How Healthy is Our Healthcare System Now? League of Women Voters Volusia County January 2019

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1 How Healthy is Our Healthcare System Now? League of Women Voters Volusia County January 2019

2 Introduction and Agenda The Affordable Care Act (ACA) Health Insurance Marketplace Hot Topics in Health Care Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 2

3 The Affordable Care Act (ACA) Key ACA Provisions: Health Plan Reforms Essential Health Benefits Metal Level Benefit Plans How Premiums are Calculated

4 Health Plan Reforms Health Plan Characteristics: No denials for pre-existing conditions Everyone who applies for coverage must be accepted Coverage for Essential Health Benefits with no lifetime maximums or annual dollar limits Choice of plans at different cost sharing ( metal ) levels Premiums based on age, location of residence, smoking status Financial assistance based on household income Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 4

5 Essential Health Benefits (EHB) Plans must cover these benefits with no annual or lifetime dollar limits: Graphic Source: AHIP Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 5

6 Metal Level Benefit Plans Four Metal Level categories of health plans are available: Platinum Gold Silver Bronze Higher Premium Lower Premium Each metal plan covers the same set of Essential Health Benefits A plan s Metal Level is based on what a plan will pay, on average, for covered services and reflects differences in cost-sharing and out-ofpocket expenses for these services Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 6

7 How Premiums are Calculated The cost of a health plan depends on: Age Adult rates increase with age and cannot exceed a 3:1 ratio Children ages 0 20 will have the same rate Location Premium will vary based on the county the applicant lives in Medical costs in area directly affect premium Tobacco Usage Rates may be up to 50 percent higher for tobacco users Tax credits do not apply to tobacco surcharge Premiums for families will be the sum of the rate for each person to be covered, with a cap of 3 children ages Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 7

8 Health Insurance Marketplace Marketplace Overview Financial Assistance Advance Premium Tax Credits How the Premium Tax Credits Work

9 Health Insurance Marketplace Overview Allows consumers to determine eligibility for financial assistance and access information to evaluate and enroll in health plans. Consumer completes Marketplace application Marketplace makes eligibility determination Consumer enrolls in health plan Consumer provides demographic, income, and dependent information Marketplace provides eligibility results and amount of premium tax credit available Enrollment and tax credit information sent to issuer of selected plan Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 9

10 Financial Assistance This table outlines the Federal Poverty Level (FPL) income ranges that will qualify for financial assistance for enrollment in 2019 coverage: Household Size 100% FPL 250% FPL 400% FPL 1 $12,140 $30,350 $48,560 2 $16,460 $41,150 $65,840 3 $20,780 $51,950 $83,120 4 $25,100 $62,750 $100,400 Each add l person Add $4,320 Add $10,800 Add $17,280 Household incomes below 100% FPL do not qualify for state or federal financial assistance to obtain health insurance coverage Household incomes between % FPL qualify for Advance Premium Tax Credits to offset premium costs Household incomes between % FPL also qualify for Silver plans that have lower out-of-pocket costs Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 10

11 Financial Assistance Advance Premium Tax Credits Advance Premium Tax Credits (APTCs) also known as subsidies are available to applicants based on a combination of: Household Income Available for incomes between % of the Federal Poverty Level (FPL) Subsidy based on second-lowest cost Silver plan (SLCSP) in county Cost of Silver Plans Family Size Based on the number and ages of people covered Each of Florida s 67 counties has separate rating factors County of Residence Tax credits must be used to purchase coverage through the Marketplace. Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 11

12 How the Premium Tax Credits Work The tax credits are paid directly to the insurance company each month to offset premium costs for the health plan an individual selects. The insurance company then sends a monthly bill to the individual for any balance due. The individual pays the insurance company any balance due. Monthly Premium Tax Credit Consumer Owes $384 $243 $141 Example based on a 27-year old in Volusia county with an annual income of $25,000 (206% FPL) who purchases the second lowest cost 2019 Silver plan. Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 12

