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Georgia’s Healthcare Exchange Experience

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  1. Georgia’s Healthcare Exchange Experience Robert Threlkeld, Partner Morris, Manning & Martin, LLP rthrelkeld@mmmlaw.com (404) 233-7000

  2. Agenda • Overview of Affordable Care Act • Georgia Exchange (focus on Individual plans) • Year 1 Overview • Year 2 Projections • How to Help Navigate Members

  3. OVERVIEW OF THE AFFORDABLE CARE ACT

  4. Affordable Care Act The Patient Protection and Affordable Care Act (Pub. L. No. 111-148) was enacted on March 23, 2010; the Health Care and Education Reconciliation Act (Pub. L. No. 111-152) was enacted on March 30, 2010. These laws are collectively known as the Affordable Care Act (“ACA”). The primary goals of the ACA are to decrease the number of uninsured Americans and reduce the overall costs of health care.

  5. Health Insurance Exchange SOURCE: https://www.healthcare.gov/get-covered-a-1-page-guide-to-the-health-insurance-marketplace/ • ACA created the ability for states to establish a state-operated Exchange entity or elect (default) to a federally-operated Exchange • The primary functions of the Exchange include: • Eligibility and enrollment for Medicaid • Eligibility and enrollment for Individuals • Eligibility and enrollment for Small Business Health Options Program (SHOP) • Plan Management • Financial Management • Consumer Assistance for the Exchange

  6. State versus Federal Exchange SOURCE: http://kff.org/health-reform/state-indicator/state-decisions-for-creating-health-insurance-exchanges-and-expanding-medicaid/ Federally-facilitated Exchange Model (FFE)– All core functions of the Exchange are operated by the United States Department of Health and Human Services (HHS) on behalf of a state. 27 states (including Georgia) State-based Exchange Model (SBE) – All core functions of the Exchange are operated by the state. 16 states and District of Columbia State Partnership Exchange Model (SPE)—States can elect to participate in the Federally Facilitated Exchange model but retain and operate either Plan Management or Consumer Assistance OR both Plan Management and Consumer Assistance. 7 states

  7. Medicaid Expansion SOURCE: www.kff.com and The Henry J. Kaiser Family Foundation The Medicaid expansion is a core component of ACA and was designed to fill longstanding gaps in health coverage for adults. As enacted, the ACA created a continuum of health coverage options, with Medicaid expanding to cover all low-income adults with income up to 138% of poverty (about $16,000 for an individual) and tax credits to purchase private coverage in new Health Insurance Marketplaces available to people with moderate incomes.

  8. Medicaid Expansion SOURCE: www.kff.com and The Henry J. Kaiser Family Foundation However, the July 2012 Supreme Court ruling on the Affordable Care Act effectively made the Medicaid expansion a state option, and as of August 2014, 21 states, including Georgia, are not moving forward with the Medicaid expansion at this time (see next slide). In states that do not implement the Medicaid expansion, millions of low-income adults that could have gained Medicaid will remain ineligible for the program. A small number of these people may be eligible for tax credits to purchase private coverage, but the majority will be left without an affordable coverage option.

  9. Current Status of Medicaid Expansion ME VT WA NH* MT ND MN OR MA NY WI* SD ID MI* RI CT WY PA* NJ IA* NE OH DE IN* IL NV MD CO UT WV VA CA DC KS MO KY NC TN AZ SC OK AR* NM GA AL MS AK LA TX FL HI Implementing the Medicaid Expansion (28 States including DC) NOTES: Data are as of August 28, 2014. SOURCES: Current status for each state is based on data from the Centers for Medicare and Medicaid Services Slide courtesy of the Henry J. Kaiser Family Foundation Open Debate (2 States) Not Moving Forward at this Time (21 States)

  10. GEORGIA EXCHANGE

  11. Georgia Plans Generally SOURCES: http://www.webmd.com/health-insurance/20130716/how-affordable-care-act-affects-smokers • Georgia follows the Federally-facilitated Exchange (FFE) Model under which all core functions of the Exchange are operated by the United States Department of Health and Human Services (HHS) on behalf of a state. • Georgians wishing to enroll in the Exchange must visit www.healthcare.gov • Insurers are prohibited from denying coverage based on pre-existing conditions. • Tobacco Surcharge: Georgia allows insurance companies to charge tobacco users 50% more than non-tobacco users. 

