Deborah Chollet PhD Senior Fellow Individual Exchanges and Small Business Health Options Programs SHOP Exchanges Exchange design and implementation occur in the context of significant market reforms ID: 539365
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Health Insurance Exchanges under the Affordable Care Act
Deborah Chollet, Ph.D.
Senior FellowSlide2
Individual Exchanges and Small Business Health Options Programs (“SHOP” Exchanges)
Exchange design and implementation occur in the context of significant market reforms
Required duties of the individual Exchange:Enrollment and consumer assistanceEligibility determinations for public programs and subsidiesOversight of Qualified Health PlansAdministration of the ExchangeState flexibility
Overview
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Facilitate the individual purchase of coverage
Consumer information and assistance
Facilitate use of income-based subsidies to buy coverageFacilitate enrollment in public coverage, when eligibleAssist small employers that offer coverageEncourage the development of qualified health plans that compete on price and qualityWhy Exchanges?
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Market reforms
No preexisting condition
exclusions for childrenNo lifetime benefit caps
Limited recissions
Guaranteed issue
Limits on rating:
No rating on health status
Limited age rating
Essential benefit standardIndividual coverage requirementEmployer shared responsibilityBan on annual benefit caps phases inPenalty phases in for failing to meet individual coverage requirement (2014-2016) Annual review of premium increasesPublic reporting of medical loss ratioInsurers must spend a minimum percent of premium on medical costs in small group (85%) and individual (80%) products, or rebate the excessExchangesFederal regulations expected for individual and SHOP ExchangesStates adopt individual and SHOP Exchange legislation, and start implementation State individual exchanges begin operationPremium and cost sharing credits for Exchange plansState option to: Expand SHOP Exchanges to mid-sized groups (2016) Design alternative coverage program (2017)HHS determines whether states will have working individual Exchanges by 2014, or HHS will operate them20102011201320142015-2017
Market Reform and Exchange Implementation Timeline
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Facilitate initial, annual, and special open enrollment periods
Maintain internet web site with standardized information to help consumers compare plans and calculate their cost of coverage
Maintain a toll-free consumer hotlineMake eligibility determinations and enroll eligible Exchange applicants in Medicaid & CHIPWork with the IRS to determine eligibility for and amount of individual premium or cost-sharing subsidies, if no qualified employer offer Certify exemptions from the individual coverage requirement and notify employers and the Treasury of exemptions and individual terminations of coverage during the yearEstablish a Navigator program, awarding grants to eligible entities to conduct Exchange education and enrollment
Requirements for Insurance Exchanges:
Enrollment and Consumer Assistance
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Certify qualified health plans and assign ratings based on relative quality and price
Present plan options to consumers in a standardized format with information about benefits and consumer satisfaction
Review premium increases and post carriers’ justifications on the Exchange websiteUse authority to exclude plans from the Exchange if premium increases are deemed excessiveRequirements for Insurance Exchanges: Qualified health plan administration
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Marketing that does not deter high-need individuals
Sufficient choice of providers—including essential community providers serving low-income, medically underserved individuals
Accredited with respect to local performance onClinical quality measures (e.g., HEDIS)Patient experience ratings (e.g., CAPS)Consumer accessUtilization managementQuality assurance
Provider credentialingComplaints and appeals
Network adequacy and access
Patient information programs
Quality improvement strategy
Uniform enrollment form, standard presentation of health benefits, and consumer information about quality
What is a Qualified Health Plan?7Slide8
Individual Exchanges must be self-sustaining by Jan. 1, 2015
Consult with stakeholders—consumers, small business, self-employed, Medicaid, advocates for hard-to-reach populations
Account for all activities, receipts, and expenditures, and report annually to HHSPublish on an Internet website average costs of licensing, regulatory fees and required payments, administrative costReport on all operations annually to the Exchange board, Governor, legislature, and State AuditorRequirements for Insurance Exchanges:
Exchange Administration
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What entity to administer the Exchange? Contract functions?
Exclusive, statewide, sub-state, or multi-state Exchanges?
Merge individual and SHOP Exchanges?Extend SHOP to groups with 51-100 employees and (in 2017) larger groups?Allow all qualified health plans to participate in the Exchange, or only selected plans?Allow Exchange plans to vary cost sharing, care management, other provisions consistent with federal guidelines?Apply existing state mandates at state cost?What entity will do risk adjustment in/outside the Exchange?What role for agents and brokers, per federal guidelines? What Exchange surcharge to support operations?
State flexibility
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