1 missouri health exchange. 2 hiex – a government regulated standardized health care plan from...
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Missouri Health Exchange
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• HIEx – A government regulated standardized health care plan from which individuals may purchased insurance
State Exchange
• Operated by the state
Federally-Facilitated Exchange
• Operated in partnership with the state or
• Operated solely by the federal government
• Cornerstone of PPACA’s “individual mandate”
• Required to be Certified & Operational by 01/2014
Health Insurance Exchanges - HIEx
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States Position on Health ExchangesApril 2013
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1) Guaranteed Issuance
2) Limited Price variation• Age 3:1• Smoking Status 1.5:1
3) Four Premium Tiers (Bronze to Platinum) w/ Coverage Ranges of 60%, 70%, 80%, & 90%
4) No Lifetime or Annual Limits
HIEx – Key Features
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5) Out-of-Pocket Limits• Individual - $6,350• Family - $12,700
6) Insurance Purchase Tax Credits for Individuals up to 400% Poverty
7) Requirements To Purchase Exchange Insurance• Must Live In US• US Citizen or Legal National• Not Currently Incarcerated• Employers w/ Fewer Than 100 Employees*
HIEx – Key Features (cont)
* Prior to 2016 States can limit Exchange access to Employers with <= 50 employees, and starting in 2017 States can open Exchanges to Employers with > 100 employees.
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• This does not mean individuals can opt-in at any point
• Enrollment is closed after March 31, 2014 except for individuals with a “Qualifying Event”
• Loss of essential health coverage• Change in family structure• Change in citizen status• Government error with previous enrollment• Change in subsidy eligibility • Relocation to a new coverage area• Reaching Lifetime Limit on all benefits in grandfathered plan• Indian Heritage (entitled to monthly special enrollment)• Exceptional circumstance determined by HIEx or HHS (e.g. natural disasters)
HIEx Coverage Clarification (Guaranteed Issuance)
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2011 MO EMPLOYER MARKET
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Missouri Healthcare Market
Employer Sponsored 2,971,600 52%
Government Sponsored 1,739,300 30%
Individual Policy 351,000 6%
Uninsured1 (HIEx Eligible for Subsidies) 350,000 6%
Uninsured1 (HIEx Non-Eligible for Subsidies) 350,000 6%
• In addition to the individual mandate for the uninsured, Obamacare will require individuals and employers enrolled in a non-grandfathered
healthcare plan to replace their coverage with a plan that meets minimum new coverage standards.
• Grandfathering requires that nothing in prior insurance plan changed since 3/2010 including co-pays
1) Outpatient Care2) Emergency Room Visits3) Hospitalization4) Maternal & Newborn Care5) Mental Health & Substance Use
Treatments6) Prescription Drugs7) Rehabilitative & Habilitation
Services & Devices8) Lab Test9) Preventive Services & Chronic
Disease Care10) Pediatric Services11) Pediatric Dental12) Pediatric Vision
1Excludes 151,200 Uninsured 0-18
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WUSM B/E• 139% Medicare if All Payors Shift
• 170% Medicare if All Payors Except Medicare & Medicaid Shift
BJC B/E• 135% Medicare if All Payors Shift
• 163% Medicare if All Payors Except Medicare & Medicaid Shift
Missouri HIEx Potential Impact
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HIEx NetworkBronze 60/40
Silver70/30
Gold80/20
Platinum90/10
WUSM PAR
MISSOURI
BCBSMO SSM/Mercy
Coventry-2 SSM/Mercy
Coventry-1 PPO
ILLINOIS
BCBSIL PPO
Coventry-2 PPO (Limited Co.s)
Coventry-1 PPO (Limited Co.s)
Mutual HealthLink PPO
Health Alliance
HealthLink PPO
Key HIEx Plans
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Coventry – Missouri HIEx
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Coventry – Illinois HIEx
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Income LevelPremium Cap as Percent of Income*
For Silver Plan Only Reduction in Actuarial Value OOP Liability
100%- <133% 2% 94% 2/3 of Maximum
133%- <150% 3%-4% 94% 2/3 of Maximum
150%- <200% 4%-6.3% 87% 2/3 of Maximum
200%- <250% 6.3%-8.05% 73% 1/2 of Maximum
250%- <300% 8.05%-9.5% 70% 1/2 of Maximum
300%-400% 9.5% 70% 1/3 of Maximum
HIEx Cost-Sharing Subsidies
*Income Cap is subtracted from the premium of second lowest cost Silver plan and the resulting difference is the actual dollar subsidy.
