Maryland Health Benefit Exchange Update
for the Middle Atlantic Actuarial Club 2012 Annual
Meeting
September 13, 2012
The Patient Protection and Affordable Care Act (ACA)
• Signature legislation of the Obama Administration making
health insurance coverage a central focus
• Relies on the private insurance market and public programs
(Medicaid) to address the issue of access to care
• Key Components must work together:
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•
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Guaranteed Issue
Minimum Essential Health Benefits
Individual Mandate
Federal Subsidies
Risk Adjustment
• State-based Health Insurance Exchanges are the focal point for
implementing market changes
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Basic Exchange Functions
• Creates a new Health Insurance Marketplace for Individuals
and Small Groups (SHOP)
• Establish policies and procedures for certifying Qualified
Health Plan (QHPs) from commercial insurance carriers
• Makes eligibility determinations for government assistance for
health insurance
• Provides Consumer Support through Navigators, Brokers and
Agents, and Online Web Portal
• Enrolls Consumers into affordable health care options
• Consolidated Billing and Collections in the Small Group Market
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The Affordable Care Act and Maryland
• Code of Federal Regulations (CFR) 45 Part 155 – Exchange Establishment
Standards and Other Related Standards Under the Affordable Care Act
defines requirements for state-based Exchanges
• Maryland has embraced the ACA and committed itself to create a statebased Exchange
• Health Benefit Exchange Act of 2011
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•
April 12, 2011: Governor O’Malley signed the Maryland Health Benefit
Exchange Act to establish Maryland’s exchange as a public corporate and
independent unit of state government
June 3, 2011: Exchange Board held its first meeting
• Health Benefit Exchange Act of 2012
•
Senate Bill 238 and House Bill 443: Maryland General Assembly recently
passed (April 5, 2012) legislation that outlines the implementation policies and
procedures for operating the exchange
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Key Federal and Maryland State Agencies Implementing
Health Care Reform and Exchanges
• Federal
• Center for Consumer Information and Insurance Oversight (CMS/CCIIO)
• Center for Medicaid and CHIP Services (CMS/CMCS)
• Internal Revenue Service (IRS)
• Maryland
• Governor’s Health Care Reform Coordinating Council
• Maryland Health Benefit Exchange
• Board of Trustees
• Staff
• Maryland Insurance Administration (MIA)
• Maryland Health Care Commission (MHCC)
• Department of Health and Mental Hygiene (DHMH)
• Department of Human Resources (DHR)
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Seven Guiding Principles the Maryland Exchange
1.
2.
3.
4.
5.
6.
7.
Accessibility. The Exchange should reduce the number of Marylanders without
health insurance and improve access for all Marylanders.
Affordability. The affordability of coverage, within the Exchange and within the
state, is essential to improving Maryland’s health care system and economy.
Sustainability. The Exchange will need to be sustainable in order to succeed in the
long run.
Stability. The Exchange should promote solutions that respect existing strengths of
our state’s health care system and promote stability within the Exchange.
Health Equity. The Exchange should work to address longstanding, unjust
disparities in health access and health outcomes in Maryland.
Flexibility. The Exchange should be nimble and flexible in responding to the
quickly changing insurance market, health care delivery system, and general
economic conditions in Maryland, while being sensitive and responsive to
consumer demands.
Transparency. The Exchange is accountable to the public, and its activities should
be transparent, its services easily available, and its information easily
understandable by the populations it assists.
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Maryland’s High Level Implementation Approach
• Establish a consolidated strategy for Health Care Reform
implementation
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Phase I – Modified Adjusted Gross Income (MAGI) Eligibility Determinations for Medicaid
and Advance Premium Tax Credits and Cost Sharing Subsidies (by 2014)
Phase II – All Medicaid programs (by 2015)
Phase III – All Maryland Social Service programs (by 2015)
• Secure Federal Establishment Grants
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CCIIO: Planning, Early Innovator, Level One Establishment, Level Two
Establishment
CMCS: Matching Funds
• Establish Policies and Regulations
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Stakeholder Advisory Committees
Legislative and Regulatory Processes
• Set-up Exchange IT and Operations
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First Exchange Open Enrollment Period – October 2013
Self-Sufficient by 2015
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Federal Funding - $157M
• Planning Grant ($1 million):
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Initial Planning and Research
• Early Innovator Grant ($6 million)
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IT Model
Sharing resources with other states
• Level One Establishment Grant ($27 million)
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IT Development
Operations
Planning/ Administration
• Level Two Establishment Grant ($123 million)
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IT Implementation
Operations/ Administration
Consumer Assistance
Outreach & Education
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Maryland Exchange IT Systems
The system is designed as an integration of
Commercially Off the Shelf (COTS) products, that are
being integrated and configured to meet Federal and
State requirements.
This diagram indicates the key building blocks of the
solution:

Cúram is a software product that has existing and
planned features to support requirements for
Eligibility and Enrollment.

Connecture is a software product that has
existing and planned features that support
requirements for Plan Presentment and
Enrollment.

