Health Insurance Premium Guessing Game
Health insurance issuers are generating enough fodder for a good guessing game. Will Obamacare increase rates for individual insurance or not? And if so, will the increase be modest or catastrophic. Writing in the April 25 edition of the Washington Post, Ezra Klein reports that the Blues plan that serves the national capital area is warning of big increases in individual premiums. The cause? More sick people are going to get health insurance, now that the pre-existing condition limitations have been removed by the Affordable Care Act. But is that the whole story? Klein also reports that insurance companies in Vermont and Rhode Island are projecting a more modest impact in announcing their proposed 2014 rates. But in Massachusetts, where "Obamneycare" has been in place since 2006, individual premiums are the highest in the nation.
The individual mandate, which gives people the choice of either getting insurance or paying a tax, is supposed to stimulate enrollment of healthy people who might otherwise go without coverage until they get sick. Why not, since they can't be denied due to preexisting conditions? But the tax is less than the premium, so its anybody's guess how effective the mandate will be in bringing low risk people into the insurance market.
Until we see how enrollment pans out this fall, and how many healthy people dive into the risk pool, there's no way to know how big an impact the sick will have on premiums.
One thing Klein overlooked is that individual insurance will be sold both in the new health insurance exchanges (which the Feds are now calling "marketplaces," a terminology change the rest of us are ignoring), and in the open market. Klein rightly points out that the impact of higher premiums will be ameliorated for many people by the subsidies that they get through the exchanges. But those who don't qualify for the subsidies, whether they buy through exchanges or in the marketplace outside, will bear the full brunt of any premium increase. These are the folks who, if they are healthy, may well prefer to pay the tax and go without.
The Administration is gearing up for a major public relations campaign to publicize how health insurance will work for individual purchasers in 2014. We hope they will include a strong message about the importance of buying health insurance, even if you are healthy. While you may not be denied due to a preexisting condition, lack of insurance still leaves you open to catastrophic costs due to accident or unforeseen acute illness.
Health insurance: It's not just a good idea, it's the law!
Resources
Gorman Health Group policy expert Jean LeMasurier provides a summary of proposed rules from the Department of Treasury, IRS and OPM regarding the implementation of health reform.
The Exchanges will create a large risk pool that will allow risk to be managed more effectively with reduced administrative costs, read this white paper for estimates from the Congressional Budget Office (CBO) and more.
To learn how Gorman Health Group can help your organization get involved in the Exchanges or other government programs, visit our website.
Attend the GHG Forum, June 13-14 in DC, and hear from the nation's recognized leaders in health reform implementation and ongoing development of exchanges about the challenges facing both the government and private partners pre-launch, plus what lies before us in 2014 and beyond.
Uneven Funding Provides Opportunity for Agent and Brokers in Federal Exchanges
It seemed like everyone in Washington last week was discussing the upcoming outreach and enrollment prospects for the federal and state exchanges. Kaiser Family Foundation held a forum on Consumer Assistance that emphasized the uneven funding among states in the first year and the need for coordination among the various types of assistance programs. Several Congressional hearings and news articles also focused on the large discrepancy in funds for Navigators and In-person Assisters that will be available in state-based Exchanges and Consumer Partnership Exchanges compared to the Federal Exchange (FFE). HHS announced the availability of $54 million for Navigator grants for the 33 Federally operated and State Partnership exchanges. The Navigator grants range from $600,000 per state to over $8 million based on a formula that considers the size of a state and the number of uninsured. There will be no funds available for In-person assistance programs in the FFEs. In contrast, State-based Exchanges can use federal Exchange grant funding for their Navigator and In-person assistance programs. California expects to spend $43 million, New York will spend $27 million and Maryland will spend $25 million on outreach, and enrollment and application assistance for Navigators and In—person assisters. Ohio with 1.5 million uninsured will receive a $2.2 million Navigator grant and will not have a consumer assistance program.
The gap in Navigator and consumer assistance funding in Federal Exchanges offers an opportunity for agents and brokers to serve a more critical role in helping the uninsured understand their options and enroll in Exchange products.
Resources
To learn how Gorman Health Group can help your organization get involved in the Exchanges or other government programs, visit our website.
