“The ACA Miasma”

1. “The ACA Miasma” • This session is being recorded and will be posted at www.TheBrokerageInc.com • The phone lines have been muted • You may ask questions by typing them in the right side tool bar area • You will receive a follow up email with references to the subject matter and a link to the recorded webinar • You must check in during the webinar to receive one hour credit • This is a Texas based CE course only; no other states will receive CE. • You must be on the webinar for at least 50 minutes or you will not receive a CE certificate.

2. The ACA Miasma Where have we been? What just happened? But where are we going? Presented by Mike Smith, SGS, LTCP, President of The Brokerage, Inc.

3. Miasma defined 1:  a vaporous exhalation formerly believed to cause disease; also:  a heavy vaporous emanation or atmosphere <a miasma of tobacco smoke> 2:an influence or atmosphere that tends to deplete or corrupt  <freed from the miasma of poverty — Sir Arthur Bryant>; also:  an atmosphere that obscures :fog • Miasmal məl\ adjective • Miasmatic mī-əz-ˈma-tik\ adjective • Miasmic mī-ˈaz-mik, mē-\ adjective • Miasmicallymi-k(ə-)lē\ adverb

4. Has there been anything “affordable” about the “Affordable Care Act”? Or was this law written with other intentions?

6. Quote from Ways and Means Committee Chair, Rep. Kevin Brady (R-TX) July 12, 2016: "Over six years have passed since President Obama and Democrats in Congress drafted the Affordable Care Act behind closed doors and forced it into our homes, workplaces, and doctors offices. Since then, the law has been one broken promise after another – starting with the promise in its very title: ‘Affordable.’ Millions of Americans have seen the cost of health care increase to astonishing levels while quality, choice, and access have hit new lows."   The truth about this law is that it has never expanded access to affordable, high-quality health care of an individual's choosing – and it never will."

8. Nothing “Affordable” in the ACA • The United States spent a total of $3 trillion on health care in 2014 • 17.5% of gross domestic product • The Medicare forecasters estimate overall national expenditures increased 5.5 percent in 2015, to $3.2 trillion • 17.8% of 2015 GDP • By 2019, the forecasters see spending increasing to a total of about $4 trillion, or 18.5% of GDP • By 2025, $5.6 trillion • 20.1% of GDP • http://www.lifehealthpro.com/2016/07/13/medicare-forecasters-update-expenditure-projection?eNL=5786aae3140ba030055d9287&utm_source=LHPro_Daily&utm_medium=EMC-Email_editorial&utm_campaign=07142016

11. Lame Duck President Agenda for Burwell • With only three months left in the president’s term, Obama wants to use his remaining time in office to make medicine more efficient and less expensive, and Burwell is the point person to get that done • Burwell says she’s going to work to keep the changes rolling • She’s also eager to tout the progress already made, such as nearly half a billion dollars in Medicare savings recorded from 2009 to 2014 http://www.politico.com/agenda/story/2016/07/sylvia-mathews-burwell-obamacare-000152#ixzz4EZt9DQbl

12. Where are we now? https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-07-12.html

13. Carrier Checkup • Anthem, a large insurer, said it would expand its presence in the ACA exchanges — the Obamacare exchanges — but only if its merger with Cigna is allowed to go through • Covered California announced that premiums would rise by an average of 13.2 percent on its exchanges, after years of being one of the standouts for low premium growth • Now, the U.S. Department of Justice has sued to block Aetna's efforts to acquire Louisville, Kentucky-based Humana • Rumors are that Aetna will shrink their QHP footprint in 2017

14. According to CMS: • Employers appear to be adapting to the Affordable Care Act (ACA) and, despite the new mandates, are spending less on health insurance per employee than they have in the past, according to new research (really?) • Employee eligibility rates have risen since January, 2014, when the major provisions of the ACA began phasing in, but employee participation levels have held steady, helping employers to limit their overall health spend (really?)

