Transcript Slide 1

April 2011
HEALTH CARE REFORM
REVIEW AND UPDATES
Software Screen
Today’s Speaker
John Coburn, JD
Director of Training & Senior policy attorney for
Health & Disability Advocates
THEMES OF HEALTHCARE
REFORM



“If you got it, we want you to keep it
and it may get better.”
“Now, we spend all our time trying to
figure out IF those we serve qualify for
coverage and how. In the future, for
most, it will be a matter of finding out
WHICH coverage is appropriate.”
“Everybody has a box.”
4
AREAS TO DISCUSS







Overall Structure for Accessing
What Has Been Implemented So Far
Changes to Medicare Part D
Changes to Medicare in General
Medicare Cost Savings
Repeal and Litigation
Implementation to Watch
5
SOME THINGS STAY THE SAME




Most will still get coverage through employer
insurance plans.
Categories of Medicaid that exist now should
remain in place (SSI, pregnant women, children,
etc)
Medicare eligibility was not changed……it will still
be the source of insurance for Social Security
Disability Insurance beneficiaries and older adults.
The rules around what happens to Medicaid or
Medicare when a person works will be the same. 6
THE NEW STRUCTURE



“Newly Eligible” Medicaid
Insurance Exchange Available to Purchase
Coverage (Includes Premium Subsidies
and Cost Sharing Credits)
Insurance Exchange with No Subsidies.
7
MEDICAID ELIGIBILITY NOW






Some low-income parents and pregnant women can get
Medicaid.
Many low income children get health insurance through
Medicaid.
Supplemental Security Income (SSI) recipients can get
Medicaid.
Social Security Disability Insurance (SSDI) beneficiaries
may get Medicaid depending on state rules (spenddown,
share of cost, recipient liability etc.).
Special rules/programs allow most working SSDI and SSI
beneficiaries to continue with Medicaid coverage.
Low Income seniors can get Medicaid depending on state
8
laws.
“NEWLY ELIGIBLE” MEDICAID





No need to prove disability or other status.
133% FPL using income “Modified Adjusted
Gross Income” MAGI.
No asset limit
Services may look different than other Medicaid
categories but must at least cover “essential
benefits”.
States required to implement in 2014, but can
start earlier if they choose. Unlikely many states
will choose this option because there is no
9
enhanced Federal Match until 2014.
WHO ARE THE “NEWLY
ELIGIBLE” MEDICAID?




Individuals waiting for disability
determinations.
SSDI beneficiaries during the Medicare
waiting period.
Low wage workers with disabilities that are
not severe enough to meet the definition or
with no disability.
Individuals who are unemployed.
10
NEW INSURANCE EXCHANGE
2014




States will establish exchanges for individuals and
small businesses (or feds will for them).
Most individuals (exceptions include financial hardship,
religious exemptions, etc) must obtain insurance, but
insurers can no longer deny or charge more for preexisting conditions.
Premium credits and cost-sharing subsidies available
to those with lower incomes (sliding scale up to 400%
FPL).
Uniform benefits packages (must include “essential
services” and states can add more) with four levels of11
value.
ESSENTIAL HEALTH BENEFITS IN ACA


Insurance policies must cover
these benefits to be certified
and offered in Exchanges, and
all Medicaid plans must cover
these services by 2014.
Coverage must be equivalent
(in actuarial value) to one of
four benchmarks:
 Federal Employee Health
Benefits Plan,
 State Employee Plan,
 Commercial HMO Product,
or
 Secretary-approved
coverage.









Outpatient and lab services;
Emergency services;
Hospitalization;
Maternity and newborn care;
Pediatric services, including
oral and vision care;
Mental health and substance
abuse, including behavior
health treatment, with parity to
physical health services;
Prescription drugs;
Rehabilitative and habilitative
services and devices;
Preventive and wellness
services and chronic disease
management.
12
NEW “SEAMLESS” DELIVERY SYSTEM BY
2014 WITH A SINGLE APPLICATION
Expansion
Medicaid
Regular
Medicaid
Insurance
Exchange
Health Care Coverage
13
THE PREMIUM SUBSIDY




Available up to 400% FPL
Based upon the cost of the second lowest
cost silver plan (70% actuarial equivalent)
Assures you pay 3% of income starting at
133% FPL up to 9.5% of income at 300400 FPL.
If you want a plan that is more expensive
than second lowest cost silver plan, you
pay the whole difference.
14
THE COST SHARING SUBSIDY



Available up to 250% FPL
Pay less out of pocket by requiring higher
percentage paid by plan (actuarial
equivalent is higher)
Reduce the maximum out of pocket.
15
IMPLEMENTATION SO FAR



High Risk Insurance Pool –check to see if
your state has one or if the federal gov’t
runs it for your state.
New Requirements for Private Insurance
50% Doughnut Hole Coverage in 2011
16
REQUIREMENTS FOR HIGH
RISK POOL INSURANCE





Be a U.S. Citizen, National, or Legal Resident
Uninsured for 6 months
Have a pre-existing condition Limited number of
slots; first come, first served.
Participation is lower than expected so some
programs becoming more generous.
Not relevant to people on Medicare or Medicaid
as they are already insured!
17
PRIVATE INSURANCE REFORMS
NOW THROUGH 2011






