Transcript Implementation of the Patient Protection and Affordable Care Act in Delaware

Implementation of the
Patient Protection and Affordable
Care Act
in Delaware
January 2011
Rita Landgraf
Secretary, DHSS
Bettina Tweardy Riveros
Chair, Delaware Health Care Commission
Public Law 111-148 – Historic
Legislation
 Patient Protection and Affordable Health Care Act (H.R.
3590) was signed into law on March 23, 2010
 Health Care & Education Affordability Reconciliation Act
(H.R. 4782) was signed on March 25, 2010
 Expand Coverage and Increase Access to Care
– 32 million uninsured will be covered
– Estimated 17,000 - 25,000 additional Delawareans
– Expansion of Medicaid Eligibility and Increased Funding
• Significant Insurance Market Reforms
• New Insurance Exchange with Premium Sharing Subsidies, and
Cost Sharing Caps
• Emphasis on Prevention
• Bending the Cost Curve over time
Key Provisions of PPACA
Expanding Access to Affordable Care
Improving Quality
Focus on Prevention
Holding Insurance Companies Accountable
Controlling Costs
Provisions of the Affordable Care Act, By Year
Healthcare.gov
http://www.healthcare.gov/law/about/order/byyear.html
Health Care Costs in Delaware
Health Care Costs
- $6.5 billion was spent on personal health care in Delaware in
2008 – highest point in 10 years.
- $7,485 per person in Delaware
- Average rate of increase is 5% per year.
– Largest share of spending is on:
• Hospital care at 39%
• Physicians at 25.4%
• Prescription drugs at 14.8%
- U.S. average- $7,538/person (2007); $8,160 (2009 projection)
- Projected Health Spending in 2009 – 17.9% GDP; $2.5 trillion
- Per capita health care costs range from $3,129 - $4,079 for
Australia, Canada, France, Germany, Sweden, and UK (2007)
Where is Delaware Now?
Medicaid Population in Delaware
– May 2010
• 179,963 Delawareans enrolled in Medicaid
– September 2010
• 185,000 Delawareans enrolled in Medicaid
• 6,100 children enrolled in the Delaware Healthy Children Program
(CHIP)
– December 2010
• 194,249 Medicaid recipients enrolled in Medicaid, Delaware's health
insurance program for the poor, disabled and aging.
State Costs
Majority of Medicaid costs are paid by federal government – and that percentage
is increasing; however, the program is expected to cost Delaware taxpayers
more than $534.4 million this year, consuming 16 percent of the State’s $3.3
billion operating budget.
Uninsured in Delaware
Delaware’s Uninsured Population
• Over the past few years uninsured in Delaware has risen from 9.9% to
11.2%
• Approximately 101,000 are without insurance at any given time- (this is
a 2008 estimate)
• Approximately 28% - or 28,000 - uninsured Delawareans are eligible for
public benefit through Medicaid (21,000 or CHIP 7,000)
• Another 20% are eligible for Community Health Access Program
• CHAP - Incomes below 200% of FPL ($44,000 for family of 4).
Who Are the Uninsured
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23% - under the age of 19
54% - male
69% - white
59% - own or are buying their home
21%- live alone
80% - are above the poverty line
34%- with household income over $50,000
59% - are working adults
9% - are self-employed
21% - are non citizens
Uncompensated Care – Who Pays
• Cost Shift – providers attempt to recover unpaid or underpaid
costs of care delivered to one patient by increasing costs and
passing it on to another patient population
• 1999 – 28% cost shift in DE Hospitals due to uncompensated
care to the uninsured.
• For every $100 of hospital costs, the total commercial insurance
market paid an extra $28.
Expanding Coverage:
Expanding Coverage
• Coverage for Dependents (IRS Definition) (6 months – September
23, 2010):
– Must provide coverage to a beneficiary’s dependent child until
the child turns 26
– Child does not have to live at home
• Temporary High Risk Pool (90 days - July 2010 - to 2014)
– Citizens with pre-existing conditions who were uninsured
6 months prior to applying for coverage in the pool
– $5 billion provided
– Pool operated by HHS or states
– Delaware participates in HHS Pool – Premiums
• Health Benefits Advisory Committee led by Surgeon General will
recommend essential benefits package
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Expand Coverage
• Expands Medicaid eligibility to 133 % of Federal Poverty
Level (2014)
• Approximately $14,600/ individual; $29,400/family of 4
• Includes childless adults
• Provides national base of seamless coverage
• Federal Share (FMAP):
• 100% for newly eligible first 3 years (2014 – 2016)
• Phases down to 90% for 2020 and subsequent years
• Provides full funding for CHIP through 2015 and
continues authority through 2019. Children on CHIP
would be transitioned to Medicaid or into Exchange.
