Date: 05/13/2015

Final
Fiscal Matters & Sustainability Plan, including Fee Structure

HEALTH CARE EXCHANGE

Votes: View--> Action Taken:
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12:20 PM -- Discussion of Fiscal Matters and Sustainability Plan, including Fee Structure

Mr. ErkenBrack discussed insurance premium rates and told the committee that for the first time since the implementation of the exchange premium rates will be based on the population of the exchange. He stated that he expects that it will take three to five years for premium rates to normalize. Committee members discussed the assessment rates charged by the exchange including the Health Insurance Carrier Assessment (HICA) and the Broad Market Assessment. Mr. ErkenBrack explained that many factors are considered when predicting future revenues for the exchange.


12:26 PM

Mr. Drews stated that evaluation of the assessment rates and the revenue sources is currently in progress. He directed the committee to page 15 of the handout (Attachment C) regarding enrollment projections and discussed the projected cost of running the exchange. He stated that the budget process was still in progress and that planning work is continuing.

150513 AttachC.pdf150513 AttachC.pdf


12:40 PM

Mr. Drews clarified that the exchange budget year is July 1 to June 30 and discussed the process used to forecast enrollments. Discussion followed about factoring in fluctuations in the insurance market when creating a budget.


12:49 PM

Committee discussion ensued about the budget. Referring to pages 45 and 47 of the handout (Attachment C), committee members questioned the use of the HICA. The committee discussed which customers are assessed the HICA, the definition of per member per month (pmpm), and the cost of administering the exchange. Further committee discussion centered on the number of individuals eligible for Medicaid and aspects of the Affordable Care Act.


12:57 PM

The committee discussed the revenue models detailed on page 44 of the handout and the transition of funding for the exchange from federal grants to other sources.


01:01 PM

Members inquired about the pass through of the cost of the assessments to customer. Mr. Drews explained that such fees are usually passed through to the consumer and are reflected in the carriers' operating costs. Discussion continued about the need to make statutory changes to the exchange to help it function more smoothly. Mr. Drews responded to the question by clarifying that there are currently two fees assessed on carriers by the exchange: the HICA, which is a carrier assessment based on the total number of plans sold by a carrier on the exchange, and the Broad Market Assessment, which is a general monthly assessment on all health insurance plans sold in Colorado that is itemized on monthly billing statements.

Mr. Patterson and Mr. Drews responded to questions about whether the exchange is actively exploring the option of receive funding from CMS to off-set the cost of assisting customers with Medicaid eligibility determinations. Mr. Drews explained that this revenue source in still in the research phase and that the exchange is working with the Colorado Department of Health Care Policy and Financing (HCPF) to identify the best course of action. He explained that there appears to be two kinds of reimbursements available: one for technology upgrades and one for operations. Mr. Patterson responded that he is scheduled to meet with a regional CMS representative within the next week to 10 days to discuss this issue.


01:11 PM

Further discussion centered on why the assessments are passed on to consumers in light of the millions of dollars in compensation received by insurance company CEOs. Mr. ErkenBrack responded that insurance laws apply to both not-for-profit insurance companies and for profit insurance. Discussion continued about the merits of spreading the assessment over the entire insurance market rather than assessing the fees only on those who purchase policies through the exchange. Committee members continued to raise concerns about assessing fees against those who do not use the exchange.

Discussion continued about the optimal expense level cash flow detailed on page 45 of the handout (Attachment C) and about whether exchanges in other states are sustainable. Mr. Drews stated that all state exchanges are working to become sustainable. The committee continued to seek clarification about the fees assessed against carriers. Ms. Benshoof clarified that the Broad Market Assessment of $1.25 is itemized on all monthly billing statements, but that the HICA, which is assessed on the total number of plans sold by a carrier on the exchange is built into the carriers administrative costs, similar to the fees paid to brokers, and is not itemized on a billing statement.


01:27 PM

Senator Roberts made closing comments and told the committee that the next meeting is scheduled for June 5, 2015. Mr. Drews told the committee that the exchange will bring a review of next year's operating plan and budget to the June 5 meeting. Senator Roberts reiterated that the remaining agenda items will be on the June 5 agenda and that the Commissioner of Insurance and the Executive Director of HCPF will be invited to be on the agenda. Additional requests for information to be presented at the next meeting included a list of specific recommendations from stakeholders about how to improvement to the current system as well as the pro and cons of maintaining the existing shared eligibility system utilized by the exchange and HCPF versus the pros and cons of separating the system.


01:30 PM

The committee adjourned.