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This is a dicussion about the 2010 Health Reform Laws, what they mean to the local community, employers, business, and citizens of the community, and what the opportunity is under health reform for communities to retake control of their health care finance plan and build on their personal relationship with their health care providers.

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  1. 1. Patient Protection and  Affordable Care Act of 2010 Affordable Care Act of 2010 …and what it means to the employers, employees and  l l dindividual citizens of the CSRA individual citizens of the CSRA Dr. Gordon Jones HealthYncubator.com June 1st, 2010
  2. 2. Are things going to Change?“It was the best of times, it was the worst of times,it was the age of wisdom it was the age of wisdom,foolishness, it was the epoch of belief, it was theepoch of incredulity, it was the season of Light, itwas the season of Darkness, it was the spring ofhope, it was the winter of despair, we hadeverything before us, we had nothing before us, wewere all going direct to heaven, we were all goingdirect the other way ‐ in short, the period was so farlike the present period.” period. Charles Dickens, A Tale of Two Cities English novelist (1812 – 1870) 2
  3. 3. “This is a big @#$! deal!”Quoted by VP Biden at the  Doesn’t Biden Passing of Health ReformP i f H lth R f remind you of Dan  remind you of Dan Quayle, VP of Bush I
  4. 4. Triple LegislationPatient Protection and Affordable Care ActP ti t P t ti d Aff d bl C A tSigned by President Obama March 23, 2010Health Care and Education Reconciliation ActSigned by President Obama March 30 2010 Signed by President Obama March 30, 2010Amends PPACA and adds new  provisionsFinancial Regulatory Reform Bill 2010Health Insurance Rate Authority y“The Health Reform Laws” The Health Reform Laws
  5. 5. Polling Question # 1How surprised were you that the health reform  bill was enacted?1. Not at all surprised – I knew it would pass2. Somewhat surprised – I th2 S h t i d I thought we‘d get  ht ‘d t something, but not this dramatic3. Very surprised – I thought it was dead after  the January special election in Mass4. Shocked – I never thought it would happen 5
  6. 6. Evidently just a Flat 6
  7. 7. “Experts” Make Their Contributions 1,400 Special Interest Groups Spent $400+ Million  p $ Lobbying Congress on Health Reform 7
  8. 8. Trust in our Government April 2010 Pew Family Research Poll April 2010 Pew Family Research Poll found only 20% trust the Federal Gov’tEisenhower Kennedy Johnson80% Nixon Ford60% Carter Reagan Bush eaga Bush Clinton40% Obama20%0% 1960 1970 1980 1990 2000 2010 8
  9. 9. Trust them with statements like this?“We have to pass the bill so that you “W h t th bill th t f can find out what is in it” ….  Speaker Nancy Pelosi 9
  10. 10. Presidential Initiatives on Health 10
  11. 11. Presidential Initiatives on Health In the early 20th Century, National  Century National Health Insurance  efforts were killed by  the AMA because  the AMA because they believed  physicians would lose  their autonomy.y 11
  12. 12. Post Medicare/Medicaid by Johnson Administrators Physicians2500%2000% HMO1500% 1973 PART D COBRA 20031000% HIPAA ERISA 1985500% 1996 1974 0% 1970 1975 1980 1985 1990 1995 2000 Source: BLS & Himmelstein/Woolhandler/Lewontin Analysis of CPS Data
  13. 13. Shortage of Physicians 13
  14. 14. Polling Question # 2What type of reform act is this?What type of reform act is this?1. Health Reform:  will we be changing the  health status of individuals in the US?2 Healthcare Reform: will we be changing2. Reform: will we be changing  the way medical services are provided in  the US? th US?3. Health Finance Reform: will we be  changing the way healthcare is paid for in  the US? the US? 14
  15. 15. What is health insurance in the US? Insurance: the  promise of  promise of reimbursement in  case of an  f unexpected loss  15
  16. 16. “BUCAH” healthcare payers … payers…Well baby checkWell baby check Annual Physicals Annual Physicals 16
  17. 17. … compared to … … compared to  …Oil changeOil change Gym Membership G M b hi 17
  18. 18. “BUCAH” healthcare payers… ASO Administrative Services Only Administrative Services OnlyServing the Self‐insured Employer ~47% 47% 18
  19. 19. How did we get in this mess? 19
  20. 20. How did we get in this mess?Illness and medical bills were linked to at least62.1% of all personal bankruptcies in 2007equaling 866,000 and involving 2.346 millionAmericansMost were middle class60.3% of them had attended college66.4% had owned a home; ;20% included a military veteran or active‐ duty soldier soldier. 20
  21. 21. How did we get in this mess? 21
