Implementing the Affordable Care Act

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"Implementing the Affordable Care Act in Georgia" presented by Dr. Bill Custer on September 23, 2013 at 2014 is Now: Addressing Healthcare Access, Cost & Quality in Georgia.

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Implementing the Affordable Care Act

  1. 1. William S. Custer, Ph. D. Institute of Health Administration Georgia State University Healthcare Leadership Forum Healthcare Georgia Foundation September 23, 2013 Implementing the Affordable Care Act in Georgia
  2. 2. Major Components of Affordable Care Act • Expand Medicaid for the low income individuals • Expand private insurance to working families through: – Insurance regulation – Employer Mandate – Health insurance markets (“Exchanges”): • American Health Benefit Exchange for individuals – Subsidies (refundable tax credits) • SHOP exchange for small business – Individual mandate
  3. 3. Major Components of Affordable Care Act Medicaid Expansion Delayed Employer Mandate Delayed SHOP Exchange Partially Delayed Individual Exchange On time Individual Mandate On time
  4. 4. Projected Costs of Medicaid Expansion In Georgia Year Total Medicaid Expenditures State Expenditures Net Federal Expenditures New Enrollees 2014* 1,675,406,373 $79,600,000 $1,494,900,000 620,172 2015 3,360,744,966 $224,900,000 $3,034,100,000 625,326 2016 4,198,807,865 $210,100,000 $3,885,500,000 634,317 2017 4,473,049,385 $324,200,000 $4,044,300,000 642,562 2018 4,713,308,152 $404,900,000 $4,202,500,000 650,913 2019 4,941,484,491 $458,500,000 $4,375,700,000 659,372 2020 5,315,878,891 $655,900,000 $4,551,300,000 667,942 2021 5,550,591,351 $710,000,000 $4,730,500,000 676,623 2022 5,765,622,197 $737,000,000 $4,917,100,000 685,417 2023 5,989,065,391 $764,996,900 $5,111,096,900 694,325 Total for Decade 45,983,959,06 1 $4,570,096,900 $40,346,996,900
  5. 5. Impact Type Employment Labor Income Output Direct Effect 36,676 $2,115.10 $4,037.20 Indirect Effect 11,587 $526.40 $1,478.40 Induced Effect 22,079 $916.30 $2,661.50 Total Effect 70,343 $3,557.70 $8,177.10 Table 1: Georgia State Average Annual Economic Impact (in millions of 2012 dollars)
  6. 6. Jobs Created by Medicaid Expansion In Georgia by Service Delivery Area
  7. 7. Table 4: Estimated State and Local Average Annual Tax Collections (in millions of 2012 dollars) Local Tax collections $146.10 State Tax collections $130.50 Total State and Local Tax $276.50
  8. 8. American Health Benefit Exchanges • Provides one-stop insurance shopping for individuals • Offers a selection of “Exchange qualified” plans that meet minimum standards – Creates administrative mechanism for enrollment – Standardizes presentation of insurance options for plan comparability; provides a “rating” system for plans and significant transparency provisions • “Navigators” to assist consumers • All plans sold in the Exchange must be certified by Insurance Commissioner as meeting minimum federal benefit standards – Four levels of plans: bronze, silver, gold, platinum – Catastrophic plans available to individuals under age 30 or those exempt from insurance requirement – Insurers must offer children-only plans • Exchange must provide a seamless application and enrollment process for individuals who qualify for subsidies, requiring coordination with state Medicaid Program.
  9. 9. ACA Requirement – Essential Health Benefits • All health plans participating in the Exchange and in a Medicaid Benchmark Plan must provide 10 services identified as Essential Health Benefits. • States must select an essential health benefits benchmark plan by the 3rd quarter 2012. – If no plan is selected, the default plan (the largest plan by enrollment in the largest small group insurance product in the state) will become the state’s benchmark plan. • State can select their benchmark health insurance plans from the following: – One of the three largest small group plans based by enrollment; – One of the three largest state employee health plans by enrollment; – One of the three largest federal employee health plan options by enrollment; – The largest HMO plan offered in the state’s commercial market by enrollment. • States pay the cost of benefits required by state law in excess of essential health benefits. Essential Health Benefit Ambulatory Patient Services Pharmacy Emergency Services Rehab & Habilitation Services/Devices Hospitalization Lab Services Maternity & Newborn Care Preventative & Wellness Services & Chronic Disease Management Mental Health & Substance Abuse Treatment Pediatric Services – includes Dental & Vision
  10. 10. 2014 - Individual Mandate • Required to show proof of coverage with tax return – Penalty for non compliance: • $95 per individual or up to 1% taxable income (2014) • Increases to $325 or 2% (2015) and $695 or 3% (2016) • What counts as coverage? – Bronze, Silver, Gold or Platinum benefit plans or their equivalent
  11. 11. Insurance Regions for Exchange Premiums
  12. 12. Exchange Offerings by Insurance Region Regions BCBS Peach State Kaiser Alliant Humana 1 Y 2 Y Y Y Y 3 Y Y Y Y Y 4 Y Y Y 5 Y Y 6 Y Y 7 Y Y 8 Y Y Y 9 Y Y 10 Y Y Y 11 Y Y 12 Y Y 13 Y Y Y 14 Y Y 15 Y 16 Y Y
