The Affordable Care Act What does it mean to Arkansans?

1. The Affordable Care Act What does it mean to Arkansans? Arkansas Minority Health Consortium University of Arkansas for Medical Sciences Arkansas Department of Human Services Arkansas Insurance Department

2. PRESENTATION OBJECTIVES By the end of this presentation, participants will have increased their knowledge of: 1. Where We Start From. 2. The Affordable Care Act (ACA). 3. How the ACA has already helped consumers. 4. How the ACA will help consumers in the future. 5. Key Points for Seniors. 6. Impact of Medicaid Expansion (The Private Option). 7. The Health Benefits Exchange in Arkansas.

3. WHERE WE START FROM • What do we know? • Health insurance matters • Can often mean the difference between having regular medical/dental care and not having it, especially important for children. • More than 500,000 Arkansans are uninsured. • Those who are covered are paying more for coverage. • The uninsured may face bills they are unable to pay. • More than ½ of Arkansas adults have at least one (1) chronic disease.

4. WHERE WE START FROM America’s Health Rankings United Health Foundation http://www.americashealthrankings.org/ 2011 Report

5. Where We Start From Uninsured Arkansans by County (19 -64 years of age) Source: County Health Rankings & Roadmaps: A Healthier Nation, County by County. (accessed April 4, 2012 at http://www.countyhealthrankings.org/#app/arkansas/2010/measures/factors/3/map

6. WHERE WE START FROM • In 1999-2001… • 20 % African Americans uninsured • 36 % Hispanics uninsured • In 2009… • 21% African Americans uninsured • 32% Hispanics uninsured • Not much movement, disproportionate burden for minority Arkansans

7. Changing Cost Allocations for Arkansas Families’ Annual Insurance Premiums $11,816 34%* 27% 29% 66%* $6,355 68% 71% Source: AHRQ, Medical Expenditure Panel Survey (2000-2010 Tables of private-sector data by firm size and state (Table II.D.1) and II.D.2). Available at www.meps.ahrq.gov/mepsweb/data_stats/quick_tables_search.jsp?component=2&subcomponent=2.

8. 2011(Pre-Reform) Arkansas Health Insurance Coverage Availability Medicare w/ Disability Employer-Based Coverage or Private Plan Income 400% FPL Uninsured: ~500,000 Medicare 300% 300% FPL FPL Medicare >60% of all AR children >60% of all AR pregnancies 200% 200% FPL FPL Medicare Medicare ARKids First B Medicaid for Pregnant Women/Family Planning 133% FPL 100% 100% FPL FPL ARKids First A (Medicaid) (Medicaid) Medicaid w/Disability 65 0 0 10 10 20 20 30 30 40 40 50 50 60 60 70 70 Age Age

9. The Affordable Care Act The Affordable Care Act of 2010 was created to decrease health costs and improve health outcomes through: • Public and Private Coverage Expansions* • Change in Benefits and Access to Care • Insurance Issuer Market Reforms • New Individual Responsibility* • Establishment of Health Insurance Exchanges *Challenged to U. S. Supreme Court

10. The Affordable Care Act Individual Responsibility - Everyone must purchase health insurance. - Reduces the cost for many. - Assistance is available (premium tax credits). - No penalty if not required to file a tax return. Public (Medicaid) and Private Coverage Expansions - Additional 250,000 could be covered under Medicaid. - 211,000 likely to obtain Private Coverage in 2014. - Billions of dollars will come into Arkansas.

11. How the Affordable Care Act Has Already Helped Consumers Children can stay on their parents insurance policy until the age of 26. • Insurance companies can no longer deny coverage of a child under age 19 due to his/her health conditions. • Lifetime benefit limits are eliminated and annual benefit limits on insurance coverage are regulated until 2014. • Rescinding coverage by insurance companies is prohibited unless due to fraud.

12. How the Affordable Care Act Has Already Helped Consumers • No out-of-pocket cost to the consumer for preventive care, such as wellness visits, mammograms, colonoscopies, etc. • Small business health insurance tax credits provided. • Consumer Assistance Program established at AID.

13. How the Affordable Care Act Has Already Helped Consumers • Relief for more than a half-million Arkansas seniors who hit the Medicare “donut hole”. • By 2020, you will pay only 25% for covered brand name and generic drugs during the gap.

14. How the Affordable Care Act Will Help Consumers in the Future • Premiums can only be increased due to age, geography, tobacco use, and type of coverage. • Eligibility determinations are “real time.” • Primary care physicians will be paid no less, providing than 100% of Medicare payment rates for primary care services.

