Mississippi Insurance Department 1001 Woolfolk State Office Building 501 North West Street Jackson, Mississippi · 39201.

Mississippi Insurance Department

1001 Woolfolk State Office Building501 North West Street

Jackson, Mississippi · 39201

A History of Health Insurance ExchangesNot a new conceptIdea was born in the 1970’s1990’s

“Hillarycare” introduced “buying co-ops”Republicans hated it

Early 2000’sHeritage Foundation came up with a health insurance exchange conceptLooked very similar to a “buying co-op” Included individual mandateDemocrats hated it

2006Massachusetts created the Massachusetts Health Insurance Connector

Authority under Governor Mitt RomneyBased on Heritage Foundation exchange concept 2

A History of Health Insurance Exchanges2009

Utah launched its health insurance exchangeDesigned for small employers only; represents a market-driven solution

2010Democrats borrowed the Exchange concept and inserted it into PPACARepublicans hated it

In Mississippi:The concept of an exchange is accepted across party lines as good public

policyGovernor Haley Barbour advocated for a market-based, consumer-oriented

exchange for 3 years prior to the passage of the Affordable Care ActWe are trying to fulfill that vision by creating a state-based market-driven

solutionOnly 7 - 11% of Mississippians have a good understanding of what services

an exchange actually provides 3

What is an Exchange?Essentially, an Exchange is a marketplace for major

medical insurance.

A one-stop shop for health insurance -- similar to Travelocity, Expedia, and Priceline.

This is perhaps an underestimate in that the Exchange:Will be a massive undertaking;Will provide many services beyond simply offering different

insurance products for sale;The web portal comparison piece is just the “tip of the

iceberg.”4

Two Types of Exchanges

Individual Health Insurance Exchange

5

Small Employer Health Insurance Exchange

Individuals & families may purchase qualified coverage through Qualified Health Plans

Purchaser may be eligible for premium subsidies—based on income level

Small businesses with up to 100 employees may purchase qualified coverage

Premium subsidies are not available through the SHOP exchange (tax credits are available for qualified employers)

States may choose to operate two separate exchanges or combine into a single mechanism

Exchange FunctionsCertify and decertify plans to be sold on the ExchangeOperate a toll-free customer service hotlineMaintain a website to provide standardized information on plansUse a standardized format for presenting coverage options Inform individuals of eligibility for Medicaid, CHIP, etc.Make available a calculator to determine the actual cost of coverageProvide a rating system for plans available through the ExchangeCollect premiums for plans sold through the Exchange and forward those

premiums to the carrierOperate separate Exchanges for individuals and for small employersManage the movement of individuals inside and outside the Exchange and

between the individual and small employer ExchangeEstablish a “Navigator” program to assist consumers in enrollmentDevelop a risk adjustment program to appropriately distribute among

carriers the costs associated with high-risk individuals 6

Mandated Exchange Functions

77

Portal / Web sitePortal / Web site

Enrollment and

Eligibility Interface

Enrollment and

Eligibility Interface

Carrier1

Carrier1

Carrier2

Carrier2

Carrier3

Carrier3

HealthPlan#1

HealthPlan#1

Plan Comparison InterfacePlan Comparison Interface

HealthPlan#2

HealthPlan#2

HealthPlan#3

HealthPlan#3

Administration InterfaceAdministration Interface

Communication InterfaceCommunication Interface

TREASURYTREASURY

HOMELANDSECURITY

HOMELANDSECURITY

IRSIRS

HHSHHS

SOCIALSECURITY

SOCIALSECURITY

Verify CitizenshipVerify Citizenship

Verify IncomeVerify Income

Tax CreditsTax Credits

Verify ResidencyVerify Residency

STATEMedicaid

STATEMedicaid

EligibilityEligibility

ReportingReporting

SubsidiesSubsidies

Cost ReductionCost Reduction

CUSTOMERSERVICE

CUSTOMERSERVICE

NotificationsNotifications

Pay PremiumsPay Premiums

Employeeor

Consumer

Employeeor

Consumer

Billing or InvoicesBilling or Invoices

Employeeor

Consumer

Employeeor

ConsumerAdmin, Life Events, etc.Admin, Life Events, etc.

Customer ServiceCustomer Service

ONLINECALCULATO

RDisplay Total

Costs

ONLINECALCULATO

RDisplay Total

Costs

HealthPlan#4

HealthPlan#4

Carrier4

Carrier4

StateInsurance

Agency

Certify, RecertifyDecertify

Health Plans

StateInsurance

Agency

Certify, RecertifyDecertify

Health Plans

NavigatorNavigatorGuidanceGuidance

DataService

Hub

DataService

Hub

FISCALAGENTFISCALAGENT

RISK ADJUSTMENTRISK ADJUSTMENT

Minimum Requirements for the Exchange

By January 1, 2014, each state shall have in place an operational health insurance exchange to sell individual and small group major medical policies.

