Overview of Health Insurance Exchanges, Basic Health Program, and Dual Eligible IntegrationSeptember 14, 2011

Amy TenhouseDirector of PolicyDepartment of Policy and Government Advocacy

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Molina Principles for Healthcare Reform Design

Health Insurance Exchanges

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Health Insurance Exchanges (HIX)

Clearinghouse that facilitates individual and small business purchase of health insurance.

Web-based system similar to Travelocity or Expedia Required duties of the individual Exchange:

• Enrollment and consumer assistance • Eligibility determinations for public programs and

subsidies • Oversight of Qualified Health Plans • Administration of the Exchange

Must be self-sustaining by January 1, 2015

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Molina’s Position on HIX Issue Position WhyExchange Participation

Managed Care

Participation should be optional for Medicaid MCOs.If they meet federal exchange standards, they should be pre- approved for the exchange.

MCOs have a record of serving low-income folks that will be similar to many exchange customers.

Qualified Health Plans (QHPs)

Certification should be selective; NCQA accreditation is a must–haveMCOs with proven success in serving low–income recipients should be prioritized as QHPs

State’s reform design needs to ensure that customers have access to high quality, affordable health insurance options

Benefit Packages

QHPs should offer standardized set of benefits in the exchanges and have input into benefit design

Standardized benefits will prevent adverse selection, simplify benefit choices, & help better customer decisions

Brokers

Need total transparency on brokers’ fees so customers can make informed choices

Must ensure that brokers don’t steer healthy folks outside the exchange and create adverse selection within it 5

Molina’s Position on HIX Issue Position Why

Administration and Governance

Publicly Administered

Exchanges should be public entities –partnership between Medicaid agency & Insurance Commissioner

Certifying QHPs, coordinating govt. subsidized insurance programs, etc. is best done by an entity with prior experience in such matters

Governing BoardShould have state Medicaid agency leadership represented

Ensures integration of Medicaid policy and exchange design & function, without which, the exchange would fail

Advisory BoardShould have a broad cross section of industry & consumer groups

Advice from broad range of industry experts will lead to better exchange design decisions

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Molina’s Position on HIX Issue Position Why

Structure

Geographic Scope

Should be statewide but plans allowed to serve sub–regions set up to conform with state’s Medicaid regions

Will maximize consumer choice and allow plans that don’t have a statewide presence to be on the exchanges

Small Group & Individual HIX

Small group and individual markets should be separated on the exchange

Marketing, outreach, distribution channels, networks are all different for these two groups

Large Group EmployersLarge employer groups should not be allowed on the exchange in 2017

Exchange is a solution for the individual and small group markets, not a substitute for the large group market

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Molina’s Position on HIX Issue Position WhyFunctions, Responsibilities, & Standards

Eligibility Determination

Determine eligibility thru ‘no wrong door’ approach linked to state Medicaid agency eligibility processesAnnual determination & open enrollment

Will help to minimize the churn between Medicaid and the exchange

Plan Selection – Market OrganizerExchange should be “selective contractor”

Customers will receive high quality affordable coverage

Premium Administration

PremiumsExchanges should collect premiums

Simpler to consolidate subsidy calculation & premium collection

Adverse Selection

Protecting against Adverse Selection (AS)

Same rules in or out of the exchangeMonitor marketing in non-exchange markets to stop steerage of the healthy

AS will decrease MCO participation in exchanges and will increase prices and decrease choices for consumers

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HIX State Efforts

HIX implementation is at various stages in Molina states:

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Molina State Implementation of ACA: Exchange Activity in 2011

Enacted Legislation

Legislation Vetoed

Legislation Died

No Legislation Introduced

Legislation Pending

Basic Health Program

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Basic Health ProgramWho Is Eligible?

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Citizens and lawfully present immigrants who:• Are ineligible for Medicaid; • Have incomes at or below 200 percent of the

federal poverty level (FPL); and• Lack affordable access to comprehensive

employer-based coverage, as defined by the ACA.

Generally, there are two groups: • Individuals between 133 and 200 percent FPL• Lawfully present immigrants below 133 percent

FPL who are ineligible for Medicaid (e.g., legalized within the last 5 years)

Basic Health ProgramForm of Coverage

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State contracts with health plans or provider networks• Competitive bids, multiple options for consumers (if possible)

BH-eligible people may not use the exchangePremiums no more than what consumers would have paid in exchangeOut-of-pocket cost-sharing at or below certain levels

• Statute: silver and gold actuarial value levels• HHS may say that OOP costs may not exceed levels in the exchange

At least minimum essential benefitsMLR at least 85%

Federal payments = 95% of federal subsidies if BH enrollees had been in the exchange

Molina’s Position on Basic Health Program

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Reasons for Adopting Basic Health Program Greater enrollment, more stable coverage as families stay

together

BHP could smooth out the “cost–sharing shock”

Cost–sharing in the BHP would mitigate concerns about reduced preventive care and poorer outcomes for the low–income population

Provides states with more leverage in its direct purchases of coverage by allowing it to now buy on behalf of additional covered lives

A potential place to seamlessly absorb some of the children who will be impacted if CHIP funding is not extended after 2015 15

Reasons for Adopting Basic Health Program States could invest unused funds into additional services

including the ones that they fund with state $$ today.

Alternative for states looking to save previous expansions of Medicaid programs beyond minimal Federal levels or their locally developed programs for those above 133% of FPL

Supports safety net providers through higher reimbursements and retaining their patients

Medicaid/CHIP MCOs can easily extend services to BHP members based on their experience, cost, readiness, and knowledge of this population

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Molina State Implementation of ACA: Basic Health Plan Activity in 2011

No Legislation Introduced

Legislation Pending

Existing Program prior to ACA

Basic Health Program State Efforts

Most Molina states have not begun to establish/consider BHP implementation.• California is exception. • Washington has existing program.

We have drafted BHP legislation that can be used in lobbying efforts.

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Dual Eligible Integration

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Federal Medicare-Medicaid Coordination Office “Office of the Duals”

Focuses on improving Coordination between Medicare and Medicaid for dual eligibles

Will help to coordinate contracting and oversight functions by states and CMS

Focus in three major areas: • Program Alignment• Data and Analytics• Models and Demonstrations

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Federal Medicare-Medicaid Coordination Office

To date, Coordination office initiatives include: • State demonstrations to integrate care for dual eligibles• Integrated care resource center available to all states• Initiative to align the Medicare and Medicaid Programs• Medicare data for dual eligibles for states• Demonstration program to test financial models to

support state efforts integrate care for duals• Reducing preventable hospitalizations among nursing

facility residents

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State Demonstrations to Integrate Care for Duals: Integration Grants of up to $1 million each were awarded to 15 States to design new integrated care models. • Grants awarded to four Molina Healthcare states: CA, MI, WA, WI

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Federal Medicare-Medicaid Coordination Office

Status of Demonstration Grants Within Our States

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Status of Demonstration Grants Within Our States

Financial Models to Support State Efforts to Integrate Care for Duals

CMS seeks to test two financial models to better align the financing of the Medicare and Medicaid Programs. • Capitated Model: A State, CMS, and a health plan enter into a

three-way contract, and the plan receives a prospective blended payment to provide comprehensive, coordinated care.

• Managed Fee-for-Service Model: A State and CMS enter into an agreement by which the State would be eligible to benefit from savings resulting from initiatives designed to improve quality and reduce costs for both Medicare and Medicaid.

State Medicaid Director Letter released on July 8, 2011 Letter of Intent due to CMS on October 1, 2011 Target implementation date is 2012

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