Health Care Reform October 2010 Stephanie Altman Programs and Policy Director Health & Disability Advocates
Where is Illinois Now? • 1,668,800 Uninsured (673,600 are under 133% FPL) • 2,322,500 in Medicaid (FY 2007) • 16,000 in ICHIP (high risk pool) – with very high premiums • Approximately 2,525,000 – almost 1 out of 4 – Illinoisans under the age of 65 have a pre-existing condition. • Illinois has the second-highest health insurance rescission rate in the country, at 12.9 rescissions per 1,000 policies written, just behind New Mexico's nearly 19 per 1,000.
Public Law 111-148 – Historic Legislation The Affordable Care Act (ACA) • Patient Protection and Affordable Health Care Act (H.R. 3590) was signed into law on March 23, 2010 • Health Care & Education Affordability Reconciliation Act (HR 4782 )was signed on March 25, 2010 • Included negotiated differences between the House and Senate Bill
key components of affordable care act (ACA): • Individual Responsibility • Employer Responsibility • Employers with 50 or more employees are required to offer coverage or pay a “free rider” penalty if one of their employees takes a subsidy. • Create state-based “Exchanges” through which individuals and small businesses (fewer than 100 employees) can purchase coverage • Premium and cost-sharing credits available to individuals/families with income between 133-400% FPL. • “Qualified health plans“ will be sold through the exchanges • Large Expansion of Medicaid • Significant Private Insurance Market Reforms • Encourage prevention/wellness by eliminating cost-sharing for recommended preventive services for those in Medicaid, Medicare and qualified health plans.
Changes to private insurance: • Website established to help residents identify health coverage options (July 2010): • Illinois Pre-Existing Condition Insurance Plan (IPXP) began on Sept. 1, 2010 • Must be uninsured for 6 months and cannot get insurance from another source. • **You cannot disenroll from ICHIP and then re-enroll in IPXP. • Must have a pre-existing condition. • An estimated 4,000-6,000 will qualify because of funding restrictions. • Premiums cannot be more than 100% of a standard rate. It will vary based on a person's age, where she or he lives and tobacco use. • In Chicago, a 25-year-old non-tobacco user will pay $149 a month. (Premiums rise to $192 monthly for age 35, $280 for age 45, and $408 for age 55 — all in Chicago.)
Changes to private insurance (cont’d) • In 2014, • Guaranteed issue, coverage of pre-existing conditions • Premium will not be allowed to vary based on health conditions or gender; limited premium variation based on age and tobacco use • No annual benefit caps
Changes to private insurance (cont’d) • On Sept. 23, 2010 (or before): • Coverage for adult children to age 26 on parents’ health plan • For children: guaranteed issue, no pre-existing condition exclusions • Insurers are prohibited from charging co-payments or deductibles for certain preventative and medical screenings on all new insurance plans. • No lifetime caps. • Insurers are prohibited from rescissions. • Insurers are required to reveal details about administrative and executive expenditures. (Medical Loss Ratio)
Changes to medicaid eligibility – (2014) (will add 600-700,000 to medicaid in Il) • Expand Medicaid eligibility to all non-Medicare eligible individuals under age 65 with incomes up to 133% ($24,352 for a family of three in 2010) • Includes childless adults • Same immigration and residency rules apply as regular Medicaid • Will use MAGI (modified adjusted gross income) to determine eligibility (except for some key groups – including many of our clients). • Federal Share (FMAP) • 100% match for newly eligible first 3 years (2014-2016); phases down to 90% by 2020 • All newly eligible adults will be guaranteed an essential benefit package.
Essential health benefits in ACA • Outpatient and lab services; • Emergency services; • Hospitalization; • Maternity and newborn care; • Pediatric services, including oral and vision care; • Mental health and substance abuse, including behavior health treatment, with parity to physical health services; • Prescription drugs; • Rehabilitative and habilitative services and devices; • Preventive and wellness services and chronic disease management. • Insurance policies must cover these benefits to be certified and offered in Exchanges, and all Medicaid plans must cover these services by 2014. • Coverage must be equivalent (in actuarial value) to one of four benchmarks: • Federal Employee Health Benefits Plan, • State Employee Plan, • Commercial HMO Product, or • Secretary-approved coverage.
Groups exempt from benchmark coverage and must be offered traditional/full medicaid: • People with Disabilities • Dual Eligibles • Medically frail • Certain low-income parents • Other special groups (pregnant women, women who qualify for Medicaid because of breast or cervical cancer, children in foster care, and others) Given that significant health care conditions are prevalent among “Newly Eligibles,” (see Previous Chart), a considerable share of this population can be expected to be exempt from mandatory enrollment in benchmark coverage.
Additional important medicaid changes • ACA extends the MOE requirement of the American Recovery & Reinvestment Act (ARRA) prohibition on reducing eligibility for Medicaid until December 31, 2013. • States are prohibited from altering eligibility for any existing Medicaid program (even though enhanced match may not be extended beyond June 30, 2011.) • CMS verbal interpretation is that states can improve programs without penalty, but not reduce eligibility. • The MOE requirement does not apply to the “new” Medicaid expansion population. • Medicaid Physician Primary Care • Increase in Medicaid payments to match Medicare rates for pediatrician and primary care physicians (2013 and 2014). • Simplifies enrollment processes and coordinates Medicaid coverage with exchanges. • **Comments about Exchanges due to HHS on Oct. 4th.
Changes to medicare • Individuals affected by the Medicare Part D coverage gap “doughnut hole” will receive a $250 rebate, and 50% of the gap will be eliminated in 2011. The gap will be eliminated by 2020. • Elimination of cost sharing for certain preventative services and free annual check-up (2011) • Freeze Part B means tested income levels at 2010 through 2019 • Restructure payments to Medicare Advantage Plans. • CLASS (Community Living Assistance Services and Support) Act– Creates a new voluntary long-term care insurance program in 2011; enrollees who have paid premiums into the program and become eligible (due to “functional limitations”) would receive benefits that help pay for assistance in the home or in a facility.
Other Developments in ACA that are important to our clients • Delivery Systems and Access • Rebalancing Efforts: • Community First Choice Option • Improvements to the HCBS State Plan Benefit • Extending Money Follows the Person grants • Additional $ for Aging & Disability Resource Centers
Delivery System and Access Reforms • Medicaid Physician Primary Care • Increase in Medicaid payments to match Medicare rates for pediatrician and primary care physicians (2013 and 2014). • New Patient Care Models • Center for Medicare & Medicaid Innovation • Various pilots • Demonstrations: Independence at Home Demo; Hospitals Readmissions Reduction Program; Community-based Care Transitions Program
Health care reform implementation in IL • Governor Quinn signed an executive order on July 30, 2010 to create the Illinois Health Care Reform Implementation Council to help implement ACA. • The council will make recommendations to: • establish a health insurance exchange and other consumer protection reforms; • reform Medicaid; • assure high quality care; • identify federal grants and other non-governmental funding sources; and • foster the widespread adoption of electronic medical records. • Members of the Council will include directors of the relevant IL State Agencies. Meetings are open to the public.