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Making Health Care Reform Work for Us in New York State:
From National Legislationto Statewide Implementation
New York Association on Independent LivingOctober 5, 2010Heidi Siegfried, Coordinator
New Yorkers for Accessible Health Coverage646-442-4147 * [email protected]
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Basic Take-Aways• The new health care reform law is a major, historic step forward• The current status quo was NOT an option over the long-term.
• Approximately 2 million of New York’s 2.8 million uninsured will get health coverage.
• Even so, we still have more to do to get to true universal health care across America and here in New York, so there is continued work ahead.
• Goal: All residents of our state, regardless of their financial situation or immigration status, will have comprehensive insurance coverage that’s affordable-to-buy and affordable-to-use.
• Goal: All residents of our state, regardless of their financial situation or immigration status, will also have places to go receive the high-quality , affordable services from culturally-competent health care professionals.
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THE NEW LAW ITSELF:The Patient Protection and
Affordable Care Act(PPACA)
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PPACA Overview
Three broad areas of focus:• Insurance coverage reform• Delivery system reform• Financing-related provisions
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I. Insurance coverage reforms:
• Private insurance market• Employer-based plans• Public programs
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A. Private insurancemarket reforms:
• Overall insurance rules and regulations
• Individual/family coverage mandates
• New “Health Insurance Exchanges”
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Insurance rules and regulations:Coverage basics
• Elimination of pre-existing condition exclusions• Currently allowed in NY for first year
• Elimination of annual and lifetime coverage limits• Elimination of “rescissions” (retroactive
cancellations of coverage based on claims experience, for fraud only, Ian’s law)
• Young adult dependents – can remain on parents’ plan thru age 26; NY law already allows some to stay on through age 29
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Insurance rules and regulations:Policyholder benefits
• Standardized “essential benefit package” – comparable to “typical employer plan”(as determined by HHS – updated annually); minimum actuarial value of 60%
• No out-of-pocket costs for preventive care• Limits on annual deductibles for small group
plans ($2K indivs./$4K families)• State-based consumer counseling and ombuds
programs re: how to sign-up & how to use – to be offered to individuals/families and small groups
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Insurance rules and regulations:Cost Regulation
• Limits on premium variations – only allowed based on age (3:1) [NY law does not allow this], geography, family size, and tobacco use (1.5:1)
• Required “medical-loss ratios” (amount of premium income to be spent on claims – 85% (large groups); 80% (individuals/families, small groups) [the latter is 82% in NY]
• Premium rate increase review procedures established – encouraged at state level; federal govt. back-up process; plans with “excessive increases” can be removed from Exchanges
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Insurance rules and regulations:Business operations
• Regulation of marketing practices• Standardized eligibility and enrollment
procedures• Standardized claims forms and payment
processing• Standardization of appeals processes (both
internal and external) for denials of coverage for a particular service
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Individual/ family “mandates”
• Only if:not eligible for a public programnot offered employer coverage• Tax penalty for non-compliance:ramp up from 2014-16Top rates: $695/$2,085 (individuals/families),
or 2.5% income, whichever is greater
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Individual/family mandates
• Exemptions: If premium cost is >8% incomeNon-legal immigrantsNative-AmericansIncarceratedUninsured <3 mos.Non-tax filersReligious beliefs
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“Health Insurance Exchanges”
• Government-sponsored “marketplaces” to pool:
Individuals & FamiliesEmployer groups• Bulk-purchase bargaining with plans to:lower premium costslessen cost growth (over time)• State-based, with federal fall-back
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Exchanges: Who Qualifies• Individuals and families who are not eligible for
public programs or don’t have employer-sponsored coverage
• Initially available to smaller groups (<100 employees)
• Larger groups (>100 employees) eventually possible (at discretion of HHS secretary)
• Only open to citizens and legal residents• All Members of Congress and Senators and their
direct staff must use
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Exchanges: Benefit Packages
• Standard “essential benefits package” to be offered
• Cannot include abortion coverage (which must be purchased separately as a rider); states can ban abortion coverage altogether
• Differing “tiers” of plans based on “actuarial values”: bronze, silver, gold, platinum – 60%, 70%, 80%, 90%
• Lower-cost, limited-benefit “catastrophic plans” can be offered – available up to those up to age 30, and to those who are exempt from mandate
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Exchanges: Affordability Provisions
• Sliding-scale premium subsidies: For low- and moderate-income individuals and families
(up to 400% of the “Federal Poverty Level” (“FPL”) – e.g., $44K individuals/$88K family of 4)
People cannot be required to spend more than 9.5% of income on premiums
Subsidies cannot be used for abortion coverage riders• Annual sliding scale out-of-pocket limits (for
deductibles, co-pays, co-insurance) for low- and moderate-income individuals/families (up to 400% FPL)
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Exchanges: Other provisions
• Small group and individual exchanges can be merged by states• States can form regional,