Noridian is leading the integration of the COTS
solutions based on the EXACT Service Oriented
Architecture (SOA) integration product.
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MD HIX Implementation Timeline
The diagram below articulates the timeline and development approach Maryland is
following in order to be prepared for CMS Certification and to deliver the HIX Solution in
time for production operations in Q4, 2013
2nd QTR ‘12
1st QTR ‘12
4th QTR ‘12
3rd QTR ‘12
2nd QTR ‘13
1st QTR ‘13
4th QTR ‘13
3rd QTR ‘13
CMS ELC Gate Reviews
Design Review
Planning Review
Implement Review
CMS ILC Gate Reviews
COTS
Demo
Test
Core
Requirements
Federal Requirements
SP1
SP2
SP3
SP4
SP5
Certification
Process
Non-Functional / Technical Requirement
Development
Other Requirement
Development
State Requirements
SP6
SP7
SP8
End-to-End
Testing,
including:
Functional and
Technical
Testing
Deployment &
Disposition
Training
Fix any
Production
bugs, etc.
Architecture Development
Key: DDR – Detail Design Review; FDDR – Final Detail Design Review; PORR – Preliminary Operational Readiness Review; ORR – Operation Readiness Review
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Warranty /
Maintenance
Deployment to
Production
Completed Tested System
Architecture
Plan
Sprint Execution – for requirements
required for CMS Certification 1/1/13
Complete all development
Sprint
Order
Prioritize
Rqmts &
activities
required
for
Certificat
ion on
1/1/13
ORR
Integrated
Testing
Receive CMS Certification (Conditional)
NFRD
Complete Gap Analysis
IT Vendor Starts
Knowledge
Transfer
Planning &
Rqmt
Artifacts
Implementation
& Test
Design
Start 2-path Sprint Approach
Validate
PORR
Start Enrollment
FDDR
DDR
What the Exchange Means to Maryland
• Expands access to health insurance for 740,000 Marylanders
currently without health insurance
• Provides federal subsidies and tax credits for individuals up to 400%
of FPL to pay for health insurance premiums
• Provides $500 million in federal subsidies into the State of Maryland
NEW funds in the Maryland health care system
• Provides individuals access to primary care physicians, preventive
services
• Lowers uncompensated care costs in the healthcare system resulting
in lower insurance premiums across the state
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Health Care Coverage Projections in Maryland due to the
Affordable Care Act
*
* Hamid Fakhraei, Ph.D., Director of Economic Analysis, The Hilltop Institute, University of Maryland,
Baltimore County (UMBC)
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Carrier Impact and Qualified Health Plans (QHPs)
• Market-wide
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Minimum Essential Health Benefits
Minimum Medical Loss Ratios
Guaranteed Issue
Community Rating
Rating Variation Limitations
Risk Adjustment and Reinsurance
• Exchange Specific
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Actuarial Value Metal Bands (Bronze, Silver, Gold, Platinum)
Network Adequacy and Essential Community Providers
Quality and Transparency Data
QHP User Fees
Active Purchasing (potential)
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Qualified Health Plans (QHPs) Contracting
Step 1
Issuer Contracting
with the Exchange
Step 2
MIA
Review & Approval
Step 3
Exchange
Final Certification
(Issuer Level)
(Issuer & Plan level)
(Issuer & Plan level)
Maryland Market Rules
SERFF
Service Area Requirements
HIX
Licensure
Step 4
MHCC
Quality & RELICC
Data
(Issuer Level – Year 1)
Annual Custom File
HMO/PPO HEDIS Scores
Accreditation
Marketing Standards
Solvency
Transparency Standards
HMO/PPO CAHPS Scores
Benefits, Rates & Forms
Network Adequacy Data
Quality Data Requirements
Essential Health Benefits
Dental Plan CAHPS Scores
Tracking of RELICC Data
Essential Community Provider
Data
Limitations on Cost Sharing
Reporting Requirements
Vision Plan CAHPS Scores
Continuity of Care
Requirements? 2014 or 2015?
Actuarial Value/Metal Levels
Broker Compensation
Discriminatory Benefit Design
Transparency Data
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RELICC Data
(Internal use only)
Consumer Financial Assistance
• Eligibility Rules Based on Modified Adjusted Gross Income (MAGI) in
relation to Federal Poverty Level (FPL)
• Calculating actual APTC depends on:
• MAGI in relation to FPL
• 2nd Lowest Priced Silver Plan
• Potential Issues:
• “Churn” and Continuity of Care
• Price Stability under Guaranteed Issue (High Risk Pools)
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Sample Monthly Premium Payments by Income Level
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Employer Sponsored Insurance
• Employer Group Size Considerations
• Only small groups can purchase on the Exchange through 2017
• Maryland defines small group up to 50 employees through 2016
• Adopt federal definition of small group of up to 100 employees
after 2016
• Tax credits for small groups that purchase in the Exchange starting in
2014
• Penalty for larger groups that don’t offer minimum essential coverage
to their employees
• Defined Contribution / Employee Choice Model
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Opens up all plans on a metal level to employees
Minimum participation rate
Employers make defined contributions (minimum?)
Rating by average age or individual employee?
Special enrollment
Timing of account set-up and contracting
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Consumer Assistance
• Marketing and Consumer Education
• Web Portal
• Online Eligibility Determinations
• Plan Shopping, Comparison, and Enrollment
• Several Classes of “Assistors”
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Navigators
Exchange Call Center
DHMH / DHR Case Workers
Brokers and Agents
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Navigator Program
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Third Party Benefit Administrators
• Current Market Role
• Broker Training and Tools
• Plan Shopping and Enrollment
• Back-Office Financial Administration (Billing, Collections,
Reconciliation, etc)
• Other Value Add Benefit Management Services (Life, Disability, Payroll)
• Role in SHOP Exchange
• TPA Certification Program
• Use Exchange systems
• Use their own systems
• Online Marketplace
• Back-Office Financial Administration
• Performance Metrics and Service Levels
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