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Building the Future of Health Care

Building the Future of Health Care. Roberta Rifkin, VP of Government Affairs December 14, 2012. Health Care in America. Not available to everyone. Expensive. Inefficient. The Need for Reform. 50 million uninsured Costly Highest expenditures per person

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Building the Future of Health Care

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  1. Building the Future of Health Care Roberta Rifkin, VP of Government Affairs December 14, 2012

  2. Health Care in America Not available to everyone Expensive Inefficient 2

  3. The Need for Reform • 50 million uninsured • Costly • Highest expenditures per person • $7960 USA--$5352 Norway (next highest) • Paying for quantity, not quality • Unsustainable • 2012 $21,000 • 2021 $42,000 3

  4. Under Construction • The Patient Protection and Affordable Care Act (ACA) was signed into law on March 23, 2010 • ACA is a starting point to achieve health reform A Better Patient Experience Improved Community Health Lower Costs 4

  5. Three Core Areas of Construction Coverage • Exchanges • Medicaid expansion • Market reforms Affordability • Individuals: premium subsidy, cost sharing • States: Medicaid expansion reimbursement • Small Businesses: tax credit Quality • Community-driven solutions 5

  6. Construction Timeline • Implementing since 2010 • Market reforms • Funding innovation • Transition to new marketplace • 2014 - Pivotal Year • New Marketplace • Individual Mandate • Employer responsibility 6

  7. The Construction Team Federal State Community 7

  8. Federal Construction Team • Leads planning and implementation; issues regulations and guidance • Monitors state and community activities • Keeps construction moving forward The Blueprint 8

  9. Key Federal Plans • Market Reforms • Essential Health Benefits • Coverage Responsibility • Exchanges • Taxes and Penalties • Reporting Requirements 9

  10. Federal: Market Reforms Already Implemented • Dependent Coverage to Age 26 • No Rescissions • Phasing Out Annual Limits • $0 Copay for Prevention • Closing the “Donut Hole” • No Pre-Existing Condition Exclusion 18 and under Effective in 2014 • No Pre-Existing Condition Exclusion for 19 and older • Cap Raised on Wellness Program Rewards to 30%

  11. Federal: Responsibilities for Coverage after 1/1/14 • Small Employers (<50) • No penalty for not offering coverage Individuals Large Employers (>50) Penalty for no coverage offered Penalty if coverage is unaffordable or inadequate • Penalty for none or not having minimum value coverage (60% AV) • Some exemptions apply

  12. Federal: Health Insurance Exchange • Web-based marketplace to buy health coverage beginning in 2014 for: • Individuals • Small employers (<50) • States have flexibility to establish their own exchange or participate in the federally facilitated exchange. • The Exchange will be the only means for individuals to access federal subsidies that will lower consumer premiums and provide cost sharing. • Small Employers who purchase coverage in the Exchange may be eligible for tax credits 12

  13. Federal: Essential Health Benefits (EHBs) • EHBs define the scope of coverage for small group and individual plans beginning in 2014. • States can select a benchmark plan as the standard for EHBsor default to most populated small group plan • New York has chosen the Oxford EPO plan

  14. Federal: Products in the Exchange • Plans can be offered by Qualified Health Plans (QHPs), Multi-state Plans, and CO-OPs. • Products sold in the Exchange must meet the following: Bronze= 60% Actuarial Value Silver = 70% Actuarial Value Gold = 80% Actuarial Value Platinum = 90% Actuarial Value A catastrophic plan will also be available

  15. Federal: Exchange for Small Employers (SHOP) • Small Business Health Options Program (SHOP) will have rolling enrollment • State decides if employers will choose plan or precious metal level • Premiums aggregated for SHOP

  16. Federal: Exchange for Individuals • Initial Open Enrollment: • Begins October 1, 2013 • Ends March 31, 2014 16

  17. Federal: Premium Subsidies and Cost Sharing Premium Subsidies Cost Sharing Will reduce out of pocket expenses (deductibles, co-pays, etc) • Subsidy is advance payment of premium

  18. Enrollment Scenario: Brian • Access: Navigator • Eligibility • Determination: Medicaid • Choices: Medicaid Plans Brian Age: 35 Single Job: Waiter Income: $12,500

  19. Enrollment Scenario: Maria and Steve Ages: 27, 28 Married Jobs: Steve- Writer Maria- Day Care (PT) Income: $31,000 Maria and Steve • Access: • Web Portal • Eligibility: • Subsidy: Premium tax credit/cost sharing • Choices: • QHP – bronze, silver gold, platinum • Multi-state plan option • CO-OP