15. Employee participation in group health is up

16. Mergers or not? More Miasma… • Aetna / Humana (and then Molina enters the picture…) • Anthem / Cigna

18. ACA in 2016: 10 changes to the Affordable Care Act • Full implementation of the Employer Mandate • 2015 coverage requirements: • Businesses with 100 or more FTEs (full-time equivalents) had to offer at least 70% of full time employees insurance to avoid penalties • 2016 changes to coverage requirements: • Businesses with at least 50 FTEs must offer at least 95% of the FTEs insurance to avoid penalties

19. ACA in 2016: 10 changes to the Affordable Care Act 2. Reporting requirements and penalties IRS has offered some relief for the 2015 reporting forms (due in 2016) Penalties will not be imposed on a filer for reporting incorrect or incomplete information if the filer can show that it made good-faith efforts to comply with the information reporting requirements for 2015

20. ACA in 2016: 10 changes to the Affordable Care Act 3. Small Business Health Option Program (SHOP) • Size of eligible companies would continue to apply to employers with one to 50 employees, rather than changing to one to 100 employees as of 2016 as provided in the original ACA • 70% of employees must accept the offer of SHOP coverage or be enrolled in other types of coverage for the company to participate • Beginning in 2016, employers may offer their employees one of three options through SHOP: • Health coverage only • Dental coverage only • Both health and dental coverage

21. ACA in 2016: 10 changes to the Affordable Care Act 4. Delay in Cadillac tax until 2020 The 2016 Consolidated Appropriations Act imposed yet another delay in implementation of the Cadillac tax, which was originally scheduled to take effect in 2013. This implementation was delayed until 2018 but now is delayed until January 1, 2020.

22. ACA in 2016: 10 changes to the Affordable Care Act 5. Menu-labeling requirements delay The rules will begin to be enforced by the FDA on May 5, 2017, one year after the date of publication of this final guidance notice in the Federal Register (81 FR 27067, May 5, 2016). 6. Repeal of automatic health care enrollment (Applies to ALE with 200 or more employees.) This provision had been postponed since December 2010 through a Department of Labor FAQ detailing that employers were not required to comply with automatic enrollment until the implementing regulations were issued

23. ACA in 2016: 10 changes to the Affordable Care Act 7. Medical device tax moratorium The tax is now slated to take effect on devices sold on or after January 1, 2018, but will be under further analysis and review during this suspension period. 8. Health insurance tax moratorium This tax moratorium has been imposed by the Consolidated Appropriations Act — for 2017, on the collection of the annual health insurance provider fee which has been in effect since 2013.  This was a tax imposed on the health insurance providers but passed through to the consumer through premiums. It is anticipated that this could lower premiums by 1 to 3 percent

24. ACA in 2016: 10 changes to the Affordable Care Act 9. Individual tax penalties In 2016, it is the higher of these amounts: • 2.5 percent of annual household income above the tax filing threshold to a cap of the national average bronze plan premium, OR; • $695/adult and $347.50/child under 18 to a maximum penalty of $2,085 per family.

25. Remember: The IRS PPACA implementers didn't write PPACA http://www.lifehealthpro.com/2016/06/06/ppaca-employer-mandate-may-start-two-step-fights?slreturn=1468679302&t=employee-benefits&page=4

26. ACA in 2016: 10 changes to the Affordable Care Act 10. Premium rate changes for 2016 The Kaiser Family Foundation analysis of silver plans in major cities in 13 states showed the following average rate increases from 2015 to 2016: • 4.1 percent – the second lowest cost silver plan before tax credits • 1.9 percent – the second lowest cost silver after tax credits • 5.1 percent – the lowest-cost silver plan before tax credits • 2.9 percent – the lowest-cost silver plan after tax credits • http://www.lifehealthpro.com/2016/07/05/aca-in-2016-10-changes-to-the-affordable-care-act?eNL=5780125f160ba05d124d1a89&utm_source=LHPro_Weekender&utm_medium=EMC-Email_editorial&utm_campaign=07102016&t=individual-health&page=8

29. So what would a BCBSTX premium in 2016 look like in 2017?

30. Family of five in 750 zip code: Male age 50 Female age 49 Female age 21 Male age 18 Female age 9 All Non-Tobacco

31. 2016 to 2017 Family QHP • $1,591.29 for a Silver QHP, BCBSTX • At 58.6% higher in 2017, the premium is now $2,523.79 • That is $30,285.43 • If a family of five has a household income of $114,000, that is 401% of the Federal Poverty Level • $30,285.43 of net, take home pay! OUCH!

