STAFF SUMMARY OF MEETING
HEALTH CARE EXCHANGE
|Time:||09:04 AM to 02:03 PM|
|This Meeting was called to order by|
|This Report was prepared by|
X = Present, E = Excused, A = Absent, * = Present after roll call
|Bills Addressed: ||Action Taken:|
|Public Feedback, Constituent Requests, & Material Received in 2015|
Presentation - Colorado Health Institute about Connect for Health CO
Presentation - Independence Institute about Connect for Health CO
Discussion with HCPF about Connect for Health CO
Discussion with Division of Insurance about Connect for Health CO
Discussion of Marketplace for Next Open Enrollment Period
Presentation of Budget and Operating Plan
|Witness Testimony and/or Committee Discussion Only|
Witness Testimony and/or Committee Discussion Only
Witness Testimony and/or Committee Discussion Only
Witness Testimony and/or Committee Discussion Only
Witness Testimony and/or Committee Discussion Only
Witness Testimony and/or Committee Discussion Only
Witness Testimony and/or Committee Discussion Only
Witness Testimony and/or Committee Discussion Only
09:05 AM -- Review of Public Feedback Surveys, Constituent Requests, and Materials Received
Senator Roberts called the meeting to order. She reviewed the agenda (Attachment A).
Bill Zepernick, Legislative Council Staff, presented updated cumulative statistics gathered from the public feedback survey concerning consumer experiences with Connect for Health Colorado (the exchange). The survey is located on the committee's website at www.colorado.gov/LCS/exchangereviewcomm. Referring to information provided in the Legislative Council Staff (LCS) memorandum titled Update on Public Feedback on Connect for Health Colorado (Attachment B), Mr. Zepernick told the committee that between May 1, 2015, and May 28, 2015, 17 survey responses were received. He explained that the concerns appear to be the same as concerns identified by previous survey respondents. The concerns identified by both consumers and brokers who completed the survey included:
- delays in confirming coverage with insurance carriers;
- difficulties in payments being processed correctly;
- long waiting times and varying degrees of knowledge when calling the customer support center;
- high cost of plans offered through the exchange;
- frustrations with the shared-eligibility system, including having to first apply for Medicaid before being determined eligible for the subsidy; and
- difficulties using the Connect for Health Colorado website; however, the plan comparison feature was complimented.
Mr. Zepernick then highlighted the materials received by the committee in meetings throughout 2015 (Attachment C).
Elizabeth Haskell, Legislative Council Staff, provided a LCS memorandum titled Number of Constituent Requests Related to Connect for Health Colorado - October 2013 through May 2015to the committee (Attachment D). She told the committee about constituent services provided by LCS relating to Connect for Health Colorado. She stated that 118 constituent requests have been received since October 2013. She discussed communication issues between Connect for Health Colorado and insurance companies, as well as with the Department of Health Care Policy and Financing. Ms. Haskell discussed the process for receiving requests and some limitations on the information available. She responded to questions about the amount of staff time required to respond to constituent requests and the types of issues that are being referred to constituent services. Ms. Haskell explained that it takes about 30 to 45 minutes total of staff time per request, and the difficulty some constituent are having getting a corrected 1094A tax form is a new issue this year. She was not able to address whether ongoing problems such as Medicaid eligibility determinations have been addressed over time. Ms. Haskell responded to committee questions stating that the issues brought forth in constituent services are similar to the issues identified in the public feedback survey. In response to questions about the time it takes to resolve constituent requests, Ms. Haskell responded that her office could not accurately provided a timeline on how long it takes for the exchange or other agencies to resolve constituent's concerns.
09:21 AM -- Senator Roberts told the committee that, in addition to the time set aside at 1:30 pm for public testimony, she was going to allow a few minutes for public testimony at this point in the meeting since a member of the public was in attendance.
