Aca overview sc_09-13

O V E R V I E W O F T H E A F F O R D A B L E C A R E A C T

S E P T E M B E R , 2 0 1 3

The New Health Insurance Marketplace in South Carolina

Presentation Overview

This presentation:

is designed to provide a basic overview and illustration of the ACA and its implementation in SC.

is not a comprehensive overview of the law or the state’s implementation activities.

provides a highlight of the more significant provisions of the law and their impact on insurance regulation and South Carolina insurance markets.

Provides some basic information about where consumers should go for assistance.

About the ACA

The ACA:

Requires most Americans to purchase health insurance coverage or pay what the ACA calls a "penalty," which the Supreme Court deemed to be a tax (the "Individual Mandate"),

Prohibits insurance companies from denying coverage to those with preexisting conditions or health issues (i.e., guaranteed issue),

Prohibits insurance companies from charging unhealthy individuals higher premiums than healthy individuals (i.e., adjusted community rating), and

Provides avenues for Americans to acquire health insurance that provides a minimum basic level of coverage.

Individual Mandate

Effective January 1, 2014, everyone must have health insurance coverage

If a person does not have health insurance coverage, they may have to pay a penalty in the form of a tax In 2014, the penalty is $95 per uninsured person in household

or 1% of annual income whichever is higher

By 2016, the penalty is $695 or 2.5% of annual income per uninsured person in household (whichever is higher)

Some individuals may be exempt from the penalty. Contact your agent for more details on the eligibility criteria.

Health Insurance Exchanges

The ACA requires each state to establish an American Health Benefit Exchange (or “marketplace”) that facilitates the purchase of qualified health plans in the individual and small group markets.

If a state does not establish an Exchange, the HHS Secretary is required to do so in that state. These are called federally-facilitated exchanges.

South Carolina has a federally-facilitated exchange (FFE) for individuals and small businesses.

The FFE for individuals is called the “The Health Insurance Marketplace” and the FFE for small businesses is called the “Small Business Health Opportunities Program (SHOP)”

Health insurance products sold inside and outside the Exchange must contain essential health benefits.

Essential Health Benefits

Health Insurance Must Cover these ten statutorily-prescribed categories:

Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance abuse disorder services, including behavioral

treatment Prescription drugs Laboratory services Preventive/wellness services and chronic disease management Pediatric services including oral and vision care

If the selected EHB does not cover required benefits it must be supplemented. States must defray the costs of State-mandated benefits in excess of EHB South Carolina’s benchmark plan is the largest plan in the small group market

KEY MARKET REFORMS

Immediate Market Reforms

Effective September 23, 2010*

• No Lifetime Limits / Restricted Annual Dollar Limits

• Rescissions Prohibited except for Fraud or Intentional Misrepresentation

• Coverage of Preventive Services with No Cost Sharing

• Coverage of Dependent Children up to Age 26

• No Pre-existing Condition Exclusions for Children (Up to Age 19)

• Appeals Process (Internal Review & External Review)

• Prohibition of Discrimination Based on Salary

• Access to Primary Care and OB/GYN Providers and Emergency Services

*6 months following PPACA’s enactment date of March 23, 2010

Additional Market Reforms Effective January 1, 2014*

No Annual Dollar Limits No Waiting Periods that Exceed 90 Days No Pre-existing Condition Exclusions for All

Guaranteed Issue for All

Guaranteed Renewability

Coverage for Individuals Participating in Approved

Cancer Clinical Trials

Coverage of Essential Health Benefits (as defined by HHS Secretary), including limits on annual out-of-pocket costs and required actuarial value tiers

*Health Insurance Exchanges also go into effect at this time (more details on Exchanges in later slides).

ACA Application

The ACA applies to individual and group health plans

ACA breaks plans down into certain categories and some are treated differently

Small/large

Grandfathered/non-grandfathered

Insured/self-insured

Union/non-union

Some plans are exempt Retiree-only plans (less than 2 participants who are current

employees) Spin-off retirees to stand-alone retiree plan

HIPAA excepted benefits (e.g., stand alone dental, vision, or disease-specific coverage

Medical FSA plans (but some provisions are specifically applicable to Medical FSAs

How does the ACA apply to You?

Understanding exactly how the ACA may apply to consumers is not always easy.

The next several slides are designed to provide some guidance on how the ACA may apply.