  12. Georgia Plan Benefits SOURCE: http://www.cms.gov/CCIIO/Resources/Data-Resources/Downloads/georgia-ehb-benchmark-plan.pdf • All approved plans in the state must cover the same package of benefits, called essential health benefits. In Georgia, the benefits include: • Outpatient services, such as doctor visits or tests done outside a hospital, including chiropractic care and the diagnosis and treatment of conditions that cause infertility • Emergency services • Hospital stays • Pregnancy and baby care • Mental health and substance abuse services, including behavioral health treatment • Prescription drugs, including generic and certain brand-name drugs • Rehab and habilitative services, those that help people recover from an accident or injury and those that help people with developmental issues. In Georgia, this includes up to 20 visits for physical or occupational therapy and 20 visits for speech therapy. Coverage for autism services is also required. • Lab services • Preventive and wellness services, along with those that help people manage chronic conditions • Services for children, including dental and eye care • Some services not included: hearing aids, cosmetic surgery, long-term care, and private nursing.

  13. “Metal” Plans SOURCE: https://www.healthcare.gov/how-do-i-choose-marketplace-insurance/plans-categories/ • Insurers must cover a minimum set of essential health benefits and must organize their plan offerings into five levels of patient cost-sharing (below, ranging from most to least protective). These “metal” plans are offered in each state. • Plans in each category pay different amounts of the total costs of an average person’s care. This takes into account the plans’ monthly premiums, deductibles, copayments, coinsurance, and out-of-pocket maximums. The actual percentage an insured pays will depend on the services he or she uses during the year. • Bronze Plan:Insureds pay 40% and the plan pays 60%. • Silver Plan:Insureds pay 30% and the plan pays 70%. • Gold Plan:Insureds pay 20% and the plan pays 80%. • Platinum Plan:Insureds pay 10% and the plan pays 90%. • Catastrophic Plan: plans pay less than 60% of the total average cost of care on average. They’re available only to people who are under 30 years old or have a hardship exemption.

  14. “Metal” Plans Continued SOURCE: http://kaiserfamilyfoundation.files.wordpress.com/2013/09/early-look-at-premiums-and-participation-in-marketplaces.pdf Bronze plans (which cover 60 percent of health care costs when averaged across all enrollees) have the most cost-sharing and represent the lowest level of coverage generally available through exchanges. As a consequence, they typically have the lowest premiums. Silver plans have lower cost-sharing than bronze plans (covering an average of 70 percent of enrollees’ health care costs on average), and will therefore generally have higher premiums.

  15. Georgia and Medicaid Expansion SOURCE: Health and Human Services, http://www.hhs.gov/healthcare/facts/bystate/ga.html Georgia has not expanded Medicaid. As of July 2014, only 204,051 Georgians have gained Medicaid or CHIP coverage since the beginning of the Health Insurance Marketplace’s first open enrollment period in October, 2013. According to HHS, if Georgia expanded Medicaid, an additional 478,000 uninsured individuals would gain coverage. The expansion would be paid 100% by federal funds for the first three years and federal funds would never fall below 90% of costs thereafter. Across the nation, 8 million more Americans are now enrolled in Medicaid and CHIP.

  16. Georgia Enrollment Numbers: 2014 SOURCE: U.S. Department of Health and Human Services, http://www.hhs.gov/healthcare/facts/bystate/ga.html 316,543 individuals selected a Marketplace planbetween October 1, 2013 and March 31, 2014 (including additional special enrollment period activity through April 19, 2014). 57% are female and 43% are male. 36% are under age 35. 31% are between the ages of 18 and 34. 87% selected a plan with financial assistance.