By January 1, 2013, the Secretary of Health & Human Services (HHS) will determine whether each state will have an effective mechanism in place to run an Exchange by January 1, 2014, and if not, then the Federal government will step in to run the Exchange for the state.

Only qualified health plans certified by the Exchange may be offered through the Exchange.

8

What Will a Federal Exchange Look Like?Medicare.govWill not be tailored to the specific needs of Mississippians

“Cookie cutter” exchange for all states that fail to create their own ExchangeFederal government may pick two to three national carriers for the

Federal Exchange.The Federal government will have sole authority to regulate the

insurance plans sold through the exchange to the exclusion of each state’s traditional role in insurance regulation. The Federal government may utilize existing state regulatory agencies to

implement law without additional funding or opportunity for input; States will still pay for the Federal exchange.

Federal government will regulate health insurance in Mississippi.Federal government will determine eligibility for Medicaid and may

withhold funding if a State refuses to enroll individuals that the Federal Exchange deems eligible.

9

Likely State Scenarios in 2014Three Primary Categories

States making significant progress (5-10 states)Will be certified as “approved”Will likely still rely on Federal processes for some

functionality

States making some progress (30-35 states)Will be certified as “conditionally approved”Will be considered state-federal “hybrid”

States making little or no progress (5-10 states)Will have a Federally-facilitated ExchangeMay continue to work toward a state-facilitated exchange 10

Mississippi Based Exchange

States have the right of first refusal to operate an Exchange.

Federal Exchange is the fallback.

11

“For Mississippians,By Mississippians”

12

13

Mississippi Comprehensive Health Insurance Risk Pool Association

The enabling legislation for the Risk Pool is found in Mississippi Code Annotated 83-9-203 et seq., 1972 as amended.

Subsection 83-9-213(2)(p) specifically states: (2) The association may:

(p) Serve as a mechanism to provide health and accident insurance coverage to citizens of this state under any state or federal program designed to enable persons to obtain or maintain health insurance coverage.

Section 83-9-213(3) states: (3) The commissioner may, by rule, establish additional powers and duties

of the board and may adopt such rules as are necessary and proper to implement Sections 83-9-201 through 83-9-222.

14

Mississippi Comprehensive Health Insurance Risk Pool Association

The Association is operated by a nine-member board of directors, as stated in Section 83-9-211(2)(a).

The board of directors consists of:Four (4) members appointed by the Insurance Commissioner. Two (2) of

the commissioner’s appointees shall be chosen from the general public and shall not be associated with the medical profession, a hospital, or an insurer. One (1) appointee shall be representative of medical providers. One (1) appointee shall be representative of health insurance agents.

Three (3) members appointed by the participating insurers, at least one (1) of whom is a domestic insurer.

The Chair of the Senate Insurance Committee and the Chair of the House Insurance Committee, or their designees, who shall be nonvoting, ex officio members of the board.

15

Exchange Advisory Board & SubcommitteesThe Commissioner of Insurance issued Bulletin 2011-9 on

October 18, 2011, which established an Exchange Advisory Board & Advisory Subcommittees.

The Advisory Board will assist the Department of Insurance as it develops rules, regulations, and policy governing the Exchange.

The Advisory Board and Subcommittees consist of members representing the following stakeholder groups:

16

A) Educated health care consumers B)Individuals & entities with enrollment experience C) Advocates for hard-to-reach populations D) Small businesses & self-employed individuals E) State government agencies F) Federally-recognized tribes within the State

G) Public health experts H) Health care providers I) Large employers J) Health insurance issuers K) Health insurance agents & brokers holding current licenses

17

Exchange Advisory Board & Subcommittees MembershipEDUCATED

HEALTH CARE CONSUMERS

EXPERIENCE IN ENROLLMENT

HARD TO REACH

POPULATIONS

SMALL BUSINESSES & SELF-EMPLOYED

INDIVIDUALS

PUBLIC HEALTH EXPERTS

HEALTH CARE PROVIDERS

HEALTH INSURANCE

ISSUERS

HEALTH INSURANCE AGENTS & BROKERS

LARGE EMPLOYERSSTATE GOVERNMENT AGENCIES/DIVISIONS

FEDERALLY-RECOGNIZED

TRIBESGeroldean Dyse Sherry Abraham Michael Jones Linda Dixon Rigsby Dr. James P. Almas Bucky Murphy Susan Martindale Signe Jones

Roy Mitchell Sannie Snell Nancy Stewart Corey Wigging Tammy Bullock Scott Stanford Bryan Lagg Keri Abernathy

Therese Hanna Kimberly Hughes Katrina Reynolds Kim Stonecypher Dr. Margaret Gray Dr. Grayson Norquist Kim Hancock Kurt Hellmann Angela Ladner Rims Barber Debbie Ferguson

