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

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. Health Reform
An overview of the impact of the
Patient Protection and Affordable Care
Act in the United States

3. Federal Poverty Level
High-risk Pool
Health Insurance Exchange
(Marketplace)
Insurance Subsidies
Individual Mandate
Essential Benefits

4. Health Reform
1. Sources of coverage

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. More Georgians with health
insurance coverage
(non-elderly)
Baseline Scenario in 2019
No Expansion of Medicaid in 2019
2.2013

7. Health Reform
1. Sources of coverage
2. Financial Implications

8. funding and spending
Medicare Savings
~ 1 trillion
Fees, Taxes and
Penalties
Insurance Premium
Subsidies
~ 1 trillion
Medicaid

9. Health Reform
1. Sources of coverage
2. Financial Implications
3. Major change components

10. Changes in
Public
Coverage
Changes in
Private
Coverage
Improving
Health Care
Quality
Improving
Health

11. Medicaid expansion
Changes in
Public
Coverage

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. Changes in
Private
Coverage
What does it mean for
employers?

14. <25
Employees
<50
Employees
>50
Employees
>200
Employees

16. 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%

17. 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

18. 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%.

19. 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?

20. SHOP Exchange Purchasing
<50
Employees
• Certify, price and rate plans
• Standardized benefit information
• Administer small business tax
credits

21. 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

22. Must:
>200
Employees
• Auto enroll new workers
– Employee only
– Lowest cost plan
• Employee can still opt out or change
selection

23. Changes in
Private
Coverage
Insurance Market Regulation

24. 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

25. 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)

26. Changes in
Private
Coverage
Health Insurance Exchange
(Marketplace)

27. • 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

28. How Will Health Insurance Exchanges Work?
In States with Medicaid Expansion
Changes in
Private
Coverage
Health
Insurance
Exchange
Medicaid
Private
Insurance

29. How Will Health Insurance Exchanges Work?
In States without Medicaid Expansion
Changes in
Private
Coverage
Health
Insurance
Exchange
Medicaid
Private
Insurance

30. Exchange Participation
Status as of May 28, 2013
Medicaid expansion
Changes in
Private
Coverage
http://kff.org/health-reform/state-indicator/health-insurance-exchanges/#

31. 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”

32. Insurance
Regions for
Exchange
Premiums

33. 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

34. 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

35. 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

36. Improving
Health Care
Quality
Best information
Coordinated care
Provider incentives and
penalties

37. National health strategy
Research and public health
innovation
Improving
Health
Mandatory preventive care
Healthier communities

38. Health Reform
1.
2.
3.
4.
Sources of coverage
Financial Implications
Major change components
Timeline

39. 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

40. Upcoming Changes:
Coverage Expansions
Individual Mandates Enacted
Additional limits, fees, incentives
2010
2011
2012
2013 2014

41. Health Reform
1.
2.
3.
4.
Sources of coverage
Financial Implications
Major change components
Timeline

42. Atlanta Economy

43. 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

44. 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

45. 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