Affordable Care Act impact on insurance plans

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Affordable Care Act impact on insurance plans

• Individual market webinar

40192CAIENABC 8/13
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Todays topics

• What well cover
• Overview of 2014 changes
• Health Insurance Marketplace
• Coverage options customer mapping, transitioning
  and grandfathering
• Case examples
• Tools and resources

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Overview of 2014 changes
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Changes that affect premiums
Guaranteed issue No one can be denied coverage
New taxes and fees Apply to certain plans
Subsidies/credits Help those with low or
moderate incomes pay for coverage
Broader benefits and limits 10 types of
Essential Health Benefits required, out-of-pocket
limits and deductible restrictions
Reinsurance program Insurers / TPAs / self-funded
plans contribute to fund high claims
Change in rating Rates based on age and address
(and tobacco use, in some states), not gender and
health status
New Health Insurance Marketplace (Exchanges)
Offers plans for individuals
At least 60 actuarial value Plans pay at least
60 of covered services
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How each premiumis affected
Individuals Small groups Large groups
Guaranteed issue
Broader benefits
depending on number of required benefits
included in plan
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How each premiumis affected
Individuals Small groups Large groups
Change in rating
At least 60 actuarial value
for healthy
for less healthy
for healthy
for less healthy
young men and older women
young women and older men
groups younger than average
groups older than average
young individuals
older individuals
for customers with more cost share than allowed
little change for customers with less cost share
for customers with more cost share than allowed
little change for customers with less cost share
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How each premiumis affected
Individuals Small groups Large groups
New taxes and fees
Subsidies/ credits
for those who qualify
for those who qualify
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How each premiumis affected
Individuals Small groups Large groups
Reinsurance program
New Health Insurance Marketplace (Exchanges)
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Essential health benefits (EHBs)
Nongrandfathered plans for individuals on and off
the Marketplace must cover

• Outpatient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder services
  (including behavioral health treatment)

• Prescription drugs
• Rehabilitative and habilitative services/devices
• Laboratory services
• Preventive and wellness and chronic-disease
  management
• Pediatric services(including dental and vision)

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EHBs and annual/ lifetime dollar limits

• Annual/lifetime dollar limits cannot apply
• Affects only nongrandfathered plans
• Applies for in-network and out-of-network
  services
• Visit limits are allowed on EHBs and can replace
  dollar limits
• Non-EHB annual/lifetime dollar limits are allowed
• Rule
• Applies to medical, pharmacy and pediatric vision
  and dental benefits that are under the policy
• Does not apply to
• Stand-alone benefits, which are excepted under
  HIPAA

NOTE Medical Policy rules still apply to EHBs
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Out-of-pocket (OOP) maximum

• 2014 OOP limits for all individual
  nongrandfathered plans
• Individual 6,350
• Family 12,700
• The OOP cap applies for medical and specialty
  EHBs
• Cap is equal to the amount set for HSA-compatible
  plans

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Community rating

• Premiums for individuals are not based on gender
  or health but on
• Family size
• Age with maximum 31 rating bands
• Where people live

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Studies on premium impact

• Center Forward
• Increases likely in the individual and small
  group markets
• Some groups up by 49, others down by 39
• American Action Forum
• Increase in costs for young, healthy people in
  the individual and small group markets
• Costs for older, less healthy would drop about
  22
• Milliman actuarial firm
• 75 to 95 rise in premiums in the individual
  market
• Rates for others would drop
• Jonathan Gruber of MIT
• Premiums in individual market may increase as
  much as 85
• Small group market may increase more than 20

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Health Insurance Marketplace
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Overview of state models
State-Based Facilitator Exchange
State-Based Active Purchaser Exchange
Partnership Exchange, State-Based Active
Purchaser/Facilitator Blend, or
Federally-Facilitated with State Plan Management
Federally-Facilitated Exchange
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Coverage options for individuals
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Options for individuals

• People not already on a government plan have
  these options
• Employer-sponsored coverage
• Individual coverage through Health Insurance
  Marketplace (on exchange)
• Individual coverage outside the Health Insurance
  Marketplace (off exchange)
• No coverage pay the penalty

