Hc Reform June 2011 Ppaca
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04/10/23Prepared by Chuck Kiskaden
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HealthCare Reform – Patient Protection and Affordable Care
Act
Changing the Supply and Demand Curve regarding Health Care
The Players Why now instead of under Clinton? What Models were under
consideration? What will be the impact on Employers
and Employees? What can you do now to control costs?
Imagine the HC Reform train roaring down the tracks with “Cost Control” brake broken off in the engineers hand!
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bbbbbbbbbb
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Instructions on implementing Health Care Reform Legislation
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OUT
OF
Control
H C
Insu
rance
Cost Control EmergencyBrake HandleBroken OFF
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Supply and Demand Curve
What happens when you change the demand, hold the cost and no change in Supply?
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The Players Employers Employees Unemployed Retired Organized Medicine (Docs, Hospitals,
HMOs, ancillary Providers, Pharma, etc.) For Profit Insurance Companies & HMO’s States Federal Government
Employers
Wins LosesNo companies Denied Pay or Play$0 Copay on Prev. Children to 26Carrier MLR restrictions Increased $Health Exchanges 2014 Health ExchangesTax Credits Vouchers in 2014
W2 changes
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Individuals
Wins LosesNo Pre-Xexclus. Inc in Med Tax DedChildren to 26 Increased $$0 Copay on Prev. Mandated CoverageVouchers in 2014Reduced Donut HoleMini-Meds eliminated
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Individuals
Wins LosesHigh Risk PoolsExpanded M’CalPremium SubsidiesNo Lifetime LimitsProhibition on RecisionMax waiting period 90 days
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Why Now? Between 2002 and 2009, premiums more
than doubled, increasing 117.5%, while California's overall inflation rate increased 23.1%.
Cost shifting has reached tipping point to trigger federal & state intervention Tipping points are "the levels at which the
momentum for change becomes unstoppable."
$800,000,000,000 in potential savings???
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Plan Design Trends
2007 2009
PPO HMO PPO HMO KP
Co – Pays $10 $20 $ 20 $20/$30 EOA $15
Inpatient Hosp $250/$750 $250 per day $0
Deductible Avg. $364/842 $250 $500 - 1000 250 -1000 $?
Out of Pocket Max
In-Network $2178 $1973 $2000 $1500/$4500 1500/3000
Out of Network $5187 NA $6000 NA NA
Co-Insurance
In-Network 80% 100% 80% 100% 100%
Out of Network 60 -70% 0% 70% 0% 0%
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National Rx Benefit Trends
2005 20072009
Prescriptions (3 Tier)
Generic $ 10 $ 10 $ 10 to $20
Brand $ 23 $ 24 $ 30 (after ded)
Non-Formulary $ 40 $ 50 $ 50 (after ded)
Data Source – National Survey of Employer Sponsored Health Plans
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Macro Cost Shifting
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Pay Full Retail
Medical paid at $.60 on the dollar
Best Risks and Underinsured
Poor Risks, Can’t afford Insurance, etc.
Macro Cost Shifting
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What Models were under Consideration?
Universal Health Care Single Payor System Medicare for All Health Insurance Reform
With Health Care Exchange that includes a Public Plan or Health Care Co-operative
At State Level? (A program like the HIPC?) At Federal Level?
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Health Reform – What happens next and
when?
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Patient Protection and Affordable Care Act
Cost – $940 billion over next 10 years
Deficit Impact – Saves $143 Billion over next 10 years Saves $1.2 Trillion over second 10
years
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Patient Protection and Affordable Care Act
32 Million uninsured now covered Mandated coverage starting 2014
Fine if not insured - $95 or 1% of income in first year (whichever is greater) and finally reaching $695 or 2% of income.
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Tax Implications Individual tax starting in 2014 if you are
not insured Pay or Play for large employers - $2000
per year Cadilac Plan tax – 40% excise tax Medicare Tax increase on investment
income from 2.9 to 3.8 in 2013 Brand name Rx excise tax of 2.5 B
rising to 4.2 B in 2018
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Tax Implications Excise tax on medical device
manufacturers – 2.9% starting 2012 Health Carriers – 8 B starting in 2014,
11.3 B in 2015 -2017, 14.3 B in 2018 assessed based on market share
Tax on itemized deductions threshhold increased from 7.5% to 10%
Excise tax on indoor tanning – 10%
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Patient Protection and Affordable Care Act
September 2010 Tax Credits for Small Businesses Drug Cost help for Seniors ($250 rebate
checks in 2010 toward donut hole costs and in 2011 50% discount of Generic drug cost as the donut hole slowly closes)
Coverage for Pre-existing conditions through high risk pools - $5 billion
High risk pools set up 90 days after signature
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Tax Credits for small groups For the next four years, until the
Exchanges are set up, businesses with 10 or fewer full-time-
equivalent employees earning less than $25,000 a year on average will be eligible for a tax credit of 35% of health insurance costs.
