1. VERMONT HEALTH REFORM Families USA: Vermont’s Health Care Exchange Plan Design Georgia J. Maheras, Esq. Project Director Vermont Health Care Innovation Project January 24, 2014 5/1/2015 1

2. VERMONT HEALTH REFORM FIRST, A LITTLE BACKGROUND 5/1/2015 2

3. VERMONT HEALTH REFORM 5/1/2015 3 Some Features of Vermont’s Health System  14 community hospitals, including 8 critical access hospitals (fewer than 25 beds)  1 in-state academic medical center, plus Dartmouth- Hitchcock, provide most tertiary care  11 FQHCs serving more than 150,000 Vermonters  Fewer than 2000 physicians, more than half of whom are employed  3 health insurance carriers, only 2 in small group market  6.8% uninsured

4. VERMONT HEALTH REFORM Vermont’s Health Reform Goals* Assure that all Vermonters have Access to and Coverage for High Quality Care Reduce Health Care Costs and Cost Growth Assure Greater Fairness and Equity in How We Pay for Health Care Improve the Health of Vermonters 4 *from the State’s Strategic Plan for Health Reform, February, 2012

5. VERMONT HEALTH REFORM Who does what in Vermont health reform (2012-14)? Green Mountain Care Board: Cost Containment Payment reform Governor’s Office: Single payer financing and operations Department of VT Health Access: Exchange Expansion of Advanced Primary Care Practice Model 5

6. VERMONT HEALTH REFORM Vermont Health Reform Timeline 2012 Control costs, pay for value Design a simpler system of coverage and financing 2014 Operate Vermont Health Benefit Exchange: single portal for insurance for non-group, small group and public programs After ACA waiver is available (2017?) Green Mountain Care – unified system One payer for most Vermonters Public financing 6

7. VERMONT HEALTH REFORM VERMONT’S EXCHANGE REFLECTS VERMONT’S HEALTH CARE SYSTEM 5/1/2015 7

8. VERMONT HEALTH REFORM Features of Vermont’s Exchange Vermont is an ACTIVE purchaser. All plans offered to individuals and small businesses in 2014 will have been selected by Vermont Health Connect Small Business can enroll directly with carriers for 2014 Define small group at 50 full-time employees or fewer (2014-2015) Individual and small group markets merged 8

9. VERMONT HEALTH REFORM Vermont’s Process  Vermont’s Exchange Team developed standardized plans. – Listening sessions – Actuarial support – Current market scan  Vermont’s Agency of Administration proposed plans to the Green Mountain Care Board for approval.  Green Mountain Care Board held a series of public meetings and solicited public comment. 5/1/2015 9

10. VERMONT HEALTH REFORM Administration’s Principles for Decision Making 10  Creating meaningful choice for consumers  Encouraging high value services, like primary care and generic drugs, and innovation – in alignment with State priorities  Minimizing disruption for small group and individual market  Maximizing portability of plans, allowing consumers to move between employer and individual coverage while maintaining desired plan  Affordability  Administrative simplicity  Maximizing individual premium tax credits

11. VERMONT HEALTH REFORM Administration Stakeholder Input 11  Workgroup with a variety perspectives met over last few months – Included consumer and patient advocates, brokers, representatives from insurance companies, providers, and other interested parties – Weighed in on number of plans to offer on the Exchange and the cost-sharing structures they prefer – Examples of input: priority to low copays for PCP office visits and generic drugs, certain services before deductible, include coinsurance to encourage consumer cost awareness, align cost-sharing within tiers and by services, offer fewer and distinct plans, allow insurance companies flexibility

12. VERMONT HEALTH REFORM  A hybrid approach of state-specified plan designs and some “ choice ” plans designed by insurance carriers within set parameters  4 specified design options across four actuarial levels: – At Platinum:1 Specified Plan Design – At Gold:1 Specified Plan Design – At Silver: 2 Specified Plan Designs – At Bronze:2 Specified Plan Designs  Additional “ Choice ” Plan Designs 12 Approach Recommendations

13. VERMONT HEALTH REFORM “Choice” Plan Design 13 The Green Mountain Care Board granted DVHA authority to approve “Choice” plans Process: – State released RFR – Insurers submitted qualified “choice” plan designs – DFR reviewed submissions and certified plans – DVHA selected plans to offer on the Exchange from certified plans based on specific criteria

14. VERMONT HEALTH REFORM “Choice” Plan Design Criteria 14 DVHA would used the following criteria in choosing a “Choice” plan:  Meaningfully different from standard plans – Distinct design structure within same AV level, e.g., difference of $500 in deductible, or an AV that varies by at least 10% for three major service categories – Ensures additional plan designs offered will increase the diversity of options for groups/members – Both quantitative and non-quantitative differences  Fosters significant innovations in: – Wellness promotion - demonstrated experience and success – Promoting individual engagement in prevention

15. VERMONT HEALTH REFORM Proposed Specified Plan Design Options Specified Design Specified Design 1 1 Specified Design 0 Choice Design 1 Specified Design 1 Choice Design 2 Specified Designs 1 Choice Design P l a t i num GoldGold S il v e r Specified Design 1 2 Specified Designs 1 Choice Design Br on ze Key: Circle = State-Specified Design Square = Insurer Choice Design 6 Specified Designs 3 Choice Designs (to be discussed 9/6) Total Specified Design 2 Choice Design 15

16. VERMONT HEALTH REFORM Specified Silver Plans 16 Why these 2 plans? Priority for affordable cost- sharing for primary care & generic drugs Variation in cost-sharing design between two plans (mostly co- pays versus mostly coinsurance) HDHP plan design qualifies for health savings accounts & health reimbursement accounts Deductible/Out of Pocket Maximum Silver Medical Deductible (Individual/Family) $1900/$3800 $1550/$3100 Rx Deductible $100/$200 $1250/$2500 Integrated Deductible No Yes Medical Out of Pocket Maximum (Individual/Family) $5100/$10,300 $5750/$11,500 Rx Out of Pocket Maximum (Individual/Family) $1250/$2500 Integrated Out of Pocket Maximum No Rx -No, Medical - Yes Family Deductible/Out of Pocket Maximum Stacked, 2x Individual Aggregate, 2x Individual Medical Deductible 1 waived for: Prev, OV, UC, Amb Preventive Drug Deductible waived for: Generic scripts Wellness scripts Service Category Copay / Coinsurance Hospital Services 2 40% 20% Emergency Room 3 $250 20% Preventive $0 0% Office visit w/PCP or Mental Health $20 10% Specialist Office Visit 4 $40 20% Urgent Care $60 20% Ambulance $100 20% Rx Drug Coverage Rx Generic $12 $10 Rx Preferred Brand $50 $40 Rx Non-Preferred Brand 50%

17. VERMONT HEALTH REFORM Vermont Premium Reductions 17 Vermont’s health care programs had premiums that were more affordable than the ACA’s APTC. Vermont received Medicaid match to reduce the applicable percentage for premium payments by 1.5%

18. VERMONT HEALTH REFORM Vermont Cost Sharing Reductions 5/1/2015 18

19. VERMONT HEALTH REFORM Vermont Cost Sharing Reductions 5/1/2015 19