Integration of Medicaid and the Exchange

1. Integration of Medicaid and the Exchange Robin Lunge Director of Health Care Reform November 18, 2011

2. Purpose & Agenda • Overview of issues & options for how to integrate Medicaid and the Exchange • Summary of analysis underway • Your thoughts and input!

3. Goals • Universal coverage (for low and moderate income Vermonters) • Comprehensive High Quality Benefits / Innovative services to meet individuals’ needs • Focus on Better Consumer Experience • Provider Access and Quality • Payment Reform • Simplified Administration • Controlling Health Care Costs

4. Stages of Vermont Health Reforms

5. Medicaid Changes in 2014 • Medicaid income eligibility increases to 133% FPL • $1226/month • Income calculation changes for some people • “MAGI” – modified adjusted gross income from tax return • More verification done electronically • Reduction in paperwork, we hope!! • Web-based enrollment • Can still do phone & in person

6. Health Benefits Exchange in 2014 • Individuals without employer-sponsored insurance • Small businesses & their employees • Federal tax subsidies for people with incomes under 400% FPL • $3684/month

7. Medicaid & the Exchange in 2014 • What happens to VHAP, Catamount Health, and employer-sponsored insurance assistance? • Individuals with incomes under 133% move to Medicaid • Individuals with incomes over this amount – either • Basic Health Plan (option – next slide more details) • Health Benefit Exchange with subsidies • Very much like Catamount Health & ESIA • What happens to coverage for individuals with disabilities and seniors? • This coverage need not change • Anticipate filing Medicaid waiver request to continue coverage for certain populations currently covered

9. Medicaid & the Exchange: 2014 Health Coverage Options

10. Exchange with federal subsidies • 100% federal funds • In process of creating complete financial model • Premiums are lower than VHAP/CHAP for very low income & for 2 person families • Premiums are a bit higher at upper income levels of CHAP

11. Comparison of Subsidies: Exchange Subsidy & Current Vermont

12. Exchange with federal subsidies • Cost-sharing (deductibles, co-payments, co-insurance) • Higher in Exchange than for VHAP • Approx. 70-80% of people in VHAP move to Medicaid • VHAP has no deductible or co-insurance, limited co-pays • Hard to compare CHAP & Catamount • Need detailed benefit designs to compare deductibles, etc • Out of pocket maximums (total you MIGHT have to pay) higher in the Exchange w/ subsidy than Catamount Health • Provider rates – by insurer

13. Possible solutions to cost-sharing issues • State subsidy “wrap” in addition to federal subsidy • Similar to wrap for employer-sponsored insurance program now • Could provide additional assistance so people don’t have dramatic increases • In process of costing this out • Flexibility in income phase-out • 60-40 if included in new Medicaid waiver request • Basic Health Plan (see next slides)

14. Basic Health Plan • 95% federal funds that would have been received in Exchange • More protective of consumers financially • More chance of people losing coverage due to transitions • Impacts on Exchange financial sustainability & viability • Provider rates uncertain at this point • Could be Medicaid; could be Catamount Health level; could be private insurance level

15. Medicaid Option above 133% • May cover populations above 133% in Medicaid • 60/40 fed/state split • More expensive – lose 100% fed funds • Issues with Exchange viability and sustainability • Provider rates at Medicaid level