Aca presentation on exchanges

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  • 1.The Affordable Care Act and You How to Navigate the New Healthcare Landscape

2. Sponsored by SMARTvt and Presented by Jean S. Twombly Member Academy Health Consulting Partner with PCResourcesVT.com 3. A C A How do I get better health coverage? Can I get a subsidy? When is open enrollment? Will I pay a penalty if I dont buy coverage? My employers plan costs too much. I need a break. 4. ACA Fast Facts 5. 5 The ACA is short for the Patient Protection and Affordable Care Act It was passed into law on March 23, 2010. Many people who purchased healthcare plans after that date are affected by the PPACA Individual Mandate and will need to enroll in an ACA Compliant insurance plan in 2014. ACA Fast Facts Many individuals and families with incomes between 133- 400% of the Federal Poverty Level qualify for a subsidy to help pay for health insurance. Subsidies can only be obtained by enrolling On Exchange. States are mandated to furnish residents access to an Exchange, a health insurance marketplace. Open Enrollment for ACA health plans begins October 1, 2013. 6. 6 All new ACA compliant plans are mandated to furnish the following ten essential benefits. Prescription Drug Coverage Hospitalization Emergency Care Laboratory Services Ambulatory Patient Services Mental Health and Substance Abuse Benefits Pediatric Dental and Vision Services Maternity Services Wellness and Preventive Care Habilitative and Rehabilitative Benefits Insurance carriers have reworked both plans and rates to comply with the mandate. The State and Federal healthcare marketplaces are designed to foster competition among plans and to facilitate comparison between plans which are similarly priced. ACA Plans are ranked by actuarial value and are grouped by metal level: Platinum, Gold, Silver, and Bronze. ACA Ten Essential Benefits 7. 7 ACA Plan Metal Levels Plans with higher monthly premiums offer the benefit of lower coinsurance when care is received. Plans with lower monthly premiums have higher deductibles, coinsurance, copays and out-of-pocket maximums. The insured can choose a plan which fits the anticipated use of the healthcare system. 8. 8 ACA Plan Actuarial Values Each ACA plan must meet the following actuarial values with a variance of +/- 2%. Platinum = 90% AV Gold = 80% AV Silver = 70% AV Bronze = 60% AV Actuarial values are based on standard EHB costs and population measurements. This means that a plan with 70% AV pays approximately 70% of the cost of healthcare. The insured will be responsible for the 30% remainder. 9. Healthcare Plan Subsidies 10. 10 The Individual Mandate also requires the Federal government to provide subsidies to make health insurance affordable for low and middle income individuals and families. A new Federal Data Hub will determine subsidy eligibility based on income as % of Federal Poverty Level (FPL). Beginning in 2014, applicants seeking coverage on-exchange may qualify for two types of subsidies: Individuals and families with incomes between 100-250% of the FPL qualify for BOTH the Cost-Sharing Reduction subsidy and the Advance Premium Tax Credit. Exchange Subsidy Overview Advance Premium Tax Credit (APTC) Applicants who qualify for the APTC will owe a reduced premium. The Federal Government will advance the difference in premium amounts to the carriers monthly. Cost-Sharing Reductions (CSR) Applicants who qualify for CSR will be enrolled in a specific plan with reduced cost-sharing. Federal Government will advance an estimated cost-sharing reduction monthly. e Premium Tax Credit. 11. 11 Income Guidelines for Subsidies The amount of subsidy depends on family size and income level. In general, applicants at the following income levels will qualify to save in 2014*. The lower the income, the greater the savings. If the expected 2014 income you report is too high, you might not get the correct amount of savings. If you make more money than predicted, you might have to repay some or all of the subsidy amount on the next tax return. Family of Income level Family of Income Level 1 $45,960 5 $110,280 2 $62,040 6 $126,360 3 $78,120 7 $142,440 4 $94,200 8 $158,520 12. 12 Subsidy Calculator The Kaiser Family Foundation subsidy calculator prompts individuals to enter the following information: o Income o Whether employer coverage is available o Family size o Ages of applicants Applicants then receive an estimate of the subsidies they are eligible for and expected health insurance costs. 13. 13 APTC Premium Subsidy Details Availability: Available to individuals/families with incomes between 133% and 400% of FPL . Vermont has expanded Medicaid up to 133% of federal poverty level. The APTC subsidy is calculated as a premium cap based on income level. Eligibility: No employer coverage or Employer coverage either Does not have an actuarial value of 60% or more The cost of the coverage would exceed 9.5% of income. Income Level Premium Cap as % of Income Income Level Premium Cap as % of Income < 133% of FPL Medicaid 201-250% FPL 6.3-8.05% of income 133% -150% FPL 3-4% of income 251-300% FPL 8.05-9.5% of income 151-200% FPL 4-6.3% of income 301-400% FPL 9.5% of income Note: In 2013 the Federal Poverty Limit is $11,490 for an individual and $23,550 for a family of four. 14. 