Accountable Care Organizations and Status of Exchange Implementation Presentation to MN Health Action Group September 27, 2012 Manny Munson-Regala

Key provisions of the Patient Protection and Affordable Care Act (PPACA) Expanded Coverage Medicaid Tax credits and subsidies Employer and individual mandates Insurance Reforms Exchanges MLR/Premium requirements High-risk pools Payment Reforms Cuts Reduced Medicare Advantage subsidies Bundling, global payments Accountable Care Organizations (ACOs) Workforce Enhancements Primary care physicians (PCPs) Advanced practice nurses and physician extenders Quality Improvements Reduced payment for Hospital Acquired Conditions (HACs) and preventable readmissions Core measures Patient satisfaction

What is an Exchange? An Exchange is an online marketplace where Minnesotans can find, compare, choose, and obtain health care coverage that best fits their personal and family needs

Affordable Care Act (ACA) Why an Exchange? Subject of ongoing dialogue in Minnesota since 2006 Provision within the federal Affordable Care Act (ACA) enacted in March 2010 Affordable Care Act The federal health care reform law enacted in March 2010. The law was passed in two parts: The Patient Protection and Affordable Care Act was signed into law on March 23, 2010 and was amended by the Health Care and Education Reconciliation Act on March 30, 2010. The name “Affordable Care Act" is used to refer to the final, amended version of the law.

How will an Exchange work? Insurers Consumers HIX IT & Operations State Government Certify which insurers and benefit plans are qualified for participation Operate a toll-free hotline and website for providing information Provide standardized comparative information on insurers and benefit plans Set up open enrollment and special enrollment periods Determine eligibility for individual and employer subsidies Determine eligibility for Medicaid and facilitate enrollment Facilitate eligibility and enrollment using a uniform format in “real-time” Make an electronic calculator available to display the cost of coverage Communicate with employers regarding employee subsidy eligibility, cancelation of coverage Use an electronic interchange to share information with state and federal agencies to determine eligibility, amount of subsidies, determine exemptions from coverage requirements, etc. Establish a “Navigator” program Federal Government

Current Exchanges State run- Massachusetts Connector and Utah Health Exchange Private Exchanges- CBIA, Bloom Health, HealthPass of NY, AON, Extend Health, California Choice, Bloom, Highmark and Towers Watson

States submit blueprint application Timeline November 16, 2012 States submit blueprint application October 1, 2013 Open Enrollment January 1, 2014 Coverage Begins

ISSUES State vs. Federal Governance Role in Marketplace Role of Existing Market Regulator Integration of Medicaid Distribution Channel Costs and Sustainability Products Sold

Policy Issues Governance Role vis a vis Regulators Facilitator vs. Purchaser Sustainability Assisters/Navigators/Agents and Brokers Adverse Selection Stakeholder Engagement Governor has said no final policy decisions until after election Many unknowns – still early in the planning process Governance – state agency, quasi or non-profit Small Group Market – 50 or 100 employees Allow large employer participation in 2017? Health plan offerings – essential benefits and enough choices to need consumer needs Navigators – requirements and compensation Funding – establishment via federal grants through 2015; state funding after Market Competition and Value (Certification, Market Rules, Risk Sharing, and Avoiding Adverse Selection): Avoiding adverse selection (certification, participation, and market rules inside and outside Exchange - regulatory simplification) Incenting competition and improved health outcomes for high risk individuals – risk adjustment and wellness discounts Risk adjustment – consideration of MN alternative methods Merger of the individual and small group markets Other: Basic Health Plan or private subsidies through Exchange for 133-200% FPL – what happens to MinnesotaCare? Measurement and reporting of cost, quality, and satisfaction for insurers, health benefit plans, and providers Small group: Defined contribution and “true” portability for individuals

Financing Federal Grant of $1 M Federal Grant of $4.2 M February 2011 Federal Grant of $4.2 M August 2011 Federal Grant of $23 M February 2012 Applied for Federal Grant of $42.5 M August 2012 Purpose Analyze the impact of Exchange requirements and options Estimate the level of upfront and ongoing funding for implementation and operation Develop a work plan and budget for federal implementation Components - Background Research - Stakeholder Engagement - Program Integration - Resources and Capabilities - Governance - Financing - Technical Infrastructure - Business Operations - Legal and Regulatory

Organizational Structure Executive Order Directing Commerce to Design and Develop Exchange Governor’s August 2012 Letter Transfer to Minnesota Management and Budget Legislative Solution? Commerce “jump-started and incubated”, then transitioning to role as insurance regulator MMB brings experience in coordinating, facilitating and leading these kinds of projects No final decisions will be made by the administration prior to the upcoming election. Legislators will have the opportunity thereafter to review options and participate in the final decisions.

Status of State Implementation

State Partnership Exchange State operates all exchange activities; however, state may use federal government services for the following activities: Premium tax credit and cost sharing reduction, Exemptions, Risk adjustment program and Reinsurance program State-Based Exchange State operates activities for Plan Management, Consumer Assistance or Both State Partnership Exchange HHS operates; however, state may elect to perform or can use federal government services for the following activities: Reinsurance program and Medicaid and CHIP eligibility, assessment or determination Federally Facilitated Exchange

Challenges Time Money Expertise Other Market Changes Relationship to Cost

Value Proposition Consumer Engagement Competition Portability Administrative Efficiency Seamless Marketplace

Resources mn.gov/commerce/healthexchange- for information on the work on the Exchange healthreform.mn.gov- for information on the impact of the ACA in MN healthcare.gov- for general information on the ACA For other questions: manny.munson-regala@state.mn.us