Gorman Health Group SVP of Public Policy, Jean LeMasurier, summarizes the proposed CMS regulation CMS-9955-P- Patient Protection and Affordable Care Act; Exchange Functions: Standards for Navigators and Non-Navigator Assistance Personnel.
To get more information on how Gorman Health Group helps onboad sales agents in one easy step, visit our website.
Employer Health Coverage Post Recession
A new report on employer sponsored health insurance issued by the Robert Wood Johnson Foundation shows some interesting trends in coverage post-recession. "State-Level Trends in Employer-Sponsored Health Insurance"
The overall trend in employer health insurance coverage has been on a downward slide for several decades and that trend is continuing. In 2000, almost 70 percent of non-elderly workers got their health coverage from employer plans but by 2011 the percent fell to 60 percent. Interestingly, it wasn't just because the number of employers offering coverage declined by 6 percent, but also because 5 percent fewer workers who were offered coverage actually enrolled. It seems that the intersection of the recession and the cost of health insurance created a perfect storm. The report found that premiums for family coverage increased by 125 percent over the last decade, and even though the employee share remained fairly constant, the net impact on worker's out-of pocket costs was dramatic, increasing from $1,526 to $3, 842. The decline occurred in 47 states but the impact varied dramatically by state. Michigan, which was hard hit by the problems in the auto industry and other economic woes, led the way with a decline in employer sponsored coverage of over 15 percent. The study found that while employer coverage declined for all income groups, the impact on the lower income groups was disproportionately greater.
These trends will be interesting to watch with the launch of the Exchanges in 2014. The report raises an interesting question about whether small employers will increasingly shift to self-insured plans rather than offer insured plans through the SHOP Exchanges. If that is the case, there could be possible adverse selection for employers who use the SHOP plans.
Resources
To learn how Gorman Health Group can help your organization get involved in the Exchanges or other government programs, visit our website.
EXCHANGES: Looking for Help
CMS has posted a Q&A about their willingness to allow states to partner in plan management activities without submitting a blueprint. This makes a new fourth category of exchanges. So, in addition to state exchanges, partnership exchanges, federally facilitated exchanges, the new fourth category is states willing to cooperate in FFE states. Basically, CMS has decided to ignore the February 15th deadline for states to note their willingness to partner with CMS.
CMS is looking for a letter from an interested state's governor or insurance commissioner. The letter must provide attestations that the state has the operational capacity to oversee plan management activities, benefit packages, plan compliance and complaint resolution, conduct de-certifications and appeals as well as provide technical assistance to health insurance issuers. In addition, states need to show that they can participate in a one-day review of its operational plans and that they have the capacity to do that.
Once CMS gets the letter, they will initiate a review of the state's request and sign an agreement with the state to allow the state to have a role in regulating QHPs in the Federal Exchange. CMS also provided an enticement by noting that CMS can provide funds the state can use to support these additional activities.
This is the answer for states that wanted to avoid filling out the blueprint required in the Partnership Exchange. While credibility of CMS is challenged, it may just unearth those last states willing to balance their political resistance with their interest in having a hand in controlling health insurance issuers in their states.
Resources
Hear Gorman Health Group experts discuss the Federal Facilitated Exchange (FFE) and implications for health plans.
Gorman Health Group Senior Vice President of Public Policy Jean LeMasurier offers a summary of the latest guidance on the state partnership exchange, released on January 3, 2013 from HHS.
Download Jean LeMasurier's whitepaper on Insurance Exchanges in the ACA.
Exchanges: Sales Agent Certification
CMS has released a notice seeking comments on their plans for training and certifying sales agents who could enroll persons into the federally facilitated exchanges. To be exact, the notice is about collection of data about the sales agents who are trained and certified for selling coverage offered by qualified health plans on the exchange. It just so happens that the vehicle for doing the collection is the training and certification program that is mandated by the law and the final regulations published last March. So, CMS does not want comments about the requirement to be trained and certified but they do want comments about what information is collected and maintained about individual sales agents.
