CALIFORNIA’S EXCHANGE

1. CALIFORNIA’S EXCHANGE

2. Basics of the California Exchange • California’s Exchange is an independent public entity within state government • Governed by a five-member board appointed by the Governor and Legislature • Exchange Board in CA will be an active purchaser • Similar to Massachusetts • Unlike Utah (open marketplace)

3. California Health Benefit Exchange Vision The vision of the California Health Benefit Exchange is to improve the health of all Californians by assuring their access to affordable, high quality care. The mission of the California Health Benefit Exchange is to increase the number of insured Californians, improve health care quality, lower costs and reduce health disparities through an innovative, competitive marketplace that empowers consumers to choose the health plan and providers that give them the best value. The California Health Benefit Exchange is guided by the following values: Consumer-focused, Affordability, Catalyst for reform, integrity, partnership and results oriented.

4. Federal ACA Requirements • 10 required benefit categories • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental health and substance use disorder services, including behavioral health treatment • Prescription drugs • Rehabilitative and habilitative services and devices • Laboratory services • Preventive and wellness services and chronic disease management • Pediatric services, including oral and vision care

5. California Health Insurance Mandates Breast Cancer Testing and Treatment Cancer Screening Tests Cervical Cancer Screening Mammography Mastectomy and Lymph Node Dissection-LOS Cancer Clinical Trials Prostate Cancer Screening Diabetes Management and Treatment HIV Vaccine HIV Testing

6. California Health Insurance Mandates • Osteoporosis • Phenylketonuria • Home Health Care (offer) • Hospice Care • Dementing Illness Exclusion Prohibition • Alcohol and Drug Exclusion Inhibition • Alcoholism Treatment (offer) • Coverage and Premiums for Persons with Physical or Mental Impairment • Coverage for Mental and Nervous Disorders (offer)

7. California Health Insurance Mandates Nicotine or Chemical Dependency Treatment in Licensed Alcoholism or Chemical Dependency Facilities Parity Coverage for Severe Mental Illness Behavioral Health Treatment for Autism and Related Disorders Orthotic and Prosthetic Devices and Services (offer) Prosthetic Devices for Laryngectomy Special Footwear for Persons suffering from Foot Disfigurement Acupuncture (offer) General Anesthesia for Dental Procedures Pain Management Medication for Terminally Ill

8. California Health Insurance Mandates Asthma Management Comprehensive Preventive Care for Children under 16 Comprehensive Preventive Care Ages 17 or 18 (offer) Coverage for Effects of Diethylstilbestrol Screening Children for Blood Lead Levels (offer) Emergency 911 Transportation Medical Transportation Services-Direct Reimbursement OB-GYNs as Primary Care Providers Pharmacists-Compensation for Services within their Scope of Practice

9. California Health Insurance Mandates Contraceptive Devices Requiring a Prescription Prenatal Alpha Feto Protein Testing Infertility Treatments (offer) Maternity-LOS Maternity-Amount of Copayment or deductible Prenatal Diagnosis of Genetic Disorders (offer) Maternity Services Sterilization Rationale Exclusion Prohibition Jawbone or Associated Bone Joints Reconstructive Surgery

10. California Health Insurance Mandates Authorization for Nonformulary Prescription Drugs Blindness or Partial Blindness Coverage of Previously Prescribed Drugs Prescription Coverage for “Off-Label” Use Compliance with Federal Laws and Regulations regarding Preventive Services without Cost Sharing

11. Exchange Enrollment Estimates Enrollees’ Health Insurance Coverage by Source

12. California Healthcare Coverage 2016 • Commercial 45% Exchange 3.5% • Medicaid 33% Expanded to Undocumented children 2017 • Medicare 10% • Uninsured 11% Undocumented Adults Middle Class without Employer Coverage Medicaid has become the public option

13. Exchange Enrollment Update Bay Area at nearly 300k L.A. at approx. 420k * Source: ASPE Issue Brief (March 2015)

14. 2015 State Enrollment by Plan

15. Patient Cost-Sharing Issues • Much of Exchange’s offerings are catastrophic coverage • Standard cost-sharing caps: $6,250 indiv.; $12,500 family • Cost-sharing reductions for those ≤ 250% FPL ($28,725 + ~$10k per dependent) in silver plans • No cost for a preventive care visit • Cost-sharing challenges for patients: • Significant co-pays for specialist services and imaging • High brand drug deductibles • Inexperience with premiums & cost-sharing

17. Provider Issues: Out-of-Network Services • Exchange hostile towards out-of-network care • Plan must disclose what it will pay on out-of-network, non-emergent services to an enrollee • In-network physicians must disclose the use of or referral to an out-of-network provider or facility • “In a manner that allows the enrollee the opportunity to act upon . . . the recommendation” • Anthem & Blue Shield require patient signature • Safe harbor: Physician may rely upon plan-published information sources

18. Provider Issues: Networks & Directories • 9 class action suits filed in California: • Felser v. Blue Cross of California, no. BC550739 • Cowart v. Blue Cross of California, no. BC549438 • Brown et al. v. Blue Cross of California, no. BC554949 • Harrington v. Blue Shield of California, SF Superior Ct., no 14-539283 • Weiss v. Blue Shield of California and Blue Shield Life & Health Ins. Co., LA Super. Ct., no. BC 550977 • Daum v. Blue Shield of California, San Diego Superior Ct., no. 37-2014-00023350 • McCarthy v. Blue Shield, LA Super. Ct., no. BC558549 • Davidson v. Cigna, LA Super. Ct., no. BC558566 • LaRue v. Health Net, LA Super. Ct. no. BC566095

19. Provider Issues: Networks & Directories • Most causes of action based on bait-and-switch: • Breach of implied covenant of good faith and fair dealing • Misrepresentation in marketing of network and subsequent denial of out-of-network claims • Breach of contract • Failure to ensure timely access of care under terms • Concealment of material facts • Transitioning enrollee into narrow network product with misleading or nonexistent notice