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1 Safety Net Health Plans and Health Insurance Exchanges National Association of Public Hospitals Annual Conference September 20, 2011 Jennifer Babcock
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Agenda ACAP Survey Results – January 2011 What Keeps Us Up At Night Churn Tax Reconciliation Other? The 2014, The Affordable Care Act, and Safety Net Health Plans Hopes and Aspirations Reality The Long, Hard (And Rewarding) Road Affordable Care Act Opportunities 2
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ACAP Survey Results January 2011 3
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How important is it for your plan to participate in the state insurance Exchange? 4
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Has your plan participated in the state’s planning process for the development of an Exchange? 5
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To what extent are you concerned that the following might prevent your plan from participating in the Exchange? Major Concern Minor Concern Not a Concern Not Sure Number of Plans Reserves201083 Accreditation1611 4 Licensing611213 Uncertainty of risk adjustment211704 Uncertainty of reinsurance918104 System changes161465 Network adequacy1019102 State statutory restriction81499 6
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What Keeps Us Up At Night 7 Reconciliation of taxes Eligibility churn
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Eligibility “Churn” in Exchange & Medicaid: The Problem in 2014 Medicaid Within 6 months, 40% of Medicaid enrollees will experience coverage disruption After 1 year, 38% no longer Medicaid-eligible; 16% more will have lost and regained eligibility Exchange Within 6 months, 30% of adults will experience disruption in Exchange eligibility After 1 year, 24% no longer eligible; 19% more will have lost and regained eligibility Source: Rosenbaum & Sommers, “Issues in Health Reform: How Changes May Move Millions Between Medicaid and Insurance Exchanges,” Health Affairs, February 2011 8
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Tax Reconciliation for Low-Income People Premium tax credits provided in advance and reconciled at end of tax year. Individuals who received excess advance premium tax credits (based on projected income) must repay (based on actual annual income). Repayments capped. Hardship for individuals and families. Impact on ‘goodwill’ toward Exchanges. 9
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2014, The Affordable Care Act, and Safety Net Health Plans 10
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Hopes & Aspirations New Business Opportunity! Meeting the needs of low-income health care consumers in new commercial coverage environment! 11
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Hopes & Aspirations Most ACAP plans are considering service to health insurance Exchanges. States understand the value of Medicaid plans serving as Qualified Health Plans. KFF Profile of Medicaid Managed Care Programs in 2010: Eight states considering requiring Medicaid plans to serve Exchange. Seven states considering requiring Exchange plans to serve Medicaid. Source: http://www.kff.org/medicaid/8220.cfmhttp://www.kff.org/medicaid/8220.cfm 12
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Reality Stiff competition: For State & Federal policies that encourage participation by Safety Net Health Plans For Exchange business. New commercial functions will be required, including premium collection, marketing, customer service, others. Major Stumbling Blocks: Risk Adjustment/Reinsurance Reserves Accreditation Network Adequacy 13
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The Long, Hard (And Rewarding) Road Asking the right strategic questions; considering how existing lines of business will be impacted by ACA changes in 2014 Medicaid expansion to 16-25 million individuals Medicare SNPs Other? Opting to enter Exchange…How? Independent Qualified Health Plan CO-OP Part of multi-state option Partnership with other community-based plans Building reserves, capacity, functions 14
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But at the end of the road… Opportunities! Medicaid expansion to 16-25 million individuals Exchange coverage plus substantial subsidies Basic Health Program 15
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Thank You! Jennifer McGuigan Babcock ACAP 202-204-7518 jbabcock@communityplans.net 16
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