The Affordable Care Act and Implications for the Business Community

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This presentation covers the basics of the Affordable Care Act (health reform) and shares important information needed by the business community.

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The Affordable Care Act and Implications for the Business Community

  1. 1. The Affordable Care Act and the Implications for the Business Community 2013 Healthcare Summit Presented by Children’s Healthcare of Atlanta October 15, 2013 Karen Minyard, Ph.D.
  2. 2. Health Reform An overview of the impact of the Patient Protection and Affordable Care Act in the United States
  3. 3. Federal Poverty Level High-risk Pool Health Insurance Exchange (Marketplace) Insurance Subsidies Individual Mandate Essential Benefits
  4. 4. Health Reform 1. Sources of coverage
  5. 5. Sources of Coverage Current national estimates from the Congressional Budget Office, May 2013 2013 2018 Change Employer 57% 56% -1% Non-Group and Other 9% 8% -1% Medicaid/CHIP 13% 20% +7% Uninsured 21% 11% -10% Exchange 0% 9% +9%
  6. 6. More Georgians with health insurance coverage (non-elderly) Baseline Scenario in 2019 No Expansion of Medicaid in 2019 2.2013
  7. 7. Health Reform 1. Sources of coverage 2. Financial Implications
  8. 8. funding and spending Medicare Savings ~ 1 trillion Fees, Taxes and Penalties Insurance Premium Subsidies ~ 1 trillion Medicaid
  9. 9. Health Reform 1. Sources of coverage 2. Financial Implications 3. Major change components
  10. 10. Changes in Public Coverage Changes in Private Coverage Improving Health Care Quality Improving Health
  11. 11. Medicaid expansion Changes in Public Coverage
  12. 12. Medicaid Expansion Status as of September 16, 2013 Changes in Public Coverage http://kff.org/medicaid/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/#map
  13. 13. Changes in Private Coverage What does it mean for employers?
  14. 14. <25 Employees <50 Employees >50 Employees >200 Employees
  15. 15. Tax Credits • Full Credits <25 Employees – <10 FTEs – Wages < $25,000 • Phased out credits – 10 to 24 FTEs – Wages to $50,000 • Credit as share of premium: – 2010-2014: 35% – 2014-2015: 50%
  16. 16. Tax Credits – 2014: Examples Number of FTEs <25 Employees Average Annual Wages ($’s) Employer Tax Credit payments for Health Insurance % Tax Credit 10 $20,000 $40,000 $20,000 50% 15 $20,000 $60,000 $20,000 33% 24 $20,000 $96,000 $3,200 3.3% 10 $40,000 $40,000 $8,000 20% 15 $40,000 $60,000 $2,000 3.3% 24 $40,000 $96,000 0 0
  17. 17. Small Business Tax Credit • Employers who have fewer than 25 full-time equivalent employees who earn an average of $50K a year, and pay at least half of the employee health insurance premiums are eligible for a tax credit. • The maximum credit a business can receive is 35% until 2014, when that amount increases to 50%.
  18. 18. Small Business Tax Credit • The Congressional Budget Office estimated that tax credits would total 2.5 billion in 2010 • The total claim amount for 2010 was 468 million. • Why the lower amount?
  19. 19. SHOP Exchange Purchasing <50 Employees • Certify, price and rate plans • Standardized benefit information • Administer small business tax credits
  20. 20. Pay or Play • Penalties if full-time workers obtain coverage in the Exchange >50 Employees – $2,000 per full-time worker (exclude first 30) if no coverage offered – $3,000 per worker obtaining the subsidy if coverage offered that is not sufficiently generous – High cost sharing – High employee premiums
  21. 21. Must: >200 Employees • Auto enroll new workers – Employee only – Lowest cost plan • Employee can still opt out or change selection
  22. 22. Changes in Private Coverage Insurance Market Regulation
  23. 23. Sample Changes to Current Practices Insurance Regulation • Prior approval of rate • Community rating increases premiums • No pre-existing condition exclusions • Mandatory medical loss ratio of 80 or 85% • No lifetime and very (by group size) limited annual benefit caps
  24. 24. 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)
  25. 25. Changes in Private Coverage Health Insurance Exchange (Marketplace)
