Health Care Reform: How Will it Change the Delivery System?

1. SOUTH CAROLINA HOSPITAL ASSOCIATION Health Care Reform:How Will it Change the Delivery System? 4/1/2010

2. Evolution of U.S. Health Care Policy • Our system is the result of several major policy decisions rather than one, unified health care policy. • Employer-based coverage • Government-sponsored coverage • EMTALA

3. Employer-Based Coverage • During WWII, wage controls by the federal government led employers to offer health insurance instead of raising wages.

4. Medicare & Medicaid • To cover the elderly and some of the very poor, the federal government enacted Medicare & Medicaid in mid 1960s.

5. EMTALA • The Emergency Medical Treatment and Active Labor Act (EMTALA) of 1986 requires hospitals to screen and stabilize (treat) each and every patient who comes to the hospital ED seeking care.

6. Patient Protection and Affordable Care Act • On March 23, 2010, the Patient Protection and Affordable Care Act was signed into law.

8. “Everyone is entitled to his own opinion, but not his own facts.” Senator Daniel Patrick Moynihan

9. Provisions Affecting Consumers

10. Provisions Going Into Effect in 2010 • Temporary high risk pool for persons with pre-existing conditions and non-Medicare eligible retirees over 55 • Transitional rebates to fill “doughnut hole” • First round of insurance reforms 2010

11. First Round of Insurance Reforms • No cancellation of coverage when an insured person becomes sick • No denial of coverage for children with pre-existing conditions • Young adults up to age 26 may remain on parents’ policies • No lifetime limits on coverage 2010

12. Provisions Going into Effect in 2014 • Premium assistance and subsidies for consumers • Health insurance exchanges • Essential health benefits • Medicaid expansion • Additional insurance reforms • Individual mandate 2014

13. Health Insurance Exchange Self Employed Links buyers and sellers of insurance Small Business Uninsured (Not eligible for Medicaid/CHIP) Others Insurance “Exchange” or “Connector” Private Plan Private Plan Private Plan Private Plan

14. Medicaid Expansion • By 2014, states must extend Medicaid eligibility to all legal residents up to 133% of poverty and under 65 years old. • 133% FPL is $14,404 for individual and $29,327 for family of 4. • Feds will cover 100% of states’ costs from 2014-2016 and the following portions after 2016: 2017 – 95% 2018 – 94% 2019 – 93% Beyond – 90% 2014

15. Additional Insurance Reforms • No annual limits on coverage • No denial of coverage for adults with pre-existing conditions • No higher premium based on gender or medical history • Insurers required to report share of premium income spent on medical care • Limits on out-of-pocket costs 2014

16. Individual Mandate • Beginning Jan. 1, 2014, US citizens and legal immigrants must have coverage or pay a penalty when they file their federal tax returns. • Individual penalties $95 per person in 2014 $325 per person in 2015 $695 per person in 2016 • Household penalties 1% of household income in 2014 2% of household income in 2015 2.5% of household income in 2016 *Exemptions for hardship 2014

17. Provisions Affecting Hospitals and Physicians

18. Beginning 2011 • Prohibits federal payments to states for Medicaid services related to health care acquired conditions (2011) • Creates new Medicaid medical home option for enrollees with chronic conditions (2011) • Provides 10% Medicare bonus to primary care physicians and general surgeons in shortage areas (2011-2015)

19. Beginning 2012 • Medicare and Medicaid bundling pilots (2012-2016) • Establishes voluntary, national pilot program allowing groups of providers to be recognized as Accountable Care Organizations (ACOs) (2012)

20. Beginning 2013 • Increases Medicaid payments to primary care physicians to 100% of Medicare rates (2013-2014) • Reduces Medicare payment for excess readmissions (2013) • Establishes Independent Payment Advisory Board (IPAB) to submit proposals to reduce Medicare spending (2014) • Requires penalties and public reporting on healthcare-acquired conditions for Medicare patients (2015)

22. SOUTH CAROLINA HOSPITAL ASSOCIATION Health Care Reform For more information: www.scha.org/advocacy/health-care-reform 4/1/2010