Companies with between 11 and 25 workers and an average wage of up to $50,000 are eligible for partial credits.
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Tax Credits for small groups The tax credit will remain in place,
increasing to 50% of costs, for the first two years a company buys insurance through its state exchange.
The Congressional Budget Office predicts that the tax credit will affect about 12% of individuals covered via the small-group insurance market, lowering their cost of insurance by between 8% and 11%.
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Patient Protection and Affordable Care Act
September 2010 Reinsurance for early retirees (55
to 64). The program reimburses participating employment-based plans for 80 percent of the cost of benefits provided per enrollee in excess of $15,000 and below $90,000
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Patient Protection and Affordable Care Act
September 2010 All Kids get covered even with pre-
existing conditions Prohibition on Rescission - No
insurance carrier can cancel your insurance if you have a major medical condition
No more lifetime limits
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Patient Protection and Affordable Care Act
September 2010 Unmarried Children can stay on parents
plan until age 26 Development and utilization of uniform
explanation of coverage documents and standardized definitions.
Office of women’s health Reasonable break time for nursing
mothers Amends Fair Labor Stds Act (100+ employers)
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Patient Protection and Affordable Care Act As of
January 1, 2011
Insurance premium MLR payment reform Claims to Premium ratio can not be less
than 80% for small employers Claims to Premium ration can not be less
than 85% for all other employers (100+) Non-Profit Blue Plans must meet 85% ratio Rebates for all amounts where
administrative costs exceeding these ratios
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Patient Protection and Affordable Care Act As of
January 1, 2011
Funding for reducing childhood obesity demonstration project
Every hospital operating within the United States shall publish a list of standard charges for items and services provided by the hospital.
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Patient Protection and Affordable Care Act As of January 1, 2011 State health care workforce development grants Federally supported student loan funds Nursing student loan program Health care workforce loan repayment programs Nurse-managed health clinics Training in family medicine, general internal
medicine, general pediatrics, and physician assistantship
Centers of Excellence program, which develops a minority applicant pool
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Patient Protection and Affordable Care Act As of January 1, 2011
Expanding access to primary care services and general surgery services
Spending for Federally Qualified Health Centers (FQHCs)
Transparency reports and reporting of physician ownership or investment interests
Medicare self-referral disclosure protocol (Whistle Blowers) Jan 2011
CLASS - a new, voluntary, self-funded public long term care insurance program
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Patient Protection and Affordable Care Act As of January 1, 2011
Inclusion of cost of employer-sponsored health coverage on W-2 (Delayed to 2012)
Increase in additional tax on distributions from HSAs and Archer MSAs not used for qualified medical expenses to 20%
Eliminates tax deduction for retiree expenses allocable to Medicare Part D
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Patient Protection and Affordable Care Act As of January 1, 2011
Increases gross income threshold for itemized deduction for medical expenses from 7.5 percent to 10 percent
Additional hospital insurance tax on high-income taxpayers
single taxpayers with income in excess of $200,000 and couples filing jointly with incomes in excess of $250,000
increases from 0.5 % 0.9 % Requires that non-profit BCBS organizations
have a medical loss ratio of 85 percent or higher
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Patient Protection and Affordable Care Act As of January 1, 2011
Establishes Simple Cafeteria Plans that ease participation restrictions so that small businesses can provide tax-free benefits to their employees. Under this provision, self-employed individuals are included as qualified employees
Support for Pregnant and Parenting Teens and Women
Grants for small businesses to provide comprehensive workplace wellness programs
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Patient Protection and Affordable Care Act As of
January 1, 2011
Requires all plans to cover preventive services and immunizations recommended by the U.S. Preventive Services Task Force and the CDC, certain child preventive services recommended by the Health Resources and Services Administration (HRSA), and women’s preventive care and screening recommended by HRSA, without any cost-sharing.
