0. Managing a New Population of Insured
Jon Kunkle
Vice President and CFO
Kaiser Foundation Health Plan - Mid-Atlantic States
November 18, 2016

1. Speaker Biography

2. Today’s Discussion Observations about the Kaiser model
ACA Impacts on Individual Health Insurance Market
How has the market evolved?
Competitive landscape
Funding and Financial Performance (3Rs)
Prospective View
ACA Impacts on Medicaid Expansion
Background / ACA Expansion
Changes in Medicaid Population Since ACA Expansion
Observations about the Kaiser model
Perspective on 2016 Election

3. Individual: Background
* Through June 2016
Source: The Henry J. Kaiser Family Foundation

4. Individual: Competitive Landscape
2017 Pullback
Broad Participation

5. Individual: 3Rs - Reinsurance

6. Individual: 3Rs – Risk Adjustment
The Law
Zero-sum funds transfer between carriers based on the health status of ACA-compliant commercial populations
The Reality
Larger than anticipated fund transfers for some players
Perspective on “winners and losers”
CMS commitment to continual improvement of parameters

7. Individual: 3Rs – Risk Corridor
In political speak, the “Insurer Bailout”
Designed to be a zero-sum game, similar to risk adjustment
In reality, the 2014 payables only represented 12.6% of the receivables, creating a massive funding deficit
2015 still to be determined
Likelihood of full 100% payment for very unclear

8. Individual: Prospective View
HHS projects continued growth into 2017
3.5m new enrollees + 9m continuous = 12.5m total HIX population
Keys to watch for:
Total enrollment (do we hit 12.5m?)
Subsidy / Cost Share Reduction levels
Demographics
2018 and beyond…very unclear but highly unlikely that things return to pre-ACA status

9. Medicaid: Background
Note: Includes individuals ages 0 to 64. Insurance coverage is based on coverage level at time of interview. FPL refers to the Federal Poverty Level. As of 2015, the FPL was $20,090 for a family of three.
Source: The Henry J. Kaiser Family Foundation

10. Medicaid: ACA Expansion Population

11. Medicaid: Characteristics of ACA Expansion Population
KP Adult Expansion membership has increased 95% and now represents approximately 20% of total KP Medicaid
Demographic differences
Tend to be younger (50% between years old) and skew slightly more male
Unique medical cost profile
Account for 25% of Medicaid medical expenses
Significant utilization of Emergency Room
Most prevalent diagnoses are mental health/depression, diabetes, pregnancy, multiple sclerosis, and chemical dependency

12. Medicaid: Prospective View
State perspective on funding dynamics
Assessing the likelihood of further expansion
Potential impacts of election

13. Kaiser Permanente Model
Value-based approach vs. traditional Fee For Service (FFS)
Telemedicine
Investment time horizon
Partnership dynamics with Permanente Medical Groups
Partnership dynamics with hospitals

14. Perspective on Election

15. Q & A