Ready, Set, Go!The Sprint To Health Care

Coverage

Upper Peninsula Hospital Trustees Forum

Janet OlszewskiApril 20, 2013

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HMA: Our Offices

• Services Include:– Healthy policy development and analysis

– System development and restructuring

– Program development and evaluation

– Regulatory compliance

– Strategic planning – technical assistance

– Finance and reimbursement strategies

– Procurements – proposals – applications

– Data analysis

HMA: Services

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Selected Topics

• Overview• Medicaid• Health Insurance Reforms• Health Insurance Marketplace

(Exchange)• Employers• Uninsured Post ACA

Overview - Coverage Strategy in the ACA

• Employer-based coverage (large groups)• “SHOP” Exchange for Small Employer groups • Health Benefits Exchange (Health Insurance Marketplace) for

Individuals:– Tax credits for individuals and families with incomes between 100%

to 400% of Federal Poverty Level (FPL)– Cost sharing subsidies for those between 100-250% of poverty– Level of credit/subsidy decreases as income increases

• Medicaid for non-elderly with Modified Adjusted Gross Income (MAGI) below 138% FPL (138% FPL in 2012 = $14,856 household of 1, $31,809 household of 4)

• CHIP (MIChild) for children through 2019

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Some Changes Already Implemented• Children <26 years old can remain on parents’

coverage• Eliminated preexisting condition clauses for

children’s coverage• Preventive services available with no copay

for insured and commercial and Medicare beneficiaries

• Preexisting condition Insurance Pool Coverage

• Closure of Medicare Part D doughnut hole

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Now for the Hard Part!

• Medicaid Eligibility Changes• Medicaid Expansion• Insurance Market Reforms• Insurance Exchanges

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Medicaid: Eligibility Changes• Deliberate and significant changes in how

Medicaid eligibility is done:o Clear separation from other public assistance programso Elimination of coverage based on categories – all non-elderly

covered below 138% FPLo Fundamental changes in eligibility determination income

standards and processes– Income tax standards – “Modified Adjusted Gross Income”– Electronic verification with IRS and other state & federal

sources– No asset tests for non-disabled, non-elderly individuals

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Calendar Year 2010- Upper Peninsula Uninsured Under Age 65

Source: Small Area Health Insurance Estimates (SAHIE), U.S. Census Bureau, August 2012 Update

All Incomes

<100% FPL

<138% FPL

<200% FPL

<250% FPL

<400% FPL

100-138% FPL

36,845 10,374 15,642 22,180 26,409 33,199 5,266

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Medicaid Expansion Largely Financed by Federal Government

• For new eligibles, the State Medicaid share: • 2014, 2015 and 2016 is 0%; • 2017 is 5% • 2018 is 6% • 2019 is 7% • 2020 and after is 10%

• For current eligibles, State share unchanged:– State share averages 43% (Range 26% to 50%)

Examples of Comprehensive State Analyses: Michigan

• Michigan House Fiscal Agency (7-12-2012)— Net state savings first 6 years and roughly cost neutral thereafter;

net savings over 10 years of $1.1 Billion

• Michigan Senate Fiscal Agency (6-28-2012)— State GF savings of at least $200 Million/year through 2017;

Medicaid expansion is “more of a policy issue than a fiscal issue”

• Center for Health Care Research & Transformation— Net state savings of $1.17 Billion (2014-2019); a small annual net

cost equal to $41 Million in 2020 or $65 per covered enrollee

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Sources: http://www.house.mi.gov/hfa/PDFs/Medicaid%20Expansion%20Memo%20Jul17.pdf http://www.senate.michigan.gov/sfa/Publications/Memos/mem062812.pdfUdow-Phillips, Marianne; Fangmeier, Joshua; Buchmueller, Thomas; Levy, Helen. The ACA’s Medicaid Expansion: Michigan Impact. October, 2012. Center for Healthcare Research & Transformation. Ann Arbor, MI http://www.chrt.org/publications/price-of-care/aca-medicaid-expansion-michigan-impact/

