Maureen M. Corcoran Daphne K. Saneholtz. July 5, families. providers. cost-saving. insurance
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1 June 28, 2012 Maureen M. Corcoran Daphne K. Saneholtz July 5, 2012 reform families insurance providers INSURANCE cost-saving ACCESS REFORM consumers cost-saving REFORM providers regulation Mental Health regulation quality access insurance health care
2 Summary of the Decision Is the individual mandate a violation of the Commerce Clause? Decision: Violation of the Commerce Clause Comment: The Court holds that the mandate violates the CC. However, upheld within Congress power to lay and collect taxes. Is the individual mandate a tax or penalty? Does the Anti Injunction Act (AIA) apply? Decision: Mandate functions as a tax, but not for purposes of AIA. Comment: AIA does not apply because the ACA does not require that the penalty be treated as a tax. 2
3 Summary of the Decision Is the individual mandate severable from the other parts of the law? Is the entire law unconstitutional Decision: Not applicable Comment: The Court doesn t reach severability, having upheld the mandate and the expansion. Does the federal government have the right to impose upon the states a minimum Medicaid eligibility of 133% FPL? Is it a usurpation of states rights? Decision: Constitutional, but without penalty to states for non participation. Comment: States have a choice about whether to participate in the expansion of eligibility. Federal government does not have the power to terminate all existing Medicaid funding to the state. Special Copyright Edition 2012, Vorys Health Care Advisors Reform LLC. All Memo: Rights Reserved. June 29, 2012 Deloitte Center for Health Solutions publication 3
4 ACA Most of the law proceeds as written Insurance requirements already implemented Prohibition on payment for health careacquired conditions (7/1/11) Covers smoking cessation for pregnant women (10/1/10) Innovations in Care/Authority/Funding Duals, bundled payment demo, new options for HCBS, inc. Community FirstChoice, Health Home enhanced funding Medicaid drug savings to the state
5 ACA Also not impacted by SCOTUS 1% increase in FMAP for states on preventive services (1/1/13) Adjusts primary care rates to 100% of Medicare, paid 100% by feds from 1/1/13 to 12/31/14 Increase in SCHIP match rate by maximum of 23% (10/1/15) Reductions in Disproportionate Share Hospital (DSH) funding beginning FY 14, even if state doesn t expand Medicaid
6 Why the ACA is important: Access to coverage 6
7 ACA Impact on Medicaid Enrollment Estimates prior to SCOTUS Decision Prior and new eligible contribution to 2020 total Medicaid/SCHIP population (in millions) 1 39 million current Medicaid enrollees 2 million prior eligible 10 million newly eligible 51 million total..31% increase Ohio FFIS projection of state cost of expansion to 133% FPL $422m (Total FFY ) 1 Source: Deloitte Center for Health Solutions analysis, Deloitte s Health Reform Impact Model, and ACA Provision Mapping Tool:
8 Ohio: Red bars impacted by the decision Remember: Each state s Medicaid program is unique! *
9 Medicaid Expansion-SCOTUS Before ACA: No category for childless adults and generally low and highly variable coverage for parents (not children) ACA added category: 1902(a)(10)(A)(i)(VIII)-Non pregnant, non Medicare eligible adults, under age 65, who are not otherwise eligible, up to 133% FPL (138% MAGI) Intended to cover parents & childless adults Would receive benchmark or benchmark equivalent benefit-flexibility for state Medicaid programs to streamline a package of services. Not necessarily full Medicaid package Feds pay for almost the entire cost: 100% FY %, 94%, 93%- FY 17, 18, 19 90% & beyond
10 2012 Federal Poverty Guidelines (100% Federal Poverty Level) Keep in mind minimum wage: $7.25 x 2000 hrs = $14,500 Family of 4=$23,050 If 2000 hrs., need wage of $11.53/hr. 10
11 Examples of Medicaid Coverage: Parents & Childless Adults 30 states-no coverage for childless adults Coverage for parents-as low as 17% FPL in Arkansas Median coverage for parents nationally 63% Even those states with coverage for childless adults, coverage often not equal to Medicaid may be basic package with few key services Before the ACA, the only way to cover childless adults was using 1115 research and demonstration waivers, i.e., NY & AZ 11
12 Maintenance of Effort State must keep pre-aca Medicaid coverage levels for the transition period State s income eligibility standards and requirements in effect as of March 23, 2010 must remain without change until Children < 19 yrs. old - thru 2019 Adults/parents: until a state s health insurance exchange is fully operational
13 Health Benefit Exchange: Interaction with Medicaid & determining subsidies is very important Option for state to create own or participate in the federal exchange The Exchange provides a mechanism to: Facilitate the sale of qualified health insurance plans for purchase by individuals or small employers To determine Medicaid eligibility and eligibility for subsidies for certain individuals The intent of the Exchange is to reduce the number of uninsured; provide a transparent marketplace, consumer education, and assist individuals with access to programs; and provide premium assistance tax credits and costsharing reductions 13
14 Another impact of the SCOTUS decision Subsidy for purchase with the Exchange ACA provides subsidies for individuals to purchase insurance thru the state or federal Health Benefit Exchange Subsidies only for those earning > 100% and up to 400% If a state s Medicaid program does not cover parents (and/or childless adults) up to 100% FPL, the poorest individuals and families (those earning less than 100% FPL) will not be eligible for subsidy to purchase insurance thru the exchange
15 Ohio: Not eligible for subsidy Childless adults 0-100% FPL & Parents % * If state does not expand, this group is also not eligible for subsidy
16 Ohio Streamlining Medicaid Eligibility Ohio taking the opportunity to modernize and streamline its existing Medicaid eligibility system & prepare for changes under the ACA Proposed implementing an 1115 waiver that will modernize the eligibility determination system Will move from 150 eligibility categories to 3; children, adults who use LTC, and adults who do not use LTC Will eliminate resource tests, etc. and use MAGI for some
17 States will need to decide about Medicaid coverage Maintenance of effort in effect for the transition period Then each state will need to decide Significant federal funding, but significant impact on state budgets nonetheless. Rest of the law in effect. Much for states, employers and other policy makers to do.
18 About Vorys Health Care Advisors Vorys Health Care Advisors, LLC helps health care providers, business decision makers and professional associations to achieve their objectives in a constantly changing governmental and business health care environment and to assist them in making well informed, strategic and tactical decisions tailored to their individual goals, needs and aspirations. Contact Information Maureen Corcoran, MSN, MBA mmcorcoran@voryshcadvisors.com Daphne K. Saneholtz, JD dksaneholtz@voryshcadvisors.com Vorys Health Care Advisors 52 E.Gay St Columbus OH
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