Transcript Health Care Reform Overview of Federal Health Insurance

Health Care Reform
Overview of The Patient Protection and
Affordable Care Act
June 5, 2010
Chris Barley, Staff Attorney
Ohio Poverty Law Center
1
Presentation Overview
• Limited to major provisions
• Details to be determined later
• Effect of reform will be different across states
• Many interpretations exist
2
Structure of Reform
3
Key Insurance Provisions
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Health insurance market reforms
Ombudsman program
High risk pool
Reinsurance program
Health Insurance Exchange
Required Purchase of insurance
Subsidies
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Pre-Reform Blueprint:
What It Looks Like NOW.
5
Chart prepared by PICO National Network, Washington D.C. 2010
Post-Reform Blueprint
2014
Chart prepared by PICO National Network, Washington D.C. 2010
6
Early Insurance Market Reforms
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No lifetime limits
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Restrictions on allowable annual benefit limits
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Coverage of dependents up to age 26
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Pre-existing condition exclusions prohibited for children up to
age 19
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Appeals processes for enrollees
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May not discriminate based on salary
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Benefits for preventive services required
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Coverage for emergency services at in-network level
7
Early Insurance Market Reforms
Review of Premium Rates
• Federal HHS will develop a process for the
annual review of premium rate increases
• Federal HHS will distribute $250 million in
grants over 5 years to cover state costs
8
Early Insurance Market Reforms
Health Plan Loss Ratio Requirements
• Loss ratios reported to HHS
• Report must breakdown on how premiums are spent
• Reporting requirements to be developed by HHS & NAIC
• In January 2011, rebates provided when plans do not
meet loss ratio targets.
• Loss ratio expenses based on clinical services and
activities that improve health care quality
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Early Insurance Market Reforms
Health Plan Disclosure Requirements
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Payment policies and practices
Financial disclosures
Enrollment and disenrollment data
Claims denial information
Data on rating practices
Information on cost-sharing and payments with
respect to out-of-network coverage
10
Insurance Market Reforms
• Must provide:
– uniform summary of benefits
– explanation of coverage documents.
• Must use standardized definitions
• HHS to publish standards in 12 months
11
Insurance Market Reforms
• Guaranteed issuance
• Elimination of:
– Preexisting condition
– Annual limits on coverage
– Waiting periods
– Limitation on deductibles
• Rating restrictions for group and individual
market:
• Small employer redefined (1-100 employees)
12
Consumer Ombudsman Program
• Provides grants to create health ombudsman
program
• Serves as an advocate for consumers
• Assists with insurance-related complaints and
appeals
• Assists consumers with enrollment
• In 2014, Resolves problems with subsidies
• Collects, tracks and quantifies consumer
problems and insurance inquiries
13
Temporary High Risk Pool
• For individuals with pre-existing conditions
• For uninsured for 6 months or longer
• May contract with states or non-profit entities
to provide coverage
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Temporary High Risk Pool
(continued)
• Federal funding of $5 billion allocated to fund
eligible enrollees until 2014.
• Federal HHS working with states to develop
program guidelines
15
Temporary Reinsurance
Program for Early Retirees
• For employers providing insurance to retirees age 55+
• Including state government programs like PERS, STRS
• Program pays 80% of claims costs between $15,000 and
$90,000 annually
• Payments under the program must be used to lower costs
of the plan
• Must submit application to HHS to participate
• Funding of $5 billion
16
Electronic Health Care
Transactions
• Requires compliance with standard electronic
health care transactions
• Imposes new, earlier deadlines for federal
HHS rules and implementation
17
Health Insurance Exchange
• Directs states to establish American Health
Benefit Exchanges
• Small Business Health Options Program
(SHOP).
• Exchanges must be operational by January
2014
• Must be administered by governmental agency
or non-profit organization
• HHS will establish exchanges in those States
where they fail to create one.
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What is a Health Care
Exchange?
• “Virtual Marketplace”
• Run by the state or the federal government (at
the state’s choice)
• Insurance companies that want to sell
insurance in the Exchange must sell plans
that meet certain standards
• The Exchange will allow consumers to
comparison shop
• The Exchange will also determine appropriate
levels of subsidies for consumers to help them
afford coverage, up to 400% FPL.
Health Insurance Exchange
Program Features
• One-stop insurance shopping
– Provide a selection of “Exchange qualified” plans
– Standardizes presentation of insurance options for plan
comparability
– Provides a “rating” system for plans
– Redefines small businesses as 1-100 employees
• Must contract with “navigators”
– Four levels of plans:
– Catastrophic plans available to individuals under age 30
– Insurers must offer children-only plans
• Exchange must provide a seamless application
• Federal funding: implementation grants to states
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Other Provisions
• Co-Op program
• Merging of individual and small group
markets
• Employer rewards
• Health Care Choice Compacts
• Nationwide plans
21
Individual Requirement to
Purchase Insurance
• Individuals required to obtain coverage
• Can be an individual or group plan
• Exemptions
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religious objections,
financial hardship,
undocumented immigrants,
American Indians,
people earning under the tax filing threshold, and
short gaps in coverage.
• Subsidies
– up to 400% of federal poverty level
22
Individual Requirement to
Purchase Insurance
(continued)
• Penalties for non-compliance
– $95 per person in 2014
– $325 per person in 2015
– $695 per person in 2016
• Enforcement through IRS.
23
Small Employer Requirements and
Tax Credits
• Small employers exempt
• Part - time workers
– How are the counted?
– Not required to offer coverage
• Tax Credits for small employers
– < 25 employees
– <$50,000 in average annual salary
– 35% of premium, 50% in 2014
• Credits phased out gradually
24
Large Employer Requirements to
Purchase Insurance
• >50 full time employees
– Must offer insurance
– If employees receive public subsidies employer pays
$2,000 per year
– Large employers whose employees who receive
premium assistance pay the lesser of
 1) $3,000 per year
 2) $2000 per year
– Penalties calculated monthly based on number of
applicable employees
• >200 employees must automatically enroll
new employees
25
Impact on Market and Consumers
• Premium rates will change
• Minimum loss ratio requirements may mitigate
some increased premiums
• Uninsured individuals with preexisting
conditions to be able to obtain coverage
through the temporary insurance risk pool
• Rating requirements and guarantee issue will
impact small and individual markets
26
Impact on Market and Consumers
continued
• All plans issued going forward must
meet federal requirements
• Employers with existing group plans can
continue to enroll new employees
• All private plans sold after March 23rd
must comply with new benefit
provisions
27
Additional Information
Ohio Consumers for Health Coverage
• www.OhioConsumersForHealthCoverage.org
• www.aarp.org
• www.CommunityCatalyst.org
• www.FamiliesUSA.org
• www.HealthReformGPS.org – tracking news and developments
• www.HDAdvocates.org – experts on people with disabilities
• www.kff.org – Kaiser Family Foundation
•
www.NationalPartnership.org – working on delivery reforms
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For More Information
Cathy Levine, Executive Director
UHCAN OHIO
OCHC, Co-Chair
(614) 456-0060 x 222
[email protected]
Col Owens, Senior Attorney,
Legal Aid of Southwest Ohio
OCHC Co-Chair
215 E. Ninth Street
Cincinnati, Ohio 45202
(513) 300-3042
[email protected]
Kathleen Gmeiner, UHCAN Ohio
OCHC Project Director
(614) 456-0060 x 223
[email protected]
Gene King, Director
Ohio Poverty Law Center
555 Buttles Ave.
Columbus, Ohio 43215
(614) 221-7201
[email protected]