1. 2012 Annual Meeting Association of Counties
Rebecca Ternes
Deputy Commissioner
North Dakota Insurance Department

2. Healthcare Reform Overview
Supreme Court Ruling
Employer Health Insurance Requirements
Health Insurance Exchange
Essential Health Benefits
What’s Next for Healthcare Reform?

3. Supreme Court Ruling 5-4 split vote
Congress can tax people with enough income that choose to go without health insurance.
The Federal government does not have the power to force people to buy insurance but it does have the power to impose a tax on those without health insurance.
The mandate was important to avoid adverse selection.
States cannot lose federal funding for Medicaid programs if they do not expand.

4. Current U.S. Employer Health Insurance Market
Half of businesses with 3-9 workers provide health insurance
73% of businesses with workers provide health insurance
98% of businesses with 200+ workers provide health insurance
About 1 in 4 business owners are uninsured in U.S. which makes them individual buyers
Source: Kaiser Family Foundation Policy Insights, September 28, 2012

5. Employer health insurance requirements in 2014
More than 200 employees—must auto enroll employees (opt-out)
More than 50 employees—must provide essential coverage or pay penalties
50 or fewer employees—exempt
Counting employees will be different

6. Employer cost vs. benefit analysis
Pay for employee
insurance
Good will
Competitive benefit structure
Incentivizing better health of employees and reducing costs
Tax credits for employers with up to 25 employees
Pay the penalties
Save money
One less business decision, less hassle keeping everyone happy
Allow employees to buy in or out of Exchange

7. Health Insurance Exchange
Individual and small-business (SHOP) Exchange must exist (can be combined)
Exchange in every state by Jan. 1, (operational by October 1, 2013)
State-based Exchange
Partnership
Federally-facilitated Exchange
Outside market remains intact— grandfathered and nongrandfathered

8. Exchanges must: Facilitate comparisons and purchases
Administer subsidies
Provide standard comparative info
Rate plans on cost and quality
Certify individual mandate exemptions
Coordinate with Medicaid and CHIP
Establish Navigators program
Be operational by October 1, 2013 and fully functioning by January 1, 2014

9. SHOP Exchange Traditional employer model or Employee choice
Employer enrolls and makes choice of plan(s) for employees or
Employee choice
Employer chooses benefit level (metals)
Employee picks which insurer and which plan within metal category
Defined Contribution only

10. ND’s Exchange status
Applied for and received $1 million Exchange Planning Grant
Completed study in December 2011
Bill in 2011 regular session to plan for implementation
Bill in 2011 special session for state-based Exchange—failed 64-30
Leaves us with a Federally Facilitated Exchange for now
Final decision date is November 16, 2012

11. Essential Health Benefits (EHB)
Will have to be included in nongrandfathered plans
Individual and small group markets
In and outside of the Exchange, Medicaid benchmark and benchmark-equivalent and basic health programs

12. Essential Health Benefits (EHB)
Items and services in 10 categories:
Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health, substance abuse disorder services
Prescription drugs
Rehabilitative and habilitative services and devices
Laboratory services
Preventive, wellness, chronic disease management
Pediatric services, including dental and vision

13. EHB timeline
March 31, 2012: determine potential plans from four options:
Largest plan by enrollment in any of the three largest small group insurance products in the state
Any of the largest three state employee health benefit plans by enrollment
Any of the largest three national FEHBP plans by enrollment
Largest insured commercial non-Medicaid HMO

14. EHB timeline
September 30, 2012: recommend to the Secretary of HHS the state’s benchmark plan
Secretary will determine if the plan:
Meets 10 category requirements
Reflects typical employer plan
Accounts for diverse needs
Ensures there are no incentives to discriminate
Ensures compliance with Mental Health Parity Act
Provides states a role in defining EHB
Balances comprehensiveness and affordability

15. EHB benchmark plan
Should a state not choose a benchmark plan, the default plan would be the small group plan with the largest enrollment
Approved plan will be the benchmark for and HHS intends to review and update EHB for 2016 and beyond.

16. EHB decision implications
EHB is thought of as a floor—insurers may add to the benefits and price accordingly, but they cannot take benefits away
Basic plan vs. rich plan
Pricing increases
Premium value
Insurer competition
Network adequacy

17. EHB decision implications
Choosing a richer plan
Likely to cause insurers to request premium rate increases
Affordability
Specific coverage may cause a plan to be more or less expensive (e.g., fertility benefits vs. laboratory services)
May force employers and individuals to purchase insurance they do not want or need

18. EHB decision implications
Choosing a basic plan
Possible market disruption—ND plans are traditionally fairly rich
Small employers may terminate previous, richer plans for cheaper basic plans
Allows insurers to design unique plans to compete
More variation for employers and individuals shopping in or out of the Exchange

19. ND’s status Analysis Legislative hearings
Commissioner sent in a benchmark submission on September 28
ND recommendation was the Sanford Health Plan plus the CHIP pediatric dental and vision benefits
HHS Secretary will now publish choices, take comment and make final decision.
Date???

20. What’s next for Healthcare Reform?
Lots of work for insurers to get ready for 2014
Complex decisions for employers, employees and individual health insurance consumers
Training for agents and agencies
Insurance Department to work with the Exchange
NDDHS Medicaid to work with the Exchange
Continued implementation of market reforms
Election Results? Congressional action?

21. North Dakota Insurance Department