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Mission:. To promote responsible and equitable fiscal policies through research and education. Joy Smolnisky, Director 808 N. West Ave., Sioux Falls, SD [email protected]. The Affordable Care Act (ACA) in South Dakota. Concepts Coverage Costs - PowerPoint PPT PresentationTRANSCRIPT
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Mission: To promote responsible and equitable fiscal policies
through research and education
Joy Smolnisky, Director 808 N. West Ave., Sioux Falls, SD 605-367-9667 [email protected]
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The Affordable Care Act (ACA) in South Dakota
• Concepts
• Coverage
• Costs
• Choices
• Consequences
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How will ACA affect South Dakotans’ access to and cost of health insurance?
Federal law includes:
regardless of state decision to expand Medicaid
1. Coverage guarantees
2. Insurance exchanges
3. Federal tax credits to pay for insurance
4. Individual mandate
5. Funding provisions
Medicaid
Expansion
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Coverage Guarantees
• Young adults can stay on parents plan until age 26 (2010)
• Eliminates life-time limits on coverage (2010)
• Guaranteed availability of insurance
• Minimum medical loss ratio for insurers
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state-based American health benefits exchange
1. “essential health benefits” packages
2. Four categories of plans
3. Limited annual cost-sharing
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How will affect South Dakotans’ access to and cost of health insurance?
Federal law includes:
regardless of state decision to expand Medicaid
1. Coverage guarantees
2. Insurance exchanges
3. Federal tax credits to pay for insurance
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FEDERAL TAX CREDITS
92,800 South Dakotans* will be eligible for Premium Subsidies
*Data Source: Research using Lewin Group economic models: http://www.familiesusa.org/assets/pdfs/health-reform/premium-tax-credits/South-Dakota.pdf
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FEDERAL TAX CREDITS – Cost Sharing
1/3 of out-of-pocket cap
1/2 of out-of-pocket cap2/3 of out-of-pocket cap
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Small Business Tax Credits
2010 to 2013: 35% credit / 25% NFP
2014 and after 50% credit / 35% NFP
http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers
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Dollars (in millions) available to help South Dakotans pay
health insurance premiums in 2014
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Federal Spending on Exchange Subsidies in SD, 2014-2019
Million $ in South Dakota
Premium Subsidies
Cost Sharing Subsidies
Total
876 $ 876 $ 106 $ 983Source: Urban Institute
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Funding mechanisms
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2013
•New limits on itemized medical deductions & flexible spending accounts ($2,500/yr)
•Medicare Tax increase (individual incomes over $200,000/families over $250,000)
•Tax on Medical Devices (2.3%)•Eliminates tax-deduction for employers receiving Medicaid retiree drug subsidy
2014 Employer requirements
2018 Excise tax on “cadillac” employer provided health plans
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How will ACA affect South Dakotans’ access to and cost of health insurance?
Federal law includes:
regardless of state decision to expand Medicaid
1. Coverage guarantees
2. Insurance exchanges
3. Federal tax credits to pay for insurance
4. Individual mandate
5. Funding provisions
Medicaid
Expansion
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How does this decision affect healthcare in South Dakota?
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138% FPL
100% FPL
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Medicaid Expansion Bridges the Gap
30,000 uninsured
South Dakotans
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49,000 uninsured South Dakotans below 138% federal poverty level
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Medicaid Expansion
FMAP (federal share)
for newly eligible
parents and childless
adults
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Another concern….
1. Will Federal Government continue commitment to 90% FMAP rate after 2020 for Medicaid Expansion?
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How much will Medicaid Expansion cost South Dakota?
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Cost projections arebased on assumptions
• Projected eligibles• Participation rates• Crowd-out rate • woodwork effect • Per enrollee cost
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How much will Medicaid Expansion cost South Dakota -
the first 6 years?Governor – $99.7 million• 5.5% increase in state Medicaid costs 2014-19 • 48,564 new eligibles from expansion & 5,982
existing eligibles
Urban Institute - $112 million
Kaiser: 1.1% increased state spending
Uncompensated care savings estimate change cost to a range of: $15 million total expense to $82 million in state government savings
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after 2019 - ballpark calculation:
X
48,564 newly eligible
$4,264 per person
State share of cost
X
State cost for care:48,564 x $4,264 x 10% = $20.7 million
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Adding administrative costs:
State cost for care*:48,564 x $4,264 x 10% = $20.7 million
State cost for administration:48,564 x 2.5% = $ 5.2 million
Annual SD cost* estimateafter 2019 = $25.9 million
*based on FY11 cost per eligible - calculations by SD B&PP
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HOW MUCH IS $26 million*?
• 8.6% of FY12 state spending on Medicaid to increase coverage by 42%
• $533 per year per person newly enrolled
• $31.41 per year per SD resident in new state spending
*based on FY11 cost per eligible - calculations by SD B&PP
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138% FPL
100% FPL
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138% FPL
100% FPL
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Medicaid Expansion Bridges the Gap
30,000 uninsured
South Dakotans
92,800
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