Health Reform in Kansas: The Affordable Care Act

1. Health Reform in Kansas:The Affordable Care Act Sheldon Weisgrau Thrive Allen County October 18, 2012

2. Agenda • Introduction • The Problem • Why do we need health reform? • The Affordable Care Act (aka “Obamacare”) • What’s really in the law? • Specific impacts • Medicaid expansion • Seniors and Medicare • Rural health workforce • Questions & Discussion Health Reform Resource Project

3. Health Reform Resource Project • Funded by Kansas Grantmakers in Health: • Kansas Health Foundation • Health Care Foundation of Greater KC • REACH Healthcare Foundation • Sunflower Foundation: Health Care for Kansans • United Methodist Health Ministry Fund • Housed at Kansas Association for the Medically Underserved (KAMU) Health Reform Resource Project

4. Health Reform Resource Project • Assist in public education and consumer and stakeholder engagement related to health reform • Provide technical assistance to consumer and advocacy organizations • Assist Kansas entities in securing grants and programs available under the Affordable Care Act (ACA) Health Reform Resource Project

5. What works? • “Best health care system in the world” • Widespread medical technology • State-of-the-art facilities • Advanced research and training • Center of development for drugs and medical devices • Lots of money in the system, well-paid Health Reform Resource Project

6. Why health reform? • Access • 48.5 million uninsured • 365,000 uninsured in Kansas • Millions more underinsured • Employment-based health insurance declining • Maldistribution of providers, other resources • Quality • Inconsistent • Disparities • Patients often don’t receive recommended care • Cost • Highest in the world • Increasing faster than salaries and inflation • Main driver of budget deficits Health Reform Resource Project

7. Health Reform Resource Project

8. Kansas Uninsured Source: KHI, 2011 Health Reform Resource Project

9. Kansas Uninsured (by County) Source: KHI, 2012 Health Reform Resource Project

10. Brown Doni-phan Cheyenne Ne-maha Rawlins Marsh-all Decatur Wash-ington Norton Republic Phillips Smith Jewell Atchison Jack-son Cloud Sherman Pottawatomie Thomas Sheri-dan Riley Clay Osborn Mitchell Graham Rooks Jeffer-son Leavenworth Ottawa Shaw-nee Geary Lincoln Wabaun-see Wallace Logan Gove Trego Dickin-son John-son Ellis Russell Doug-las Saline Osage Morris Ellsworth Miami Frank-lin Lyon Greeley Wich-ita Scott Lane Ness Barton Rush Marion McPher-son Chase Rice Coffey Linn Ander-son Pawnee Hamilton Kearny Finney Hodgeman Stafford Green-wood Harvey Reno Bour-bon Butler Allen Edwards Wood-son Gray Sedgwick Ford Pratt Neo-sho Wilson Stanton Grant Craw-ford Has-kell Kingman Kiowa Elk Cowley Meade Clark Sumner Barber Labette Chero-kee Mont-gom-ery Morton Stevens Sew-ard Coman-chee Harper Chautau-qua 365,000 uninsured in Kansas = all residents in… Wyandotte

