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Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
Medicaid and the ACA
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Medicaid and the ACA

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  • 1. Cover area with cropped image. Do not overlap blue bar. Completely cover gray area. UnitedHealthcare and Health Reform On the Horizon: 2014
  • 2. Health Care Landscape Reform Timeline Though several key compliance provisions are behind us, the most material marketplace changes won’t come until 2014 – Adjusted Community Rating, Guaranteed Issue, Industry Fees, Essential Health Benefits, Medicaid Expansion and Exchanges Compliance Compliance, Growth and Transparency 2 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.
  • 3. 3 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. July/August September Q4 2012 Q1 2013 • Supreme Court decision (late June) • MLR rebates delivered 8/1 • Expansion of Women’s Preventive Care • MLR process begins for 2013 – survey to determine ATNE • Summary of Benefits and Coverage document for new and open enrollments after 9/23 • PCORI fee for plans ending 10/1/12 (pay by July 2013) • Guidelines for Essential Health Benefits and state benchmark plan decisions • New product portfolio and rate filings begin Advocacy on impact of 2014 ACA requirements & market changes • FSA limits $2500 • Employer Required W-2 filing • Broker meetings and updates on new product portfolio – ACR and market changes for small group • Exchange notification Health Care Reform Landscape 2012 Focus
  • 4. 4 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Highlights • 30 million newly insured individuals • Perhaps 80 million switching coverage source • 20+ million purchasing through Exchanges • Number covered by Medicaid increases by 15+ million • Average subsidy of $5,000- $6,000 per subsidized enrollee • Medicaid primary care reimbursement increased to Medicare rates (2013 and 2014) Estimates above based on public sources including CBO and Lewin Group publications Guaranteed Issue Taxes, Fees & Assessments Employer Mandate / Penalty Medicaid Coverage Expansion Premium Subsidies Cost-Sharing Subsidies Adjusted Community Rating Expanded Benefits / Mandates Cost-Sharing Limits Risk Adjustment & Reinsurance CO-OPS & Multi-State Plans Individual and SHOP Exchanges 2014 PPACA Insurance Market Provisions Though several key compliance requirements are behind us, the most material marketplace changes won’t come until 2014 Health Care Reform Landscape What Happens in 2014?
  • 5. Health Care Reform Landscape What Happens in 2014? 5 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. On the Horizon • Expanded Benefits – State-defined Essential Health Benefits (EHB) to include ten mandated categories, including pediatric dental/vision; No lifetime limits; No annual dollar limits on EHB; Actuarial value thresholds. • State definitions of EHB will vary and may require product adjustments. Employers will need to adjust plan design and offerings based on rules going into effect. • Rating Changes – Community rating; Guaranteed issue of coverage; No medical underwriting; Ban on pre-existing condition exclusions (for all ages). • Health insurance in the individual and small group market will only be able to vary premiums by family size, geography, tobacco use and age. Other rating factors currently used, such as gender industry, group size, health status and medical history will be prohibited. • Taxes and Fees – Assessments to insurers and employers to pay for subsidies and risk adjustments (e.g., Patient-Centered Outcomes Research Institute Fee, Insurer Fee, Reinsurance Fee) The Resulting Landscape • A number of fees and taxes, and benefit requirements that will affect the cost of health care for employers during the next several years. • While the exact cost may differ for each employer based on location and plan design offered, on average employers are expected to see a substantial increase in costs.
