Tennessee Public Health Association. Overview of the Affordable Care Act

Transcription

1 Tennessee Public Health Association Overview of the Affordable Care Act Susie Baird Director of Policy Health Care Finance and Administration September 12,

2 Origins of ACA Signed into law on March 23, 2010, by President Obama. The most significant change in publicly funded health care since Medicare and Medicaid in

3 Primary Goal: Access to Health Care Coverage Employer-sponsored insurance (large group market 50 or more employees) Insurance affordability programs (programs offering subsidized coverage to lower income people who might not have any other insurance options) 3

4 Insurance Affordability Programs Medicaid CHIP The Exchange or Marketplace (APTC) 4

5 Principles of Insurance Affordability Programs Income for most eligibility categories will be calculated one way MAGI Assets are not considered in MAGI categories Hierarchy: 1. Medicaid 2. CHIP 3. Marketplace subsidized coverage (APTC) Streamlined application, eligibility, enrollment no wrong door 5

6 Modified Adjusted Gross Income (MAGI) and ACA For most people, MAGI = Line 4 on Form 1040EZ; Line 37 on Form 1040 on IRS Income Tax Return) Family size based on tax-filing unit Includes income sources such as wages, salaries, taxable interest and dividends Child support will not count as income Taxable amount of Social Security benefits will count as income 6

7 Medicaid 7

8 Medicaid Changes 1/1/14 Division of eligibility categories into MAGI and non-magi Addition of new eligibility category--former Foster Care Children to age 26 TennCare to make Medicaid and CHIP Eligibility determinations Medicaid Expansion 8

9 Eligibility Determinations 1/1/14 Focus on on-line applications Link with federal data hub (IRS, SSA, DHS) Electronic, near-real time decisions Data hub will verify application information (income, citizenship, immigration status, etc.) Intention: Data hub will not store data, but will securely transmit data between federal and state agencies 9

10 Open Enrollment 10/1/13 Beginning on 10/1/13, people can apply to the Marketplace for APTC to begin on 1/1/14 If the Marketplace finds that an applicant would be eligible for Medicaid on 1/1/14, the Marketplace can make that determination After 1/1/14, the Marketplace will do an assessment of applicants for Medicaid eligibility; TennCare will make the actual Medicaid determination 10

11 The Medicaid Expansion Designed to extend Medicaid to individuals below the age of 65 who: o Are not pregnant o Are not otherwise eligible for Medicaid or Medicare o Have family incomes up to 138% of poverty (no resource limit) Intended to be mandatory: 100% federal dollars for first three years (for adults) After SCOTUS decision in June 2012: o Mandatory for children to age 19 o For persons 19-65, a state option 11

12 To Adopt the Medicaid Expansion or Not? Pro s: Many new people will get coverage at little cost to the state initially Having fewer uninsured people may mean less uncompensated care costs for providers Otherwise uninsured enrollees will have a source of health care and may therefore seek care before they become sick Con s: Worries that federal money may be reduced or may go away Concern about adding so many people to a program that is challenged in many states Possibility of having to disenroll Expansion enrollees if the state cannot support them in the future 12

13 The states and Medicaid Expansion 13

14 Benefits for Adult Expansion Enrollees Enrollees to be offered Benchmark Benefits = Alternative Benefit Plan (ABP) ABPs must include Essential Health Benefits (EHBs) Certain enrollees must be offered Medicaid Medically Frail 14

15 Premium Assistance As of 1/1/14, all states will have Health Insurance Marketplaces with Qualified Health Plans (QHPs) Why not use 100% federal dollars to buy Expansion adults into Marketplace? The Tennessee Plan 15

16 CHIP 16

17 CHIP Changes 1/1/14 CHIP in Tennessee is CoverKids Current coverage level: Up to 250% poverty Will use MAGI income calculations Children with incomes below 138% of poverty will be moved to Medicaid Children with incomes above 250% of poverty will be disenrolled and referred to the Marketplace 17

18 Marketplace 18

19 The Marketplace Marketplace will offer Qualified Health Plans (QHPs). Three options for states: State-Based Marketplaces (SBMs) 16 states State Partnership Marketplaces (SPMs) 7 states Federally Facilitated Marketplaces (FFMs) 27 states including Tennessee Two different types of customers: Individuals and families Small businesses (SHOP Marketplace) DELAYED until 1/1/15 Small Business = 50 or fewer employees (initially) States have the option to merge the two types of Marketplaces into one. 19

20 Metal Levels for QHPs Bronze covers 60% of enrollees total costs Silver covers 70% of enrollees total costs Gold covers 80% of enrollees total costs Platinum covers 90% of enrollees total costs Actuarial value (AV) : The percentage of the total covered expenses that the plan pays for, on average, for a typical population. A plan with a 70% actuarial value means that consumers would pay, on average, 30% of the cost of health care expenses through features like deductibles and coinsurance. 20