11. Brown Doni-phan Cheyenne Ne-maha Rawlins Marshall Decatur Wash-ington Norton Republic Phillips Smith Jewell Atchison Jack-son Cloud Sherman Pottawatomie Thomas Sheri-dan Riley Clay Osborn Mitchell Graham Rooks Jeffer-son Leavenworth Ottawa Shaw-nee Geary Lincoln Wabaun-see Wallace Logan Gove Trego Dickin-son John-son Ellis Russell Doug-las Saline Osage Morris Ellsworth Miami Frank-lin Lyon Greeley Wich-ita Scott Lane Ness Barton Rush Marion McPher-son Chase Rice Coffey Linn Ander-son Pawnee Hamilton Kearny Finney Hodgeman Stafford Green-wood Harvey Reno Bour-bon Butler Allen Edwards Wood-son Gray Sedgwick Ford Pratt Neo-sho Wilson Stanton Grant Craw-ford Has-kell Kingman Kiowa Elk Cowley Meade Clark Sumner Barber Labette Chero-kee Mont-gom-ery Morton Stevens Sew-ard Coman-che Harper Chautau-qua Greeley + Wallace + Lane + Comanche + Hodgeman + Clark + Wichita + Stanton + Rawlins + Kiowa + Sheridan + Graham + Hamilton + Gove + Cheyenne + Logan + Chase + Elk + Decatur + Trego + Edwards + Jewell + Ness + Morton + Lincoln + Rush + Woodson + Chautauqua + Smith + Osborne + Kearny + Haskell + Stafford + Meade + Barber + Scott + Republic + Rooks + Phillips + Norton + Stevens + Washington + Morris + Gray + Sherman + Harper + Ottawa + Mitchell + Ellsworth + Greenwood + Russell + Pawnee + Wabaunsee + Grant + Kingman + Thomas + Doniphan + Anderson + Clay + Coffey + Wilson + Cloud + Pratt + Linn + Brown + Rice + Marshall and Nemaha + Allen =365,000+ Kansans without health insurance Wyandotte

12. What difference does health insurance make? • The uninsured are: • Less likely to receive preventive and prenatal care • More likely to go without medical care or prescription drugs due to cost • More likely to be diagnosed at later stage of illness • More likely to be hospitalized for avoidable conditions • Less likely to receive recommended care • Less healthy • Earn less • Have higher death rates Health Reform Resource Project

13. Affordable Care Act • 900+ pages, 10 titles • Access to private health insurance • Expanded Medicaid coverage • Medicare reform • Wellness and prevention • Health care workforce • Fraud and abuse • Access to drugs and biologics • Voluntary long-term care insurance (CLASS) • Revenue measures • Manager’s amendment and reconciliation Health Reform Resource Project

14. Health Reform Resource Project

15. ACA – Intertwined Goals • Make better health insurance coverage more available and affordable for legal residents • Reform health care delivery and financing to provide better quality and outcomes, more cost effective care Health Reform Resource Project

16. ACA Snapshot • What it does • Builds on the existing system of coverage • What it doesn’t do • Does not create “government-controlled” or “socialized” health care • Does not create “death panels” • Does not turn the system over to insurance companies Health Reform Resource Project

17. ACA – Key Features • Seven-Part Solution • Premium cost controls • Short-term incentives to increase coverage • New rules regarding scope of coverage and consumer protections • Individual mandate • Health Insurance Exchanges • Employer requirements • Expanded Medicaid Health Reform Resource Project

18. 1. Premium Cost Controls • Medical loss ratio requirements • Insurance companies must spend 80/85 percent of premiums on medical services and quality improvement • Make available standardized comparable information on available insurance plans • http://www.healthcare.gov/ • Support to states to create and strengthen insurance rate review Health Reform Resource Project

19. 2. Short-Term Coverage Expansion • Pre-Existing Condition Insurance Plans (PCIP) • High risk pools for those uninsured for at least 6 months due to pre-existing condition • Early retiree reinsurance program • Federal support to employers who provide coverage for retirees ages 55-64 • Tax incentives for small employers to provide coverage Health Reform Resource Project

20. 3. Scope of Coverage • Patients Bill of Rights • Prohibits rescission • No lifetime dollar limits • Dependents covered through age 26 • No pre-existing condition exclusions for children • Guaranteed Issue and Community Rating: • Nobody can be denied coverage or charged more due to pre-existing conditions (effective January 1, 2014) Health Reform Resource Project

21. 4. Individual Mandate • Mechanism to discourage “free-riders” under guaranteed issue • Exemptions under certain conditions • Alternatives • Employer/union-sponsored plan • Individual insurance through an Exchange • Public program (Medicare, Medicaid, etc.) Health Reform Resource Project

22. 5. Health Insurance Exchanges • Established by each state by 2014 • Administered by federal govt if state opts out • For individual and small group markets • Expands to larger employers in 2017 • Provides web-based one-stop shopping • Pooling mechanism for individuals and small businesses • Plans must offer “essential health benefits” package Health Reform Resource Project