The most important step in figuring out how the ACA applies is determining whether the health plan is grandfathered or not

A grandfathered plan is one that was in effect or existence on March 23, 2010

Grandfathered plans are exempt from some, but not all ACA provisions

Grandfathered status may be temporary

Special grandfathering rule for collectively bargained plans

Insured plan-grandfathered until the last CBA relating to insurance terminates

Self-funded plan-general grandfather rules apply

Employers/Insurers are to provide notice about whether the plan is grandfathered or not in all employee communications describing plan benefits

ACA Provisions that Apply to All Plans (including Grandfathered Plans)

All plans (including grandfathered plans) must:

Provide coverage for adult children up to age 26

Not include annual or lifetime limits on essential health benefits

Not include pre-existing condition exclusion for enrollees< age 19

No pre-existing condition exclusions at all in 2014

Waiting periods limited to 90 days in 2014

No rescission of coverage except for fraud or misrepresentation

ACA Provisions that Apply to Non-grandfathered Plans

Non-grandfathered plans are those plans that were not in effect on March 23, 2010, they require:

Certain preventive care be covered without cost-sharing

IRS non-discrimination rules extended to insured employer plans

Pediatrician may be child’s primary care provider

No pre-authorization or referral required to see OB-GYN

ER services must be paid at in-network benefit levels and cannot require pre-authorization

Insurers must have internal and external claims review processes

Insurers must disclose certain plan data and design characteristics

Reports must be made to HHS and enrollees about benefits that improve wellness

Limits on out-of-pocket costs payable by participants

Coverage of routine costs associated with clinical trials

Changes that Cause Loss of Grandfathered Status

Insurers/Employers cannot significantly change the plans or they may lose the grandfathered status. Examples of changes that could cause a loss of grandfathered status include:

Significant changes reducing benefits (e.g., elimination of coverage for diabetes, cystic fibrosis or HIV/AIDS)

Significant changes like increasing employee-cost sharing Any increase in member coinsurance percentage

Co-pays must be increased by the greater of $5 or percentage equal to medical inflation plus 15% cumulative from March 23, 2010

Deductibles may be increased only by a percentage equal to medical inflation plus 15%

Decreasing rate of employer contributions by more than 5% of total cost

Adding or Decreasing annual limits on covered services

Changing insurers

Changes that Do Not Cause Loss of Grandfathered Status

Insurers/Employers can make some changes without losing grandfathered status. They include:

Cost adjustments to reflect medical inflation

Adding new benefits and limited adjustments to existing benefits

Adding new enrollees

Voluntary adoption of new consumer protections

Changes to comply with state or federal laws

If a lifetime limit exists, may add annual dollar limit not lower than lifetime limit until 2014

So… How does all of this affect me?

The answer depends upon your specific situation

The next few slides provide a couple of examples to illustrate how the ACA may impact specific individuals

Someone who buys insurance directly from the health insurance market

Someone who gets coverage through his or her employer

Someone one on Medicare

Example: I purchase my own insurance

If you buy your own insurance then you have private insurance. Some of the biggest changes to private insurance begin in 2014. However, many changes affect you now.

Is Your Insurance Grandfathered?

All of the changes in the Affordable Care Act (ACA) apply to new health plans. Some do not apply to 'grandfathered' private plans.

Did you have your current health insurance when the ACA became law on March 23, 2010?

If yes, then you have a 'grandfathered' plan.

If no, then you have a 'new' plan.

A plan stays grandfathered so long as no major changes are made to its terms or conditions. Major changes include cutting benefits or increasing out-of-pocket costs. Plans must tell you if they are grandfathered and give contact information for questions. But, check your plan papers or call your insurer if you are not sure.

So far these changes affect ALL plans:

You…

CANNOT pay for over-the-counter medicines with your Health Reimbursement/Savings Account (HRA, HSA) or Flexible Spending Accounts (FSA). You can only buy prescribed medications with these funds.

20% tax on unpermitted purchases

I purchase my own insurance … cont’d.

Insurers…

May NOT deny coverage to children 19 and younger with prior health problems (often called pre-existing conditions)

May NOT deny family coverage to parents because they have children with prior health problems.

May NOT put lifetime limits on the dollar value of essential health benefits

May NOT put annual limits on essential health benefits of less than:

$750,000 for plans that started between Sept. 23, 2010 and Sept. 22, 2011

$1,250,000 for plans that started between Sept. 23, 2011 and Sept. 22, 2012

May NOT cancel your coverage if you get sick unless you have lied or committed fraud

MUST allow your children to remain on your plan until age 26.

Until 2014, grandfathered plans only have to do this if your child cannot get insurance through their own employer.

In 2014, all plans must cover children until 26 even if they can get insurance through their own employer.

I purchase my own insurance… cont’d.

MUST use a standardized summary of benefits and explanation of coverage.