  • 6. 6 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Eff. Date Provision Description Small Group1 Large Group Individual Applies to GF?2 FI ASO FI ASO 8-12 Women’s Preventive Expand to include additional screening, prenatal office visits, breastfeeding support and some contraceptives. Yes Yes Yes Yes Yes 1-13 FSA Limits Employee contributions limited $2,500 per year, with increases allowed in future years to adjust for inflation. Yes Yes Yes Yes n/a Yes 1-14 Essential Health Benefits (EHB) Health Plans must provide EHB for individual and small group. Ten mandated benefit categories (to include pediatric dental and vision). Subject to state variation. Yes No No No Yes Annual/Lifetime Limits Must be removed for all services defined as essential health benefits Yes Yes Yes Yes Yes3 Yes3 Deductible Limits Plan design deductibles may not exceed a $2,000 (self- only) or $4,000 (other than self-only) limitation Yes No No No No OOP Max Must comply with OOP limits for HSA qualified plans Yes Yes Yes Yes Yes Clinical Trials Must cover routine costs associated with clinical trials Yes Yes Yes Yes Yes Actuarial Value Plans must be Bronze (60%), Silver(70%), Gold (80%) or Platinum (90%) Metallic Levels Yes No No No Yes Waiting Periods Maximum 90 day waiting period Yes Yes Yes Yes No Yes Pre-Ex Conditions Pre-existing condition exclusions must be removed for all members, not just those under age 19. Yes Yes Yes Yes Yes Yes Community Rating Rate factors limited to family structure, benefit plan design, geography, tobacco use and age. Prohibited: gender, group size, health status, medical history Yes No No No Yes Expanded Benefits & Rating Changes General Overview 1 Prior to 2016, states may define SG as 1-50 2 All provisions listed apply to nongrandfathered plans 3 Removal of annual limits does not apply to grandfathered Individual plans
  • 7. 7 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Plans in individual and small group markets must provide Essential Health Benefits Package – four components of the package: 1. Essential Health Benefits – 10 required coverage categories • Pediatric dental and “habilitative services” are “new”, not typically covered by UHC • HHS has delegated EHB definition via “benchmark plans” to states (by Q4 2012) • Practical impact  State mandates will be required by EHB 2. Out-of-Pocket Maximum  new accumulation rules and ceiling • OOPM ceiling at HSA level: likely $6,400/12800 in 2014 (indexed to inflation) • All cost-sharing (for essential health benefits) must accumulate to OOPM • Applies broadly  all plans, all group sizes, all funding approaches • Does not apply to out-of-network benefits 3. Small group deductible ceiling  $2,000 single/$4,000 family • Indexed to inflation • Exception for Bronze plans if you cannot “reasonably” design one with a $2000 deductible • Does not apply in individual market • Does not apply to out-of-network benefits 4. Limited to “Metallic” coverage levels (Bronze, Silver, Gold, Platinum) • Defined by actuarial value (plus/minus 2%): Bronze/60%, Silver/70%, Gold/80%, Platinum/90% • Federal requirement to offer one Silver, one Gold plan on Exchanges • Metallic level requirement applies BOTH on and off-exchange *Grandfathered plans exempt from above requirements Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. 7 Expanded Benefits Reform Provisions Impacting Product & Plan Design Individuals and employers will be required to have/provide “minimal essential coverage” • Minimum actuarial value of 60%
  • 8. PPACA plan design rules pricing impact dependent on starting plan design & customer reaction Small group pricing impact estimate: 4-11% pricing increase (in extreme situations, could be >20%) Large group estimate: 3-6% These changes are independent of other price impacts from PPACA (e.g. taxes/fees, community rating, etc.) Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. 8 Impact Assessment Estimated Pricing Impacts from ACA-driven Plan Design Changes Plan A Plan B Plan C Plan D Plan E Description Mainstream copay plan Richer copay plan (if conform to Silver) Richer copay plan (if conform to Gold) High deductible copay plan Very high deductible HSA plan Deductible $1,500 $500 $500 $2,500 $5,000 Coinsurance 80% 80% 80% 90% 100% Approx. Actuarial Value 70% 75% 75% 70% 60% Essential Health Benefits  1-5%  1-5%  1-5%  1-5%  1-5% Conform to Metallic Level n/a  3-7%  3-7% n/a n/a Flat-dollar copays to OOPM  3-6%  3-6%  3-6%  3-6% n/a Lower Deductible to Ceiling n/a n/a n/a  1-2%  11-17% Changes to Compensate for Deductible n/a n/a n/a  1-2%  11-17% Deductible $1,500 $1,500 $500 $2,000 $2,000 Coinsurance 80% 80% 90% 85% 50% Approx. Actuarial Value 70% 70% 80% 70% 60% Direct Pricing Impact  5-13%  12-22% Impact if Compensating for Deductible Ceiling  4-11%  1-5%  4-11%  1-4%  7-18%Total Starting Plan Details PPACA- Driven Product Changes Revised Plan Details
