Health Reform and the Minnesota Health Insurance Exchange

ANNA ODEGAARD SEIU

Today’s Agenda

1. Health Reform Overview2. Minnesota Health

Insurance Exchange3. Critical Decisions4. Q & A

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?

Health Reform Overview

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

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.

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.

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

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.

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:

1. Ambulatory services 6. Prescription Drugs

2. Emergency services 7. Rehab services

3. Hospitalization 8. Laboratory services

4. Maternity and Newborn care 9. Preventive/Chronic Disease

5. Mental health and substance use 10. Pediatric services

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)

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.

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

The ACA requires most people to buy health insurance.

1. This is called the Individual Mandate.2. This spreads risk over a larger and

healthier population.3. It means insurers can afford the cost of

other reforms (like covering people regardless of their health status) without raising everyone’s premiums.

4. It also means tax payers won’t have to cover cost of uncompensated care.

Something to be very proud of

And a whole lot of other stuff

Health Reform in Minnesota:

Critical Decisions

Health Reform: Critical Decisions• Will Minnesota adopt full Medicaid

Expansion?

• What will happen to the MNCare population?

Health Reform: Critical DecisionsMinnesota should adopt full Medicaid

Expansion to 138% of the Federal Poverty Level.

Individual: < $15,000Family of 4: < $32,000

Health Reform: Critical DecisionsFederal Funding for full Medicaid

Expansion:

100% first 3 years98% next 3 years90% after 2020

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.

Minnesota Health Insurance Exchange

What is an Exchange?

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

What is an Exchange?

On the Exchange web site you can:

Determine eligibility

Compare health plans

Enroll in a public or private health plan

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

Why do we need a Health Insurance

Exchange?

Consumer-friendly features

Insurance will be more affordable:

Premium tax credits

Cost-sharing subsidies

Small business tax credits

Consumer-friendly featuresPremium Tax Credits for people with

household income up to 400% of the Federal Poverty Level:

Individuals: up to $45,000Family 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 $28,000Family of 4: up to $58,000

Consumer-friendly features

Tax credits for small businesses:

< 25 employees

< $50,000 average salary

Consumer-friendly features

Insurance will be more accessible:

Single streamlined application

Real-time eligibility determination

Plan comparison tools

Minnesota Health Insurance Exchange:

Critical Decisions

Critical Decisions

1. Will the Exchange be an Active Purchaser?

2. How will the Exchange be governed?

3. How will the Navigator system work?

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.

Critical Decisions

An Active Purchaser Exchange canNegotiate for lower prices and better

coverage

Establish a competitive bidding process

Offer a manageable number of health plans

Critical Decisions

California requires its Board to engage in Active Purchasing:

“The board shall seek to contract with carriers so as to provide healthcare coverage choices that offer the

optimal combination of choice, value, quality, and service.”

-California AB 1602

Critical Decisions

How will the Exchange be

governed?

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

Critical Decisions

The Navigator Program

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

Critical Decisions:

1. Full Medicaid Expansion to 138% FPL2. Basic Health Plan for MNCare

population3. Active Purchaser Exchange4. Conflict-free Exchange Board5. Community-Based Navigator Program

Q & A

Anna Odegaardanna.odegaard@seiuhealthcaremn.org