1.  The Affordable Care Act 2013 Update This publication has been created by the Area Agency on Aging, Region One with Financial assistance, in whole or in part, Through a grant from the Center for Medicare and Medicaid Services.

2. The Affordable Care Act  The Patient & Protection Affordable Care Act (PPACA) passed in 2010 has provisions that take effect each year until 2020.  The PPACA affects Medicare, Medicaid, Private and Group Health Insurance, and mandates the availability of affordable health insurance to all Americans beginning in 2014

3. Helpful Acronyms  ACA – Affordable Care Act (short for the PPACA)  CMS – Centers for Medicare and Medicaid Services  FPL – Federal Poverty Level (annual levels announced every February)

4. The ACA and Medicare  In general, the ACA will restructure payments made by Medicare with a combination of reductions in some areas, increases in others, as well as a combination of financial incentives and penalties based quality performance

5. The ACA and Medicare  the ACA will restructure payments made by Medicare to a “value-based” payment system measured by the health of patients versus a “volume-based” payment system measured by the number of services provided

6. 2013 Part D Drug Costs  In 2013 the cost of prescription drugs to Medicare beneficiaries in the donut hole will continue to reduce  In 2013 beneficiaries will pay 47.5% for brand-name drugs, and 79% for generic drugs in the donut hole

7. The ACA & Part D Drug Costs  Part D drug co-insurance continues to gradually reduce for beneficiaries until 2020 when the donut hold goes away  In 2020 the donut hole coverage period will effectively become an extended initial coverage period where the costs of all drugs is 25% of the total drug cost

8. Hospital Reimbursements  Reduces or eliminates payments to hospitals for preventable and excessive hospital re-admissions effective October, 2012  Reduces Medicare payments to certain hospitals for hospital-acquired conditions by 1% beginning in 2015

9. Primary Care Physicians  Increases reimbursement rates to primary care physicians beginning in 2013  Provides for financial incentives to doctors for keeping patients healthy based on standardized criteria

10. Medicare Accountable Care Organizations  The ACA has selected medical networks as designated Accountable Care Organizations (ACO’s)  The ACO’s provide coordinated care through a network of primary care and specialty providers

11. Medicare Accountable Care Organizations  Accountable Care Organizations (ACO’s) are selectively available in some areas to Original Medicare beneficiaries  ACO’s are not HMO’s, and members have the same flexibility as all Original Medicare beneficiaries

12. Medicare Electronic Health Records  The ACA imposes penalties on medical providers not showing “meaningful use” toward the implementation of electronic health records beginning in 2015  Electronic Health Records (EHR) are envisioned as key to coordinated care

13. Medicare Demonstration Projects  Various demonstration projects (pilot projects) are being established to provide better care to beneficiaries and save costs  Care Transitions demonstration projects  DMEPOS Competitive Bidding in Maricopa and Pima Counties on 7-1-13

14. Medicare Fraud & Abuse  The ACA’s ongoing effort to prevent Medicare fraud and abuse continues with enhanced fraud detection capabilities  Senior Medicare Patrol programs empower beneficiaries to be watchful for fraud and abuse

15. Medicare Advantage Plans  Payments to Medicare Advantage Plans are gradually reduced between 2012 and 2016 to be more in-line with average fee- for-service payments  85% of plan expenditures must go toward members care to avoid penalties

16. Medigap Review Under the ACA  The ACA requires the NAIC to review Plans C and F for potential revision to include “nominal cost-sharing to encourage the use of appropriate physician services under (Medicare) Part B.” The new benefit standards are to be made available beginning January 2015

17. Independent Payment Advisory Board  Establishes a 15-member independent review board to reduce the per capita rate of growth of Medicare spending  The Board will regularly review expenditures and make recommendations to achieve reductions in payments beginning in 2015

18. Medicaid Expansion  States are permitted to opt into Medicaid expansion beginning in 2014  Medicaid would effectively be available to all U.S. citizens and legal, permanent residents with income below 138% (133% + 5%) of the Federal Poverty Level

