Health Reform in Kansas:The Affordable Care Act
Sheldon WeisgrauThrive Allen County
October 18, 2012
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Introduction The Problem
◦ Why do we need health reform? The Affordable Care Act (aka “Obamacare”)
◦ What’s really in the law?◦ Specific impacts
Medicaid expansion Seniors and Medicare Rural health workforce
Questions & Discussion
Agenda
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Funded by Kansas Grantmakers in Health:◦ Kansas Health Foundation◦ Health Care Foundation of Greater KC◦ REACH Healthcare Foundation◦ Sunflower Foundation: Health Care for Kansans◦ United Methodist Health Ministry Fund
Housed at Kansas Association for the Medically Underserved (KAMU)
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Assist in public education and consumer and stakeholder engagement related to health reform
Provide technical assistance to consumer and advocacy organizations
Assist Kansas entities in securing grants and programs available under the Affordable Care Act (ACA)
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“Best health care system in the world”◦ Widespread medical technology◦ State-of-the-art facilities◦ Advanced research and training◦ Center of development for drugs and medical
devices◦ Lots of money in the system, well-paid
What works?
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Access◦ 48.5 million uninsured
365,000 uninsured in Kansas◦ Millions more underinsured◦ Employment-based health insurance declining◦ Maldistribution of providers, other resources
Quality◦ Inconsistent◦ Disparities◦ Patients often don’t receive recommended care
Cost◦ Highest in the world◦ Increasing faster than salaries and inflation◦ Main driver of budget deficits
Why health reform?
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Kansas Uninsured
Source: KHI, 2011
2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/20109%
10%
11%
12%
13%
14%
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Kansas Uninsured (by County)
Source: KHI, 2012
365,000 uninsured in Kansas = all residents in…
Cheyenne
Sherman
Wallace
Greeley
Rawlins
Thomas
Logan
Wich-ita
Decatur
Sheri-dan
Gove
Scott Lane
Norton
Graham
Trego
Ness
Phillips
Rooks
Ellis
Rush
Smith
Osborn
Russell
Barton
Jewell
Mitchell
Lincoln
Ellsworth
Rice
Republic
Cloud
Ottawa
Wash-ington
Clay
Saline
McPher-son
Dickin-son
Harvey
Marion
Marsh-all Ne-maha
Brown
Riley
Geary
Morris
Chase
PottawatomieJack-son
Wabaun-see
Lyon
Coffey
Osage
Shaw-nee
Doni-phan
Atchison
Jeffer-son
Leavenworth
Doug-las
John-son
Frank-lin
Miami
Ander-son
Linn
Bour-bon
Craw-ford
Chero-kee
AllenWood-son
Neo-sho
Labette
Wilson
Mont-gom-ery
Green-wood
Elk
Chautau-qua
Butler
Cowley
Sedgwick
Sumner
Reno
Kingman
Harper
Stafford
Pratt
Barber
Pawnee
Edwards
Kiowa
Coman-chee
Hodgeman
Ford
Clark
Finney
Gray
Meade
Has-kell
Sew-ard
Kearny
Grant
Stevens
Hamilton
Stanton
Morton
Wyandotte
Greeley + Wallace + Lane + Comanche + Hodgeman + Clark + Wichita + Stanton + Rawlins + Kiowa + Sheridan + Graham + Hamilton + Gove + Cheyenne + Logan + Chase + Elk + Decatur + Trego + Edwards + Jewell + Ness + Morton + Lincoln + Rush + Woodson + Chautauqua + Smith + Osborne + Kearny + Haskell + Stafford + Meade + Barber + Scott + Republic + Rooks + Phillips + Norton + Stevens + Washington + Morris + Gray + Sherman + Harper + Ottawa + Mitchell + Ellsworth + Greenwood + Russell + Pawnee + Wabaunsee + Grant + Kingman + Thomas + Doniphan + Anderson + Clay + Coffey + Wilson + Cloud +
Pratt + Linn + Brown + Rice + Marshall and Nemaha + Allen
=365,000+ Kansans without health insurance
Cheyenne
Sherman
Wallace
Greeley
Rawlins
Thomas
Logan
Wich-ita
Decatur
Sheri-dan
Gove
Scott Lane
Norton
Graham
Trego
Ness
Phillips
Rooks
Ellis
Rush
Smith
Osborn
Russell
Barton
Jewell
Mitchell
Lincoln
Ellsworth
Rice
Republic
Cloud
Ottawa
Wash-ington
Clay
Saline
McPher-son
Dickin-son
Harvey
Marion
Marshall Ne-maha
