We've been telling you about Cascade Care for months, now with plans coming online in mere months, the OIC has laid out what the program will look like and which Washington state counties will have the "Public Option" available on the Exchange.
Washington State’s Cascade Care program aims to provide consumers easier-to-understand individual plan options through the State Exchange. Carriers wanting to offer plans on the Exchange in 2021 need to include some “Standard” plans alongside their “Regular” plan options. In addition, we will see new plans available through a public-private partnership with five contracted carriers, called “Public Option” plans. Both Standard and Public Option plans will have preset benefit plan designs, providing one bronze, silver and gold metallic level plan. The first enrollees under these new programs will start coverage on January 1st.
Open enrollment in the individual market will provide state residents with up to three types of plan offerings: regular carrier-provided individual plans, plus Cascade Care’s Standard carrier-provided individual plans and carrier-sponsored Public Option plans.
Standard Cascade plans: Any carrier offering 2021 plans on the Exchange will need to offer the Cascade Silver plan and the Cascade Gold plan. If they offer a “Regular” Bronze-level plan, they also must offer the Cascade Bronze plan. Standard plans have preset benefits across all carriers. The goal is for plans to be more understandable to consumers, who can then make better-informed choices based on a carrier’s network strength, quality of care, and monthly premium.
Regular plans: Alongside these Standard plans, the carriers will be able to offer an unlimited number of nonstandard individual plans, which we are calling “Regular” plans in this article. These plans are expected to look very similar to Exchange’s 2020 individual plan offerings.
Public Option plans: These plans will have the same preset benefit designs as the Standard plans, but provider reimbursement levels will be tied to Medicare rates. The State is contracting with only a handful of carriers to offer these programs, which include the Cascade Select Gold, Cascade Select Silver, and Cascade Select Bronze.
All 39 counties in Washington State will have at least two carriers from which to choose plans, although only 19 counties’ residents will have access to a Cascade Select Public Option plan. Overall, there are expected to be thirteen carriers providing 2021 plans in the Exchange (two of these carriers are still pending approval from the Office of the Insurance Commissioner). Five of these carriers have been contracted with the State to offer Public Option plans. Our 2021 State Exchange will offer 115 Regular plans, 51 Standard plans, and 15 Public Option plans, although not all carriers will be offering their plans in all counties.
For 2021, the five contracted carriers that will offer Public Option plans are
Legislative Background of the Public Option
Senate Bill 5526 was originally touted as a Public Option for individual purchasers of healthcare in Washington State. The final approved bill looked much different after multiple rewrites in the House and Senate. The final signed law does not authorize the state to offer their own healthcare program to individuals, rather, it allows the state to enter into cost-sharing agreements with health insurance companies who then provide the coverage.
Phasing Out Regular Plans: Initially, the bill would have phased out “Regular” individual plans by 2025. The final bill tasks the Office of the Insurance Commissioner with analyzing the impact to Exchange customers if only standardized plans were to be offered on the Exchange beginning in 2025. Their report is due to the legislature by December 1, 2023.
Controlling Premiums: The only way to accomplish the Public Option goal of increasing benefits while staving off increases was to limit reimbursements to providers and facilities. This was a hotly debated topic both in the state House and the Senate. Ultimately, they landed on a plan’s maximum reimbursement to providers and facilities, excluding pharmacy benefits, of 160% of Medicare-like Rates (MLR) in the aggregate, with the director of the Health Care Authority being able to waive this cap in some instances. By inserting “aggregate” into the reimbursement cap language, carriers will have leeway to pay some providers a lower percentage of MLR while paying others higher levels.
Provider Payment Safeguards: There were two safeguards added to the reimbursement maximum language to ensure adequate payments to certain providers and facilities. Reimbursements for Primary Care Providers (family medicine, general internal medicine, and pediatrics) have a floor of 135% of MLR. Rural hospitals or sole community hospitals cannot be paid less than 101% of allowable costs “as defined by the US Centers for Medicare and Medicaid services.”
Subsidies: While the original bill called for providing subsidies to those whose adjusted gross income is less than 500% of the Federal Poverty Level (FPL), the final bill merely tasks the Exchange with developing an implementation and funding plan. They will need to present this plan to the legislature by November 15, 2020. The goal will be to limit individual healthcare premiums to no more than 10% of income. There is currently no set implementation date for this provision of the law.
The Bottom Line
Consumers logging onto the State Exchange are going to be provided all options available in their county. Public Option plans will have “Cascade Select” in their name and Standard plans will simply have “Cascade” in their name. Again, the main difference between these two sets of plans is the level at which providers of care will be reimbursed by the insurance carrier. For consumers, as always, it will come down to a combination of price, provider network, carrier name recognition/reputation, and plan benefits. We won’t know how popular these new Standard and Public Option plans will be until the dust from open enrollment settles. We’ll do a deep dive into those statistics as soon as they are available.
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I love numbers. I'm a math geek. I read benefits industry articles and periodicals for relaxation (but, honestly, I'm still a fun gal). I also like to share what I've learned and you'll find it all here.