Plan & Partner Management Update Exchange Board of Trustees Meeting January 2014

Federal Transitional Reinsurance Program Administration

Temporary program 2014-2016 to protect non-grandfathered health insurance plans operating in the individual market, both inside and outside the exchange, from risk associated with insuring high cost individuals States that establish state-based exchanges may elect to administer the transitional reinsurance program Through Insurance Article §31-117(c) the State of Maryland elected to administer a Transitional Reinsurance Program The Maryland Health Benefit Exchange (MHBE) designated as the Reinsurance Oversight Entity

Oversight and administration to include: program oversight, vendor management, and federal and issuer interface – Internal resources data collection and reporting functions – Internal resources a data collection and validation vendor - External resources Provide annual Notice of Benefit and Payment Parameters Notice of Benefit and Payment Parameters sent April 2013 MHBE will not modify Federal parameters for 2014 Carrier Reporting Requirements: Quarterly Summary Claims Report Year-end Claims Summary Report Third party claims audit and validation On-site claims audit

Discussion with CMS on reporting requirements revealed State of Maryland has opted to have HHS administer the Risk Adjustment program for the State all carriers must supply claim detail information to the HHS edge server HHS will be produce claim summary reports from the edge serve data, conduction validation audits on data submissions and make reinsurance payments to the carriers where they administer Carriers must submit claim detail information to HHS for the Risk Adjustment program

Requiring carriers to submit summary claim data to MHBE, audit the results, provide data to HHS, receive payment from HHS and issue to carriers is duplicative effort and will require investment in systems and resources As the Transitional Reinsurance Program is a temporary program (3 years) and MHBE has already determined it will not modify the parameters or collect additional reinsurance contributions from carriers for 2014; it does not appear that MHBE can add significant value to Maryland carriers by administering the Transitional Reinsurance Program It is staff recommendation that administration of the Transitional Reinsurance Program be returned to HHS

State Based Reinsurance Program

The Health Progress Act of 2013 provides that MHBE, in consultation with the Maryland Health Care Commission (MHCC), and with the approval of the Insurance Commissioner, is authorized to establish a State Reinsurance Program on or after January 1, 2014 The purpose of the program is to mitigate the impact of high-risk individuals on rates in the individual insurance market inside and outside the exchange Funding for the program is authorized from the portion of the hospital assessment transferred to the MHBE Fund, which currently is used to fund MHIP The MHBE has determined that it will not provide additional reinsurance parameters beyond the Federal Transitional Reinsurance parameters for 2014

The Federal Transitional Reinsurance Program is intended to mitigate the impact of high-risk individuals on rates in the individual insurance market inside and outside the exchange It is uncertain how the Federal Transitional Reinsurance Program will impact the Maryland market Notice needs to be given to carriers by March 15th, 2014 if Reinsurance parameters for 2015 are to be changed It is staff recommendation that MHBE continue evaluation of implementing a State Reinsurance program for 2015

Individual Market Subsidy Options

Implementation of the Affordable Care Act affords access to health insurance for individuals who previously were barred based on health condition Opening the individual marketplace to all individuals regardless of their medical condition creates risk that increased medical costs will impact future premiums for all policyholders Maryland solicited the assistance of The Hilltop Institute to evaluate how Maryland could best ensure individuals participate in the individual insurance market and how future premium rate increases could be contained

The first part of the Hilltop analysis addresses premium subsidy options This option is intended to ensure that individual health insurance is affordable and its cost not a barrier to access A subsidy program can be instituted separate from the Federal Transitional Reinsurance Program and is not bound by the same reporting deadlines (March 15th) Premium Subsidy Program options submitted to the board for review

Legislation needed to allow MHIP Surplus funds to be used for an Individual Market Subsidy Program(s) Further review and selection of a subsidy program to be completed It is the recommendation that MHBE consider adoption of a premium subsidy program for 2015 and propose legislation to allow MHIP Surplus funds to be used for a subsidy program

Thank you! For questions on the information contained in this presentation, please contact: Michele Eberle Interim Director, Plan & Partner Management Maryland Health Benefit Exchange Email: Michele.Eberle@maryland.gov www.MarylandHealthConnection.gov