23. 5. Health Insurance Exchanges – Tax Credits • May be used to purchase coverage through Exchange • Individuals qualify if household income is up to 400% of FPL • Businesses qualify if they meet size and salary requirements Health Reform Resource Project

24. 6. Employer Requirements • Large employers (50+ employees) that don’t provide coverage may face penalties. • For example: • Employer does not offer minimal essential coverage to full-time employees; and • At least one employee receives government subsidy to purchase insurance in Exchange Health Reform Resource Project

25. 7.Expanded Medicaid • By January 1, 2014, Medicaid expands to cover all eligible individuals with income up to 138% FPL Health Reform Resource Project

26. Who Gets Covered? • Private coverage through Exchanges • Approx 16 million non-elderly uninsured • Most are employed • Expanded Medicaid • Approx 16 million non-elderly uninsured • Half have income below 50% FPL • One-third diagnosed with chronic condition Health Reform Resource Project

27. Who Gets Covered in Kansas? • 365,000 Kansans currently uninsured (13% of population) • Under ACA: • About two-thirds will receive insurance coverage • ~60% through expansion of Medicaid • ~40% through expansion of private insurance • About one-third remain uninsured Health Reform Resource Project

28. The Supreme Court Decision Health Reform Resource Project

29. The Medicaid Question • Is the Medicaid expansion unconstitutionally coercive? • Yes – The federal government may not make all Medicaid funding contingent on expanding the program • So, the federal government has no enforcement authority over the expansion • Therefore, expansion of Medicaid is optional for states Health Reform Resource Project

30. Medicaid Expansion: Impact on Kansas • 130-150,000 new beneficiaries • Approx 60% of all Kansans covered under the ACA • New Medicaid spending (2014-2019) • Federal: ~ $3.5 billion • State: ~ $166 million • Other budget impacts Health Reform Resource Project

31. Medicaid Expansion: Impact on Kansas • Local impact • New revenue for providers • Expansion of capacity, services, and jobs • Economic impact • Effect of new dollars circulating through state and local economies Health Reform Resource Project

32. The ACA and Medicare • Enhances benefit package • Covers annual wellness visit • Reduces out-of-pocket costs • No deductibles or coinsurance for preventive services • Benefit used by 300,000+ Kansas beneficiaries in 2011 • Phases out Part D donut hole • 40,000 Kansas beneficiaries received average discount of $600 in 2011 Health Reform Resource Project

33. The ACA and Medicare • Reduces rate of cost growth • Does not “cut” Medicare funding • Phases out overpayment to Medicare Advantage plans • Enables provider payment and delivery system reforms • From “volume-based” to “value-based” • Expands fraud and abuse prevention • Extends program solvency Health Reform Resource Project

34. Other ACA Provisions Affecting Seniors • Expansion of home and community-based services • More funding for Aging and Disability Resource Centers (ADRCs) • Programs to enhance quality and patient safety, reduce readmissions • Programs to expand primary care, nursing, geriatric care workforce Health Reform Resource Project

35. ACA and Rural Health Workforce • Medicare payment changes for physicians • 10% bonus for PC services furnished by PC practitioners, 2011-2015 • Reduce geographic practice expense disparities • Medicaid payment changes for primary care • Payment at 100% of Medicare, 2013-14 Health Reform Resource Project

36. ACA and Rural Health Workforce • Expand National Health Services Corps ($1.5 billion over 5 years) • Primary care resident training in RHCs and FQHCs • Financial assistance/grants for: • Dental students likely to work in rural areas • Mid-career training for public and allied health • Schools training mental health providers likely to serve high needs populations • Family nurse practitioner training programs • Expansion of nursing student loan program Health Reform Resource Project

37. Where do we go from here? • November 6, 2012 • If not the ACA, then what? • Establish Health Insurance Exchange? • State, federal, or partnership • Medicaid expansion? Health Reform Resource Project

38. Additional information Sheldon Weisgrau, Director Health Reform Resource Project 1129 S. Kansas Avenue, Suite B Topeka, KS 66612 785-408-8008 HealthReformResource@gmail.com Health Reform Resource Project