Sheldon Weisgrau Thrive Allen County October 18, 2012

 Introduction  The Problem ◦ Why do we need health reform?  The Affordable Care Act (aka “Obamacare”) ◦ What’s really in the law? ◦ Specific impacts  Medicaid expansion  Seniors and Medicare  Rural health workforce  Questions & Discussion Health Reform Resource Project2

 Funded by Kansas Grantmakers in Health: ◦ Kansas Health Foundation ◦ Health Care Foundation of Greater KC ◦ REACH Healthcare Foundation ◦ Sunflower Foundation: Health Care for Kansans ◦ United Methodist Health Ministry Fund  Housed at Kansas Association for the Medically Underserved (KAMU) 3Health Reform Resource Project

 Assist in public education and consumer and stakeholder engagement related to health reform  Provide technical assistance to consumer and advocacy organizations  Assist Kansas entities in securing grants and programs available under the Affordable Care Act (ACA) 4Health Reform Resource Project

 “Best health care system in the world” ◦ Widespread medical technology ◦ State-of-the-art facilities ◦ Advanced research and training ◦ Center of development for drugs and medical devices ◦ Lots of money in the system, well-paid 5Health Reform Resource Project

 Access ◦ 48.5 million uninsured  365,000 uninsured in Kansas ◦ Millions more underinsured ◦ Employment-based health insurance declining ◦ Maldistribution of providers, other resources  Quality ◦ Inconsistent ◦ Disparities ◦ Patients often don’t receive recommended care  Cost ◦ Highest in the world ◦ Increasing faster than salaries and inflation ◦ Main driver of budget deficits Health Reform Resource Project6

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8 Source: KHI, 2011

Health Reform Resource Project9 Source: KHI, 2012

365,000 uninsured in Kansas = all residents in… Wyandotte

Greeley + Wallace + Lane + Comanche + Hodgeman + Clark + Wichita + Stanton + Rawlins + Kiowa + Sheridan + Graham + Hamilton + Gove + Cheyenne + Logan + Chase + Elk + Decatur + Trego + Edwards + Jewell + Ness + Morton + Lincoln + Rush + Woodson + Chautauqua + Smith + Osborne + Kearny + Haskell + Stafford + Meade + Barber + Scott + Republic + Rooks + Phillips + Norton + Stevens + Washington + Morris + Gray + Sherman + Harper + Ottawa + Mitchell + Ellsworth + Greenwood + Russell + Pawnee + Wabaunsee + Grant + Kingman + Thomas + Doniphan + Anderson + Clay + Coffey + Wilson + Cloud + Pratt + Linn + Brown + Rice + Marshall and Nemaha + Allen =365,000+ Kansans without health insurance Wyandotte

 The uninsured are: ◦ Less likely to receive preventive and prenatal care ◦ More likely to go without medical care or prescription drugs due to cost ◦ More likely to be diagnosed at later stage of illness ◦ More likely to be hospitalized for avoidable conditions ◦ Less likely to receive recommended care ◦ Less healthy ◦ Earn less ◦ Have higher death rates Health Reform Resource Project12

 900+ pages, 10 titles 1. Access to private health insurance 2. Expanded Medicaid coverage 3. Medicare reform 4. Wellness and prevention 5. Health care workforce 6. Fraud and abuse 7. Access to drugs and biologics 8. Voluntary long-term care insurance (CLASS) 9. Revenue measures 10. Manager’s amendment and reconciliation 13Health Reform Resource Project

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 Make better health insurance coverage more available and affordable for legal residents  Reform health care delivery and financing to provide better quality and outcomes, more cost effective care 15Health Reform Resource Project

 What it does ◦ Builds on the existing system of coverage  What it doesn’t do ◦ Does not create “government-controlled” or “socialized” health care ◦ Does not create “death panels” ◦ Does not turn the system over to insurance companies Health Reform Resource Project16

 Seven-Part Solution 1.Premium cost controls 2.Short-term incentives to increase coverage 3.New rules regarding scope of coverage and consumer protections 4.Individual mandate 5.Health Insurance Exchanges 6.Employer requirements 7.Expanded Medicaid 17Health Reform Resource Project

 Medical loss ratio requirements ◦ Insurance companies must spend 80/85 percent of premiums on medical services and quality improvement  Make available standardized comparable information on available insurance plans ◦  Support to states to create and strengthen insurance rate review 18Health Reform Resource Project

 Pre-Existing Condition Insurance Plans (PCIP) ◦ High risk pools for those uninsured for at least 6 months due to pre-existing condition  Early retiree reinsurance program ◦ Federal support to employers who provide coverage for retirees ages  Tax incentives for small employers to provide coverage 19Health Reform Resource Project