09:22 AM Public Comment
09:22 AM -- Mr. Sameen Brenn, representing himself, spoke about the difficulty he had signing up his wife for a Kaiser insurance plan through the exchange when her Medicaid coverage ended after the birth of her child. He explained that he and his wife were both on a Kaiser plan prior to the birth of their child in December, but when the child was born it was recommended to him to apply for Medicaid for the baby. It turned out that both the baby and his wife were eligible for Medicaid. Once his wife's Medicaid eligibility ended, he had difficulty communicating with the exchange and Kaiser to get her covered by a Kaiser plan. Mr. Brenn detailed his experience of having to provided the same documents more than once and the difficulty determining the correct premium subsidy. He stated the issues have been resolved and his wife now has coverage. Committee discussion followed about the process used by Medicaid to notify clients of acceptance and denials and Medicaid eligibility categories.
09:40 AM -- Presentation by Colorado Health Institute about Connect for Health Colorado
Jeff Bontrager, Director of Research on Coverage and Access, Colorado Health Institute (CHI), discussed how the exchange could be improved and how changes could be made to the exchange under a Section 1332 Innovative Waiver (waiver). Throughout his presentation Mr. Bontrager referred to a handout (Attachment E). He stated that improvements can be defined as operational improvements, financial improvements, and affordability and access improvements. He discussed strategies for sustainability of the exchange, as well as an exit strategy. Mr. Bontrager clarified that an exit strategy referred to making fundamental changes to the exchange not eliminating the exchange entirely.
Mr. Bontrager discussed strategies for sustainability of the exchange which included utilizing access fees, diversifying the risk pool, diversifying offerings, leveraging partnership with Medicaid, leasing out infrastructure and permitting advertising. He also suggested ways to make fundamental changes to the exchange, such as contracting some functions to private entities, privatizing the marketplace, transitioning to the federal marketplace, doing away with the marketplace altogether, and considering other broad insurance market reforms. He further discussed that if the exchange is substantially changed, it would be important to make a plan to transition current enrollees to the new system, understand implication of the federal option, explore repurposing of the infrastructure, and assess the impact the change will have on competition and transparency.
Mr. Bontrager continued his presentation by discussing the application of waivers and the issues to be considered when deciding to move forward with utilizing the waiver option. He explained that some states have already begun discussing how an innovation waiver could help meet their goals around healthcare, and other states are certain to start the discussion. The few states that have begun conversations are still in the early stages. Mr. Bontrager explained that a waiver provides a means to make changes to the existing insurance requirements of the Affordable Care Act (ACA) by altering requirements for benefits, subsidies, tax credits, the individual mandate, the employer mandate, insurance marketplaces, and qualified health plan provisions. He stated that the General Assembly would need to pass legislation to permit the state to utilize the waiver option. He suggested that the first step in the waiver process should be to identify the problem with the current system and then build a waiver to solve this problem. Mr. Bontrager referenced an additional handout titled Section 1332 State Innovation Waiver A Vehicle for Change prepared by CHI (Attachment F).
Senator Roberts thanked Mr. Bontrager for his presentation and asked him to return to the next meeting to respond to questions from the committee once the committee has had time to consider his presentation. Committee discussion and questions followed about other states that have considered the waiver approach. Mr. Bontrager spoke about other states that have been exploring waiver options and the coordination of waivers and the 1115 Medicaid waivers. He explained that some waivers are Medicaid specific, but 1332 waivers address the rules regarding private insurance. Committee discussion continued about the advantages and disadvantages of seeking a waiver, as well as discussion about requirements for small businesses to qualify for tax credits. Committee members commented on Mr. Bontrager's presentation.
10:12 AM -- Presentation by the Independence Institute about Connect for Health Colorado
Linda Gorman, Health Care Policy Center Director, Independence Institute, discussed the status of the healthcare insurance system prior to the implementation of the ACA. She stated that the insured population fluctuated around 85 percent. She told the committee that a certain percentage of low-income individuals did not seek to be insured because they knew that they could be covered by government programs if they became sick enough. She discussed charity programs that provided access to free health care. She stated that prior to the mandated coverages of the ACA, a much wider variety of insurance plans were offered due to the ability of insurers to limit the services covered by a plan. She discussed the difference between cost and coverages of corporate insurance plans and individual insurance plans, and the difference in paying for a health plan with pre-tax dollars and post-tax dollars. Ms. Gorman stated that the majority of health needs can be covered by a plan that covers up to $50,000 per year, and discussed the idea of allowing for the same tax benefits for those who purchase insurance through employer and those who purchase individual plans. She stated that the exchange exists as a monopoly to determine who is exempt from being required to have health insurance, to distribute subsidies for expensive health plans, and to make sure the subsidies are distributed to the correct insurance company. She told the committee that there is discussion at the federal level to allow for a flat tax credit for those who purchase health insurance. She discussed her views of the short comings of the exchange, including: poor financial controls, high administrative costs, the advertising budget, expenditures exceeding income, and the desire to receive payment for Medicaid enrollment services. She further discussed using general tax revenues to increase the number of insured. Ms. Gorman discussed eliminating the requirement that employers offer insurance to low wage workers, the idea of offering noncompliant policies, and the King v. Burwell case pending before the U.S. Supreme Court.
