Overview of Health Reform Community Memorial Foundation John Bouman Sargent Shriver National Center on Poverty Law May 6,

Health Reform Categories Coverage -- additional 32 million people Public programs (Medicaid, SCHIP, clinics) Private requirements/exchange/subsidies Retains/reforms private insurance system Demonstrations and investments in quality, cost control, workforce, LTC re-balance, more 2

Medicaid Expansion Covers everyone under 65 up to 133% FPL – 100% federal funding for newly eligible in , phases down to 90% in 2020 and thereafter – Early implementation option (existing FFP) Illinois: ,000 newly eligible, many young adults 3

Family SizeIncome 1$14, $19, $24, $29, % Federal Poverty Level: Medicaid Expansion

Medicaid expansion Increase Medicaid primary care rates to 100% of Medicare levels in with full federal funds for increase SCHIP retained and fully funded through 2015; 23 pct. point increase in match rate in 2015 Maintenance of effort for adults to 2015 and children to 2019 No change in non-citizen rules: 5-year bar 5

Subsidies to families with incomes between %FPL to help purchase insurance Subsidies also available to families between % FPL to limit out-of-pocket expenses Available to legal noncitizens, not to undocumented who buy insurance Private insurance affordability

Premium subsidies Sliding scale: Up to 133% FPL: 2% of income % FPL: 3 – 4% of income % FPL: 4 – 6.3% of income % FPL: 6.3 – 8.05% of income % FPL: 8.05 – 9.5% of income % FPL: 9.5% of income

400% Federal Poverty Level: Family SizeIncome 143, , , , Premium subsidies

The Exchange “Expedia” or “Travelocity” for insurance plans User friendly format to understand terms, compare benefits & services across plans Four levels of coverage standard set of comprehensive benefits including medical, mental health, prescription drug & rehabilitative services 9

Exchange Minimum benefit package Bronze plan covering 60% of the cost of benefits Silver plan covering 70% (basis for premium subsidies) Gold plan covering 80% Platinum plan covering 90% Catastrophic plan for individuals < age 30 States can create “Basic Health Plan” for uninsured % FPL 10

Individual Mandate Requires all U.S. citizens and legal residents to have coverage Penalties take effect January 2014: – $95 in 2014 (or 1% taxable income) – $695 in 2016 (2.5% taxable income) Hardship exceptions Important to broaden the insurance pool 11

Employer provisions No mandate Penalty: if above 50 employees and do not offer coverage, and at least one employee receives a public subsidy (flat fee for each employee after the first 30) Smaller penalty: if above 50 employees and offer coverage, but at least one employee receives a public subsidy 12

Small business States create small business pools, or “SHOP Exchanges” by 2014 Under 100 employees (state option: 50) Until 2014, tax credit of 35% of health insurance costs for businesses with under 10 employees with under $25K avg. salary partial credit for under 50 employees with under $50K avg. salary. 50% credit first two years of SHOP Exchange 13

Dependent Coverage Expansion Under 26 years old and parent has a policy that provides “dependent” coverage, can be included Effective for policy renewals after September 2010 Illinois law in effect now 14

Insurance Market Reforms Guaranteed issue/renewability No exclusions for pre-existing conditions Public review of premium increases Age rating 3:1 ratio allowed Prohibition against rescissions Elimination of lifetime & annual dollar limits Easier access to health care providers Spend 80-85% of premium dollars on care 15

Temporary High Risk Pool Until 2014 when ban on pre- existing condition is lifted & Exchange operational Adults with pre-existing conditions & uninsured for the past 6 months eligible for the Pool 16

Tax Exempt Hospitals 17 Effective the first tax year after March 2012, each tax- exempt hospital must: Complete a community health needs assessment at least every three years Work with local public health officials in that assessment process Make the assessment widely available to the public Report annually, in its Form 990 tax return, how it is meeting the needs identified in the assessment, and where it is not meeting those needs, “the reasons why such needs are not being addressed”

“Donut Hole” Medicare Part D co-payment for prescription drugs Phased out by 2019 $250 downpayment in

Other Medicaid Reduction of Disproportionate Share payments to reflect phase-in of coverages after 2014 Home and Community-Based state plan option – Allow financial eligibility to 300% SSI – Allow targeting of populations – Allow more than one – No need for waiver “cost neutrality” 19

CLASS Act “Community Living Assistance Services and Supports” (CLASS) Act: – National, voluntary long term care insurance program – Payroll deductions; requires opt-out – 5 year enrollment before vesting – If person becomes functionally impaired, cash payment of not less than $50/day for non-medical services and supports to stay in the community – Effective

Additional Provisions Comparative effectiveness research Medical malpractice reform demonstrations Medicare/Medicaid bundled payment demos Quality and care coordination demos Prevention and wellness research and demos No Medicare/Medicaid co-pays for prevention Medicaid long term care re-balancing strategies including Money Follows Person Healthcare workforce initiatives Funds for FQHC expansions 21

Timeline 2010 New high-risk pools and federal subsidy Coverage for dependents up to age 26 Restrictions on annual and lifetime coverage limits and pre-existing condition exclusions for children No co-pays for preventive care; no rescissions Small business tax credits $250 donut hole payment Optional early Medicaid expansion 22

Timeline 2011 Mandatory minimum medical loss ratio HHS develops standard documents and definitions to help consumers understand insurance coverage 2012 State DSH allotment could be reduced 23

Timeline 2013 States evaluated for significant progress toward having exchange operational by Exchanges open Medicaid expansion Major insurance market changes 2015 States eligible for 23% point increase SCHIP FFP 24

Timeline 2016 Health care choice inter-state compacts may take effect, allowing insurers to sell across state lines 2017 States begin to pay a share of Medicaid expansion 2018 Excise tax on high-cost plans takes effect 25

Resources Department of Insurance : Consumer Health Insurance hotline ( ) Kaiser Family Foundation: Department of Health and Human Services White House Reform Plan: meeting/proposal 26

Questions? Thank you! 27