14 APTC Computation Example The subsidy is tied to the premium of the average of plan choices the Silver Plan. The subsidy calculator on the Exchange computes the APTC, applying a premium cap as a % of household income. For Example: John is an individual with household income at 275% FPL. Premium cap for a taxpayer at 275% FPL is 8.775% (halfway between 8.05% and 9.5%) In our example, a 275% FPL equals a monthly income of $2,560 for a household of one Note: The FPL is updated annually, and will likely be different in 2014. The chart for 2013 can be found at http://www.familiesusa.org/resources/tools-for-advocates/guides/federal-poverty-guidelines.html Income Level Premium Cap as a % of Income < 133% FPL* Medicaid 133%-150% FPL 3-4% of income 151-200% FPL 4-6.3% of income 201-250% FPL 6.3-8.05% of income 251-300% FPL 8.05-9.5% of income 301-400% FPL 9.5% of income > 400% FPL No subsidies 15. 15 APTC Computation Example continued If the Silver Plan costs $384/month and John has a monthly income of $2,560 : His premium subsidy equals the difference between plan cost and $224.64 [8.775% x $2,560 monthly income] Individuals may select any plan and still receive the tax credit. The amount of the tax credit may not exceed the plan premium. Since John is eligible for a $159.36/month tax credit: If he selects a less expensive plan with a cost of $150/month, John can only receive a tax credit of $150/month If he selects a more expensive plan with a cost of $500/month, he will owe $340.64 monthly: Tax credit: $384 minus $224.64 = $159.36/month His plan cost: $500 minus $159.36 = $340.64/month 16. 16 CSR Cost Sharing Reductions Available to families and individuals o With incomes up to 250% FPL AND o Enrolled in a Silver plan on the Exchange Cost-sharing reductions include lowered deductibles, coinsurance and copayments. Carriers must create three variations of the basic silver metal plan essentially increasing the actuarial value by decreasing cost sharing to accommodate the cost sharing bands by FPL. There are three CSR bands: o Medicaid-eligible to 150% of FPL o 151 to 200% of FPL o 201 to 250% of FPL If FPL changes during the year, cost sharing reductions must be updated. 17. 17 MVP Healthcare Silver Base Plan (.70 AV) Deductible: $1,300 OOP Max: $6,350 Copay: $30 PCP / $40 Specialist after deductible Coinsurance: 20% after deductible Rx: Integrated Medical/Drug Deductible. All Generics: 20% after deductible. Preferred Brand: 30% after deductible. Non-Preferred Brand: 50% after deductible. Specialty: 50% after deductible Example of a Silver Metal Base Plan 18. 18 Silver Base Plan (.70 AV) Deductible: $1,300 OOP Max: $6,350 Copay: $30 PCP / $40 Specialist after deductible Coinsurance: 20% after deductible Rx: Integrated Medical/Drug Deductible. All Generics: 20% after deductible. Preferred Brand: 30% after deductible. Non-Preferred Brand: 50% after deductible. Specialty: 50% after deductible 201%-250% FPL (.73 AV) Deductible: $900 OOP Max: $5,200 Copay: $30 PCP / $40 Specialist after deductible Coinsurance: 20% after deductible Rx: Integrated Medical/Drug Deductible All Generics: 20% after deductible Preferred Brand: 30% after deductible Non-Preferred Brand: 50% after deductible Specialty: 50% after deductible 151%-200% FPL (.87 AV) Deductible: $0 OOP Max: $2,250 Copay: $5 PCP / $ 25 Specialist copay Coinsurance: 20% Rx: All Generics: 10% coinsurance Preferred Brand: 30% coinsurance Non-Preferred Brand: 50% coins Specialty: 50% coinsurance 100%-150% FPL (.94 AV) Deductible: $0 OOP Max: $2,250 Copay: $0 PCP / $10 Specialist copay Coinsurance: 10% Rx: All Generics: No charge Preferred Brand: 10% coinsurance Non-Preferred Brand: 20% coinsurance Specialty: 20% coinsurance Silver Plan Cost Sharing 19. The Federal Data Hub and Penalties for the Uninsured 20. 20 The Federal Data Hub HHS Homeland Security SSA IRS CMS Treasury 21. 21 The IRS and Treasury will manage the Advance Premium Tax Credit Subsidy which will be based on the applicants Modified Adjusted Gross Income (MAGI). The APTC Subsidy will be sent by the U.S. Treasury Department to insurance carriers to fulfill premium payments each month. Any changes in income will be reconciled with the insured when filing the following years taxes. Health and Human Services (HHS) will manage the Federal Data Hub and the Federally Facilitated Exchange (FFE). Who Manages Subsidies and the Hub? HHS will also manage the Cost-Sharing Reducation Subsidy. Once a member has enrolled in a new plan and is eligible for a subsidy, the insurance carrier will be sent a monthly subsidy amount. Note that Vermont has expanded Medica