19. Arizona & Medicaid Expansion  Arizona has passed legislation to fully participate in Medicaid Expansion. Beginning in 2014 the Expansion goes into effect.  Health Insurance Exchanges that begin in 2014 can only offer the premium subsidies to residents with more than 100% of FPL

20. Health Insurance Marketplace  The ACA mandates that states either establish their own health insurance exchanges by October 1, 2013 or use the federal exchanges  The health insurance marketplace will offer citizens and legal residents affordable health care options regardless of pre-existing conditions

21. Arizona’s Marketplace  Arizona has decided not to establish its own exchange, as have 30 other states  Arizona’s exchange will be established and operated by the Federal Government  Administration by CMS, and will be available to consumers on 10/1/13

22. Eligibility  Citizens and legal residents  Premium subsidies are available to individuals and families with income less than 400% of FPL  Employees offered coverage by their employer are not eligible for premium credits

23. Individual Premium Limits  Premium payment limits based on income  100-133% FPL: 2% of income  133-150% FPL: 3-4% of income  150-200% FPL: 4-6.3% of income  200-250% FPL: 6.3-8.05% of income  250-300% FPL: 8.05-9.5% of income  300-400% FPL: 9.5% of income

24. Income Examples  For a single person (annual income  100% of FPL = $ 11,490 ; 400% of FPL = $ 45,960  For a couple (annual income)  100% of FPL = $ 15,510 ; 400% of FPL = $ 62,040  For a family of four (annual income)  100% of FPL = $ 23,550 ; 400% of FPL = $ 94,200

25. Essential Benefits Package  Creates an essential health benefits package that provides a comprehensive set of services  Coverage for at least 60% of health costs  Limits annual cost-sharing to the HSA limits ($5,950/individual and $11,900/family); lower limits for those with income less than 250% FPL

26. Benefit Tiers  Bronze Plan pays 60% of costs  Silver Plan pays 70% of costs  Gold Plan pays 80% of costs  Platinum Plan pays 90% of costs  All Plans must provide essential benefits

27. The Individual Mandate  Requires U.S. Citizens and Legal Residents to have qualifying health coverage beginning in 2014  Those without coverage face tax penalties beginning in 2014 if not covered

28. The Individual Mandate  2014 penalty is $95 or 1% of taxable income, whichever is greater  2015 penalty is $325 or 2% of taxable income, whichever is greater  2016 penalty is $695 or 2.5% of taxable income, whichever is greater

29. The Individual Mandate  Exemptions to the tax penalties are available for financial hardship, religious objections, American Indians, those without coverage for less than 3 months, undocumented immigrants, and incarcerated individuals

30. Assisters and Navigators  The ACA requires that Assisters be available in 2013 to facilitate people shopping for new health insurance  The ACA requires Navigators in 2013 and beyond to help people shopping for insurance on the exchange

31. Private & Group Health Insurance  The ACA bans annual or lifetime limits on the cost of care  The ACA mandates preventive health services without a co-pay  The ACA requires that 85% of insurance revenue be spent on healthcare, and that shortfalls be refunded to members

32. Private & Group Health Insurance  Requires dependent coverage for children up to age 26  Prevents denials or increased premiums due to pre-existing conditions, and limits waiting periods to 90 days

33. Employer Requirements  Assess employers with 50 or more FT employees that do not offer group coverage, and have at least one FT employee who receives a premium tax credit, a fee of $2,000 per FT employee (excluding first 30 employees)  This provision has been delayed to 2015

34. Employer Requirements  Employers with 50 or more FT employees that offer coverage, but have at least one FT employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium tax credit or $2,000 for each FT employee (excluding first 30 employees)  This provision has been delayed to 2015

35. Employer Requirements  Employers with more than 200 employees are required to automatically enroll employees into employer sponsored group health insurance coverage  Employees may opt out  This provision has been delayed to 2015

36. Small Business Tax Credits  Employers with 25 or less employees and average annual wages of less than $50,000 that offer their employees group health coverage are eligible for business tax credits

37. ACA Information Resources Marketplace 1-800-318-2596 www.healthcare.gov www.cms.gov www.kff.org