13 Premium Tax Credit Examples in Florida For a 27 year old with income of $25,000 (206% FPL): Zip Code County City Plans SLCSP Subsidy Net Premium Volusia Daytona Beach 94 $ 384 $ 243 $ Duval Jacksonville 49 $ 384 $ 243 $ Orange Orlando 54 $ 387 $ 246 $ Hillsborough Tampa 49 $ 390 $ 249 $ Miami-Dade Miami 49 $ 367 $ 226 $ Leon Tallahassee 12 $ 587 $ 446 $ Escambia Pensacola 36 $ 402 $ 261 $ 141 With income at 206% FPL, this enrollee is responsible for 6.76% of the plan premium the subsidy adjusts to ensure the net premium remains constant. Differences in county plan premiums are based on a number of factors: Cost of medical services (historical, current, and future) Location of care (office, outpatient, urgent care, ER, hospital) The number of medical providers and facilities in the service area The number of insurers in the market The number of people enrolled in health coverage in the service area Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 13

14 Hot Topics in Health Care ACA Repeal and Replace Timeline Efforts to Weaken the ACA Texas v. United States What s Next in Health Care Policy Medicare for All, Single Payer Plans

15 ACA Repeal and Replace Timeline In general, repeal and replace legislation would have: Repealed the individual and employer mandates (and related penalties) Repealed ACA taxes (medical device tax, Cadillac tax, etc.) Modified premium assistance programs for consumers Eliminated the ACA s Medicaid expansion and converted state funding to block grants Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 15

16 Efforts to Weaken the ACA December 2017: The Republican tax bill eliminates the ACA penalty for not having health insurance coverage. As of January 1, 2019, the penalty for not having qualifying health coverage will be reduced to $0 or 0 percent of household income. June 2018: The Department of Justice (DOJ) declines to defend the ACA in a lawsuit brought by 20 states. In Texas v. U.S., the states claim that the entire ACA must be struck down because the 2017 tax law eliminated the individual mandate tax penalty. June 2018: New rules expand access to Association Health Plans (AHPs). Allows for sole proprietors and small employers to form associations based on either a common industry and/or geography and offer large group plans. These plans are not subject to ACA essential health benefit rules and do not qualify for tax credits. July 2018: New Navigator funding cuts are announced for the 2019 open enrollment period. Since 2017, Navigator funding has fallen from $62.5 million to $10 million nationwide, and from $9.5 million to $1.25 million in Florida. August 2018: New rules expand access to Short Term Limited Duration Insurance (STLDI) plans. These plans can now be offered for up to 12 months (up from 3 months), and can be renewed for an additional two years. These plans are not subject to ACA essential health benefit or cost-sharing rules and do not qualify for tax credits. Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 16

17 Texas v. United States December 2017: Congress passes the Tax Cuts and Jobs Act, which reduces the tax penalty for not having health coverage to $0 as of February 2018: 18 Republican state Attorneys General and two Governors, led by Texas, filed a lawsuit against the United States challenging the constitutionality of the ACA since the tax penalty will be eliminated in 2019 and the individual mandate isn t severable from the rest of the law. May 2018: The Court allowed 17 Democratic state Attorneys General, led by California, to intervene and defend the ACA. June 2018: The Department of Justice (DOJ) refused to defend the ACA but asked the Court to only overturn provisions guaranteeing coverage for individuals with preexisting conditions and the requirement that insurers ignore health status when setting premiums. December 2018: The Court ruled that the individual mandate is unconstitutional and inseverable from the rest of the ACA, meaning the entire law is unconstitutional. The Court has released a subsequent decision indicating that the ACA should remain in place while the original ruling moves through the appeals process. California Attorney General Xavier Becerra has stated that the Democratic states will appeal the decision to the Fifth U.S. Circuit Court of Appeals, and ultimately to the Supreme Court if necessary, to uphold the ACA. Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 17