MUST spend 80% of premiums on medical services for individual plans, and 85% for large group plans. If an insurer spends less than this they must you some money back.

This does not apply to self-insured plans.

These changes only affect NEW plans right now:

You…

Can appeal an insurer's decision to an internal insurer review board

Can appeal an insurers' decision to an independent outside review board once you have gone through the insurer's internal process

Insurers…

MUST cover 100% of the cost of preventive services They cannot charge a co-pay for these services or require a deductible to be met.

MUST tell you what your share of the cost is for items and services

MUST share with the government its rules on payment policies and enrollee rights.

May NOT decide whether you are eligible for a certain plan based on your income.

I get my coverage through my employer…

If you get your insurance from your employer then you have private insurance. Some of the biggest changes to private insurance begin in 2014. However, many changes affect you now.

Is Your Insurance Grandfathered?

All of the changes in the Affordable Care Act (ACA) apply to new health plans. Some do not apply to 'grandfathered' private plans.

Did you have your current health insurance when the ACA became law on March 23, 2010 and it hasn't been changed in a major way?

If yes, then you have a 'grandfathered' plan.

If no, then you have a 'new' plan.

A plan stays grandfathered so long as no major changes are made to its terms or conditions. Major changes include cutting benefits or increasing out-of-pocket costs. Plans must tell you if they are grandfathered and give contact information for questions. But, check your plan papers or call your insurer if you are not sure.

So far these changes affect ALL plans:

You…

CANNOT pay for over-the-counter medicines with your Health Reimbursement/Savings Account (HRA, HSA) or Flexible Spending Accounts (FSA). You can only buy prescribed medications with these funds.

20% tax on unpermitted purchases.

Insurers…

May NOT deny coverage to children 19 and younger with prior health problems (often called pre-existing conditions)

May NOT deny family coverage to parents because they have children with prior health problems.

May NOT put lifetime limits on the dollar value of essential health benefits

May NOT put annual limits on essential health benefits of less than:

$750,000 for plans that started between Sept. 23, 2010 and Sept. 22, 2011

$1,250,000 for plans that started between Sept. 23, 2011 and Sept. 22, 2012

Insurers…

May NOT cancel your coverage if you get sick unless you have lied or committed fraud

MUST allow your children to remain on your plan until age 26.

Grandfathered plans only have to do this if your child cannot get insurance through their own employer.

In 2014, all plans must cover children until 26 even if they can get insurance through their own employer.

MUST use a standardized summary of benefits and explanation of coverage.

MUST spend 80% of premiums on medical services for individual plans, and 85% for large group plans. If an insurer spends less than this they must you some money back.

This does not apply to self-insured plans.

Employers…

Must report the cost of your employer-sponsored health insurance on your W-2. This is so people know how much their health care costs. It is not taxable income.

Who have more than 200 employees must automatically enroll new full-time employees in coverage unless the new employee says they do not want to be enrolled.

These changes only affect NEW plans right now:

You…

Can appeal an insurer's decision to an internal insurer review board

Can appeal an insurers' decision to an independent outside review board once you have gone through the insurer's internal process

Insurers…

MUST cover 100% of the cost of preventive services (click here for the current list of these services). They cannot charge a co-pay for these services or require a deductible to be met.

MUST tell you what your share of the cost is for items and services

MUST share with the government its rules on payment policies and enrollee rights.

May NOT decide whether you are eligible for a certain plan based on your income.

Employers…

May NOT have rules that only allow high-income employees to enroll in certain plans. All employees must have the option of enrolling in all health insurance plans offered.

I already have insurance…

I already have insurance

The Affordable Care Act (ACA) does not make you give up your current health insurance. It requires that most people have health insurance by 2014, if they do not already have it.

The ACA also makes changes to make sure your insurance plan:

Provides a minimum level of benefits,

Limits how much you have to pay out of pocket,

Provides you quality care.

Whether these changes and others apply to your insurance plan depends on whether you have a 'new' plan or a 'grandfathered' plan.

Did you have your current health insurance when the ACA became law on March 23, 2010?

If yes, then you have a 'grandfathered' plan.

If no, then you have a 'new' plan.

How does the ACA affect my Medicare coverage?

The most important fact to know is the new healthcare

law will not cut your government-guaranteed benefits. You get the same benefits Medicare has always guaranteed whether you have a traditional Medicare plan (Part A or B) or a Medicare Advantage plan (Part C). These are benefits like doctor services, inpatient and outpatient hospital care, and durable medical equipment.

