Medicaid & The Exchange
Opportunities for Integration and Key Considerations
John Kaelin, Senior Vice President of Health Reform Implementation
Presentation to the National Governors Association
Friday, April 20, 2012
UnitedHealthcare’s Health Benefits Platform
 Individuals Served:
25M people
 Individuals Served:
9M people
 Individuals Served:
3.7M people
 Serves employers
ranging from sole
proprietorships to
large, multi-site and
national employers,
students and
individuals
 Operates the largest
business in America
dedicated to the
health and well-being
of individuals over age
50
 Manages health care
services for state
Medicaid and other
publicly funded
programs and their
beneficiaries
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Expansion Projections: 2019 View
>$43,560
Non-subsidized coverage
$43,560
~15,000,000
individuals
$32,670
Premium subsidies available to families with incomes between
133-400% FPL (to purchase insurance through the Exchanges)
$21,780
~8,000,000
individuals
$14,484
~16,000,000
individuals
Current
Medicaid
States have the option to create a Basic Health Plan for
uninsured individuals with incomes between 133-200% FPL
who would otherwise be eligible to receive premium subsidies in
the Exchange.
Medicaid Expansion: Uniform 133% FPL and new definition
(Modified Adjusted Gross Income, or MAGI)
Note: This visual is scaled to 2011 FPL guidelines for a household size of 1. Numbers do not necessarily reflect all net new coverage. Sourced from
CBO estimates, available at: http://www.cbo.gov/budget/factsheets/2011b/HealthInsuranceProvisions.pdf
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Medicaid Expansion:
Anticipated Characteristics
• Many researchers have studied the anticipated characteristics of individuals who will receive coverage through the
Medicaid Expansion in 2014.
• Results of these studies vary widely.
•
Some predict a higher cost population with a significant need for services to treat multiple chronic conditions,
behavioral health, and substance abuse.
•
Others predict a lower cost population that is relatively healthy, predominately young (between the ages of 19 –
34), and who predominantly reports themselves to be in “excellent or very good” physical and mental health.
• In reality, we are likely to see a blend of these characteristics, but should not expect this population to be homogenous.
• Numerous factors may influence the characteristics of the Expansion population in each market, including state outreach
efforts, state sales and marketing requirements, and the extent to which a state already covers a portion of this
population.
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Relatively High Need
Relatively Low Need
• Less likely to be parents
• Disproportionately “young”
• Relatively high need
(behavioral health,
substance abuse, multiple
chronic conditions)
• Individuals at the lower end
of the poverty scale incur
disproportionately high costs
• More likely to be in a working
household
• Less likely to be parents
• Relatively healthy
Center for Health Care Strategies (CHCS)
Findings
• In 2010, UnitedHealthcare participated in a project with CHCS and select states to
understand the needs of the Medicaid Expansion population.
• In contrast to the CBPP study, which relied on survey data, this study drew heavily
from utilization and costs experiences in several states.
• While highlights are provided on the next slides, the full report is available at:
http://www.chcs.org/usr_doc/Medicaid_Expansion_Brief.pdf
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Summary of CHCS Findings
• Specific programs and results vary from state to state, but the overall findings are
consistent:
AZ
On average, childless adults cost more per
year than the TANF population
On average, individuals at the lower end of
the poverty scale incur disproportionately
high costs
Childless adults tend to be associated with
high utilization (particularly for services
related to chronic conditions, mental health,
and substance abuse)
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IN
ME
NY
OR
PA
Implications of Churn
• Individuals with fluctuating income will move between Medicaid and Exchange eligibility.
• Key aspects of coverage, such as benefits, provider network, and out of pocket costs, may be
disruptive and confusing.
• Individuals experiencing such shifts may require additional support and assistance as they
navigate the effects of coverage changes.
Income of $15,246 per year
(140% FPL in 2011 dollars)
Income of $14,702 per year
(135% FPL in 2011 dollars)
Medicaid
Benefits
Medicaid
Network
Care
Management
(If MCO)
No
Premium
No Cost
Share
Essential
Benefits
Commercial
Network
(likely
restricted)
* This diagram assumes that Medicaid covers up to 138% FPL and assumes no Basic Health Plan
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Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.
Different Care
Management
(or potentially no
care management)
Significant
(yet
subsidized)
Premium
Copays,
Coinsurance
Its Impact On Consumers
Absent strategies to address churn, frequent shifts between programs will cause confusion, disruption
and continuity of care issues (access, benefits, services).
• Can I still go to my doctor or health care professional?
• Which ID card should I use?
• Who do I call?
• Which program are my children in? How can our family stay together?
• Why isn’t this benefit covered any more?
• I still don’t have a car and need a ride to my doctor!
• I don’t speak English, can a translator help me?
• Can I stay with my same health plan?
• What do you mean I have to pay for care (a new copay/premium for someone moving from
Medicaid to the Exchange?)
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And Then There Is The “Cliff”
Though Exchange consumers at lower income levels will receive substantial premium subsidies, their
cost to purchase coverage will be significant. Premiums, copayments, deductibles…the terminology may
lead to confusion for Medicaid consumers who move to the Exchange. The cost obligations may be
overwhelming and lead them not to purchase coverage.
Annual
Income
%FPL
(Family Size 1)
Eligibility
Premium (after
subsidy)
Expected Cost
Sharing
Total Out of
Pocket
$14,702
135%
Medicaid
$0
$0
$0
$15,246
140%
Exchange
$518
$343
$861
Consumers will enter and have their eligibility determined via the Exchange. A modest change in income,
in this example and increase of $544 pre-tax dollars annually, can lead to a substantial increase in an
individuals cost obligation (in this case $861 annually in after-tax dollars).
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Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.
Potential Levers to Address “Churn”
Potential Levers and Requirements
Policy
End to End Eligibility, Recertification and Enrollment Via Exchange
Align the Benchmark and Essential Health Benefits
The Basic Health Plan
Common Health Plans across Medicaid, The Exchange, and BHP
Common Providers across Medicaid, The Exchange and BHP
A Focus on Affordability, the Right Price Points
Special Enrollment Rules For Health Plans that Operate In
Medicaid & The Exchange
Same Member ID Card For All Programs
Pro-Actively Track and Conduct Outreach to Help Families In
Transition, including Health Insurance Literacy
Consistent Enrollment Rules, Timeframes, and Definitions for
Medicaid and the Exchange
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Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.
Product
Tool
Contact Information
John Kaelin
Senior Vice President, Health Reform Implementation
John_kaelin@uhc.com
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Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.