18 Impacts if ACA Is Struck Down If the ACA is ultimately declared unconstitutional the impacts of eliminating its provisions will be felt across the entire health care system: Private Insurance Medicare Medicaid Up to 11 million people would lose their Marketplace coverage Pre-existing condition protections Guaranteed issue rating Coverage for essential health benefits Coverage for preventive services at no cost Annual and lifetime out-ofpocket maximums Coverage for children up to age 26 Financial assistance for premium tax credits Coverage for preventive services at no cost Closing of the Part D donut hole by 2020 through reductions in the beneficiary coinsurance rate for prescription drugs Prohibits Medicare Advantage plans from imposing higher costsharing limits than Traditional Medicare for chemotherapy, renal dialysis, skilled nursing care, and other services Up to 13 million people would lose their Medicaid coverage Coverage for preventive services at no cost Coordination of enrollment processes between state Medicaid and CHIP programs Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 18

19 What s Next in Health Policy Our healthcare system is stable for now ACA Repeal and Replace: No longer a viable option so the ACA remains intact With Democrats now in control of the House, ACA repeal efforts are over Look for new legislation to strengthen the ACA and stabilize the individual market New Legislation to Strengthen the ACA: Proposals under consideration include: Reducing prices for prescription drugs Eliminating surprise (out of network) bills Reinforcing current pre-existing condition protections Expanding the availability of financial assistance under the ACA Restoring funding for public education and outreach about the Marketplace Democratic Health Care Platform: Will continue to evolve heading into 2020: Short term efforts will focus on strengthening the ACA Long-term approach still unclear add a public option, or move to single payer? Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 19

20 Medicare for All vs. Single Payer vs. Universal Coverage Medicare for All has become a focal point for future Democratic health reform efforts. There is some uncertainty over exactly what the term means. Some use the term as shorthand for a single payer system, while others equate it to universal coverage. A true single-payer system would be a health care system where the federal government is the only entity paying claims. Universal coverage would provide everyone with access to health care whose model should be based on the most efficient way to provide quality, affordable care. The existing Medicare program is not a single-payer system but a public-private coverage model with multiple components, each with separate premiums: Traditional Medicare (Part A and Part B, also called original Medicare) Medicare Advantage (Part C) health plans offered by private insurers Medicare prescription drug plans (Part D) offered by private insurers Any Medicare-based option would need to add or expand coverage for pediatric, maternity, contraceptive, dental, and vision services all while lowering administrative costs. For more detailed overviews and comparisons of the various Democratic proposals: The Kaiser Family Foundation: Vox: Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 20

21 Comparison of Democratic Health Care Plans Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 21

22 Additional Resources Healthcare.gov The Marketplace provides information on the ACA, eligibility and financial programs, local resources for help, and plan details. Kaiser Health News A nonprofit news service providing in-depth coverage of health care policy at no charge, including daily newsletters and a What the Health weekly podcast. Henry J. Kaiser Family Foundation A nonprofit foundation focused on national health issues and the U.S. role in global health policy. Its independent, nonpartisan analysis is available at no charge. Health Affairs Blog Following the ACA A blog from the leading journal of health policy thought and research featuring posts from noted health policy experts, commentators, and Health Affairs staff. The Commonwealth Fund A private foundation that promotes a high performing health care system that achieves better access, improved quality, and greater efficiency. The Fund supports independent research on health care issues and makes grants to improve health care practice and policy. Center for Budget and Policy Priorities: Health Reform A nonpartisan research and policy institute whose work supports efforts to ensure that programs provide and maintain affordable coverage to meet the needs of low-income children and families, seniors, and people with disabilities. Georgetown University Center on Health Insurance Reforms A blog focused on health insurance coverage, insurance markets, and how people are affected by insurance reform. Vox A site that explains the news by providing context, analysis, and insight on a variety of topics, including politics and health policy. Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 22

23 Questions Kelly James Director, Florida Blue Center for Health Policy (904) Florida Blue is an Independent Licensee of the Blue Cross and Blue Shield Association. 23