Respond to uncertainty in the marketplace, in light of republican efforts to repeal and replace the Affordable Care act. This is an hour and a half. Affordable Health Care Act. Dash i would like to welcome you to todays briefing. Ais is part of a series on features ons Health Insurance and we will be doing three summits on the future of health care this year starting with the future of Health Insurance and chronic care and the future of the health care workforce. They are excited you are here. But i comes to Health Insurance, the future starts here and now. We have a lot to talk about today. Before we do, i want to thank our sponsors for todays session, our annual series. Our sponsors are anthem, and i want to thank the blue cross and Blue Shield Association and our other sponsors for their support. I would like to point out one of our Board Members is meg murray. Thanks for being here. We will hear a couple of brief words from two of our sponsors. I want to introduce shawn martin, here to say a few words. Shawn . Mr. Martin thank you very much, and congratulations on securing the friday after the Health Reform vote for this discussion. Good morning. I am with the American Academy of family physicians. Years ago organizations launched a campaign to draw attention to the value of Preventive Care in our health care system. There is a lot of debate in washington now, clearly. The one thing we know is investments in primary care and prevention cause longterm benefits. A study found in a state found that for every dollar invested in primary and Preventive Care produce an upstream in the state of oregon. The health and primary campaign is pleased to sponsor this event today. Congratulations on your timing. We look to a good discussion. Ms. Dash thanks, and now i would like to introduce mark congratulations on your timing. Hayes. Mr. Hayes good morning. We are glad to be a sponsor of this session. Ascension is the Largest Nonprofit Health System in the United States and the largest catholic system in the world. We are committed to achieving 100 access and 100 coverage. This session is so timely as all eyes moved to the senate to work the very hard work to strengthen and stabilize the individual market and insure that health plans can participate and have a vibrant, competitive market and to preserve the coverage that we have under current law. Were looking forward to this session. We thank you for being here. And thank you all for being here very much. Have at it. Ms. Dash thank you, mark. Let me give context for the conversation. Clearly in the wake of the passage of the Affordable Health care act yesterday, there are a lot of questions about what happens next. There will be a lot questions about the politics and the process, and we will leave those questions to others. We will focus on the policy and the policy details because as the conversation moves to the senate and beyond, the policy will be critically important. Secondly, we will focus on the individual Health Insurance market because there are immediate questions about what happens next in this marketplace. We know Health Insurers today, this week, this month are making decisions about whether to participate in 2018. They are looking to 2019 and beyond, and there are potentially significant impacts on patients, families, and on the market. We have a fantastic panel. Karen pollitz is a senior fellow at the Kaiser Family foundation where she works on the program for the study of Health Reform and private Health Reform and tracks implementation Health Reform with associates on the Consumer Protections in the system. Next, deep banerjee is a director with a Financial ServicesRatings Group which covers a portfolio of private Insurance Companies. He will tell us more about the market impact. Next, cori uccello is an actuary at the American Academy of actuaries. And they provide nonpartisan assistance to policy makers and regulators. Brian webb is the assistant director for Health Policy and education for the National Association of insurance commissioners. Without further ado, we will turn it over to karen for an overview, and lets go. Thank you, karen. Ms. Pollitz i would say that this has to be the most Timely Alliance event i have ever participated in and probably the most aptly named. The individual Health Insurance market is indeed at a crossroads, and the signs are not yet clear where it is going next. My job is to remind you where this market has been in the change in direction it took to get where it is today and then tee up discussion with my colleagues about issues raising questions about where it could go into the future. This is a reminder. The individual market this is the smallest part of our Health Coverage system. Only about 8 of nonelderly people get the coverage to the individual market today. Most of us are covered in work or through public programs, mostly medicaid, chip, and some medicare for disabled under 65. Individual market is largely a transitional market and a residual market. It is where people go when they do not qualify for these other sources of coverage. A lot of people move through this market. They may be here for a year or two between jobs or while they are working in a job that does not offer benefits or while they are getting ready to go on the public program. About 1 3 of people in this market lived here all the time, the selfemployed and Small Business owners who do not sponsor a group plan. That is about 1 3 of the market. Those are the people who this is where they get the