Healthcare Reform Overview

1. Healthcare Reform Overview May 12, 2010

2. What We’ll Discuss Today • Overview of what the new healthcare system will look like • Review of key addiction related-provisions • Timeline for implementation • Next steps 2

3. National Healthcare Reform • After more than a year of work, missed deadlines, and compromises, the healthcare reform bill was passed and signed into law on March 23, 2010 • Some provisions take effect immediately but most will take effect in 2014, with full implementation by 2019 • Once fully implemented, CBO estimates that 95 percent of the legal population will have health insurance 3

4. Key Things to Keep in Mind • Preliminary discussion • Statute provides framework, lots of remaining questions/ambiguity • Scope of services/continuum of care not defined • Years of regulations expected • Enormous need for education and outreach 4

5. What does healthcare reform do? • Creates health exchanges for individuals and small employers to pool risk and purchase insurance • Requires transparency, mandated benefits and other consumer protections • Provides sliding scale subsidies for individuals and families up to 400% FPL to purchase or take up offers of health coverage • Prohibits insurers from denying coverage to people with pre-existing conditions, charging higher premiums based on gender or health status, and placing annual or lifetime caps on insurance coverage • Requires individuals to carry health insurance or pay a financial penalty 5

6. What else does healthcare reform do? • Expands Medicaid eligibility to all Americans below 133% FPL • Mandates newly-eligible childless adults be enrolled in generally less-comprehensive “benchmark” plan • To finance the expansion, states will receive 100% FFP for 2014-2017, 95% FFP for 2018-2019, and 90% FFP after 2019 for expansion population • Allows adult children to remain on their parent’s insurance until their 27th birthday • Creates a national high-risk pool for adults with preexisting conditions to buy into until implementation 6

7. Key SUD/MH provisions in the new law • SUD/MH services included in the basic benefits package required in the exchange • All plans in the exchange must adhere to the provisions of the Wellstone/Domenici parity act • The parity act already applies to large group plans that would exist outside the exchange • Requires that newly-eligible Medicaid enrollees, including childless adults, receive adequate health coverage that includes SUD/MH coverage 7

8. Other key SUD/MH provisions in the new law • Includes SUD/MH in chronic disease prevention initiatives • Includes SUD/MH workforce in health workforce development initiatives • Makes SUD prevention, treatment, and MH service providers eligible for community health team grants aimed at supporting medical homes 8

9. Timeline for implementation • Some provisions take effect immediately or in the next several months. • Biggest changes take effect on January 1, 2014, with full implementation by 2019. 9

10. Key provisions that take effect in 2010 • Young adults can remain on their parent’s health plan until they turn 27 • Preexisting condition exclusions prohibited for children • Group or individual market plans are prohibited from rescinding coverage once an enrollee is covered under a plan, except for cases of fraud • Prohibition against lifetime benefit caps and “unreasonable” annual limits • National high-risk pool for people with preexisting conditions created; includes limited federal subsidies • States now have option to extend Medicaid coverage to childless adults up to 133% FPL and receive current FFP • Eliminates cost-sharing for preventive care in Medicare and private plans 10

11. Key provisions that take effect in 2014 • All other insurance market reforms, including: • Guaranteed issue and renewability, prohibition of rating based on health status • Elimination of all annual and lifetime limits • State insurance exchanges become effective for individuals and small employers with up to 50 or 100 employees. After 2017 states have option to open exchange to large employers. • Exchange subsidies for those up to 400% FPL become available • Essential benefit requirements become effective 11

12. More key provisions that take effect in 2014 • States are required to extend Medicaid coverage to all up to 133% FPL • Individual mandate becomes effective • Individuals that cannot demonstrate that they have qualifying coverage or are exempt will have to pay $95 or 1% of taxable income in 2014, increasing to $695 or 2.5% of taxable income in 2016 • Limited employer responsibility requirement implemented • Quality improvement provisions take effect 12

13. Next steps • 2014 will be here before we know it. Implementation will be fast and furious. • Federal agencies are already beginning to draft regulations • Most important regulations related to SUD/MH include: • Benefit design • Continued guidance on parity • Changes within Medicaid • Healthcare delivery system—medical home and other models of care • Workforce • Chronic disease prevention 13

14. Questions? Gabrielle de la Gueronniere gdelagueronniere@lac-dc.org and Dan Belnap dbelnap@lac.org Legal Action Center 14