  17. Enrollment Numbers: 2014

  18. Enrollee Plan Selections: 2014 SOURCE: ASPE Marketplace Summary Enrollment Report and CMS March Medicaid/CHIP Enrollment Report • Bronze Plan:11% of Georgians selected (20% nationally) • Insured pays 40% and plan pays 60% • Silver Plan:71% of Georgians selected (65% nationally) • Insured pays 30% and the plan pays 70%. • Gold Plan:6.5% of Georgians selected (8% nationally) • Insured pays 20% and the plan pays 80%. • Platinum Plan:9.5% of Georgians selected (5% nationally) • Insured pays 10% and the plan pays 90%. • Catastrophic Plan: 2% of Georgians selected (2% nationally) • Thirty-one percent of Georgia enrollees were between the ages of 18 and 34.

  19. Insurers Selling in Georgia Marketplace: 2014 SOURCE: Georgia Office of Insurance and Safety Fire Commissioner • Participating insurers generally will offer a number of plans at various tiers of coverage (“metals”), and they also typically offer more than one plan option within a given coverage tier. As a result, the number of plans available to consumers will be significantly greater than the number of insurers participating. • In 2014, only five carriers participated: • BlueCross BlueShield (BCBS) of Georgia, Alliant, Humana, Kaiser Foundation Health Plan, and Peach State

  20. Georgia Market Rating Areas SOURCE: Georgia Office of Insurance and Safety Fire Commissioner The Market Rules and Rate Review Final Rule (45 CFR Part 147) provides that each state will have a set number of geographic rating areas that all issuers in the state must uniformly use as part of their rate setting. In Georgia, the Market Rating Areas are based on counties and there are currently 16 regions. The carriers were split into regions throughout the state to identify what areas each participated. In 2014, BCBS was the only carrier that was offered in all 16 regions in the state.  Not all counties within a particular rating area are actually served by each carrier in every case. A carrier is noted as serving a named Market Rating Area if they serve in at least one county within a particular rating area.

  21. Georgia Market Rating Areas

  22. Insurers By Market Rating Area: 2014 SOURCE: Georgia Office of Insurance and Safety Fire Commissioner

  23. Premium Variables SOURCE: http://kaiserfamilyfoundation.files.wordpress.com/2013/09/early-look-at-premiums-and-participation-in-marketplaces.pdf and Georgia Office of Insurance and Safety Fire Commissioner Exchange premiums reflect insurers’ estimates of the cost of offering the new benefits to the people who are expected to enroll. Insurers will be able to vary premiums only by age (to a limited extent), tobacco status, geographic region, and family size. In general, lowest premiums for 2014 were in Region 8: Columbus. In general, highest premiums for 2014 were in Region 1: Albany.

  24. Premium Variables SOURCE: http://kaiserfamilyfoundation.files.wordpress.com/2013/09/early-look-at-premiums-and-participation-in-marketplaces.pdf and Georgia Office of Insurance and Safety Fire Commissioner Unsubsidized exchange premiums vary due to several factors, such as differences in the underlying cost of health care, market competition, and the effectiveness of state rate review programs at lowering premiums. Exchanges also vary in their authority to negotiate premiums with insurers or exclude plans. Within a given rating area for a given insurer, premiums will vary by the age of an individual, as well as family income and household size, which determine eligibility for tax credits.

  25. Premiums* Based on Rating Area: 2014 *Premiums are based on average rate for all insurers per Rating Area for a 40 year old individual **Based on lowest-price Silver or Bronze plan per insurer SOURCE: Data provided by Georgia Office of Insurance and Safety Fire Commissioner

  26. Premiums Based on Rating Area: 2014

  27. Premiums* Based on Insurer: 2014 *Premiums are based on average rate per insurer across all Georgia Rating Areas for a 40 year old individual. Insurers do not all offer plans n same rating areas, which may affect an insurer’s average premium price. **Based on lowest-price Silver or Bronze plan per insurer SOURCE: Data provided by Georgia Office of Insurance and Safety Fire Commissioner

