Roadmap to 2014: Subsidized Insurance Workgroup Update

Commonwealth of MassachusettsExecutive Office of Health and Human Services

Roadmap to 2014:Subsidized Insurance Workgroup Update

Stakeholder MeetingDecember 21, 2011

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Guiding Principles and Key Concepts

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Guiding Principles

As we prepare for providing health insurance coverage to Massachusetts’ subsidized population under national health care reform in 2014, these guiding principles were developed by inter-agency leaders

1. Creating a consumer-centric approach to ensuring that all eligible Massachusetts residents avail themselves of available health insurance subsidies to make health care affordable to as many people as possible.

2. Creating a single, integrated process to determine eligibility for the full range of health insurance programs including Medicaid, CHIP, potentially the Basic Health Program and premium tax credits and cost-sharing subsidies.

3. Offering appropriate health insurance coverage to eligible individuals by defining both the populations affected and the health benefits that meet their needs.

4. Working within state fiscal realities, maximizing and leveraging financial resources, such as FFP.

5. Focusing on simplicity and continuity of coverage for members by streamlining coverage types, thereby making noticing and explanation of benefits more understandable, and also minimizing disruptions in coverage.

6. Creating an efficient administrative infrastructure that leverages technology and eliminates administrative duplication.

7. Building off the lessons learned since passage of Chapter 58.

8. Creating opportunities to achieve payment and delivery system reforms that ensure continued coverage, access, and cost containment and improve the overall health status of the populations served.

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ACA Key Concepts

Medicaid Expansion• The ACA mandates that adults 0-133% FPL who have not traditionally been eligible for Medicaid be

covered under the Medicaid State Plan starting in January 2014• Massachusetts, as a state that has already expanded to this population, will receive 75-93% FMAP

from CY2014 to CY 2019, and 90% FMAP from CY 2020+• States must provide at least “Benchmark coverage” for the new State Plan-eligibles

Basic Health Plan Option (BHP)• The ACA provides states the option of establishing a BHP (Sec. 1331)• The state would receive 95% of the premium and cost-sharing tax credits that would have been

allotted if these individuals had purchased through the Exchange• The BHP must provide at least the Essential Health Benefits package

Tax Credits• The ACA provides advanced tax credits to eligible individuals with incomes up to 400% FPL who

purchase through the Exchange• The amount ($ value) of the tax credit varies by income, with individuals required to spend a certain

percentage of their income on health insurance

Essential Health Benefits (EHBs)• The ACA requires all plans offered through the Exchange to provide Essential Health Benefits• Regulations defining the EHBs will be developed by the US Secretary of HHS

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Transition Populations

• MassHealth Toggle Populations• Pregnant Women 186-200% FPL• Breast and Cervical Cancer• HIV+• 19-20 Year Olds 0-150% FPL

• CommCare

• CommCare Bridge

• CommChoice

• MassHealth Basic

• MassHealth Essential

• Medical Security Plan

• Insurance Partnership

• Health Safety Net

Static Populations

• MassHealth/Family Assistance Children < 300% FPL

• MassHealth Parents < 138% FPL

• MassHealth Pregnant Women < 185% FPL

• MassHealth Limited

• Children’s Medical Security Plan

• CommonHealth

• MassHealth Disabled Adults

• Dual Eligibles (Disabled and Elders)

Populations

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Subsidized Population Transition Analysis

“As Is” “To Be”

Population2011 2014-2019 Program Options

Current Eligibility Levels

Current Program Eligibility Levels Program Options

Children Under 1

≤ 200% FPL MassHealth Standard ≤ 200% FPL MassHealth Standard 32,580

Children 1-18


Children Under 18

≤ 300% FPL Family Assistance (CHIP) ≤ 300% FPL Family Assistance (CHIP) 45,160

Parents


Disabled Adults


Pregnant Women

≤200% FPL MassHealth Standard

≤ 185% FPL MassHealth Standard 22,322

186-200% FPL

MassHealth Standard

296MassHealth Benchmark

BHP

QHP

Women with Breast and Cervical Cancer

≤ 250% FPL MassHealth Standard

≤ 138% FPLMassHealth Standard

<200MassHealth Benchmark

139 – 250% FPL

MassHealth Standard

<200 MassHealth Benchmark

BHP

QHP

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Current Eligibility Levels Current Program Eligibility Levels Program Options