Ms. Gorman responded to a variety of questions from the committee about the flat tax rate she referenced in her testimony, removing the mandate that employers offer health insurance, clarifying her statement about how individuals procured health insurance prior to the ACA, the elimination of non-ACA compliant policies, enrolling in an insurance plan outside of the open enrollment period, whether expanding Medicaid has reduces costs for hospitals, and the sustainability of the Colorado HealthOP which is a member-governed nonprofit health insurance company.
10:41 AM -- Discussion with Department of Health Care Policy and Financing about Connect for Health Colorado
Sue Birch, Executive Director, Colorado Department of Health Care Policy and Financing (HCPF), and Chris Underwood, Health Information Officer, HCPF, came to the table. Director Birch spoke about HCPF's partnership with the exchange and the shared eligibility system. Director Birch pointed out that, unlike other states' exchanges, the Colorado exchange is not a state agency. She stated that the function of the exchange is to sell health plans that meet the needs of Colorado residents and comply with the ACA. She explained that HCPF is involved in identifying eligibility for Medicaid, but in not involved in enrolling individuals in private health plans or in the small business component of the exchange. She discussed the number of uninsured individuals that have been identified and suggested that the exchange has a variety of companies offering a number of plan choices. Director Birch explained that Medicaid, Medicare, and premium subsidies are all ranges of government assistance with Medicaid and Medicare being a full subsidies and the premium subsidy being applied on a sliding sale. She discussed the need for HCPF and the exchange to meet federal rules and regulations in order to access federal matching funds. She continued her discussion by explaining that most Medicaid applications go through the shared eligibility system seamlessly, but some applications for families with complicated household situations can take extra time. Director Birch also pointed out that the department is vigilant about preventing fraud so some documents must be verified prior to approval.
Director Birch stated that in 2014 HCPF sent 220,000 denials for Medicaid to clients and over 330,000 denials in 2015. She told the committee that the HCPF and the exchange continue to collaborate outside of the exchange's open enrollment period.
Mr. Underwood highlighted the upgrades made by HCPF and the exchange to the health information technologies between the first exchange open enrollment period to the second open enrollment period. He explained that in year one clients had to enter their information twice: once for Medicaid eligibility determination and then again for the subsidy determination if they were found ineligible for Medicaid. The system now shares information and can determine Medicaid and subsidy eligibility without entering information twice. He stated that 75 percent of exchange customers received a real time eligibility determination. He explained that upgrades, which will be installed by the next open enrollment period include a wrap-up screen that will detail the customer's eligibility for medical assistance programs or for the subsidy and will show the amount of income reported. There will also be a fast path for questions similar to Connecticut's system which directs questions to customers based on their answer to the previous question. He told the committee that there will be an integrated system that will allow the Connect for Health Colorado call center staff to access customer Medicaid information through the Colorado Benefits Management System (CBMS) in addition to new functionality for customers seeking insurance due to a life change event. There are also plans to implement an avatar to help guide customers through the process.
Mr. Underwood explained that 95 percent of all Medicaid applications are processed within the 45 day time period required by the federal government. He explained that extensive training is required to process Medicaid applications.