coverage and they do not belong in any other places. It is a small market, but it is the tail that wags the dog in our health care system. Over a threeyear period, adults need to get coverage, and before the market reforms in 2014, it was hard to do this. But since new rules and subsidies, the market enrollment has grown. It is in the neighborhood of 20 million people. About 2 3 of them buy their coverage to the marketplace is set up under the Affordable Care act. 20 are buying acacompliant plans that followed the rules because they are not eligible for some do tests of these or they do not know they are eligible. We estimate about 12 are enrolled in noncompliant plans in the individual market. These are the grandfathered plans that did not have to conform and the grandmothered plans just as the market reforms came in place in 2014 and they were allowed to keep them temporarily. It is fair to say this market was entirely transformed by the aca. Before 2014, this was a voluntary market. Now we have an individual mandate. There is a requirement to buy coverage, and if you do not qualify, youre supposed to come here to get it. Before 2014 this was mostly an unsubsidized market. Basically people paid 100 of the premium with their own aftertax dollars. Now it is a heavily subsidized market in a subsidies up to 400 times the poverty level, also help with cost sharing up to incomes of 2 1 2 times of the poverty level. Insurers were concerned about whether to part with people with the premiums that people would make decisions whether they expected to need their Health Insurance and were more inclined to sit out if they decline. Insurers worry about selection. There is a rule about human beings that 20 of us in any given year account for 80 of all Health Care Spending. Where mostly healthy most of the time. When we get sick or have a complicated pregnancy, claims can get high. That is what insurance does. It is supposed to pool risk, but it cannot do that when people only want to buy coverage when they are sick. Before the aca, the result of the individual market was medically underwritten. People would be turned down or charged more or have their preexisting condition excluded, so your ability to buy coverage and a coverage was dependent on your Health Status. Now that is not allowed. Under the aca, in return for making this market mandatory, insurers are reported to everybody and charge them basically the same rate. There were benefits that were highly variable in this market. In particular, it was unusual to see policies that covered Maternity Care unless state law required it. We often saw limits or the absence of coverage for other benefits like mental health, Substance Abuse treatment, rehab, prescription drugs. The definition of Health Insurance under federal law before the aca was anything else into companies sell. With the aca, benefit standards were added also costsharing. Those were done to make coverage meaningful and also definitional. If we are going to have people have something and going to subsidize it, we want to know what it is. Now Health Insurance in the market has to be Major Medical coverage. It was inefficient before. The amount of premium dollars that insurers spent on the aca were 60 before. Now they have to be at least 80 or people have to be given a rebate the following year. This market has been entirely transformed. That transition was difficult. I think challenging, in a way, for Insurance Companies. They had to adopt a new model. When the new marketplaces opened in 2014, insurers were offering products they had not offered before. They were selling them to a public that they were not used to covering. They had new competition by plans they had not competed with before. Cori will tell you they like to do their estimates with experience, but they did not have a lot of experience. We saw file ability in the pricing and a lot of insurers undervalued their policies. The premiums came in lower than anybody expected. Sometimes that was a calculation error. Other carriers were pricing aggressively hoping to tie up new market share early on. Insurers have had to get used to that and that has been tricky. There were other things during the implementation. It is fair to say the early years did not run like clockwork. Lots of things not work out as expected. There were risk stabilization programs. I will let my colleagues talk about that, but they were meant to cushion mistakes in estimating and cushion losses in the market. They do not operate the way folks expected. There was ongoing concern and is, is the mandate strong enough, and are the subsidies high enough to assure this adverse selection . About 70 or more people who are uninsured claim an exemption from the amended because coverage is not affordable. Subsidies are on a sliding scale up to four times the poverty level. So that has been an issue. The website did not work in 2014. There were a lot of things. There were things unique in individual market areas that felt volatility. This is a map you have seen on our website that shows the number of Insurance Companies participating in the marketplace by county in United States. The orange areas are areas where there is just one Insurance Company selling. The blue areas are two, and the gray areas, there are three or more competing in a marketplace. Lots of reasons why the orange areas are the way they are, two in particular. When you look at the allorange states, wyoming, arizona, alaska, alabama, those are all states that have high concentration of