HIV+ Individuals

≤ 200% FPL Family Assistance

≤ 138% FPLMassHealth Standard


139-200% FPL

MassHealth Standard


BHP

QHP

Childless Adults Receiving Mental Health Services

≤ 100% FPL MassHealth Basic ≤ 100% FPL MassHealth Benchmark 11,842

Childless Adults Who are Long Term Unemployed

≤ 100% FPL MassHealth Essential ≤ 100% FPL MassHealth Benchmark 74,319

Individuals Eligible for Unemployment Compensation

≤ 400% FPL Medical Security Plan

≤ 138% FPL MassHealth Benchmark 3,934

139-300% FPLBHP

24,672QHP

301-400% FPL QHP 16,037

Employees of Small Employers Who Are Receiving Premiums

≤ 300% FPL Insurance Partnership

≤ 138% FPL MassHealth Benchmark 946

139-300% FPLBHP

4,250QHP

Five Year Grandfathered Immigrants Eligible for CommCare 8/1/09

≤ 300% FPLCommonwealth Care

Bridge Program0-300% FPL

BHP22,920

QHP

Five Year Bar Immigrants

≤ 400% FPL Health Safety Net0-300% FPL

BHP23,000

QHP

301-400% FPL QHP -

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Current Eligibility Levels

Current Program Eligibility Levels Program Options

Disabled Adults and Children

N/AMassHealth

CommonHealthN/A

MassHealth CommonHealth

37,067

Individuals Not Eligible for MassHealth

≤ 300% FPL Commonwealth Care

19-20 year olds: ≤ 138% FPL

MassHealth Standard14,674

MassHealth Benchmark21 year olds+:

≤ 138% FPLMassHealth Benchmark 81,562

19-20 year olds: 139-150% FPL

MassHealth Standard


BHPQHP

21 year olds +: 139-300% FPL

BHP61,509

QHPIndividuals with Incomes above 300% FPL

300-400% FPL Commonwealth Choice 300-400% FPL QHP 38,107Non-Qualified Aliens

MassHealth Standards for Adults and ChildrenChildren < 1: ≤ 200%

FPLChildren 1-18: ≤150%

FPLParents: ≤ 138% FPL

Pregnant Women: ≤ 200% FPL

MassHealth Limited

MassHealth Standards for Adults and ChildrenChildren < 1: ≤ 200%

FPLChildren 1-18: ≤150%

FPLParents: ≤ 138% FPL

Pregnant Women: ≤ 200% FPL

MassHealth Limited 55,543

Children Who are Non-Qualified Aliens

N/AChildren’s Medical

Security PlanN/A

Children’s Medical Security Plan

<200

HSN0-138% FPL Health Safety Net 0-138% FPL MassHealth Benchmark 49,000

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Subsidized Coverage Options

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Subsidized Coverage Options

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Coverage OptionsInitial Modeling

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Initial Modeling Assumptions

MassHealthBenchmark

BHP Option QHP

Coverage Level 0-133% FPL 0-200% FPL 139-400% FPL

Covered Lives 296,330 119,000 245,000

Benefits CommCarePT1 + NEMT +

EPSDT

CommCare PT2(Very similar to

EHBs)

EHBs

Cost-Sharing Nominal Sliding Scale(Similar to CC PT2, subject to

ACA restrictions)

ACA Levels

Provider Reimbursement

105% - 110% Medicaid

105% - 110% Medicaid

Commercial

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Key Issues in Evaluating Options

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Key Issue: Continuity

• MassHealth and CommCare have similar plan offerings with similar provider networks.

• Data shows significant levels of dropped coverage when moving from MassHealth to CommCare.

• New model must prioritize continuity across subsidized programs.

0 5000 10000 15000 20000 25000 30000

CC-->MH

MH-->CC

Tra

nsi

tion

Transition Events: 22,062

Transition Events: 26,593

Health Plan Unavailable: 55%

Health Plan Unavailable: 14%

Unenrolled at 90 Days: 4%

Unenrolled at 90 Days: 43%

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Key Issue: Consumer Costs

• ACA cost sharing is significantly higher than MA Chapter 58.

• New model must mitigate cost sharing increases.

MA vs. ACA Subsidy Schedule

0

2

4

6

8

10

0 100 200 300 400 500

% FPL

% In

com

e

ACA Tax Credit Schedule

MA Subsidy Schedule

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Key Issue: Federal Dollars

• Enhanced FFP could free State dollars.

• Freed up State dollars could be used to reduce cost-sharing and enhance benefits or be used for other State purpose.

