California Health Benefit Exchange Overview David Maxwell-Jolly Chief Operations Officer California Health Benefit Exchange March 8, 2012 Child Support Directors’ Association

California Health Benefit Exchange 1 Sources of Health Insurance Coverage in California Source: California HealthCare Foundation. SNAPSHOT California’s Individual and Small Group Markets on the Eve of Reform, 2011.

California Health Benefit Exchange 2 Rising Spending: National Health Spending as a Share of Gross Domestic Product (GDP) Source: California HealthCare Foundation. California Health Care Almanac: Health Care Costs 101, April 2010.

California Health Benefit Exchange 3 The Patient Protection and Affordable Care Act President Obama Signed Into Law Landmark Health Care Reform Legislation “Today, after almost a century of trying. Today, after over a year of debate. Today, after all the votes have been tallied, health insurance reform becomes law in the United States of America…We are a nation that faces its responsibilities and faces its challenges. Here in this country we shape our own destiny…That's what makes us the United States of America.” – President Obama March 23, 2010

California Health Benefit Exchange 4 Health Insurance Market Reforms Taking Effect January 2014 Guaranteed issued Guaranteed renewability Prohibition on preexisting condition exclusion Restrictions on rating variations in premiums Family structure Geography Actuarial value of benefit Age (3:1 ratio) Tobacco use (1.5:1 ratio) Prohibitions on waiting periods longer than 90 days Small group and individual plans must offer “essential health benefits package” Limitations on cost-sharing

California Health Benefit Exchange 5 Shared Responsibility for Health Care: Individuals Individuals must maintain minimum essential coverage beginning in 2014 Annual penalty for individuals without coverage 2014: the greater of $95 or 1% of income 2015: the greater of $325 or 2% of income 2016: the greater of $695 or 2.5% of income Exemptions from penalty Those for whom the lowest cost plan options exceeds 8% of income Those with incomes below the tax filing threshold Religious objections American Indians Those without coverage for less than 3 months Undocumented immigrants Incarcerated individuals

California Health Benefit Exchange 6 Affordable Coverage Choices Refundable premium tax credits for individuals purchasing on Exchange who have incomes between 138% and 400% of Federal Poverty Level (FPL) Reduced cost-sharing limits for individuals purchasing on Exchange with incomes between 138% and 400% of FPL Small business tax credits through 2015 Fewer than 25 FTE employees and average wages under $50,000 Full credit available if 10 or fewer FTE employees and average wages under $25,000 Employer must pay at least 50% of premium cost : Credit up to 35% (25% if tax-exempt employer) : A credit is available to small business for the first 2 years it offers employee a plan through an Exchange

California Health Benefit Exchange 7 Shared Responsibility for Health Care: Employer’s Participation Employers with 200+ employees must auto-enroll all new full- time employees Employers with 50+ full-time employees that do not offer coverage and have at least 1 employee who receives a premium assistance tax credit (income up to 400% of FPL) must pay a penalty of $2000 per full-time employee If employer does not offer coverage but 1+ employees receives tax credit, must pay a penalty that is lesser of $3000 for each employee getting credit or $2000 per full-time employee First 30 employees are exempt from penalty

California Health Benefit Exchange 8 Expansion of Public Programs Medicaid eligibility expanded to 138% FPL and to all non-elderly, non-pregnant individuals (states may include more) Federal assistance for the added coverage Medicaid eligibility will use the same tests as Exchanges – modified AGI with no asset tests Expanded federal support for CHIP

California Health Benefit Exchange 9 Timeline for California Health Benefit Exchange

California Health Benefit Exchange 10 California Health Benefit Exchange Vision and Mission The vision of the California Health Benefit Exchange is to improve the health of all Californians by assuring their access to affordable, high quality care. The mission of the California Health Benefit Exchange is to increase the number of insured Californians, improve health care quality, lower costs, and reduce health disparities through an innovative, competitive marketplace that empowers consumers to choose the health plan and providers that give them the best value.