15. Key Points for Seniors • Many preventive services like flu shots, diabetes screenings, mammograms, and other cancer screenings at no cost to the consumer. • Cracks down on fraud, waste and inefficiencies to protect Medicare, including tougher penalties for criminals. • Coordination of care improvements through the use of electronic health records.

16. Key Points for Seniors • 52.5% discount on covered brand-name drugs while in the donut hole in 2013. • Average saving of $600. • No forms to file. • Protects all guaranteed Medicare benefits. • Improvements that extend the life of the Medicare Trust Fund.

17. Impact Medicaid-funded Private Insurance will have on Families & Communities • About 250,000 uninsured Arkansans would receive health care. • Half of all currently uninsured Arkansans age 19 – 64. • 100% of uninsured parents with children on AR Kids First would be eligible for Medicaid (Arkansas Advocates, 2012). • Fewer deaths of the working-age poor. • 1,200 fewer deaths per year due to expansion • 1,100 fewer deaths per year due to Exchange.(RAND, 2013)

18. Impact Medicaid-funded Private Insurance will have on Families & Communities • Fewer personal bankruptcies. • Child-bearing age women could have access to preventive services before pregnancy. • More stable local hospitals and clinics. • Hospitals report $340 million in uncompensated care costs. (Arkansas Hospital Association 2012) • Less cost shifting from uninsured to insured.

19. Impact Medicaid-funded Private Insurance will have on Families & Communities • Better supported local health care providers. • More accessible mental health care. • Fills the coverage gap. • Approximately 167,000 Arkansans are between the current Medicaid eligibility and qualifying income for a subsidy for private insurance on the Exchange. (Arkansas Advocates, 2012) • Funding private insurance for low-income individuals (up to 138% of the Federal Poverty Level).

20. Impact Medicaid-funded Private Insurance will have on Families & Communities • Federal government picks up 100% of cost for first three years. • DHS estimates based on proposed option for covering low-income adults through private health plans in the state exchange: • Cumulative savings of $670 million over ten years. • Savings of at least $151 million first full year. • Certain Medicaid enrollees will shift to better match rate, saving money. • Indigent care funds can be shifted to shore-up the financially-stretched program.

21. January 1, 2014 (Exchanges Operational)Arkansas Health Insurance Coverage Availability Medicare w/ Disability Medicare w/Disability Employer-Based Coverage, Private Plan Income Private Insurance Private Insurance 400% Employer-Based Coverage or Exchange Plus Tax Credits (sliding scale) FPL 19-26 yrs of age Medicare 300% 300% FPL FPL 150,000 - 200,000 Lives Covered ~$1.5 Billion Estimated New Federal Dollars for Arkansas Medicare 200% 200% Pregnant Women/Family Planning FPL FPL Medicare Medicare ARKids First B 133% FPL 250,000 Lives Covered $1 - $1.5 Billion Federal per Year Medicaid Expansion 100% 100% FPL FPL ARKids First A (Medicaid) Medicaid Expansion (Medicaid) Medicaid w/Disability 65 0 0 10 10 20 20 30 30 40 40 50 50 60 60 70 70 Age Age

22. What is a Health Insurance Exchange? • Competitive marketplace where individuals, families and small employers can shop for, select and enroll in high quality, affordable private health plans that meet their specific needs at competitive prices. • Exchanges will also help eligible individuals receive premium tax credits and cost sharing reductions or help them enroll in other state or federal public health programs.

23. Types of Health Insurance Exchanges • State-Based Exchange (SBE) – State is responsible for all functions (QHP, Premium fees, oversight/Monitoring, eligibility/enrollment, IT, outreach/education, consumer complaint, In-Person assistance and the call center). • Partnership Exchange – Exchange is operated by the federal government, however State retains responsibility for Plan Management and/or Consumer Assistance functions. • Federally-facilitated Exchange – All functions are the responsibility of the federal government.

24. Health Benefits Exchange in Arkansas • Arkansas is planning to operate under the Federally-facilitated Partnership Exchange model, allowing Arkansas to continue to protect and serve Arkansans by: • Continuing to approve and regulate all insurance plans, including those offered on the Exchange. • Providing consumer assistance functions to include enrollment assistance and post-enrollment complaint resolution.