Move From Move To

Childless adults <139% FPL

MH Expansion (Basic, Essential, HIV/FA) and

CommCare

50% FMAP

Medicaid State Plan

75% FMAP in 201490% FMAP in 2020

Childless adults 139% - 300% FPL

CommCare

50% FMAP

BHP/QHP with federal tax subsidies

100% Federal funds

Five year bar legal immigrants <139% FPL

HSN

50% FMAP


100% Federal funds

Five year bar legal immigrants

CommCare Bridge

100% State funds


100% Federal funds

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Key Issue: Exchange Scale

•Absent growth and dependent on final design decisions, Health Connector membership may decline by 70%.

•How will MA ensure that the Exchange will be sustainable as low income populations shift to Medicaid under ACA rules?

•What will be the roles of the Exchange and MassHealth in managing subsidized programs?

CommChoice, 38,107

CommChoice, 38,107

CommCare PT1, 70,524

CommCare PT 2A, 34,347

CommCare PT 2B, 28,921



Bridge PT 1, 11,451

MassHealth, Approx 95,000

BHP (if this option is adopted),

Approx 76,000

-

50,000

100,000

150,000

200,000

250,000

Health Connector Enrollees 2011 Health Connector Enrollees 2014

~ 214,000

~ 64,000

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Takeaways from Initial Modeling

• ACA requires higher levels of consumer cost sharing as compared to cost-sharing currently imposed in CommCare.

• State savings could be used to reduce cost sharing for consumers up to 300% FPL.

• BHP may offer opportunity to reduce cost sharing in 2014 for consumers between 139% and 200% FPL with no state investment.

• BHP modeling includes some federal revenue uncertainties, including premium value of 2nd lowest cost silver plan and EHBs, which could impact State cost (since State receives 95% of premium amount).

• BHP has risk for Connector related to scale, leverage and sustainability

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Follow up Modeling

To further refine Cost and FFP Estimates

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Population Variances

Enrollment Assumptions• Model using upper and lower bounds of enrollment in

Medicaid Benchmark, and BHP/QHP to 200% FPL.

Acuity Assumptions• Model using higher acuity for certain BHP members

(MSP and Bridge).

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Cost-sharing and Take-up Rates

Premium and Cost-Sharing Assumptions• Model the BHP with premiums and cost-sharing as under the ACA and as in CommCare Plan Type 1 and Type 2.

Take-up Rates• Model differential coverage take-up rates of the BHP, QHP, and subsidized QHP related to member cost sharing bounds.

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Cost/Revenue Variances

Trend Assumptions• Model the impact of different Medicaid-Commercial trend scenarios (current modeling assumes 4% Medicaid and 6% Commercial) to illustrate the revenue and cost implications of reasonable combinations.

Benefit Assumptions• Model the impact of a narrower set of Essential Health Benefits (current modeling assumes CommCare Plan Type 1 benefits) for BHP and subsidized QHP members to reflect “typical small employer.” Impact includes cost of “adding” benefits and the change in state revenue for a BHP (due to a lower premium price).

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Benefit ConfigurationDecisions To Be Made

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New Medicaid State Plan Populations

Benchmark Coverage

• What are the covered services?

• What will the premium assistance component look like? (ESI requirements, minimum benefit levels, FFS wrap?)

Who are the truly new enrollees? How many?

What enrollment options will be used for the expanded Medicaid population?

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Basic Health Plan (BHP) Option – 138-200% FPL and AWSS

Will there be a BHP? If so,

• What benefits and cost-sharing?

• How will it be administered?

• What will it cost members?

• What will it cost the State?

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Qualified Health Plans (QHP)Essential Health Benefits and Tax Credits

Will there be a “wrapped” QHP? If so,

• To what % FPL?

• How will it be operationalized in regard to copays, premiums, and additional benefits?

• What will it cost members?

• What will it cost the State?

How will tax credits work for members?

• What is their financial exposure for incorrect subsidy amounts (due to errors or income changes)?

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Movement Between Subsidized Programs

Where are the transition points?

• at 138% FPL, at 200% FPL, both?

How many people are expected to move between programs?

What are the benefit “cliffs”?

What are the cost sharing “cliffs”?

How does movement between programs affect continuity of: coverage, providers, care?

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General Questions

• How do options align with Guiding Principles?

• How will budgets be aligned across programs (MassHealth, Connector, MSP, HSN)?

• Will health plans be required to participate across Medicaid, (BHP), QHP?

• When will enrollments begin?

• How will members be notified?

• What Statute changes are needed?

• What State Plan changes are needed?

• What MassHealth 1115 Waiver changes are needed?

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Next Steps for Subsidized Insurance Options

• Manatt/Mercer to provide final evaluation results, including sensitivity analysis.

• Stakeholder engagement relative to findings anticipated in January.

Roadmap to 2014: Subsidized Insurance Workgroup Update

Documents

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