In response to questions from the committee about the Medicaid eligibility determination process, Mr. Underwood explained that about 75 percent of applicants received a real time determination, but in some cases, information, such as citizenship status, must be verified prior to making a determination. He explained that in many cases this verification does not take 45 days, but may only take a few extra minutes for an eligibility technician to verify the information. He reiterated that 95 percent of applications processed within the 45 day federal requirement. Mr. Underwood discussed the departments efforts in exploring federal funding to assist with eligibility determinations. Director Birch then responded to questions about HCPF's efforts to explore Section 1332 Innovative Waivers, by stating that, since there has not been any federal guidance issued yet, HCPF does not have a 1332 waiver working group at this time, but is open to exploring options if necessary.
Mr. Underwood spoke about Medicaid call center standards and the move to have county departments of human services process Medicaid applications received through the state's online application website, PEAK. Committee discussion followed regarding the difficulty some clients have understanding Medicaid determination letters, enhanced federal funding to help with technology development, and the possibility of a client receiving both Medicaid and a premium subsidy through the exchange. There was additional discussion about allowing individuals who qualify for Medicaid to use funds to purchase private insurance.
In response to committee concerns that Colorado did not access federal funds for use by the exchange, Director Birch pointed out that HCPF and the exchange did utilize federal funds to establish the shared eligibility program, and it is expected that more federal funds will be used for technology upgrades. She explained that the exchange did not utilize federal funding for services because it was not clear whether this funding could be utilized appropriately.
Mr. Underwood discussed the Medicaid application process and, in response to committee questions, explained that the Medicaid application has been streamlined and does ask questions that will route the applicant to additional questions regarding eligibility or ineligibility depending on their responses. He stated that there are some clients who are eligible for both Medicaid and a premium subsidy and this issue is being investigated. Director Birch told the committee that HCPF has not undertaken any formal discussion about allowing Medicaid clients to use funds to purchase private health insurance. Committee discussion followed regarding Medicaid eligibility criteria for children, pregnant woman, and families, and the length of time it takes to process a Medicaid application. Director Birch discussed the creation of an aligned case management system that would include the exchange and HCPF using the same sort of technology so that customer services representative will be able follow the client through the system. She explained that the exchange and HCPF are working on refining communication and communicating more effectively with clients.
Director Birch clarified that 75 percent of Medicaid applicants receive a real time eligibility determination and 95 to 96 percent of all Medicaid applications are processed within the federal 45 day guideline. Committee discussion and comments followed regarding the efforts to improve the shared eligibility system including collaborating with other states that utilize shared eligibility systems, the limited number of Medicaid providers in the state, and the increasing number of residents enrolled in Medicaid.
Committee discussion and comments continued about the difficulty some families have getting insurance coverage when one member of the family is eligible for Medicaid, but the other members of the family are not eligible, and about medical providers who are selling their practices or retiring earlier because they do not want to manage Medicaid paperwork.
11:40 AM -- Discussion with Division of Insurance about Connect for Health Colorado
Marguerite Salazar, Commissioner of Insurance, Colorado Division of Insurance (DOI), and Peg Brown, Deputy Commission, DOI, came to the table. Commissioner Salazar explained the relationship between the exchange and DOI. She told the committee that the law clarifies that efforts are not to be duplicated between the exchange and DOI. She stated that DOI accepts rate filings and licenses brokers, and the exchange sells insurance policies. She explained how the division and the exchange collaborate to identify shared concerns and address those concerns together. Commissioner Salazar spoke about the value gained by her being a member of the board of directors and how her professional experience helps clarify the role of DOI and the exchange. Ms. Brown clarified for the committee that DOI regulates insurance carriers and plans offered both on and off the exchange and some insurers offer plans both on and off the exchange. In response to questions from the committee, Commissioner Salazar explained that the premium rate for a plan is the same whether the plan is purchased through the exchange and off the exchange.
In response to committee concerns about the viability of Colorado HealthOP, Commissioner Salazar stated that the Colorado HealthOp is currently meeting solvency standards required by the state. She explained that she does review the Colorado HealthOP's financial information monthly and that the state does have a guarantee fund created to assist Colorado residents if a Colorado insurance company becomes insolvent. She explained that if an insurance company becomes insolvent, the guarantee fund will continue to collect premiums from the insured customers and pay out claims, or the insured customers may switch to another carrier if they so choose. Commissioner Salazar clarified that, in the event that an insurer becomes insolvent, the consumer continues to use his or her contracted plan and there are not delays in paying bills to the providers, and, if the guarantee fund would become depleted, additional assessments would be levied on Colorado insurance companies to backfill the fund.
