1. 11 is an Independent Licensee of the Blue Cross and Blue Shield Association. The Regence Group Jim Walton, Director of New Sales Regence BlueCross BlueShield of Oregon Jim Walton, Director of New Sales Regence BlueCross BlueShield of Oregon Oregon’s Exchange Fall/Winter 2012 Hagan Hamilton Regence BlueCross BlueShield of Oregon is an Independent Licensee of the Blue Cross and Blue Shield Association © 2012. The Regence Group, all rights reserved.

2. 2 Legal Disclaimer Health Insurers and regulators continue to receive information from Health and Human Services regarding the Patient Protection and Affordable Care Act. Therefore, this information has and will continue to change. Health Insurers will also continue to receive information from the Oregon Insurance Division and ORHIX*; this information has and will continue to change. The information provided in this presentation should not be construed as legal advice.

3. 3 The Line Up 1 Exchange Basics 2 Individual 3 SHOP 4 Penalties 5 Challenges

4. 4 Back to the Basics

5. 5 Oregon Exchange – Structure Public corporation- own entity Similar to SAIF, or OHSU Governance: Citizen Board – 9 Members Appointed by the Governor and were confirmed by the Senate- September 23, 2011 At least 2 consumer members, and no more than 2 members can have ties to insurance or health care industry Board makes decisions, not recommendations

6. 6 The Oregon Health Insurance Exchange Corporation Mission Statement Improving the health of all Oregonians by providing health coverage options, increasing access to information, and fostering quality and value in the health care system

7. 7 Who will use the Exchange? Starting in 2014: Individuals Medicaid eligible (up to 133% of federal poverty level) Individuals who qualify for federal subsidies (133-400% of FPL) Individuals seeking insurance who are not eligible for financial assistance Small employer groups Groups with 1-50 employees (2014) Groups of 51-100 (2016) Other employer groups In 2017, may add 100+ employee groups: PEBB, OEBB (2015?)

8. 8 Add Individual place holder Individual

9. 9 Reshaping the Individual Market Portability Market High Risk Pool Uninsured Individual Market COBRA Enrollees Small Group Market Medicaid Expansion Market Reforms

10. 10 Individual Eligibility Adults Kids OHP Tax Credits No Subsidy Healthy Kids HKC Tax Credits No Subsidy 0% 100% 133% 200% 300% 400% FPL

11. 11 Federal Poverty Guidelines – 2012 Family Size100%200%300%400% 1$11,170$22,340$33,510$44,680 2$15,130$30,260$45,390$60,520 3$19,090$38,180$57,270$76,360 4$23,050$46,100$69,150$92,200 5$27,010$54,020$81,030$108,040 6$30,390$61,940$92,910$123,880 7$34,930$69,860$104,790$139,720 8$38,890$77,780$116,670$155,560

12. 12 Exchange Premium Limits by FPL Up to 133% FPL: 2.0% of income 133-150% FPL: 3.0% - 4.0% of income 150-200% FPL: 4.0% - 6.3% of income 200-250% FPL: 6.3% -8.05% of income 250-300% FPL: 8.05% - 9.5% of income 300-400% FPL: Capped to 9.5% of income

13. 13 Individual Example Let’s do some math…Single Parent/Two Kids $700 monthly premium. (2 nd lowest Silver Plan) Annual income $38,180 (200% FPL) Premium percentage is 6.0% of annual income, or $2,223.6 ($185 per month) Advance credit is $700 (premium) – $185 (max allowed premium percentage)= $515/month ½ Cost Subsidy (deductibles, co pays, co-insurance, max out of pocket)

14. 14 Cost Sharing Subsidies Cost Subsidy 0% 1/3 1/2 2/3 Federal Poverty Level 251%+201-250%151-200%133-150% Actuarial Value - Possible Silver Plan Base - 70%73%87%94% Deductible - Individual $1,750 $500$50 Maximum out of Pocket - Individual $5,750$4,000$1,200$600 Copay / Coinsurance Inpatient and Outpatient 30% 10% Emergency Room 30% 10% Preventive Visits and Services $0 Office Visits - Primary Care $35 $10 Office Visits - Specialists $60 $25 Prescription Drug - Generic $10 $5 Prescription Drug - Preferred Brand 50% 30% Prescription Drug - Non-Preferred Brand 50%

15. 15 Add SHOP placeholder SHOP

16. 16 Small Employer Tax Credit Eligibility No more than 25 full-time equivalent employees Annual average wages ≤ $50k Pay at least 50% of cost of premiums Purchase coverage through the exchange 50% tax credit (35% for non-profits) IRS.gov Available only 2014 and 2015

17. 17

18. 18 Small Employer Tax Credit – How does it work? Main Street Mechanic 2010: $24,500 (35%) 2014: $35,000 (50%) $70,000 Annually $250,000 Annual Wages $25,000 per worker

19. 19 Penalty place holder SHOP

20. 20 Employer “pay or play” penalties Pay-or-play penalties apply if 50+ employees at 30+ hrs a week Free rider penalty No coverage offered At least one employee receives Exchange subsidy $2,000 penalty x (total # employees – 30) Unaffordable coverage penalty Coverage is offered, but employee’s cost is > 9.5% of household income or employer pays less than 60% of total cost $3,000 penalty only for each employee who receives Exchange subsidy Grandfathered plans not exempt from penalties

21. 21 Enrollment

22. 22 Low Uptake Estimate Moderate Uptake Estimate High Uptake Estimate 127,850 183,000201,770 281,790280,250 398,450

23. 23 Challenges

24. 24 Challenges Cost Technology Providers Political Outcomes

25. 25 COST: ACA “Premium Shock” Individual 27% to 55% –2% to 30% ACA requirements (e.g. pre-ex, age bands) –20% to 24% merging OMIP, portability and HealthyKids Connect with indiv. market Small Group -5% to +16% –ACA + movement from associations –Unknown: Dumping by healthy groups * Premium estimates done by State/Wakely Consulting Group

26. 26 Technology New systems must be ready Eligibility System – Feds & ORHIX Homeland Security IRS Enrollment System – ORHIX & Carriers Is it a one way street? Billing System – ORHIX & Carriers Individual… seems pretty straight forward SHOP… it depends Customer Service ORHIX to Carrier Hotline “Warm Transfer” Feds, States, Carriers all working together

27. 27 Providers Providers moving from FFS to CCO/ACO agreements over next several years Access Statewide PPO vs. ACO

28. 28 Politics November Elections Federal Funding Navigators, grants Oregon Legislature meets in January 2013

29. 29 Highlights  Open Enrollment: October 2013  Coverage Begins: January 2014  Individual Options Access to tax credits and cost-sharing subsidies Ability to search and compare plans Quality ratings and grading  Small Employer (SHOP) Options 1-50 Employees in 2014, 1-100 in 2016 4 options, including defined contribution plan