Affordable Care Act impact on insurance plans Individual market webinar

40192CAIENABC 8/13

What we’ll cover:

▪ Overview of 2014 changes▪ Health Insurance Marketplace ▪ Coverage options: customer mapping,

transitioning and grandfathering▪ Case examples▪ Tools and resources

2

Today’s topics

Overview of 2014 changes

4

Changes that affect premiums

Guaranteed issueNo one can be denied coverage

Broader benefits and limits 10 types of Essential Health Benefits required, out-of-pocket limits and deductible restrictions

Change in rating Rates based on age and address (and tobacco use, in some states), not gender and health status

At least 60% actuarial value Plans pay at least 60% of covered services

New taxes and feesApply to certain plans

Subsidies/credits Help those with low or moderate incomes pay for coverage

Reinsurance programInsurers / TPAs / self-funded plans contribute to fund high claims

New Health Insurance Marketplace (Exchanges) Offers plans for individuals

IndividualsSmall groups

Large groups

Guaranteed issue

Broader benefits

5

How each premiumis affected

~~ ~~

depending on number of required benefits

included in plan

~~ ~~

~~Increase Decrease Little change

IndividualsSmall groups

Large groups

Change in rating

At least 60% actuarial value

6

How each premiumis affected

~~

for customers with more cost share

than allowed

~~

~~Increase Decrease Little change

for healthy

for less healthy

young men and older women

young women and older men

young individuals

older individuals

for healthy

for less healthy

groups younger than average

groups older than average

little change for customers with less cost

share

~~for customers

with more cost share

than allowed

little change for customers with less cost

share

~~

IndividualsSmall groups

Large groups

New taxes and fees

Subsidies/ credits

7

How each premiumis affected

for those who qualify~~for those who qualify

~~Increase Decrease Little change

IndividualsSmall groups

Large groups

Reinsurance program

New Health Insurance Marketplace (Exchanges)

8

How each premiumis affected

~~

~~Increase Decrease Little change

▪ 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)

9

Essential health benefits (EHBs)

Nongrandfathered plans for individuals on and off the Marketplace must cover:

▪ 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

10

EHBs and annual/ lifetime dollar limits

NOTE: Medical Policy rules still apply to EHBs

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

11

Out-of-pocket (OOP) maximum

Premiums for individuals are not based on gender or health but on:

Family size Age – with maximum 3:1 rating bands Where people live

12

Community rating

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%

13

Studies on premium impact

Health Insurance Marketplace

15

Overview of state models

State-Based Active Purchaser Exchange

Partnership Exchange, State-Based Active Purchaser/Facilitator Blend, or Federally-Facilitated with State Plan Management

State-Based Facilitator Exchange

Federally-Facilitated Exchange

Coverage 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

17

Options for individuals

▪ Mapping▪ Transitioning▪ Grandfathering

18

Options for current members

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.

We’re mapping our nongrandfathered members to new ACA-compliant plans

▪ As a participant in California’s 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

19

Mapping

An option to keep a plan that was in effect before March 23, 2010.

A grandfathered plan doesn’t have to meet ACA requirements.

Benefits of a grandfathered plan:

▪ Could help control premium costs

▪ May offer more choices of providers and prescription benefits

▪ Won’t be affected by ACA changes that could increase out-of-pocket costs

Grandfathering

Case examples

Mark’s employer has decided not to offer coverage. Mark needs coverage for his family and himself, so he’s 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”).

22

Case exampleShop in the Marketplace

Mandy is 27 and recently aged off her parent’s 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 she’ll pay a penalty for not having insurance. The penalty goes up each year.

23

Case exampleNo coverage

Penalty is $95 or 1% of taxable earnings, whichever is larger

2014:

Mandy should work with her producer to see if she qualifies for a subsidy or a tax credit before deciding to go without insurance.

Tools and resources

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 can’t renew their current plans because of new ACA requirements

Tools to help your business

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 that’s different from what we’ve recommended; offers a personalized message and shows new options compared to their current plan

Decision-making tools

Use our Producer Toolboxto quote our Marketplace products

27

Redesigned site for producers:

makinghealthcarereformwork.com

For members:

healthcarereform4you.com

28

HCR websites

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

Thank you!

Q & A

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.