In the process of telling us what they want to collect, CMS is also letting us know something about the training and certification program. First, they expect that approximately 250,000 agents will take the FFE training and certification program. They note that this excludes all states where a state operated exchange will function. If agents (approx. 240,500) are allowed to sell QHP coverage in state operated exchanges, the states need to develop and offer their own certification program. CMS also notes that captive agents (approx. 110,500) are expected to enroll persons through their QHP. This means any training for these sales agents must be conducted by the health plan and must follow required enrollment processes through the exchange.
CMS will collect basic identifying information such as name, location, and state license as the agent accesses the system. There is no paper process so agents without electronic access need not apply. After providing basic information, the agent will take the training course and complete the exam to be certified. CMS expects the agent to spend 4.75 hours to complete training and testing in the first year allowing for re-taking and re-testing for those who fail to complete it in the first try. For succeeding years, the expected time requirement falls to 3.25 hours. During this process, CMS can identify particular issues about the test such as time required or troublesome questions and concepts. In addition, CMS will know the individual test taker's training history and their relative success. There is no prohibition on retakes or how often an agent can re-take the training and test. Agents who are certified though the process will be listed on the FFE website so that interested persons can contact them for information and assistance.
CMS notes that they will use collected data for oversight and monitoring. CMS will take follow-up actions whenever they identify questionable activity. Also, from time to time, CMS will ask agents to make their records available for oversight and compliance purposes but does not make clear what records are involved in these requests or actions will occur. Finally, agents will be required to sign an agreement that allows all of this to occur plus documents their commitment to periodically updating information.
Access to the portal will begin around July 1. There is no indication of a fee for taking the training and CMS does provide an outline of the training program that covers the basic components of exchange operations and eligibility determinations.
No doubt there will be questions since any data collection efforts with federal implications for the agent call big brother into question. Clearly, sales agents will have concerns about another body getting complaints about their sales activity and CMS will counter that it has over 25 years of experience with sales agent mischief dealing with vulnerable populations in the Medicare Advantage program.
Click here for information on how to submit comments on this notice.
Click here for a description of the data collection program and some of the processes that will be used to train, certify and collect information.
Resources
Senior Vice President for Public Policy, Jean LeMasurier, summarizes the February 7, 2013 notice from CMS regarding Agency Information Collection Activity.
Download a podcast on the key components of OEV calls and get advice on how to handle rapid disenrollment — and other common challenges.
Learn how Gorman Health Group certifies, trains and manages sales agents with our Sales Sentinel software.
250,000 Agents in the Federal Exchanges???
In a Federal Register notice out yesterday CMS officials are projecting 254,095 health insurance agents and brokers will sign up to sell the "metal plans" in the new federal health insurance exchange (HIX) system. Quarter. Million. Agents. OMG. And the scary part: they face a fraction of the regulatory requirements Medicare sales agents do.
"Federally facilitated exchanges" will operate in some two dozen states next year -- largely in Red States with a significant presence of independent brokers, such as Florida, Texas and Arizona. The final regs on the Federal exchange issued last May included a surprise provision allowing agents to sell exchange products to eligible individuals -- designed to get more enrollment into the program faster through this huge distribution channel.
CMS plans to collect information about producers through a registration process, and by verifying a producer's licensure status and issuer appointments. Once the agents get through the registration process, they will be able to get any required training and take any required exams on the CMS Learning Management System site.
In addition to using the producer data to run the exchange training process, "CMS will use the collected data for oversight and monitoring of agent/brokers." Exchange agents would probably have to register with the system annually, and getting through the entire process could take each agent an average of 4.7 hours, CMS estimated.
Here at Gorman Health Group, we certify, train and manage over 30,000 agents selling Medicare products. And I can tell you that less than 5 hours' training and a bare-bones certification process means there are going to be plenty of sleezeballs selling the "metal plans" to the chronically uninsured. And that will only serve to confuse and exploit huge numbers of them, diminish support for health reform, and bring complaints down upon sponsors. We need a tougher system than CMS outlines here to ensure these vulnerable Americans don't fall prey to predatory salespeople.
Resources
Senior Vice President for Public Policy, Jean LeMasurier, summarizes the February 7, 2013 notice from CMS regarding Agency Information Collection Activity.
Download a podcast on the key components of OEV calls and get advice on how to handle rapid disenrollment -- and other common challenges.
Learn how Gorman Health Group certifies, trains and manages sales agents with our Sales Sentinel tool.