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Delaware Focus
• Medicaid Expansion to Newly Eligible
States are required to extend Medicaid eligibility to everyone
younger then 65 with incomes up to 133% of FPL($29,327 family
of 4).
2014 – 2016 - Federal government pays 100%
2017 – Delaware will pick up 5% of cost
2020 - Federal government pays 90% of cost
• Increase FMAP for Delaware’s Already Expanded Population
Delaware currently provides expanded coverage to 27,000
Delawareans up to 100% FPL
• Currently - Federal government pays 53% of the cost (after
ARRA funds expire)
• 2014 – the federal match will increase to 75% and by 2020
will cover up to 90% of cost
Market Reforms: Employers
Employer Sponsored Plans & Increasing
Choice for Small Business
• Sixty-one percent of working age individuals and their families receive
employer-sponsored insurance coverage, and this coverage is
increasingly in jeopardy.
• The primary source of instability in the employer-sponsored insurance
market is the decrease in employers offering health insurance coverage
to workers and their families.
– Between 2000 and 2008, the percentage of firms offering health
insurance coverage to their employees declined from 69 to 63.
– For firms employing fewer than 10 workers, the decline was even
greater – from 57 to 49 percent.
– Coverage outside the employer-sponsored market is unaffordable or
does not provide adequate coverage for most Americans.
– Only five percent of non-elderly Americans receive coverage on the
individual market, where coverage is more expensive and limited
than in employer-sponsored plans.
Small Business Issues
Health Care and Small Business
• Health care costs are a huge cost driver for businesses. Small
business owners, in particular, have a hard time negotiating and
paying for healthcare coverage for their workforce.
• Over the past decade, average annual family premiums for
workers at small firms increased by 123 percent, from $5,700 in
1999 to $12,700 in 2009, while the percentage of small firms
offering coverage fell from 65 to 59 percent.
• National studies indicate that small businesses on average pay
18% more for their healthcare coverage compared to larger
businesses.
• ACA addresses these issues through small business tax credits
and an improved insurance marketplace for small business.
Tax Credits for Small Business
Tax Credits for Small Business
• Under ACA, small employers with fewer than 25 full-time equivalent
employees and average annual wages of less than $50,000 that
purchase health insurance for employees are eligible for a tax credit.
• For 2010 through 2013, that small business tax credit is up to 35 percent
of their contribution toward the employee’s health insurance premium.
• Starting in 2014, small businesses will have access to state-based Small
Business Health Options Program (SHOP) Exchanges, which will
expand their purchasing power, reduce costs and increase competitive
pressure on insurers, with the goal of driving down premiums for small
businesses.
• For 2014 and beyond, small employers who purchase coverage through
the new Health Insurance Exchanges can receive a tax credit for two
years of up to 50 percent of their contribution.
• Tax exempt organizations eligible for similar credits.
Expanding Coverage:
Small Business Tax Credits (2010)
• Eligibility: Employers with fewer than 25 full time employees (or a
firm with fewer than 50 half time workers) who
– pay average annual wages of less than $50,000
– who provide health insurance to their employees
• Value
– Worth up to 35% of employer’s premium costs in 2010.