  26. 26. • An organized market for health insurance that: Health Insurance Exchange • Establishes common rules for benefits and pricing • Offers consumers a choice of plans • Provides consumers information about their choice • Facilitates plan enrollment • Administers the subsidies • States can determine structure and potential regional partners
  27. 27. How Will Health Insurance Exchanges Work? In States with Medicaid Expansion Changes in Private Coverage Health Insurance Exchange Medicaid Private Insurance
  28. 28. How Will Health Insurance Exchanges Work? In States without Medicaid Expansion Changes in Private Coverage Health Insurance Exchange Medicaid Private Insurance
  29. 29. Exchange Participation Status as of May 28, 2013 Medicaid expansion Changes in Private Coverage http://kff.org/health-reform/state-indicator/health-insurance-exchanges/#
  30. 30. Features of Exchange Plans Blue Cross Plans - Region 3 Actuarial Value Deductible Coinsurance Monthly 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”
  31. 31. Insurance Regions for Exchange Premiums
  32. 32. Exchange Offerings by Insurance Region Regions BCBS Peach State Kaiser 1 Y 2 Y Y Humana Y 3 Y Y 4 Y Y Y Y Y 5 Y Y 6 Y Y 7 Y 8 Y 9 Y Y 10 Y Y 11 Y Y 12 Y Y 13 Y 14 Y 15 Y 16 Y Y Alliant Y Y Y Y Y Y Y Y Y
  33. 33. Out-of-Pocket Costs for a BlueCross Blue Shield Silver Plan for a 40-Year-Old by Income Region 3 Family Income $12,000 $24,000 $36,000 $48,000 Subsidy $310.90 Net Costs Subsidy Net Costs Subsidy Net Costs Subsidy Net Costs $290.90 $20.00 $178.65 $132.25 $25.90 $285.00 $0.00 $310.90 Source: Insurance company filings with Georgia Insurance Commissioner
  34. 34. Tax Subsidy in Exchange Age Number of People Average Monthly Subsidy 19 to 26 69,888 $208 26 to 35 91,225 $259 35 to 50 123,016 $300 50 to 64 87,877 $285 Total Adults 372,006 $263
  35. 35. Improving Health Care Quality Best information Coordinated care Provider incentives and penalties
  36. 36. National health strategy Research and public health innovation Improving Health Mandatory preventive care Healthier communities
  37. 37. Health Reform 1. 2. 3. 4. Sources of coverage Financial Implications Major change components Timeline
  38. 38. Changes Already in Effect: Insurance Regulation Tax and Spending Changes Improving Quality Measures Reduced Payments – Medicare Quality Incentives and Demonstration Projects 2010 2011 2012 2013 2014
  39. 39. Upcoming Changes: Coverage Expansions Individual Mandates Enacted Additional limits, fees, incentives 2010 2011 2012 2013 2014
  40. 40. Health Reform 1. 2. 3. 4. Sources of coverage Financial Implications Major change components Timeline
  41. 41. Atlanta Economy
  42. 42. Health Insurance Exchange Premium Subsidies • Annual economic output • Jobs – – – – – – – – – – Private hospitals Offices of physicians, dentists, and other health practitioners Home health care services Medical and diagnostic labs and other ambulatory care Real estate establishments Food services and drinking places Employment services Transit and ground passenger transportation Wholesale trade businesses Services to buildings and dwellings • Local Taxes
  43. 43. GHPC Health Reform Resources and Tools: www.gsu.edu/ghpc/health-topics/health-care-reform - Leading Through Health Reform (PowerPoint Presentation) GHPC Policy Brief Package: • • • • • • • • - ACA Funding for Georgia Community Health Health Insurance Exchanges The Supreme Court Ruling on the Affordable Care Act: What will it mean for Georgians? An Overview of Health Reform State Implications of Health Reform in Georgia Implications of Health Reform for Community-Based Organizations The Impact of Health Reform on Health Care Providers Health Reform Implications for Employers GHPC’s 50-State Health Reform Calculator for Small Businesses© The Little Blue Book, a health glossary Leading through Health System Change: A Public Health Opportunity Planning Tool
  44. 44. Contact: Karen Minyard, Ph.D. Georgia Health Policy Center Georgia State University 404-413-0314 ghpc@gsu.edu www.gsu.edu/ghpc www.facebook.com/georgiahealthpolicycenter

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