  13. 13. Source: Analysis of HHS Proposed Rules On Reinsurance, Risk Corridors And Risk Adjustment Prepared by Wakely Consulting Group – Ross Winkelman, FSA, MAAA, Julie Peper, FSA, MAAA, Patrick Holland, Syed Mehmud, ASA, MAAA, James Woolman The State Health Reform Assistance Network, RWJ Risk Adjustment, Reinsurance and Risk Corridors Under ACA
  14. 14. Actuarial Value Deductible Coinsurance Premium (40 Yr. Old) Bronze 60% $6,300 0% $251 Silver 70% $3,000 10% $310 Gold 87% $750 0% $394 Source: : “Insurance company filings with Georgia Insurance Commissioner Features of Exchange Plans Blue Cross Plans Region 3
  15. 15. Health Insurance Exchange: Tax Credits • Individuals/families with incomes from 100% to 400% FPL qualify for tax credits to reduce Exchange premium cost. – 100% FPL = $11,170 individual, $23,050 family of 4 – 400% FPL = $44,680 individual, $92,200 family of 4 • Assistance paying out-of-pockets costs is available for members with incomes from 100% to 250% FPL. • Tax credit and payment subsidies are based on the cheapest Exchange Silver Plan . • Members contribute toward their premium costs based on a sliding fee by percent of FPL: – Up to 133% FPL = 2% of income. – 133% -150% FPL = 3.0% to 4% of income. – 150% - 200% FPL = 4.0% to 6.3% of income. – 200% - 2505 FPL = 6.3% to 8.05% of income. – 250% - 300% FPL = 8.05% to 9.5% Of income. – 300% - 400% FPL = 9.5% Of income. • The Congressional Budget Office estimates the average tax credit will cost about $5,000 a year per tax return, which includes individuals and families.
  16. 16. Family Income $12,000 $24,000 $36,000 48,000 Regions BCBS/ Silver Plan Age 40 Subsidy Net Costs Subsidy Net Costs Subsidy Net Costs Subsidy Net Costs 1 $460.86 $440.86 $20.00 $328.61 $132.25 $175.86 $285.00 $0.00 $460.86 2 $310.43 $290.43 $20.00 $178.18 $132.25 $25.43 $285.00 $0.00 $310.43 3 $310.90 $290.90 $20.00 $178.65 $132.25 $25.90 $285.00 $0.00 $310.90 4 $387.69 $367.69 $20.00 $255.44 $132.25 $102.69 $285.00 $0.00 $387.69 5 $321.16 $301.16 $20.00 $188.91 $132.25 $36.16 $285.00 $0.00 $321.16 6 $406.94 $386.94 $20.00 $274.69 $132.25 $121.94 $285.00 $0.00 $406.94 7 $356.11 $336.11 $20.00 $223.86 $132.25 $71.11 $285.00 $0.00 $356.11 8 $321.03 $301.03 $20.00 $188.78 $132.25 $36.03 $285.00 $0.00 $321.03 9 $329.61 $309.61 $20.00 $197.36 $132.25 $44.61 $285.00 $0.00 $329.61 10 $295.19 $275.19 $20.00 $162.94 $132.25 $10.19 $285.00 $0.00 $295.19 11 $380.24 $360.24 $20.00 $247.99 $132.25 $95.24 $285.00 $0.00 $380.24 12 $314.99 $294.99 $20.00 $182.74 $132.25 $29.99 $285.00 $0.00 $314.99 13 $369.94 $349.94 $20.00 $237.69 $132.25 $84.94 $285.00 $0.00 $369.94 14 $342.09 $322.09 $20.00 $209.84 $132.25 $57.09 $285.00 $0.00 $342.09 15 $422.42 $402.42 $20.00 $290.17 $132.25 $137.42 $285.00 $0.00 $422.42 16 $317.76 $297.76 $20.00 $185.51 $132.25 $32.76 $285.00 $0.00 $317.76 Out of Pocket Costs for a Blue Cross Silver Plan for a 40-Year-Old by Region and Income
  17. 17. Tax Subsidy in Exchange Age Number of People Average Monthly Subsidy 19 to 26 69,888 $408 26 to 35 91,225 $316 35 to 50 123,016 $300 50 to 64 87,877 $285 Total Adults 372,006 $263
  18. 18. Employer Coverage Requirements • Small employers with 50 are exempt from requirement. • Employers with more than 50 full-time employees must offer insurance meeting certain cost requirements or pay penalties: – Large employers who do not offer insurance and whose employees receive public subsidies pay 1/12 of $2,000 per FTE per month, with a waiver for first 30 FTEs – Large employers who offer insurance but have employees who receive premium assistance because they cannot afford the insurance (affordability is 9.5% of income) pay the lesser of 1) 1/12 of $3,000 per FTE receiving subsidy per month, or 2) 1/12 of $2000 per month for the total number of full-time employees with a waiver for first 30 FTEs – Penalties calculated monthly based on number of applicable employees • Employers with 200 or more workers who offer coverage must automatically enroll new employees and continue enrollment of current employees; employees may choose to opt-out
  19. 19. Small Business Health Options Program (SHOP) • Provides purchase option for and small businesses – Offers a selection of “Exchange qualified” plans that meet minimum standards – Redefines small businesses as 1-100 employees; states may limit to 50 until 2016 – States can expand coverage to large employers (greater than 100 employees)in 2017.
  20. 20. SHOP Exchange • Law’s intent: – Employees of small employers have increased choice of plan – Reduce small employer costs • Aggregate premiums over all employee choices and present employer one bill • 2014: – Employers only have choice of one plan – No Aggregation – Tax Credits for small employers only offered in Exchange
  21. 21. Consumer Assistance: Navigators • What: Navigators will help educate people about their coverage options, and they’ll help applicants figure out if they are eligible for assistance with the cost of the private plans sold through the marketplaces. • Who: Community-based and consumer-focused nonprofit organizations are required to be among the types of groups that serve as navigators. Must have existing relationships with populations served. Must not have financial relationship with insurers.

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