HEALTH CARE REFORM Where Do We Go From Here? November 15, 2016
AGENDA WHERE DOES THE LAW STAND FOLLOWING THE ELECTION? IN THE NEWS: WHAT TO EXPECT NEXT 2017 ACA HIGHLIGHTS: COST DRIVERS & NEW REGULATIONS STRATEGIC CONSIDERATIONS & ACTION ITEMS
WHERE WE BEGAN
2016 ELECTION NOVEMBER 8, 2016
Government NONE OF US ARE AS DUMB AS ALL OF US.
2016 ELECTION RESULTS UNITED STATES HOUSE OF REPRESENTATIVES 2016 Pre-Election GOP: 234 Seats DEMS: 201 Seats ALL 435 Seats in the House of Representatives: Up for Election GOP: Defending 247 Seats DEMS: Defending 188 Seats Democrats: Needed 30 Seats to Take Control Competitive Districts: 66 Results: Republicans: 239 Seats Democrats: 192 Seats Not Yet Determined: 4 Seats
2016 ELECTION RESULTS UNITED STATES SENATE 2016 Pre-Election GOP: 54 Seats DEMS: 44 Seats INDP: 2 Seats 34 of the US Senate Seats: Up for Election GOP: Defending 24 Seats DEMS: Defending 10 Seats Democrats: Needed 4 Seats to Take Control in the Senate Results: Republicans: 51 Seats Democrats: 46 Seats Independent: 2 Seats Undecided: 1 Seat (LA: Run-Off Election on December 10)
2016 ELECTION RESULTS UNITED STATES SENATE COMPETITIVE RACES: 2016 FL: REPUBLICAN IL: DEMOCRAT IN: REPUBLICAN NH: DEMOCRAT NV: DEMOCRAT OH: REPUBLICAN PA: REPUBLICAN WI: REPUBLICAN 2018 SENATE RACES: 32 of the US Senate Seats: Up for Election GOP: Defending 8 Seats DEMS: Defending 24 Seats President Elect Trump s Pledge to Repeal Obamacare in the First 100 days
The Patient Protection & Affordable Care Act IN THE NEWS
OBAMA ON OBAMACARE The ACA is doing exactly what it was intended to do President Obama 10.26.2016
CHANGES TO THE PUBLIC EXCHANGE Carriers Leave the Exchange 1/3 of States Only Have One Provider Option At Least One Carrier Exiting the Exchange
HEALTH INSURANCE CARRIERS LEAVING? IN A NUT SHELL ADVERSE SELECTION Not Enough Healthy Enrollees Signed Up to Counteract the Cost of Providing Care for OLDER, LESS HEALTHY ENROLLEES INITIAL EXCHANGE PREMIUM RATES Set Lower Due to RISK CORRIDOR (Umbrella of Protection for Carriers) Provided by the Government for 3 years By 2018 Carriers to Calculate Premiums Based on ACTUAL RISK POOLS instead of Estimated Enrollment
MARKETPLACE ENROLLMENT BY METAL LEVEL BRONZE PLANS AS OF MARCH 31, 2016 Ohio 71,050
MARKETPLACE ENROLLMENT BRONZE LEVEL PLANS IN 2017 Premiums will Increase Across ALL Tiers for the 2017 Plan Year On Average, Bronze Plans will Increase by about 21% = $311 for a Single 30-Year-Old Nonsmoker Compared to $258 in 2016 Average Deductible will Increase to Just Under $6,100
OBAMACARE Craziest Thing in the World The people who are getting killed on this deal are small business people & individuals who make just a little too much to get any of these subsidies because they re not organized. They don t have any bargaining power with insurance companies so they re getting whacked. Bill Clinton 10.04.2016
OBAMACARE Craziest Thing in the World So you've got this crazy system where all of a sudden 25 million more people have health care and then the people who are out there busting it -- sometimes 60 hours a week -- wind up with their premiums doubled and their coverage cut in half. It's the craziest thing in the world. Bill Clinton 10.04.2016
What to Expect Next?
