Evolution of the Michigan Insurance Exchange

1. Evolution of the Michigan Insurance Exchange Metro Detroit Association of Health Underwriters October 25, 2012

2. Where It All Started • March 2010 - PPACA became law • Shortly thereafter, HHS released rules and regulations for establishing exchanges • The law initially contained a provision that allowed agents to be compensated by carriers but after rules and regs were published that authority was left to the states • The State of Michigan Department of Community Health received an Exchange Planning grant in the amount of $999,772 in Sept, 2010 • Workgroups were held in the summer of 2011 to lay the groundwork and recommendations were made to the State • MAHU was represented on all subcommittees

3. “Then” – State Based Exchange • Senator Marleau’s office & LARA (Dept of Licensing and Regulatory Affairs) • Provided language that would differentiate agents and navigators and that would compensate agents traditionally • Worked with the Business coalition (SBAM, MBPA, MMA, and Michigan Chamber) to present common exchange recommendations to the Legislature • These partners supported agent involvement from the beginning • Testified at House Health Policy and Senate Health Policy meetings in conjunction with MAIA and NAIFA

4. SB693 (S-2) Passed the Senate • Defines producer according to Michigan Insurance Code • Limits navigator duties by defining “facilitate” enrollment as everything leading up to enrollment, but not including enrollment • Allows producers to: • Enroll qualified individuals, employers and employees in the exchange • Assist individuals in applying for premium tax credits and cost sharing reductions per the federal act

5. SB693 (S-2), cont. • Allows producers to: (cont) • Receive commissions or other remuneration from a carrier for enrolling consumers in a qualified health plan • Does not require enrollees to use services of a producer but if they do, the consumer will not be penalized, either by premium cost or coverage, for choosing to use the services of a producer

6. SB693 (S-2) Other Provisions • Establishes a sunset clause in the event any part of the Federal act is declared unconstitutional, repealed or otherwise altered • Limits the exchange to small employers until January 1, 2016 • Defines small employer as a sole proprietor or group of 2 to 50 employees • Allows groups up to 100 employees to enroll in the exchange after January 1, 2016 • Does not authorize the Marketplace to spend State funds

7. What Happened in the House? • Bill was referred to House Health Policy committee (Nov. 2011), chaired by Rep. Gail Hanes, where it stalled • Exchange hearings wrapped up after months of testimony from all stakeholders, including 3 hours of public testimony • The House was working on their own bill but they fully support the agent community so we expected agent language to remain intact • They initially indicated no action would be taken until after the Supreme Court decision since they were been told by the technology companies that it’s a “flick of a switch” to become operational

8. Michigan Received a Second Grant, Nov. 29, 2011 • The Michigan Department of Licensing and Regulatory Affairs (LARA) received Level One funding in the amount of $9.8 million • Grant application stated money would be used to: • Conduct additional analysis on the impacts of the Exchange and the Affordable Care Act in Michigan, including additional insurance market analysis; • Acquire contractual services to assist the State and the Exchange with legal matters, technology planning, education and outreach, financing and policy issues; • Support the State of Michigan as it works toward establishment of this new entity • The Michigan Legislature refused to appropriate these funds • No money can be spent until funds are appropriated

9. Looming Deadlines? • Michigan must submit an exchange blueprint to the Feds by Nov. 16th • Michigan risks losing the 2nd Federal grant if it’s not appropriated by Nov, 2012 (some states received extensions) • HHS Secretary must certify by Jan. 1,2013, Michigan’s readiness to operate an exchange • Enrollment and go live dates are Oct. 1, 2013 for plans effective Jan. 1, 2014 • Will these change?

10. “ Now” - Federal/State Partnership Model • Governor Snyder announcement in September • Michigan doesn’t have the time or resources to develop a state based exchange due to lack of enabling legislation and inability to spend the Federal grant money • Opted to handle 2 functions: plan management and consumer assistance

11. Back to Square One • Fed/State Partnership model fully embraces the Navigator program • Funded with federal grant money • Allows navigators to “facilitate” enrollment • Feds get to choose Navigators (generally non-profit) • Agents/Brokers can apply to be navigators but must be non-profit and can’t get paid from any carriers directly!

12. Strengths of Navigators & Agents/Brokers Potential Overlap Public Education Marketing and advertising Distributing fair and impartial information about coverage options Facilitate Enrollment in Qualified Health Plans Providing referrals to appropriate state entities to address questions, grievances or complaints Navigators Ability to provide outreach to special and underserved populations Language and/or cultural expertise Familiarity with public sector health programs Agents and Brokers Familiarity with private health insurance markets and coverage options Coordination and integration of all benefits (LTC, disability, life insurance, dental, vision, Medicare products, financial services) Assistance with coverage issues (networks, authorizations, etc.) Assistance with claims issues throughout the plan year (resolving matters with providers, insurers, assisting with appeals) Assistance with policy renewals (plan comparisons, benefit utilization analysis, negotiation of appropriate benefits) Integration of cost-saving measures (wellness programs, disease management, plan utilization) Assistance with detailed employer/employee enrollment issues (verifications, participation requirements, certifications etc.) Familiarity with state insurance laws, regulations and programs Compliance assistance (HIPAA, COBRA, ERISA, PPACA, Medicare Secondary Payer, plan testing, etc.)

13. What About Agents & Brokers? • HHS expects agents will have the same role they do today and get paid as they do today • How? We must wait and see! • Agents and Brokers still have support from the Governors office, Senate, House, and carriers • All parties expect agents to be paid by carriers

14. What Are Other States Doing? • Iowa enacted a law to license navigators • Maine passed legislation to certify navigators • Neither of these states enacted legislation to create an exchange and both are expected to participate in a partnership or FFE

15. What Are Other States Doing? • Illinois drafted the Illinois Navigator Program Design Final Draft in June, 2012 which provides a model for the navigator program, including certification requirements such as : • One time background check • Initial Navigator training program that covers both Exchange and insurance affordability programs • Initial training exam • Retraining every 12 months with recertification exam • The DOI is still accepting comments • Illinois is expected to establish a partnership but wants to maintain authority to certify navigators through this model

16. What MAHU is Doing • Using the other state models to meet with House, Senate and Governor’s office again • Intend to work with legislators to introduce a bill to regulate navigators and compensate agents traditionally

17. What Can You Do? • Be a member of NAHU • You receive valuable updates to keep you apprised of all matters relating to Health Care Reform • Talk to your state legislators about the value of an agent • Please act upon any call to action that you receive--they are time sensitive • Be educated….NAHU’s website (nahu.org) and Kaiser Family Foundation website (kff.org) are great resources

18. MAHU Legislative Team • Cathy Cooper, MAHU Immediate Past President • Dominic Siciliano, NAHU Exchange Liaison for Michigan • Jeff Thomas, MAHU Legislative Chair • Brad Scoffin, MAHU President • Gary Reed, Lobbyist – CKR

19. Questions Cathy Cooper, MAHU Immediate Past President ccooper@haaweb.net