Federal Health Care Reform Implementation Update Elizabeth Hall

Federal Health Care Reform Implementation Update Elizabeth Hall, Vice President, Federal Affairs

Public Policy Platform 2

Federal Environment 2012 Timeline November/ February 2012: Expiration of Payroll Tax Cut and SGR Fix December 2012 – Continuing Resolution Expires August 2012 —Payment of MLR Rebates June 2012– Supreme Court Decision November 6 2012— General Election January 2013 – Sequestration Implemented December 2012 Expiration of Bush Tax Cuts January 2013 – Presidential Inauguration (if R wins) 3

Topics for Today Implementation Updates ▪ Supreme Court ▪ Exchanges ▪ Essential Health Benefits Political Environment Note: This presentation is not intended to advise you on how to comply with PPACA or its related regulations. This presentation is not intended to offer legal advice. For specific questions, please consult with your counsel or benefits advisor. 4

Issue: Anti-Injunction Act 5

Issue: Individual Mandate Constitutionality Is the individual mandate constitutional: • Commerce Clause – Can Congress force engagement in commerce/regulate “inactivity”? • Necessary and Proper Clause 6 6

Issue: Medicaid Expansion Is the Medicaid Expansion Constitutional? • Is the Federal Government coercing states to expand Medicaid benefits? 7 7

Issue: Severability Is the individual mandate severable? • The law includes no “severability clause” • If the law finds a portion of the legislation unconstitutional, what portion of the law must stand or fall? 8 8

Exchange Enabling Legislation WA ME ND MT VT NH MN OR SD ID NY WI NJ PA IA NE IL UT OH IN MD WV VA CO CA RI MI WY NV MA CT MO KS DE DC KY NC TN OK AZ NM SC AR Enacted: 13 MS TX AL GA Study Law: 3 LA Executive Order: 7 FL Pending bill: 12 Failed 2012: 1 Failed 2012 + planning ongoing * Represents legislative activity as of 1/19/12, not compliance with ACA. No regular 2012 session: MT, NV, ND and TX Source: Blue Cross and Blue Shield Association, January 19, 2012 No Bill + planning ongoing: 12 9

Exchange Timeline - 2012 State Applications for Exchange Certification due to HHS in Q 3 of 2012 State Legislative Sessions—Typically Run First Half of Year HHS Indicates States Must Select EHB Benchmark Plan by Q 3 of 2012 States Must Demonstrate to HHS by End of Year 2012 that they are Positioned to Operate an Exchange in 2014 to Avoid Federal Fallback 10

Essential Health Benefits Key Provisions in the Legislation § HHS to define essential health benefits (Institute of Medicine to provide guidance) § However, benefits shall include the following categories: 1. 2. 3. 4. 5. Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Prescription drugs 6. Mental health and substance abuse disorder services 7. Rehabilitative and habilitative services and devices 8. Laboratory services 9. Preventive and wellness services & chronic disease mgt. 10. Pediatric services, including oral and vision care § Scope equal to “typical employer plan” 11

Essential Health Benefits Bulletin HHS Gives States Four Options: 1. The largest plan by enrollment in any of the three largest small group products in the state 2. One of top 3 state employee plans in the state 3. One of top 3 national Federal Employees Health Benefit Program plans in the state 4. The top HMO Commercial plan in the state 12

Top Small Group Plans in Any of the 3 Largest Products Anthem products are among the top 3 SG products in most states per HHS Web Portal State First* Second Third CA Kaiser SG HMO Anthem PPO CO United Choice Plus Kaiser HMO Rocky Mountain PPO (Anthem) CT Oxford PPO Connecti. Care HMO Blue Care HMO (Anthem) GA BCBS Healthcare Plan of GA POS BCBS Healthcare of GA HMO Aetna HMO IN Anthem PPO Anthem Lumenos United Choice Plus KY Anthem PPO Anthem Lumenos Humana PPO ME Anthem PPO Aetna PPO Anthem Lumenos MO Blue Access Choice PPO (Anthem) United Choice Plus Mercy Health Plans PPO NH HMO Blue New England (Anthem) Matthew Thorne Blue (Anthem) Access Blue New England (Anthem) NV Rocky Mountain PPO (Anthem) Health Plan of NV POS Health Plan of NV HMO NY Oxford Health EPO Prism EPO (Empire BCBS) Oxford HMO OH Anthem PPO Med Mutual of OH Super Med. Anthem Lumenos VA Anthem Health Plans of VA PPO Anthem Health Keepers HMO Optima Vantage HMO WI United Choice Plus Compcare POS (Anthem) Medical Associates HMO 13

