Presentation on theme: "The Patient Protection & Affordable Care Act (ACA) implements broad, historic changes to U.S. health care Expanded access to health insurance and care."— Presentation transcript:
2The Patient Protection & Affordable Care Act (ACA) implements broad, historic changes to U.S. health careExpanded access to health insurance and careGuaranteed issue of coverage in commercial insurance marketExpanded Medicaid eligibilityImproved affordability for certain populationsSubsidies and premium tax credits for low and modest income individualsRestricted rating factors and other significant changes in commercial insurance marketEnhanced regulatory rate review processesFocus on containing medical costsIncentives to create medical homes and Accountable Care Organizations (ACOs)Measures to reduce waste, fraud, and abuseImproved quality outcomesComparative effectiveness researchValue-based Medicare payment structurePromote prevention and wellnessNo cost-sharing for preventive servicesSupport for employer-based wellness programs
3While some reforms have already taken effect, most become effective January 1, 2014 July 1, 2010:Federal high risk pool established for uninsured with pre-existing conditionsJanuary 1, 2011:Minimum medical loss ratio requirements for health insurersEstablished Center for Medicare & Medicaid InnovationJanuary 1, 2013:Medicaid primary care reimbursement rates no less than 100% of Medicare reimbursement ratePayment bundling in MedicareOctober 1, 2012:Medicare Value-Based Purchasing program for hospitalsMarch 23, 2010:ACA enacted20102011201220132014January 1, 2012:Incentives to establish ACOs to improve quality and reduce costsSeptember 23, 2010:Dependent coverage extended to young adults up to age 26Guaranteed issue for children under 19No cost-sharing for certain preventive servicesRegulation of annual/lifetime policy limitsJanuary 1, 2014:Individual mandate and minimum coverage requirementsPremium credits & subsidies available through exchangesExpanded eligibility for MedicaidMajor underwriting and rating reforms in commercial marketRate stabilization programs (risk adjustment, reinsurance, and risk corridor, or the “3Rs”) take effect in commercial marketSource: U.S. Department of Health and Human Services.
4ACA reforms address multiple aspects of health care system to drive change and control medical costs Commercial HealthInsurance MarketPublic HealthInsurance ProgramsACA ReformsEmployersProvidersand Health SystemsPublic Healthand Wellness
5In 2014, much of the current structure of the health insurance market remains, but with new dynamics Employer Plans 149 millionIndividual Plans 15 millionUninsured 49 millionMedicaid/ CHIP 51 millionMedicare 40 millionLarge Employers (50+ employees)Small Employers (<50 employees)Employer pays penalty (delayed)Insurance Market Reforms,Guaranteed Issue, No Medical UnderwritingExchange/Commercial MarketMedicaid/ CHIPMedicareEmployer benefits meet minimum plan and affordability requirements for employees*Employees seek coverage through exchanges, commercial market, or public programsCarrier ACarrier BCarrier CCarrier DCO-OPPublic ProgramsorPrivate Payer RatesPublic Payer RatesDelivery System Reforms Medicare Payment ReformComparative Effectiveness Research Wellness/Prevention Incentives Health IT/Medicare Payment ReformsHospitalsPhysiciansRx ManufacturersOther ProvidersSource: Kaiser Family Foundation.Based on 2011 data; figures do not include approximately 4 million covered by other public programs.
6The commercial health insurance market faces uncertainty as it prepares for 2014 Significant market reformsGuaranteed issue/elimination of medical underwritingModified community ratingRating factors limited to age, tobacco use, geographic area, and family compositionLimited variation in rating factorsMinimum coverage requirementsEssential Health BenefitsActuarial Value (e.g. “metal” tiers)Limitations on out of pocket maximums, annual/lifetime limitsTransparent marketplaceExchangesRate reviewRate stabilization programsRisk adjustmentReinsuranceRisk corridor
7Public programs benefit from some reforms and provide platform for pilot programs MedicareMedicare Advantage rates restructured to reflect differences in Medicare fee-for-service ratesQuality bonuses for Medicare Advantage plans and primary care providersIncentives to create Accountable Care Organizations (ACOs)Reduce Medicare payments for preventable hospital readmissions and hospital-acquired conditionsBundled payment pilot for various services for an episode of care that begins three days prior to a hospitalization and spans 30 days following dischargeHospital value-based purchasing programMedicaidMedical homesIncrease prescription drug rebatesProhibit federal funding for Medicaid services related to health care system acquired conditionsIncrease reimbursement rates for primary care providers
8Employers need to understand responsibilities and options under the new law employer mandate delayed until 2015Does the employer have at least 50 full-time equivalent employees?Does the employer offer coverage to its workers?Does the insurance pay for at least 60% of covered health expenses for a typical individual?Do any employees have to pay more than 9.5% of family income for the employer coverage?Did at least one employee receive a premium tax or cost-sharing subsidy in an exchange?Employees can choose to buy coverage in an exchange and receive a premium tax credit.These employees can choose to buy coverage in an exchange and receive a premium tax creditPenalties do not apply to small employersEmployer must pay a penalty for not offering coverageEmployer must pay a penalty for not offering affordable coverageSome small employers may be eligible for tax creditsAnnual penalty based on # of employeesAnnual penalty based on # of employees receiving tax creditsSource: Kaiser Family Foundation.
9Changes to delivery of care promote prevention and quality outcomes Focus on preventive medicine and primary careLow or no cost-sharing for preventive and primary care services in commercial plansIncreased Medicaid reimbursement rates for primary care servicesIncentives to enhance coordination of care through ACOs, medical homes in public programsAimed at improving quality and reducing costsACO providers share in savingsMay support trend toward employed vs. private practice physiciansACO and medical home models may easily expand beyond public programsComparative effectiveness research initiativesSupport for rural health care providersPayment linked to quality outcomesMedicare value-based purchasing program for hospitals; plans to expand beyond hospitalsQuality bonusesPlan quality ratings listed on exchanges
10Increased access to coverage and demand for medical services Guaranteed issue and individual mandate expected to reduce uninsured populationEffectiveness of individual mandateVarying opinions on relative morbidity of uninsured populations and impact of pent-up demandCost-sharing design of commercial health plans may change incentives to seek careFocus on primary care and preventive medicine may increase demand for these servicesDemand must be balanced with pressure to control costs while maintaining qualityMore reliance on physician extenders to meet demandSpecialists may or may not be as acutely affected by increased demand
11Medical professional liability Workers’ compensation Could property/casualty risk profiles evolve for health insurers, employers, and health care providers?Medical professional liabilityWorkers’ compensationOther professional liability exposuresDirectors & officersErrors & omissionsEmployment practices liabilityAutomobile liability