This document summarizes the key components and status of recent US health reform legislation. It discusses that the bills have been passed by Congress and signed into law. Implementation will be staggered starting in 2014. The legislation expands Medicaid eligibility and subsidies for private insurance. It also establishes health insurance exchanges, regulates private insurance practices, and creates long-term care options. States will face increased costs and challenges integrating systems.

1. Health Reform
Ann Kohler
Director of Health Services
National Association of State Medicaid Directors
American Public Human Services Association
June 8, 2010
www.TheNationalCouncil.org

2. Current Status
> Legislative Status:
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• The House passed the Senate’s version of the bill;
• The House passed a package of amendments to the Senate bill
through a reconciliation bill;
• The Senate passed the reconciliation bill with minor changes;
• The House passed the amended reconciliation bill; and
• Both of the bills have been signed into law.
law
> Implementation:
• Staggered time-line of effective dates;
• Major Medicaid and private-market changes effective 2014;
• CMS, NASMD, NGA & State Representatives forming
workgroups to address Medicaid Changes.
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3. Key Components of Reform
> Medicaid Changes:
• Expands Medicaid to everyone under 133% of FPL, with increased
Federal funds for this population;
• Current eligibility levels, p
g y , procedures and methodologies are frozen
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until 12/31/2013 for adults and 9/30/2019 for children (including
CHIP);
• Restructures income calculation for many Medicaid beneficiaries (but
y (
not people with Disabilities) to IRS income calculation – Elimination
of income disregards;
• Elimination of asset/resource test for individuals who have the
income calculation restructured;
• Mandatory increase to the provider rates Medicaid pays for primary
care services (100% Federal funds).
funds)
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4. Key Components of Reform
> Medicaid (continued):
• Expands Medicaid to any individual under 25 previously served
through Child Welfare;
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• Creates State-plan option for family planning services;
> Other programs:
• Includes grants and incentives to expand and subsidize high-risk
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pools;
;
• Increases funding for ADRCs;
• Establishes grants for School-based health services.
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5. Key Components of Reform
> Long term Care
Long-term Care:
• Establishes the CLASS Act:
• National long term care insurance program funded by payroll
deductions;
• Eligibility determined by ADLs, not finances;
• C t new options for community-based l
Creates ti f it b d long-term care through
t th h
Medicaid;
• Provides FMAP incentives to increase long-term care in the
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community;
• Provides grants and demonstrations to address IMD coverage.
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6. Key Components of the Bill(s)
> Private Insurance Reforms:
• “Community Rating – limits on variation in premiums for
Community Rating”
individuals within a geographic area;
• Prohibits exclusion of pre-existing conditions;
• “Guaranteed Issue/Renewal” – no one can be denied
coverage/dropped due to health conditions;
• Removes annual/lifetime limits on care;
• Required Benefits Package (Including Rehabilitation, Habilitation,
MH treatment).
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7. Key Components of th Bill( )
K C t f the Bill(s)
> Individual mandate to buy insurance – allows some individuals to
“opt-out” f
“ t t” of mandate;
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> Establishment of “Exchange”:
• Based on Massachusetts “Connector” model; ;
• Provides centralized marketplace to compare insurance and purchase plans;
• Federal government provides subsidies for people with low-to-moderate income
to assist with the purchase of insurance.
insurance
> Competition:
• Establishes Health care nonprofit cooperatives;
• State may offer an insurance plan up to 200% FPL
> State Innovation:
• Waivers for states to try alternate coverage methods.
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8. Potential Impact to State Programs
> Potential Issues:
• Eliminating income disregards;
• Increased costs on state budgets due to mandatory Medicaid
expansions & costs associated with developing and operating the
exchanges;
• Changes to eligibility systems & interoperability with the exchanges;
• Loss of revenue through restructuring of drug rebate programs;
• Reduction in “DSH”;
• Large expansion may cause access issues for everybody (not just
Medicaid recipients).
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9. Potential Impact to State Programs
> Potential Positive Changes:
• Greater availability of insurance in the private sector;
• Broader range of services available through private insurance
plans;
• N preexisting condition exclusion, denial of coverage or
No i ti diti l i d i l f
termination of coverage;
• CLASS act – LTC without Medicaid funding; g;
• New Medicaid coverage for low-income people – including
individuals currently served in some State-only programs.
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10. Future Considerations
> State Budget issues:
• 48 states experiencing budget shortfalls;
• Increased Federal Funds (FMAP) expire 1/1/2011;
• Bills containing extensions to FMAP increase have passed both the
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Senate & House, but have not been reconciled;
• Loss of FMAP would lead to significant rate cuts & service
reductions.
reductions For more information on proposed cuts:
http://www.aphsa.org/Home/Doc/WhitePaperFMAP.pdf
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11. For More Information:
Ann Kohler, Director of Health Services
National Association of S
N i lA i i f State M di id Di
Medicaid Directors
American Public Human Services Association
Ann.Kohler@aphsa.org
202.682.0100
Ext. 299
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12. Use telephone or computer speakers
> Call 888.259.8414 for
technical support
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Recordings/Presentations
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Available 48 hours AFTER the live event at
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(Click on Resources & Services and then on
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