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Limited to individuals at 133% FPL +
HIEx Individual Mandate(Non-Enrollment Penalty)
1% 2% 3%
Adult $95.00Child $47.50
Adult $325.00Child $162.50
Adult $695.00Child $347.50
3x Lessor of Above
2014 2015 2016
3x Lessor of Above
3x Lessor of Above
OR OR OR
Taxable IncomeModified AGI1
Penalty Per Adult & Child2
Maximum Per Family3
GR
EA
TE
R O
FC
AP
Penalty
Increases by:
Rate of Inflation
or
2.5% of Income
2017
1Income defined as total income in excess of filing threshold ($10,000 per Individual//$20,000 per family in 2013)2Child defined as individual under 183Penalty is pro-rated for the number of months individual is without insurance, though there is no penalty for a single gap in coverage of less than 3 months in a year. Penalty cannot exceed national average for Bronze-level premium.
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Example(Non-Enrollment Penalty 2014)
SCENARIO #1
$50,000 $50,000 x 1% = $500.00
2 Adults 95.00 x 2 = $190.00
3 x $190 = $570.00
$500.00
INCOME
FAMILY SIZE
PENALTY CAP
PENALTY
Greater of = $500.00
SCENARIO #2
$100,000 $100,000 x 1% = $1,000
2 Adults1 Child
95.00 x 2 = $190.0047.50 x 1 = $ 47.50 $237.50
3 x $237.50 = $712.50
$712.50
INCOME
FAMILY SIZE
PENALTY CAP
PENALTY
Greater of = $1,000
Lessor of
=
Lessor of
=
$500.00
$712.50
3 x $190 = $570.00
3 x $237.50 = $712.50
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Family Deductibles for St. Louis
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Example Cost Liability for St. Louis (Least Costly Family Plan w/o HSA)
* Cost sharing for individuals that select Silver Plan – 100%- <200% 2/3 reduction; 200%-250% = ½ reduction and 250%+-400% = 1/3 reduction.
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Monthly Premium Family w/ Subsidy
$2,100 Annual incremental cost to enroll in a plan where BJC & WUSM are PAR
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1) Policy should be: • Politically & PR Sound• Fair & Equitable to All Patients (i.e. Uninsured & Insured)
2) Individuals with access to health insurance should be encouraged to purchase coverage, including:
• Low income unemployed persons• Employed individuals without access to employer sponsored insurance• Self-employed individuals
3) The expected collection rate should be based solely on an individual’s FPL
Proposed WUSM Charity Care Policy (For The New Market Dynamic)
Underlying Principles
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FPLHISTORIC
WUSM/BJC
< 100% 0%
100%-200% 0%
201%-250% 20%
251%-300% 40%
301%-350% 55%
351%-400% 80%
> 400% 100%After Insurance
75%Uninsured/Self-Pay
Proposed Charity Care PolicyPercent of Charge Sought
While BJC and WUSM utilized the same discount structure for Charity Care, implementation differed.
BJC based its decision solely on a patients AGI.
WUSM evaluated AGI and all known assets e.g. property holdings.
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FPLHISTORIC
WUSM/BJCPROPOSED
WUSM
< 100% 0% 0%
100%-200% 0% 30%
201%-250% 20% 35%
251%-300% 40% 40%
301%-350% 55% 45%
351%-400% 80% 50%
> 400% 100%After Insurance
75%Uninsured/Self-Pay
100%After Insurance
75%Uninsured/Self-Pay
Discount Applies After
Lessor of $50 Office Co-Pay or Plan Co-Pay
+30
+15
0
-10
-30
0
0
Proposed Charity Care PolicyPercent of Charge Sought
Point-of-Reference50% ≈ WUSM’s contracted HMO/PPO Allowable
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FPLHISTORIC
WUSM/BJCPROPOSED
WUSM
< 100% 0% 0%
100%-200% 0% 30%
201%-250% 20% 35%
251%-300% 40% 40%
301%-350% 55% 45%
351%-400% 80% 50%
> 400% 100%After Insurance
75%Self-Pay
100%After Insurance
75%Self-Pay
Discount Applies After
Lessor of $50 Office Co-Pay or Plan Co-Pay
Bro
nze
60
/40
Sil
ve
r7
0/3
0
Expecte
d
Purchase
Level HIEx Allowable
Charge $1,000
Rate @ 50% $ 500
ResponsibilityPlan @ 60% $ 300
Pt. @ 40% $ 200
Calculation of Charity DiscountPlan Portion $ 300
Pt. Portion(Historic Discount x Pt. Portion)$200 x 20%
$ 40
EXAMPLE
Proposed Charity Care PolicyPercent of Charge Sought
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FPLHISTORIC
WUSM/BJCPROPOSED
WUSM
< 100% 0% 0%
100%-200% 0% 30%
201%-250% 20% 35%
251%-300% 40% 40%
301%-350% 55% 45%
351%-400% 80% 50%
> 400% 100%After Insurance
75%Self-Pay
100%After Insurance
75%Self-Pay
Discount Applies After
Lessor of $50 Office Co-Pay or Plan Co-Pay
Bro
nze
60
/40
Sil
ve
r7
0/3
0
Expecte
d
Purchase
Level HIEx Allowable
Charge $1,000
Rate @ 50% $ 500
ResponsibilityPlan @ 60% $ 300
Pt. @ 40% $ 200
Calculation of Charity DiscountPlan Portion $ 300
Pt. Portion(Historic Discount x Pt. Portion)$200 x 20%
$ 40
Net Expected $ 340
% Charge 34%
Rounded
EXAMPLE
Proposed Charity Care PolicyPercent of Charge Sought
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1) Be Politically & PR Sound• Minimize alienation of referring providers• Look reasonable to WUSM providers• Look reasonable to patients caught in the middle• Play well if addressed in the local media
2) Mitigate legal exposure to the extent possible
3) Discourage Plan Carve-Out Initiatives
Proposed Policy Regarding Non-PAR Patients
Underlying Principles
Policy should:
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Non-PAR (insured) patients will not be scheduled for an office appointment until an SPA is executed with the patient’s health insurance carrier:
• SPA shall require 100% payment due from the carrier
• SPA shall require payment within 30 days of bill date
• SPA shall require payment at a charge recover level comparable to WUSM’s terms with similar payors.