geographically-contingent exchanges• Plans offered must meet standards
for provider capacity
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B. Employer-sponsored coverage reforms:
• Large groups (>50 employees)• Small groups (<50 employees)• Special program for age groups:
Young adultsEarly retirees
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Employer Coverage: Large Groups
• If >200 employees: mandate to provide coverage to all workers if providing coverage
• Penalties incurred if no coverage offered and if any employee(s) gets premium subsidies via new insurance Exchanges
• Employees may opt out of employer plan to new insurance Exchange in certain circumstances; vouchers available if <400% FPL
• Eventual access to Exchanges if/when allowed by HHS secretary
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Employer Coverage: Small Groups• Tax credits to assist purchasing coverage: start in 2010 ramps-up by 2014 in amount (initially <35%, then to
50%) eligibility and amount depends on employer size
(initially <10 employees), and average wage base (initially < $25K/yr., excluding principals/owners)
Overall, smaller and lower-wage businesses get better deals
Slightly lower tax credit rates for non-profits• Coverage offered via Exchanges starting in 2014
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Employer Coverage: Special Age Groups
• Targets: cohorts with high rates of uninsurance• Young adult dependent coverage
(age 19-26) can stay on parents’ plan• Early retirees (age 55-64) –
temporary re-insurance program for high-cost claims (up to 2014)
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C. Public Insurance Program Reforms
• Low(er) income individuals/families:MedicaidState Child Health Insurance Program (SCHIP)New state-based “basic health plan” option• Medicare – seniors and long-term disabled• Other options
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Medicaid: Individuals and Families
• Expanded eligibility (up to 133% FPL – ~$14K indivs. /~$29K family of 4) • Elimination of various differential categories
for eligibility based on age, family composition, pregnancy, etc.• Standardized, comprehensive benefits• Community Choice Option, 1915 (i) option,
and Balancing Incentive• No out-of-pocket costs for preventive care
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Medicaid: State Requirements
• Expansions possible as soon as 2011, but no later than 2014• Increase federal matching fund support
(“FMAP”) for states starting 2014• Streamline enrollment and re-certification
procedures• Increased reimbursement rates for primary
care to Medicare levels• “Maintenance of effort” requirement
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Child Health Insurance (SCHIP)
• mostly dealt with in Jan. 2009 via “Child Health Insurance Program Reauthorization Act”• Reauthorization extended via PPACA
from 2014 to 2019 (additional 5 yrs.)• Funded extended via PPACA from
2014 through 2015 (additional 2 yrs.)
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State-based “basic health plan” option
• Can be offered by states to individuals and families between 133%-200% FPL (~$14K-$22K indivs./~$29-$44K family of 4)
• An alternative to private coverage through Exchanges
• States get 95% of premium subsidies that would have otherwise gone to qualifying individuals and families
• Medicaid benefit package• No co-pays for preventive services
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Medicare: Improvements
• Eliminate Part D coverage gap (“donut hole”) over 10 years• $250 rebate in 2010 once Part D coverage gap is reached• 50% discount on brand-name drugs in Part D coverage
gap (starts in 2011); includes biologics• Lowering of “catastrophic coverage” eligibility level for
Part D (over 10 years)• Elimination out-of-pocket costs for preventive care and
annual physical• Freeze sliding-scale Part B premium levels
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Medicare: Program Improvements
• Expand and streamline eligibility for Medicare Savings Plans that help lower-income beneficiaries with their out-of-pocket costs and Part B premiums • Raise reimbursement rates for primary care• Eliminate over-payments to private
“Medicare Advantage” plans• Improve long-term financing of Part A Trust
Fund for an additional decade
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Other Public Program Options• Temporary high-risk pools – funding offered to states – fed govt. to
offer fall-back program• Two new national plans via Office of Personnel Management
offered through state exchanges; one must be non-profit• Creation of non-profit co-op plans incentivized – can be national,
multi-state, statewide, or regional• New, voluntary long-term care insurance program (“Community
Living Assistance Services and Supports” aka “CLASS”); financed via payroll deductions – employees must opt-out; provides $50-$75/day for personal care
• States allowed to apply for waivers from PPACA paradigm starting in 2017 to implement alternative schemes, if they meet set criteria
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II. Delivery System Reform• Goals – to improve:AccessQualityEfficiencyCost control
• Reforms leveraged via:Public programs: Medicare and Medicaid Insurance regulationsPooling via Exchanges
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Delivery System Reform: Areas of Focus
• Expanded access to services• Quality Improvement• Public health• Wellness• Workforce development• Reimbursement reforms
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Expanded Access: Where to get care
• Various expansions of primary, preventive, and home/community-based services
• Doubling of funding for community health centers and the National Health Service Corps
• Expanded funding for school-based health services
• New “patient-centered medical homes”, “accountable care organizations” and “community-based collaborative care networks”
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Expanded Access: Other Reforms
• Bonus payments to primary care providers to practice in medically-underserved areas
• Non-profit hospitals to offer expanded free/discounted care to uninsured and under-insured patients
• A whole variety of new initiatives to address various health care disparities
