THE AFFORDABLE CARE ACT AND UNIVERSITY OF MINNESOTA EMPLOYEES AND FAMILIES Prepared by Pete Benner for U of M AFSCME 1November 7,2013

Per Capita Total Current Health Care Expenditures, U.S. and Selected Countries, 2009 ^OECD estimate. *Break in series. Notes: Amounts in U.S.$ Purchasing Power Parity, see includes only countries over $2,500. OECD defines Total Current Expenditures on Health as the sum of expenditures on personal health care, preventive and public health services, and health administration and health insurance; it excludes investment. Source: Organisation for Economic Co-operation and Development. “OECD Health Data: Health Expenditures and Financing”, OECD Health Statistics Data from internet subscription database. data accessed on 01/10/12.

How Much We Use Depends on How Old We Are AGEUS PER CAPITA HEALTH CARE SPENDING $2, $3, $5, $7, $10, $16, $25,691 Source: Centers for Medicare and Medical Services, Office of the Actuary, National Health Statistics Group – 2004 data 3 November 7,2013 Prepared by Pete Benner for U of M AFSCME

Note: Dollar amounts in parentheses are the annual expenses per person in each percentile. Population is the civilian noninstitutionalized population, including those without any health care spending. Health care spending is total payments from all sources (including direct payments from individuals and families, private insurance, Medicare, Medicaid, and miscellaneous other sources) to hospitals, physicians, other providers (including dental care), and pharmacies; health insurance premiums are not included. Source: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey (MEPS), Household Component, Concentration of Health Care Spending in the U.S. Population, 2009 (≥$51,951)(≥$17,402)(≥$9,570)(≥$6,343)(≥$4,586)(≥$851)(<$851) Percent of Total Health Care Spending

It’s the Prices Stupid! “It is higher health care spending coupled with lower – not higher – use of health services that adds up to much higher prices in the United States than in any other member nation of the Organization for Economic Cooperation and Development. Aside from a few high-tech services, Americans actually use less health care and rely on fewer health-care resources than do residents of other industrialized countries.” Uwe Reinhardt, New York Times Economix Blog, March 29, 2013 November 7,2013 Prepared by Pete Benner for U of M AFSCME 5

Take Aways Healthy need to help pay for the sick Young need to help pay of the old Well Off need to help pay for the rest of us It is not the fault of the patient – which is not the same as saying patients do not sometimes ask for care which adds no value or might actually hurt them November 7,2013 Prepared by Pete Benner for U of M AFSCME 6

Affordable Care Act So Far Affordable Care Act Passes Adult Children to Age 25 – regardless of residence, school attendance, marital status Guaranteed Issue Kids Early Retiree Reinsurance Program – help employers maintain coverage for pre-65 retirees. November 7,2013 Prepared by Pete Benner for U of M AFSCME 7

ACA So Far Health Plan Loss Ratios capped at 80% for individual and small group markets and 85% for large group market. Increased Medicare taxes for the 1% Closing of the Medicare Rx Donut Hole November 7,2013 Prepared by Pete Benner for U of M AFSCME 8

What’s Next? Individual Mandate for Adults Starts 2014 Employer Mandate Starts 2015 Medical Assistance Expansion to 138% FPL starts 2014 Minnesota Health Insurance Exchange Starts 2014 Premium and Out of Pocket Subsidies in Individual Market Start in 2014 November 7,2013 Prepared by Pete Benner for U of M AFSCME 9

Individual Mandate Everyone Must Have Health Insurance Coverage or Pay Penalty Insurance must provide “Minimum Essential” Coverage 2014 Penalty of $95 or 1% of household income 2015 Penalty of $325 or 2% of household income 2016 Penalty of $695 or 2.5% of household income Medical Assistance, Medicare, VA, TriCare, Employment based coverage, and individual coverage all meet the requirement for coverage. November 7,2013 Prepared by Pete Benner for U of M AFSCME 10

Help for Minnesotans In January, Minnesotans will be covered from birth to age 65 by a combination of Medical Assistance, MinnesotaCare, and MNsure. Some of this will be continuation of existing programs and some will be new programs from the Affordable Care Act. November 7,2013 Prepared by Pete Benner for U of M AFSCME 11

Minnesota Insurance Marketplace MNsure Offer health plans to individuals who want premium or out of pocket subsidies. Offer health plans to small employers. Administer premium and out of pocket subsidies. Train and Oversee “Navigators” and “In-Person Assisters”. Run single seamless enrollment and eligibility determination system for public programs and for MNsure. November 7,2013 Prepared by Pete Benner for U of M AFSCME 12

Federal Poverty Levels Family Size 100% FPL138% FPL200% FPL 275% FPL400% FPL 1$11,490$15,856$22,980$31,598$45,960 2$15,510$21,404$31,020$42,653$62,040 3$19,530$26,951$39,060$53,708$78,120 4$23,550$32,499$47,100$64,763$94,200 Income limits increase for additional family members. 13 November 7,2013 Prepared by Pete Benner for U of M AFSCME