  22. 22. Polling Question # 3How well do you think you understand what H ll d thi k d t d h tis in the 2,409 page legislation?1. Very well – I‘ve read parts, all, a summary2. Pretty well – I‘ d2 P tt ll I‘ve done some research, but I  h b tI only understand a few components3. Not very well –what I heard on the news4. Not at all – l d t b4 N t t ll glad to be participating today ti i ti t d5. Don‘t know 22
  23. 23. “The Act” Affects Everything & Everybody Healthcare Finance System lh i S 23
  24. 24. OverviewOverall ApproachOverall Approach Individuals must have health coverage or pay  a tax/penalty (IRS regulated) Employers with 50+ FTEs will face a tax Employers with 50+ FTEs will face a tax  penalty if they don’t cover their employees Federal subsidies to start up health exchanges  d l b idi h lh h and CO‐Ops to help the individual and small  employer purchase coverage l h Many new regulations over health insurance  y g companies and employer plans 24
  25. 25. OverviewCoverage expandedCoverage expanded Pay for 31 of the 54 million currently  uninsured Expanded Medicaid eligibility to 133% of FPL Expanded Medicaid eligibility to 133% of FPL Parents coverage of dependents until age 26 An individual may choose any in‐network  p y physician (no matter the specialty) as their  ( p y) Primary Doctor 25
  26. 26. OverviewEffect on MedicareEffect on Medicare Lowers the income threshold for increased  individual Medicare premium requirements Extends the Medicare Trust to 2026 (9 years Extends the Medicare Trust to 2026 (9 years  beyond the 2017 insolvency mark of today) 26
  27. 27. OverviewNo longer allowedNo longer allowed Lifetime benefit limitations Annual benefit limitations Pre‐existing conditions i i di i Unreasonable premium increases p OTC drugs paid out of HSA funds 27
  28. 28. OverviewEach state must have a health benefit exchange Each state must have a health benefit exchangeby 2014 to pool the funds and spread the risk of individuals and group health benefitsindividuals and group health benefits Not a health plan in‐and‐of themselves A marketplace of Federally Qualified Health Plans Oversight and rates all plans based on quality Oversight and rates all plans based on quality IDs to IRS the employer of employees who have  enrolled in an exchange plan enrolled in an exchange plan Manages employer‐provided Free Choice Vouchers  for individuals to purchase through the exchange for individuals to purchase through the exchange 28
  29. 29. OverviewFederal Funds to assist MDs adopt Health Federal Funds to assist MDs adopt HealthInformation Technology  American Recovery and Reinvestment Act of 2009  grants $48 Billion for HIT: $63,750 per providerHealth Plan must adopt HIT SOP:  Allow providers to determine patient’s eligibility and financial Allow providers to determine patient s eligibility and financial  obligation at the point‐of‐care  Requires no or minimal augmentation of paper q g p p  Provide timely status of medical claims  On 4‐1‐2014 health plans will be assessed $1 per‐life‐per‐day On 4 1 2014 health plans will be assessed $1 per life per day  penalty for non‐compliance to HIT SOP 29
  30. 30. The CostCost generally agreed by CBOCost generally agreed by CBO First 10 years it will cost $938 Billion Projected to reduce the deficit $134 Billion Requires $1.072 trillion in new tax revenues i $ illi i p yWho will pay 138 million eligible US tax payers (2007) ~42.5 million do not net‐contribute 95.5 million will pay an additional $11,225 95.5 million will pay an additional $11,225  in taxes over the 10 year period 30
  31. 31. IRS is now in the Healthcare BusinessTax implications will also applyTax implications will also apply All taxes and penalties are driven through the  IRS Code giving the IRS new power over  healthcare in the US $2 per employee per year tax to go to medical  research Increase in Medicare payroll taxes for earned  income over $200,000 (ind) & $250,000 (fam)  i $200 000 (i d) & $250 000 (f ) 40% nondeductible excise tax on high‐dollar  g coverage plans “The Cadillac Plans” 31
  32. 32. IRS is now in the Healthcare Business New fees and taxes on several health care‐ New fees and taxes on several health care related industries including medical device and  pharmaceutical companies starting in 2010 pharmaceutical companies starting in 2010  10‐percent tax on indoor tanning services Tanning Industry Tanning Industry Lobbyist 32
  33. 33. Employer Plan MandatesPenalties begin 2014 for the 50+ employer P lti b i 2014 f th 50 l who provides:  No coverage I d Inadequate coverage t  Excessive coverage cess e co e ageThis health plan is “Just Right” g 33
  34. 34. What does a business owner need to do?I.I Talk with your Healthcare Consultants and  T lk ith H lth C lt t d your CPAs ASAP!II. If you offer any type of coverage now, you  will need to tweak it to comply with the  earliest of regulations: By 6/23/10: By 6/23/10:  35% Tax Credit for Small Businesses  Report coverage value on employee’s W‐2  Early Retiree Reinsurance program starts y p g 34
