The Affordable Care Act: The Short and Longer Term Implications for Oral Health

1. The Affordable Care Act: The Short and Longer Term Implications for Oral Health Peter C. Damiano Professor and Director Public Policy Center University of Iowa Institute for Oral Health Conference September 13, 2013

2. Today’s Topics • What’s driving health reform discussion • The Patient Protection and Affordable Care Act (ACA) • Already enacted • Implementation issues for 2014 • Issues facing Dentistry and Oral Health • Discussion

3. Our current political environment and the need for information

4. Why Reform Health Care in US • Cost • Access to Care • Quality

5. What do we spend on health care in US? • $500 Billion • $1 Trillion • $3 Trillion • $10 Trillion • 1/3 waste* • Average cost-$8086/person • 4 times 1990 spending • 10 times 1980 spending • *IOM Study: Best care at lower cost, September 2012

6. Health Care Costs Average spending on health per capita ($US )

7. Access (insurance coverage) • 50 million uninsured (16.3%) • Up 13 million in past 10 years • 25 million underinsured • Among insured • 55% have employer based insurance (from 64% in 1999) • 15% Medicare • 16% Medicaid

8. Uninsured by income in US • Uninsured > one year: • 41% of lower income • 4% of higher income

9. Average Premium Contributions at Higher- and Lower-Wage Firms, 2012 Worker Premium Contribution Employer Premium Contribution Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2012.

10. The Patient Protection and Affordable Care Act (PPACA) • Signed into law March 2010 • Emphasis on: • Individual insurance market • Small business insurance market • Few implications for large employer-sponsored insurance • Already self-insured

11. How the ACA feels to most

12. Market-based reform • Right of center approach to reform: • Similar to proposals by Richard Nixon, Robert Dole and Mitt Romney • Left of center approach: single payer • Majority private insurance expansion • Especially states without Medicaid expansion

13. How bad is the problem?

14. Cost of reform • Total cost: $940 billion first ten years • Impact on deficit: $124 Billion in reductions in the deficit first ten years $1.2 Trillion second ten years Source: Congressional Budget Office, March 2010

15. Cost of reform • Impact on Medicare/SS solvency: • Extend Medicare trust fund solvency 12 years (2017 to 2029) • higher payroll taxes (0.9%) on those making over $200,000 • lower hospital payment rates • SS improved by taxing highest benefit plans in 2018 Source: Medicare and Social Security Trustee Report, August 2010

16. Financing of ACA • Tanning tax (2010) • 10% on indoor tans • Non-profit hospitals must conduct community needs assessment and develop a financial assistance policy • Can oral health be included? • Reduced deductions for OTC drugs for Flex or Health Saving Accounts (2011) • Reduced deductions for non-medical distributions from Flex or Health Saving Accounts (2011)

17. Financing of ACA • Medicare payroll tax on investments (2012) • 3.8% on investment income for families >$250,000 • Medical device tax (2013) • 2.3% of sale price • Health insurance Co. net premium tax (2014) • Estimated to add about 2% to insurance company costs per policy-increase over time to 3.5% • Excise tax on investments (2019) • 40% on “Cadillac” plans

18. Net 25 million more insured Decline of 32 million estimated in 2010 31 million will remain uninsured Some shifting from employer-sponsored Coverage in new plan 24 million Source: CBO report to Congress, May 2013

19. ACA Policies Already in Place Over 50 components of reform enacted thus far

20. Policies in place (2010) • Coverage of children up at age 26 on parent’s policies • Development of state/federal high risk pools • Elimination of pre-existing conditions for children • Free preventive service coverage for all new health plans

21. Policies in place (2010) • Insurance companies prohibited from • Rescinding coverage because of illness • Imposing yearly and lifetime caps on coverage • Small-business tax credits: up to 35% of premiums for 2 years • Fewer than 25 employees and average wages under $50,000)

22. Policies in place (2010) • Establish process for reviewing health plan premium increases and justify increases. • Require states to report on trends in premium increases and recommend if plans should be excluded from Exchange based on unjustified premium increases.

23. Policies in place (2011) • Prevention and Public Health fund established ($15 billion) • Infrastructure support for community health centers • Medicare prescription drug 50% discount • Free preventive care for seniors in Medicare • Medical loss ration begins (85% on services) • Reduce payment for Medicare Advantage

24. Policies in place (2012) • Accountable Care Organizations begin in Medicare • Spread to privately insured and Medicaid in some states • Free preventive care coverage for women’s health

25. ACA: 2014 and Beyond

26. Next policies (2014) • Individual mandate begins. • Affects 6% of population (Urban Institute study) • Most of whom want coverage • Medicaid expansion begins in select states • Eliminates categorical eligibility • Health insurance Marketplaces begin in all states • Some state, some partnership, some Federal

27. Eligibility for Children* • Medicaid • up to 138% of FPL • Children’s Health Insurance Program • 139-300% FPL • Health Insurance Marketplace • 300-400% of FPL • Traditional insurance market • >400% FPL *Should not change much with ACA expansion

