Affordable Care Act ABC’s of the ACA Transforming Healthcare: Surfing the Tsunami of Change October 24, 2014 Donna Orban Certified Marketplace Navigator

Learning Objectives  Explain the Health Insurance Marketplace from consumer perspective  Describe demographics of Marketplace consumers  Look at enrollment by the numbers

Learning Objectives  Describe key provisions of the ACA.  Describe the history of the Affordable Care Act (ACA).  Describe the implementation of ACA beginning in 2009.

Marketplace Exchange It’s like a mall for health insurance! What does is mean for consumers?

The Health Insurance Marketplace

Easier to Buy Insurance Insurance Exchanges allow people to compare plans, apples to apples Families and individuals receive tax credit, depending upon income, to help pay for health insurance coverage Marketplaces offer multiple Qualified Health Plans from participating providers Ability to find coverage to fit your individual needs Marketplaces provide basic information on: Plan premiums Deductibles Out-of-pocket costs

Premium Tax Credits  Must not be eligible for “affordable” job based coverage that meets Minimum Essential Coverage  Household income must be between 100% and 400% of Federal Poverty Level for household size

Expansion of State Health Insurance Programs affordable-care-act

Olympics of Healthcare Coverage

The Silver plan is set up so that 70% of medical costs are covered through the provider. With cost-sharing reductions the amount listed below is what the provider and the government will pay for out-of- pocket health services:  If your income is % of the FPL, the actual coverage of a Silver plan is 94%  If your income is % of the FPL, the actual coverage of a Silver plan is 87%  If your income is % of the FPL, the actual coverage of a Silver plan is 73% Only Silver Plan = Cost Sharing Reductions

Marketplace Enrollment & Demographics How many individuals have new comprehensive insurance and what do they look like?

Enrollment by the Numbers From Oct 1, 2014 through the extension deadline April 19, 2015:  8,019,763 people selected Marketplace plans  More than 4.8 million additional individuals enrolled in Medicaid and CHIP  About 3.8 million people, including nearly 1.2 million young adults (18 – 34), enrolled during the final reporting period, which began March 2 and concluded on April 19

Marketplace Demographics Of the more than 8 million who enrolled in Marketplace plans:  54 % are female and 46 % are male  34% are under age 35  28 % are between the ages of  65 % selected a Silver Plan; 20% Bronze  85% selected a plan with financial assistance

Marketplace Demographics  62.9 % of those reporting are white  16.7 % are African American  10.7% are Latino  7.95 are Asian  1.3% are multiracial  0.3% American Indian/Alaska Native  0.1% Native Hawaiian/Pacific Islander

Marketplace Demographics Total Oklahoma Marketplace Enrollment = 69,221 (bottom 7 states for enrollment)  70.1 % of those reporting are white  9.0 % are African American  7.5 % are Latino  6.8% are Asian  3.4 % are multiracial  3.1 % American Indian/Alaska Native  0.1% Native Hawaiian/Pacific Islander

Patient Protection and Affordable Care Act Transforming the Delivery and Business of Healthcare

Major Tenants of ACA  Payment reform  Quality  Delivery system redesign Who does it impact? o Everyone! Changes that may impact families o Financial Protection o Easier Access to Health Insurance o Tax Credits

Financial Protections No annual or lifetime limits Spending caps will limit the amount consumers pay out of pocket each year Insurance companies have to spend at least 80% of premiums on medical care Eligible Tax Credits and cost sharing reductions to lower cost of healthcare

Quality of Care and a Focus on Prevention Women Children Native Americans Individuals with Medical Conditions Legal Immigrants

Who and How the ACA helps…  Women  Insurance companies can no longer deny women insurance because of a pre-existing conditions such as:  Breast or Cervical Cancer  Pregnancy or C-Section  Domestic Abuse  Insurers can no longer charge women more than men for the same coverage

Who and How the ACA helps…  Native Americans  Permanently authorizes the Indian Health Care Improvement Act and:  Improves access to 1.9 million Native Americans served by Indian Health Services  Cost sharing reductions avail % FPL  AN/AI can enroll monthly

Who and How the ACA helps…  People with medical conditions  People with a disability or mental illness can work part-time and still qualify for Medicaid  Mental healthcare must be covered just like physical health care  Insurers cannot refuse or charge more to cover those individuals with pre- existing conditions

Who and How the ACA helps…  Chronic Health Problems  No longer deny individuals Insurance due to pre-existing conditions or for participating in a clinical trial  No yearly or lifetime limits on coverage  All Marketplace insurance plans will cover children’s vision and dental  Young adults can stay on their parents’ plan until age 26  Coverage is available even if child is married or has own child (child and spouse are not covered)

Who and How the ACA helps…  Legal Immigrants  Eligible for:  Purchasing health insurance from the State Exchange (2014) with no waiting periods  Premium tax credits, cost-sharing reductions, temporary high-risk pools, and “basic health plans” offered by a state

Reforming Healthcare How long has the U.S. been seeking change in healthcare?

