Federal Health Reform 2013

The Affordable Care Act A Non-Partisan Presentation

Thomas McAuliffe

Missouri Foundation for Health

Percentage of All Firms Offering Health Benefits, 1999-2009

66%69% 68% 66% 66%

63% 60% 61% 60% 63% 60%

56% 57% 58% 58%55% 52%

47% 48% 45%49%

46%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

All Firms

3-9 Workers

Patient Protection and Affordable Care

Act (ACA)

Creates Market Places (Exchange)

Subsidies to Purchase

Subsidies to small businesses

Carrot

Changes to insurance

More People

Individual Mandate

Business Requirements

Fees / Taxes

Stick

Costs

Payment & Prevention

Expanding Medicaid

Improving Medicaid

Increasing health workforce

Politics of health

Topics Covered in the ACA

• Health Insurance Exchanges

• Tax Credits for Individuals

• Impact on Small Businesses

• Employer Requirements

• Private Insurance

• Individual Mandate

• Medicaid

• Medicare

• Workforce/Access to Care

• Quality of Care

• Prevention

• New Models of Care

Major Themes of the ACA

• Expanding Health Insurance Coverage

• Insurance Regulations

• Focus on Prevention

• New Models of Care

• Increasing Quality

Health Insurance Exchanges

• Like a Farmer’s Market for health insurance

• Individuals and small businesses (<100)

• Larger employers beginning in 2017

• Creates four benefit plans, plus catastrophic plan

• Guarantee issue and renewability

• Rating rules (only for age, family size, and tobacco)

Benefit Design• Essential health benefit package includes:

• Preventive care• Hospitalization• Emergency services

• Benefits features:• No cost-sharing for preventive care• No annual or lifetime dollar limits on coverage• Coverage for dependents up to age 26

• Prescription drugs• Maternity care• Mental health and

substance abuse

Premium Subsidies to Individuals/Families

Tax Credits: Maximum Percent of Income Paid for Premiums

Income for a Family of Four Percent Paid for PremiumsFPL Range From: To:

100-133% of FPL $23,050 $29,327 2% of income

133-150% of FPL $29,327 $33,075 3-4% of income

150-200% of FPL $33,075 $44,100 4-6.3% of income

200-250% of FPL $44,100 $55,125 6.3-8.05% of income

250-300% of FPL $55,125 $66,150 8.05-9.5% of income

300-400% of FPL $66,150 $88,200 9.5% of income

Example$44,100 -Annual income for family of four at x 6.3% 200% of poverty

$2,778 – Family’s Share ($232/month)

Bronze Plan $10,000

Family’s Share - $ 2,778

Premium Support $ 7,222

ExampleBronze Plan $10,000

Family’s Share - $ 2,778

Premium Support $ 7,222

Gold Plan $12,000

Family’s Share - $ 2,778

Premium Support - $ 7,222

Additional Family Share $ 2,000

Total Family Share for Gold Plan:

$4,778 or $398/month

Small Business• No requirement that small employers must offer

health insurance or pay a fine (<50 employees)

• Sliding scale tax credits for small employers (<25 employees)

• Access to the Exchange in 2014 and must use tax credit within the Exchange starting then

Employer Requirements• Employers with >50 employees

• If do NOT offer coverage• If do offer coverage

• If employer offers coverage, the employee’s share of premium must exceed 9.5% of income in order for them to be eligible for a tax credit in the Exchange

• Employers with >200 employees

• Report health coverage on W-2 forms (year delay for employers that file fewer than 250 W-2’s)

Changes to Private Insurance• No annual/lifetime limits

• No rescinding coverage

• No pre-existing condition exclusions

• Rating rules

• Guaranteed issue

• Dependents up to 26

• 80-85% of premium spent on medical services • (~$65 million in rebates in Missouri)

Individual Mandate• All individuals must have “qualifying” coverage

• Those without coverage:• Will be required to pay a phased-in penalty:

○ $95 or 1% of taxable income in 2014, ○ $325 or 2.0% of taxable income in 2015, and ○ $695 or 2.5% of taxable income in 2016

(up to a maximum of three times that amount or $2,085)

• Exemptions for financial hardship, religious objections, or 8% rule

Expansion of MO HealthNet

• Expand Medicaid to 133% of FPL for non-Medicare

individuals and families

• Guaranteed benchmark benefit package

• 100% federal funds at first, then step-down to 90%

18%

85%  100%  133% 185%  300%

 1 $9,495 $11,170 $14,856 $20,665 $33,510

 2 12,861 15,130  20,123 27,991 45,390

 3 16,227 19,090  25,390 35,317 57,270

 4 19,593 23,050  30,657 42,643 69,150

2012 Federal Poverty Levels (FPL)

• 90 percent of the currently uninsured have incomes below 400% of poverty.

• 66% of the currently uninsured have incomes below 200% of poverty.

Source: The Missouri Medicaid Expansion: Good for All Missourians

BUDGET SUMMARYCOST, SAVINGS & REVENUE

General Revenue Summary -- Dollars in MillionsFY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

Cost New Eligibles $0.0 $0.0 $0.0 ($30.1) ($69.3) ($86.6) ($117.6) ($143.3)

Savings $31.0 $71.4 $82.3 $81.2 $78.9 $79.6 $78.4 $78.0

New Revenues $15.5 $53.6 $57.3 $61.8 $63.0 $65.0 $67.2 $69.6

Total Impact on GR $46.5 $125.0 $139.6 $112.9 $72.6 $58.0 $28.0 $4.3

Source: Missouri Office of Administration

Arguments Against Expansion• The US and Missouri can’t afford this

expansion

• Medicaid is a broken system

• Congress change the terms of the expansion

• Affect on the state’s credit rating (AAA- Negative outlook)

Challenges• Medicaid Expansion

• Will it happen?

• Exchanges• What will they look like?

• Access is still significant problem• Parity & cost-savings• Navigators

• Who is going to assist with enrollment?

19 Declared State-based Exchange; 7 Planning for Partnership Exchange; 25 Default to Federal Exchange

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Contact Information:

Thomas McAuliffe

tmcauliffe@mffh.org

314-345-5574