Modified Adjusted Gross Income MAGI is your adjusted gross income from your federal tax form – adding in any non-taxable social security income and any tax-exempt interest – and for eligibility for Medical Assistance taking out scholarships, awards or grants used for educational purposes (plus a couple other things that will not impact many people). Separate rules for American Indians. 14November 7,2013 Prepared by Pete Benner for U of M AFSCME

Who will MNsure serve? Medical Assistance – Medical Assistance: kids and pregnant women under 275% FPL – regardless of whether covered or can be covered under employer sponsored insurance – Medical Assistance: Adults below 138% FPL – regardless of whether covered or can be covered under employer sponsored insurance – No asset test – Coverage options determined by Department of Human Services – Care provided through health plans – no premium, $2.65/month deductible, $3 office copay and Drug copays no more than $3 for MA – If currently covered by employer, MA may have you stay on your insurance and reimburse premium and out of pocket. 15November 7,2013 Prepared by Pete Benner for U of M AFSCME

Who will MNsure serve? MinnesotaCare – MinnesotaCare: Adults between 138% and 200% FPL – but only of they cannot be covered under “affordable” employer sponsored insurance either as an employee or as a dependent – Full Benefit Set for all adults – No asset test – Coverage options determined by Department of Human Services – Care provided through health plans – premium from $4 to $50/month/adult, $2.65/month deductible, $3 office copay, $3 drug copay and $3.50 ER copay for MinnesotaCare. – If currently covered by employer, would need to dis-enroll during open enrollment period 16November 7,2013 Prepared by Pete Benner for U of M AFSCME

Who will MNsure serve? Individuals – Those seeking individual market coverage – Tax credits available from 200% to 400% FPL – Your premium share capped at % of your household income: 6.3% of income at 200% of FPL – to 8.05% at 250% of FPL – to 9.5% of FPL between % of FPL. This applies to the Silver Plan. You can take this tax credit and buy up to a gold or platinum plan or buy down to a bronze plan. – Tax credits available to those without “affordable” employer coverage (employee share of premiums for employee only coverage above 9.5% of income) and those not eligible for public programs – Tax credit goes directly to offset premiums each month – with end of year settle up as part of filing federal income taxes. 17November 7,2013 Prepared by Pete Benner for U of M AFSCME

What is Affordable? Affordable means that the employee share of the employee only premium cannot exceed 9.5% of the employee’s household income. If employee share of employee-only coverage is “affordable”, but share of family coverage is “not affordable” – employee cannot get premium subsidy from Exchange. November 7,2013 Prepared by Pete Benner for U of M AFSCME 18

Plan Levels of Coverage Levels of Coverage Plan Pays on Average Enrollees Pay on Average* (in addition to the monthly plan premium) Bronze60 %40 % Silver70 %30 % Gold80 %20 % Platinum90 %10 % 19November 7,2013 Prepared by Pete Benner for U of M AFSCME

How Premiums Are Set Aged based for individual and small group market – just as they are now 3 to 1 range from youngest to oldest – just as they are now Geographic and tobacco use splits – just as they are now No add on for being sick – No pre-existing condition exclusion – No one denied coverage because they are sick – Guaranteed Issue 20November 7,2013 Prepared by Pete Benner for U of M AFSCME

Age Bands Platinum Plan – Metro – Non Smoker 25 - $ $ $ Platinum Plan – Duluth - Non Smoker 25 - $ $ $ November 7,2013 Prepared by Pete Benner for U of M AFSCME 21

Plans Available and Tobacco Upcharge Blues – none Medica – 9% Preferred One – 14% HealthPartners – 15.15% UCare – 30% November 7,2013 Prepared by Pete Benner for U of M AFSCME 22

When can you enroll? Initial open enrollment October 1, 2013 through March 31, 2014 Annual open enrollment after that October through December Special enrollment periods available in certain circumstances during the year Individuals may apply and be eligible for Medicaid throughout the year If you have “minimum essential coverage” you cannot enroll in public program or tax credit without dropping that coverage. 23November 7,2013 Prepared by Pete Benner for U of M AFSCME

MNsure Assisters Website Toll-free call center In-Person Assistance Help when you need it 24November 7,2013 Prepared by Pete Benner for U of M AFSCME

Who Wins? Kids, Grandkids and Pregnant Women to Medical Assistance Lowest Income workers to Medical Assistance no matter what Workers excluded from employer coverage to MNsure Workers for whom employee only coverage is not affordable to MNsure Workers on unpaid leave or layoff to MNsure. Former employees to MNsure. Pre-65 early retirees to MNsure. Public sector retirees with Health Care Savings Plans through MSRS can use that money to pay MNsure premiums and still get premium tax credit. 25November 7,2013 Prepared by Pete Benner for U of M AFSCME

MNSURE November 7,2013 Prepared by Pete Benner for U of M AFSCME 26