  28. Premiums Based on Insurer: 2014

  29. Premiums* Based on Age: 2014 *Premiums based on average of lowest cost premiums across all insurers SOURCE: Data provided by Georgia Office of Insurance and Safety Fire Commissioner

  30. Premiums Based on Age: 2014

  31. Tax Credits SOURCES: http://www.healthinsurance.org/georgia-state-health-insurance-exchange/ and http://aspe.hhs.gov/health/reports/2014/Premiums/2014MktPlacePremBrf.pdf . Enrollees with family incomes from one to four times the federal poverty level (about $24,000 to $94,000 for a family of four) may qualify for tax credits that will lower the cost of coverage through reduced premiums and, in some cases, also be eligible for subsidies to reduce their out-of-pocket costs. Among Georgia residents selecting a QHP, 87 percent qualified for financial assistance, compared to 85 percent nationally. Areport released in June by the U.S. Department of Health and Human Services showed the average monthly premium, after tax credits, for Georgia consumers was $54. Sixty percent of enrollees pay $50 or less per month after subsidies. Georgia’s $54 average is second only to Mississippi, where the average monthly premium after subsidies is just $23.

  32. Tax Credit Calculation SOURCE: http://kaiserfamilyfoundation.files.wordpress.com/2013/09/early-look-at-premiums-and-participation-in-marketplaces.pdf • Exchange subsidies limit the percent of one’s income that he or she must spend on a silver premium. The cap depends on the enrollee’s income range. • Maximum Amount Enrollee Pays for Benchmark Silver Premium = Cap (%) * Income • If the enrollee’s unsubsidized premium is already less than their cap, he or she would not receive a subsidy. • Tax Credit = Unsubsidized Benchmark Silver Premium – Maximum Amount Enrollee Pays for Silver Premium • Subsidized enrollees can apply their tax credit toward the purchase of other levels of coverage, such as bronze plans. • Amount Enrollee Pays for Bronze Premium = Unsubsidized Bronze Premium – Tax Credit

  33. Subsidy Study 1: 2014 SOURCE: http://kff.org/interactive/subsidy-calculator/ • Blake is a 25 year-old non-smoker and resides in Atlanta, Fulton County (Rating Area 3). • Blake is single, has no children, has no employer coverage. • Blake’s household income in 2014: $25,000 (218% of poverty level of $11,670 for family of 1). • Maximum % of income Blake will have to pay for the premium, if eligible for a subsidy: 6.92% • Health Insurance premium in 2014 (for a silver plan, before tax credit): $2,362 per year ($197 per month) • Blake could receive a government tax credit subsidy of up to: $633 per year (which covers 27% of the overall premium) • Amount Blake pays for the premium: $1,729 per year ($144 per month) (which equals 6.92% of Blake’s household income and covers 73% of the overall premium)

  34. Subsidy Study 2: 2014 SOURCE: http://kff.org/interactive/subsidy-calculator/ • Jay and his wife Jenn are 40 year-old non-smokers and reside in Athens, Clarke County (Rating Area 2). • Jay and Jenn have 2 children, both under 21 and non-smokers who will also enroll in exchange coverage • Neither Jay nor Jenn has employer coverage. • Jay and Jenn’s household income in 2014: $60,000 (255% of poverty level of $23,850 for a family of 4). • Maximum % of income Jay and Jenn have to pay for the premium, if eligible for a subsidy: 8.19% • Health Insurance premium in 2014 (for a silver plan, before tax credit): $8,721per year ($727 per month) • Jay and Jenn could receive a government tax credit subsidy of up to: $3,808 per year (which covers 44% of the overall premium) • Amount Jay and Jenn pay for the premium: $4,913 per year ($659 per month) (which equals 8.19% of their household income and covers 56% of the overall premium)

