Healthcare Reform Bryan Lagg Blue Cross Blue Shield of Mississippi

Healthcare Reform

Bryan Lagg

Blue Cross Blue Shield of Mississippi

Major Timelines Related to Healthcare Reform

2010 - 2011: Market Reform

2012 - 2013: Financing Alignment

2014 - Ongoing: The Exchange / Individual Mandates

March 23, 2010January 1, 2010

2010 Provisions

Rate Review

Consumer Information

Grants to States

Grandfathered Plan Status

in Effect

Small BusinessTax Credits

Key Provisions:Employer Responsibility

(Tax)

2010-2013

Estimated Annual Premiums

Funding Percentage

Total Tax Credit Available

Potential Tax Credit

Reduction Phase-Out (# of Employees)

Reduction Phase-Out (Average Salary)

Total Tax Credit

$70,000 50% 35% $12,250 0 0 $12,250

Number of Employees: 10Assumed Premiums: $70,000/yearFunding Percentage: 50%Average Annual Wages: $25,000Potential Tax Credit: 35%

Main Street Mechanic Auto Repair Shop

2010-2013


Funding Percentage





Total Tax Credit

$240,000 50% 35% $42,000 -$28,000 0 $14,000

Number of Employees: 40 Part-Time Employees (equivalent of 20 FTEs)Assumed Premiums: $240,000/yearFunding Percentage: 50%Average Annual Wages: $25,000Potential Tax Credit: 35%

Downtown Diner

2010-2013


Funding Percentage





Total Tax Credit

$72,000 50% 25% $9,000 0 0 $9,000


1st Street Family Services(Non-profit Foster Care)

2010-2013


Funding Percentage





Total Tax Credit

$90,000 50% 35% $15,750 -$2,100 -$6,300 $7,350


Acme Air Conditioning, LLC(Manufacturer)

March 23, 2010January 1, 2010 June/July, 2010 September 2010

2010 Provisions

Rate Review

Consumer InformationGrants to States

Grandfathered PlanStatus in Effect


Part D “DonutHole”

Decreased

Sec. 833 Changes

Limits deductibility

of insurerexecutive

compensation

(90 days out)

National highrisk pool

Early retireereinsurance

grants

July 1

HHS Internet portal

Part D discounts in “donut hole”

(180 days out)

HHS regulations on state

Exchange waivers

HIT standards

Plan Years 6 Months OutDependent

Coverage to Age 26

No pre-ex exclusion period < age 19

Preventive services with no cost-sharing

Preventive MeasuresHealthy You! Compared to USPSTF

Services / FrequencyBirth-24 Months

2-11 Years

12-17 Years

18-34 Years

35-39 Years

40-49 Years

50+ Years

Preventive medicine evaluation or re-evaluation / 1 visit per calendar year

8

Hemoglobin, hematocrit or CBC / Once per calendar year

Urinalysis / Once per calendar year

Immunizations

Blood pressure / Once per calendar year

Breast exam / Once per calendar year

Pap smear and pelvic exam / Once per calendar year

Preventive MeasuresHealthy You! Compared to USPSTF

Services / Frequency

Birth-24 Months

2-11 Years

12-17 Years

18-34 Years

35-39 Years

40-49 Years

50+ Years

Glucose

Lipid profile / Once per calendar year

Mammogram / Once per calendar year

PSA / Once per calendar year

Stool for occult blood / Once per calendar year

Flexible sigmoidoscopy / Once every five years or Colonoscopy / Once every 10 years

Bone density / Once per lifetime

March 23, 2010January 1, 2010 June/July, 2010 September 2010

2010 Provisions

Rate Review

Consumer InformationGrants to States

Grandfathered PlanStatus in Effect


Part D “DonutHole”

Decreased

Sec. 833 Changes

Limits deductibility

of insurerexecutive

compensation

(90 days out)

National highrisk pool

Early retireereinsurance

grants

July 1

HHS Internet portal

Part D discounts in “donut hole”

(180 days out)

HHS regulations on state

Exchange waivers

HIT standards

Plan Years 6 Months OutDependent

Coverage to Age 26

No pre-ex exclusion period < age 19

Preventive services with no cost-sharing

Restrictions on Rescissions

No lifetime limits; restricted annual

limits

MLR reporting

January 1, 2011

MLR rebates

HSA/FSA changes

2013

Contribution limitson HSAs

Itemized deductions forunreimbursed medical

expenses

Medicare taxes

2014

Long-Term Provisions

$8B insurer fee

Key Provisions:Financing

FSA Limits(2011+)

