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Seamless Coverage Workgroup

DEC. 4, 2015 / 12:00 – 3:00 PM

MN DEPT. OF REVENUE BUILDING (ROOM: SKJEGSTAD #2000)

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AgendaTime Item Presenter/Facilitator

12:00 – 12:05 pm Welcome and Agenda Review Lynn Blewett

12:05 – 12:15 pm Review final recommendation voting process and upcoming meeting schedule.

Lynn Blewett/Manatt

12:15 – 12:45 pm Review modeling results on Marketplace options & IT governance structure

MNsure/DHS/MN.IT

12:45 – 1:15 pm Refine preliminary recommendations on Marketplace & IT governance structure

Lynn Blewett/Manatt

1:15 – 1:25 pm BREAK

1:25 – 1:50 pm Review modeling results on continuous eligibility & refine preliminary recommendations

DHS/Manatt

2:15 – 2:45 pm Review of HCAF Forecast MMB

2:45 – 2:55 pm Public Comment Lynn Blewett

2:55 – 3:00 pm Wrap Up & Next Steps Lynn Blewett

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Voting process & upcoming meetings

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Upcoming Meetings & SurveyWorkgroup Meetings◦Dec. 18 & 21: Milliman Modeling Results ◦Dec. 21-22: Survey available to members◦Jan. 4: Manatt sends preliminary package (based on survey) to members◦Jan 11: Workgroup meets to review, amend and vote on package of

recommendations

Task Force Meetings◦Dec. 18: Workgroup 1 preliminary recommendations◦Jan. 15: Voting on final package based off of workgroup packages

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Workgroup voting process for recommendations Step 1: Workgroup Responds to Survey about Recommendations

◦ Based on a Likert Scale; need 51% of possible points to be included in the preliminary package.◦ Results will be made available to Members on January 4 (and to the public online).

Step 2: Manatt Drafts Package with Input from Workgroup Leads ◦ Package will include most salient pros and cons and identify where there was differing views among Members. ◦ Members will receive a preview of package on January 4 (it will also be posted online before the 11th)

Step 3: Workgroup Amends, as needed, and Votes on Package◦ Workgroup Lead presents the package on Jan. 11 for discussion and amendments.◦ Vote to approve means there is agreement with most (but not necessarily all) of the recommendations. ◦ Majority vote needed to approve package to be sent to the Task Force. ◦ Amendments require supermajority (3/5) for approval; No new items may be added by amendment.

NOTE: Task force will vote on packages on Jan. 15. The voting process is similar to Step 3, except that a supermajority (3/5) is needed to approve final package and amendments.

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Marketplace/MNsureFISCAL IMPACT OF MODELS FOR CONSIDERATION

CHUCK JOHNSON, DHS & SCOTT PETERSON, MN.IT

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Key Tasks for Today’s Meeting• Recap Marketplace models, including functionality pros and cons of each

• Review new information comparing the costs of each model

• Review and validate current recommendations

• Discuss whether modeling results suggest any Marketplace models are not feasible and should be struck from list of potential models

Recap: Functionality of Marketplace Models

SBM SSBM FFM

E&E/IT MN IT • Federal IT for QHP eligibility & enrollment and Medicaid/CHIP initial eligibility

• MN IT for Medicaid/CHIP eligibility case management and renewal (and initial determination for individuals who apply via the state)

• Federal IT for QHP eligibility & enrollment and Medicaid/CHIP initial eligibility

• MN IT for Medicaid/CHIP eligibility case management and renewal (and initial eligibility determination for individuals who apply via the state)

Funding State imposes 3.5% user fee on health plans sold through MNsure

Federal government is proposing to collect a 3% user fee on all health plans sold through marketplace (OR the state could collect whatever fee it chooses and pay the federal government the 3%)

Federal government currently collects 3.5% user fee on health plans sold through marketplace

Plan Management State controls State retains; proposed payment notice would limit state flexibility

State conducts rate review with final federal approval

Consumer Assistance

State controls • State controls consumer outreach and navigators

• Federal government provides E&E call center support

• Federal gov’t sets level and picks Navigators

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Key Assumptions for Determining Costs 1. One-Year Advance Notice Requirement: Earliest potential move to a federal exchange

is 2018

2. Public Program IT Resources: Minnesota would retain existing MNsure IT resources to perform ongoing development and operational support of eligibility and enrollment for MA and MinnesotaCare

3. IT Impact:

◦ A move to either federal model would require a new IT project and process to transfer applicant data between the federal exchange and state systems.