Under the Affordable Care Act (ACA), for many people Medicare covers more costs, offers more choices and works to improve the quality of care. Some people may find their premiums will go up. Please contact your insurance agent if you have any questions about your Medicare coverage.

Where do you go to find coverage in the new marketplace?

The current avenues for acquiring coverage are:

For individuals under 65 and small businesses, from the individual health insurance market inside and outside the "American Health Benefit Exchanges" ("Exchanges"),

for persons age 65 or over or disabled, through Medicare,

through Medicaid or CHIP for persons who meet state eligibility requirements,

for "full-time" employees of "Large Employers" (i.e., generally employers with 50 or more employees) through their employer, to the extent their employer elects to "play" under the Large Employer mandates,

TRICARE

Veteran’s Health Insurance Program

Grandfathered Plans

Other government programs

State high risk pools

Many individuals will be eligible for coverage under more than one of these avenues and will be able to choose what is the best value for them.

Where can consumers get information about health insurance coverage in South Carolina?

Consumers may continue to shop for insurance in the South Carolina insurance marketplace (private market outside the exchange).

Health insurance will also be available to consumers through the federally-facilitated health insurance exchange. (Call Center:1-800-318-2596)

Consumers may also contact their agent for assistance in finding coverage.

Consumers may also contact the South Carolina Department of Insurance for general information on insurance coverage issues (DOI: 1-800-768-3467).

Consumers may also contact their insurance company.

How do I access the Exchange?

In South Carolina, you can contact the Exchange in any of the following ways:

Via the online website: www.healthcare.gov

Via telephone: 1-800-318-2596

TTY:1-855-889-4325

Via Navigators:

The Cooperative Ministry (Wanda Pearson-(803) 799-3853

DECO Recovery Management, LLC

Beaufort County Black Chamber of Commerce (843) 986-1102

Other Resources for the Exchange

Here are some additional resources:

www.healthcare.gov;

1-800-318-2596; TYY: 1-855-889-4325

How Can I Get Ready to Enroll in the Marketplace, https://

www.healthcare.gov/how-can-i-get-ready-to-enroll-in-the marketplace/

Kaiser Subsidy Calculator

http://kff.org/interactive/subsidy-calculator

How do I know whether I qualify for premium subsidies?

Use the subsidy calculator on the Kaiser Family Foundation website: http://kff.org/interactive/subsidy-calculator

Beginning in October 2013, middle-income people under age 65, who are

not eligible for coverage through their employer, Medicaid, or Medicare, can apply for tax credit subsidies available through state-based exchanges.

Additionally, states have the option to expand their Medicaid programs to cover all people making up to 138% of the federal poverty level (which is about $33,000 for a family of four). In states that opt out of expanding Medicaid, some people making below this amount will still be eligible for Medicaid, some will be eligible for subsidized coverage through Marketplaces, and others will not be eligible for subsidies.

With this calculator, you can enter different income levels, ages, and family sizes to get an estimate of your eligibility for subsidies and how much you could spend on health insurance. As premiums and eligibility requirements may vary, contact your state’s Medicaid office or exchange with enrollment questions.

What are exchanges? Can I still purchase coverage through my agent?

Exchanges are the central mechanisms created by the health reform bill to

help individuals and small businesses purchase health insurance coverage. On October 1, 2013, an Exchange in every state will begin enrolling

individuals and small businesses into qualified health plans. The Exchange, operated by the federal government, will provide information

to consumers about their coverage options and what assistance is available to them.

The Exchanges will also administer the new health insurance subsidies and facilitate enrollment in private health insurance, Medicaid, and the Children's Health Insurance Program (CHIP).

The federal law does not require anyone to purchase health insurance through the Exchange, though subsidies will only be available for plans sold through the Exchange. You will be able to purchase this coverage right on the Exchange’s website or through your agent if he or she is approved to sell Exchange plans.

If you would rather buy other health insurance through an insurance agent or broker, you will be free to do so. Coverage will also be available in the market outside the Exchange.

Does the South Carolina Department of Insurance regulate the FFE?

No, but the South Carolina Department of Insurance regulates the insurers and other entities that may offer products through the FFE. The Department approves the forms and rates and regulates the solvency of these insurers.

An insurer cannot offer products through the FFE unless it is licensed by the South Carolina Department of Insurance.

The multi-state plan is the exception. The Office of Personnel Management has primary regulatory oversight over the MSPs. MSPs must be licensed. in each of the states in which it operates.

Can an insurer offer the same health insurance product at a cheaper rate outside the FFE?

Generally, no. If an insurer is selling products inside and outside the FFE, the rates and coverage must be the same for the same product.

