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The Affordable Care Act 2013 Update

The Affordable Care Act 2013 Update

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The Affordable Care Act 2013 Update

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  1. The Affordable Care Act 2013 Update This publication has been created by the Area Agency on Aging, Region One with Financial assistance, in whole or in part, Through a grant from the Center for Medicare and Medicaid Services.

  2. The Affordable Care Act • The Patient & Protection Affordable Care Act (PPACA) passed in 2010 has provisions that take effect each year until 2020. • The PPACA affects Medicare, Medicaid, Private and Group Health Insurance, and mandates the availability of affordable health insurance to all Americans beginning in 2014

  3. Helpful Acronyms • ACA – Affordable Care Act (short for the PPACA) • CMS – Centers for Medicare and Medicaid Services • FPL – Federal Poverty Level (annual levels announced every February)

  4. The ACA and Medicare • In general, the ACA will restructure payments made by Medicare with a combination of reductions in some areas, increases in others, as well as a combination of financial incentives and penalties based quality performance

  5. The ACA and Medicare the ACA will restructure payments made by Medicare to a “value-based” payment system measured by the health of patients versus a “volume-based” payment system measured by the number of services provided

  6. 2013 Part D Drug Costs • In 2013 the cost of prescription drugs to Medicare beneficiaries in the donut hole will continue to reduce • In 2013 beneficiaries will pay 47.5% for brand-name drugs, and 79% for generic drugs in the donut hole

  7. The ACA & Part D Drug Costs • Part D drug co-insurance continues to gradually reduce for beneficiaries until 2020 when the donut hold goes away • In 2020 the donut hole coverage period will effectively become an extended initial coverage period where the costs of all drugs is 25% of the total drug cost

  8. Hospital Reimbursements • Reduces or eliminates payments to hospitals for preventable and excessive hospital re-admissions effective October, 2012 • Reduces Medicare payments to certain hospitals for hospital-acquired conditions by 1% beginning in 2015

  9. Primary Care Physicians • Increases reimbursement rates to primary care physicians beginning in 2013 • Provides for financial incentives to doctors for keeping patients healthy based on standardized criteria

  10. Medicare Accountable Care Organizations • The ACA has selected medical networks as designated Accountable Care Organizations (ACO’s) • The ACO’s provide coordinated care through a network of primary care and specialty providers

  11. Medicare Accountable Care Organizations • Accountable Care Organizations (ACO’s) are selectively available in some areas to Original Medicare beneficiaries • ACO’s are not HMO’s, and members have the same flexibility as all Original Medicare beneficiaries

  12. Medicare Electronic Health Records • The ACA imposes penalties on medical providers not showing “meaningful use” toward the implementation of electronic health records beginning in 2015 • Electronic Health Records (EHR) are envisioned as key to coordinated care

  13. Medicare Demonstration Projects • Various demonstration projects (pilot projects) are being established to provide better care to beneficiaries and save costs • Care Transitions demonstration projects • DMEPOS Competitive Bidding in Maricopa and Pima Counties on 7-1-13

  14. Medicare Fraud & Abuse • The ACA’s ongoing effort to prevent Medicare fraud and abuse continues with enhanced fraud detection capabilities • Senior Medicare Patrol programs empower beneficiaries to be watchful for fraud and abuse

  15. Medicare Advantage Plans • Payments to Medicare Advantage Plans are gradually reduced between 2012 and 2016 to be more in-line with average fee-for-service payments • 85% of plan expenditures must go toward members care to avoid penalties

  16. Medigap Review Under the ACA • The ACA requires the NAIC to review Plans C and F for potential revision to include “nominal cost-sharing to encourage the use of appropriate physician services under (Medicare) Part B.” The new benefit standards are to be made available beginning January 2015

  17. Independent Payment Advisory Board • Establishes a 15-member independent review board to reduce the per capita rate of growth of Medicare spending • The Board will regularly review expenditures and make recommendations to achieve reductions in payments beginning in 2015

  18. Medicaid Expansion • States are permitted to opt into Medicaid expansion beginning in 2014 • Medicaid would effectively be available to all U.S. citizens and legal, permanent residents with income below 138% (133% + 5%) of the Federal Poverty Level

