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is an Independent Licensee of the Blue Cross and Blue Shield Association.

The Regence Group

Jim Walton, Director of New Sales

Regence BlueCross

BlueShield of Oregon

Jim Walton, Director of New Sales

Regence BlueCross

BlueShield of Oregon

Oregon’s ExchangeFall/Winter 2012Hagan Hamilton

Oregon’s ExchangeFall/Winter 2012Hagan Hamilton

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© 2012. The Regence Group, all rights reserved.

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Legal Disclaimer

• Health Insurers and regulators continue to receive information from Health and Human Services regarding the Patient Protection and Affordable Care Act. Therefore, this information has and will continue to change.

• Health Insurers will also continue to receive information from the Oregon Insurance Division and ORHIX*; this information has and will continue to change.

• The information provided in this presentation should not be construed as legal advice.

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The Line Up

1• Exchange Basics

2• Individual

3• SHOP

4• Penalties

5• Challenges

4

Back to the Basics

5

Oregon Exchange – Structure

•Public corporation- own entity• Similar to SAIF, or OHSU

•Governance:

• Citizen Board – 9 Members• Appointed by the Governor and were confirmed by the Senate-

September 23, 2011 • At least 2 consumer members, and no more than 2 members can

have ties to insurance or health care industry

• Board makes decisions, not recommendations

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The Oregon Health Insurance Exchange Corporation

Mission Statement

Improving the health of all Oregonians by providing health coverage options, increasing access to information, and fostering quality and value in the health care system

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Who will use the Exchange?

Starting in 2014:

• Individuals • Medicaid eligible (up to 133% of federal poverty level)

• Individuals who qualify for federal subsidies (133-400% of FPL)

• Individuals seeking insurance who are not eligible for financial assistance

• Small employer groups • Groups with 1-50 employees (2014)

• Groups of 51-100 (2016)

• Other employer groups • In 2017, may add 100+ employee groups: PEBB, OEBB (2015?)

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Add Individual place holderIndividual

9

Reshaping the Individual Market

Portability MarketHigh Risk

Pool

Uninsured Individual Market

COBRA Enrollees Small Group

Market

Medicaid Expansion

Market Reforms

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Individual Eligibility

Adults

Kids

OHP Tax Credits

No SubsidyHealthy Kids HKC Tax Credits

No Subsidy

0% 100% 133% 200% 300% 400%

0% 100% 133% 200% 300% 400%

FPL

FPL

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Federal Poverty Guidelines – 2012

Family Size 100% 200% 300% 400%

1 $11,170 $22,340 $33,510 $44,680

2 $15,130 $30,260 $45,390 $60,520

3 $19,090 $38,180 $57,270 $76,360

4 $23,050 $46,100 $69,150 $92,200

5 $27,010 $54,020 $81,030 $108,040

6 $30,390 $61,940 $92,910 $123,880

7 $34,930 $69,860 $104,790 $139,720

8 $38,890 $77,780 $116,670 $155,560

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Exchange Premium Limits by FPL

• Up to 133% FPL: 2.0% of income

• 133-150% FPL: 3.0% - 4.0% of income

• 150-200% FPL: 4.0% - 6.3% of income

• 200-250% FPL: 6.3% -8.05% of income

• 250-300% FPL: 8.05% - 9.5% of income

• 300-400% FPL: Capped to 9.5% of income

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Individual Example

• Let’s do some math…Single Parent/Two Kids• $700 monthly premium. (2nd lowest Silver Plan)

• Annual income $38,180 (200% FPL)• Premium percentage is 6.0% of annual income, or $2,223.6 ($185

per month)• Advance credit is $700 (premium) – $185 (max allowed premium

percentage)= $515/month• ½ Cost Subsidy (deductibles, co pays, co-insurance, max out of

pocket)

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Cost Sharing Subsidies

Cost Subsidy 0% 1/3 1/2 2/3

Federal Poverty Level 251%+ 201-250% 151-200% 133-150%

Actuarial Value - Possible Silver Plan Base - 70% 73% 87% 94%

Deductible - Individual $1,750 $1,750 $500 $50

Maximum out of Pocket - Individual $5,750 $4,000 $1,200 $600

 

Copay / Coinsuran

ce

Copay / Coinsuran

ce

Copay / Coinsuran

ce

Copay / Coinsuran

ce

Inpatient and Outpatient 30% 30% 30% 10%

Emergency Room 30% 30% 30% 10%

Preventive Visits and Services $0 $0 $0 $0

Office Visits - Primary Care $35 $35 $35 $10

Office Visits - Specialists $60 $60 $60 $25

Prescription Drug - Generic $10 $10 $10 $5

Prescription Drug - Preferred Brand 50% 50% 50% 30%Prescription Drug - Non-Preferred Brand 50% 50% 50% 50%

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Add SHOP placeholderSHOP

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Small Employer Tax Credit

• Eligibility• No more than 25 full-time equivalent employees

• Annual average wages ≤ $50k

• Pay at least 50% of cost of premiums

• Purchase coverage through the exchange

• 50% tax credit

(35% for non-profits)

• IRS.gov

• Available only 2014 and 2015

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Small Employer Tax Credit – How does it work?

Main Street Mechanic

2010: $24,500 (35%)2014: $35,000 (50%)

$70,000 Annually

$250,000 Annual Wages$25,000 per worker

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Penalty place holderSHOP

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Employer “pay or play” penalties

• Pay-or-play penalties apply if 50+ employees at 30+ hrs a week

• Free rider penalty• No coverage offered

• At least one employee receives Exchange subsidy

• $2,000 penalty x (total # employees – 30)

• Unaffordable coverage penalty• Coverage is offered, but employee’s cost is > 9.5% of household

income or employer pays less than 60% of total cost

• $3,000 penalty only for each employee who receives Exchange subsidy

• Grandfathered plans not exempt from penalties

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Enrollment

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Low Uptake Estimate

Moderate Uptake Estimate

High Uptake Estimate

127,850

183,000 201,770

281,790 280,250

398,450

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Challenges

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Challenges

• Cost• Technology• Providers• Political Outcomes

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COST: ACA “Premium Shock”

• Individual• 27% to 55%

– 2% to 30% ACA requirements (e.g. pre-ex, age bands)– 20% to 24% merging OMIP, portability and HealthyKids

Connect with indiv. market

• Small Group• -5% to +16%

– ACA + movement from associations– Unknown: Dumping by healthy groups

*Premium estimates done by State/Wakely Consulting Group

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Technology

• New systems must be ready• Eligibility System – Feds & ORHIX

• Homeland Security• IRS

• Enrollment System – ORHIX & Carriers• Is it a one way street?

• Billing System – ORHIX & Carriers• Individual… seems pretty straight forward• SHOP… it depends

• Customer Service• ORHIX to Carrier Hotline “Warm Transfer”

• Feds, States, Carriers all working together

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Providers

• Providers moving from FFS to CCO/ACO agreements over next several years

• Access

• Statewide PPO vs. ACO

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Politics

• November Elections Federal• Funding

• Navigators, grants

• Oregon Legislature meets in January 2013

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Highlights

Open Enrollment: October 2013

Coverage Begins: January 2014

Individual Options

• Access to tax credits and cost-sharing subsidies

• Ability to search and compare plans

• Quality ratings and grading

Small Employer (SHOP) Options

• 1-50 Employees in 2014, 1-100 in 2016

• 4 options, including defined contribution plan