This is not a new concept… The Heritage Foundation was one of the strongest early backers of an individual mandate. The “central element in the Heritage proposal is a two-way commitment between government and citizens. Under this ‘social contract’ the federal government would agree to make it financially possible… for every American family to purchase at least a basic package of medical care including catastrophic insurance. In return, government would require, by law, every head of household acquire at least a basic health plan for his or her family.”

Historical Review A Presidential Overview

 Franklin Roosevelt- Healthcare is a fundamental human right  Harry Truman- Single Payer Insurance System  Dwight Eisenhower- Allow small companies to pool resources to expand coverage  John F. Kennedy- Universal single payer with national health budget, no consumer cost-sharing  Richard Nixon- Minimum levels of coverage  Lyndon B. Johnson- Medicare and Medicaid Enacted  Gerald Ford- Avoidance of duplicate services

 Jimmy Carter- Focus on cost containment, minimum package of benefits, new public corporation created to sell coverage  Ronald Reagan- 1 st major expansion of Medicare benefits, ceiling on out-of-pocket costs  George Bush- Healthcare tax credits, purchasing pools, manage fraud and abuse in Medicare  George W. Bush- Prescription drug coverage for Medicare  Bill Clinton- Universal coverage, employer and individual mandates, managed competition  Barack Obama- Patient Protection and Affordable Care Act

Do these terms sound familiar???  human right  pool resources  Single Payer  Universal single payer  Minimum levels  cost containment  ceiling on out-of-pocket costs  tax credits, purchasing pools  employer and individual mandates  Prescription drug coverage

By the numbers… What does our health and our healthcare cost???

Rising Healthcare Costs

Healthcare Spending

Healthcare Spending vs. Health Outcomes We spend so much… You think we’d be healthier…

How much do you go to the Doctor???

Healthcare Spending Realities

Delivering Healthcare Services

You know we’re in the bottom…

Payment Reform Individual Financial Protections 80/20 Rule More Transparency of Healthcare Systems

More Financial Protections Insurers must justify premium increases ACA limits insurance companies overhead costs (administration and marketing) Allows individuals and small businesses to get better rates because they are in a bigger pool

Medical Loss Ratio: 80/20  80 cents out of every dollar in premiums must be paid out for policyholders medical care  If the full 80% is not paid out for medical care, the insurance company must send you a refund check every year

Protecting Women’s Health

Prevention and Wellness  No deductibles or copayments for preventative services  Grants for community wellness programs  National standards for restaurant nutrition labeling  Incentives for doctors to improve patient’s health

The Patient and Doctor Have Control  Insurance plans will have to cover essential services:  Preventative care  Hospitals  Physicians  Prescription Drugs  Substance Abuse  Dental and Vision for:  Children  Maternity Care  Clear appeals process if your claim is denied

Delivery System Redesign Buying Health Insurance Improving the Healthcare Workforce Local Efforts for Improvement

Changing the System of Healthcare Delivery  Physician Incentives for quality coordinated care  Funding for pilot projects in evidenced- based medicine  Enhanced payments for primary care physicians and general surgeons  Use of Health Informatics  Expansion of State Medicaid services

Improving the Healthcare Workforce  The ACA will provide loan repayments and scholarships for students who work in underserved areas  The ACA offers grant opportunities for health programs at colleges and universities to increase the racial diversity of the healthcare workforce

Shared Responsibilities of the ACA Federal, Business, and Individual Responsibilities

How do we pay for the ACA?  Multiple funding mechanisms are built into the ACA legislation  The ACA does NOT add to the deficit!  $143 billion in savings this decade  Examples of funding mechanisms:  $2,000 per employee fine for large businesses (50+ employees) who do not provide health insurance for employees  Higher taxes will be imposed on those earning more than $200,000 individual/$250,000 couple  Medicare Advantage plans will be reimbursed at the regular Medicare rate  Educational Reform on Student Loans

Federal Government  Pays for 100% of Medicaid expansion from  Pays for 90%-95% of Medicaid expansion in 2017 and beyond  Shares in costs of tax credits and premium subsidies

Businesses  Large employers (50+ employees) may have to pay a penalty if they do not provide coverage AND one or more of their employees receives an insurance premium subsidy  Taxes on insurance companies that offer very high cost plans “Cadillac plans”  Fee or taxes on producers of some medical equipment and pharmaceuticals

Individuals  U.S. citizens and legal residents must purchase health insurance or pay a penalty  Penalties are phased in for those who do not purchase health insurance  Exemptions granted for:  AI/AN Populations  Hardship Exemptions  Religious objections  Those without coverage for less than 3 months  Undocumented workers  Incarcerated individuals  Or, if the lowest cost plan exceeds 8% of income  Tax changes for some high-income individuals

Questions??? For more information contact: Donna Orban, CRS