1 health care reform overview of the patient protection and affordable care act june 5, 2010 chris...
TRANSCRIPT
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Health Care Reform
Overview of The Patient Protection and Affordable Care Act
June 5, 2010
Chris Barley, Staff AttorneyOhio Poverty Law Center
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Presentation Overview
• Limited to major provisions
• Details to be determined later
• Effect of reform will be different across states
• Many interpretations exist
Structure of Reform
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Key Insurance Provisions
• Health insurance market reforms• Ombudsman program• High risk pool• Reinsurance program• Health Insurance Exchange• Required Purchase of insurance• Subsidies
Pre-Reform Blueprint:What It Looks Like NOW.
5Chart prepared by PICO National Network, Washington D.C. 2010
Post-Reform Blueprint2014
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Chart prepared by PICO National Network, Washington D.C. 2010
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Early Insurance Market Reforms
• No lifetime limits
• Restrictions on allowable annual benefit limits
• Coverage of dependents up to age 26
• Pre-existing condition exclusions prohibited for children up to age 19
• Appeals processes for enrollees
• May not discriminate based on salary
• Benefits for preventive services required
• Coverage for emergency services at in-network level
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Early Insurance Market Reforms
Review of Premium Rates
• Federal HHS will develop a process for the annual review of premium rate increases
• Federal HHS will distribute $250 million in grants over 5 years to cover state costs
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Early Insurance Market Reforms
Health Plan Loss Ratio Requirements
• Loss ratios reported to HHS
• Report must breakdown on how premiums are spent
• Reporting requirements to be developed by HHS & NAIC
• In January 2011, rebates provided when plans do not meet loss ratio targets.
• Loss ratio expenses based on clinical services and activities that improve health care quality
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Early Insurance Market Reforms
Health Plan Disclosure Requirements
• Payment policies and practices• Financial disclosures• Enrollment and disenrollment data• Claims denial information• Data on rating practices• Information on cost-sharing and payments with
respect to out-of-network coverage
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Insurance Market Reforms
• Must provide:– uniform summary of benefits– explanation of coverage documents.
• Must use standardized definitions
• HHS to publish standards in 12 months
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Insurance Market Reforms
• Guaranteed issuance
• Elimination of:– Preexisting condition– Annual limits on coverage– Waiting periods – Limitation on deductibles
• Rating restrictions for group and individual market:
• Small employer redefined (1-100 employees)
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Consumer Ombudsman Program
• Provides grants to create health ombudsman program
• Serves as an advocate for consumers
• Assists with insurance-related complaints and appeals
• Assists consumers with enrollment
• In 2014, Resolves problems with subsidies
• Collects, tracks and quantifies consumer problems and insurance inquiries
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Temporary High Risk Pool
• For individuals with pre-existing conditions
• For uninsured for 6 months or longer
• May contract with states or non-profit entities to provide coverage
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Temporary High Risk Pool (continued)
• Federal funding of $5 billion allocated to fund eligible enrollees until 2014.
• Federal HHS working with states to develop program guidelines
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Temporary Reinsurance Program for Early Retirees
• For employers providing insurance to retirees age 55+
• Including state government programs like PERS, STRS
• Program pays 80% of claims costs between $15,000 and $90,000 annually
• Payments under the program must be used to lower costs of the plan
• Must submit application to HHS to participate
• Funding of $5 billion
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Electronic Health Care Transactions
• Requires compliance with standard electronic health care transactions
• Imposes new, earlier deadlines for federal HHS rules and implementation
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Health Insurance Exchange
• Directs states to establish American Health Benefit Exchanges
• Small Business Health Options Program (SHOP).
• Exchanges must be operational by January 2014
• Must be administered by governmental agency or non-profit organization
• HHS will establish exchanges in those States where they fail to create one.
What is a Health Care Exchange?
• “Virtual Marketplace”
• Run by the state or the federal government (at the state’s choice)
• Insurance companies that want to sell insurance in the Exchange must sell plans that meet certain standards
• The Exchange will allow consumers to comparison shop
• The Exchange will also determine appropriate levels of subsidies for consumers to help them afford coverage, up to 400% FPL.
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Health Insurance Exchange Program Features
• One-stop insurance shopping
– Provide a selection of “Exchange qualified” plans– Standardizes presentation of insurance options for plan
comparability– Provides a “rating” system for plans – Redefines small businesses as 1-100 employees
• Must contract with “navigators”– Four levels of plans: – Catastrophic plans available to individuals under age 30 – Insurers must offer children-only plans
• Exchange must provide a seamless application
• Federal funding: implementation grants to states
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Other Provisions
• Co-Op program
• Merging of individual and small group markets
• Employer rewards
• Health Care Choice Compacts
• Nationwide plans
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Individual Requirement to Purchase Insurance
• Individuals required to obtain coverage
• Can be an individual or group plan
• Exemptions– religious objections, – financial hardship, – undocumented immigrants, – American Indians, – people earning under the tax filing threshold, and – short gaps in coverage.
• Subsidies – up to 400% of federal poverty level
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Individual Requirement to Purchase Insurance
(continued)
• Penalties for non-compliance– $95 per person in 2014– $325 per person in 2015– $695 per person in 2016
• Enforcement through IRS.
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Small Employer Requirements and Tax Credits
• Small employers exempt
• Part - time workers – How are the counted?– Not required to offer coverage
• Tax Credits for small employers – < 25 employees– <$50,000 in average annual salary– 35% of premium, 50% in 2014
• Credits phased out gradually
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Large Employer Requirements to Purchase Insurance
• >50 full time employees– Must offer insurance
– If employees receive public subsidies employer pays $2,000 per year
– Large employers whose employees who receive premium assistance pay the lesser of
1) $3,000 per year 2) $2000 per year
– Penalties calculated monthly based on number of applicable employees
• >200 employees must automatically enroll new employees
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Impact on Market and Consumers
• Premium rates will change
• Minimum loss ratio requirements may mitigate some increased premiums
• Uninsured individuals with preexisting conditions to be able to obtain coverage through the temporary insurance risk pool
• Rating requirements and guarantee issue will impact small and individual markets
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Impact on Market and Consumerscontinued
• All plans issued going forward must meet federal requirements
• Employers with existing group plans can continue to enroll new employees
• All private plans sold after March 23rd must comply with new benefit provisions
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Additional Information
Ohio Consumers for Health Coverage
• www.OhioConsumersForHealthCoverage.org
• www.aarp.org
• www.CommunityCatalyst.org
• www.FamiliesUSA.org
• www.HealthReformGPS.org – tracking news and developments
• www.HDAdvocates.org – experts on people with disabilities
• www.kff.org – Kaiser Family Foundation
• www.NationalPartnership.org – working on delivery reforms
For More Information
Cathy Levine, Executive DirectorUHCAN OHIOOCHC, Co-Chair(614) 456-0060 x [email protected]
Col Owens, Senior Attorney,Legal Aid of Southwest OhioOCHC Co-Chair215 E. Ninth StreetCincinnati, Ohio 45202(513) [email protected]
Kathleen Gmeiner, UHCAN Ohio OCHC Project Director(614) 456-0060 x [email protected]
Gene King, DirectorOhio Poverty Law Center555 Buttles Ave.Columbus, Ohio 43215(614) [email protected]