  35. Subsidy Study 3: 2014 SOURCE: http://kff.org/interactive/subsidy-calculator/ • Bill and his wife Jan are 60 year-old non-smokers and reside in Savannah, Chatham County (Rating Area 14). • Bill and Jan have 3 children, all non-dependents and who are enrolling separately in exchange coverage • Neither Bill nor Jan has employer coverage. • Bill and Jan’s household income in 2014: $45,000 (290% of poverty level of $15,730 for a family of 2). • Maximum % of income Bill and Jan have to pay for the premium, if eligible for a subsidy: 9.21% • Health Insurance premium in 2014 (for a silver plan, before tax credit): $17,435 per year ($1,453 per month) • Bill and Jan could receive a government tax credit subsidy of up to: $13,289 per year (which covers 76% of the overall premium) • Amount Bill and Jan will pay for the premium: $4,416 per year ($368 per month) (which equals 9.21% of their household income and covers 24% of the overall premium)

  36. GEORGIA EXCHANGE: YEAR 2 PROJECTIONS

  37. 2015 Enrollment Period SOURCES: https://www.healthcare.gov/glossary/open-enrollment-period/and https://www.healthcare.gov/glossary/special-enrollment-period/ The next open enrollment period will be from November 15, 2014, to February 15, 2015. If an individual has a life-changing event -- such as the birth of a child, losing a job, or moving to a new state – such individual is not required to wait for the next enrollment period and can sign up or change coverage within 60 days of the event.  In the Marketplace, you qualify for a special enrollment period 60 days following certain life events that involve a change in family status (for example, marriage or birth of a child) or loss of other health coverage. Job-based plans must provide a special enrollment period of 30 days.

  38. Insurers Selling in Georgia Marketplace: 2015 SOURCE: Georgia Office of Insurance and Safety Fire Commissioner • In 2015, the following carriers will be added to the Georgia marketplace (to add to BCBS, Alliant, Humana, and Peach State): • Cigna, Coventry, Kaiser, Time Insurance, and United Healthcare • The carriers will still be split according to the Georgia Market Rating Areas, but along with BCBS, Coventry, Humana, and United Healthcare will most likely be available in all 16 areas. • Note that even if a carrier provides service in an area, the carrier does not necessarily provide service in every county in that area.

  39. Proposed Georgia Market Rating Areas: 2015(new insurers in each area are in red) NOTE: Not all counties within a particular service area are actually served by each carrier in every case. A carrier is noted as serving a named Geo Service Area if they serve in at least one county within a particular service area. SOURCE: Georgia Office of Insurance and Safety Fire Commissioner

  40. Projected Premiums* Based on Insurer: 2015 *Premiums are based on average rate per insurer across all Georgia Rating Areas for a 40 year old individual. Insurers do not all offer plans in same areas **Based on lowest-price Silver or Bronze plan per insurer SOURCE: Data provided by Georgia Office of Insurance and Safety Fire Commissioner

  41. Projected Premiums Based on Insurer: 2015

  42. Projected Premiums* Based on Rating Area: 2015 *Premiums are based on average rate for all insurers per Rating Area for a 40 year old individual **Based on lowest-price Silver or Bronze plan per insurer SOURCE: Data provided by Georgia Office of Insurance and Safety Fire Commissioner

  43. Projected Premiums* Based on Rating Area: 2015

  44. Change in Silver Premiums Based on Rating Area SOURCE: Data provided by Georgia Office of Insurance and Safety Fire Commissioner

  45. Change in Silver Premiums Based on Rating Area

  46. Change in Bronze Premiums Based on Rating Area SOURCE: Data provided by Georgia Office of Insurance and Safety Fire Commissioner

  47. Change in Bronze Premiums Based on Rating Area

  48. Projected Premiums* Based on Age: 2015 *Projected premiums based on average of lowest cost premiums for a 40 yearold individual across all insurers SOURCE: Data provided by Georgia Office of Insurance and Safety Fire Commissioner

  49. Projected Premiums Based on Age: 2015

  50. Change in Silver Premiums SOURCE: Data provided by Georgia Office of Insurance and Safety Fire Commissioner