Committee discussion continued. Commissioner Salazar explained to the committee that the the Health Insurance Carrier Assessment (HICA) is a carrier assessment established in the ACA and is based on the total number of plans sold by a carrier on the exchange. She explained that a carrier determines the amount of the assessment and then includes this amount in its general operating costs. General operating cost are then calculated into the rates of the entire risk pool. Committee discussion followed about the legality of assessing the HICA on the entire risk pool. Commissioner Salazar agreed to investigate the legality of assessing the HICA across the entire risk pool.
Commissioner Salazar responded to committee concerns by explaining that insurers determine their risk. Committee discussion continued about adverse selection in regard to pharmacy benefits and the supposition that some hospitals and dialysis clinics purchase private insurance for patients in certain circumstances. Further discussion focused on the recent rate filings by insurance companies with DOI, the impact the increase in the HICA will have on 2016 insurance premiums, and the requirement that at least 85 cents of every premium dollar be spent on medical care, while the remaining 15 cents can go toward administration.
Commission Salazar explained to the committee that DOI's decision to discontinue policies that were not compliant with the ACA was based mostly on feedback from insurers who asked that these plans be discontinue. She stated that insurers were finding it difficult to continue to manage the noncompliant plans.
12:22 PM -- Discussion of Marketplace for Next Open Enrollment Period - Wrap-up and Discussion of May 13 Presentation
Sharon O'Hara, Chair, Connect for Health Board of Directors (the board), asked that the agenda be altered to allow for discussion about the budget and operating plan first. Senator Roberts agreed.
12:26 PM -- Presentation of Budget and Operating Plan
Ms. O'Hara, Steven ErkenBrack, member, Connect for Health Colorado Board of Directors, Kevin Patterson, Interim Chief Executive Officer (CEO), Connect for Health Colorado, and Gary Drews, outgoing Interim CEO, Connect for Health Colorado, came to the table.
Mr. Drews referred to the handout titled 2016 Strategic and Financial Plan: Final Draft (Attachment G). He discussed the sustainability of the exchange and the proposed budget. He discussed the strategies and the successes of the exchange. He stated that 145,000 customers enrolled in health insurance through the exchange and half of these customers receive no financial assistance. He told the committee that all counties except one had increased enrollments during second enrollment period and that the exchange collaborated with brokers, health coverage guides (HCGs), carriers, and vendors. He discussed the areas that need to be addressed prior to next open enrollment period, such as the need to simplify technology and improve functionality of the exchange, make the process more consumer-friendly and carrier-friendly, and improve training and communications with brokers and HCGs health coverage guides.
Mr. Drews discussed 2016-2018 enrollment projections. He discussed the marketing and outreach strategy for the exchange. He spoke about achieving more aggressive enrollment targets, the lower budget, focusing marketing on harder-to-reach populations, and better coordination of the duel eligibility system. He discussed the current status of the service center and the plan to renegotiate with current vendors for a fixed price, integrated service center including technology, staffing systems, quality, maintenance, and a contract with a medical assistant site. He told the committee that the exchange was awarded a grant by the Colorado Health Foundation to assist with the assistance network. He explained that the upgraded system will help the exchange respond more effectively to customers with complex situations that affect their insurance options. Mr. Drews also spoke about the collaboration between the exchange and a medical assistance site that is able to perform CBMS-related work for the exchange and associated Medicaid customers. Referencing page 15 of the handout, Mr. Drews spoke about the exchange's efforts to enhance the Small Group Marketplace (SHOP).