  35. 35. What does a business owner need to do?Plan years beginning after 9/23/10:Plan years beginning after 9/23/10:  Prohibition of lifetime limits  Only restricted annual limits allowed  P hibi i Prohibition on rescissions i i  Prohibition on preexisting exclusion for  p g dependents under age 19  Plans are required to offer first dollar Plans are required to offer first dollar  coverage of preventative health services  Plans to cover dependents up to age 26 35
  36. 36. What does a business owner need to do?Plan years beginning after 9/23/10:Plan years beginning after 9/23/10:  Prohibition of discrimination based on salary  Medical Loss Ratio limitations for plans I Implement new claims admin procedures l l i d i d  Required coverage of emergency services q g g y  Individual choice of primary care provider  Required coverage of OB/GYN care  Make benefit plan details transparent Make benefit plan details transparent 36
  37. 37. Individual MandatesBy 2014, American citizens and legal residents By 2014 American citizens and legal residentsmust purchase qualified health coverage with the exception to:the exception to: Religious objectors  Incarcerated individuals  Members of Indian tribes b f d b Those who were not covered for a period of  p less than three months during the year People with no income tax liability People with no income tax liability 37
  38. 38. State’s Rights Initiatives 38
  39. 39. High Risk Pools and Georgia   6‐23‐2010 $5 Billion in federal funds will be  6 23 2010 $5 Billi i f d l f d ill b provided to the states for high‐risk pools Employers of risk pool participants will be  audited to assure they were not discouraged  from remaining in the company plan John Oxendine GA Insurance Commissioner John Oxendine, GA Insurance Commissioner,  declined to receive the funds because they are  due to run out by 2012 which is 2 years before  due to run out by 2012 which is 2 years before the 2014 coverage mandates kick in (also  participating in the State s Rights initiatives) participating in the State’s Rights initiatives) 39
  40. 40. “Transparency”All health plans will be required to make All health plans will be required to makepublic disclosure through HHS: Claims payment policies and practices Periodic financial disclosures Data on enrollment and disenrollment Data on number of claims denied Data on number of claims denied Data on rating practices Information on Out‐of‐Network cost sharing &  payments Information on enrollee and participants rights 40
  41. 41. Organizational Confusion – US Healthcare Organization Chart g of Health Reform
  42. 42. Don’t PanicConfused – Implementation overload!! There will be more  to come… Only 20% of the work has been done work has been done thus far… We are only at theEnd of the Beginning  —7 to 10 years of  7 t 10 f rule making and  changes ahead. changes ahead
  43. 43. But now is not the time! 43
  44. 44. Consumer Operated & Oriented PlansLocally Organized and Managed CO‐OPs Locally Organized and Managed CO OPs Non‐profit, member‐run health insurance issuers May not be sponsored by State or Local government  or current health insurers Must be organized under State law as a non‐profit Must meet all State insurance regulations Must meet all State insurance regulations All profits will be used to lower premiums and  increase quality for its members increase quality for its members $6 Billion will be provided for Start‐up Costs  Loans to be repaid in 5 years  Grants to be repaid in 15 years 44
  45. 45. There is an opportunity for the CSRAThe Act has provided us the opportunity to The Act has provided us the opportunity totake control of our own healthcare Healthcare is local! Its paid for by local employers and consumers Health services are provided by local health  p professionals Families follow traditional patterns for their care or  they get recommendations from their friends who  they get recommendations from their friends who have experience these providers 45
  46. 46. Consumer Operated & Oriented Plans Local Employers E l Local Consumers C CO O CO‐OP TPA/ASO Local Healthcare Providers 46
  47. 47. So what are we doing in SCRA?Central Savannah River Area 47
  48. 48. CSRA Health CO‐OP, Inc. Local Employers American  Association of Health CO‐OPs Local CSRA  TPA/ASO &600,000+ Consumers CO‐OP Services Georgia Association CSRA  of Health CO‐OPs f H lth CO OPResidents Local To bring the resources Healthcare together on a national g bases to each state and Providers each community CO‐OP. Physician y Groups Allied Medical  Health Supply 48
  49. 49. Thank You! Gordon Jones, DHA www.CSRAHCO‐OP.orgGordon@HealthYncubator.comG d @H lthY b t 706‐564‐9275 49