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Quality Improvement• Disease management and chronic care
coordination programs for patients with serious and multiple medical conditions
• New programs to expand and improve trauma and emergency care services
• Comparative effectiveness research• State-based pilot programs in medical
malpractice reform• New Federal Coordination of Health Care Office”
to focus on “dual-eligibles” (people on both Medicare and Medicaid)
34
Wellness• Technical assistance to employers for wellness
programs• Grants to small employer groups to establish
wellness programs• Allow employers to offer premium discounts to
employees participating in wellness programs• State-based pilot wellness programs for
individual markets• Disclosure of nutritional information by fast-food
chains and vending machines
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III. Financing PPACA Reforms• Public program cost savings (over the long term)
via Medicare and Medicaid (see above) – as compared to current projections
• New taxes:Medicare payrollUnearned incomeExcise tax on comprehensive employer plans“Special interests” taxes• Tax deduction limitations• Penalties for coverage mandate non-compliance
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PPACA Tax Measures• Increased Medicare payroll taxes (0.9%) on upper-
income earners ($200K indivs./$250K joint-filers)• New 3.8% tax on unearned income for same • Excise tax on “top-of-the-line” employer plans (2018): $10,200 for individuals/$27,500 for families (annual
premiums) Higher thresholds for early retirees, high-risk
professions 40% tax only on value above these levels Dental and vision benefits excluded from threshold
calculations
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PPACA Tax Measures (cont’d)
• New taxes on pharmaceutical and medical device manufacturers, health insurance companies, and indoor tanning services
• Elimination of tax deduction for employers who receive Medicare Part D subsidies for their retiree drug benefit programs
• Limits on deductions for Health Savings Accounts, and higher penalties for unallowed withdrawls from them
• Tax penalties on employers and individuals/families who don’t comply with coverage mandates (subject to certain terms and conditions)
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Implementation: Goals
• Dual focus: national and state• GOAL: Max out and go beyond PPACA to
move to true universal health care• Monitor and weigh-in on proposed new
rules and regulations• Stakeholders to be monitored at every
step along the way (especially insurers)
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Implementation: New York
• Much of implementation will happen at the state level
• State and local lawmakers will need to be educated about PPACA requirements, options, and implications
• New laws will need to be passed at state level, and/or regulations written
• New programs will need to be created – with Gov., Legislature, Dept. of Health, State Insurance Dept., other state agencies
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Federal Implementation So Far• Denials of coverage for pre-existing conditions for children
banned• Small business tax cuts – begin in 2010; IRS has posted
materials online• Young adult dependent coverage – some insurance plans are
already offering voluntarily, and more will start as of Sept. 23, 2010, and ramp-up through start of new benefit year (Jan. 1)
• Medicare Part D prescription drug coverage gap (“donut hole”) – automatic rebate checks ($250)
• Temporary high-risk pools funding to states for uninsured people with “pre-existing conditions”
• Employer early retiree re-insurance program
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More Federal Implementation for 2010
• Consumer assistance program funding for states• Rate review funding for states• Appeals procedures• Prohibition of rescissions• “Patients’ Bill of Rights” consumer protections: Ends lifetime limits on essential benefits Limits unreasonable annual benefit caps Ends co-pays for preventive services Expands choice of primary care providers Expands access to emergency services
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Implementation: NAICNational Association of Insurance Commissioners• Charged with developing recommendations re: rate review consumer ombuds services grandfathering of current plans high-risk pools medical-loss ratios annual/lifetime limits preventive coverage pre-existing conditions adult dependent coverage Rescissions Appeals long-term care insurance• 21-member consumer advisory group established – released initial report of
recommendations in May
43
New York: Implementation So Far
• Governor’s Health Care Reform Cabinet established (May 13)
• Governor appointed Health Care Reform Advisory Committee (Aug. 31) including: providers, consumers, employers, labor, local governments, insurers, policy experts
• Temporary “NY Bridge Plan” for pre-existing conditions – enrollment opened Aug. 20, and coverage begins Oct. 1st; applicants must be uninsured for 6 months prior
• Rate review funding to states – NY restored “prior approval” procedures in June
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Resources: Overall Analyses
• Kaiser Family Foundation: www.healthreform.kff.org
• Families USA: www.familiesusa.org/health-reform-central
• Community Catalyst: www.communitycatalyst.org
• Health Care for All New York: www.hcfany.org
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Resources: Constituency-Specific
• AARP: www.aarp.org/health• Consumers’ Union: www.consumersunion.org/health• Faithful Reform in Health Care:
www.faithfulreform.org • Medicare Rights Center: www.medicarerights.org • Raising Women’s Voices:
www.raisingwomensvoices.net • Small Business Majority:
www.smallbusinessmajority.org • Young Invincibles: www.younginvincibles.org
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Resources: Government
• White House: www.healthreform.gov• Congress:
http://energyandcommerce.house.govhttp://finance.senate.gov/issue
• National Association of Insurance Commissioners: www.naic.org/index_health_reform_section.htm
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Thanks for hanging in there!
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