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June Exchange Board Meeting #1: SHOP, Outreach, Assisters

In his Executive Director’s report, Peter Lee announced that Accenture had been awarded the CalHEERS grant for the Exchange’s IT system, and the board passed and adopted Resolution No. 2012-24, which allows the ED or his authorized designee to provide technical assistance on legislative proposals that affect or inform the Exchange’s mission and operations.  David Panush provided a brief legislative update, and NORC (National Opinion Center at the University of Chicago) and Ogilvy presented their preliminary results from initial focus group research, whose key findings include:

  • 36 participants with varying income levels above 138% of FPL; from Fresno and Los Angeles; uninsured and between the ages of 18-44 with no chronic diseases; 19 female and 17 male participants; 19 English speakers and 17 Spanish speakers
  • cost was biggest barrier to coverage
  • mixed understanding of health insurance and ACA reforms
  • strong support for change but considerable skepticism that high quality, affordable plans would actually be available
  • messages emphasizing financial security, peace of mind, access to care and prevention tested well
  • messages emphasizing responsibility and general wellbeing did not test well
  • displayed lack of trust in state government, as language like “trustworthy, reliable source of information” did not test well; trust needs to be earned

SHOP Options

PricewaterhouseCoopers (PwC) presented their SHOP recommendations to the board, with stakeholder comments/input incorporated throughout.  PwC recommended partial alignment between SHOP and the individual exchange, where the Exchange permits health plans that only want to participate in one exchange on an exception basis, as well as partial alignment between benefit plan offerings so plans could possibly alter benefit plans to serve the different needs of individual and small group enrollees.  Stakeholders generally agreed with partial alignment.  Stakeholders generally agreed with PwC’s recommendations on agent commission payments – either the Exchange matches health plan commissions, or Exchange sets rates for agents considering current market standards.  On employer contribution options, PwC initially recommended that the Exchange require employer contributions to at least meet the minimum federal tax credit; stakeholders suggested the option for a one-tier buy-up to allow choice.

Staff will make revisions and prepare final recommendations, and the board may make a potential decision during the July 19 board meeting.

Outreach and Marketing

Ogilvy also summarized stakeholder feedback on their outreach and marketing recommendations made in May.   Input was generally very positive, but urged the board to increase their budget.  Ogilvy will finalize staff recommendations for the board to take possible action during the June 19 board meeting, and to incorporate into the Level 1.2 funding request.

Assisters, Navigators, Agents

Similarly, Richard Heath and Associates (RHA) summarized stakeholder feedback on their assisters program recommendations also made in May.  Over 45 groups and organizations provided feedback, which generally agreed with the overall design but many were unhappy with RHA’s recommendations that providers be prohibited from being Navigators, who are eligible to be compensated by the Exchange for their enrollment activities.  As such, RHA has modified their recommendations so that community clinics may be eligible to be Navigators, while maintaining that hospitals and other providers continue to be Direct Benefit Assisters.

Additionally, many questioned if the recommend ed$58/enrollment fee was sufficient.  There was also uncertainty regarding the definition of a fee as defined by Proposition 26, and it is unclear if Exchange funds can be used to compensate enrollment into Medi-Cal or Healthy Families.

The board is tentatively scheduled to make potential decisions on the assister program during the August 23 board meeting.

Level I Phase 1.2 Grant Outline

Michael McCluer, the newly appointed CFO, presented the Exchange’s business plan and budget through June 30, 2013.  The board plans to submit a revised Level I grant (dubbed the Level 1.2 request) by the end of this month to cover August 15, 2012 to June 30, 2013.  The core principles include highest value for lowest cost, one-time vs. ongoing activity, fluid planning, interdependence and partnerships, and evidence-based planning.  Major activities during the Level 1.2 grant period include:

  • solicit and evaluate QHP bids; finalize selections
  • design and develop eligibility and enrollment processes and work flow,ensuring readiness for open enrollment in October 2013
  • complete consumer outreach communication, education and marketing plan
  • finalize Navigators/Assisters Program, including training and a compensation plan
  • launch the design, development and initial implementation of an integrated technology platform, CalHEERS, to provide the appropriate Exchange infrastructure
  • design and develop appropriate operational, accounting and finance support and controls

Total expenditures for this period are estimated at $194 million, with the bulk to be spent by the end of this year.  Exchange revenue projections for 2015 for the individual exchange range from $131 million to $208 million (where the Exchange collects 2% of premium), $197M-$312M for 3% of premiums, and $327M-$520M for 5% of premiums.  The low projections assumed an enrollment of 1.28 million individuals, whereas the high end assumed 2.04 million individuals.

Written stakeholder comments on this budget plan are due June 15, and decisions on this subject may be made during the June 19 board meeting.

All meeting materials are available online.  The next meeting will be held in Sacramento on June 19, with potential decisions to be made on outreach and communications plans; assisters scope, policies and budget; and drafting the Level 1.2 grant.

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