base rates are 150% of the Standard Risk Rate (SRR) • Preferred Provider Plan base rates are 110% of SRR with no additional discounts available (statutory minimum) • <65 age-rated in all plans by 5-year brackets • Rates vary by plan and deductible choices • Gender/smoking status do not apply