Agenda

1. Health Care Reform:2014 Overview and ImplicationsJessica RennerHealth Care Reform, Individual Market Business Lead

2. Agenda • Overview of Health Care Reform • Individual Impacts • Employer Impacts • Preparing for Exchanges • Market Impacts and Implications

3. Health Care Reform Impacts • Largely attempts to maintain the employer-based system • Changes purchasing model for individuals and small groups • Financial implications to individuals, employers, providers and insurers

4. Individual Impacts

5. Individuals Required to Purchase Coverage, but Subsidies are Available • Individuals must purchase qualified coverage or pay a penalty • Coverage options • Medicare • Medicaid, Child Health Plus, Family Health Plus • Exchanges • Employer based coverage • Tax credits and subsidies are available for those who make less than 400% of the federal poverty level

6. Implications for Consumers • Consumers must make coverage vs. penalty decisions • Consumers will need to take greater control over health care spending and decisions • Consumers will need to navigate exchanges vs. private insurance • Consumers will need to understand subsidy impacts and processes

7. Employer Impacts

8. Employers are Faced with Choices • Small groups (<25) are eligible for tax credits to subsidize offering coverage • Small groups (<50) can purchase from an insurance exchange or in the outside market • Large groups (>50) will pay penalties if they do not offer coverage or if the coverage offered does not meet affordability and benefit level criteria • Employers must provide coverage and cost information to HHS for all employees

9. Changes are Required for Group Coverage • All small group and individual coverage must cover Essential Health Benefits and “Metal” Levels • Oxford Small Group EPO plan chosen as standard plan • No pre-existing exclusions can apply to policies • Employers can not apply greater than a 90-day waiting period to begin coverage

10. Implications for Employers • Small employers must decide if and where to purchase coverage • Large employers must make “play or pay” decisions • Employers must understand coverage requirements and whether they meet them

11. Preparing for Exchanges

12. Health Plan Preparation for Exchanges • Submission of intent letter • Proposal response includes network and quality scores • Submission of small group and individual products and rate filing, April 2013 • NYS approval by 7/15/2013

13. Enhancing Technology for the New Markets • Increased web and mobile capabilities • Research, compare, shop, purchase • New methods for billing and payments • Data exchange with NYS and Federal Exchanges

14. Market Impacts and Implications

15. Individual Medicaid Medicare Self-funded Large group Small group Uninsured Individual market growth Medicaid growth based on increase in eligibility Medicare growth from population increase Relatively stable large group market Small groups most likely to drop coverage Uninsured movement into exchanges Estimated (National) Market Shifts

16. Emergence of Retail Market • Employers have reduced incentive to offer given low cost of dumping (penalties) • Individual Exchanges give employers justifiable alternative for employees • Influx of previously uninsured now buying direct • Affordability increased (in theory) through subsidies

17. Implications for Insurers • Changing and emerging segments • Opening up of individual market • Change in small group purchasing dynamics • Consultative approach needed for employers and brokers • Evolving competitive landscape reduces predictability • New competitors, existing competitors with new approaches

18. Implications for Insurers • Limited product and benefit differentiation • Commoditized market with price as focal point • Adverse selection threat/difficulty managing risk • Increased mandates and reduction of risk controls • Healthy population may be more likely to take the penalty • Direct to consumer focus

19. Thank You