Health Insurance Exchanges under the Affordable Care Act

1. Health Insurance Exchanges under the Affordable Care Act Deborah Chollet, Ph.D. Senior Fellow

2. Overview • Individual Exchanges and Small Business Health Options Programs (“SHOP” Exchanges) • Exchange design and implementation occur in the context of significant market reforms • 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 • State flexibility

3. Why Exchanges? • Facilitate the individual purchase of coverage • Consumer information and assistance • Facilitate use of income-based subsidies to buy coverage • Facilitate enrollment in public coverage, when eligible • Assist small employers that offer coverage • Encourage the development of qualified health plans that compete on price and quality

4. Market Reform and Exchange Implementation Timeline

5. Requirements for Insurance Exchanges: Enrollment and Consumer Assistance • Facilitate initial, annual, and special open enrollment periods • Maintain internet web site with standardized information to help consumers compare plans and calculate their cost of coverage • Maintain a toll-free consumer hotline • Make eligibility determinations and enroll eligible Exchange applicants in Medicaid & CHIP • Work with the IRS to determine eligibility for and amount of individual premium or cost-sharing subsidies, if no qualified employer offer • Certify exemptions from the individual coverage requirement and notify employers and the Treasury of exemptions and individual terminations of coverage during the year • Establish a Navigator program, awarding grants to eligible entities to conduct Exchange education and enrollment

6. Requirements for Insurance Exchanges: Qualified health plan administration • Certify qualified health plans and assign ratings based on relative quality and price • Present plan options to consumers in a standardized format with information about benefits and consumer satisfaction • Review premium increases and post carriers’ justifications on the Exchange website • Use authority to exclude plans from the Exchange if premium increases are deemed excessive

7. What is a Qualified Health Plan? • Marketing that does not deter high-need individuals • Sufficient choice of providers—including essential community providers serving low-income, medically underserved individuals • Accredited with respect to local performance on • Clinical quality measures (e.g., HEDIS) • Patient experience ratings (e.g., CAPS) • Consumer access • Utilization management • Quality assurance • Provider credentialing • Complaints and appeals • Network adequacy and access • Patient information programs • Quality improvement strategy • Uniform enrollment form, standard presentation of health benefits, and consumer information about quality

8. Requirements for Insurance Exchanges: Exchange Administration • Individual Exchanges must be self-sustaining by Jan. 1, 2015 • Consult with stakeholders—consumers, small business, self-employed, Medicaid, advocates for hard-to-reach populations • Account for all activities, receipts, and expenditures, and report annually to HHS • Publish on an Internet website average costs of licensing, regulatory fees and required payments, administrative cost • Report on all operations annually to the Exchange board, Governor, legislature, and State Auditor

9. State flexibility • What entity to administer the Exchange? Contract functions? • Exclusive, statewide, sub-state, or multi-state Exchanges? • Merge individual and SHOP Exchanges? • Extend SHOP to groups with 51-100 employees and (in 2017) larger groups? • Allow all qualified health plans to participate in the Exchange, or only selected plans? • Allow Exchange plans to vary cost sharing, care management, other provisions consistent with federal guidelines? • Apply existing state mandates at state cost? • What entity will do risk adjustment in/outside the Exchange? • What role for agents and brokers, per federal guidelines? • What Exchange surcharge to support operations?