◦ Total base costs for IT development and IT operations are assumed unchanged and remain the same whether the state retains the current eligibility system or uses the federal IT infrastructure (either FFM or SSBM).

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More Key Assumptions4. Federal IT Development Grant/Funding: A move to either federal model could result

in a reduction of expected federal funding for the state’s development and improvement efforts for MNsure IT.

5. MNsure retains consumer assistance and oversight function (SSBM ONLY): Under the assumption the state would pay 3.0 of the 3.5% premium withhold revenue to the federal government, the remaining .5% -- based on current 2017 enrollment projections – would only be worth $1.9M.

◦ This would leave a gap of roughly $1.7M to cover costs of these retained functions.

See Appendix slides for more details around state assumptions for potential costs of changing models.

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Outstanding issues for FFM/SSBM in Minnesota1. Future of MinnesotaCare: Unclear if federal models will support MinnesotaCare by 2018.

2. Impact on State’s IT Efforts for Public Programs: Transition to federal model would require use of state resources dedicated to this effort. This could negatively impact the ongoing existing work on the overall IT improvements for public programs and county workers.

3. Ability to sustain MNsure under SSBM: Unclear if SSBM model will be financially sustainable for the remaining state costs of MNsure functionalities.

4. Impact on priority setting process: There is no known mechanism to influence the priorities of the federal marketplace.

5. Flexibility to Innovate (1332 Waiver): Unknown if federal models could support state innovation efforts under 1332 waiver, including changes to MinnesotaCare or increased subsidies for consumers. Federal models cannot support state innovations to make federal tax credits portable.

6. Experience of public program enrollees and applicants: Customer services for public program enrollees with a federal model would be challenging for the state to coordinate and manage.

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Comparison of State Financing Needs Based on FY 2017 Budget (in 000s)

Marketplace Model Total Non Federal Share Difference from Current

MNSURE (Current) $22,060 None

FFM $27,162 $5,102

SSBM $28,741 $6,681

Figures include non federal share of DHS funds, any additional administrative funding needs from Commerce and DHS, the cost of new IT Development, and unfunded state marketplace costs in the SSBM model

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New State Funding Needs for Federal ExchangeFirst Year, Based on FY 2017 Budget (in 000s)

State Funding Needs under Federal Exchange If moved to FFM

If Moved to SSBM

Funds to complete current scope of IT System (Replacing CCIIO Grants, Etc.) $2,563 $2,563

Funds to address new IT project for account transfers $1,579 $1,579

Unfunded State Marketplace Needs $1,700

Additional DHS Administrative Costs $705 $584

Additional Department of Commerce Costs $255 $255

Total $5,102 $6,681

All financing needs above are based on the anticipated costs for the first year of a potential move to a federal exchange. Most of the items would require ongoing funding, though the need for some administrative and IT funding would be lower in subsequent years.

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New State Funding Needs for FFM

FFM: New State Costs (Year One, in 000s) Expense Commerce DHS/MN.IT MNsure Description

NEW IT Development None $1,579 $0

New Account Transfer Process between FFM/SSBM and state eligibility systems with work starting in July 2016. Some ongoing annual maintenance costs for new account transfer process would continue.

Business and Policy Development

$255 $705 $0

Staff needed to develop policy and business requirements with new federal partners and contractors, coordinate state consumer appeals with federal exchange, assist with state application to the FFM, and develop training with counties and existing navigator/outreach entities. First year costs starting July 2017.

Estimated New State Costs (First Year)

$255 $2,284 $0  Total New State Costs= $2,539

An additional $2.4 million in state costs could be needed to cover the total $10 million in CCIIO IT development grants.

