Bruce D. GreensteinSecretary

Louisiana and the Exchange under PPACA

State of Idaho Health Insurance Exchange Working Group October 9, 2012

dhh.la.gov

Louisiana’s Perspective on PPACA• NO to the Expansion

– A one-size fits all solution that cannibalizes the private insurance market and offers no reform of a broken system.

– Costs states billions of dollars (even with enhanced match) - Louisiana estimates $3.7 billion for our state over 10 years

• NO to the Exchange– Bad public policy and unsustainable– Poses financial risk to states to ensure self-

sustainability – Still have incomplete guidance and

regulations - “final rule” contains over 90 references to future rulemaking

Medicaid has largely remained structurally unchanged since signed

into law by President Johnson in 1965.

dhh.la.gov

• Does nothing to bend the cost curve and dictates the manner in which a state may “create” its own exchange through numerous regulations

• A one-size-fit- all solution locks states into the same way of doing business and perpetuates inefficiencies.

• The system is broken and needs fixing, but PPACA requires states to act as federal agents in destroying the private market system

• Largest component of the law is the expansion of Medicaid – builds upon a program that is already broken and unsustainable in its current form.

Why PPACA is Bad Policy

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dhh.la.gov

• PPACA requires all states to have health insurance exchanges, either state-based or federally facilitated.

• State-based exchanges must be operational by January 1, 2013, or HHS will initiate a federally-facilitated exchange.

Health Care Insurance Exchange

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dhh.la.gov

• Louisiana has not accepted federal dollars to act as federal agent to create the exchange. – No ongoing funding for state exchange operations

after 2015, so states must absorb those costs, which are now undeterminable due to the lack of federal guidance.

• We have returned the initial $1 million Exchange Planning Grant funding.

Unsustainable

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dhh.la.gov

• Initial rules insufficient for planning purposes and non-existent for the federally facilitated exchanges

• Guidance not final, but states still expected to have operational exchanges by January 1, 2013

• No Essential Benefits Package regulations - no sign when they will be finished

• Even with guidance, impossible to create a state-run exchange within that federal timeline that complies with existing state procurement processes.

No Clear Guidance

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dhh.la.gov

• No regulations exist for the FFE, so our knowledge is limited:– FFE will/may determine eligibility for qualified

health plans, tax credits, cost sharing reductions, and Medicaid and CHIP eligibility based on Modified Adjusted Gross Income (MAGI) – with some state decisions.

– FFE will provide eligibility information to the applicable State agency to enroll those individuals in coverage under the traditional Medicaid eligibility criteria.

Federally-facilitated Exchange

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dhh.la.gov

• HHS is accepting comments before the proposed rule is released.

• States are getting conflicting advice over how robust to make the package:– States with many state insurance mandates are lobbying to have

their mandates included in EBP or they will be required to shoulder wrap-around costs.

• January 1, 2013 is seen as the deadline for the Essential Benefits Package regulation, though HHS is “aiming” to finish sooner.

• Impacts insurance providers attempting to design their products and policies in time to receive HHS’s approval for the Exchanges.

Essential Benefits Package

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dhh.la.gov

Example of Frustration - EHB

• 9/27 Letter from LA: No decision on EHB.– No formal rulemaking and

insufficient guidance

– Lack of information on benchmark plans

– Lack of clear definitions of service categories

• No state choice, and no federal authority to make one either.

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dhh.la.gov

Louisiana Not AloneHealth Insurance Exchange Establishment in the Respective States

Bruce D. GreensteinSecretary

Louisiana and the Exchange under PPACA

State of Idaho Health Insurance Exchange Working Group October 9, 2012