Health Care Reform


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Presentation by James Smith of the American Continental Group at the Sept. 30, 2013 83rd Texas Post-Legislative Conference hosted by One Voice Texas, United Way of Greater Houston and the Harris County Healthcare Alliance.

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  • So why didn’t we outlaw tobacco, limit portions, require exercise and nutritional information, and tax alcohol? When I went to back-to-school night for my high school senior, the PE teacher told us that they were doing a special unit on nutrition and fitness where they counted the calories burned in their walk to McDonalds, and then counted the calories of the fries that they bought there. Obesity is an epidemic in the United States, and Texas is leading the nation. And yet, we haven’t done much at a federal level to address it.
  • Health Care Reform

    1. 1. Jim Smith American Continental Group 900 19th Street, NW, #800 Washington, DC 20006 202-327-8100 Health Care Reform
    2. 2. *Tobacco-related disease *Poor diet *Lack of exercise *Excessive use of alcohol *American Medical Association
    3. 3. How Will the ACA Affect the Cost of Health Insurance? *Methodology is Insurance, rather than public health *Essential benefits package is comprehensive • Subsidies • Individual mandate penalties • Reform initiatives
    4. 4. Affordable Care Act As Healthcare exchanges open for registration across the country, the Affordable Care Act (ACA) still has a number of hurdles to overcome. Budget battles, information technology concerns, and debate over the employer mandate all feature prominently, while conflicting interpretations of the facts surrounding state-level exchanges continue to distort perceptions of the law.
    5. 5. ACA Deadlines Medicaid Payments for Primary Care: Increases Medicaid payments for primary care services provided by primary care doctors to 100% of the Medicare payment rate for 2013 and 2014. Implementation: January 1, 2013 through December 31. 2014 – CO-OP Health Insurance Plans: Creates the Consumer Operated and Oriented Plan (CO-OP) to foster the creation of non-profit, member-run health insurance companies. Implementation: CO-OPs established by July 1, 2013 – Employer Requirements: Assesses a fee of $2,000 per full-time employee, excluding the first 30 employees, on employers with more than 50 employees that do not offer coverage and have at least one full-time employee who receives a premium tax credit. Implementation: Basic Health Plan: Permits states the option to create a Basic Health Plan for uninsured individuals with incomes between 133-200% FPL who would otherwise be eligible to receive premium subsidies in the Exchange. Implementation: January 1, 2014 – Limitation on Out-of-Pocket Costs: Limit on out-of-pocket costs, including deductibles and co- payments, not to exceed $6,350 for an individual and $12,700 for a family. Implementation: ON TIME ON TIME DELAYED ON TIME ON TIME
    6. 6. ACA Deadlines Multi-State Health Plans: Requires the Office of Personnel Management to contract with insurers to offer at least two multi-state plans in each Exchange. At least one plan must be offered by a non-profit entity and at least one plan must not provide coverage for abortions beyond those permitted by federal law. Implementation: January 1, 2014 – Accountable Care Organizations in Medicare: Allows providers organized as accountable care organizations (ACOs) that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program. Implementation: Medicare Bundled Payment Pilot Program: Establishes a national Medicare pilot program to develop and evaluate making bundled payments for acute, inpatient hospital services, physician services, outpatient hospital services, and post-acute care services for an episode of care. Implementation: Medicare Tax Increase: Increases the Medicare Part A (hospital insurance) tax rate on wages by 0.9% (from 1.45% to 2.35%) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly and imposes a 3.8% assessment on unearned income for higher- income taxpayers. Implementation: ON TIME UNDERWA Y UNDERWAY UNDERWAY
    7. 7. Employer Mandate On July 2nd, the Obama Administration announced that it would push back enforcement of the employer mandate until January 1, 2015. • White House officials have also said more time was needed to work out information reporting requirements so they would not be too burdensome for businesses. Delaying the mandate also defused a potential political problem for Democrats in next year's congressional elections. • The Treasury Department said it will be soliciting feedback on its proposals through early November, and will use the comments to develop final rules. • Although the one-year delay of the employer coverage requirement remains in effect, the administration says it hopes employers will voluntarily begin reporting information next year to smooth the transition in 2015.
    8. 8. Medicaid Expansion
    9. 9. Health Exchanges by State
    10. 10. Accountable Care Orgs One of the main ways the Affordable Care Act seeks to reduce health care costs is by encouraging doctors, hospitals and other health care providers to form networks to coordinate care better, which could keep costs down. To do that, the law is trying an balanced incentive structure in the Medicare program: Accountable Care Organizations. • Roughly 4 million beneficiaries are currently in an ACO • 428 hospitals nationwide have already signed up • An estimated 14% of the U.S. population is now being served by an ACO • Pursuant to the ACA, each ACO has to manage the health care needs of a minimum of 5,000 Medicare beneficiaries for at least three years.
    11. 11. “The relatively low penalties associated with the individual mandate make the effectiveness of the mandate uncertain, particularly in the first few years of reform when stability is essential and the penalty can be expected to fall well below the annual cost of the minimum standard of coverage required under the ACA.” Oliver Wyman study Penalties for Uninsured
    12. 12. Promoting Medicare Stability *Radical management redesign to impose forward- looking cost-containment capabilities *Develop Chronic Care Payment Pathways *Reduce silos of care/cost (Accountable Care) *Align responsibility and authority to eliminate microeconomic profit maximization *Data collection: *Real time data *Better encounter data from providers and patients
    13. 13. Jim Smith American Continental Group 900 19th Street, NW, #800 Washington, DC 20006 202-327-8100 Health Care Reform