25. Status of Exchanges - State-Based Exchange - Federal Exchange - Partnership Exchange

26. What is a Health Insurance Exchange?

27. Why Use The Exchange? EXCHANGE Complete single application Enrolled in correct program! Determine eligibility MEDICAID In-Person Assistance Single Application ARKIDS FIRST MAIL

28. Why Use The Exchange? All health insurance plans offered on the Exchange will be “Qualified Health Plans”, meaning that they must provide Essential Health Benefits in ten categories: 1. Ambulatory Services 2. Hospitalization 3. Emergency Services 4. Maternity and Newborn Care 5. Mental Health and Substance Use Disorder Treatment 6. Prescription Drugs 7. Rehabilitative and Habilitative Services/Devices 8. Laboratory Services 9. Preventive, Wellness, and Chronic Disease Management 10. Pediatric Services, Including Oral and Vision Care

29. Why Use The Exchange? • Consumers with incomes 100% - 400% of FPL are eligible for Federal Tax Subsidies. • Subsidy amounts are dependent upon income and the type of policy chosen (individual/family). • No asset testing is required. • Premium < 9.5% (mostly less) of household income. • Advance tax credits are also available.

30. Premium Tax Credit Eligibility • Household income 100% - 400% FPL ($23,050 - $92,200 for a family of four). • Must be enrolled in a QHP through the Exchange. • Must be lawfully present and not incarcerated. • Must not be eligible for other coverage such as Medicare, Medicaid, or employer-sponsored insurance. • Subsidies are based on the second lowest cost silver plan (actuarial value of 70%)

31. 2012 Federal Poverty Guidelines

32. Premium Limits Based on Income

33. Benefits to Using the Exchange

34. What are Penalties for Not Enrolling? • 2014 - $95 or 1% of adjusted gross income, whichever is greater for each adult in the household. • 2015 - $325 or 2%, whichever is greater for each adult in the household. • 2016 - 695 or 2.5%, whichever is greater for each adult in the household. • There are limited penalty exemptions. • Penalty for children is half that of the adults.

35. Penalty Exemptions • Those covered with minimum essential coverage in other plans. • Those living outside the USA. • Those not lawfully present. • Those covered by healthcare sharing ministries. • Those having a religious conscience objection. • Those suffering financial hardship (cost of coverage is more than 8% of household income) • Native Americans.* Note: Natives are not actually exempt from the mandate, but are exempt from the penalty. So in effect are exempt in practice BUT could still cause an employer to suffer a penalty if a native employee receives a subsidy from the Exchange.

36. Help is on the Way! • To assist consumers navigate the Exchange, the Arkansas Insurance Department (AID) has developed an In-Person Assister (IPA) Guide Program. • Through the IPA Guide program, AID will contract with various organizations throughout the state. These organizations will hire individuals to be known as “Guides” who will provide assistance to consumers. • Guides will be trained and licensed. • Guides will provide outreach/education and enrollment assistance to hard-to-reach populations.

37. Help is on the Way! • Guides will assist consumers in understanding insurance choices and federal tax subsidies, public plans, etc. • Guides will facilitate enrollment, but only consumers will make decisions about in which plan to enroll. • Guides will provide information in a way consumers can understand. • Guides will provide insurance information in a fair and impartial manner.

38. Help is on the Way! • Guides will avoid any conflict of interest. • Guides will receive no financial consideration, directly or indirectly from issuers. • Guides will protect consumer personal information. • Guides will facilitate referrals for complaint resolution. • Licensed insurance agents with special training will also be able to help.

39. Other Assistance All individuals providing in-person assistance to consumers will complete training and licensing requirements set forth by the Arkansas Insurance Department: GUIDESAGENTS/BROKERS NAVIGATORSCERTIFIED APPLICATION COUNSELORS Consumers may receive assistance via the telephone. A call center has been established to assist with enrollment. AID’s Consumer Assistance Program (CAP) staff will also be available to assist consumers.

40. Summary • Cost and quality improvements in Arkansas’s healthcare system will benefit all Arkansans. • The Affordable Care Act has already resulted in improved coverage for some. • More enhancements will become effective January 1, 2014 including access to quality, affordable insurance coverage through the Federally-facilitated Exchange.

41. For Additional Information • About the Health Care Law www.HealthCare.gov www.aarp.org/getthe facts • About the Exchangewww.hbe.arkansas.gov • About Medicare www.medicare.gov 1-800-633-4227 www.aarp.org/medicare • For Medicare help in Arkansas Senior Health Insurance Information Program (SHIIP) 1- (800) 224 - 6330 or (501) 371-2782 http://www.insurance.arkansas.gov/shiip.htm

42. Questions/Comments