Patient Protection and Affordable Care Act (PPACA)
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1 Patient Protection and Affordable Care Act (PPACA) Download this presentation on InformedOnReform.com under Reform News Essential Education February 1,
2 Agenda Essential Education Legislative and regulatory update Essential health benefits Questions Bill Hoagland Vice President Federal Affairs Tom Richards President Individual and Family Plans Segment, Online Experience, Health Care Reform 2
3 112 th Congress: 2 nd Session Legislative Update Select Health Care Legislative Policy Agenda December 31, 2011: Expiration of AMT, R&E tax credits January 31 Congressional Budget Office, Budget & Economic Outlook 2012 February 13 President s FY 2013 Budget - Medicare reforms/savings: Providers $75 billion, Beneficiaries $24 billion, Pharmaceuticals $135 billion - Medicaid reforms/savings: State provider tax threshold, DSH, DME $50 billion - IPAB reforms: Lower target rate for Medicare growth from GDP+1% to GDP +0.5% - Initiate annual fees for TRICARE-For-Life enrollment $7 billion savings - TRICARE increases pharmacy benefit co-payments $15 billion savings - Postal Service Retiree Health Benefit program $20 billion savings - Federal Employee Health Benefit pharmacy benefit contracting $2 billion savings. February 29 Medicare Payment to Physicians Doc Fix ; payroll tax reduction; long-term unemployment benefits expire April 15 Congressional Budget Blueprint (Ryan/Wyden Medicare reform) Repeal Community Living Assistance Services and Support (CLASS) Reprise repeal PPACA/ IPAB (Post SCOTUS ruling) Reprise repeal 2.3% excise tax on medical equipment Congressional effort Brokers Commissions/ MLR repeal or modification December 31: Expiration 2001, 2003, 2009 and 2010 tax provisions January 2, 2013: Enforcement of Budget Targets, $1.2 trillion spending reductions 3
4 2012 Regulatory Provisions: Executive Branch Update Provisions to be Finalized in
5 2012 Regulatory Provisions: Executive Branch Update 5
6 Budget Outlook 6
7 Federal Spending Projected for 2021 CBO August 2011 Est. Other Health Programs includes: Health insurance subsidies, exchanges, and related spending; Department of Defense Medicare-Eligible Retiree Health Care Fund (including TRICARE for Life); Children s Health Insurance Program, and other programs. 7
8 Growth in Spending from 2011 to 2021 (Selected spending categories*) Defense Appropriations All Non-defense Appropriations Combined Health Insurance Exchanges Medicaid Medicare Interest * Assumes proportional reductions in defense and non-defense appropriations to meet spending caps set in the Budget Control Act of Source: The Budget and Economic Outlook: An Update. Congressional Budget Office. August
9 Super Failure: Impact of the Budget Control Act of 2011 First Reductions: January 2,
10 Medicare Spending Relative to GDP 10
11 Judicial Branch Impact on 2012 Elections 11
12 Will the Supreme Court Decision Impact 2012 Elections? Next Steps The Court order set 5 ½ hours to hear oral arguments in March All 9 justices the full court will hear the arguments Ruling expected before the current session ends in June 12
13 Supreme Court of the United States Dates to Watch: January March 13
14 Political Setting 14
15 Views on Health Reform Remain Divided 15
16 Polarization in 90th, 100th, and 110th Congresses Source: Carroll, Royce, Jeffrey B. Lewis, James Lo, Keith T. Poole, and Howard Rosenthal Measuring Bias and Uncertainty in DW-NOMINATE Ideal Point Estimates via the Parametric Bootstrap. Political Analysis, 17(3):
17 U.S. Congress: 112 th January 2012 Retiring/Running Different Office: House: 20 D 13 R As of January 26, 2012 Senate: 7 D/I 2R 17
18 Political Environment 2012 Elections: 33 U.S. Senate Elections 23 D and 10 R Ratings Based on Polls as of January 2012: S=Solid P=Probable L=Lean TU=Toss Up * Cook Political Report December
19 President Obama vs. Republican Candidates Real Clear Politics Poll General Election * Lead over Obama 19
20 2012 Republican Calendar and Delegate Count: 1,143 Delegates Required to Win Nomination Source: The Rhodes Vcook Letter, December
21 Essential Health Benefits Overview Institute of Medicine policy principles Bulletin With exchange plans Advocacy Stakeholder implications 21
22 Essential Health Benefits Overview 22