  • 9. 9 Description Effective Date Timing / Duration Payment Cycle Segment Impact Basis of Assessment PCORI Fee • Help fund Patient-Centered Outcomes Research Institute • Will assist patients, clinicians, purchasers and policy-makers in making informed health decisions by advancing the quality and relevance of evidence-based medicine through the synthesis and dissemination of comparative clinical effectiveness research findings. • Proposed rule 10/1/12 Begins 2012 Phases out 2019 July 31 (calendar year following end of plan year) FI and ASO (ASO paid and remitted by customer) Groups and Individuals $1 pmpy in Year 1 $2 pmpy in Year 2 Insurer Fee • Annual fee on health insurance sector, allocated by market share, to fund health insurance exchange subsidies. • Fees assessed on net written health insurance premiums, with certain exclusions. • No federal guidance received to date 1/1/14 Permanent No later than September 30 of calendar year FI Only Groups and Individuals Industry wide targets $8B – 2014 $11.3B – 2015 $11.3B – 2016 $13.9B – 2017 $14.3B – 2018 ~ 2.3% of premium Reinsurance Fee • Transitional fees to stabilize individual market; assessed on a per capita basis for both fully insured and ASO members. • Fee funds reinsurance for high claimants in non- grandfathered individual market plans, on and off Exchange. • Final Rule from CCIIO; awaiting federal and state notices of payment rules (fall 2012) 1/1/14 3 Years (2014-2016) FI: State determined; ASO: Federal, Quarterly basis beginning 1/1/14 FI and ASO (ASO funded by customer, TPA remit on behalf of ASO groups) Groups and Individuals Industry wide federal targets, to which states may add: $12B – 2014 $8B – 2015 $5B – 2016 ~ $6 pmpm Excise Tax on High Cost Coverage (Cadillac Tax) • Imposes an excise tax on insurers and employers who offer rich benefit coverage. • No federal guidance to date. 1/1/18 Permanent TBD FI and ASO Groups 40% of value of employer-sponsored coverage exceeding $10,200 individual/$27,500 family; indexed by cost of living in subsequent years * Projections based on analysis of study by Oliver Wyman & AHIP 2012 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Taxes and Fees General Overview
  • 10. 10 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Individual Market Premium Increase Small Group Market Premium Increase Avg Rate Increase 15% Taxes / Fees 3.8% Product 5% Pre-Reform Post-Reform 15% 25% - 50% Healthiest Groups 25% Avg Rate Increase 12% Taxes / Fees 3.8%** Rating Rules / Product 100%+* Pre-Reform Post-Reform 12% 116% Reform Compliance Drives Significant Price Increase Community Rating Causes Material Price Disruption For Healthiest Groups • Consumers (both group and individual buyers) will face substantial price increases, further pressuring the system. • New pricing rules and new product design mandates will have a significant impact on the price consumers pay for insurance in 2014 and beyond. * Individual rates expected to increase 100% to up to 200% due to product and rating changes. ** May be partially offset by reinsurance payments, net impact not yet known. Reform Premium Impact Assessment Individual, Small and Large Fully Insured Market Product 3 to 6% Pre-Reform Post-Reform 15% 20% to 25% Avg Rate Increase 15% Taxes / Fees 3.8% Avg Rate Increase 15% Avg Rate Increase 15% Avg Rate Increase 15% Large Group Premium Increase Incremental Increase to rates beginning in 2013 to cover taxes, fees, and benefit Δs
  • 11. 11 Health Care Reform Landscape Key Things You Need to Know Small Groups 1. 2014 – SG definition may be different by state (ATNE/eligible or 50 vs. 100) 2. 2014 - No medical underwriting and moving to adjusted community rating (ACR) 3. 2014 exchanges available 4. Essential Health Benefits (EHB) applies to non- grandfathered groups 5. Women’s preventive, FSA limits and OOP max changes apply 6. New taxes and fees apply Large Groups 1. 2014 guaranteed issue applies 2. No pre-ex 3. Women’s preventive, FSA limits and OOP max changes apply 4. Deductible limits and EHB do not apply 5. New taxes and fees apply Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.