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Patient Protection and Affordable Care Act
As of 2013 Limits the amount of contributions to
health FSAs to $2,500 per year Medicare Tax increase on investment
income from 2.9 to 3.8 Exchanges begin being marketed and
employees are made aware
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Patient Protection and Affordable Care Act
As of 2014 Total Ban on Pre-existing condition denials Health insurance exchanges open End to annual benefit maximums Fair health insurance premiums
(individuals and small groups age rates limited to 1 to 3 ratio)
Small Groups 1 to 100 ees (state can set at 1 to 50 until 2016)
Guaranteed availability of coverage
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Patient Protection and Affordable Care Act
As of 2014 Prohibits discrimination against individual
participants and beneficiaries based on health status
No Discrimination based on medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability – including acts of domestic violence or disability
Permits employers to vary insurance premiums by as much as 30 percent for employee participation in certain health promotion and disease prevention programs
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Patient Protection and Affordable Care Act
As of 2014 Comprehensive health insurance
coverage minimum package defined For all plans in all markets, prohibits out-of-pocket limits
that are greater than the limits for Health Savings Accounts. For the small group market, prohibits deductibles that are greater than $2,000 for individuals and $4,000 for families.
Prohibition on excessive waiting periods that exceed 90 days
Risk Assessment Risk Adjustment with 3% corridor
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Patient Protection and Affordable Care Act
As of 2014 - Free choice vouchers Requires employers that offer coverage
and make a contribution to provide free choice vouchers to qualified employees for the purchase of qualified health plans through Exchanges.
Employees qualify if their required contribution under the employer’s plan would be between 8 and 9.8 percent of their income.
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Patient Protection and Affordable Care Act
Insurance Exchanges Available to employees who lose their job,
quit or decide to start up their own business Catastrophic plan available to people under
the age of 30 Catastrophic plan also available to anyone of
any age making a salary of less than 8% of the lowest premium plan available.
Employees in group plans where the employer does not cover at least 60% of the premium
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Patient Protection and Affordable Care Act
Insurance Exchanges Premium subsidies in the exchanges for
anyone from 133% to 400% of FPL Free coverage if the cheapest policy
exceeds 8% of your income. Expanded Medicaid to 133% of FPL
$29,327 for family of four Premiums capped at a percentage of
income From 3% to as much as 9.5%
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Patient Protection and Affordable Care Act
As of 2018 Employer excess premium tax of 40% for
plans with premiums exceeding $10,200 for singles and $27,500 for family coverage
Retirees and employees in high risk professions like fire fighters would have the excess premium tax kick in at premiums exceeding $11,850 for singles and $30,950 for family coverage
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MediCare Hospital value-based purchasing program – FY
2013 payment would be tied to hospital performance on
quality measures related to common and high-cost
conditions, such as cardiac, surgical and pneumonia care Payment adjustment for conditions acquired in
hospitals hospitals in the top 25th percentile of rates of hospital
acquired conditions Medicare shared savings program. Rewards
Accountable Care Organizations (ACOs)
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MediCare National pilot program on payment bundling Independence at home demonstration program Permitting physician assistants to order post-
hospital extended care services Medicare coverage gap discount program
Requires drug manufacturers to provide a 50 percent discount to Part D beneficiaries for brand-name drugs and biologics purchased during the coverage gap
beginning July 1, 2010 Office of women’s health
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Payment ReformHealth Care Payment Reform That Rewards Value, Not Volume
Bundling payments to cover care over a specified period, revising fees to increase compensation for primary care, and offering providers financial incentives to serve as patient-centered medical homes
Quality ImprovementHealth Information Technology Policy Evidence Based Medicine and a Business Case for Health
Information Technology
Business Case for Investing in HC Reform
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NOW – Silos of Payment
Doctors HMO’s
Hospitals
Nursing Homes and ECF’s
$$$
$$$$$$
$$$$$$
$$$$$$
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NOW – Silos of Payment
Doctors HMO’s
Hospitals
Nursing Homes and ECF’s
$$$
$$$$$$
$$$$$$
$$$$$$
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FUTURE? Accountable Care Organizations
Doctors HMO’s
Hospitals
Nursing Homes and ECF’s
$$$
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A Financing and Data Integration Model
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What can you do today to manage health care costs?
Ideas on how to lower HC Costs
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What Cost Control Options do Employers currently have?
Unavoidable Costs
Cost Sharing (5% to 10%)
Coverage Elections (0% to 15%)
Plan Selection (5% to 10%)
Provider Selection (5% to 10%)
Prescription Therapies (5% to 7.5%)
Disease Management (5% to 10%)
While no silver bullets will solve the health care crisis, aggressive strategies in two to four areas will have a dramatic impact.
While no silver bullets will solve the health care crisis, aggressive strategies in two to four areas will have a dramatic impact.
7.5%5.0%
55.0%
10.0%
5.0%
7.5%
7.5%
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Improving employees Lives
• Improving Work/Life Cycle
• Create a Corporate Wellness Culture
• Employee/dependents Health Care education
Seeking Synergy in Managing Employee Benefits!!!