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New State Funding Needs for SSBM SSBM: New State Costs (Year One, in 000s)

  Commerce DHS/MN.IT MNsure Description

NEW IT Development None $1,579 New Account Transfer Process between SSBM and state eligibility systems with work starting in July 2016. Some ongoing annual maintenance costs for new account transfer process would continue.

Business and Policy Development

$255 $584

Staff needed to develop policy and business requirements with new federal partners and contractors, coordinate state consumer appeals with federal exchange, assist with state application to the SSBM, and develop training for county partners. First year costs starting July 2017.

Consumer Assistance & Oversight

$1,700

Remaining costs of functionalities maintained by MNsure including assistor program, QHP enrollment grants, community outreach grants, assistor resource center, communication and marketing, oversight, half of legal and compliance, half of executive staff, board, and support services. These costs would be ongoing.

Estimated New State Costs (First Year)

$255 $2,163 $1,700  Total New State Costs = $4,118

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Breakdown of Marketplace Cost Comparisons (Source of Funds in 000s), part 1

Current Annual Cost by Funding Source for MATS IT and MNsure Business Operations (FY2017)

Expense TotalDHS-State

DHS-Federal MNsure

Fed Exchange Grants Notes

IT Development 20000 6624 9176 0 $4,200*

* Based on the timing of actual spending to date, CCIIO grants for IT development are now expected to be roughly $10 million in FY17. The difference would appear in the DHS budget.

IT Operations 25004 9522 13423 2059 0

Business Operations 28806 5914 8337 10319 4236

Total 73810 22060 30936 12378 8436

Spending of federal exchange grants is less than expected when these numbers were calculated. This could mean a shortfall in federal grant money of up to $10 million instead of $4.2 million as represented above under a federal model. This may increase the DHS portion of IT Costs

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Breakdown of Marketplace Cost Comparisons (Source of Funds in 000s) , part 2

Annual Cost by Funding Source for State Eligibility Systems and Marketplace Business Operations (FFM Model, Based on FY2017)

Expense Total DHS-State

DHS-Federal MNsure

Fed Exchange Grants Notes

IT Development 20000 8384 11616 0 0

Loss of federal CCIIO IT development grants replaced by DHS state and federal funds.

IT Operations 25004 10325 14679 0 0

Business Operations 14251 5914 8337 0 0

Total 59255 24623 34632 0 0Change from Current 2563 3696 -12378 -8436

Spending of federal exchange grants is less than expected when these numbers were calculated. This could mean a shortfall in federal grant money of up to $10 million instead of $4.2 million as represented above under a federal model. This may increase the DHS portion of IT Costs

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Breakdown of Marketplace Cost Comparisons (Source of Funds in 000s) , part 3

Annual Cost by Funding Source Eligibility Systems and Marketplace Business Operations (SSBM Model, Based on FY2017)

Expense Total DHS-State

DHS-Federal MNsure

Fed Exchange Grants Notes

IT Development 20000 8384 11616 0 0

.5% of withhold remains in MNsure budget for remaining marketplace functions. Additional funds will be needed for state marketplace functions. DHS may continue partial cost allocation, but funds remain in DHS budget.

IT Operations 25004 10325 14679 0 0Business Operations 17851 5914 8337 3600 0Total 62855 24623 34632 $3,600  0Change from Current 2563 3696 -8778 -8436

Spending of federal exchange grants is less than expected when these numbers were calculated. This could mean a shortfall in federal grant money of up to $10 million instead of $4.2 million as represented above under a federal model. This may increase the DHS portion of IT Costs

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Recap & Workgroup DiscussionMARKETPLACE RECOMMENDATIONS

LYNN BLEWETT

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Recap: Workgroup Preliminary Recommendations

1. Codify the current IT executive steering committee structure for overseeing the IT modernization plan, including MNsure’s IT system.

2. Stay the course on MNsure’s current IT improvement plan through the 2016 open enrollment period upon which performance would be evaluated based on recommended criteria.