– January 1, 2014 worth up to 50%
• Non-Profits
– eligible for payroll tax deduction if they fit above criteria
– worth up to 25% of employer’s premium costs
– 2014 – 35% credit
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Market Reforms & Employers
• Small Business Health Options Program Exchange – Non-profits
eligible (2014)
• Small group plans must accept every employer and individual
who applies (2014)
• Small Employer/Non-Profit: 100 employees or state can define as
50 or less (2014)
• Large Employers: Can participate in Exchange, at each state's
discretion (2017)
Employer Responsibility (2014)
• In 2014, the Affordable Care Act requires large employers to
pay a shared responsibility fee only if they do not provide
affordable coverage
• Employers with 50 or more full time employees (FTEs) who
do NOT offer coverage must pay penalty:
– for every full-time employee that receives a premium
credit for the Exchange
• FTE= 30 or more hours per week
• Part-time employees: Less than 30 hours per week
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Pressing Timeline
Health Benefit Exchanges (2014)
• Creates state-based “Health Benefit Exchanges”, or marketplace
to increase choice, provide competition, transparency on services
and cost
• Private insurance plans that meet minimum standards on benefits
and cost-sharing set forth in regulations
• Multi-state Exchanges run by HHS for states that choose not to
operate their own Exchange
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Increases Quality, Affordable
Options
Health Benefits Exchange
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These Exchanges would include web portals that provide standardized, easy-tounderstand information that make comparing and purchasing health care coverage easier
for small business employees, and reduce the administrative hassle that small businesses
currently face in offering plans.
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Starting in 2017, the Affordable Care Act also provides states flexibility to allow businesses
with more than 100 employees to purchase coverage in the SHOP Exchange.
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If businesses don’t offer coverage, workers at small firms and their families would be
eligible for their own tax credits to purchase coverage through the Exchange.
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The Affordable Care Act streamlines health plans to keep premiums lower by instituting a
premium rate review process and setting standards for how much insurance companies
can spend on administrative costs, also known as the medical loss ratio.
Delaware’s Role in Health Benefit
Exchange
• Exchange Requirements
• Certify qualified health plans
• Establish toll free telephone access
• Web portal development with standardized, comparative
information on health plan options
• Choice of plan options
• Electronic calculator to determine cost of plan and premium
tax credit
• Seamless with Medicaid enrollment/eligibility
Essential Benefits Package for Exchange
Plans
• Hospitalization, emergency
services, ambulatory (i.e.
outpatient) services
• Prescription drugs and
laboratory services
• Rehabilitative and
habilitative services and
devices
– pre-health care reform
insurance policies did not
cover them or severely
limited the number of
treatments
• Mental health and
substance use disorder
services including
behavioral health
treatment
• Preventative and wellness
services and chronic
disease management
• Pediatric services
including dental and vision
care
• Maternity and newborn
care
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Health Insurance Exchanges
Insurance Marketplace - Health Insurance Exchange
• The Affordable Care Act provides Delaware with resources to plan for the best
implementation for Delawareans of a competitive, private health insurance
marketplace for consumers that provides lower costs, one-stop insurance
shopping, and greater benefits and protections.
State Flexibility around Health Exchanges
• States have substantial flexibility to dictate the design and operation of new
competitive marketplaces – Health Insurance Exchanges – that will provide
affordable private insurance to individuals and businesses beginning in 2014.
Under the Act we can work to implement provisions of the Act in a manner that
can be very helpful to small businesses in our state, so that they can provide
affordable healthcare coverage to their employees.
• Delaware’s DHSS was awarded a $1 million planning grant to engage key
stakeholders across the state in a planning process to determine the best
implementation of an Exchange in Delaware.
• Stakeholder outreach process – to consumers, small business, agent/broker
community and others - is already beginning, in collaboration with the Delaware
Health Care Commission. Additional federal funds will be available for
implementation.
Defining Exchange’s Essential Benefits
• HHS Secretary must ensure that scope of benefits are equal to
scope of benefits provided by typical employer sponsored plan
• Establish that benefits are not denied based on:
– Individual’s “present or predicted disability, degree of medical
dependency, quality of life, age or expected length of life”
• Department of Labor to conduct survey of employer sponsored
plans, provide report to inform HHS Secretary’s determination
• Will be a chance for public comment
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Security and Stability that Promotes
Entrepreneurship
• In 2014, the Affordable Care Act ends the discriminatory
insurance industry practices of jacking up premiums by up to 200
percent because an employee got sick or older.
• It will also reduce “job lock” – the fear of switching jobs or starting
a small business due to concerns over losing health coverage –
by guaranteeing access to coverage for all Americans. This will
encourage more people to launch their own small businesses, or
join existing small employers.
• Reviews the Impact of Reform on Small Businesses
– The Affordable Care Act requires the Government
Accountability Office (GAO) to specifically review the impact of
Exchanges on increasing access to affordable health care for
small businesses to ensure that Exchanges are indeed making
a difference for small business owners.