rural areas. It is hard for multiple Insurance Companies to compete when there are not many people buying in the first place. They are also areas in states that did not select medicaid expansion. It turns out in one of our papers in her packet that talks about risk scores of Market Participants by state. The Health Status tends to be lower and risk is higher in areas that have not expanded medicaid. Poverty turns out to be correlated with Health Problems and there is a lot of enrollment volatility at lowincome levels, so eligibility for subsidy changes. There are also areas where other stuff is going on. Tennessee has an interesting thing going on that works against stability in the marketplace. Against stability in the marketplace. There is an Organization Called the farm bureau which is not a licensed health insurer, so it does not have to follow the rules, but they sell Health Coverage. They get to cherrypick the other insurers in the marketplace. And then iowa, which is mostly gray and blue, but may go orange or we will need a new color for zero, is a state that has a very high concentration of noncompliant plans. About half of the people in the individual market in iowa are in these grandfathered plans. Elsewhere, you see a lot of insurer participation, and about insurer participation, and about 57 of people in the marketplace are in an area where there are three or more companies participating. I think that is a sign at least in a lot of areas the marketplace is stabilizing. I should point out this is what the market looks like today. This all reflects insurers decisions made last summer. Before the election, for all the stuff were doing now, this was based on how are they doing with all this other kind of problems going on with implementation. Insurers are getting the hang of it. Data shows their margins are coming back up. We are not in a death spiral. I will let panelists talk about that some more. That leads us to where we are now. Since the election, there is a new political x factor that is causing uncertainty in the marketplace. Insure rs are worried about whether these costsharing subsidies are going to continue to be paid. If not, they are on the hook for providing the subsidies, but they do not get reimbursed by the government. These cost between 7 billion and 10 billion a year, and insurers have said one has said they will leave the marketplace altogether if the payments stop or are not guaranteed for 2018. Other insurers are filing to set rates for funding in 2018. One if these payments are made and what if they are not, but also talking about leaving the marketplace altogether. The individual mandate is a question mark. The First Executive order was lets look for ways not to enforce any burdens on people or companies. The secretary has Broad Authority to grant exemptions, so there is concerned. Absent the mandates, cbo has said that alone will cause premiums to go up 20 . And then the future of outreach. How will the next open enrollment work . The new administration canceled the final week of outreach activities during open enrollment. They have since announced the next open enrollment is going to be half as long as we were thinking it was going to be. Just question about how active will the outreach be given that obamacare is horrible and is a mess and will that be an effective selling job to get people to sign up for 2014. And then we have what is going on on the hill. The house bill passed yesterday makes a lot of changes to the marketplace, and it raises questions about how it could operate Going Forward that could operate Going Forward and if said that alone will cause premiums to go up 20 . And then the future of outreach. How will the next open enrollment work . The new administration canceled the final week of outreach activities during open enrollment. They have since announced the next open enrollment is going to be half as long as we were thinking it was going to be. Just question about how active will the outreach be given that obamacare is horrible and is a mess and will that be an effective selling job to get people to sign up for 2014. And then we have what is going on on the hill. The house bill passed yesterday makes a lot of changes to the marketplace, and it raises subsidies substantially, and keeps in place the medicaid expansion, but substantially reduces federal matching money for that population and the entire medicaid program. So this adverse selection factor is back again, and i think insurers are worried about that. Changes were added to the bill over the course of amendments to try to offset that, including facility for states that flexibility for states to waive Community Rating so that insurers would have the ability to screen out of the pool some of the most expensive people. And then in addition, this fund insurers would have the ability for states, the 100 billion fund that is available for a lot of purposes to offset some changes in the bill. States could use that for the subsidies to replace those that were repealed. They could use it for reinsurance which worked pretty well. They could use it for highrisk pools. We do not know if this is going to be enacted. Insurers are going to have to figure out how to compete in a new market under these new provisions and what that will mean for the cost of coverage and who can participate and what will happen to people when they are sick. I guess we will find out. So i will leave it there. Ms. Dash thank you so much. Deep . Mr. Banerjee good afternoon. Yesterday when i was