Commercial HMO/PPO – 75% Charge. (Note: This is equivalent to WUSM’s rate with contracted out-of-area payors that primarily refer tertiary level patients)
Federal HIEx – 50% Charge. (Note: this is comparable to WUSM’s contracted Federal HIEx rate and WUSM’s rate with contracted in-area Commercial HMO/PPO payors)
Proposed Policy Regarding Non-PAR Patients
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Carrier Political/PR Sound Carve Out Disincentive
Commercial HMO/PPO/ Private Exchange
75% Charge
1) Out-of-Network patients likely seeking tertiary care or care not readily available in-network. Extending contracted tertiary care rates likely appears reasonable to:
• Referring Providers• WUSM Providers• Patients• Neutral 3rd Parties
2) WUSM not denying patient access to Medical Center resources.
1) SPA rate equivalent to 150% of the contracted local in-network commercial HMO/PPO rate. (i.e. 50% Charge vs 75% Charge)
2) Plan’s medical management policies/protocols not in play:
• Denials• Recodes• Bundling
3) All payments due from carrier. Carrier bears entire financial risk insulating WUSM from bad debt and patient from financial exposure associated with Co-Pays, Co-insurance and Deductibles.
4) Payment based on Charge not fixed fee schedule, accordingly WUSM controls entire payment.
5) Payment due in 30 days.
6) Decision to approve of deny access falls to carrier.
Proposed Non-PAR Patient PolicyCommercial HMO/PPO/Private Exchange
REMAINS UNCHANGED FROM
CURRENT APPROACH
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Carrier Political/PR Sound Carve Out Disincentive
Federal HIEx
50% Charge
1) Out-of-Network patients likely seeking tertiary care or care not readily available in-network. Extending contracted Federal HIEx rates likely appears reasonable to:
• Referring Providers• WUSM Providers• Patients• Neutral 3rd Parties
2) WUSM not denying patents access to required Medical Center Resources
1) SPA rate equivalent to 190% of what we believe is the contracted specialist rate associated with par providers (i.e. Medicare vs 50% Charge).
2) Plan’s medical management policies/protocols not in play:
• Denials• Recodes• Bundling
3) All payments due from carrier. Carrier bears entire financial risk insulating WUSM from bad debt and patient from financial exposure associated with Co-insurance, deductibles and annual deductible limits.
4) Payment based on Charge not fixed fee schedule accordingly WUSM controls entire payment.
5) Payment due in 30 days.6) WUSM can change required reimbursement at
any time since SPA is linked to only one patient.
7) Decision to approve or deny access falls to carrier.
Proposed Non-PAR Patient PolicyFederal Exchange
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Providing Guidance to HIEx Eligible Patients
• Three BJC employees have received Certified Application Counselor status
• WUSM has been approved as a Certified Application Counselor siteCurrently in the process of securing certification for 4 financial counselors (2
located at CAM, 2 at West Campus)
• Goal is to counsel qualified patients on how to secure HIEx coverage and what plans will allow access to Medical Center resources
• BJC seeking Broker community interest in signing patients up for HIEx(s) [low/marginal commission business]
• WU including HIEx information in pre-65 retiree mailing
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Feedback From Local Broker Community
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• We should expect employers to react to the changing market dynamic
• Expect employers that had previously resisted discontinuing spouse/dependent coverage, due to lack of insurance options for spouses/dependents with a pre-existing medical condition, to move spouses/dependents to an Exchange
• Currently seeing large employers moving to fully insured while medium sized groups tend to be moving to ASO relationships.
• Do not expect the Massachusetts’ results to occur in our market, the market dynamics are very different in terms of distribution of medical resources and patient social/demographic variables.
• At least one Broker indicated their company was looking at establishing a private exchange.
• Brokers, as a group, appeared lukewarm to assigning agents to assist individuals with signing up with the Exchanges. Viewed as a low margin commission business.
Broker Feedback