Health Care Reform. For every action, there is an equal and opposite reaction. Sir Isaac Newton, ( )

Transcription

1 Health Care Reform For every action, there is an equal and opposite reaction Sir Isaac Newton, ( )

2 Agenda Overview of PPACA Key features that will impact you & your clients Navigators Your New Best Friend Health Insurance Exchanges Employee benefit trends Impacts on Medicare Your role: insurance agent or consultant?

3 Stuff to make you wonder Health care is the only widget in America where the price is determined by a third party after the services have been received ObamaCare will cost over $1T Estimated $115B just to build the infrastructure Where will the money come from?

4 Total USA Unfunded Liabilities Medicare: $24.8 trillion Obligation per household: $212,500 Social Security: $21.4 trillion Obligation per household: $183,400 Federal debt: $9.4 trillion Obligation per household: $79,900 USA Today June 2012

5 Unfunded Liabilities Con t Military retirement/disability benefits: $3.6T Obligation per household: $31,200 Federal employee retirement benefits: $2T Obligation per household: $17,000 Total = $61.2T or $524,000 per household USA Today, June 2012

6 Americans remain confused by ACA 78% of the uninsured don t know about HIEs 83% of those eligible for Medicaid expansion do not know 56% of the 259 employers surveyed misunderstood the employee mandate to offer a QHP (e-health survey March 2013)

7 Repeal and Replace? States could reduce federal deficits by $1.7T if they refuse to implement the exchanges and Medicaid expansion mandated by the ACA 34 states have refused to implement the HIEs The Supreme Court ruled that the federal gov t cannot force states to create the exchanges Michael Cannon, "50 Vetoes: How States Can Stop the Obama Health Care Law," Cato Institute, March 21, 2013

8 HR The Affordable Care Act Became law March 23, 2010 January 1, Health Insurance Exchanges Enrollment begins Oct 2013! Are you ready? Is the USA migrating to a Medicare for all system? 57% = the amount of health claim dollars paid by: The Federal Employees Health Benefits Welfare Plan Medicare Medicaid

9 Kathleen Sebelius Most powerful woman in the USA? The phrase secretary shall appears 858 times in HR 3509 (2,409 pages) The phrase appears 24 times in HR 4872 (1,037 pages)

10 Affordable Care Act (ACA) $2,000 max individual deductibles Modified community rating No pre-existing condition exclusions No medical underwriting or rate ups for risk Premiums may charge 50% more for smokers may gets discounts for wellness programs

11 ObamaCare Gender-based pricing equality New federal & state exchanges for insurance purchases Federal subsidies for purchase of insurance 3:1 age slope The ratio of premium cost between highest rate and lowest rate due to age of insured

12 3:1 Example Rate in 2013 Rate in 2014 Increase Annual Increase Age 60 $1,000 $900 Saved $100 mo Saved $1,200 Age 27 $150 $300 $150 mo $1,800 Age slope between the ages of Will the subsidies stimulate enough savings? Ages = 10M un-insureds

13 MLR s in the ACA Minimum Loss Ratios 80% individual and small groups 85% large groups (50+) 80% of health agents have seen their commissions drop since % of health agencies have had to reduce their staff and services to offset commission reductions (InsuranceNewsNet Magazine Jan 2012)

14 MLR s Future? H.R would exclude producer compensation from MLR calculations 221 Co-Sponsors as of NAIC sought a resolution to reverse the MLR CMS basically said no way How does CMS fit into this equation anyway?

15 Rebates If a carrier does not pay out at least 80% or 85%, depending on the group size, the carrier must issue a rebate to the insureds. 12.8M Americans received a rebate in 2012 Average of $151 per household Total rebates: $1.1B Must be paid out by Aug 1 of each year According to Healthcare.gov, Feb 2013

16 Essential Benefits Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including behavioral health treatment

17 Essential Benefits continued Prescription drugs Rehabilitative & habilitative services & devices Laboratory services Preventive & wellness services; chronic disease management Pediatric services, including oral & vision care 2% of private health plans today offer all EHBs As of March 2013 (report HealthPocket, Inc)

18 Smile! Children clearly gain from the ACA The definition of essential health benefits encompasses pediatric services, including oral and vision care How will this impact group dental sales?