21 Mandates for the Individual Marketplace Individual Mandate Employer Mandate 21

22 Minimum Essential Coverage Goal: Almost everyone will have Minimum Essential Coverage (MEC). What qualifies as MEC? Coverage under a government-sponsored program (Medicare Part A, Medicaid, CHIP, Tricare, the VA, Peace Corps) Coverage under an eligible employer-sponsored plan Coverage under a plan in the individual market that is at least at the bronze level Coverage under a grandfathered (3/23/2010) health plan * Note: a person who does not have minimum essential coverage and who is not exempt must purchase insurance through the Marketplace or pay a penalty! 22

23 Individual Mandate Individual Mandate (AKA minimum coverage provision, individual responsibility agreement or shared responsibility provision) Most persons without health insurance must buy a plan that provides minimum essential coverage or face penalties Individual penalties for adults not purchasing insurance is greater of: o 2014: o 2015: o 2016: $95 or 1% of income $325 or 2% of income $695 or 2.5% of income 23

24 People who are exempt from paying the penalty Members of health care sharing ministries Members of Native American tribes Persons who are incarcerated Persons who lack affordable coverage (premiums for a bronze policy that cost more than 8 percent of their income) Persons who have incomes below the tax filing threshold (in 2013, $10K for an individual; $20K for a family) Illegal immigrants Persons with short term gaps in coverage (under 3 months) Religious conscience exemptions Hardship exemptions 24

25 Employer Mandate The employer mandate (AKA employer responsibility provision or the free rider penalty ) -- Delayed until 1/1/15 Businesses with more than 50 FTE employees must offer their employees affordable insurance that provides minimum value or face penalties Penalty: $2,000 per employee with the first 30 employees exempt o Penalty is triggered only when an employee receives a federal subsidy to buy insurance through the Marketplace. o Coverage not required for part-time employees (less than 30 hours per week) or seasonal employees (less than 120 days per calendar year) 25

26 Premium Subsidies Only available to persons who are members of a tax-filing unit and who purchase coverage through the individual Marketplace (not a SHOP Marketplace) To qualify, persons must have household incomes (prior year s tax return) between 100% and 400% of poverty Family Size Income Range (2013 dollars) Max. Monthly Required Contribution (2013 dollars) Individuals $11,490 - $45,960 $19 - $364 Family of 2 $15,510-62,040 $26 - $491 Family of 3 $19,530 - $78,120 $33 - $618 Family of 4 $23,550 - $94,200 $39 - $746 26

27 Cost-sharing Subsidies Applicable for individuals who qualify for the premium tax credit AND who are enrolled in a Silver Plan Two types of cost-sharing assistance available Types of Cost- Sharing Assistance Reduction in annual outof-pocket limits Subsidy to assure that the plan covers a certain percent of allowed costs (increase the actuarial value) Income Groups % of poverty % of poverty % of poverty % of poverty % of poverty % of poverty Amounts Reduce by two-thirds Reduce by one-half Reduce by one-third 94% AV 87% AV 73% AV 27

28 Household income as a % of FPL Post SCOTUS ACA Eligibility Expansion 400% 350% While the law originally intended to make individuals with household incomes below 138% of poverty eligible for Medicaid, the law only allowed Insurance Exchange subsidies for households between 100% and 400% of poverty. Without the Medicaid expansion, this creates a coverage "doughnut hole". Those below 100% of poverty who do not qualify for Medicaid today would not qualify for Medicaid nor would they receive federal subsidies to purchase insurance through the Exchange. 300% 250% 250% Insurance Exchange Subsidies 221% 200% 185% Medicaid 150% 100% Doughnut Hole 133% Insurance Exchange Subsidies % Medicaid Mandatory Medicaid Expansion 100% Medicaid 133% Medicaid 140% Medicaid Medicaid Medicaid Medicaid/ CHIP Doughnut Hole Non-pregnant, non-disabled childless adults <65 50% Aged, Blind Disabled (SSI) Children 6-19 Children 1-5 Adult Caretakers of Children Infants and Pregnant Women Long Term Care Breast and Cervical Cancer/CHIP Medically Needy/SSD Not Medicaid or CHIP eligible 28

29 Insurance 29

30 Insurance Reforms May not deny coverage on the basis of a pre-existing condition ( guaranteed issue ) May not rescind coverage when simple paperwork mistakes have occurred May not establish lifetime or annual caps on essential coverage May not charge higher premiums based on gender or health status; premiums charged by a health insurance issue for non-grandfathered health insurance coverage in the individual or small group market may vary only based on family size, rating area, age (within a ratio of 3:1 for adults) and tobacco use (within in a ratio of 15:1) Must cover Essential Health Benefits (EHBs) Must cover preventive services with no copays or deductibles Must cover young adults on their parents plan up to age 26 Must maintain an MLR of 80-85% on premium dollars and return funds to members when the issuer spends a higher percentage on non-health related activities Must justify proposed rate increases of 10% or more 30

31 Sources of More Information Healthcare.gov Tennessee Navigators SEEDCO Tennessee Primary Care Association 31