Washington Health Benefit Exchange

Subsidy Study: Kick-Off MeetingMay 21, 2020

Cascade Care Stakeholder Workgroup

Today’s Agenda

▪ Welcome

▪ Legislative Requirements

▪ Review of Assumptions

▪ Input on Policy Considerations

▪ Stakeholder Feedback

▪ Next Steps

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Requirements of Cascade Care Bill1. Standard Qualified Health Plans (QHPs): Requires HBE, in

consultation with HCA, OIC, and an actuary and other stakeholders, to design and implement standard QHP plans for 2021 plan year

2. Public Option: Requires HCA, in consultation with HBE, to contract with health carriers to offer state procured standard QHPs (public option plans) for 2021 plan year that have provider reimbursement rate caps and must include quality and value requirements

3. Subsidy Study: Requires HBE, in consultation with HCA and OIC, to develop and submit a plan for implementing premium subsidies through Exchange for individuals up to 500% FPL (report due Nov. 15, 2020)

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Subsidy Study: Key Goals and Considerations

▪ Lower Washington’s uninsured rate

▪ Increase access

▪ Lower premiums

▪ Support continuity of coverage and retention

▪ Build credible and scalable model that can be used now and, in the future, to determine impacts on premiums, enrollment, state costs and the uninsured rate

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Purpose and Scope of Workgroup Meetings

▪ Maintain an iterative process of bringing subsidy study work to stakeholders, discussing technical impacts of subsidy design features, and incorporating feedback to inform final report

▪ Engage with stakeholders to understand impacts of various subsidy designs in time to influence the analysis and final product

▪ Discuss policy goals and market impacts and exchange information, experience and observations

▪ Ask for and receive meaningful feedback

▪ Inform of progress and next steps

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ESSB 5526: Subsidy Study

ESSB 5526 (Section 6) Subsidy Study Requirements

▪ Plan to implement and fund a state premium subsidy program

▪ Developed by Exchange in consultation with HCA and OIC

▪ Plan must include:

▪ Assessment of the impact of subsidies on the uninsured rate

▪ Assessment of providing cost-sharing reductions to plan participants

▪ Implementing legislation

▪ Due to the legislature by November 15, 2020

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ESSB 5526 (Section 6) Subsidy Requirements

▪ Limited to individuals purchasing coverage on the Exchange

▪ Limited to individuals up to 500% FPL

▪ Affordability goal: limit participant premium spend to no more than 10% of income

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Subsidy Study Assumptions

Assumptions

▪ Exchange is the subsidy program administrator (similar to APTC, CSRs, sponsorship program)

▪ Healthplanfinder capability will be leveraged to reduce cost and burden

▪ State funding targeted to meet greatest need and maximum effect

▪ State subsidy will only be available to reduce consumer premiums after all available federal tax credits are applied (similar to COFA program)

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Assumptions

▪ Program eligibility will be verified when customers apply and change report

▪ State subsidy will be displayed to the consumer during plan shopping

▪ State subsidy eligibility and amount will be communicated to consumers and carriers

▪ Exchange will facilitate reconciliation between consumers and carriers

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Stakeholder Engagement

Subsidy Study Stakeholdering Plan

▪ The Exchange will leverage existing forums to solicit input and feedback

▪ Background information, reports and drafts will be made available on the Cascade Care Implementation website

▪ Key Stakeholders

▪ Exchange Board & Committees & Workgroups

▪ Legislators

▪ Governor’s Office

▪ HBE/OIC/HCA: Cascade Care interagency workgroup

▪ External stakeholders

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Key External Stakeholders

▪ Carriers

▪ Providers

▪ Consumers Advocates

▪ Business Community

▪ Labor

▪ Community Assisters

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Subsidy Study Meeting Timeline

▪ May 21: Kickoff Session - Background, goals, and assumptions

▪ June 1: Kickoff session feedback due

▪ June 24: Review Wakely model using initial scenario

▪ July 6: Session 2 feedback due

▪ July 22: Finalize model, review additional scenarios, and initial funding discussion

▪ July 31: Session 3 feedback due

▪ August 26: Finalize subsidy approach, further funding discussion

▪ September 4: Session 4 feedback due

▪ September 23: Finalize funding approach, review initial draft report

▪ October 2: Session 5 feedback due

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Resources

▪ Cascade Care Website: https://www.wahbexchange.org/about-the-exchange/cascade-care-2021-implementation/

▪ Meeting Materials

▪ “Subsidy Study Materials” tab will have additional information

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Background & Policy Considerations for Subsidy Design

Environmental Scan, Research, Data

▪ Review of other state efforts

▪ Review of recent studies (actuarial research, uninsured)

▪ COVID-19 Impacts

▪ Wakely Report

▪ SEP enrollment data

▪ ESD data

▪ Monitoring market movement

▪ 2020 enrollment data

▪ Review of previously considered funding mechanisms

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Subsidy Design ▪ The Exchange has contracted with Wakely to build a scalable

model and analyze a limited set of scenarios

▪ Scenarios will help identify areas of greatest need and maximum effect

▪ Each scenario will represent a different subsidy method (percent of income; sliding scale; etc.)