Brown
Riley
Geary
Morris
Chase
PottawatomieJack-son
Wabaun-see
Lyon
Coffey
Osage
Shaw-nee
Doni-phan
Atchison
Jeffer-son
Leavenworth
Doug-las
John-son
Frank-lin
Miami
Ander-son
Linn
Bour-bon
Craw-ford
Chero-kee
AllenWood-son
Neo-sho
Labette
Wilson
Mont-gom-ery
Green-wood
Elk
Chautau-qua
Butler
Cowley
Sedgwick
Sumner
Reno
Kingman
Harper
Stafford
Pratt
Barber
Pawnee
Edwards
Kiowa
Coman-che
Hodgeman
Ford
Clark
Finney
Gray
Meade
Has-kell
Sew-ard
Kearny
Grant
Stevens
Hamilton
Stanton
Morton
Wyandotte
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The uninsured are:◦ Less likely to receive preventive and prenatal care◦ More likely to go without medical care or
prescription drugs due to cost◦ More likely to be diagnosed at later stage of
illness◦ More likely to be hospitalized for avoidable
conditions◦ Less likely to receive recommended care◦ Less healthy◦ Earn less◦ Have higher death rates
What difference does health insurance make?
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900+ pages, 10 titles1. Access to private health insurance2. Expanded Medicaid coverage3. Medicare reform4. Wellness and prevention5. Health care workforce6. Fraud and abuse7. Access to drugs and biologics8. Voluntary long-term care insurance (CLASS)9. Revenue measures10. Manager’s amendment and reconciliation
Affordable Care Act
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Make better health insurance coverage more available and affordable for legal residents
Reform health care delivery and financing to provide better quality and outcomes, more cost effective care
ACA – Intertwined Goals
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What it does◦ Builds on the existing system of coverage
What it doesn’t do◦ Does not create “government-controlled” or
“socialized” health care◦ Does not create “death panels”◦ Does not turn the system over to insurance
companies
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ACA Snapshot
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Seven-Part Solution1. Premium cost controls2. Short-term incentives to increase coverage3. New rules regarding scope of coverage and
consumer protections4. Individual mandate5. Health Insurance Exchanges6. Employer requirements7. Expanded Medicaid
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ACA – Key Features
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Medical loss ratio requirements◦ Insurance companies must spend 80/85 percent
of premiums on medical services and quality improvement
Make available standardized comparable information on available insurance plans◦ http://www.healthcare.gov/
Support to states to create and strengthen insurance rate review
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1. Premium Cost Controls
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Pre-Existing Condition Insurance Plans (PCIP)◦ High risk pools for those uninsured for at least 6
months due to pre-existing condition
Early retiree reinsurance program◦ Federal support to employers who provide
coverage for retirees ages 55-64
Tax incentives for small employers to provide coverage
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2. Short-Term Coverage Expansion
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Patients Bill of Rights◦ Prohibits rescission◦ No lifetime dollar limits
Dependents covered through age 26 No pre-existing condition exclusions for
children Guaranteed Issue and Community Rating:
◦ Nobody can be denied coverage or charged more due to pre-existing conditions (effective January 1, 2014)
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3. Scope of Coverage
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Mechanism to discourage “free-riders” under guaranteed issue◦ Exemptions under certain conditions
Alternatives◦ Employer/union-sponsored plan◦ Individual insurance through an Exchange◦ Public program (Medicare, Medicaid, etc.)