 Patients Bill of Rights ◦ Prohibits rescission ◦ No lifetime dollar limits  Dependents covered through age 26  No pre-existing condition exclusions for children  Guaranteed Issue and Community Rating: ◦ Nobody can be denied coverage or charged more due to pre-existing conditions (effective January 1, 2014) 20Health Reform Resource Project

 Mechanism to discourage “free-riders” under guaranteed issue ◦ Exemptions under certain conditions  Alternatives ◦ Employer/union-sponsored plan ◦ Individual insurance through an Exchange ◦ Public program (Medicare, Medicaid, etc.) 21Health Reform Resource Project

 Established by each state by 2014 ◦ Administered by federal govt if state opts out  For individual and small group markets ◦ Expands to larger employers in 2017  Provides web-based one-stop shopping ◦ Pooling mechanism for individuals and small businesses  Plans must offer “essential health benefits” package 22Health Reform Resource Project

 May be used to purchase coverage through Exchange ◦ Individuals qualify if household income is up to 400% of FPL ◦ Businesses qualify if they meet size and salary requirements 23Health Reform Resource Project

 Large employers (50+ employees) that don’t provide coverage may face penalties. ◦ For example:  Employer does not offer minimal essential coverage to full-time employees; and  At least one employee receives government subsidy to purchase insurance in Exchange 24Health Reform Resource Project

 By January 1, 2014, Medicaid expands to cover all eligible individuals with income up to 138% FPL Health Reform Resource Project25 Household Size 2012 Annual Federal Poverty Guidelines (138%) 1$15,415 2$20,879 3$26,344 4$31,809 5$37,274 6$42,739

 Private coverage through Exchanges ◦ Approx 16 million non-elderly uninsured ◦ Most are employed  Expanded Medicaid ◦ Approx 16 million non-elderly uninsured ◦ Half have income below 50% FPL ◦ One-third diagnosed with chronic condition 26Health Reform Resource Project

 365,000 Kansans currently uninsured (13% of population)  Under ACA: ◦ About two-thirds will receive insurance coverage  ~60% through expansion of Medicaid  ~40% through expansion of private insurance ◦ About one-third remain uninsured 27Health Reform Resource Project

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 Is the Medicaid expansion unconstitutionally coercive? ◦ Yes – The federal government may not make all Medicaid funding contingent on expanding the program ◦ So, the federal government has no enforcement authority over the expansion ◦ Therefore, expansion of Medicaid is optional for states Health Reform Resource Project29

 ,000 new beneficiaries ◦ Approx 60% of all Kansans covered under the ACA  New Medicaid spending ( ) ◦ Federal: ~ $3.5 billion ◦ State: ~ $166 million  Other budget impacts Health Reform Resource Project30

 Local impact ◦ New revenue for providers ◦ Expansion of capacity, services, and jobs  Economic impact  Effect of new dollars circulating through state and local economies Health Reform Resource Project31

 Enhances benefit package ◦ Covers annual wellness visit  Reduces out-of-pocket costs ◦ No deductibles or coinsurance for preventive services  Benefit used by 300,000+ Kansas beneficiaries in 2011 ◦ Phases out Part D donut hole  40,000 Kansas beneficiaries received average discount of $600 in 2011 Health Reform Resource Project32

 Reduces rate of cost growth ◦ Does not “cut” Medicare funding ◦ Phases out overpayment to Medicare Advantage plans ◦ Enables provider payment and delivery system reforms  From “volume-based” to “value-based” ◦ Expands fraud and abuse prevention  Extends program solvency Health Reform Resource Project33

 Expansion of home and community-based services  More funding for Aging and Disability Resource Centers (ADRCs)  Programs to enhance quality and patient safety, reduce readmissions  Programs to expand primary care, nursing, geriatric care workforce Health Reform Resource Project34

 Medicare payment changes for physicians ◦ 10% bonus for PC services furnished by PC practitioners, ◦ Reduce geographic practice expense disparities  Medicaid payment changes for primary care ◦ Payment at 100% of Medicare, Health Reform Resource Project35

 Expand National Health Services Corps ($1.5 billion over 5 years)  Primary care resident training in RHCs and FQHCs  Financial assistance/grants for: ◦ Dental students likely to work in rural areas ◦ Mid-career training for public and allied health ◦ Schools training mental health providers likely to serve high needs populations ◦ Family nurse practitioner training programs ◦ Expansion of nursing student loan program Health Reform Resource Project36

 November 6, 2012 ◦ If not the ACA, then what?  Establish Health Insurance Exchange? ◦ State, federal, or partnership  Medicaid expansion? Health Reform Resource Project37

Sheldon Weisgrau, Director Health Reform Resource Project 1129 S. Kansas Avenue, Suite B Topeka, KS Health Reform Resource Project38