1 The Affordable Care Act and Texas Implementation Texas Statewide Independent Living Conference April 5, 2011 Stacey Pogue, Senior Policy Analyst, Center for Public Policy Priorities 900 Lydia Street - Austin, Texas (512) –

2 Health Reform: The Big Picture Establishes a system for making comprehensive care available to all lawfully present Americans at an affordable price Competition in health insurance marketplace cannot be based on avoiding risk Lays a foundation for controlling costs and improving quality of care

3 Timeline : Early insurance market reforms begin : Start building new systems needed to support covering large numbers of uninsured. 2014: Big expansion of coverage starts.

4 Health Reform Building Blocks No lifetime limits Parent’s coverage for young adults to age 26 No pre-existing condition denials for kids More accountability for premiums New federal high risk pool: Small employer tax credits Medicare improvements First Year Reforms

5 Health Reform Building Blocks Can’t deny coverage No pre-existing condition exclusions Can’t charge more if you get sick Limits on premium increases based on age Minimum essential benefits and more standardized plans Small business tax credits increase Private Market 2014

6 Health Reform Building Blocks Eligibility up to 133% of the federal poverty level ($29,300/yr for family of four) Adds ≈ 1.3 million adults in Texas –Need improved eligibility system Full federal funding Maximum state share of 10% –Significant new state costs Medicaid Expansion 2014

7 Health Reform Building Blocks Exchange = state-based, organized insurance market Clear, comparable information on cost, coverage, value Open to: –Individuals without job-based insurance –Small employer groups –Members of Congress Premium assistance for <400% FPL ($88,000 for a family of four) Sliding-scale deductibles/copays and out-of-pocket caps Exchange & Affordability 2014

8 Coverage Level Options in the Exchange 4 standard levels, plus a catastrophic plan (for people under age 30 or if no other coverage is affordable) Options vary by % of covered benefits paid by the plan on average vs % covered through out-of-pocket enrollee cost sharing % covered by plan % enrollee cost share All coverage has essential benefits, to be defined by HHS: hospital, ER, mental health, maternity, Rx, preventive care, chronic disease management and more. Platinum Bronze Gold Silver

9 >$88,400 for a family of four; >400% of FPL  Job-based coverage, or  Full-cost coverage in the exchange $66,200-$88,400; % of FPL  Job-based coverage, or  Subsidized exchange coverage: premiums capped at 9.5% of income $44,100-$66,200; % of FPL  Job-based coverage, or  Subsidized exchange coverage: premiums capped at 6.3 – 9.5% of income $29,300-$44,100; % of FPL CHIP Job-based coverage, or Subsidized exchange coverage: premiums capped at 3% - 6.3% of income <$29,300 for a family of four; < 133% FPL Medicaid Children Adults (non-disabled adults, not eligible for Medicare) Family Income Health Reform Coverage Options by Income Family income based on 2009 federal poverty income levels for a family of four

10 Texas Uninsured by Income Today… 88% of 6.4 million uninsured <400% FPL 758K 628K 2.1 Million 1.8 Million 1.2 Million Annual income limits given for a family of four, federal poverty level U.S. Census, CPS 6.4 million includes 1.6 million non-citizens; ~2/3 of ( just over 1 million) likely undocumented

11 Health Reform Building Blocks Requirement to have coverage if you have an affordable option Several exemptions Needed for affordable coverage after market reforms Penalty is 1/6 of the cost of coverage Individual Mandate 2014

12 Health Reform Building Blocks Larger employers face penalties if full-time workers get subsidized exchange coverage –Penalty is ≈1/4 of the cost of coverage Small employers have no new obligations; won’t face penalties –May qualify for tax credits (2010) –Can purchase at a fair price in exchange –Or employees can directly get affordable exchange coverage Employer Responsibility 2014

13 Under Reform Employer 159 million 56% Medicaid/CHIP 51 million 18% Nongroup & Other 26 million 9% Private Exchanges 24 million 9% Uninsured 23 million 8% Employer 162 million 57% Medicaid/CHIP 35 million 12% Uninsured 54 million 19% Nongroup & Other 30 million 11% Without reform Source: The Congressional Budget Office Cost Estimate of H.R. 4872, Reconciliation Act of 2010, Mar. 20, Million U.S. Residents Under Age 65 Americans’ Coverage in 2019: If nothing changed compared to health reform law

14 Which Texans would Gain Coverage If Reform were Fully Implemented Today? Exchange with help Exchange at full cost Medicaid adults: newly eligible Medicaid/CHIP kids : eligible NOW but not enrolled Remain uninsured ≈ 2 Texans gain private coverage for each 1 gaining through Medicaid Of the 6.4 Million Uninsured Texans today…

15 Who Will Still be Uninsured? U.S. Citizens Not subject to mandate; will not owe penalty –those with very low income –those who would pay more than 8% of income for most affordable exchange coverage Subject to mandate; will owe penalty –Some may choose not to buy coverage –Others may still find coverage unaffordable Undocumented: not covered by the mandate no Medicaid/CHIP (not before, not now), no premium help, and cannot buy at full cost from exchange Legal Permanent Residents: Adults are excluded from Texas Medicaid under state law, but Can purchase from exchange and qualify for help with premiums

16 Best Steps for Texas to take in 2011 to Implement Health Reform Start building a strong Texas insurance exchange to help families and small businesses get affordable insurance in Make sure the Texas Department of Insurance can enforce popular insurance reforms—like no pre-existing denials for kids, keeping kids on your policy until age 26, and making sure rate hikes are fair. Give state agencies and the exchange the authority and tools to build consumer-friendly systems for enrolling in health coverage. Fed law requires “No Wrong Door” and online application between exchange and Medicaid. Need integration between two enrollment systems from the start

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