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Overview:Patient Protection

and Affordable Care Act

(and other Health Reform Initiatives)

Sheryl Garland, M.H.A.November 13, 2015

Objectives

• Provide an overview of the Patient Protection and Affordable Care Act (ACA)

• Review coverage options under the ACA

• Review recent legislative issues

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U.S. has been working on reforming its health care system for a long time….

Franklin Roosevelt outlines Economic Bill of

Rights that includesright to adequate

medical care

The Medicare and Medicaid programs

are signed into law by Lyndon Johnson

President Clinton asks the

First Lady to convene the White House

Task Force on Health Reform

Barack Obama signs the Patient

Protection and Affordable Care Act

Teddy Roosevelt endorses social

insurance as a part of his platform

President Truman calls for a National Health

Program in a message to Congress

1912 1944 1947 1993 20101965

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Why Is Health Reform An Issue?

• In 2014, there were nearly 36 million uninsuredAmericans*

• Since 2004, average health insurance premiums for family coverage have risen 69%**

• Average annual cost of employer‐sponsored family coverage in 2014 was $16,834**• Average employee contribution: $4,823

• In 2014, 55% of firms offered employer-sponsored coverage**

*Nation at a Glance: Uninsured Americans, CDC/NCHS National Health Interview Survey, 2013-2014, June 25, 2015. **The Kaiser Family Foundation and Health Research & Educational Trust, “Employer Health Benefits: 2014 - Summary of Findings”, September 10, 2014.

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On average, other wealthy countries spend about half as much per person on health than the U.S. spends

$3,289

$3,493

$4,460

$8,745

 $‐  $1,000  $2,000  $3,000  $4,000  $5,000  $6,000  $7,000  $8,000  $9,000  $10,000

United Kingdom

OECD Average

Japan

Australia

Sweden

France

Belgium

Comparable Country…

Canada

Germany

Austria

Netherlands

Switzerland

United States

Total health expenditures per capita, U.S. dollars, PPP adjusted, 2012

Source: Kaiser Family Foundation analysis of 2013 OECD data: "OECD Health Data: Health expenditure and financing: Health expenditure indicators", OECD Health Statistics (database). doi: 10.1787/data-00349-en (Accessed on June 25, 2014). Notes: Because 2012 data was unavailable, 2011 were used for Australia and the Netherlands. Data for Canada and Switzerland are estimated values.

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Patient Protection and Affordable Care Act

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• Enacted in March, 2010 with the goals of:

• Ensuring access to quality health care• Providing affordable health insurance to the uninsured

• By 2024 will expand coverage to ≈ 26 million currently uninsured Americans

• Net cost of coverage expansion is $1.4 trillion over 10 years (2015-2024)

Source: Congressional Budget Office, Updated Estimates of the Effects of the Insurance Coverage Provisions of the Affordable Care Act, April, 2014

Patient Protection and Affordable Care Act (ACA)

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Impact of ACA on Children’s Health

• Prohibition on pre-existing condition exclusions

• Plans provide dependent coverage until a child turns 26

• Required coverage of preventive services without cost-sharing

• Authorization and funding for CHIP through September 30, 2015 (recently expanded to 2017)

• Established a new loan repayment program for certain medical, surgical, and behavioral health subspecialties

ACA Created Several Coverage Options

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• Established an Individual Mandate (Jan 1, 2014)

• Established an Employer Mandate(Jan 1, 2015 and Jan 1, 2016)

• Expanded Medicaid to non-elderly population with incomes at or below 138% FPL* (Jan 1, 2014)• (133% 2015 FPL = $15,654–single

person, $32,253 – family of 4)• OPTIONAL for States

• Created Health Insurance Exchange (Marketplace) (Jan 1, 2014)

* FPL = Federal Poverty Level

Nonelderly Uninsured byFederal Poverty Level

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Source: Diamond, D., “Thanks, Obamacare: America’s Uninsured Rate is Below 10% For the First Time Ever, Forbes, August 12, 2015,http://www.forbes.com/sites/dandiamond/2015/08/12/for-first-time-americans-uninsured-rate-is-below-10/