CBO: Slower Growth in Exchange and Medicaid Enrollment
The Congressional Budget Office released its new economic outlook yesterday and predicts a slower start to enrollment in the new exchanges: 7 million people in 2014 -- down from 9 million last July -- and rising by 2016. The CBO report also estimates that 8 million people will enroll in Medicaid in 2014, so about 15 million people will obtain health insurance next year.
CBO says those numbers will jump, and quickly. By 2016, 24 million people will get coverage through the exchanges and 11 million through Medicaid. By 2024, they'll be at 26 million and 12 million, respectively. CBO attributed the slower start to a number of factors, including "the readiness of exchanges to provide a broad array of new insurance options, the ability of state Medicaid programs to absorb new beneficiaries, and people's responses to the availability of the new coverage."
CBO warned that the impact of the health law is a "source of great uncertainty" and said it's difficult to assess the full impact of the law, much of which hasn't been established in regulation or implemented yet.
Resources
Visit our website to learn how Gorman Health Group can help you develop and/or execute on a unique model of care for Medicaid Plans.
Gorman Health Group policy expert Jean LeMasurier provides a summary of proposed rule CMS-2334-P, which reflects new statutory Medicaid and CHIP eligibility provisions.
Listen to a discussion focused on the lessons learned from MA and Part D when it comes to product strategy in the Exchanges.
Hear Gorman Health Group experts discuss the Federal Facilitated Exchange (FFE) and implications for health plans.
FFE — Notice of Intent to Apply
Things should be starting up in the next few weeks for health plans interested in offering products in the FFE. Given the lack of specificity in the final exchange regulation and CMS' pursuit of state help, potential applicants will be in a constant scramble to see who's on first between the states and CMS. So, there is a need for tactical observation and quick analysis to determine their ability to meet each new twist as it is announced. It is a moving target of regulation that does not lead to a sense of certainty for any health plan that they can or will apply.
Preliminary CMS timelines call for submission of a notice of intent (NOI) to apply sometime in February. CMS relies on the NOI to begin to set up their automated systems for actual applications that will be received beginning in April. While CMS does not use the NOI to determine their need for resources, a large response could do just that. Also, the NOI is not binding, starting with a fairly incomplete set of requirements means that applicants can only estimate their willingness to follow through with an application and merely send one in to check the startup box in the process.
CMS has also let it be known that there is no timeline for states to decide if they want to be a regulator in the FFE. Some state legislators in FFE states are being pressed for more state regulatory action by their constituent health plans. So, it is likely that some health plans will not know which regulations will be applied as they make a decision to complete the application.
No doubt, CMS is looking for the lowest common denominator that will relieve their worry over resources as well as the concerns of potential applicants. However, potential applicants need to know ASAP if the FFE requires building new structures and operations or not when state rules are determined sufficient. While submitting an NOI is a no-brainer, the expense of actually making the application under these uncertain circumstances has real budgetary meaning for some health plans and may staunch some of the willingness to complete the application.
The preliminary FFE timeline looks like this.
February — March
- Health Plans submit Notice of Intent to apply
- FFE Health Plan Application released
April — May -
- CMS begins review of applications
- CMS releases benefit module
- CMS tests consumer application
June — July — CMS Call Center goes live
- CMS conducts all application reviews
- CMS reviews all benefit proposals
August — September
- CMS completes all health plan FFE agreements
- CMS readies each FFE for enrollment operations
October
- Open Enrollment begins
November - December
- Open Enrollment continues
January 2014
- Open Enrollment continues
- QHPs begin coverage period for enrollees
March 2014
- Open Enrollment Ends
Resources
Gorman Health Group Senior Vice President of Public Policy Jean LeMasurier offers a summary of the latest guidance on the state partnership exchange, released on January 3, 2013 from HHS.
Download Jean LeMasurier's whitepaper on Insurance Exchanges in the ACA.
Listen to a discussion focused on the lessons learned from MA and Part D when it comes to product strategy in the Exchanges.
Read Gorman Health Group Chairman, John Gorman's, blog titled "Exchange Activity Kicks into High Gear".