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Employee Benefits Cost Control
• Plan Design
• Utilization Management
• Risk Management Data Reports
Seeking Synergy in Managing Employee Benefits!!!
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Employers “In Control”• Improving Work/Life Cycle
• Plan Design
• Create a CorporateWellness Culture
• Utilization Management
• Employee/dependents Health Care education
• Risk Management Data Reports
Seeking Synergy in Managing Employee Benefits!!!
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Information and Data Sources
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Health Care Reform Web Sites commonwealthfund.org/ healthreform.gov/ mailmanschool.org/facultypubs/womenshealth
carereform.pdf whitehouse.gov/assets/documents/CEA_Health
_Care_Report.pdf reuters.com/article/healthNews/idUSTRE56K01
720090721 hudson.org/files/documents/20090612_JB_Kutt
ner_longterm_fiscal_impact_health_reform.pdf
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http://randcompare.org/http://randcompare.org/current/http://randcompare.org/options/
http://randcompare.org/options/mechanism/refundable_tax_credit http://randcompare.org/options/mechanism/purchasing_pools
Massachusetts “Health Care Connector”
http://randcompare.org/options/mechanism/employer_mandate
Pay or Play explainedMandates (Cal, Or, WA passed and subs
repealed)Hawaii 1974Mass 2006
Health Care Reform Web Sites
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Health Care Web Sites
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Medical Info/Research www.medem.com - modern medical library www.ncqa.com - Nat'l Committee on Qual.
Assurance www.doctorsolve.com/ - Info on drugs in Canada www.coverfingtheuninsured.org www.insureusa.org http://www.prevent.org/ - information on disease
prevention and health promotion policies and practices
www.cmwf.org/index.htm - Commonwealth Fund
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Employee Empowerment & Health Wellness
www.4women.gov - Nat'l Women’s Health site www.ivanhoe.com - Medical Breakthroughs http://vm.cfsan.fda.gov - US FDA Food Safety Ctr. www.healthyroads.com – ASHP wellness product www.new.chcf.org - Cal Health Care Fndn www.mrmib.ca.gov – MRMIB http://www.opa.ca.gov/report_card/. - Cal Office of
Patient Advocate www.healthcarecoach.com/ www.mayoclinic.com http://www.doclopedia.com- Use doclopedia to
put your medical history, prescriptions, and bills in one convenient space for FREE
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Employee Empowerment & Health Wellness
http://www.hhs.gov/transparency/ - The “Four” Value Driven Health Care Principles. Health care transparency provides consumers with the information necessary, and the incentive, to choose health care providers based on value.
www.netwellness.org – 100 health topics to find in-depth information on hundreds of diseases and wellness issues
http://www.insureuonline.org/ - The National Association of Insurance Commissioners (NAIC) has created the Insure U — Get Smart About Insurance program to help consumers make educated decisions.
www.organizedwisdom.com - OrganizedWisdom is a collaborative health information community, combining professional and user-generated health content with social networking technologies to help people make the most informed health decisions possible.
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Provider/Health Plan Report Cards www.healthscope.org www.lumetra.org - dedicated to measurably
improving the quality, safety, and integrity of healthcare.
www.aahp.org - Amer Assn of Health Plans www.chcf.org – California Health Care
Foundation www.healthcarecoverageguide.org – Cal
Health Care Foundation web site www.guiadecoberturadesalud.org – CHCF
hispanic site for small employers www. benefitscheckup.org/
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Government Web Sites www.cdc.gov - Center for Disease Control www.medlineplus.gov www.medicare.gov/ - info on Part D drug plans www.leginfo.ca.go - Cal ins code www.dmhc.ca.gov - Dept Managed Health
Care www.mrmib.org – High Risk Ins pools
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Insurance / Employer Purchasing www.pbgh.org - Pacific Business Group on Health www.calchoice.com – Small employer purchasing pool
www.ibenefits.com www.bizjournals.com www.definedcare.com - Defined Care Website www.egroupbenefits.com http://www.healthsmart.org/ - Practical health care
information brought to you as a service from the National Business Coalition on Health.
http://www.nbch.org/members/members.cfm - List of Business Coalitions by state
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Info for HR Specialists www.smartbrief.com - AAHP Smartbrief www.benefitsalert.com - ER benefits legal news www.mcol.com acinatech@yahoo.com - Email newsletter http://www.lifemasters.com/ - An internet site to
help employers access disease management information
www.ncqucalculator.com www.healthleaders.com - stock site www.allbusiness.com - small bus resources
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