ROBIN LUNGE DIRECTOR OF HEALTH CARE REFORM NOVEMBER 18, 2011 Integration of Medicaid and the Exchange

Purpose & Agenda Overview of issues & options for how to integrate Medicaid and the Exchange Summary of analysis underway Your thoughts and input!

Goals Universal coverage (for low and moderate income Vermonters) Comprehensive High Quality Benefits / Innovative services to meet individuals’ needs Focus on Better Consumer Experience Provider Access and Quality Payment Reform Simplified Administration Controlling Health Care Costs

STAGE 3: Vermont Single Payer (2017 and beyond – 2014 if ACA waiver date changed in federal law) Two financing plans developed for universal coverage under: 1. Green Mountain Care (single payer) and 2. Exchange – report back to legislature in 2013 STAGE 2: Vermont Health Benefit Exchange becomes operational (2014) Integration Plan Developed for “Single Payer Exchange” – report back to legislature in 2012 STAGE 1: Vermont Health Benefit Exchange and Vermont Health Reform Board (established 2011) Stages of Vermont Health Reforms

Medicaid Changes in 2014 Medicaid income eligibility increases to 133% FPL  $1226/month Income calculation changes for some people  “MAGI” – modified adjusted gross income from tax return More verification done electronically  Reduction in paperwork, we hope!! Web-based enrollment  Can still do phone & in person

Health Benefits Exchange in 2014 Individuals without employer-sponsored insurance Small businesses & their employees Federal tax subsidies for people with incomes under 400% FPL  $3684/month

Medicaid & the Exchange in What happens to VHAP, Catamount Health, and employer-sponsored insurance assistance?  Individuals with incomes under 133% move to Medicaid  Individuals with incomes over this amount – either  Basic Health Plan (option – next slide more details)  Health Benefit Exchange with subsidies Very much like Catamount Health & ESIA What happens to coverage for individuals with disabilities and seniors?  This coverage need not change  Anticipate filing Medicaid waiver request to continue coverage for certain populations currently covered

Medicaid & the Exchange: 2014 Health Coverage Options

Exchange with federal subsidies 100% federal funds  In process of creating complete financial model Premiums are lower than VHAP/CHAP for very low income & for 2 person families Premiums are a bit higher at upper income levels of CHAP

Comparison of Subsidies: Exchange Subsidy & Current Vermont

Exchange with federal subsidies 12 Cost-sharing (deductibles, co-payments, co- insurance)  Higher in Exchange than for VHAP  Approx % of people in VHAP move to Medicaid  VHAP has no deductible or co-insurance, limited co-pays  Hard to compare CHAP & Catamount  Need detailed benefit designs to compare deductibles, etc  Out of pocket maximums (total you MIGHT have to pay) higher in the Exchange w/ subsidy than Catamount Health Provider rates – by insurer

Possible solutions to cost-sharing issues State subsidy “wrap” in addition to federal subsidy  Similar to wrap for employer-sponsored insurance program now  Could provide additional assistance so people don’t have dramatic increases  In process of costing this out  Flexibility in income phase-out  if included in new Medicaid waiver request Basic Health Plan (see next slides)

Basic Health Plan 95% federal funds that would have been received in Exchange More protective of consumers financially More chance of people losing coverage due to transitions Impacts on Exchange financial sustainability & viability Provider rates uncertain at this point  Could be Medicaid; could be Catamount Health level; could be private insurance level

Medicaid Option above 133% May cover populations above 133% in Medicaid 60/40 fed/state split  More expensive – lose 100% fed funds Issues with Exchange viability and sustainability Provider rates at Medicaid level