California Health Benefit Exchange 11 California Health Benefit Exchange Values Consumer-focused At the center of the Exchange’s efforts are the people it serves, including patients and their families, and small business owners and their employees. The Exchange will offer a consumer-friendly experience that is accessible to all Californians, recognizing the diverse cultural, language, economic, educational and health status needs of those we serve. Affordability The Exchange will provider affordable health insurance while assuring quality and access. Catalyst The Exchange will be a catalyst for change in California’s health care system, using its market role to stimulate new strategies for providing high-quality, affordable health care, promoting prevention and wellness, and reducing health disparities. Integrity The Exchange will earn the public’s trust through its commitment to accountability, responsiveness, transparency, speed, agility, reliability, and cooperation. Partnership The Exchange welcomes partnerships, and its efforts will be guided by working with consumers, providers, health plans, employers and other purchasers, government partners, and other stakeholders. Results The impact of the Exchange will be measured by its contributions to expanding coverage and access, improving health care quality, promoting better health and health equity, and lowering costs for all Californians.

California Health Benefit Exchange 12 Exchange Governance Independent Public Entity Board Members Diana Dooley, Board Chair and Secretary of the California Health and Human Services Agency, which provides a range of health care services, social services, mental health services, alcohol and drug treatment services, income assistance and public health services to Californians Kim Belshé, Senior Policy Advisor of the Public Policy Institute of California, former Secretary of California Health and Human Services Agency, and former Director of the California Department of Health Services Paul Fearer, Senior Executive Vice President and Director of Human Resources of UnionBanCalCorporation and its primary subsidiary, Union Bank N.A., Board Chair of Pacific Business Group on Health, and former board chair of Pacific Health Advantage Robert Ross, M.D., President and Chief Executive Officer of The California Endowment, previous director of the San Diego County Health and Human Services Agency from 1993 to 2000, and previous Commissioner of Public Health for the City of Philadelphia from 1990 to 1993 Susan Kennedy, Nationally-recognized policy consultant, former Deputy Chief of Staff and Cabinet Secretary to Governor Gray Davis, former Chief of Staff to Governor Arnold Schwarzenegger, former Communications Director for U.S. Senator Dianne Feinstein, and former Executive Director of the California Democratic Party

California Health Benefit Exchange 13 Visions for California’s Health Benefit Exchange Price Leader The Exchange drives lower premiums; it is a cost-focused store and offers the most competitively priced health plans. Service Center The Exchange is a consumer destination; it is a consumer-friendly, one-stop shop with broad choices on plan design, accessible information, and strong customer service. Source: “California’s Health Benefit Exchange: The Future Envisioned,” California Healthcare Foundation, August Change Agent The Exchange is catalyst of finance and delivery reform; establishing incentives to encourage innovation and improvement in the cost, quality, and efficiency in health care delivery. Public Partner The Exchange is closely aligned with Medi-Cal and Healthy Families partnering to adopt an array of policies that align to improve the health status and health care outcomes of low-income, high-need individuals.

California Health Benefit Exchange 14 Major Issues before the California Health Benefit Exchange Business, Operations, and Financial Sustainability Enrollment & Information Technology Stakeholder Consultation Research and Analysis Communication Support; Research and Marketing, Outreach, and Education Assisters Strategy Health Plan Management and Delivery Reform Small Business Health Options Program (SHOP) Essential Benefits Basic Health Plan …and many more

California Health Benefit Exchange 15 Qualified Health Plans Affordable Care Act Requirements Qualified Health Plans will be certified by Health Benefit Exchanges Must provide Essential Benefit Package Insurer must offer at least one plan at Silver level and one at Gold level

California Health Benefit Exchange 16 Uninsured, by Employment Status and Firm Size Source: California HealthCare Foundation. SNAPSHOT California’s Individual and Small Group Markets on the Eve of Reform, Total Uninsured: 7.2 Million

California Health Benefit Exchange 17 Individual Purchasers, by Employment Status and Firm Size Source: California HealthCare Foundation. SNAPSHOT California’s Individual and Small Group Markets on the Eve of Reform, Total Individual Purchasers: 2.2 Million

California Health Benefit Exchange 18 Individual California Enrollment by Carrier Source: California HealthCare Foundation. SNAPSHOT California’s Individual and Small Group Markets on the Eve of Reform, 2011.

California Health Benefit Exchange 19 Timeline for California Health Benefit Exchange

California Health Benefit Exchange 20 For More Information: Visit our website at And join our listserv