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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
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]
The Affordable Care Act (ACA) in South Dakota
• Concepts• Coverage• Costs• Choices• Consequences
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 guarantees2. Insurance exchanges3. Federal tax credits to pay
for insurance4. Individual mandate5. Funding provisions
MedicaidExpansion
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
state-based American health benefits exchange
1. “essential health benefits” packages2. Four categories of plans3. Limited annual cost-sharing
How will affect South Dakotans’ access to and cost of health insurance?
Federal law includes:
regardless of state decision to expand Medicaid
1. Coverage guarantees2. Insurance exchanges
3. Federal tax credits to pay for insurance
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
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
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
Dollars (in millions) available to help South Dakotans pay
health insurance premiums in 2014
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
Funding mechanisms
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
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 guarantees2. Insurance exchanges3. Federal tax credits to pay
for insurance4. Individual mandate5. Funding provisions
MedicaidExpansion
How does this decision affect healthcare in South Dakota?
138% FPL
100% FPL
Medicaid Expansion Bridges the Gap
30,000 uninsured
South Dakotans
49,000 uninsured South Dakotans below 138% federal poverty level
Medicaid Expansion
FMAP (federal share)
for newly eligible
parents and childless
adults
Another concern….
1. Will Federal Government continue commitment to 90% FMAP rate after 2020 for Medicaid Expansion?
How much will Medicaid Expansion cost South Dakota?
Cost projections arebased on assumptions
• Projected eligibles• Participation rates• Crowd-out rate • woodwork effect • Per enrollee cost
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 millionKaiser: 1.1% increased state spendingUncompensated care savings estimate change
cost to a range of: $15 million total expense to $82 million in state government savings
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
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
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
138% FPL
100% FPL
138% FPL
100% FPL
Medicaid Expansion Bridges the Gap
30,000 uninsured
South Dakotans
92,800