  20. Enrollment Scenario: Carol Carol Age: 55 Divorced Job: Consultant for Energy Companies Income: $100,000 • Access: • Toll-free Telephone Line • Eligibility: • No subsidy • Choices: • QHPs • Plans outside the Exchange

  21. Enrollment Scenario: Audrey Audrey Age: 42 Married, 1 child Job: Manages a shoe store with 20 employees Income: $36,000 • Access: • Web Portal • Eligibility: • Employer Contribution • Choices: • Employer selects a metal level of coverage • Audrey can buy up or down

  22. Federal: Employer Options for 2014 Small Group Options in 2014 • Purchase coverage as done today • Use the New York State SHOP • Drop coverage: employees can use the state Exchange • Use a private exchange or IH website Large Group Options in 2014 • Provide coverage as done today • Drop coverage: employees can use the state Exchange • Use a private exchange or IH website • Go self-funded

  23. Federal: Taxes and Penalties Summary 2013 • Medicare tax income adjustment • Eliminates employer tax deduction for Medicare Part D • Increased threshold for medical expense deduction • FSA Cap • Medical Device and Pharmaceutical Taxes 2014 • Employer Responsibility • Individual Mandate • Health Insurer Tax 2018 • Cadillac Tax

  24. Federal: Taxes and Penalties • Effective in 2013 • Medicare taxes for earners making more than $200,000 single or $250,000 joint • Eliminates employer tax deduction for Medicare Part D drug subsidy payments • Increased threshold for medical expense deduction • 10% of AGI for unreimbursed expenses, waived for 65 and older

  25. Federal: Taxes and Penalties • FSA Cap • $2500 • Medical Device Tax • Pharmaceutical Tax • Health Insurer Tax • Cadillac Tax • Insurers taxed for employer-sponsored health plans aggregate expenses that exceed $10,200 for individual coverage and $27,500 for family coverage

  26. Federal: Reporting Requirements • Employer Premium Contribution on W2 forms • Reporting only, non-taxable • For employers with >250 forms • Summary of Benefits and Coverage (SBC) • Insurers use Federal template for benefit summary • Employers will distribute • Employers Report on Coverage Offered • Reporting to HHS/Treasury on coverage offered • Informing employees about Exchange options

  27. Possible Delays: The Future of ACA • Implement • Obama Administration issuing regulations and distributing funding • Repeal • House has voted to repeal over 30 times • Could repeal specific provisions • Defund • Provisions relying on funding from appropriations process may be underfunded or not funded at all • could include IRS appropriations to implement tax credits in Exchange

  28. Possible Delays: The Fiscal Cliff • The “Fiscal Cliff” • Expiring December 31st • Bush Tax Cuts • Tax breaks for high earners • Payroll tax reductions • Doc Fix (Sustainable Growth Rate Formula adjustments) • Could reduce Medicare provider payments by ~27% on January 1 • Avoiding sequestration from Budget Control Act of 2011 • If “fiscal cliff” is not averted, CBO predicts a 4% drop in GDP and almost certain recession

  29. Possible Delays: Sequestration • Congress directed to cut $1.2 trillion over 10 years, or sequestration is automatic • $109 billion in cuts for 2013 • Defense budget cut 50% • 50% cut to nondefense funds • Health cuts: Will impact some appropriations for ACA implementation • Medicare cuts: Capped at 2% • Medicaid and CHIP exempt

  30. State Construction Team • Use Federal Blueprint • Flexible • Floor or ceiling 30

  31. New York’s Construction Plan • Medicaid Redesign • Exchange Establishment

  32. New York: Medicaid Redesign Team • Medicaid Redesign Team created by Governor in 2010 • Some changes to Medicaid include: • Moving all beneficiaries to managed care by 2016 • Centralizing administration • Addressing benefits, housing, cultural issues

  33. New York State: Exchange Blueprint • New York has applied to be a state-run Exchange • Active participation in plan selection for the Exchange • Reduce total plan offerings in the state • Offer a mix of standardized & insurer designed products 33

  34. Community – Spheres of Influence • You can make a difference • Recognize your role • Small changes matter • Engage in your spheres of influence • Home • Work • Physician’s Office • Neighborhood Find Your Place at the Table 34

  35. Reducing the Mortgage on our Future • The ACA is a starting point to help us reduce our “mortgage” • If we focus on quality, lower costs will follow 35

  36. How Do We Get There? • Revitalize & grow primary care • Payment reform • Enhance health information • Culture of health • Greater alignment of health system 5 Key Actions 36

  37. Buffalo: Our Healthy Future Our community can achieve this!

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