  • 12. Responsible health consumers Integrated clinical services Powerful information Focus on service Network access Innovative solutions We give individuals personal information and support to help identify and respond sooner to health risks and opportunities. Integrating more clinical data sources and evidence based medicine standards helps us to identify risks earlier and better control costs. We provide insights vital to improve decision making and health results. Continuous process improvements drive a better consumer experience and greater satisfaction. Our large network better access and lower, more predictable costs on a local and national level. Creative products and technologies that change behavior and support higher quality outcomes. UnitedHealthcare Engaged and Positioned for the Future 12 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. 12 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Better information. Better health. Better decisions.
  • 13. 13 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. United for Reform Resource Center • Health Reform Provisions and Health Reform Videos − Summary, Links, FAQs, Video, Employer Guide www.uhc.com/reform
  • 14. 14 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. • Adult child coverage until age 26 • Annual dollar limits restricted • Early retiree reinsurance program (ERRP) • ER coverage as in-network, no prior authorization G • Initial appeals review standards G • Lifetime dollar limits prohibited • Medicare Part D rebate for beneficiaries in the gap • No pre-existing conditions for kids until age 19 • Online consumer information at healthcare.gov • Pediatricians as PCPs, direct access to OB/GYNs G • Preventive services with no cost sharing G • Rescissions prohibited except for fraud or non- payment • Small business tax credit • Temporary high risk pool • Annual fee on pharmaceutical manufacturers begins • Annual rate review process • Appeals ombudsmen and process documentation G • Auto-enrollment for groups with 200+ FTEs (implementation delayed until regulations released) • Discounts in Medicare Part D “donut hole” • HSAs/HRAs/FSAs: limitations for OTC medications • Increase penalty for non-qualified HSA withdrawals • Minimum medical loss ratio (MLR): 85% for large group; 80% for small group and individual • Non-discrimination rules apply to insured plans (implementation delayed until regulations are released) G • Small business wellness grants • Administrative simplification begins • Annual fee on medical device sales begins • Deduction for expenses allocable to the Part D subsidy for “qualified prescription drug plans” eliminated • Employee notification of access to Exchanges • FSA contributions limited to $2,500 • High earner tax begins • Patient-centered Outcomes Research Institute (PCORI) fee increases to $2 per member/year • W-2 reporting on the value of employer- sponsored health benefits • Annual insurer industry fee through 2018 • Coverage for all adult children until age 26 including those that have employer coverage (formerly not covered for grandfathered plans) • Deductible caps cannot exceed $2K for individual and $4K for family G • Guarantee issue and renewal rules G • Health Benefit Exchanges • ICD-10 code adoption • Individual & employer mandates • Mandatory coverage for clinical trials G • No annual limits • No pre-existing condition exclusions • OOP limits must comply with OOP limits for HSA qualified plans G • Rating restrictions G • Standardized essential health benefits • Tax credits and subsidies for individuals and small employers • Waiting period limits • 60-day advance notice of material modifications • Accountable Care Organization requirements • Appeals provision fully implemented G • First medical loss ratio rebates to be paid by August • New women’s preventive services with no cost sharingG • Patient-centered Outcomes Research Institute (PCORI) fee ($1 per member/year) • Quality bonus begins for Medicare Advantage plans • Quality of Care Reporting Requirements • Summary of Benefits and Coverage (SBC) and the Uniform Glossary • High-value plan excise tax begins (2018) • Medicare Part D “donut hole” closed by 2020 • States can open Exchanges to CHIP eligibles (2015) and all employers (2017) 2010 2011 20142012 2013 2015 & beyond G Grandfatherable provision Rev. 9/12 Note: some provisions apply only to fully insured business (e.g., MLR and guarantee issue) Health Care Reform Timeline

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