Cost/Benefit Analysis of
Tribal Sponsorship
Mim Dixon and Dale Nachreiner
Tribal Self Governance Annual Meeting
New Orleans, May 8, 2012
Opportunity in
Affordable Care Act
• Opportunity for Tribes
• New revenues for Tribe
• CHS cost savings
• Tribal Sponsorship is a path to
realize the revenues and savings.
• New tool available to help your Tribe
do cost-benefit analysis of Tribal
Sponsorship.
Tribal Sponsorship
• Tribe pays portion of premium for
selected individuals to enroll in
Health Insurance Exchanges.
• Federal funds can be used.
• Aggregate payments
• One check per month from Tribe
• Payment to Exchange, Insurance or TPA
• Exchange decides rules for Tribal
Sponsorship.
TEOC Project
• Case Studies of Tribal Sponsorship
•
•
•
•
3 Tribes
2 scenarios for each Tribe
Real numbers
Methodology developed
• Focus Group with Tribal Leaders
• Cost/Benefit Analysis Tool
• www.nativeexchange.org
Case Study Results
• Small, medium and large Tribes
• 6 different scenarios
• In every scenario, Tribe had net
benefit
Range: $65,398 to $4,684,878
• Positive rate of return
Range: $1.77 to $5.99 for each $1 spent
Results of Focus Group
with Tribal Leaders
• Health Directors are primary source
of information for Tribal decisions
about Tribal Sponsorship.
• Tribal Councils want Health
Directors to present a Tribal-specific
proposal.
• Health Directors must be well
informed about Health Insurance
Exchanges.
TEOC Cost/Benefit
Analysis Tool
• ACA provisions guide model
• Based on data and assumptions
• Tribe fills out questionnaire
•
•
•
•
Demographics (age)
Census data (poverty levels)
Billing and collection data
Administrative costs
• Spreadsheets calculate estimated
costs and benefits of 3 scenarios.
Affordable Care Act
• Insurance companies can base
premiums on
• Age (3x greater for older people)
» This is only factor used in methodology.
» This is why age pyramid is needed.
• Geographic area
• Tobacco use (1.5% higher)
• Federal subsidy of premiums
• Individual payment limited to % of income
» This is why income information is needed.
Annual Federal Subsidy of Health Insurance
Premiums by Income Level for Individuals
Premium Limit
as % Income
% FPL
Individual Premium
(Tribal Sponsorship)
138-150
2%
< $690
151-200
3-4%
$1,037
201-250
4-6.3%
$1,875
251-300
6.3-8.05%
$2,776
301-400
8.05-9.5%
$3,391-$4,099
Cost Assumptions
• Use only people 19-64 years old
<19 eligible for Medicaid or CHIP
>65 eligible for Medicare
• Use only individual premiums
• Use Silver plan premium costs
• 70 % actuarial value
• Kaiser Family Foundation calculator
• 138% FPL for Medicaid Expansion
• Poverty rates for uninsured active
users are same as AI in general
population in U.S. Census
Revenue Assumptions
• Tribes will be providers of services
for plans they sponsor.
• No co-pays or deductibles for
anyone sponsored by Tribe.
• Reimbursement for Exchange plans
will be between Medicare and
commercial insurance rates.
• Bill-to-collection ratio same as
current commercial insurance.
Calculating CHS Savings
• 3 year average CHS expenditures
• Use number of people eligible for
CHS to get savings per person.
Administrative Costs
Included in Methods
• Education and enrollment assistance
• Provider contract administration
• Billing plan for services provided
Cost/Benefit Analysis Tool
• Generates 1 page summary table
• 3 scenarios for Tribe:
• All uninsured active users
• Uninsured active users eligible for CHS
• Uninsured Tribal members
• For each scenario:
•
•
•
•
Costs
Revenue and CHS savings
Net benefits
Estimated earnings from $1 invested
Caution!
• These are estimates only.
• Affordable Care Act may change.
• Supreme Court decision in June
• Elections may affect ACA
• Federal regulations are still being written
• Tribe may want to consider other
scenarios.