1. Health Reform: An Overview Unit 4 Seminar

2. The Decision The opinions spanned 193 pages, upholding the individual insurance mandate while reflecting a deeply fractured court. Upheld the ability of states to receive enhanced federal funds to expand their eligibility criteria for Medicaid. But a 7-2 majority of the court struck down the corollary provision in the law that sought to allow HHS to cut off all federal Medicaid funding for failing to expand the program to cover the uninsured.

3. The Decision

5. Expand health insurance coverage Improve coverage for those with health insurance Improve access to and quality of care Control rising health care costs Goals for Health Reform Figure 2

6. Promoting Health Coverage Medicaid Coverage (up to 133% FPL) Employer-Sponsored Coverage Exchanges (subsidies 133-400% FPL) Individual Mandate Health Insurance Market Reforms Universal Coverage Figure 3

7. Expanding Health Insurance Coverage— Early Actions Create temporary Pre-existing Condition Insurance Plan for people with medical conditions who are uninsured – To qualify, individuals must be uninsured for six months – Federally funded – Available in each state until 2014 Allow adult children to remain on their parents’ health insurance policy until age 26 – Children do not have to live with parents, nor be students – May be married, but spouses and children not eligible Figure 4

8. Expand Medicaid to all individuals under age 65 with incomes up to 133% of the poverty level ($14,400/individual or $29,300/family of 4) Create new Health Insurance Exchanges where individuals and small employers can purchase coverage Provide premium subsidies to eligible individuals and families with incomes up to 400% of the poverty level ($43,300/individual or $88,200/family of 4) through the Exchanges Expanding Health Insurance Coverage— in 2014 Figure 5

9. Expanding Health Insurance Coverage— Who in 2014 Who Benefits from the Medicaid Expansion? A key element of the Affordable Care Act (ACA) is the expansion of Medicaid to nearly all individuals with incomes. Up to 138 percent of the federal poverty level (FPL) ($15,415 for an individual; $26,344 for a family of three in 2012) in 2014. The threshold is 133% FPL, but 5% of an individual’s income is disregarded, effectively raising the limit to 138% FPL. The expansion of coverage will make many low-income adults newly eligible for Medicaid and reduce the current variation in eligibility levels across states.

10. An additional 17 million individuals are expected to gain Medicaid and CHIP coverage by 2016, according to the Congressional Budget Office. Medicaid, along with new coverage options available through new Health Insurance Exchanges and tax credits, will help reduce the number of uninsured by approximately 30 million. Who Benefits from the Medicaid Expansion?

13. Enrollment increases will vary by state. Large state variation in current adult eligibility levels, from under 25% to over 200% of poverty, helps explain differences in the number of uninsured across states. In states like Montana, Nevada, and Texas, where Medicaid eligibility levels for adults are low, Medicaid enrollment is expected to increase by at least 45 percent. Who Benefits from the Medicaid Expansion?

14. Estimated Health Insurance Coverage in 2019 SOURCE: Congressional Budget Office, March 20, 2010 Total Nonelderly Population = 282 Million Figure 6

15. Improving Health Insurance Reform the health insurance market – Prohibit insurers from denying coverage or charging people more because they are sick – Prohibit insurers from rescinding coverage or placing annual or lifetime limits on coverage Improve benefits for those with insurance – Ensure coverage of preventive services with no cost-sharing – Establish minimum benefit standards – Limit out-of-pocket spending for consumers Figure 7

16. Employer Requirements and Incentives Larger employers that don’t offer affordable coverage will face penalties of up to $2,000 per full-time worker per year beginning in 2014 Small employers with up to 50 employees will be exempt from penalties Tax credits available for some small businesses that offer health benefits Figure 8

17. Individual Mandate Individuals will be required to have health coverage that meets minimum standards in 2014 Individual mandate spreads costs among whole population Mandate enforced through the tax system Penalty for not having insurance: greater of $695 (up to $2085 for family) or 2.5% of family income Exemptions for certain groups and if people cannot find affordable health insurance Figure 9

18. Some Uninsured Will Remain Congressional Budget Office (CBO) estimates 23 million uninsured in 2019 Who are they? – Immigrants who are not legal residents – Eligible for Medicaid but unenrolled – Exempt from the mandate (most because can’t find affordable coverage) – Choose to pay penalty in lieu of getting coverage Many remaining uninsured will be low-income Figure 10

19. Health Reform and Delivery System Changes Promoting primary care and prevention Improving provider supply Developing new models for coordinating and delivering care Making use of information technology Reforming provider payments to promote quality Figure 11

20. Promoting Primary and Preventive Care Increased Medicare and Medicaid payments for primary care providers Incentives for new doctors and other health professionals to practice primary care No cost-sharing in Medicare and new private plans for certain preventive services and incentives for states to do same in Medicaid Funding for population-based prevention activities

21. Improving Health Care Quality Development of a national quality strategy Coordinated care through medical homes and other models Quality-based payments for health care providers and improved information on provider quality Comparative effectiveness research to identify most effective treatments and interventions Enhanced data collection to address health care disparities Figure 13

22. Containing Health Care Costs Greater oversight of health insurance premiums and insurer practices Increased competition and price transparency through Exchanges Provider payment reforms in Medicare Testing of new, more efficient delivery system models in Medicare and Medicaid Figure 14 Return to KaiserEDU Tutorials

23. Financing Health Reform, 2010-2019 Total Cost = $938 Billion Savings to Federal Deficit = $124 Billion Source: Congressional Budget Office, 2010 Federal savings New revenues Figure 15

24. Health Reform Implementation Timeline 2010 Some insurance market changes—no cost-sharing for preventive services, dependent coverage to age 26, no lifetime caps Pre-existing condition insurance plan Small business tax credits Premium review 2011-2013 No cost-sharing for preventive services in Medicare and Medicaid Increased payments for primary care Reduced payments for Medicare providers and health plans New delivery system models in Medicare and Medicaid Tax changes and new health industry fees 2014 Medicaid expansion Health Insurance Exchanges Premium subsidies Insurance market rules— prohibition on denying coverage or charging more to those who are sick, standardized benefits Individual mandate Employer requirements

25. Future of Health Reform: Legislation Is Just the Beginning Implementation will be challenging – Guidance and federal oversight needed – Resources for infrastructure and capacity building – Policy and political challenges Health reform provides opportunities to improve our health care system – Reduce the number of people who are uninsured – Make the health insurance system work better for all consumers – Transform delivery and payment systems to get better value – Reorient health care to focus on prevention and primary care Figure 17

26. Resources Kaiser Family Foundation: http://healthreform.kff.org/http://healthreform.kff.org/ New DHHS consumer website: http://healthcare.gov/http://healthcare.gov/ Alliance for Health Reform: http://www.allhealth.org/http://www.allhealth.org/ National Association of Insurance Commissioners: http://www.naic.orghttp://www.naic.org National Governors Association: http://www.nga.orghttp://www.nga.org Additional KaiserEDU tutorials: Health Care Reform: A Retrospective: http://www.kaiseredu.org/tutorials/retrospective-health-reform/player.html http://www.kaiseredu.org/tutorials/retrospective-health-reform/player.html Health Reform: How Will Medicaid Change?: http://www.kaiseredu.org/tutorials/medicaid-and-health-reform/player.html http://www.kaiseredu.org/tutorials/medicaid-and-health-reform/player.html Health Reform and Medicare: http://www.kaiseredu.org/tutorials/Medicare-and-health-reform/player.html http://www.kaiseredu.org/tutorials/Medicare-and-health-reform/player.html Figure 18