Connector Appeals Program January 15, 2009 Jamie Katz

January 15, Overview Mandate Penalty Appeals MCC Determinations Commonwealth Care Appeals

January 15, Overview Appeals Unit volume grew dramatically between 2007 and 2008 due to Mandate Appeals and Commonwealth Care Appeals Numbers are approximate due to complications in counting

January 15, Mandate Appeals Process Mandate Appeals process a hidden success in 2008 –Brand new process involving different state agencies with no legal precedent –Modest consumer confusion or resistance –General compliance--most penalized individuals paid and most appellants who pursued appeal prevailed –Virtually all appeals resolved within 2008 –Hearings operated smoothly and in a user- friendly manner

January 15, Mandate Appeals Process Number of DOR filers—3.9 million in 2007 –Approx. 195,000 uninsured (5%) –Approx. 118,000 deemed able to afford health insurance and subject to penalty Approx. 51,000 with No Tax Status or Limited Income Credits, so no taxes paid and no penalty of personal exemption in 2007 –Approx. 67,000 subject to penalty Of these taxpayers, 7,160 filed intent to appeal with DOR

January 15, Mandate Appeals Process Of the 7,160 who appealed (as of 12/31/08) 2,460 appeals reviewed by Connector 2,070 appeals reviewed on paper, 390 through hearings Approved 1,780 appeals on paper (72%) Denied 450 Dismissed 200 (failure to provide documents, failure to show up for a hearing) In process 30 4,700 taxpayers failed to follow through with appeals, after their initial appeal requests Small number came late in year and still under review

January 15, Mandate Appeals Process Cases decided in hearings: Hearings were primarily telephonic Connector provides and pays for trained attorneys as hearing officers and, if necessary, interpreters 389 hearings scheduled: 160 dismissed for failing to appear (primarily for telephonic hearings) Of the 229+ hearings held, 75% of appellants prevailed (173 approved, 56 denied)

January 15, Mandate Appeals Process 72% 2% 6% 18% For 2,460 Individuals Who Completed Appeals

January 15, Mandate Appeals Process Looking Forward to 2009: –Continued great assistance from DOR –Some taxpayers recognized penalty late in the year--unlikely they had a chance to remedy their situation for 2008 taxes –Added complexity due to penalty calculation based on insurance participation by individual months –Potential for much larger penalties, which may have an impact on penalty appeals volume

January 15, MCC Determinations Applications for MCC Determinations –Single applications may request determinations for multiple plans, resulting in both approvals and denials (one application covers 109 plans) 74 applications received as of 01/08/09, covering many more plans –45 plans reviewed in full as of 01/08/09 –39 plans approved, 3 denied, 3 determined to have no MCC deviation (no Connector action necessary) –12 of the approved plans submitted actuarial attestations –2 Connector FTEs currently required for MCC determinations

January 15, MCC Determinations Many phone calls and s with carriers, employers, and brokers Guidance given on application process and standards Organizations told not to apply if plans will not meet MCC Examples of denials –No RX –No mental health coverage –Union submitted plan for part-time employees; Connector would not certify it due to significant deficiencies, so plan reportedly dropped

January 15, MCC Determinations Central issue: Will potential financial exposure for most covered individuals exceed Bronze potential exposure? Examples of robust plans with deviations deemed MCC compliant: –Preventive care, but not before deductible in plans with low deductibles and low or no OOPs maximums –Caps on preventive care ($200-$500) but plans with low or no deductibles and low or no OOP maximums –Mental health/substance abuse co-insurance not counted toward OOP maximums (2009 issue) –Co-pays exceed $100 and not counted toward OOP maximums (often a separate cap on these co-pays) –Infrequent: $1 million annual maximums that reset each year (plans exceed Bronze level benefits and more generous than plans with $1 million lifetime maximums)

January 15, MCC Determinations MCC Consumer responses Many individuals voicing disapproval – they have insurance that does not meet MCC and they do not want to pay more One particular sub-group – individuals who had previously purchased plans without RX –Individuals can buy prescription drugs through the VA, through pharmacies, or do not use prescription drugs –They cannot find MA plans without prescription drug coverage

January 15, Commonwealth Care Appeals Approximately 3,800 appeals filed in 2008 –Subjects of appeals: Eligibility denials and disenrollments primarily due to access to other insurance (appeal process intertwined with exception letter process) –Approximately 70% or more of appeals were for eligibility denials or disenrollments Denials of requests for premium or co-pay waivers Denials of requests for plan type changes

January 15, Commonwealth Care Appeals Connector closed over 2,700 appeals in 2008 –Remaining cases—many cases require additional information, many filed late in year (approx. 1,000 in Nov/Dec. 2008), others in the process of review –Also dealing with system changes as the program moves to Perot Systems

January 15, Commonwealth Care Appeals Of the approximately 2,700 appeals closed: 1,350 +/- appeals dismissed as moot (large majority got into Comm Care or MassHealth) Approximately 400 appeals went to hearing officers –259 appeals dismissed due to no-shows (64%) –Number of decisions issued---61 (58 pending) 16 appeals allowed, 42 denied Remaining cases: 850 dismissed (not Connector cases, untimely), 80 transferred to MassHealth, others withdrawn Efforts underway to simplify processes so that appeals and exception letter process are not occurring simultaneously