Insurance Market Reforms
• Bars pre-existing condition exclusions for everyone (2014)
– Bars pre-existing condition exclusions for children under 19
(6 months after enactment – September 23, 2010)
– No coverage exclusions for specific conditions
– No higher premiums or fees for such conditions
• Prohibits coverage rescissions (6 months – September 23, 2010)
– Insurers drop individual when s/he gets sick or apparent preexisting condition is discovered
• Prohibits annual limits (2014)
– Prior to 2014: “Restricted” annual limits, to be defined by HHS
Secretary are permitted
• Prohibits lifetime limits on coverage (6 months/September 23)
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Insurance Market Reforms
• Bans discrimination based on health status, medical condition
(mental or physical illness), disability (2014)
• Guaranteed issue and renewability
– Small group and Individual plans must accept every
employer and individual who applies.
• Increased Rates for Primary Care Providers
– The ACA requires Medicaid programs to reimburse PCP at
100% of Medicare rates, with additional 2% funded by
federal government. Delaware Medicaid currently
reimburses at 98% of Medicare rates.
• Requires 80-85% of premiums to be spent on health care
services and health care quality improvements.
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Insurance Rates
Improved Transparency around Health Insurance Rates
• Initiatives by Insurance Commissioner
• Delaware access to federal funds to help improve the review of
proposed health insurance premium increases, take action
against insurers seeking unreasonable rate hikes, and ensure
consumers receive value for their premium dollars.
• Delaware to address the Health Insurance Premium Review
Process by developing new premium filing requirements, improve
its ability to review rates; post premium filings on its website;
employ a new rate comparison feature, and host public meetings
and hearings on proposed rate increases.
Individual Responsibility (2014)
• Those who are uninsured add over one thousand dollars to
the average premium of families with insurance.
• Everyone will be asked to share responsibility for lowering
costs and covering more people
• Tax penalties for no coverage - IRS:
• 2014: $95
• 2015: $325
• 2016: $695 OR
• Percent of household income: 1% in 2014, 2% in 2015,
2.5% - 2016 and after
• Exempts individuals with incomes too low to pay taxes
($9,350) or if premiums exceed 8% of income
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Making Coverage Affordable
• Tax credits provided for individuals/families between 133% 400% Federal Poverty to buy coverage in Exchange (2014)
– approximately $11,000/individual; $88,000 family of four
• Paid by government directly to insurer
• Limits on cost sharing: deductibles, coinsurance, co-payments
– 100-200% FPL: $1,983/individual; $3,967/family
– 200-300% FPL: $2,975/individual; $5,950/family
– 300-400% FPL: $3,987/individual; $7,973/family
• Small group market plans are prohibited from deductibles greater
than $2,000 for individuals and $4,000 for families
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State Preparation and Planning
Challenge for Delaware:
Maximize benefits for Delaware citizens and
businesses to support the goals of:
– widespread access to affordable health
insurance and health care
– improving quality and reducing costs
– supporting people in community-based settings
– promoting healthy lifestyles and prevention
– supporting economic development and job
growth.
