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Agenda

Commonwealth Health Insurance Connector Authority Commonwealth Choice Seal of Approval Update Patrick Holland, Chief Financial Officer Board of Directors Meeting June 11, 2009. Agenda. Seal of Approval Timeline Goals of Seal of Approval Process Background and overview of carrier responses

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Agenda

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  1. Commonwealth Health Insurance Connector AuthorityCommonwealth Choice Seal of Approval UpdatePatrick Holland, Chief Financial OfficerBoard of Directors MeetingJune 11, 2009

  2. Agenda • Seal of Approval Timeline • Goals of Seal of Approval Process • Background and overview of carrier responses • Proposed Health Connector changes to initial RFR specifications • Next steps

  3. CY 2010 CommChoice Seal of Approval (SOA) BOD Agenda Topics

  4. Goals of Seal of Approval Process

  5. Goals of SoA Process • Select and offer high value plans • Align choice of plan designs and carriers with consumer demand • Market data • Consumer focus group results • Enhance simplicity of consumer shopping experience • Minimize risk selection • Inside and outside of the Heath Connector • Among participating health plans • Maintain continuity of coverage for existing ~21,000 Commonwealth Choice members

  6. Background and overview of carrier responses

  7. Items Requiring Board Feedback • Recommended suite of products • Minor changes to standardization model • Annual Benefit Maximum on Young Adult Plans

  8. Recommended Suite of Products • Revised suite of plan designs for consideration/discussion • Gold B (as defined in initial RFR) • Silver A, B, C (as defined in initial RFR) • Bronze A, C (as defined in initial RFR) • Bronze B (new $2,000/$4,000 deductible w/co-pay design; replaces coinsurance) • YAP A, B (as defined in initial RFR)

  9. Recommended Suite of Products (con’t) • Moving to 9 plan designs from essentially 21 different plan designs • Easier for consumer to navigate • Find Product Tier [Gold/Silver/Bronze] • No greater than 3 plan designs within each tier • Select carrier

  10. Underlying Medical Trend • Premium trend for Connector-based products consistent with outside market • Underlying medical trend for NG-Small Group market between 7.5% - 11% • One outlier above 11%

  11. Gold - Overview • Current offerings are largely standardized • Very little variation across products • Membership heavily concentrated in one benefit design • Goal was to preserve standardization and create lower cost option • Requested pricing for two plan designs: • Current most popular plan (NHP/BCBS) • New, lower-cost option

  12. Gold – Selected Designs

  13. Gold – Product Price Compare • New prices relative to current plans with trend

  14. Silver - Overview Large number of plans and significant variation in benefits across carriers “high” and “low” benefit designs unclear Membership more diffuse, but concentrated in a few benefit designs Goal was to standardize products while creating clear higher and lower product choices for each carrier Requested bids on three products Current most popular products 14

  15. Silver – Selected Designs 15

  16. Silver – Product Price Compare • New prices relative to current plans with trend

  17. Bronze - Overview Most popular benefit tier Less variation than silver, but still significant differences across plan options Goal was to standardize choices with different price points Requested bids for three options: Current most popular product New design based on market research HSA compliant plan (similar to a current popular product) 17

  18. Bronze – Selected Designs 18

  19. Bronze – Product Price Compare • New prices relative to current mix with trend

  20. YAP Overview • Range of product options • Membership heavily concentrated in two benefit designs • Goal was to standardize benefits based on most popular options • Requested bids on two plans, with four iterations of annual benefit max

  21. YAP – Selected Designs 21

  22. YAP Pricing Differential • Price difference relative to $50,000 annual maximum

  23. Health Connector Proposed Modifications to Initial RFR Specifications

  24. Proposed Modifications • Member Value-Added Options for Consideration • Waiver of co-payment for preventive care office visits • Offer 3 visit co-pay option on PCP visits in YAP B plan design • The Health Connector currently has products on the shelf which allow for 3 PCP office visits subject to co-payment only (subsequent visits are subject to the deductible) • Inpatient Mental Health • Carriers may modify the inpatient mental health cost-sharing arrangement, so long as this modification results in a plan design that is consistent with state and federal mental health parity regulations

  25. Proposed Modifications • Durable Medical Equipment • The information provided in the RFR Responses indicated variances in the way carriers are defining DME • The Health Connector is considering waiving the requirement of carriers to conform to the same cost-sharing and benefit structure for this service category (all tiers; all plan designs)

  26. Proposed Modifications • Revise Plan Design Offerings at Gold Level • Eliminate RFR proposed Gold A plan • The RFR proposed Gold B plan design will become the only Gold tier plan available for sale January 1, 2010 • Existing Gold can be open for renewals only • Revise Plan Design Offerings at Bronze Level • Replace RFR proposed Bronze B plan design with new plan design • Plan design would have a $2,000/$4,000 deductible and co-pay cost-sharing rather than coinsurance • Would allow for both co-pay and coinsurance plan design options for consumers on the bronze tier

  27. Proposed Modifications • Revised suite of plan designs for consideration/discussion • Gold B (as defined in initial RFR) • Silver A, B, C (as defined in initial RFR) • Bronze A, C (as defined in initial RFR) • Bronze B (new $2,000/$4,000 deductible w/copay design) • YAP A, B (as defined in initial RFR)

  28. Next Steps

  29. Next Steps • Integrate Board feedback from today • Continue discussions with Carriers • Bring final recommendations to Board on June 23 regarding participating carriers

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