Topics for Today Implementation Updates ▪ Supreme Court ▪ Exchanges ▪ Essential Health Benefits Political Environment Note: This presentation is not intended to advise you on how to comply with PPACA or its related regulations. This presentation is not intended to offer legal advice. For specific questions, please consult with your counsel or benefits advisor. 14

Political Environment 2012 Elections, President Obama, Congress and Health Care Reform 15 15

2012 Presidential Election: The Path to 270 Electoral Votes 16 Source: Real Clear Politics 16

Americans See Country Headed in the Wrong Direction 17 Source: NBC News/Wall Street Journal Survey, Jan. 24 th, 2012 1, 000 Am 17

President Obama Approval Ratings 18 Source: New York Times/CBS News Poll, Jan. 19 th, 2012 18

Republican Base Unimpressed with Party’s Candidates • More Republican and Republican-leaning registered voters say the GOP field is only fair or poor (52%) than did so in early January (44%). • At about this point four years ago, 68% of Republican and GOPleaning voters rated the field as excellent or good. 19 Source: Pew Research Center 19

Obama vs. Romney Presidential Matchup • A USA TODAY/Gallup Swing States Poll from Jan. 28 th found that registered voters in 12 key swing states are evenly split between Barack Obama and Mitt Romney in their 2012 presidential election preferences. ▪ Obama and Romney have also been statistically tied in each of five polls conducted among swing state registered voters dating back to August 20 Source: Gallup USA/Today Poll 20

Battle for the House of Representatives Current House: 242 Republicans & 193 Democrats § Magic Number: 218 Seats are needed for House Majority § Democrats Need to Win 25 New Seats to Flip House § 50 Seats are Considered Slight Lean/Toss-Ups § GOP Currently Holds 28 of those Seats § Democrats Holds 22 of those Seats Republican Held Seats Democrat Held Seats 21 Map Source: Real Clear Politics 21

Congressional Approval Ratings 22 Source: : Real Clear Politics 22

Battle for the Senate Current Senate: 53 Democrats & 47 Republicans § Magic Number: 51 Seats are needed for Senate § GOP Need to Win 4 New Seat to Re-Gain Control of Senate § 8 Senate Races this Election Cycle are Considered Toss-Ups § 6 of those Toss-Up Senate Races are Currently Controlled by Democrats Majority 23 Map Source: Real Clear Politics 23

Key Battleground Senate Races Up-Close Four Most Competitive Senate Races • Massachusetts • Florida • Nevada • Virginia 24 24

Massachusetts Senate Race Senator Scott Brown Elizabeth Warren (D) (R-Incumbent) • Scott Brown won this seat in a special election against a weak opponent • Moderate voting record and bipartisan appeal • Harvard law professor, oversaw TARP and established the Consumer Financial Protection Bureau. • Viewed as liberal star who plays well to the deep blue party base in state • Latest poll had both candidates in statistical tie • President Obama won Massachusetts with 62 percent of the vote in 2008 • 54 percent of the state’s voters are registered independents 25 25

Florida Senate Race Senator Bill Nelson -Incumbent) Congressman Connie Mack (R) (D *Likely Republican Nominee* • Has been Senator since 2000 • Only Democrat to hold state-wide office in a increasingly conservative state • Father was two term Florida Senator • Fits the conservative trending of the electorate • Still needs to survive a bruising primary race • Latest poll had candidates in statistical tie • Nelson currently has a huge fundraising advantage 26 26

Nevada Senate Race Senator Dean Heller (R-Incumbent) • Appointed to the Senate last year • Former Congressman and Secretary of State Congresswoman Shelley Berkley (D) • Has represented Clark County (Las Vegas) since 1998 • Largely unknown outside her Vegas area district • Nevada economy has been devastated by the recession and the drag of President Obama could hurt Berkley’s chances • Polls have both candidates in statistical dead heat • Large Hispanic population and large influx of new voters 27 27

Virginia Senate Race Former Senator George Allen (R) Former Gov. Tim Caine (D) • Former Governor and Senator • Former Governor and DNC Chair • Strong possibility that the current Gov. Bob Mc. Donnell could be picked as Romney’s running mate • Chosen to run with President Obama’s message • Once a solidly republican state, the voter demographics have shifted to become more favorable to democrats • Polls have both candidates in statistical tie 28 28

Public Remains Largely Split On ACA signed into law on March 23, 2010 Favorable 2010 Source: Kaiser Family Foundation Health Tracking Polls Unfavorable 2011 Don’t know/Refused 2012 29

Republican Opposition to ACA Far More Intense Than Democratic Support Very favorable Somewhat unfavorable Very unfavorable Total Democrats Independents Republicans Source: Kaiser Family Foundation Health Tracking Poll , conducted January 12 -17, 2012 30

Next Steps • What happens next? • What does it mean to you? 31 31

Questions?