Affordable Care Act: Find Your Way Around the

Health Care Law David Parra

Associate State Director- Multicultural Outreach, AARP Arizona

Educational Series-Promoting Good Health

2

Agenda People with health insurance People who are uninsured or buy their

own coverage People with Medicare Small business owners

3

People with Health Insurance

Adds More Consumer Protections• Premium increases of 10% or more must be

justified.

• 80% to 85% of health insurance premiums must be spent on care; otherwise, refunds will be given to policyholders.

• No excessive premiums can be charged (ratios allowed: 3 to 1 and 1.5 to 1).

(continues)

4

5

Adds More Consumer Protections• Coverage can’t be dropped if you get sick or for

making an honest mistake on the application.

• Pre-existing conditions can’t be used to deny coverage or charge more.

• No limits can be placed on coverage – lifetime (now), annual (2014).

(continues)

6

Adds More Consumer Protections• More free preventive services must be offered, such

as immunizations, and screenings for diabetes and certain cancers (including mammograms and colonoscopies). Women’s services are also included.

• Young adults can remain on family policy until age 26.

7

People Who Are Uninsured Or Buy Their Own Coverage

8

InitialOpen Enrollment PeriodOct. 1, 2013 – Mar. 31,

2014

Coverage Beginsas Early as

January 1, 2014

Creates a Health Insurance Marketplace

Four Levels of Coverage

9

* Based on average cost of an individual under the plan. Figures may not be the same for every enrolled person.

CATASTROPHIC & DENTAL PLANS will also be offered.

1. Doctor visits2. Emergency services3. Hospital care4. Maternity and newborn care5. Mental health and substance use disorder services, including

behavioral health treatment6. Prescription drugs7. Rehabilitative services and habilitative services and devices8. Laboratory services9. Preventive and wellness services, and chronic disease

management10. Pediatric services, including oral and vision care

10

10 Essential Health Benefits

• Plans will have out-of-pocket limits equal to those on Health Savings Accounts ($6,250 for individual and $12,500 for couple in 2013) – starts in 2015.

• Marketplace will include a Small Business Health Options Program (SHOP).

11

Out-of-Pocket Limits and SHOP

• States may receive 100% federal funding for 2014 through 2016, 95% in 2017, 94% in 2018, 93% in 2019, and 90% for 2020 and beyond.

• Participating states provide a benchmark benefits package which must include the 10 essential health benefits.

• Marketplace will screen for Medicaid and CHIP eligibility, but will refer, not process applications.

12

Expands Medicaid (Optional for States)

• Must be a citizen or national, lawfully present, not incarcerated, and live in the service area.

• Advanced Premium Tax Credits will be available (help to pay for monthly premium).

• Cost-sharing subsidies will be offered (help to reduce the out-of-pocket limits).

13

Insurance, Subsidies, and Penalties

(continues)

• 0% to 133% (additional 5% of income not counted) - eligible for Medicaid in States that expand Medicaid (new resident 5-year rule applies).

• 100% to 400% - eligible for advanced premium tax credit.

• 100% to 250% - eligible for cost-sharing subsidy.

14

Insurance, Subsidies, and Penalties

(continues)

• Employees with employer-based coverage are eligible for subsidies in the Marketplace only if their plan has an actuarial value of less than 60% or their premium share (individual) exceeds 9.5% of income.

• Employers with more than 200 employees will be required to automatically enroll employees in their health plan. Employees may opt out if so choose.

15

Insurance, Subsidies, and Penalties

(continues)

• Penalties for individual adults: $95 in 2014, $325 in 2015, and $695 in 2016 or 1.0% of taxable income in 2014, 2.0% in 2015, and 2.5% in 2016 – whichever is greater. After 2016, increase will follow cost-of-living adjustment.

16

Insurance, Subsidies, and Penalties

(continues)

• Penalty exemptions: financial hardship, religious objections, American Indians, no coverage for less than three months, undocumented immigrants, incarcerated individuals, those for whom the lowest cost plan option exceeds 8% of an individual’s income, and those with incomes below the tax filing threshold (in 2012 the threshold for taxpayers under age 65 is $9,750 for singles and $19,500 for couples).

