ACA in Brief 2/18/2014. It Takes Three Branches... Overview of the Affordable Care Act. Health Insurance Coverage, USA, % 16% 55% 15% 10%
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1 Health Insurance Coverage, USA, % Uninsured Overview of the Affordable Care Act 55% 16% Medicaid Medicare Private Non-Group Philip R. Lee Institute for Health Policy Studies Janet Coffman, MPP, PhD Associate Adjunct Professor February 20, % 15% Employer-Sponsored Insurance Medicaid also includes other public programs: CHIP, other state programs, military-related coverage. Numbers may not add to 100 due to rounding. Medicare includes persons dually eligible for Medicare and Medicaid. SOURCE: DeNavas-Walt C, Proctor B, and Smith J. Income, Poverty, and Health Insurance Coverage in the United States: United States Census Bureau. Issued September It Takes Three Branches... ACA in Brief 3 4 1
2 Outline Insurance reform Expand access Provide better coverage Control costs Insurance Reform Health system reform Improve quality and efficiency Strengthen workforce and infrastructure More emphasis on public health and prevention 5 6 The Individual Mandate All citizens and legal immigrants must have coverage Tax penalty if no coverage. In 2014 the higher of $95 per adult ($47.50 per child) 1% of annual household income The Individual Mandate Exemptions granted for Undocumented persons No coverage for less than 3 months Lowest cost plan > 8% of income Financial hardship Religious objection 7 8 2
3 Medicaid Expansion Historically, Medicaid eligibility varied from state to state & generally excluded low-income adults without children (unless they disabled or elderly). Under the ACA, all citizens with incomes 138% below FPL eligible for Medicaid. The Supreme Court ruled that the federal government cannot compel states to expand Medicaid. Health Insurance Exchanges Available to Individuals and families Small business States chose whether to Establish their own exchange Participate in the federal exchange 9 10 Health Insurance Exchanges State regulated insurance marketplaces Can compare plans by quality and cost All plans offer the same essential benefits Four standardized benefit designs Health Insurance Exchanges: Essential Health Benefits Hospitalization Emergency services Outpatient care Prescription drugs Laboratory services Maternity and newborn care Preventive and wellness services Rehabilitative and habilitative services and devices Mental health and substance use disorder services Pediatric vision and dental
4 Health Insurance Exchanges: Metal Tiers Health Insurance Exchanges: Subsidies 40% 60% Plan Pays 30% 70% Consumer Pays 20% 80% 10% 90% Bronze Silver Gold Platinum Subsidies for persons & families with incomes % federal poverty level ($31,322 to $94,200 for a family of four) Premium tax credit toward purchase of insurance Contributions capped at 2% to 9.5% of income Tied to lowest cost silver plan Cost sharing tax credit (rebate on Out of Pocket costs) incomes 133% to 250% federal poverty level Employer Responsibility Employers with > 50 employees working 30 hours per week face penalties if they do not offer affordable insurance that covers at least 60% of typical expenses. Implementation delayed 2015 for firms with > 100 full-time employees 2016 for firms with full-time employees Incentives for Small Employers Tax credits up to 50% of employer s contribution for health insurance for employers who meet the following criteria 25 employees Average annual wage of less than $50,000 Contribute at least 50% of the total premium Purchase coverage through an exchange
5 Coverage for Young Adults Individual Insurance Market Rules The ACA permits young adults to remain on their parents policies until age 26 Implemented in 2010 An estimated 8 million young adults eligible Alternative to exchanges or Medicaid if parents have health insurance Guaranteed issue Cannot deny coverage for preexisting conditions Cannot cancel coverage without proving fraud Premiums can vary only based on Location Age - 3 age bands Tobacco use (not in California) Insurance Market Rules - All Prohibitions on Lifetime limits on coverage Annual limits on coverage Cost sharing for recommended preventive services (new policies only) Coverage for Preventive Services Requires coverage without cost sharing (no out-of-pocket costs) for preventive services recommended by US Preventive Services Task Force Advisory Committee on Immunization Practices HRSA Bright Futures Guidelines (children and adolescents) HRSA Women s Preventive Services Guidelines
6 Insurance Market Rules Health System Reform Medical Loss Ratios Health plans must report % of premiums spent on clinical services and quality Provide rebates if medical loss ratios Less than 85% for large group market Less than 80% for small group and individual markets Provide funds to states for rate review Reimbursement Concern about access to primary care for new Medicaid enrollees Only 66% of primary care physicians in the USA accepted new Medicaid patients in 2011 Medicaid reimbursement rates are lower than Medicare and private insurance rates On average Medicaid fees are 66% of Medicare fees Reimbursement Increases Medicaid fee-for-service reimbursement for primary care physicians to Medicare rates States receive 100% federal matching funds Only authorized for 2013 and 2014 Sources: KCMU/Urban Institute Medicaid Physician Fee Surveys, National Ambulatory Medical Care Survey
7 Reimbursement Medicare bonus payments of 10% for primary care providers Includes physicians, physician assistants, nurse practitioners, and clinical nurse specialists Only authorized from 2011 through 2015 Medicare bonus payments of 10% for general surgeons in health professional shortage areas Only authorized from 2011 through 2015 Reimbursement Reduce Medicare payments to hospitals for readmissions within 30 days Reduce Medicare and Medicaid payments for hospital acquired conditions Health Workforce Development Health workforce planning Scholarship & loan repayment programs Delivery System Reform Bundled payment pilot projects (Medicare and Medicaid) Grants to health professions schools to Increase supply in high priority professions Improve racial/ethnic diversity Enhance preparation for practice in underserved areas Changes Medicare graduate medical education payments to expand training in Primary care Ambulatory settings Health homes (Medicaid) Accountable care organizations (Medicare)
8 Bundled Payment Alternative to fee-for-service and capitation Pay for episodes of care (3 days prior to hospitalization to 30 days post-discharge) Single payment for Inpatient care Hospital outpatient care Physician services Post-acute care Health Homes Integrate and coordinate all primary, acute, behavioral health, and long-term services and supports for persons with chronic conditions State Medicaid agencies Receive a 90% match from the federal government Have flexibility to design payment policies and designate eligible providers Accountable Care Organizations Groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their Medicare patients Delivery System Reform Establishes new entities to assess the impact of innovations in care delivery Patient Centered Outcomes Research Institute Center for Medicare and Medicaid Innovation
9 Public Health and Prevention Conclusion Prevention and public health fund The ACA is stimulating major reforms in Health insurance Health care delivery National strategy for improving the public s health Support for employer sponsored wellness programs These reforms have potential to improve Access to care Value (health outcomes per $ spent) Substantial variation in implementation due to State discretion re Medicaid expansion and health insurance exchanges Use of demonstration projects to test new models
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