Exchange Activity Kicks Into High Gear
With all the activity underway across the states, you'd think we were less than 10 months away from when health plans in the Exchanges begin enrolling or something. Oh wait...HOLY CRAP we're less than a year from launch! The game is on, friends:
- Minnesota is taking steps to put its health insurance exchange into law, which has been operating under an executive order for over a year.
- Florida's special Senate committee will meet for the second time to discuss potential implementation of the healthcare law.
- California's budget, released last week, endorsed selling Medicaid bridge plans (low or zero premium plans for people earning between 138% to 200% of the FPL) on the state's exchange.
- Mississippi may receive a decision this week or next from HHS on whether the state's exchange has received conditional certification.
- Connecticut reported that five insurers and four dental plans applied to participate on its exchange.
- Oregon announced 16 insurers applied to sell on its exchange.
- Washington DC is in the process of engaging stakeholders and has created work groups on essential health benefits and established advisory boards for plan management and consumer assistance.
- Illinois's Health Care Reform Implementation Council is meeting today and exchanges may be a topic of conversation.
It's time to get real, folks: this is happening. Starting in October.
Resources:
Listen to a discussion focused on the lessons learned from MA and Part D when it comes to product strategy in the Exchanges.
Hear Gorman Health Group experts discuss the Federal Facilitated Exchange (FFE) and implications for health plans.
Federally Facilitated Exchanges — Getting States to Help Out
The fog has cleared. CMS sees the size of the FFE Mountain and is beginning to put its plans in place to get health plans certified to participate in the FFE by August 2013. While the partnership states have clearly indicated their intention to play a role in reviewing federal requirements for FFE applicants, other states' governors have cited a myriad of reasons for not having an exchange. At this point, CMS has a few issues to sort through before they can give directions to applicants.
Each state must communicate to CMS their level of cooperation in conducting reviews of applications and oversight of health plans in the FFE. All of this activity must be accomplished at warp speed to make sure that everyone is on the same page in terms of their roles and responsibilities in getting plans on the FFE.
For the seven partnership states, the decision is clear. Each state has provided information in their blueprint application about areas they will oversee. While this is a major step, CMS and each partnership state will need to mutually agree how state requirements comport with FFE requirements. Where they do not, states must understand federal criteria and conduct reviews accordingly in the application process. An MOU will certify the process in each state.
Currently, twenty-four other states that have chosen not to partner with CMS will follow different routes as the FFE becomes operational. CMS extended the timeline to February 15 to encourage more of these states to become a partnership state. To give them an idea of what partnership means, CMS published descriptions of the roles the states can play in a partnership.
At the same time, CMS has made numerous entreaties to these states about roles that they can play in the FFE oversight process (see pp14-16). Consequently, CMS must plumb each non-partner state to determine their interest. This means that leadership in the state regulatory agencies must determine the degree to which they should become a cog in the federal regulatory system.
For some, providing no support is fundamental political theater that demonstrates state independence and requires the federal government to incur full costs along with responsibility for failure. Notably, any of these passive states can still receive payments to provide licensure and solvency as well as any other information that will assist the FFE.
For FFE states willing to coordinate, the CMS task is to evaluate state requirements to determine equivalency to FFE requirements and agree on methods for oversight with each state in whatever limited number of areas equivalency can be established, as well as how information can be continuously shared to support FFE oversight activities.
The dance steps needed for mating state regulatory structures with the federal government in each of the 24 non-partner states are substantial. Getting state/federal agreement to mutually oversee health plans in any limited area requires bureaucratic grease, especially in a compacted timeline. To work with states and make the path as clear and uncomplicated as possible, CMS is making a framework to do this with added definitions and analytic tools. The goal: to be ready in three months for the first applicants.
Notwithstanding resolving equivalency of requirements in states that wish to hold off federal takeover in even a small way, the mating process will also bog down in negotiations around added resources, costs incurred and payment for state services. CMS needs to ensure that these issues do not become obstacles that upend the August 2013 timeline. CMS will need to re-consider using any state's regulatory structure when it becomes clear this engagement process has overwhelmed the goal in that state.
Resources:
Download Jean LeMasurier's whitepaper on Insurance Exchanges in the ACA.
Read Steve Balcerzak's previous blog post on the FFE draft application for qualified health plans.