32. So what are the “affordable” options for health insurance protection? • STM • Health Care Sharing Ministry Plan • Group health insurance • Accept the rate increase? • Become uninsured?

33. Short Term Major Medical • STM sales are soaring right now • Add a supplemental health plan • Pay the penalty (Shared Member Responsibility Payment) • Still lower than the previously mentioned rate increase of 58.6%

34. Family of five, 750 zip code area

35. Let’s add some supplemental coverage Ages 50-54 per month is $738.90

36. STM - What’s in it for the client? • STM deductible $5,000, 70/30% coinsurance of $5,000, total max out of pocket is $10,000 for one person • Supplemental health plan coverage of $100,000 per person for cancer, $100,000 for heart/stroke, $100,000 for 17 named critical illness conditions, hospital indemnity, chemo, radiation and accident coverage • STM premium is $423.60 + Supplemental plan premium $738.90 for a total of $1,162.50 • Penalty applies, so add $237.50 per month for a total of $1,400 per month (2.5% of 114,000 = $2,850, which is a $237.50 per month penalty) • Still less than the current $1,591.29 premium

37. STM - What’s in it for the agent? • Commission on current QHP is paid on initial premium of $1591.29 at 6%, or $95.48 per month • Or… • STM 20% of $423.60 is $84.72 – Plus! • Supplemental plan 45% of $738.90 is $332.50 • Total agent commission now is $417.22 – a 437% increase over the existing QHP commission

38. Health Care Sharing Ministry Plan • Members are exempt from ObamaCare • $1,000,000 lifetime benefit (For Altrua Health) • Choice of PHCS doctors and hospitals • Generic prescription drug benefits • Agent commission 5% (Altrua Health)

41. HCSM - What’s in it for the client? • Silver Standard Plan premium is $600 ages 50-59 • Supplemental plan is $738.90 • Total premium of $1,338.90 • Penalty is waived • Is this a better option than the STM + Supplemental plan at $1,400 with the penalty included?

42. What about an individual PMEC? • PMEC = Preventive Minimum Essential Coverage • Now also being referred to as “personal minimum essential coverage” • Would waive the penalty (Individual Shared Responsibility Payment) • Could use a PMEC to waive the penalty and add a STM or HCSM plan Homework assignment: watch this 4 minute video on a PMEC https://vimeo.com/176624654

45. Here is how CMS views the ACA from Andy Slavitt, CMS Acting Administrator, June 2016 • The Marketplace is succeeding by almost any benchmark, but it is still in its early trial and error stage • For the first five years, we will continue to be in a learning and experimentation period - where a lot will be tested before best practices are more widely developed • The Marketplace is a highly strategic opportunity for those who see health care evolving into a more B2C market to create new competitive advantages.  • That even though we are in the learning and experimentation stage, we are confident we have the tools to make sure the market is stable and succeeds for the long term 

47. Clinton proposal • Calls for an additional $40 billion in federal support to community health care centers over the next decade.  • Allows those over 55 to opt into Medicare early, putting in place a monthly cap on out-of-pocket prescription drug costs and establishing a federally run “public option” insurance program

48. Medicare Eligibility at Age 55? • Sell more Medicare related products? • Pay higher taxes? • Medicare for All? • Single Payer? More miasma…

49. Your Next President? • http://cookpolitical.com/presidential/charts/scorecard • Electoral College Vote as of 9-29-16: • President Hillary Clinton 272 vs. Donald Trump 197 • Vegas Odds on a $100 bet: • -565 Hillary - if you place a $100 bet and sheloses, youlose $565 • +250 Trump - $100 wins $250