23 Navigating Essential Health Benefits * For essential health benefits coverage, non-grandfathered plans in the individual and small group markets would use the contract situs state benchmark plus any mandates in the benchmark plan. ** Health insurance issuers and self-insured plans (large and small group) cannot put lifetime or annual dollar limits on essential health benefits. However, it's unclear which state-selected benchmark(s) would be used by issuers and group health plans in complying with the ban on lifetime and annual limits. 23
24 Essential Health Benefits IOM Recommendations 10/7/11 Institute of Medicine Policy Principles 24
25 Essential Health Benefits Bulletin 12/16/11 25
26 Essential Health Benefits Bulletin 12/16/11 Cont. Proposal Addressed States will choose from four existing health plan options as a benchmark to establish the services and items included in essential health benefits: - Largest plan by enrollment in any of the three largest small group products - Any of the largest three state employee health benefit plans by enrollment - Any of the largest three federal employee health plan options by enrollment - Largest insured commercial non-medicaid HMO operating in the state State mandates associated with the selected benchmark plan will be included in the essential health benefits package State mandates outside of the benchmark will be paid by the state Default benchmark plan would be the largest plan by enrollment in the largest product in the state s small group market Categories missing from the benchmark must be supplemented from another benchmark plan 26
27 Essential Health Benefits Bulletin 12/16/11 Cont. Proposal Addressed Health insurance issuers may have some flexibility to: - Adjust benefits on specific services covered and quantitative limits - Allow substitution within each of the 10 categories - Allow substitution across benefit categories New coverages: - Habilitative services to be offered at parity with rehabilitative services OR plans decide which habilitative services to cover and report to HHS for analysis and future clarification - Mental Health/Substance Abuse expanded for individual and small group, offered at parity with medical - Pediatric Oral and Vision coverage to be selected from either the federal employee and/or CHIP program 27
28 Applying Essential Health Benefits to Exchanges Impact of Essential Definition Defined appropriately, exchanges will offer a variety of affordable plans and access will increase Defined too broadly or too vaguely, costs will increase and exchange coverage may be unaffordable. Employees sent to the individual exchange may opt to pay the penalty and become uninsured 28
29 Essential Health Benefits: Advocacy HHS should provide a uniform federal definition of essential health benefits for 2016 and beyond HHS should provide a federal definition for the purposes of complying with the ban on annual and lifetime limits during the transition period ( ) States essential health benefits approach and definition should be determined by 7/1/12 If mandates are included in the benchmark plan, a 1/1/12 cutoff of new mandates is needed Allow current benefit limits on mandates included in the essential health benefits package Affordability is key so consumers can purchase plans and don t opt out and pay penalties instead Allow coverage of essential health benefits in-network only Benefit design flexibility, usage of utilization and medical management tools are important Actuarial value calculations must be consistent across issuers within a market, and should be based on essential health benefits only Preserve formulary structures and management as effective clinical and cost management tools Confirm a consistent definition for habilitative based on proven medical efficacy standards Pediatric dental and vision coverages should be screenings only 29
30 Stakeholder Impacts State by State Approach 30
31 Next Steps and Questions Visit our website, InformedOnReform.com, or through Cigna.com Today s presentation is posted under Reform News. Our next webinar will take place in March. 31
32 "Cigna" is a registered service mark and the "Tree of Life" logo is a service mark of Cigna Intellectual Property, Inc., licensed for use by Cigna Corporation and its operating subsidiaries. All products and services are provided by such operating subsidiaries and not by Cigna Corporation. Such operating subsidiaries include Connecticut General Life Insurance Company, Cigna Health and Life Insurance Company, and HMO or service company subsidiaries of Cigna Health Corporation and Cigna Dental Health, Inc. All models are used for illustrative purposes only. 02/12. Some content provided under license. 32
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