RISING COSTS & STRATEGIES WHAT DRIVES COSTS? COST QUALITY ACCESS COST OF UNITS RISKS VS. NUMBER OF UNITS USED
OVERVIEW FEES, TAXES, COVERAGE EXPANSION & COST PROJECTIONS Medical Device Manufacturers Pharmaceutical Companies Health Insurers TRANSITIONAL REINSURANCE FEE PCORI FEE Patient-Centered Outcomes Research Institute HEALTH INSURER FEE PREVENTIVE CARE EXPANSION CADILLAC TAX 2010 ----- ----- ----- 2011 ----- $ 2.5 billion ----- 2012 ----- 2.8 ----- 2013 $ 1.8 billion 2.8 ----- 2014 2.7 3.0 $ 8.0 billion 2015 2.8 3.0 11.3 2016 3.0 3.0 11.3 2017 3.1 4.0 13.9 2018 3.2 4.1 14.3 2019 3.4 2.8 *
CADILLAC TAX WHAT IS A HIGH-VALUE PLAN? Bronze-level Plan with High Utilization May Trigger the Tax Per Employee / Family Member 2018 THRESHOLDS TO-BE REPEALED POST-ELECTION High-Value Plan: Higher-Cost Plan based on Plan Utilization & CLAIMS Basis for Tax: 40% of the Difference Between the Total Cost of Health Benefits for an Employee in a Year and the Threshold Amount for that Year Self-Only Coverage $10,200 Per Year ($850/Month) Non Self-Only Coverage $27,500 Per Year ($2,292/Month)
SUBSIDY ELIGIBILITY ILLUSTRATION Federal Poverty Level Scale: 2016 Persons in Household 100% 133 % 250% 400% 1 $11,880 $15,800 $29,700 $47,520 2 $16,020 $21,307 $40,050 $64,080 3 $20,160 $26,813 $50,400 $80,640 4 $24,300 $32,319 $60,750 $97,200 5 $28,440 $37,825 $71,100 $113,760 6 $32,580 $43,331 $81,450 $130,320 7 $36,730 $48,851 $91,825 $146,920 8 $40,890 $54,384 $102,225 $163,560 For each Additional person, add: $4,160 $5,532 $10,400 $16,640
Premium Tax Credit Eligibility Federal Subsidies Based on Cost of Silver (70% Value) Plan Family Income % of FPL Maximum Premium Cost % of Family income for 2017 < 133 % 2.04 % 133 150 % 3.06 4.08 % 150 200 % 4.08 6.43 % 200 250 % 6.43 8.21 % 250 300 % 8.21 9.69 % 300 400 % 9.69 %
2016 REMINDERS & 2017 ANNOUNCEMENTS
2016 Regulatory Update Date Regulation Status JANUARY 4 DOL & HIPAA Audits INCREASING MARCH 22 Summary of Benefits Coverage (SBC) FINAL REVISIONS MAY 16 EEOC Final Rules on Employer Wellness Programs ADDITIONAL LIMITS ON INCENTIVES MAY 18 Wage & Hour Division OVERTIME EXPANSION -- NON-EXEMPT WORKERS MAY 18 HHS Nondiscrimination Regulations (Section 1557) TRANSGENDER INDIVIDUALS - COVERAGE JULY 6 Subsidy Notice from Exchanges EMPLOYER APPEAL OPTIONS? JULY 15 1094-C & 1095-C Final Forms & New Codes DEADLINES & PENALTIES NOV 15 Transitional Reinsurance Fee FINAL YEAR FOR FILING
REMINDER WHO RECEIVES WHICH IRS FORMS? Who Reports? Who Receives Forms? Carrier Employer Employee IRS Large Employer (> or = 50 EEs) Fully Insured 1095-B 1095-C 1095-B 1095-C 1095-B Carrier 1095-C Employer Small Employer (<50 EEs) Fully Insured 1095-B None 1095-B 1095-B Carrier Large Employer (> or = 50 EEs) Self-Funded Small Employer (<50 EEs) Self-Funded None 1095-C 1095-C 1095-C Employer None 1095-B 1095-B 1095-B Employer