28. Eligibility for Adults w/Expansion* • Medicaid (all-eliminates categorical eligibility) • Up to 133% FPL • Health Insurance Marketplace • 134-400% of FPL • Traditional insurance market • >400% FPL *Adults are defined as age 19-64

29. Medicaid Expansion by State:Welcome mat affect and newly eligible populations As of July 1, 2013 Source: kff.org

30. Health Benefits Marketplaces • On-line health insurance marketplace • e-insurance like • Offer regulated qualified health plans (QHPs) that meet state regulated standards • Require two multi-state plans in each Marketplace (e.g., federal employee plans) • Not clear how this will work in Iowa • At least one plan must be offered by a non-profit entity

31. Who is likely to be in Marketplace? • Uninsured • Those with inconsistent coverage from employers or employers who drop coverage • Some existing Medicaid eligibles may become eligible for Marketplace (or vice-versa) • New way to calculate Medicaid eligibility based on tax return • Modified Adjusted Gross Income (MAGI)

32. Types of models for marketplace • State based • Federal facilitated • Partnership

33. Types of models for marketplace Source: Pew states.org

34. Small Business Health Options Program: SHOP • On-line Marketplace for small businesses • Should provide lower cost, standardized options for businesses under 50 employees • No mandate to provide coverage but would gain buying power • Employers only have to offer one plan but can allow more options in states marketplaces (not federal yet) • Can work with current brokers to select plan or choose one on their own

35. Plans in Marketplace

36. Qualified Health Plans (QFPs) • In good standing in a state • Offer at least one gold and one silver level plan • Cost must be same through Marketplace or outside • Numbers of plans varies by state • Largest plan may not be participating

37. Levels of coverage* *Proportion of all costs paid by plan on average

38. Costs of plans in Marketplace Big question and will vary by state/plan richness • 100-200% FPL • $1,983/individual and $3,967/family; • 200-300% FPL • $2,975/individual and $5,950/family; • 300-400% FPL • $3,987/individual and $7,973/family • Limit on out-of-pocket costs, (w/ deductibles and co-payments) not to exceed $6,350 for an individual and $12,700 for a family • Delayed until 2015

39. Essential Benefits Package Includes: • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental health and substance use disorder services, • Prescription drugs • Rehabilitative and habilitative services and devices • Laboratory services • Preventive and wellness services and chronic disease management, and • Pediatric services, including oral and vision care

40. Consumer attitudes about selecting plans* For those most likely to use Marketplace: • Current coverage and access worse • Much less aware/knowledgeable about ACA and marketplace • Similarly supportive of ACA components • Cost most important factor in choosing plans • Need help with choice • Not as comfortable with on-line system • Prefer one-on-one help *Recent UI PPC study with 500 Iowans

41. Navigators (Federal) • Assist with the selection of Marketplace plans • 105 groups received federal support • Funding based on number of uninsured in state • FQHCs also received funding for this • Will help consumers • apply for coverage, • answer questions about coverage options • help them select option best for them • 20-30 hour training, pass exam

42. Certified application counselors (CACs) • CMS designation via application process • -Hosp, CHCs, MH prov, non profits, libraries, local health Depts • -marketplace.cms.gov no www had info • -also champions for coverage to provide help • -Can apply now and complete training • -5 hrs plus 2-3 hrs of state training

43. Health status of new enrollees • Most new enrollees will be relatively health IF adverse selection does not occur • Young, healthy adults select plans outside of Health Insurance Marketplace • About one-sixth of uninsured have multiple chronic conditions including significant oral health problems

44. IowaCare Program • For uninsured adults up to 200% FPL • Limited provider network, limited benefits • No dental coverage • 70,000 but phasing out by end of 2013 • Very low health status (self-reported)* • 3 or more chronic conditions–60% • Physical health fair or poor–40% • Mental health fair or poor–34% • High unmet need for mental health, oral health, prescription medications *From UI PPC study about IowaCare program, 2013

45. IowaCare Chronic health conditions* *Self-report, 2013 survey UIPPC Study

46. Oral health status

47. What about Dentistry:Near Term Issues

48. Medicaid Dental Expansion • 13 million new enrollees • Children (under 19)- • All will gain comprehensive dental coverage • Most from woodwork affect • Adults • Only states with adult dental benefits will gain coverage • Some looking at options that could be related to ACO development

49. Dental Coverage in Health Insurance Marketplace Children • Essential Health Benefit (EHB)-required • 3 million could gain coverage (ADA) • Most stand alone dental plans • Must be offered-not purchased in federal marketplace • Procedures covered-based on state benchmark • Separate out of pocket maximum (~$1000) from medical policies • Medically necessary orthodontia

50. Dental in Health Benefit Marketplaces Adults • Not an essential benefit • Stand alone private dental insurance policies available for purchase from Marketplaces