3. Develop a framework for lawmakers and Governor to use to evaluate the current Marketplace model against other options for Minnesota.

Outstanding issue: After viewing cost information, does the workgroup want to recommend one or more options if the State chooses to change the current model based on OEP performance for 2016?

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Workgroup survey on what is needed in Minnesota’s Marketplace.

CriteriaNot

ImportantSomewhat Important

ImportantVery

Important

Marketplace has the ability to support Minnesota-specific affordability scale. 2 2 4 3

Marketplace enables a streamlined process for eligibility determinations, plan selection, and enrollment. 0 0 3 8

Consumer-facing portal is user-friendly and supports efficient navigation. 0 0 8 3

Call Center provides timely help for prospective enrollees in need of technical assistance. 0 2 4 4

Culturally-competent consumer assistance (i.e., navigators) is readily available to support informed plan selection/enrollment. 0 0 5 6

Marketplace provides a single access point for determining one’s eligibility for all public benefits. 1 3 1 6

Marketplace allows for easy integration with health plans. 1 2 4 3

IT and governance are cost efficient and supported by sustainable funding model. 0 2 4 5

Marketplace has the ability to drive value for all Minnesota, through, for example, value-based purchasing requirements or creating standard plan designs.

3 3 1 4

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Modeling: Continuous Eligibility KAREN GIUSTO, DHS

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Eligibility Reporting Requirements for MA and MinnesotaCare◦Medical Assistance: Enrollees are required to report changes that may impact

their eligibility within 10 days.

◦If reported change causes ineligibility, coverage ends with 10-day advance notice. (However, pregnant women and auto newborns currently have continuous eligibility.)

◦MinnesotaCare: Enrollees are required to report changes within 30 days. ◦If reported change causes ineligibility, coverage ends with 10-day notice.

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12-month Continuous Eligibility

This option would provide additional months of coverage for populations without regard to most changes in circumstances.

Public policy goals:◦Reduce churn in and out of coverage for families with frequent income

changes ◦Maintain stable risk pool for health plans that assume financial risk for

managing care of a defined population.◦Reduce State administrative burden and cost related to terminating and re-

enrolling eligible individuals into coverage.

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Cost Estimates for Continuous Eligibility If Minnesota applied 12-month continuous eligibility to MAGI-based MA populations and MinnesotaCare effective July 2017, the approximate state cost for applying 12-month continuous eligibility is below.

Actual implementation would require significant IT resources which would have additional costs and may effect the timeline for implementation

Program/Population FY2017 FY2018 FY2019

Medical Assistance MAGI Population 24,000,000 50,000,000 57,000,000

Medical Assistance Children Only 10,000,000 20,000,000 23,000,000

MinnesotaCare (HCAF) 4,000,000 11,000,000 13,000,000

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Health Care Access Fund Update

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Changes in Fund Balance◦ 2017 balance of $586 million, 2019 balance of $1.149 billion

◦ Improvement from end-of-session estimates of $0 balance

◦ Lower expenditures and transfers drive forecast change

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Lower Medical Assistance Spending in HCAF MA spending adjusted in every forecast based on updated estimates of costs of 2013 legislative changes

Adjustments reflect broader program changes

◦ Total MA spending down 5% in FY 2016-17 from end-of-session estimates

◦ Savings concentrated in groups tied to HCAF spending

◦ Lower than expected managed care rates and use of hospital presumptive eligibility lower HCAF share

Medical Assistance appropriation reduced $109 million (12%)

Medical Assistance transfer reduced $27 million (27%)

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Lower MinnesotaCare Spending

• MinnesotaCare spending down $429 million (57%) in FY 2016-17

• Lower managed care rates reduce total program costs

• Higher federal payment further reduces state share

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AppendixMORE DETAILS OF COST ESTIMATES & ASSUMPTIONS FOR MARKETPLACE MODEL CHANGES

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MN.IT @ DHS transition assumptionsTiming & Implications

For the purpose of this communication, it was assumed the decision for Minnesota to move from a State-Based Exchange to a Federally Facilitated Exchange would be made by the 2016 Minnesota State Legislature. Transition efforts would begin following that decision and continue up to the 2018 Open Enrollment Period (which begins in Q4, 2017), in keeping with the one-year of advance notice required by the Federal government.

