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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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