The California Individual Health Market Under PPACA (2014)

There seems to be quite a bit of confusion out there as regards the upcoming healthcare reform market for individuals and families in California.

There will be one pool of people in the overall market comprising one single risk pool.  In that overall single pool there will be two markets available for individuals and families in California to purchase qualifying health plans (QHP) which have not yet been developed by the carriers for the markets (deadline for the exchange is May 31, 2013).  QHPs must fall into a 'precious metals' tier of Platinum, Gold, Silver, Bronze and one Catastrophic Tier.  They must meet actuarial values  as determined by the PPACA.

The Exchange

California will operate a state health benefits exchange which will offer plans inside of the exchange to those who wish to purchase those plans and especially for those seeking premium subsidy assistance or credit (or both).  Subsidy for exchange plans will be based on financial qualification and will be set to the Silver Tier of plans.  Anyone seeking a subsidy MUST purchase their health insurance through the exchange to receive that subsidy.  Subsidy will not be available to those who purchase outside of the exchange who otherwise would qualify.

Insurance carriers will offer certain plans to the exchange and these plans will need to conform to exchange requirements.  They may offer plans at every tier level or only at certain tier levels. Some insurance carriers may not offer any plans to the exchange. 

Outside The Exchange (Copycats)

Insurance carriers must duplicate the plans they offer inside of the health benefits exchange outside of the exchange.  If a carrier offers four silver plans and one bronze plan inside of the exchange, that carrier must also offer the exact same plans outside of the exchange.

Outside The Exchange Only 

In addition to the copycat plans mirroring the exchange plans, insurance carriers can and will create other plans to be specifically sold only outside of the exchange.  These plans will also be guaranteed-issue and will not be available inside of the exchange for subsidy qualifiers or those wishing to purchase exchange level coverage.

Plans sold only outside of the exchange must meet a 'metal tier', have the correct actuarial value, and contain the required 'essential health benefits'.  Beyond that, carriers can and likely will create broader plans for this market segment with different provider networks (think larger), different plan options (HSAs), different co-pays, Rx benefits, drug formulary and so on.  

These plans will likely represent the primary coverage plan purchases by those who do not qualify for subsidy from the exchange.  

I will add a blog soon with information on general income guidance for subsidy qualification from the health benefits exchange.

Brokers and agents will be permitted to assist with enrollments inside or outside of the exchange with commission compensation (still unknown) to be paid by the insurance carriers directly.  Exchange enrollments will need to be done through the exchange portal or by paper application from the exchange.  Plans sold outside of the exchange will be carrier specific pretty much like it is now.

Dave
www.davefluker.com

Bills filed to fix insurance exchange and strengthen premium rate review

Sen. Joe Crisco, Co-Chair of the Insurance and Real Estate Committee, has filed bills to protect consumers in health reform. An Act Concerning the Duties of the CT Health Insurance Exchange directs the exchange to actively negotiate premiums with insurers on behalf of consumers. Other states are using negotiation to keep premiums more affordable. An Act Concerning the Insurance Department’s Review of Health Insurance Premium Rates directs the department to consider consumer out-of-pocket costs, affordability, provider rates, executive compensation in approving insurer rates and to directly monitor provider network adequacy. Both concepts are included in 31 Ways to Save Money in CT’s Health Care Budget.

CT Insurance Exchange standard plan proposal too expensive for consumers

The draft standard plan proposal for the CT Health Insurance Exchange includes copays of $40 to $45 for a physician visit (CT 2011 average $23.79), $150 ER copays, and deductibles up to $3,000 for individuals and $6,000 for families (CT 2011 average $1,331 and $2,500 respectively). Better, more affordable plans are currently available in CT on eHealthInsurance.com. It is important to note that the Exchange will be marketing their plans to CT’s uninsured, who couldn’t afford the more reasonable options available now. In what is becoming standard process for the Exchange, the proposal was developed by Exchange staff with industry insiders in non-public meetings. The draft was open for public comment until today but it was never released to the public or posted on a public website. Some Exchange Board members didn’t know anything about the process. Click here for our comments.

CA SB 1431 Small Group Stop-Loss Bill Is Back On!

According to an e-blast from health underwriters today, the CA Legislature intends to re-open SB 1431 (De Leon) which was shelved last year.  

SB 1431 essentially raises the stop-loss amounts for self-funded small group plans in California to a level commensurate with large employer plans.  SB 1431, if passed and implemented, would likely force most small employers in California (under 50 employees) to revert to fully-insured health plans for their employees.

Dave
www.davefluker.com

VA And TRICARE Meet 'Obama Care' Requirements

According to a document released by the White House, both VA (Veteran's Administration) and TRICARE health coverage meet the 'individual responsibility requirement' to maintain qualified health insurance under the PPACA (Obama Care).

Those who are eligible for VA services and those who have TRICARE (myself included) coverage will not be required to change coverage nor purchase a new coverage plan from the California Health Benefits Exchange in 2014.  

Those eligible for VA services may also purchase a qualifying health plan (QHP) if they so desire, but are not required to purchase a plan.  

White House Memo on VA/TRICARE

Dave
www.davefluker.com

Mickey Herbert joins Harvard Pilgrim

Former ConnectiCare CEO, Mickey Herbert, has joined Harvard Pilgrim Health Care as a consultant. Harvard Pilgrim has applied for a license to expand to CT’s insurance marketplace. He resigned from the CT Health Insurance Exchange Board a month ago, adding to growing conflict of interest concerns. Concerns have been raised about Board members ties to and investments in insurance companies despite strong conflict of interest limits in state law.

One Fiscal Cliff Down and Three To Go––But No Real Solution On the Horizon

Last week's deal to avert the "fiscal cliff" settled very little.

For those in the health care market, I will suggest the big takeaway is that we should expect very little will be settled in the coming months and we will continue to face a great deal of uncertainty for years to come.
Without an agreement to alter the course we are on, it is estimated that we will add more than $10 trillion to

Five large CT insurers interested in exchange

Aetna, Anthem, ConnectiCare, HealthyCT (the new nonprofit co-op plan), and United all sent letters of intent to the CT Health Insurance Exchange signaling their intent to participate. The other large insurer in the state, CIGNA, does not participate in CT’s individual market, according to exchange staff. Harvard Pilgrim did not submit a letter, but may be awaiting licensure. While not binding, the response is very good. As advocates predicted, there was little need to worry about insurers not participating in the exchange. Advocates have criticized the exchange for designing policies very favorable to insurers, lax in accountability, and unaffordable for consumers and small businesses.