Implications addressed included a high-level estimate of existing plans to make functionality improvements and defect fixes to the system in 2016.

Transition Efforts & Costs

Four major categories of work were identified, along with high-level elements of system changes and other required efforts associated with transitioning to a Federally Facilitated Exchange.

• Decommission QHP Functionality of METS (Minnesota Eligibility Technology System)• Interface with FFM• Eligibility & Processing• Notice Changes

An estimate was made regarding the resource hours required to complete this work. This includes Project Managers, Business Analysts, Quality Assurance staff, and Technical resources (vendors and State) needed. Dollar amounts were applied to these various categories of resource hours, resulting in a total estimate transition cost for MN.IT @ DHS.

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IT-Related Transition DetailsDecommission QHP

Functionality of METS*Interface with FFM Eligibility & Processing Notice Changes

• Develop and implement comprehensive plan to transition from a State-Based Marketplace to a Federally Facilitated Exchange, addressing all IT elements needed for the transition.

• Develop plan leading to shutdown of the MNsure.org website, including all functionality and user interface changes needed.

* Minnesota Eligibility Technology System, formerly known as the “new eligibility system” or the “MNsure IT system.”

• Develop capability to send to and receive from the FFM (via Account Transfer process) account data (e.g. when a Medical Assistance or MinnesotaCare enrollee becomes ineligible for public program coverage).

• Develop capability to send to FFM client data needed to make APTC / UQHP / QHP determination.

• Develop capability for FFM to interface with MMIS for APTC clients to ensure no other Medical Assistance or MinnesotaCare coverage exists.

• Eliminate interfacing of UQHP, QHP and Insurance Assistance data to the ESOR system.

• Maintain the ability to refer non-MAGI population to the MAXIS system.

• Develop capability to process data/accounts received from the FFM, including altering the Curam system as needed to: interface with the FFM; reflect Medical Assistance and MinnesotaCare coverage eligibility; and to ensure accurate coverage determination in MMIS.

• Develop capability to process any open verifications for clients who were not verified by FFM.

• Ensure ability to continue to accept and enter paper applications in the Curam system.

• Deactivate the Curam system functionality addressing APTC/UQHP/QHP eligibility determinations.

• Alter notice templates to remove MNsure branding.

• Issue notices for both applicants and enrollees no longer eligible for Medical Assistance or MinnesotaCare and direct them to apply via FFM.

• Issue notices for QHP, UQHP and IA enrollees that they will now be serviced by the FFM.

• Deactivate the Curam system functionality for processing and issuing notices for APTC/UQHP /QHP.

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MN.IT/DHS IT Roadmap ImpactThe 2016 MN.IT @ DHS / MNsure IT Roadmap is currently being finalized with plans to communicate it in January, 2016. Assuming transition efforts begin in June 2016 and continue through the 2018 Open Enrollment Period (which begins in Q4 2017) the following implications were applied to the needed IT system work.

• The initial 2016 IT release (tentatively planned for Spring) would be largely unaffected.

• All subsequent 2016 IT releases would be altered based on a decision to transition to a Federally Facilitated Exchange.

• For example, enhancement work would likely cease on the “Plan Shopping” functionality of MNsure.org, as well as work to enhance the SHOP program for small employers.

• Starting in Q2, 2016 – to free up needed resources for transition work – all desired IT improvements targeting MinnesotaCare and Medical Assistance would be reviewed, with resources limited to critically needed defect fixes or change requests.

• While this assessment has not been undertaken, it could eliminate system enhancements and defect fixes targeting County Workers, Carriers and Enrollees.

• Examples of eliminated work include but are not limited to: Improvements to Enrollee Notices, additional Streamlined Life Event functionality for County workers, ongoing improvements to data exchanges with Carriers, and changes to improve eligibility determinations and renewal processes.

• Continuing into 2017, available resources would be weighted heavily to transition work.