2014 Health Insurance Subsidies: Non-Elderly in Michigan if Medicaid Expanded to 138% FPL

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100% FPL

200% FPL

400%FPL

Adults Children

Medicaid Adults

Exchange Subsidies

Medicaid/CHIP Children

138% FPL

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2014 Health Insurance Subsidies: Non-Elderly in Michigan if Medicaid is not Expanded

0

200% FPL

400% FPL

Adults Children

Medicaid Parents

Exchange Subsidies

Medicaid/CHIP Children

100% FPL

Childless Adults

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Who in the UP Goes to the Exchange and Who Remains Uninsured with No Medicaid Expansion

Source: Small Area Health Insurance Estimates (SAHIE), U.S. Census Bureau, August 2012 Update

All Incomes

<100% FPL

<138% FPL

<200% FPL

<250% FPL

<400% FPL

100-138% FPL

36,845 10,374 15,642 22,180 26,409 33.199 5,266

Red=Uninsured; Yellow=Exchange

Medicaid Expansion – National Picture

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Arkansas Proposal – Medicaid Expansion• Use federal Medicaid funds to purchase

insurance for Medicaid expansion population in the Health Insurance Marketplace

• “All In the Eyes of the Beholder”• Cost effectiveness• Wrap Around Services• Cost sharing

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Insurance Market Reforms

• All policies sold both on and off the Exchange must include Essential Health Benefits (10 specific categories of service)– Ambulatory services– Emergency care– Hospitalization– Maternity and newborn Care– Mental health and substance use disorder services– Prescription drugs– Rehabilitative and habilitative services– Laboratory services– Preventive and wellness services and chronic disease management– Pediatric services including oral and vision care

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Insurance Market Reforms

• Michigan has picked Priority Health HMO as standard package, with the MIChild package for pediatric oral and vision care

• Penalties– Employer (50 and over FTEs)– Individual ($95 for 2014 growing to $695 by

2017)

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Insurance Market Reforms

• Guarantee Issue• Elimination of pre-existing

condition exclusions• Annual limit elimination• Limits on rating factors (family

size, geography and tobacco use)

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Health Insurance Marketplace Types

• 3 types• State Based Exchange• Federally Facilitated Exchange (FFE)• State Partnership Exchange

• Michigan will be a State Partnership Exchange and will perform plan management functions

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National Exchange Picture

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Health Insurance Marketplace

• Individual and Small Group Coverage• “Precious Metal” Plans- Platinum, Gold, Silver

and Bronze• All policies cover same benefits, levels only

vary by amount of cost covered• Individuals and families<400% FPL can access

premium tax credits and cost sharing subsidies• In 2014 small employers will have to pick one

plan for all their employees

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“Metal Level” PlansPlan Actuarial Value*

Bronze 60%

Silver 70%

Gold 80%

Platinum 90%

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Actuarial Value refers to the portion of the costs the health plan covers

Premium Tax Credits• Only available through the Health Insurance

Marketplace• Individuals up to 400% of poverty may be

eligible for premium assistance ($89,400 for a family of 4 and $43,560 for an individual)

• Indexed to second lowest cost silver plan in the Marketplace

• Individual can choose this plan or apply the credit to a higher or lower cost plan of their choice

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Examples of a Premium Tax Credit for an Individual

Annual Income

Percent of FPL

Example of Premium Tax Credit

Premium Contribution as a Percent of Income

$15,860 138% $4,480 3.3%$17,235 150% $4,310 4.0%$22,980 200% $3,550 6.3%$28,725 250% $2,690 8.1%$34,470 300% $1,730 9.5%$45,960 400% $630 9.5%

Based on a premium of $5000 per year and 2013 poverty levelsSource: Help Is At Hand: New Health Insurance Tax Credits in Michigan, Families USA, March, 2013

Consumer Cost Sharing

• Individuals below 250% of poverty (@$55,000 for a family of 4) may also be eligible for cost sharing assistance

• Cost sharing is defined to include: deductibles, copays, and coinsurance. It excludes premiums, balance billing for non network providers and spending for non covered services

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Consumer Cost Sharing

• Statutory Reductions in Cost Sharing

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Household Income Reduction in Cost Sharing

