Health Reform Implementation
-- Federal Regulations -- Presentation to the
NIHB Annual Consumer Conference
September 28, 2011
Doneg McDonoughTechnical Advisor
to the National Indian Health Board([email protected])
Acronyms
AI/AN: American Indian and Alaska Native I/T/U: Indian Health Service (IHS), Tribe and tribal organization, and urban Indian organizationHHS: Federal Department of Health and Human ServicesCMS: Center for Medicare and Medicaid Services, HHSCCIIO: Center for Consumer Information and Insurance Oversight at CMSIRS: Internal Revenue Service, Department of TreasuryIHCIA: Indian Health Care Improvement ActACA: Patient Protection and Affordable Care Act, including reconciliation act modifications (Pub. L. 111-148 and Pub. L. 111-152)
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Update on NIHB regulation work
At the moment --health reform = issuance of Federal regulations From HHS, CMS, CCIIO, IHS, IRS
In reviewing and commenting on these Federal regulations, a primary focus is to ensure that American Indians and Alaska Natives will have timely access to a full range of needed health care services from the AI/AN’s providers of choice.
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Our Pitch / Framework for Comments
Federal Trust Responsibility Federal government has a unique obligation to AI/AN There is a unique relationship between the Federal
government and Tribes
In the ACA, Congress added a new mechanism to carry out the Federal Trust Responsibility In addition to Indian health programs (I/T/U
providers) supported by direct appropriations In addition to Medicare, Medicaid and CHIP ACA created subsidized insurance through Exchanges
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Our Pitch / Framework for Comments
The Federal government as well as AI/AN and Tribes benefit if the Exchange plans provide a real option for AI/AN Potential to bring additional resources for health care
services to tribal communities… thereby furthering Trust Responsibility
Potential to lessen demands on Federal appropriation to IHS Potential to expand health care services readily available to
AI/AN Opportunity to access full AI/AN cost-sharing protections and
general premium assistance if enroll through Exchange But AI/AN need to know that they can access their providers
of choice if they enroll in an Exchange plan
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Our Pitch / Framework (continued)
There is tension in two elements of implementation Obama Administration’s desire to provide maximum
flexibility to States in implementing health reform For Indian-specific provisions, efficient and effective
implementation requires standardization
To carry-out the Congressional intent in the ACA, we need CMS to direct States on a limited set of issues, such as -- Require Exchange plans to offer to contract with I/T/U Require Exchange plans to use Indian Addendum
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Our Pitch / Framework (continued)
Two general provisions in the ACA support our request that Exchange plans be required to offer to include I/T/U providers in Exchange plan networks ACA section 1311(c)(1)(B): Network adequacy
(“ensure a sufficient choice of providers”) ACA section 1311(c)(1)(C): Essential
community providers (“providers that serve predominantly low-income, medically-underserved individuals”)
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Our Pitch / Framework (continued)
Two Indian-specific provisions in the IHCIA (and ACA) support our request that Exchange plans be required to offer to include I/T/U providers in Exchange plan networks IHCIA section 206: Established a “right of
recovery” for services rendered by I/T/U to AI/AN IHCIA section 408: Established that “a Federal
health care program must accept an [I/T/U] as a provider eligible to receive payment under the program for health care services furnished to [AI/AN]…
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Our Pitch / Framework (continued)
Taken together, these provisions – Establish a requirement (most directly through IHCIA
section 408) that Exchange plans offer to contract with I/T/U
The requirement to “offer to contract” does not dictate the rate at which I/T/U are to be paid
– Section 408 establishes a floor of “payment… on the same basis as any other provider…”
– Section 206 provides leverage in rate negotiations with Exchange and other health plans that if an I/T/U is not included in-network, the I/T/U can later demand payment at the higher of (a) the I/T/U’s reasonable charges billed or (b) the highest rates paid to other providers
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Our Pitch / Framework (finale)
Since Congress enacted provisions establishing that I/T/U have a right to participate in Exchange plan networks and to bill Exchange plans (whether in-network or not)And, since there are a range of Indian-specific provisions in various Federal laws that Exchange plans are obligated to adhere toIt is in the interest of the Federal government (and AI/AN) to -- Require Exchange plans to offer to contract with I/T/U Require the use of a standard Indian Addendum to the
Exchange contracts
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NIHB Regulatory Work
Twice a month, NIHB updates a report titled NIHB Regulation Review and Impact Analysis Report (RRIAR)The purpose of the RRIAR is to identify and summarize key regulations issued by CMS pertaining to Medicare, Medicaid, CHIP, and health reform that affect – (a) American Indians and Alaska Natives and/or (b) Indian Health Service, Indian Tribe and tribal organization, and urban Indian
organization providers. The RRIAR includes a summary of regulatory analyses prepared by NIHB and indicates the extent to which the recommendations made by NIHB were incorporated into any subsequent CMS actions. The analyses and recommendations include those made by NIHB, by the Tribal Technical Advisory Group to CMS (TTAG), and in some instances by individual Tribes.The RRIAR consists of three tables – Table A provides a status report on the RRIAR itself, listing the regulations included in the
RRIAR to date, and the components of the analysis provided under each. Table B lists key regulations issued by CMS, due dates for comments, a synopsis of the
CMS action, and a summary of the analysis, if any, prepared by NIHB. Table C identifies the recommendations made by NIHB pertaining to each regulation, if
any, and evaluates the extent to which the recommendations made by NIHB were incorporated into subsequent CMS actions.