Mary Werner Kay Trapp Jill Bishop Dr. Philip Marler John Reed Marilyn Douglas Thomas Montgomery Sandi Munden

Robert Pugh Lee Ann Griffin* Kristy Simms Dr. Morris Hamilton Robert Morris Dr. Jasmine Chapman Beth Dickson Myrtis Small Mitch Morris Dr. Joe Files

Gary Ben

Bill Oliver Stephanie Barnes Taylor* Dr. Richard Conn Dr. Kristi Henderson Mary Mixon Dr. Lenito Sinay Dr. Frank Reese Keith Heartsill David Elliott Michael Neuendorf Dr. Gail Megason Ann Bishop Dr. Thomas Joiner Dr. Owen EvansDr. Donald Seago Larry Walker Dr. R.A. Foxworth Stephen Nichols Dr. Tammy Sims Mike Birdsong Dr. Marc Mitchell Dr. W. R. Webb

Dr. Claude Brunson Dr. Richard deShazo J. Michael Estes Lorraine Washington Terry Trigg Daniel M. Harrison Emily Lewis Mike Carney Patty Collins Wally Davis

Joel Jasper Dudley Wooley Steve Armstrong Doug Henley Cindy Hamman Preston Francis Scott Bingham Dan Gibson

Lawrence Kissner Charles Pace Michael Bailey Kyle Godfrey Jeff Album Clinton Mayes

Teresa Planch Elizabeth C. O’Keeffe Dr. Michael Patterson John T. Newsome Jerri Avery Dr. Randy EasterlingRita Rutland

18

19

20

21

Federal Funding Opportunities Through 2014

Level I:Single-year funding only

Period of performance is up to one year post-award

Available only through 2012 States may apply through June 29, 2012

Level II:Multi-year funding

Period of performance is from date of award through December 31, 2014

Available through 2014 States may apply through June 29, 2012

22

Federal Funding Opportunities Post 2014

23

Barriers To ImplementationOverall lack of certainty

2012 ElectionsConstitutional challenges

Lack of timely guidance from HHS1,968 new or expanded powers given to the Secretary of HHSLots of red tape

Heavy technology liftSystems developmentStrained public/private sector resources—not enough vendors

Tough statutory timelinesAgreement among state officialsStakeholder buy-in

24

United States Supreme Court

Individual mandate is upheld as constitutionalThe penalty for noncompliance with the mandate is

a tax

Medicaid expansion is coercive to states and therefore unconstitutional

25

Essential Health BenefitsOnly qualified health plans offering Essential

Health Benefits and certified by the Exchange may be offered through the Exchange.

HHS issued guidance on Essential Health Benefits on December 16, 2011.

MID will review plans and determine whether they meet the requirements set for qualified health plans.

26

Essential Health BenefitsThe guidance released on December 16, 2011, sets forth the

intended regulatory approach of HHS, which allows states to select an existing health plan to set the “benchmark” for the items & services to be included in the Essential Health Benefits package.

The four benchmark plans are:One of the three largest small group plans in the state;One of the three largest state employee health plans;One of the three largest Federal employee health plan options;The largest HMO plan offered in the state’s commercial market.

HHS intends to require that a health plan offer benefits that are “substantially equal” to the benchmark plan selected by the state and modified as necessary to reflect the 10 categories of coverage listed by PPACA.

27

EHB: Ten Categories of CoveragePPACA Section 1302 sets out ten categories of coverage that must

be included in the Essential Health Benefits package:1) Ambulatory patient services;

2) Emergency Services;

3) Hospitalization;

4) Maternity and newborn care;

5) Mental health and substance use disorder services, including behavioral health treatment;

6) Prescription drugs;

7) Rehabilitative and habilitative services and devices;

8) Laboratory services;

9) Preventive and wellness services & chronic disease management;

10) Pediatric services, including oral & vision care.28

2014 ReformsProhibition of pre-existing condition exclusionsGuaranteed issueRating rules:

No health status3:1 maximum age rating1.5:1 tobacco use

Single risk pools in individual and small group markets

Individual mandateEmployer responsibilities

29

The Future of the Law: 2012 Elections

Who will occupy the White House? Is “effective” repeal by Executive Order possible? If President Obama is re-elected then PPACA will be implemented by using

all means necessary

Who controls the House and Senate and to what degrees? Is actual repeal possible?Will statutory timelines remain? If Republicans get Senate, House & Presidency, then through “reconciliation”

process (same process used in the Senate to pass PPACA) the funding for many PPACA programs can be stopped. This will do nothing to stop some major reforms (such as guaranteed issue &

community rating) from going into effect and this could cause major problems. 30

Mississippi Insurance DepartmentCommissioner Mike Chaney

[email protected]

Aaron Sisk · (601) 359-2012 31