Individual and Employer Mandates

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Individual and Employer Mandates

• As of 2014, everyone is required to:1. Have health insurance coverage2. Have a coverage exemption3. Pay a penalty

• Beginning January 1, 2015, employers with 100 or more full-time or full-time equivalent employees had to offer affordable coverage

…to full-time employees and their dependent children

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Individual Mandate: Penalties

■Collected through tax returns

■Exempted: undocumented immigrants, Native Americans, and those who earn too little to file a tax return

2014  2015 2016 and beyond

$95 Per adult 

$325Per adult 

$695Per adult 

 OR  OR  OR

1% Of family income 

2%Of family income 

2.5%Of family income 

Whichever is greater 

Source: The Kaiser Family Foundation

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Medicaid Expansion

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0%

50%

100%

PregnantWomen

Children 0-5 Children 6-18

Elderly &Disabled

Parents ChildlessAdults

Current Elig Federal Reform

• Program created in 1965

• Helps states provide medical coverage for low-income families and other categorically-eligible individuals • Optional for states to participate

• Current Eligibility for Medicaid/FAMIS in Virginia

• Pregnant women and children (below 200% FPL)

• Adults with children (below 30% FPL)

• Aged, blind or disabled (below 80% FPL)

• Expansion provides coverage up to 138% FPL

138%

Medicaid in Virginia

Fed

eral

Po

ver

ty L

evel

*Coverage up to 200% FPL available through FAMIS

**

*

Medicaid Eligibility by FPL

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Year

Match by State Fiscal Year**

(July to June)

Federal State

2014 100% 0%

2015 100% 0%

2016 100% 0%

2017 95% 5%

2018 94% 6%

2019 93% 7%

2020 – beyond 90% 10%

Impact of Medicaid Expansion in Virginia

**http://cciio.cms.gov/resources/files/exchanges-faqs-12-10-2012.pdf.

• Approximately 400,000 Virginians would be eligible – Projected enrollment is

approximately 250,000

• Federal government pays 100% through 2017– Expanded enrollment is

estimated to result in a savings of $1.1 billion to the State through 2022*

*Medicaid DSH and Indigent Care, Presentation to the Senate Finance Committee, Health and Human Resources Subcommittee, Scott Crawford, Department of Medical Assistance Services, January 27, 2014,

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Health Insurance Exchange(Marketplace)

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ACA required the establishment of Health Insurance Exchanges (Marketplaces) in all States

• If a state-based Exchange/Marketplace is not created, the state defaults to the federal Marketplace

• 16 states and DC established State-based Marketplaces

• 34 states defaulted to the Federally-Facilitated Marketplaces (Exchanges) – including Virginia

• Marketplace plans provide• Premium Tax Credits for individuals 100% to 400% FPL• Cost-Sharing Reductions for individuals between 100% and

250% FPL

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Coverage Levels

• The ACA created four benefit levels of coverage (Metal Levels) based on how much of the cost is covered

• The levels define the split between what the consumer pays and what the health plan pays

Paid by PlanPaid by

Consumer

Platinum 90% 10%

Gold 80% 20%

Silver 70% 30%

Bronze 60% 40%

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Approximately 8 million people enrolled in the Marketplace plans nationwide in 2015

385,000 in Virginia

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Legislative Issues to Watch

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• 56 legislative attempts to repeal the ACA in the U.S. House of Representatives

• 2010 Lawsuit filed challenging the individual mandate• Supreme court rendered a decision in June 2012 stating

the Individual Mandate was constitutional

ACA Legislative and Legal Challenges

• King v. Burwell (June 2015)• Supreme Court ruled that subsidies are allowable for individuals in both

State and Federally Facilitated Marketplaces.

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Medicare Access and CHIP Reauthorization Act of 2015

• Repealed Sustainable Growth Rate (SGR) formula • Replaced with standard annual updates for 5 years (2015 –

2019)

• Transitions payment system from volume based to value based

• 2020 – 2026+ introduction of Merit Based Incentive Payment System and Alternative Payment Models

• Provides funding for the Children’s Health Insurance Program (CHIP)/FAMIS in Virginia through 2017

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Conclusion

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Questions