State Preparation and Planning
• State leadership team – Led by DHSS
– OMB – State Employee Benefit and Budget preparation
– Department of Revenue – income exemption determinations
– DMMA – Medicaid
– DSS – process applications
– DOI – oversight and certification of plans and regulate rate
bands
– DPH – prevention measures and services
– DTI and DHIN – health information network
– Health Care Commission
State Preparation and Planning
• DHSS and Health Care Commission
● Public Discussions
● Coordination with Private Sector:
Small Business
Brokers/Agents
Doctors
Hospitals
Other Providers
Community Based Health Centers
Insurance Companies
Employer Network
Consumer Groups
Educators
Responsibilities
• Overseeing planning, development and implementation
• Identifying ways to build on existing infrastructures and programs,
or to create a new entity within state government to house
governance and oversight
• Ensuring appropriate coordination and collaboration across state
agencies
• Engaging with relevant stakeholders to get insights and
collaboration on reform implementation
– PPACA in general – broader issues
– Health Benefit Exchange
Health Promotion and Prevention
• Prevention and Public Health Fund
– Administered by HHS Secretary
– Expand investment in public health program
– Support programs authorized by Public Health Service Act
• Including prevention research, health screenings and
education and awareness
• Graduated increases in annual funding availability from
FY10 $500 million to FY2015 and beyond $2 Billion
• Position Delaware to be an incubator for innovation in this
arena
Health Promotion
• Coverage without imposing cost sharing
• Certain immunizations
• Infants, children and adolescents – evidence informed
preventative care and screenings
• Incentives for business to provide wellness programs
• Establishes National Prevention, Health Promotion & Public
Council
– Coordination and leadership at the Federal level,
among departments and agencies - Cabinet level
Secretaries - Surgeon General (Chair)
Promotion of Healthier Outcomes
• Medicaid/Chronic Disease Prevention
• 5 Year Grants to states (2011 or when HHS Sec. develops
program) for incentives for beneficiaries for:
– Tobacco cessation, weight reduction and control,
cholesterol reduction, blood pressure reduction, diabetes
onset reduction or improved management of diabetes
– States can provide sub-grants/contracts to Medicaid
providers, community based or faith-based organizations
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Medicaid and Medicare Wellness
• Annual wellness visits and personalized prevention plans for
Medicare beneficiaries (Jan. 2011)
• No co-pays or deductibles for preventive services for Medicare
patients (2011)
• 1% FMAP increase for States if Medicaid program covers clinical
preventive services recommended by the Preventive Services
Task Force (2013)
• Grants to provide incentives to Medicaid beneficiaries who
successfully participate in a wellness program and healthy
lifestyle program Must demonstrate changes in health risk and
outcomes
Health Promotion and Prevention
• Community Health Centers and National Health Service Corp
• Education and Outreach Campaign – national public-private
partnership
• School Based Health Centers – access in hard to reach
communities
• Oral Health – Demonstration grants for preventative care
• Community Transformation – Competitive grants – evidence
based activities to reduce
– Chronic disease rates, prevent secondary conditions, address
health disparities, create a stronger evidence base of effective
programming
– Examples – healthier schools, worksite wellness healthy food
venues, special populations
Health Promotion and Prevention
• Nutritional Labeling of Standard Menu Items at Chain Restaurants
• Demonstration of Individualized Wellness Plan – to those utilizing
community health centers
• Optimizing the delivery of Public Health Services – organize
finance or delivering public health services in real world
community settings
• Funding for Childhood Obesity Demonstration Project
• Better Diabetes Care – National report card – study impact on
medical practice – medical education requirements prior to
license- Grants through National Diabetes Prevention Program
• Centers of Excellence for Depression
• National Congenital Heart Disease Surveillance System
Workforce Impact
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National Workforce Commission
State Workforce Development Grants
Workforce Program Assessment – Identify trends, gaps, issues
Public Health Workforce Recruitment and Retention – loan
repayment
Training for Mid-Career Public and Allied Health Professionals
Grants to Promote Community Health Workforce
Preventative Medicine Training Grant Program – training to
graduate medical residents in preventive medicine specialties
Additional primary care residency slots
Funding to support physician assistant training in primary care
Workforce Initiatives
• Funding to encourage students pursue full time nursing careers
• Establishes new nurse practitioner led clinics
• Encourages states to plan for and address health professional
workforce needs
• Expanding tax benefits to health professionals working in
underserved areas
Grant Awards To Date
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Health Benefit Exchange Planning Grant - $1 million
Premium Review Grant - $1 million
Aging and Disability Resource Center - $400,000
Maternal, Infant and Child Visitation Program - $1.280 Million
Personal Responsibility Education - $250,000
Public Health Infrastructure Grant - #1 - $100,000
Supplemental Funding – Behavioral Risk Factor Survey - $37,860
Strengthen Epidemiology, Lab and health information system
capacity - $435,942
• Healthy Communities – Tobacco Cessation - $54,554
• HIV Surveillance Enhanced Lab Reporting - $51,218
Grant Awards To Date
• Primary Care Workforce Nursing Training _
– DSU - $20,480
– Wesley - $44,521
– Wilmington University - $55,062
– U. D. - $36,608
Important Websites to Watch
• www.HealthCare.gov
• www.dhcc.delaware.gov
Contacts for more information and participation opportunities
[email protected] and [email protected]