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4. Individual Mandate
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Established by each state by 2014◦ Administered by federal govt if state opts out
For individual and small group markets◦ Expands to larger employers in 2017
Provides web-based one-stop shopping◦ Pooling mechanism for individuals and small
businesses Plans must offer “essential health benefits”
package
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5. Health Insurance Exchanges
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May be used to purchase coverage through Exchange◦ Individuals qualify if household income is up to
400% of FPL◦ Businesses qualify if they meet size and salary
requirements
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5. Health Insurance Exchanges – Tax Credits
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Large employers (50+ employees) that don’t provide coverage may face penalties. ◦ For example:
Employer does not offer minimal essential coverage to full-time employees; and
At least one employee receives government subsidy to purchase insurance in Exchange
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6. Employer Requirements
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By January 1, 2014, Medicaid expands to cover all eligible individuals with income up to 138% FPL
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7. Expanded Medicaid
Household
Size
2012 Annual Federal Poverty Guidelines
(138%)
1 $15,415
2 $20,879
3 $26,344
4 $31,809
5 $37,274
6 $42,739
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Private coverage through Exchanges◦ Approx 16 million non-elderly uninsured◦ Most are employed
Expanded Medicaid◦ Approx 16 million non-elderly uninsured◦ Half have income below 50% FPL◦ One-third diagnosed with chronic condition
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Who Gets Covered?
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365,000 Kansans currently uninsured (13% of population)
Under ACA:◦ About two-thirds will receive insurance coverage
~60% through expansion of Medicaid ~40% through expansion of private insurance
◦ About one-third remain uninsured
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Who Gets Covered in Kansas?
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The Supreme Court Decision
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Is the Medicaid expansion unconstitutionally coercive?◦ Yes – The federal government may not make all
Medicaid funding contingent on expanding the program
◦ So, the federal government has no enforcement authority over the expansion
◦ Therefore, expansion of Medicaid is optional for states
The Medicaid Question
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130-150,000 new beneficiaries◦ Approx 60% of all Kansans covered under the ACA
New Medicaid spending (2014-2019)◦ Federal: ~ $3.5 billion◦ State: ~ $166 million
Other budget impacts
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Medicaid Expansion: Impact on Kansas
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Local impact◦ New revenue for providers◦ Expansion of capacity, services, and jobs
Economic impact Effect of new dollars circulating through state and
local economies
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Medicaid Expansion: Impact on Kansas
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Enhances benefit package◦ Covers annual wellness visit
Reduces out-of-pocket costs◦ No deductibles or coinsurance for preventive
services Benefit used by 300,000+ Kansas beneficiaries in
2011◦ Phases out Part D donut hole
40,000 Kansas beneficiaries received average discount of $600 in 2011
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The ACA and Medicare
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Reduces rate of cost growth◦ Does not “cut” Medicare funding◦ Phases out overpayment to Medicare Advantage
plans◦ Enables provider payment and delivery system
reforms From “volume-based” to “value-based”
◦ Expands fraud and abuse prevention
Extends program solvency
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The ACA and Medicare
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Expansion of home and community-based services
More funding for Aging and Disability Resource Centers (ADRCs)
Programs to enhance quality and patient safety, reduce readmissions
Programs to expand primary care, nursing, geriatric care workforce
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Other ACA Provisions Affecting Seniors
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Medicare payment changes for physicians◦ 10% bonus for PC services furnished by PC
practitioners, 2011-2015◦ Reduce geographic practice expense disparities
Medicaid payment changes for primary care◦ Payment at 100% of Medicare, 2013-14
ACA and Rural Health Workforce
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Expand National Health Services Corps ($1.5 billion over 5 years)
Primary care resident training in RHCs and FQHCs
Financial assistance/grants for:◦ Dental students likely to work in rural areas◦ Mid-career training for public and allied health◦ Schools training mental health providers likely to
serve high needs populations◦ Family nurse practitioner training programs◦ Expansion of nursing student loan program
ACA and Rural Health Workforce
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November 6, 2012◦ If not the ACA, then what?
Establish Health Insurance Exchange?◦ State, federal, or partnership
Medicaid expansion?
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Where do we go from here?
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Sheldon Weisgrau, DirectorHealth Reform Resource Project1129 S. Kansas Avenue, Suite BTopeka, KS [email protected]
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Additional information