17

Insurance, Subsidies, and Penalties

18

People Who Have Medicare

• Protecting and improving guaranteed benefits.

• Cracking down on waste and fraud.

• Identifying savings that extend its financial stability.

19

Strengthens Medicare by:

20

Closes the Doughnut Hole by 2020

2020: Coverage gap will disappear

Part D cost sharing will

remain

2014: 52.5% discount on brand name

drugs

28% discounton generics

21

You pay: 5% of drug costs

Part D: 2014 Drug CoverageStage 1

InitialCoverage

Stage 3Catastrophic

Coverage

Stage 2No Coverage

“Doughnut Hole”

Out-of-Pockets:DeductibleCopaymentCoinsurancePremium - not countedCoinsurance75% - Insurance

25% - You

Coinsurance0% - Insurance

100% - You

Coinsurance95% - Insurance

5% - You

52.5% disc. - brand

28% disc. - generic

$0 - $2,850 $2,850 - $4,550

$4,550+

Closes by 2020

22

You pay: 5% of drug costs

www.aarp.org/doughnuthole

23

Adds Free Preventive Services • An annual wellness visit.

• Screenings for diabetes and certain cancers (mammograms and colonoscopies).

• Certain vaccines.

• Applies also to Advantage plans.

Call Medicare at 1-800-633-4227www.medicare.gov

24

Other Important Items• Offers bonus and extra payments to

promote quality care and encourage doctors and nurses to serve under-served communities.

• Improves home care coordination: face-to-face visits from certain health practitioners (certification of home health services) - visits must occur within 90 days before you receive home health care or 30 days after you start care. (continues)

• Higher Part D premium for higher income earners (applies also to Part B) - $85K for individuals/$170K for couples.

• Higher Part A contribution (FICA) for higher income earners - $200K-individuals/$250K-couples (0.9% increase) *not applicable to employer.

• More information about nursing homes required.

25

Other Important Items

26

Small Business Owners

27

Tax Credits to Offset Insurance Costs• Phase I: 35% of contribution (25% for Tax-

Exempt) / 2010-2013 / three requirements:1. Fewer than 25 full-time employees (30 hours).2. Under $50K average annual wages.3. Pay at least 50% of employee premiums.

• Phase II: 50% of contribution (35% for Tax-Exempt) / 2014 and beyond / same requirements.

• Full credit if fewer than 10 full-time employees, with under $25K average annual wages.

28

Insurance Options and Penalties• Companies with under 50 full-time equivalent

employees – no requirement, no penalty.

• Companies with 50 or more full-time equivalent employees who do not offer health insurance and have at least one employee receiving a premium tax credit in the Insurance Marketplace will pay $2K a year per employee – first 30 are exempt.

(continues)

29

Insurance Options and Penalties• Companies with 50 or more full-time

equivalent employees who do offer health insurance but have at least one employee receiving a premium tax credit in the Insurance Marketplace will pay the lesser of $3K a year per employee receiving the credit or $2K per full-time employee – first 30 are exempt. (continues)

30

Insurance Options and Penalties• Companies with up to 100 employees will be

able to obtain health insurance for their employees at the health insurance marketplace – SHOP.

• Penalty implementation for businesses will start in 2015.

31

Resources• www.healthcare.gov • www.healthlawanswers.org • www.healthlawfacts.org • www.healthlawresources.org • www.marketplace.cms.gov • www.hhs.gov/healthcare • www.azahcccs.gov • www.healthearizonaplus.gov • www.sba.gov/healthcare (continues)

32

Resources• www.id.state.az.us/healthcarereform • www.irs.gov/sbhtc • www.smallbusinessmajority.org• www.kff.org • www.coveraz.org • www.aachc.org• www.medicare.gov• www.ssa.gov

Questions & Answers