  19. Arizona & Medicaid Expansion • Arizona has passed legislation to fully participate in Medicaid Expansion. Beginning in 2014 the Expansion goes into effect. • Health Insurance Exchanges that begin in 2014 can only offer the premium subsidies to residents with more than 100% of FPL

  20. Health Insurance Marketplace • The ACA mandates that states either establish their own health insurance exchanges by October 1, 2013 or use the federal exchanges • The health insurance marketplace will offer citizens and legal residents affordable health care options regardless of pre-existing conditions

  21. Arizona’s Marketplace • Arizona has decided not to establish its own exchange, as have 30 other states • Arizona’s exchange will be established and operated by the Federal Government • Administration by CMS, and will be available to consumers on 10/1/13

  22. Eligibility • Citizens and legal residents • Premium subsidies are available to individuals and families with income less than 400% of FPL • Employees offered coverage by their employer are not eligible for premium credits

  23. Individual Premium Limits • Premium payment limits based on income • 100-133% FPL: 2% of income • 133-150% FPL: 3-4% of income • 150-200% FPL: 4-6.3% of income • 200-250% FPL: 6.3-8.05% of income • 250-300% FPL: 8.05-9.5% of income • 300-400% FPL: 9.5% of income

  24. Income Examples • For a single person (annual income • 100% of FPL = $11,490; 400% of FPL = $45,960 • For a couple (annual income) • 100% of FPL = $15,510; 400% of FPL = $62,040 • For a family of four (annual income) • 100% of FPL = $23,550; 400% of FPL = $94,200

  25. Essential Benefits Package • Creates an essential health benefits package that provides a comprehensive set of services • Coverage for at least 60% of health costs • Limits annual cost-sharing to the HSA limits ($5,950/individual and $11,900/family); lower limits for those with income less than 250% FPL

  26. Benefit Tiers • Bronze Plan pays 60% of costs • Silver Plan pays 70% of costs • Gold Plan pays 80% of costs • Platinum Plan pays 90% of costs • All Plans must provide essential benefits

  27. The Individual Mandate • Requires U.S. Citizens and Legal Residents to have qualifying health coverage beginning in 2014 • Those without coverage face tax penalties beginning in 2014 if not covered

  28. The Individual Mandate • 2014 penalty is $95 or 1% of taxable income, whichever is greater • 2015 penalty is $325 or 2% of taxable income, whichever is greater • 2016 penalty is $695 or 2.5% of taxable income, whichever is greater

  29. The Individual Mandate • Exemptions to the tax penalties are available for financial hardship, religious objections, American Indians, those without coverage for less than 3 months, undocumented immigrants, and incarcerated individuals

  30. Assisters and Navigators • The ACA requires that Assisters be available in 2013 to facilitate people shopping for new health insurance • The ACA requires Navigators in 2013 and beyond to help people shopping for insurance on the exchange

  31. Private & Group Health Insurance • The ACA bans annual or lifetime limits on the cost of care • The ACA mandates preventive health services without a co-pay • The ACA requires that 85% of insurance revenue be spent on healthcare, and that shortfalls be refunded to members

  32. Private & Group Health Insurance • Requires dependent coverage for children up to age 26 • Prevents denials or increased premiums due to pre-existing conditions, and limits waiting periods to 90 days

  33. Employer Requirements • Assess employers with 50 or more FT employees that do not offer group coverage, and have at least one FT employee who receives a premium tax credit, a fee of $2,000 per FT employee (excluding first 30 employees) • This provision has been delayed to 2015

  34. Employer Requirements • Employers with 50 or more FT employees that offer coverage, but have at least one FT employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium tax credit or $2,000 for each FT employee (excluding first 30 employees) • This provision has been delayed to 2015

  35. Employer Requirements • Employers with more than 200 employees are required to automatically enroll employees into employer sponsored group health insurance coverage • Employees may opt out • This provision has been delayed to 2015

  36. Small Business Tax Credits • Employers with 25 or less employees and average annual wages of less than $50,000 that offer their employees group health coverage are eligible for business tax credits

  37. ACA Information Resources Marketplace 1-800-318-2596