Prohibition on pre-existing exclusion for children.
Young adults can stay on parent’s insurance until
26.
Prohibition on lifetime limits and rescissions.
Prohibition on charging co-pays or deductibles for
certain preventative and medical screenings on all
NEW insurance plans.
Insurers required to reveal details about admin
and executive expenditures (Medical Loss Ratio)
and on Jan. 1, 2011.
Medical Loss Ration must be 80-85, but many 18
waivers have been granted
MEDICARE PART D CHANGES





Changing of Annual Enrollment Period
Drug Manufacturer Discount During
Doughnut Hole
Discounts to Generics during Doughnut
Hole
Closing of Doughnut Hole Over Time
Uniform Exceptions and Appeals Process
19
MEDICARE PART D CHANGES





ADAP and Indian Health Services Count
as TROOP
Means-tested Part D premiums
Costs eliminated for those participating in
Medicaid waivers (similar to nursing home)
Formulary Requirements for 6 Protected
Classes and Others
Elimination of part of tax deduction for
employer retiree plans
20
PHASE OUT OF BRAND
DOUGHNUT HOLE
 2011-12
50%
 2013-2014
52.5%
 2015-16
55%
 2017
60%
 2018
65%
 2019
70%
 2020
75%
21
PHASE OUT OF GENERIC
DOUGHNUT HOLE










2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
7%
14%
21%
28%
35%
42%
49%
56%
63%
75%
22
OTHER MEDICARE CHANGES



Savings through several mechanisms
Elimination of cost sharing for certain
preventive services and free annual checkup.
Freeze Part B means tested income levels
at 2010 through 2019
23
MEDICARE SAVINGS IN MORE
DETAIL




Constraints in payment increases or
reductions in payments
Changes to Medicare Advantage
Strategies to increase quality and
efficiency
Revenue enhancement through taxes and
changes to premium structure for higher
income beneficiaries
24
CONSTRAINTS IN PAYMENT
INCREASES/REDUCTIONS IN PAYMENTS



Cuts in payment increases that vary by
type of provider and year
Productivity adjustment based on 10 year
average annual increase in economywide
productivity
Proponents argue that this will not impact
services and this is in line with cuts from
previous laws, opponents argue that it will.
25
INDEPENDENT PAYMENT
ADVISORY BOARD




15 member board appointed by President and
confirmed by Senate with 6 year staggered terms
(with 3 recs each from Congressional leaders).
Experts in healthcare financing, delivery and
organization and majority cannot be involved in
delivery or management of services.
Make recommendations for savings if targeted
growth rates are not met, with implementation
beginning in 2015.
Recommendations go into effect unless Congress
enacts, though a fast track process, specific
26
legislation to prevent.
CHANGES TO MEDICARE
ADVANTAGE PAYMENTS



Payments to plan based upon comparison
between bid (plan’s cost) and benchmark (max
medicare will pay for those benefits).
Benchmarks have been increased in past to
encourage participation, which has resulted in
benchmarks being higher than average cost of
original Medicare.
New law phases in a new way to calculate
benchmarks, which will result in both reductions
and possible increases for plan quality.
27
STRATEGIES TO INCREASE
QUALITY AND EFFICIENCY







Medicare prohibited from interfering with practice of
medicine or manner in which medical services are provided
(medically necessary)
Productivity adjustments (discussed above).
Voluntary program to bundle payments for physician,
hospital and post-acute care.
Accountable Care Organizations that meet quality of care
targets and reduce costs share in savings.
Payment reform in certain hospital readmission situations
and penalty to some hospitals where common, high-cost
health conditions acquired in hospital occur
Patient-Centered Outcome Research Institute and CMS
28
Center for Medicare and Medicaid Innovation
Stepped up efforts to prevent fraud
REVENUE ENHANCEMENT



Increases Medicare Hospital Insurance
payroll tax from 1.45 to 2.35 for higher
wage earners ($200,000 single, $250,000
couple).
Freezes income point at which Part B
premium is means tested at $85,000
single/$170,000 couple through 2019.
Begins means testing for Part D at same
income point and that point remains
29
through 2019.
WAIT: WHERE IS THE
DOCTOR’S CUT NOW?



Every year, the physician payment is
supposed to decrease and, every year,
Congress “kicks the can” to the next year.
Both healthcare reform bills failed to
address this issue at all as it was sticking
point to moving forward.
But, as usual, the cut was stalled in
December 2010, effective through 2011
30
WHAT ABOUT REPEAL?



Repeal would require both houses of
Congress and President (not gonna
happen!)
Most funding is self-executing.
History shows once the ball starts
rolling……….
31
WHAT ABOUT THESE
LAWSUITS?




Score is 3-2 upholding HCR
One judge threw out whole law, other the
individual mandate.
Implementation is proceeding.
Likely to land in the Supreme Court for
final decision.
32
IMPLEMENTATION TO WATCH
OUT FOR



High Risk Insurance Pool
 How is enrollment in your state?
 Can it be expanded?
States are planning now:
 Is there stakeholder involvement?
 What will your exchange look like?
 What are they doing with planning grants, if applicable?
 How is your state shoring up eligibility infrastructure?
Essential Benefits Package:
 What will the requirements be on the federal level
 What will your state require?
33
?
Questions / Discussion
Have additional questions?
Please contact us at [email protected]
www.rxassist.org