The Patient Protection and Affordable Care Act
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1 The Patient Protection and Affordable Care Act George Lyford Colorado Center on Law and Policy 789 Sherman St., Suite 300, Denver, CO x310,
2 Pre-ACA Problem #1: ACCESS Roughly 50 million uninsured Growing holes in our employer-sponsored insurance system 15% decline in last decade Non-group alternative is broken discriminatory and expensive Millions of Americans are one bad gene or one badly timed accident away from bankruptcy 2
3 Health Insurance Coverage in the U.S., 2011 Uninsured, 16% Medicaid/Other Public, 18% Medicare, 13% Employer- Sponsored Insurance, 49% Private Non- Group, 5% Total = million SOURCE: KCMU/Urban Institute analysis of the 2012 ASEC supplement to the CPS.
4 Health Insurance Coverage in Colorado Source: The Colorado Trust, Colorado Health Access Survey (2011)
5 Pre-ACA Problem #2: COST Health Care costs are over 17% of our economy biggest single sector of economy Projected to be 40% by 2075 Unsustainable for federal & state budgets 5
6 Health Care Spending as a Percentage of GDP, Percent US NETH FR GER DEN CAN SWIZ NZ SWE UK NOR AUS JPN GDP refers to gross domestic product. Source: OECD Health Data 2011 (June 2011).
7 Cumulative Increases in Health Insurance Premiums, Workers Contributions to Premiums, Inflation, and Workers Earnings, Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), ; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, (April to April).
8 Colorado Average Insurance Premiums 8
9 The big picture Affordable Care Act signed into law March 2010 Insurance Market Reforms Greater access to affordable coverage Commitment to prevention and public health Support for quality improvement, payment and delivery system reform Begin to address work force issues 9
10 ACA Structure Affordable Care Act 10
11 Insurance reforms Dependent care coverage for adult children to age 26 No pre-existing conditions exclusions for children No lifetime limits No rescissions Medical Loss Ratio to 80% ind. market and 85% large group market (2010 reporting, 2011 rebates) Free preventive care (new plans) Begin phase out of annual limits No annual limits Guaranteed issue Guaranteed renewability No gender rating No health status rating Age rating 3:1; Geographic variation/tobacco rating 1.5:1 11
12 Individual mandate All citizens and legal residents required to have coverage starting 2014 Exceptions: religious objection; Native Americans; financial hardship; lowest cost plan > 8% of income; undocumented immigrants; gaps of 3 months or less Penalties assessed through federal income tax for each uninsured family member to be phased in starting in 2014 at $95/individual or 1 percent of household income. In 2016 penalty = $695/adult, $375/child or 2.5% of income. Maximum of $2,085 per family or 2.5% of income, whichever is greater. 12
13 Affordability Provisions Medicaid expansions: all non-disabled under age 65 eligible up to 133% of poverty Premium tax credits available up to 400% of poverty Cost sharing subsidies up to 250% of poverty (limits out of pocket spending) New marketplace for accessing coverage 13
14 Coverage access points Employer based coverage Medicare Medicaid Exchanges Uninsured 14
15 Medicaid Medicaid will be expanded to 133% of federal poverty in Income eligibility based on modified adjusted gross income + 5% income disregard for nondisabled persons <65. Option for states to allow patients with chronic conditions to designate a health home (mental health included) and get increased federal match. The federal government will provide states 100% funding for expansion through 2016 with a gradual reduction to 90% in Medicaid primary care payment rates will increase to 100% of Medicare rates in 2013 and
16 Medicaid Eligibility Requirements Modified Adjusted Gross Income (MAGI) new method for calculating income Simplify eligibility categories (children, parents/caretaker relatives, and AwDC) Household composition based on tax household Verification based on electronic sources unless not reasonably compatable 16
17 Employer Coverage Small employers (<50) are not required to provide employee coverage. Have access to an Exchange. Tax credits available for small businesses (up to 25 employees with average wages under $50,000, if 50% of premium paid) to provide employer coverage starting Up to 35% now, 50% Large employers (>50) pay a penalty per full-time employee if an employee receives subsidized coverage in the exchange. Employees who have an offer of employer coverage generally cannot purchase in the exchange, with a few exceptions. 17
18 Exchange New marketplaces for individuals and small businesses to compare and purchase health insurance. Must go to the Exchange to get affordability credits. Eligibility: generally, people who do not have access to employer coverage or a public program like Medicaid. Businesses up to 50 employees, up to 100 in 2017 Exchange Plans must include minimum essential benefits Four different categories of plans will be offered that vary based on coverage levels, plus catastrophic plans for young adults under
19 Medicare Eliminate the donut hole by 2020 starting with $250 rebate in 2010, 50% discount on name brand drugs in Expands number of covered preventive services and eliminates cost sharing starting % bonus payment for primary care physicians and general surgeons in health care shortage areas ( ). Improved care coordination and integration for dual Medicare/Medicaid eligible enrollees. Restructure Medicare Advantage payments Require 85% medical loss ratio for Medicare Advantage Extend Medicare solvency by 12 years to
20 Established by SB Publicly appointed board of directors Legislative implementation & review committee Policy decision-making process Advisory groups Financing Interoperability with HCPF 20
21 Public Awareness Campaign 21
22 Colorado Implementation Medicaid Expansion Governor Hickenlooper announced plans to expand Medicaid to 133 percent FPL SB passed in 2013 Currently enacting regulatory changes to align state law with ACA including Medicaid eligibility requirements 22
23 Supreme Court Supreme Court issued upheld ACA in June 2012 Major Holdings: 23 Anti-injunction act does not bar review Minimum Coverage Requirement valid exercise of Congress s taxing power Medicaid Expansion valid exercise of Congress s spending clause power, BUT federal government may not terminate ALL federal funding if state does not expand
24 Thank You Name: George Lyford Phone: Ext
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