19 Preventive Care in HCR Items or services that have an A or B rating Immunizations for routine use in children, adolescents, and adults Evidence-informed preventive care and screenings No cost sharing for preventive care services (in-network)

20 ACO s Accountable Care Organizations an improved HMO? Is a network of docs and facilities that share responsibility for providing care to patients 321 ACOs in operation today 248 are Medicare oriented 73 are commercial oriented

21 ACO Info 20% of these ACOs cater to low income 45% of the USA lives in a primary service area 17% live in an area with 2 or more ACOs $940M projected savings in the next 4 years Top ACO states 36 in CA, 35 in FL, 23 in TX, 18 in NY and MD

22 ACA Impact So Far Dependent children to age 26 Unlimited benefits, no policy maximums Higher premiums 2 points higher on payroll taxes Fewer health insurance carriers and lower commissions

23 Subsidies Congressional Budget Office estimated that 127M people potentially qualify for subsidies CBO estimated that only 18 million will participate An employee is not eligible for a subsidy if: The employer offers at least the actuarial equivalent of the Bronze Plan (60%) The employee cost share is not more than 9.5% of their annual income (W-2 Employee)

24 Subsidies Subsidies only available in Public HIEs Application estimated to be 15 pages for a family of 3 with 21 steps to follow IRS will scrub the app and check for citizenship Collect premium minus subsidy Subsidies will be collected by the carrier from CMS

25 Subsidy Instructions 61 page draft

26 Video to help consumers learn how to apply online

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28 Here are some great resources Keep up to date with the ACA!

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30 Instant calculations $5,751 / 12 =$ monthly premium

31 What do you get now for $479 per mo?

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34 Medicaid.gov

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37 Sign up for updates like this: Sign up for updates like this

38 Navigators Your new competition?

39 Navigators Impact the role of the agent Not required to be licensed Hired at the tax payer s expense Job is to: help people to learn about the HIE s help a person select a plan

40 CMS Issues Proposed ACA Navigator Rules April 3, 2013 Sets standards for navigator training, certification, and conflict of interest Proposed rule does not require that navigators and non-navigator assistance personnel be licensed Imposes training & certification requirements

41 In California: Navigators CA is projecting $54,000 avg. pay Projecting to enroll 700,000 people Projecting 21,000 navigators needed 700,000/21,000 = applications $54,000/33.33 apps = $1620 per enrollment

42 Who can be a Navigator? Licensed agents (if the state permits) Resource partners of the Small Business Admn State or local human service agencies Business associations Chamber of Commerce Community & consumer focused non-profits Indian tribes, tribal orgs., and urban Indian orgs. Unions Trade and professional associations Industry organizations

43 The Health Insurance Marketplace Formerly referred to as Health Insurance Exchanges (HIEs)

44 Health Insurance Marketplace HIEs Health Insurance Exchanges If a state fails to set up an Exchange by , DHHS Secretary will establish and operate the Exchange in the state Small Business Health Options Program (SHOP) Public (FFE) Federally Facilitated Exchange State Exchange Private market driven

45 Impact of HIEs on Agents Small Employer groups Those w/low incomes more likely to drop existing coverage and get new coverage via SHOP Small Business Health Option Program Employee Choice delayed until Individuals Those w/low incomes more likely to drop existing coverage and get new coverage via FFEs Federally Funded Exchanges or state exchanges

46 Private Exchanges Operating Today Towers Watson OneExchange Recently acquired ExtendHealth, a Medicare exchange Aon Hewitt Went live has enrolled 100,000 active employees so far 2/14/13 Mercer: has a new Medicare eligible retiree exchange

47 Broker Driven HIE Example

48 Comparable Tiers of Plans in Health Insurance Marketplace Metallic plans out of pocket expenses are the tied to max of HDHPs $6,350 for single coverage and $12,700 for families in % coverage (Bronze plan) 70% coverage (Silver plan) 80% coverage (Gold plan) 90% coverage (Platinum plan)

49 Updates CBO dropped their estimated HIE enrollees down to 27M from 32M on April 12, 2013 Employer group health enrollees are estimated to drop by 8M 34 states have declined to operate a state exchange, raising the ACA implementation cost to the Feds Bloomberg News Services, April 12, 2013