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Options for current members

• Mapping
• Transitioning
• Grandfathering

Communications about coverage options are being
mailed to members and Brokers. All members will
be contacted by the end of October. Please check
with your local sales representative for
state-specific information.
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Mapping

• Were mapping our nongrandfathered members to new
  ACA-compliant plans
• As a participant in Californias Individual
  Health Insurance Marketplace, we are required to
  discontinue non-ACA compliant nongrandfathered
  individual plans as of 1/1/14.
• Therefore we will map all of our nongrandfathered
  members to off-Exchange ACA complaint plans
  effective 1/1/14.
• An easier way to transition from an old plan to a
  new plan
• Guide shows plan options for members who are
  mapped
• We will apply the current Agent of Record

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Grandfathering

• An option to keep a plan that was in effect
  before March 23, 2010.
• A grandfathered plan doesnt have to meet ACA
  requirements.
• Benefits of a grandfathered plan
• Could help control premium costs
• May offer more choices of providers and
  prescription benefits
• Wont be affected by ACA changes that could
  increase out-of-pocket costs

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Case examples
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Case exampleShop in the Marketplace

• Marks employer has decided not to offer
  coverage. Mark needs coverage for his family and
  himself, so hes going to shop in the Health
  Insurance Marketplace.
• His reasons
• He can compare plans side by side from different
  insurers to find coverage that meets his needs.
• He can work with his producer to find out if he
  qualifies for a subsidy or tax credit when he
  buys a plan in the Marketplace (on exchange).
• He may also choose to work with his producer to
  buy Individual coverage outside the Marketplace
  (off exchange).

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Case exampleNo coverage

• Mandy is 27 and recently aged off her parents
  plan. She has opted not to buy coverage.
• Her reasons
• She thinks the cost is too high for regular or
  even catastrophic insurance.
• She can always go to the ER if she needs to.
• Mandy may save money on premiums, but shell pay
  a penalty for not having insurance. The penalty
  goes up each year.

2014
Penalty is 95 or 1 of taxable earnings,
whichever is larger
Mandy should work with her producer to see if she
qualifies for a subsidy or a tax credit before
deciding to go without insurance.
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Tools and resources
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Tools to help your business

• To help you keep and grow your business, use
  these tools from anthem.com/ca
• Producer Toolbox new producer website with
  single sign-on and online account management
• Marketing materials gives you the tools you
  need to help your clients buy the individual and
  family plans that fit their needs available on
  the MerrillConnect order supply site
• Plan map/transition guide shows you how we will
  map nongrandfathered plans to Anthem
  ACA-compliant plans makes it easier for you to
  help clients who cant renew their current plans
  because of new ACA requirements

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Decision-making tools

• Also available at anthem.com/ca for you and your
  clients
• Subsidy estimator shows whether your client
  might qualify for a subsidy and gives an
  estimate final determination comes from the
  Marketplace
• Online shopper site clients can get a quote,
  learn about insurance basics, compare plans,
  check if they can get a tax credit or subsidy and
  apply for a plan available in Spanish and
  English
• (Coming soon) ChangeMyCoverage tool web-based,
  self-service tool helps clients if they move to
  an Anthem ACA-compliant plan thats different
  from what weve recommended offers a
  personalized message and shows new options
  compared to their current plan

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Use our Producer Toolboxto quote our
Marketplace products
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HCR websites

• Redesigned site for producers
• makinghealthcarereformwork.com
• For members
• healthcarereform4you.com

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Key dates

• January 1, 2014 Anthem members with plans that
  are not grandfathered and not ACA-compliant move
  to our compliant plans (off-exchange)
• January 1, 2014 Conversion and Guarantee Issue
  Plans end
• March 31, 2014 Open Enrollment ends
• April 1 September 30, 2014 Special Enrollment
  for qualifying events only

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Q A

• Thank you!

Anthem Blue Cross is the trade name of Blue Cross
of California. Anthem Blue Cross and Anthem Blue
Cross Life and Health Insurance Company are
independent licensees of the Blue Cross
Association. ANTHEM is a registered trademark of
Anthem Insurance Companies, Inc. The Blue Cross
name and symbol are registered marks of the Blue
Cross Association.