AFFORDABLE CARE ACT (ACA) UPDATE JUNE 26, 2013 FREDDY WARNER SYSTEM EXECUTIVE, PUBLIC POLICY & GOVERNMENT RELATIONS MEMORIAL HERMANN HEALTH SYSTEM
ACA - REVISITED OBAMA SIGNED INTO LAW 2010 GOALS PROVIDE INSURANCE to 50M UNINSURED One-Half Gain Coverage Via Expanded Medicaid REDUCE COST of HEALTHCARE BASIC TENETS INDIVIDUAL MANDATE EMPLOYER MANDATE HEALTH INSURANCE EXCHANGE (aka MARKETPLACE) SUBSIDIES up to 400% Federal Poverty Level (FPL)
ACA - REVISITED IMPLEMENTATION DATES MOST COMPONENTS TAKE EFFECT in 2014 SUPREME COURT 2012 DECISION INDIVIDUAL MANDATE - Upheld MEDICAID EXPANSION States Can Opt Out TEXAS RESPONSE ABBOTT ONE OF 26 STATE AGs CHALLENGING ACA PERRY: NO MEDICAID EXPANSION PERRY: NO HEALTH INSURAANCE EXCHANGE
ACA - REVISITED Provide affordable healthcare to all Americans Effectively, should not cost a person more than 9.5% of income Overhaul of Health Insurance Policies: o o Minimum Essential Health Benefits Strict Definitions of Coverage Levels: Bronze, Silver, Gold, Platinum, Catastrophic Elimination of annual and lifetime limits Elimination of Pre-existing condition barrier o Limits on Premium Community Rate Variation Government control of Insurance Profits Employer Mandate Group coverage Individual Mandate (includes coverage for families)
ACA Who Are the Uninsured? Health Status Young & Healthy 48% Sick, Active, and Worried 29% Passive & Unengaged 15% Previous Insurance Experience In the individual market 4% With Medicaid 8% Through employer sponsored plans 21% Uninsured 67% Texas Uninsured +/- 6M or 25% (Highest Percentage in the US) Houston/Harris County Has Highest Percentage Uninsured of Most Populous MSAs * National statistics
Minimum Essential Health Benefits Ambulatory Patient Services Emergency Services Hospitalization Maternity and Newborn Care Mental, Behavioral Health & Substance Abuse Prescription Drugs Rehabilitative Services & Devices Laboratory Services Preventive and Wellness Services Pediatric Dental and Vision Care
EMPLOYER Mandate Major Cost Increase for Many Employers Mandate Applies to Employers with 50 employees 30 hours = FTE Total variable part-time / seasonal hours 30 = FTE s Employers Must Offer Coverage ( Play ) To Employee (and children; not required for spouse) Coverage of at least Bronze level Employee contribution maxed at 9.5% of income If Employer Chooses Not to Offer Coverage ( Pay tax/penalty) $2,000 per (FTE s 30) with specific requirements or pay tax penalty $3,000 per FTE who purchases via the exchange and receives tax credit (up to max total of the above number) Employers with 25 employees with average wage < $50k may be eligible for health insurance tax credit Employers with > 200 FTE s must automatically enroll employees NOTE: Potential Impact of Texas Decision NOT to Expand Medicaid
INDIVIDUAL Mandate Mandates Individuals to Obtain qualifying health coverage Provision applies to all US Citizens and Legal Residents* Penalties** 2014 Greater of $95 x up to three family members on tax return ($285); or 1% of taxable income 2015 Greater of $325 x up to three family members on tax return ($975); or 2% of taxable income 2016 Greater of $695 x up to three family members on tax return ($2,085); or 2.5% of taxable income * Exceptions for financial hardship, religious objections, incarcerated, American Indians ** Increased by cost of living adjustment beginning in 2016
INDIVIDUAL Mandate For Coverage Purchased through a Health Insurance Exchange: Premium Credits: Individual and Family Premium Contributions* Limited to the Following 100-133% FPL 2% of income 133-150 3-4 150-200 4-6.3 200-250 6.3-8.05 250-300 8.05-9.5 300-400 9.5 Cost Sharing (copays, coinsurance, deductibles) Paid by the Federal Government All Medical Benefit Plans Must Keep Annual Out-of-Pocket Maximums Limited to $6,250/Individual ($12,500 family) *Built on Silver plan level of benefits
HEALTH INSURANCE EXCHANGE: Marketplace Center of all Transactions Sales / Enrollment Mechanism On-Line Call Service Center (for enrollment questions) Portal Comparable to Expedia TEXAS Chose NOT to Create an Exchange; therefore Subject to Federally-Facilitated Exchange Small Business Health Options Program (SHOP) Exchange NOT Available in 2014 (HHS Cited Operational Challenges )
TEXAS RESPONSE to ACA Governor Perry Statements Following SCOTUS Decision No Medicaid Expansion Result: Forgo Federal Matching Funds No State-Sponsored Health Insurance Exchange Result: Subject to Federal Exchange 2013 Texas Legislature Post-Session: HHSC Negotiations with Federal HHS/CMS
ACA: Texas Impacts/Challenges Texas is One of 18 States Opting Out of Medicaid Expansion (28 Will; 4 Undecided) Texas is One of 26 States Choosing Not to Create a State Health Insurance Exchange (17 Will; & Will Operate a Federal/State Exchange) Texas Decision Leaves $100B in Federal Matching Funds on the Table One-Half of Texas 6M Uninsured Would Gain Coverage Under Expanded Medicaid Without, +4M Will Remain Uninsured
ACA: Texas Impacts/Challenges Texas: Lowest Per Capita Medicaid Spend Texas: Pays 52 cents per $1.00 of Cost for Medicaid Services Recent TMA Survey Result: 31% of Texas Physicians Will See a New Medicaid Patient Texas Premium Increases Under ACA Projected at 33.8% (US Projected 31.5% Increase)
ACA: Texas Impacts/Challenges ACA Individual Mandate Will NOT Compel Uninsured to Buy Insurance Insufficient Penalty EMTALA Provides Access to Hospital ERs ACA Employer Mandate Will Result in Large Employers Dropping Employees Coverage/Paying penalty Federal/State Reimbursement Rates Will Continue to Decline Number of Willing Physicians Will Also; Therefore Less Access to Care
ACA: Texas Impacts/Challenges Healthcare Providers Will Face More Stringent (Federal/State) Quality/Performance Measurements With Lower Reimbursement Major Insurers Will Sit on the Sidelines; Evaluate ACA Roll-Out Before Committing; Therefore, Less Competition Great Uncertainty Will Continue for Healthcare Providers, Patients
QUESTIONS? FREDDY WARNER SYSTEM EXECUTIVE, PUBLIC POLICY & GOVERNMENT RELATIONS MEMORIAL HERMANN HEALTH SYSTEM