50 Employer Benefit Trends

51 PPACA & Employers 11.5M fewer Americans receive employer provided coverage than in 2000 Private sector from 58.9% in 2000 to 52.4% in 2011 Average employee premium doubled from 2000 to $2,490 to $5,081 Average family premium went from $6,415 to $14,447 in the same period BenefitsPro, April 2013

52 2014 Small Business Tax Credit Up to 50% for groups up to 25 lives in 2014 Up to 35% for non-profits Must have an average salary of <$50,000 Employer must pay at least 50% of the premium Work at least 30 hours per week Healthcare.gov

53 What will happen in 2013? Deloitte survey finds 1 in 10 will drop coverage CBO projects 8M fewer people will be covered by group health in 5 years CBO projects the ACA will expand coverage to 27M of the 52M+ uninsured via HIEs GAO studies ranged from a 2.4% decrease to a 2.7% increase in group health coverage Who the heck knows?

54 Employer Trends? Defined contribution vs. defined benefits Employers want control over their budget Fixed dollar premium per employee Let the employee choose their coverage from the HIE (Health Insurance Exchanges) Take the $2,000 per employee penalty?

55 Self Funding What you ve got is basically a loophole for the small employer to get out of the ACA requirements Robert Laszewski, a Virginia-based consultant and former insurance executive

56 Self Funding ERISA & Summary Plan Documents Allows a plan to get out of several ACA mandates; examples: No 3:1 age slope No $2,000 max deductibles May be underwritten Not community rated

57 Medicare and Medicaid

58 Medicare Part A Trust Fund projected broke by introduced IRMAA Income Related Monthly Adjustment Amounts so far has been a great year for Medicare Advantage plans Will 2014 be a whole different story?

59 Medicare Advantage MA plans: February 2012 = 13.3M enrolled February 2013 = 14.6M (28.5% of all enrolled) Hospital re-admissions down 39% Emergency Room visits down 24% Managing Chronic Illness 80% of the claims come from 20% of the chronically ill Medicare beneficiaries

60 CBO Projects MA Growth MA plans will swell to 21 million participants by fiscal 2023 from 14 million in 2013 The CBO estimates Medicare will pay Advantage plans $250 billion in 2023 compared with $145 billion projected for this year.

61 Medicare Donut Hole Reduce the cost sharing provisions of the Part D Coverage Gap Beginning in 2011, cost sharing of brand name drugs is 50%; generic is 86% % for generics; 47.5% for brand Scheduled reductions to $0 by 2019

62 Medicaid Covers about 60M Americans Feds pay an average of 58 cents on the dollar; states pay the rest Total cost per year is currently $400B Obama s budget steers clear of any cuts Challenge: sell the states that no cuts will take place sell the HIE rollouts Washington AP, April 2013

63 Improved Medicaid Reimbursement Effective Jan 1, 2014 Federal government will pay 100 percent of the cost of certain newly eligible adult Medicaid beneficiaries These payments will be in effect through 2016, phasing down to a 90 percent matching States fear the gov t will renege

64 PCP Shortage The Assn of American Medical Colleges: estimated that the USA would have a shortage of approximately 21,000 primary care physicians in Deficit grows to 85,000 by 2020 Half of the 830,000 physicians are over age 50 Is telemedicine part of the solution?

65 Your role: health insurance specialist or consultant? Commissions or fee based planning?

66 How do we deal with ObamaCare? Stay educated and up to date Keep your clients informed IMM could double in premium, especially younger ages Group health rates estimated to be 30-50% higher Defined contribution strategies are an option Self funding is an answer for some groups ERISA strategies offer the employer some flexibility Diversify your product portfolio

67 Opportunity! 52.4M estimated uninsureds 32.4M will ultimately get coverage 10.4M via HIEs 2.2M via SHOP.4M via Individual Major Med 5.4M via employer group health 14.0M via Medicaid expansion Society of Actuaries Study, March 2013

68 Why The Brokerage? Comprehensive product portfolio Significant marketing support Free E & O Lead programs 36 years of business We are a true NMO National Marketing Organization

69 Questions? Go forth: survive and thrive! Complete your evaluation form before you leave!