This does not affect plans sold outside the Exchange or grandfathered plans. Remember, grandfathered plans do not have to comply with all ACA requirements and this could affect the cost.

Grandfathered plans are not subject to all of the ACA mandates; grandfathered plans cannot be sold or marketed through the Exchange.

Where do I go for help if I have a problem with an insurer?

Generally, you would file a complaint about the conduct of an insurance company or agent with the South Carolina Department of Insurance. You may submit that complaint online at http://www.doi.sc.gov or fax it to: (803) 737-6231 or email: [email protected] or call 1-800-768-3467.

Complaints about the operation of the FFE will go to the FFE.

Questions about Medicaid issues will go to SCDHHS.

Do we know what products will be offered in the South Carolina Health Insurance Market?

The Department completed its review of products that will be offered through the FFE. The review of those products had a July 31st deadline. CMS will make information about the products and rates available around October 1, 2013.

The Department is in the process of reviewing products that will be offered in the market outside the exchange.

The Department has received a number of filings to market products outside the Exchange. These filings continue to come in.

What is the name the FFE?

The official name of the FFE is

the Health Insurance Marketplace for individuals and families and

The Small Business Health Options Program (SHOP) for small businesses.

Both are federally operated.

Contact Information: www.healthcaremarketplace.gov/marketplace

1-800-318-2596

What types of plans will be available through the FFE?

Health plans sold through the FFE will be required to meet comprehensive standards for items and services that must be covered. To help consumers compare costs, plans available through the FFE will be organized in four tiers, or four levels of generosity of the cost-sharing that each plan includes:

Bronze level –The plan must cover 60% of expected costs across a standard population. This is the lowest level of coverage.

Silver level – The plan must cover 70% of expected costs across a standard population.

Gold level –The plan must cover 80% of expected costs across a standard population.

Platinum level – The plan must cover 90% of expected costs across a standard population. This is the highest level of coverage.

Also, a catastrophic plan will be offered, and will cover the same services. But, its coverage will be slightly less generous than the Bronze level plans. A catastrophic plan may be a less expensive option for those who are eligible: only young adults under 30 and individuals who have a hardship exemption from the individual mandate are allowed to purchase catastrophic plans. Premium tax credits and cost-sharing reductions are not available for catastrophic plans.

Stand-alone dental plans are available through the FFE. These plans can also be certified by the feds as providing the pediatric dental EHBs for sale outside the Exchange.

We anticipate having stand-alone dental products available in the market outside the Exchange.

What insurance companies will offer coverage through the FFE?

The FFE website will include a list of the plans available for sale on or after October 1, 2013.

Four companies applied to offer Qualified Health Plans (QHPs) in South Carolina. They have not yet been approved by HHS/CMS.

HHS/CMS will let them know whether their applications to be a QHP has been approved during the first week of September.

This all sounds so complicated… who will help consumers navigate the new system?

Navigators

State Assisters

Application Assisters (Counselors)

Primarily in hospitals and clinics

Volunteers with training and certification

Agents and Brokers

Listed on the Exchange

Commissions Paid by Insurers

Appointment Issues

I hear there is going to be a Co-op plan in SC. What is a CO-Op Plan?

Federal government will foster the creation of qualified nonprofit insurers Loans for start-up costs

Grants to help meet solvency requirements

Unobligated funds cut off in fiscal cliff deal

CO-OP loans granted to plans in: IL, AZ, CO, CT, IA, NE, KY, LA, ME, MD, MA, MI, MT, NV, NJ, NM, NY, OH, OR, SC, TN, UT, VT, WI

Must be governed by majority vote of members

Profits must be used to reduce premiums, increase benefits, or improve quality of care

Must be licensed by state and follow state insurance laws

Consumers’ Choice Health Plan is the name of the CO-OP in South Carolina.

What is a multi-state plan? Does South Carolina have one?

U.S. Office of Personnel Management (OPM) contracts with insurers to offer at least 2 plans in each state (at least one a non-profit)

Contracting process similar to the Federal Employees Health Benefit Plan (FEHBP)

Insurers must be licensed in every state in which they operate Must be in at least 60% of states in first year; 70% of

states in second year; 85% of states in third year; and all states in fourth year

Not required to cover entire state unless required by state

Plans must comply with state rules and regulations, if they exist.

Multi-state Plans are not approved to sell on the FFE by the DOI, but it is anticipated that there may be a multi-state plan operating in SC.

Thank You

Information from the following websites was used to develop this presentation:

http://www.healthcare.gov

http://www.dol.gov

http://www. sba.gov

http://reform.healthfoundation.org

http:www.aarp.org