Limited to $2,500 per year

Tax on Rx/Devices(2011)

$47B in new taxes

Increased Medicare Tax(2013+)

Increases tax on income and investments for high-income people‣ Additional .9% HI tax for individuals earning more than $200,000 and joint filers earning more than $250,000

Insurance Tax (2014+)$60B tax on insured products; $8B in 2014

Cadillac Tax (2018+)Tax on high-value plans ($10,200 single/$27,500 family)

2013



expenses

Medicare taxes

2014


$8B insurer fee

Health insuranceExchanges

Key Provisions:Exchanges

Exchanges(2014+)

‣ States must establish Exchanges for individuals and small employers (federal fallback)‣ Employee choice‣ Subsidies and small employer credits only available through Exchange‣Options limited to 4 “actuarial value” benefit packages‣ Bronze (60%), Silver (70%), Gold (80%), Platinum (90%)‣ Insurers must offer Silver and Gold

Key Provisions:Exchanges

Exchanges(2014+)

‣ Catastrophic plan offering available to individuals less than 30 or with financial hardship‣ State mandates required only if state pays added costs‣ Participating plans must meet extensive requirements‣ Grants to “navigators” for education and enrollment

Outside Exchange

‣Individual and group coverage can be sold‣ Must meet “essential benefits”‣ Follow cost-sharing limits‣ Apply state benefits mandates

Small Business Tax CreditsEmployees 2010 2011 2012 2013 2014 2015

1-25

35% tax credit eligible if:1) 50% funding level2) Average Annual Wage (AAW) < $25,0003) Phase-out based on size & AAW

Early retiree reinsurance grants

50% tax credit eligible if:1) Exchange participation2) 50% funding level3) AAW < $25,0004) Phase-out based on size & AAW

Employers required to report value of healthcare benefits on W-2

Part D subsidy deduction elimi-nated

Medicare tax increase

2010-2013


Funding Percentage





Total Tax Credit

$90,000 50% 35% $15,750 -$2,100 -$6,300 $7,350


Acme Air Conditioning, LLC(Manufacturer)

2014-2015


Funding Percentage


Tax Credit



Total Tax Credit

$90,000 50% 50% $22,500 -$3,000 -$9,000 $10,500

2013



expenses

Medicare taxes

2014


$8B insurer fee


Individualmandate and

subsidies

Key Provisions:Individual Mandate and

Subsidies

Individual Mandate(2014+)

All individuals must purchase minimum coverage. Penalty (with exceptions) is lower of:‣ National average premium, or‣ Greater of: % income (up to 2.5%), or $95 (2014), $695 (2016)

Subsidies(2014+)

Sliding scale, up to 400% Federal Poverty Level ($88,000 per year for family of 4)‣ Only available through Exchanges

2013



expenses

Medicare taxes

2014


$8B insurer fee



subsidies

Employerrequirements

Key Provisions:Employer Requirements

Requirement:“Play”(2014+)

Employers with more than 50 full-time employees (FTEs) must offer minimum coverage:‣ Part-time are included on FTE basis in calculating more than 50 FTEs‣ FTE is 30+ hours per week‣ No minimum contribution‣ Must provide “essential coverage”

Coverage Penalty:“Pay”(2014+)

Employers with more than 50 FTEs:‣ Not offering coverage and at least one FTE receives tax credit ‣ $2,000 x total number of FTEs (minus first 30 FTEs)‣ Offering coverage at least one FTE receives tax credit but actuarial value less than 60% or employee cost is more than 9.5% of household income‣ Lesser of $2,000 x total FTEs or $3,000 x number of employees receiving tax credit

2013



expenses

Medicare taxes

2014


$8B insurer fee



subsidies

Employerrequirements

Medicaidexpansion

Risk Pool eliminated

Final Summary:State of the Union 2014

Government subsidies

Medicaid rolls increased

Exchange implemented/incentives to enroll

Rich benefit designs taxed

No real measures addressing cost, only attempts to increase access;

rates will increase

Coverage mandated/insufficient penalties

Documents

Healthcare Reform Bryan Lagg Blue Cross Blue Shield of Mississippi