4 Who is MHC? Member-operated health CO-OP Non-profit organization Home-grown (Helena-based) Funded via federal start-up loans CO-OPs currently approved in 24 states Offering products via the Health Insurance Exchange
6 Health Care Problems Insurance Situation 50 million uninsured Americans 200,000 uninsured Montanans Premiums double in last 10 years 62% of all bankruptcies medically-related
7 Health Care Problems Insurance Situation Coverage isn’t comprehensive Affordability Emphasis on group/employer-provided insurance. Pre-existing condition clause Fear of losing coverage with job loss/change Insurance denied if no continuity of coverage
Health Insurance Exchanges Internet-based marketplaces to shop for and buy health insurance Compare apples to apples (tiers of coverage) Determine eligibility for premium subsidies Plans on the exchange must offer Essential Health Benefits 278,000 Montanans could get insurance via the Exchange Congress and their staff will get insurance from the Exchange 9 Exchange = Marketplace
ACA Subsidies For qualifying individuals and families without employer-based insurance. Subsidies are not for those receiving Medicare. Starting in 2014 Subsidies (advanceable tax credits) to offset monthly premiums for those with income between 100-400% of the Federal Poverty Level (FPL). 65% of Montana families have incomes below 340% of the FPL. 13
Projected Income$34,516 (300% of poverty level) Unsubsidized annual health insurance premium (adjusted for age) $7,500 Maximum % of income the person/family must pay for premium (based on income % of poverty level) 9.50% Amount person/family pays$3,279 Government tax credit/subsidy$4,221 2014: Subsidies At Work 14 *Must purchase from the Exchange/Marketplace to receive subsidy.
2014: Subsidies At Work 15 Projected Income$16,107 (140% of poverty level) Unsubsidized annual health insurance premium (adjusted for age) $7,500 Maximum % of income the person/family must pay for premium (based on income % of poverty level) 3.41% Amount person/family pays$550 Government tax credit/subsidy$6,950 *Must purchase from the Exchange/Marketplace to receive subsidy.
ACA Subsidies Subsides will ensure qualifying households pay no more than a specific percentage of income on premiums: Percentage of household income is a sliding scale based on the Federal poverty level (FPL) of the family involved: Up to 133% FPL: 2% of income 133-150% FPL: 3.0% – 4.0% of income 150-200% FPL: 4.0% – 6.3% of income 200-250% FPL: 6.3% – 8.05% of income 250-300% FPL: 8.05% – 9.5% of income 300-400% FPL: Capped to 9.5% of income Source: (PPACA §§ 1401, 10105; HCERA § 1001; IRC § 36B) 17
ACA Catch-22 What is affordable? Employers: W-2, Box 1 9.5% of salary Employees: 1040, MAGI, 9.5% of income IRS: 8% of household income 18
Affordable Care Act (ACA) 20 Signed into law March 2010 Expand Medicaid Encourage employers to offer health insurance. Provide premium subsidies Establish health insurance exchanges Strengthen consumer protections Impose protections to guard against unreasonable rate increases. Encourage primary and preventive care. Mandate insurance for everyone.
Affordable Care Act (ACA) Insurance companies cannot: Put a lifetime cap on how much they will pay Cancel coverage by finding a paperwork error. Deny coverage based on pre-existing conditions Charge women more for coverage 21
Affordable Care Act (ACA) Making Health Care Affordable Preventative services are free Cancer screenings: mammograms & colonoscopies Vaccinations: flu, mumps & measles Blood pressure and cholesterol screenings Tobacco cessation counseling Depression screening And more… 22
Affordable Care Act (ACA) Making Health Care Affordable The 80/20 Rule Before…insurance companies spent as much as 40 cents of every premium dollar on overhead, marketing and salaries. Now…they must spend 80 cents of your premium dollar on your health care or on improvements to care. If they don’t, they must repay the money. 23
2014: Changes for Employers Small employers offering health insurance… with 25 or fewer full-time employees that have average wages under $50K …are eligible for small business tax credit of 35 percent (increasing to 50% by 2014). 24
2014: Changes for Employers Businesses with less than 50 full-time employees are exempt from having to offer health insurance to workers. 97% of Montana business have fewer than 50 full- time employees. 80% of Montana employers have fewer than 10 workers. 25
2014: Changes for Employers Penalties for large companies (50+ workers): Not offering minimum essential benefit coverage -- $2,000 per full-time worker (subtracts first 30 full-time workers) Not offering affordable coverage – lesser of $3,000 per full-time employee receiving a subsidy or $2,000 per full- time employee Excellent Summary: http://laborcenter.berkeley.edu/healthpolicy/ “Summary of Provisions Affecting Employer-Sponsored Insurance” 26
Penalties for the Uninsured 2015: Insurers mail a Notice of Insurance (similar to W-2) for taxes. Income too low to file a federal tax return? Penalties are not meant for you. 2014– $95 per adult and $47.50 per child, up to a family maximum of $285 or 1 percent of family income, whichever is greater 27
Stay informed: Medicaid expansion dead? Will other insurers participate on the exchange? Consider the paradigm shift from group coverage to individual coverage. Do we have ample primary care physicians? Expect a dramatic change in the health care market. Anticipate the possibility of an insurance shift (354,000 Montanans may see an insurance change). Know that there will be fine-tuning and clarification of the ACA. See: www.healthcare.gov Making the New Laws Work for Montana 29