▪ Wakely will analyze the impact of each scenario on:

▪ Enrollment; Consumer Premiums/Risk Pool; State Costs; Uninsured Rate

▪ Impacts will be examined at varied, scalable funding levels (low, medium, high)

▪ Within available resources, impacts on specific enrollment groups within each scenario will be exmanined

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Illustrative Scenario for Discussion Purposes: “Expanded APTC Funding”

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Less than 139% FPL 139 – 150% FPL 151 – 200% FPL 201 – 250% FPL 251 – 300% FPL 301 – 400% FPL 401 – 500% FPL

Current Federal

sliding scale 2.06%-3.39% 3.39%-4.12% 4.12%-6.49% 6.49%-8.29%

8.29%-9.78% 9.78% N/A

New maximum

percent

contribution

0% 2% 3.5% 4.5% 6% 7.5% 9.86%

Subsidized Non-

Subsidized Subsidized

Non-

Subsidized Subsidized

Non-

Subsidized Subsidized

Non-

Subsidized

Subsidized Non-Subsidized Subsidized Non-Subsidized Non-Subsidized

Current

estimated

average net

monthly premium

$34 $508 $90 $572 $140 $530 $235 $567 $336 $610 $450 $670 $782

New estimated

average net

monthly premium

$0 $40 $80 $135 $220 $355 $598

Percent decrease

in estimated

monthly premium

100% 100% 56% 93% 43% 85% 43% 76% 35% 64% 21% 47% 24%

Impacted

Population 11,218 841 13,513 407 39,145 1,537 25,343 1,503 17,552 1,400 24,056 2,299 8,903

Estimated cost

per group $ 3,734,772.00 $ 4,592,820.00 $ 6,446,544.00 $ 2,305,944.00 $ 21,538,332.00 $ 7,468,416.00 $ 23,734,116.00 $ 6,519,264.00 $ 18,854,271.84 $ 5,262,676.56 $ 17,644,012.50 $ 6,273,341.10 $ 12,894,846.27

Total state cost of ~$140M annually; based 2019 enrollment; no uptake assumption included

Subsidy Model Development

Information shared with Wakely includes:

▪ Plan information

▪ Coverage dates

▪ Subsidy status

▪ Payment status

▪ FPL

▪ Income

▪ APTC

▪ Cost-sharing tier

▪ Premium

▪ SLCSP Benchmark

▪ Geography

▪ Demographics (Age, Race, Ethnicity)

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Policy Considerations

▪ Should certain populations be prioritized (e.g., lower income, unsubsidized, younger, older, rural)? Who and why?

▪ What are the implications for impact and cost?

▪ How has your thinking shifted with the impact of the pandemic on job and income loss?

▪ What are your preferred scenarios?

▪ Should subsidy be more generous sliding scale percentage of income (like APTC)?

▪ Focused on the ‘cliff’ populations (more generous at lower end and higher ends)?

▪ Others?

▪ Should the subsidy be tied to Cascade Care plans?

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Policy Considerations

▪ How has the current pandemic and rising unemployment changed the conversation around the need for a state subsidy?

▪ In light of state budget constraints and competing priorities given COVID-19, thoughts on funding sources?

▪ Additional considerations to address gaps in coverage and affordability?

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Next Steps

Next Steps

▪ Provide feedback on policy considerations/questions

▪ Provide additional studies/reports/state activities to share

▪ Identify key design elements and preferred scenarios

▪ Feedback due: June 1, 2020

▪ Submitting feedback:

▪ CascadeCare@wahbexchange.org

▪ Next meeting: June 24, 10-noon

▪ Series will be sent to participants following this meeting

▪ Wakely participation in June meeting to step through model

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Appendix

COVID-19 Newly Uninsured in 2020

WA State Office of Financial Management estimates:

▪ Uninsured rate increased to 12.1% in 2020

▪ 419,500 people lost their coverage in the eight weeks’ time, bringing the estimated state’s total uninsured to 941,100

▪ Full report available at: https://www.ofm.wa.gov/

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Exchange Administration of Federal Premium Subsidies

▪ Federal premium subsidy program is over $600M+ annually

▪ Administered on sliding scale basis up to 400% FPL

▪ Benchmarked to second lowest cost silver plan (SLCSP)

▪ Eligibility determined/verified when apply and change report

▪ Tax credit can be used in any plan metal level

▪ Amount displayed to consumer when shopping

▪ Consumers chooses how much to receive in advance

▪ Exchange communicates subsidy amount to consumers and carriers

▪ Exchange facilitates reconciliation between consumers and carriers

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Federal Tax Credit Sliding Scale

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Exchange Administration of Federal Cost-Sharing-Reduction (CSR) Subsidies

▪ Consumers up to 250% FPL receive CSRs that increase the actuarial value of their silver plan

▪ Until late 2017 funding provided by the federal government (stoppage has led to numerous lawsuits)

▪ Since stoppage cost added to silver premiums (‘silver loading’)

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2020 FPL Guidelines

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