Actuarial Value Level

100-150% of FPL 2/3 94%

150-200% of FPL 2/3 87%

200-250% of FPL 1/2 73%

250-300% of FPL 1/2 70%

300-400% of FPL 1/3 70%

Marketplace Website

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2014 Enrollment Process• Open Enrollment Period for 2014

• October 1, 2013 through March 31, 2014

• Subsequent years - one month open enrollment in October for following calendar year

• Individuals can sign up themselves using web or can receive assistance from Navigators or other certified application counselors

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Navigators

• Navigator Roles:• Conduct public education for Exchange eligible

populations,• Help consumers in a fair and impartial manner

with selection of a QHP and with information on premium tax credits and cost sharing assistance

• Refer consumers to existing ombudsman or consumer assistance programs

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Navigators

• Proposed rule indicates that there will be 2 organizations, one of which must be a nonprofit

• Navigators can’t be affiliated with health insurers or receive commissions for selling health insurance

• Grant funding opportunity announce April 9, 2013(http://www.grants.gov, and search for CFDA # 93.750. )

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Employer Impact• Variable effect on employers based on:

– Full time employee counts– Whether or not they currently offer

insurance– Worker wages– Worker health status– State Insurance regulations

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Small Employers• Defined as < 50 workers• Coverage must include Essential Health Benefits• New insurance options through SHOP Exchange

– New offerings– Ability to offer multiple plans to employees

delayed to 2015• Tax credit availability

– <25 employees– Average annual wages below $50,000– Pay at least 50% of cost of insurance

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Large Employers• Defined as having 50 or more full time

workers (30 hours per week)• Must offer insurance coverage• If any of their workers get coverage

through the Exchange the company must pay a penalty

• No access to SHOP Exchange until 2017

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Issues to Watch as this Develops• Employers-

• Using Avoidance, Coping and Compliance Strategies

• Hate uncertainty and that is all they see right now

• Do more employers move to self insure to avoid premium tax and rating factors?

• Hiring, wage and schedule decisions• Do small employers use the SHOP

Exchange?

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Issues To Watch Cont’d• Consumers

• Surveys indicate 2/3 of the uninsured do not understand the coverage options

• Will they buy insurance through the Exchange?

• Will premium and out of pocket costs be viewed as reasonable?

• What outreach methods work?• Will the tax penalty motivate people?

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Issues to Watch Cont’d

• Insurers• Will they participate in the

Exchanges?• How will they price products?• How will they change offerings

outside the Exchanges?• How does their behavior change for

2015?

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Issues To Watch Cont’d

• Providers• Do they adopt active approaches to

educate patients/consumers• Do they accept more Medicaid patients

should Medicaid be expanded?• What will be the impact of DSH reductions

on hospitals?• How do we address workforce issues?

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Who Will Be Uninsured Post ACA?

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Michigan Non-Elderly Uninsured: Total Adults Children2011 Baseline 1,363,000 1,223,000 140,000.0 If ACA were fully implemented in 2011 613,000 518,000 95,000.0

Income Distribution of Post-ACA Uninsured in Michigan

Under 138% FPL 138% to 400%

FPL > 400% FPL Total

394,000 150,000 69,000.0 613,000 64.3% 24.5% 11.3%

Note: Analysis is based on "Who will be Uninsured After Health Insurance Reform", March 2011.Authors: Matthew Buettgens, Urban Institute, and Mark Hall, Wake Forest University.

Characteristics of Uninsured Adults in Michigan After ACA

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Note: Analysis is based on "Who will be Uninsured After Health Insurance Reform", March 2011.Authors: Matthew Buettgens, Urban Institute, and Mark Hall, Wake Forest University.

Data is for North Central Region.

TOTALMedicaid

Eligible

Undocumented or recent

immigrant

With Affordability

Exemption

With Affordable Subsidized

Option

With Affordable

Un-subsidized

Option

100.0% 60.5% 8.5% 12.0% 10% 9.0%

518,000 313,400 44,000 62,200 51,800 46,600

HMA Extrapolation of Urban Institute Regional Analysis to Michigan

Helpful Resources

• Kaiser Family Foundation– http://www.kff.org

• CMS– http://www.healthcare.gov

• State ReForum– http://www.statereforum.org

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