Mr. Drews continued his presentation by discussing capital and project requirements associated with the exchange. He told the committee that the exchange plans to make capital investments in the shared eligibility system, carrier electronic data interchange improvements, and upgrades to the small business marketplaces. He also told the committee that there are plans to add about 12 new full-time equivalent employees to the exchange staff and reduce the number of contract employees. Mr. Drews reviewed the details of the proposed budget referring to the data provided in the handout. Referring specifically to page 25 of the handout, he spoke about revenue cash balances and estimated total revenue and operating cost. He stated that the revenue from the assessment fees is not realized by the exchange for about another year. Committee discussion followed regarding specific aspects of the budget and financial data. The committee discussed the deficit shown on page 25 of the handout, the forecast of future revenue, the grant received from the Colorado Health Foundation, enrollment projections for the exchange, the advertising budget, outreach to individuals who are saving to pay the penalty for not having insurance rather than purchasing insurance, and payments from Medicaid to the exchange for services provided to Medicaid customers.
Marcia Benshoof, Chief Strategy and Sales Officer, Connect for Health Colorado, addressed committee concerns about revenue received by the exchange and small business tax credits. She explained that small business tax credits are not offered as an advance premium credit through the exchange, but rather the small business owner may access the tax credit when the business' taxes are filed with the Internal Revenue Service. She suggested that the advantages for employers to go through the exchange are that they must use the exchange to qualify for a tax credit and employees have access to a variety of plans to fit their needs.
Mr. ErkenBrack addressed committee concerns regarding the HICA being distributed across an insurers entire risk pool. He stated that the ACA requires that rates be the same inside the exchange as outside of the exchange.
Committee discussion followed about the difference between gross individual enrollment and effectuated individual enrollment and the three-month grace period to pay premiums for plans purchased on the exchange. Mr. ErkenBrack explained that gross enrollment is the number of individuals that enroll in a health plan and effectuated enrollment is the number of individuals that actually pay for the plans for which they have enrolled. Mr. ErkenBrack also told the committee that 85 percent of plans sold on the exchange are either silver plans or bronze plans.
Committee members asked that the exchange staff address the following issues in the next meeting: retention rates, the sustainability of the Colorado HealthOp and its affect on the exchange, the cost to the exchange for allowing consumers three months to pay for their insurance plans, how is the exchange addressing the key learnings identified in the presentation on page 4 of the handout, is there a potential the exchange will need to refund federal grant dollars, the affect the King v. Burwell decision will have on exchange, and the affect on enrollment of changing eligibility status of consumers due to fluctuations in income, loss of a job, or change in family circumstances.
01:31 PM -- Public Comment
01:32 PM -- Matt Jenkins, representing himself, spoke about his experience as a customer of Connect for Health Colorado. He said that he has worked as a HCG focusing on assisting business owners with purchasing plans on the SHOP. He told the committee about the difficulty he experience reenrolled in a policy. He stated that the system could not properly determine his income since he received a W-2 from one job and suffered a loss in his small business. He eventually was able to get PEAK to calculate his income correctly. He discussed the SHOP marketplace and how the cost of providing insurance to employers could create problems when hiring older persons.
01:45 PM Closing Comments and Wrap-up
Mr. Patterson made closing comments. He discussed the future focus of the exchange and responded to questions. Senator Roberts spoke about the need to decide whether the committee will be addressing any issues through legislation and the need for constructive changes to the exchange now that there is some experience to the process and questions regarding underinsured. Committee members thanked Mr. Drews for his work with the exchange. The committee discussed the formation of a 1332 waiver subcommittee and decided to move forward with a subcommittee to explore option under the waiver.
Mr. ErkenBreck confirmed that the board would welcome discussion about legislation that will help the exchange become more effective. Senator Roberts told the committee that the October 6, 2015, meeting needed to be rescheduled and discussed other meeting dates. The committee could not immediately agree on a date (this meeting was subsequently rescheduled for October 27, 2015, at 9:00 a.m.).
Additional material distributed at the meeting but not discussed include:
Attachment H -- Health Insurance Exchanges or Marketplaces: State Profiles and Actions,April 28, 2015, National Conference of State Legislatures.
150605 AttachH.pdf150605 AttachI.pdf150605 AttachJ.pdf
Attachment I -- State-Base Marketplaces Look for Financing Stability in Shifting Landscape, May 14, 2015, The Commonwealth Fund.
Attachment J -- After a Slow Start, Federal Small Business Health Insurance Marketplace Offers New and Improved Functions, February 19, 2015, The Commonwealth Fund.
The committee adjourned.