1. Federal and State Update
Kris Hathaway, Executive Director
May 9, 2017
Virginia Health Insurance Reform Commission
Richmond, VA

2. About AHIP
America’s Health Insurance Plans (AHIP) is the national association whose members provide insurance coverage for health care and related services to millions of Americans every day. Through these offerings, we improve and protect the health and financial security of consumers, families, businesses, communities and the nation. We are committed to market-based solutions and public-private partnerships that improve affordability, value, access and well-being for consumers.
Accident & Health Business Markets represented by AHIP in the United States:
Major Medical
Medicaid
Medicare Advantage
Medicare Supplemental Insurance (Medigap)
Supplemental Health
Long-Term Care
Disability Income Insurance
Dental
Vision

3. Today’s Highlights Federal Landscape Current Market ACA & AHCA
Timeframe for Reconciliation Efforts
Health Care Costs
Premium Dollar
Drug Pricing
State Issues
Questions

4. Health Insurance Markets and Populations
Medicaid
64 million
(Source: CMS 2015)
Individual Market and Exchanges
18 million
(Source: HHS, 2016)
Employer Sponsored
155 million <65yo
(Source: CNBC, 2016)
CHIP
8.4 million Children
TRICARE
9.4 million
(Source: DoD 2015)
Medicare
55 million

5. Federal Update: Current Landscape
ACA
AHCA
Amendments
Reconciliation
Republican-controlled White House, Senate, and House have promised to repeal and replace much of the ACA

6. AHIP Reconciliation Stabilization Priorities
Funding Commitments
CSR payments through transition period
Make full 2016 reinsurance payments
Affordability
Patient & State Stability Fund
Recalibrate and reform APTC to strengthen incentives for younger adults to participate
Repeal the HIT
Support targeted regulatory changes
Risk Pool
New requirements for individuals to maintain continuous coverage throughout the transition
Additional enrollment policies to stabilize risk pool
Timing
Timeframe for action is now, as well as rate building and filing process

7. Millions of People are Receiving Cost-Sharing Subsidies Significant numbers are in rural America*
Percent Enrollees with CSR 0%
20%
40%
60%
80%
100%
November 21, 2016
*Based on CMS 2016 data.
FFM states = % CSR-enrolled population by county. SBM states = % CSR-enrolled population by state, county-level data not available. Note: NY and MN operate Basic Health Plans for the same population.

8. Applies to issuers in FFM states Applies to issuers in all states
2018 Plan Year QHP Key Dates for Filing & Certification
Oct. 12
CMS sends final QHP certification notices and countersigned agreements to issuers
Jun. 22 – Aug. 16
Review of QHP Applications and proposed rates between CMS and issuers.
Aug. 16
Final deadline for issuer changes to QHP application
Applies to issuers in FFM states
May 10 – June 21
QHP Application submission window
Sep. 27
Issuers submit signed QHP Agreements and final plan lists to CMS
May
May
June
July
August
September
September
October
November
Jun. 1
Deadline for single risk pool rate filing justifications in States without an Effective Rate Review Program
Aug. 1
Target date for CMS to make rate filing information public and for States to post proposed rate increases for single risk pool coverage
Applies to issuers in all states
Oct. 1.
Issuers send 90-day discontinuation notices to enrollees3, 4
Nov. 1
Open Enrollment begins. Deadline to enroll for January 1st coverage is December 15th
Issuers send 60-day renewal notices to current enrollees for the 2018 plan year4
Jul. 1
Issuers exiting the individual market in 2018 send notices to current enrollees 4
Jul. 17
Deadline for single risk pool rate filing justifications in States with an Effective Rate Review Program
1 Key Dates for Calendar Year 2017: QHP Certification in the Federally-facilitated Marketplaces; Rate Review; Risk Adjustment and Reinsurance. Revised April 2017
2 Revised Rate Review Bulletin issued April 2017
3 Because final QHP agreements are signed after 10/1, FFM guidance allows issuers to send discontinuation notices by the start of Open Enrollment. However, states may continue to require notices on October 1.
4 Some states could have earlier notice deadlines. This notice timeframe is the HIPAA total market exit.

9. KFF Analysis of State Premium Increases
Virginia: 17%

10. HHS Market Stabilization Regulations 4.13.17
- Open Enrollment Dates - Special Enrollment Period (SEP) Verification - Modified Interpretation of Guaranteed Availability (Grace Period) - Levels of Coverage (Actuarial Value) - Network Adequacy, Essential Community Providers, State Reviews

11. Financing

12. Factors Affecting Health Insurance Premiums

13. Where Does Your Premium Dollar Go?
Note: Values exceed 100% due to rounding
Source: Data sources and methodology are referenced in more detail at
2 Medical expenses as identified in this research differs from Medical Loss Ratio as defined by the Affordable Care Act.
1 Prescription drug costs include outpatient, physician- and self-administered medications – but not those administered in inpatient settings
3 Operating costs include consumer-centric activities such as communicating with members, running customer service operations, quality reviews, and data analysis, among other activities.

14. Drug Spending
Recent reports have projected drug spending in the United States to grow to $560 billion – $590 billion by 2020, up from $337 billion in 2015.
Much of this growth will be fueled by the growing number of high-priced, specialty drugs coming to the market – an estimated 225 new specialty drugs over the next five years.
While specialty drugs account for less than 2 percent of all prescriptions, they make up roughly 30 percent of spending on all prescription drugs.
Almost half (47.8 percent) of the specialty drugs included in this analysis cost more than $100,000 per patient per year.
A number of ongoing state and federal efforts are developing to address the significant challenges of high- priced drugs; and in support of these measures, this report attempts to quantify the annual per-patient expenditures for an initial sample of 150 specialty medications.

15. Prescription Drug Prices: Then & Now

16. High Cost Drugs: Is It the R&D?
Source: Vox, “9 of 10 top drugmakers spend more on marketing than research”, February 27, 2015,

17. State Issues AHCA Implementation / Updating ACA
Substance Use Disorder / Mental Health
Prescription Drug Issues (Biologics)
Provider Issues
“Right to Shop”
Mandates
Air Ambulance
Third Party Payment

18. Executive Director, State Affairs
Questions?
Thank you!
Kris Hathaway
Executive Director, State Affairs