IRS DRAFT 1094-C & 1095-C PENALTY EXPOSURE Penalty for Failure to File Form 1095 to IRS Penalty for Failure to Provide Form 1095 to Individuals Failure to Electronically File Cap on Total Amount of Penalties for Failure(s) to File During a Calendar Year Intentional Disregard for Each Failure $260 Per Return $260 Per Return $260 Per Return After the First 250 Forms $3.1 Million $500 Per Return NO CAP LIMIT
NEWER & FUTURE CONSIDERATIONS COVERAGE FOR TRANSGENDERED INDIVIDUALS ADOPTION ASSISTANCE SURROGACY COMPREHENSIVE INFERTILITY AND ADVANCED REPRODUCTIVE TECHNOLOGY (ART) PARENTAL LEAVE & PRIMARY CARE / SECONDARY CARE LEAVE
STRATEGIC CONSIDERATIONS Why is Obamacare NOT Working?
WHY IS OBAMACARE NOT WORKING? Insurance Is A Transfer Of Risk Guarantee Issue of Coverage & No Pre-Existing Condition Exclusions Artificially Suppressed Pricing (Pricing Corridor, Reinsurance Fee, Insurer Fee) Overregulation (Now Impacting Wellness) Continual Cost-Shifting to Employer-Based Plans (Becoming Unaffordable for Employers & Employees) Increasing High Deductible Health Plans (Unaffordable Bronze Plan)
WHY IS OBAMACARE NOT WORKING? Insurance Is A Transfer Of Risk NO Change in Fee-for-Service Payment Model (Increasing RX = Mental Health Needs = Increasing RX) NO Standardization for Access Across State Lines (Essential Health Benefits) NO Enforcement of Individual Mandate Penalty NO Comprehensive Tort Reform (Continuation of Defensive Medicine) NO Incentive for Improving Individual Health
POST-ELECTION What to Expect NEXT? Repeal Bill -- VERY LIKELY Republicans Need to Tell their Constituents that they Repealed Obamacare Even If Provisions Remain / Extensive Transition Windows Reconciliation? Congressional Procedure for Tax & Spend Legislation Only ( Yet Used Broadly). Prevents Filibustering in the Senate Transitional High Risk Pool? Coverage for Chronic Conditions Tax Reform? Impact to the Tax Exemption for Employer-Sponsored Health Plans? Fairness in the Tax Code for Individual Health Plans
FIRST 100 DAYS OF PRESIDENT ELECT TRUMP'S ADMINISTRATION REPEAL & REPLACE OBAMACARE ALL SPECULATION ACA Provisions Expected to WITHSTAND a Repeal Bill Ban on Pre-existing Condition Coverage Exclusions Adult Children Remaining on a Parent s Plan until Age 26 Lifetime Limits on Coverage Medicaid Expansion ACA Provisions Expected to be Repealed OR Phased-Out Federal Exchanges -- Phased-Out with a Power-Shift to States Premium Tax Credits (Subsidies) Phased-Out to Lower Thresholds Health Insurance Tax To be Repealed Cadillac Tax To be Repealed Individual & Employer Coverage Mandate To be Repealed Essential Health Benefits Fewer Requirements Age Rating Bands -- Larger Premium Bands May be Permissible
TAKEAWAY: OBAMACARE A Increase Access Through Medicaid = Failing Programs Intended to Provide Subsidized Care C Who Pays for it? A YOU
THANK YOU FOR JOINING US! Robert J. Klonk rklonk@oswaldcompanies.com Andrea Esselstein aesselstein@oswaldocmpanies.com