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Numerous regulations under review
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Value of AI/AN Cost-Sharing Protection (HHS Indian Offset)
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Value of premium and cost-sharing assistance in an Exchange
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
Minimum Employer Qualifying Coverage (ACA) Family (of 3) in Exchange at 250%
FPL (ACA)
$5,371 $8,141
$4,349
$3,685
$5,378$3,630
Comparison of Premium and Cost-Sharing Costs: Illustration of Minimum Employer-Sponsored Coverage versus Exchange Coverage
(Family of 3 at 250% FPL)
Enrollee cost-sharing
Employee/enrollee premium
Employer/sponsor premium
Total: $15,098 Total: $15,456
Key Issues: (Tribal) employer responsibility
For larger employers subject to employer requirements under ACA (50+ FTE) –
Employers offering coverage pay into Exchange if Plan does not cover 60% of expected costs (60% actuarial
value), or Employee’s share of premium is more than 9.5% of income and Employee enrolls in plan through an Exchange Employer pays $3,000 per employee enrolling through
Exchange
Employers not offering coverage Pay $2,000 to Exchange for every full-time employee
beyond the first 30
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Key Issues: Premiums and cost-sharing
Employees can leave employer coverage if “unaffordable”
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$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Average Employer-Sponsored Coverage (2009)
Minimum Employer Qualifying Coverage (ACA)
$4,090 / 71%
$2,887 / 52%
$959 / 17%
$677 / 12%
$740 / 13%
$1,972 / 36%
Employer-Sponsored Coverage: Distribution of Premiums and Cost-Sharing for Covered Services (individual coverage; illustration)
Employee Cost-sharing
Employee premium
Employer premium
Total: $5,536Total: $5,789
Key Issues: Premiums and cost-sharing
For coverage through an Exchange – All plans must offer “essential benefits
package” that is defined by Secretary The plans offered in an Exchange vary by
their actuarial value (i.e., the average share of health care costs that are paid by the plan)– Bronze (60% actuarial value)– Silver (70% actuarial value)– Gold (80% actuarial value)– Platinum (90% actuarial value)
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Key Issues: Premiums and cost-sharing
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• Government assistance is provided only to individuals/families that are enrolled “in the individual market offered through an exchange”
• Assistance available to persons in the exchange with incomes at or below 400% of FPL
• Premium assistance (Sec. 1401)– Tax credits limit enrollee premium costs– Enrollees pay the premium amount up to the value of the premium cap and the government pays the
additional premium cost, if any• Government premium assistance is tied to the cost of the second lowest silver plan in the exchange, or the plan selected,
whichever is lower– Tax credits are not available to individuals with employer-sponsored coverage
• Small business owners may be eligible to receive tax credits to offset 35% – 50% of their employee health insurance costs
• Cost-sharing reductions (Sec. 1402)– First, the law imposes reduced out-of-pocket limits (specified in law) by income level– Second, the law specifies the actuarial value of plans by income level, but the plans adjust the actual cost-
sharing structure (i.e., deductibles, co-payments, co-insurance) to achieve the actuarial value– Health plans will receive a payment from HHS to compensate for the average added costs (increased
actuarial value) from the reduced enrollee cost-sharing– AI/AN with income at or below 300% of FPL have no cost-sharing requirements for covered services
Key Issues: Premiums and cost-sharing
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Income Level
Initial Premium %
in Tier
Final Premium %
in TierUp to 133% 2.0% 2.0%133% - 150% 3.0% 4.0%150% - 200% 4.0% 6.3%200% - 250% 6.3% 8.1%250% - 300% 8.1% 9.5%300% - 400% 9.5% 9.5%401+% no limit no limit
Income Level Single Family (of 3)133% $432 $731150% $650 $1,099200% $1,365 $2,307250% $2,180 $3,685300% $3,087 $5,218350% $3,601 $6,088
Maximum Enrollee Premium Contributions in Exchange (percent of income; 2010 poverty levels)
Maximum Enrollee Premium Contributions in Exchange (dollar amount; 2010 poverty levels)
Enrollee premium protections (annual)
Key Issues: Premiums and cost-sharing
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Enrollee cost-sharing protections (annual)
Income LevelActuarial Value
of Coverage Single Family
Maximum out-of-pocket (non-premium) costs*0 - 100% 100% nominal nominal101 - 150% 94% $1,980 $3,960151 - 200% 87% $1,980 $3,960201% - 250% 73% $3,000 $6,000251% - 400% 70% $3,960 $7,920400% + $5,950 $11,900
Average out-of-pocket (non-premium) costs**0 - 100% minimal minimal101 - 150% $282 $807151 - 200% $612 $1,748201% - 250% $1,271 $3,630251% - 400% $1,412 $4,034
* Maximum out-of-pocket costs are 2011 figures which will be increased annually by the average increase in premiums nationally for the prior year.
** Average out-of-pocket costs calculation is extrapolated from the cost of the average employer-sponsored health plan offered in 2010 as reported by the Kaiser Family Foundation.
Cost-Sharing Protections through an Exchange for Persons at or Below 400% of FPL