Health Care Reform A changing landscape

1. Health Care ReformA changing landscape Kevin Hayden Chief Executive Officer

2. Changing landscape • In 2014, there are threemain ways for Americans to get insurance coverage. Through: • An employer • Government programs • The Health Insurance Marketplace (small businesses with 50 or less employees and individual consumers) • Individual Mandate & Expanded Coverage • Everyone who can have insurance must have insurance (or be fined) • More opportunities for people to gain coverage

3. Health insurance marketplace

4. ONLINE SHOPPING CENTER

5. MAIN GOALS • Provide the best coverage at an affordable price • Help qualifying individuals pay for coverage • Provide “apples to apples” comparisons among plans • Guarantee Issue: prohibit insurance carriers from denying coverage to sick individuals.

6. WHAT WE KNOW TODAY • Initially only available to small group businesses and individual consumers. • User keys in their personal information about their household and income, then the website determines eligibility results. At this point: • Subsidies (financial help paying for coverage) determined • Eligibility for Medicaid and other government programs also determined. www.healthcare.gov

7. WHAT’S IN THE Health insurance marketplace

8. ESSENTIAL HEALTH BENEFITS

9. Metal Plans Monthly Premium Out-of-Pocket Expenses Platinum 90% Gold 80% Silver 70% Bronze 60% Catastrophic Plan

10. PARTNER FOR SUCCESS • Public education is key for success. • For GHC-SCW, it’s “all hands on deck” to help our community understand what change means: • Partnering with local non-profits and government • Outreach to provide 1:1 enrollment experiences • Education with our membership

11. WHERE DO WE GO FROM HERE? • Growth in the individual consumer market • Shift from B2B to B2C • Design more plans with tailored networks and to meet individual needs • Large Group employers (50+ employees) gain access to the Marketplace in 2018 … more change ahead! • Ourmajor opportunity: refocus on the role of Primary Care to help fix the American health care system.

13. The Affordable Care Act June 13-14, 2013 David Riemer, Senior Fellow Michael Bare, Research and Program Coordinator Project for Health Insurance Exchange Education (PHIXE)

14. Medicaid Expansion in Wisconsin BadgerCare Today

15. Medicaid Expansion in Wisconsin Governor’s Proposal (As passed by the Joint Finance Committee on June 4, 2013.)

16. Medicaid Expansion in Wisconsin Cost-Saving Alternative (As rejected by the Joint Finance Committee on June 4, 2013.)

17. Medicaid Expansion in Wisconsin Enrollment Comparison: Governor’s Proposal vs. Cost Saving Alternative

18. Medicaid Expansion in Wisconsin Cost Comparison: Governor’s Proposal vs. Cost Saving Alternative

19. Structure of the ACA

21. How Did We Get Here? The Accountable Care Act and What It Means to Health Insurance and the Health Care SystemJune 14, 2013 Robert Laszewski Health Policy and Strategy Associates, LLC Washington, DC

22. The health care market is changing.We are in the midst of a historic shift in the way the business of health care is being done.It is clear to policymakers, providers, and payers that we are in the last days of fee-for-service reimbursement.We are moving to a system where providers will be more often at risk for both the cost and quality of care.We are also moving to a system where individuals will be more responsible and accountable for the cost of their health care as employers evaluate their historic place in providing benefits.

23. The Country’s Growing National Debt Will Force Changes in the Way Health Care is Paid For

24. On the Current Track, How Federal Resources Would Be Allocated in 2023

25. And Just As the Health Care Entitlements Become Unsustainable We Have Added to Them With Passage of the Affordable Care Act (ACA) • Individuals will be required to purchase coverage. • Medicaid will be expanded for the poorest. • Employers will be required to offer coverage. • Insurance companies will be required to cover everyone. • There will be minimum standards for health plans.

26. The Affordable Care Act… • Will cost $938 billion over 10 years. • Will provide coverage for about 94 percent of Americans. • 30 million people are eventually expected to gain coverage––about half in private insurance and half in Medicaid. • States have the option of running their own health insurance exchange—or letting the feds do it—as well as implementing the Medicaid expansion.

27. Accountable Care Act (ACA) Implementation:Three Months to Go • States struggling to make final decisions, or carry out the decisions they’ve already made. • 17 states were given initial approval to run exchanges—33 either left all of it to the feds or most of it (Partnerships). • “I am absolutely confident that every state will have an exchange that will be functioning and ready,’ said Gary Cohen [HHS Spokesman], who declined to elaborate on the number or identity of states that could be in for difficulties.”

29. Insurance Rate Analysis by Actuarial Firm Milliman for Centrist Group “Center Forward”

30. The Federal Government Provides Families With Health Insurance Exchange Premium Support Based Upon Their Income as a Percentage of the Federal Poverty Level

31. Examples of Premium Credits for Single Coverage and a Family of Four • Subsidies are tied to the second lowest cost Silver plan in each market. • A single person making 100% of the federal poverty level (FPL), ($11,490) would pay no more than 2% of their income, or $230 per year. • A family of four at 100% the FPL ($23,550) would be required to pay no more than 2%, or $471 per year, toward the cost of health insurance. • A single person making 250% of the poverty level ($28,725) would pay no more than 8.05% of their income ($2,312) for single coverage.

32. Examples of Premium Credits… • A family of four at 250% of the FPL ($58,875) would be required to pay no more than 8.05% of their income, or $4,739 annually, for a family health insurance plan. • A single person making 300% of poverty ($34,470) would have to pay 9.5% of their income ($3,274) toward the cost of single coverage. • A family of four making 300% of poverty ($70,650) would have to pay 9.5% of their income ($6,712) toward the cost of family coverage.

33. Examples of Premium Credits… • An individual making 400% of poverty ($45,960) would have to pay 9.5% of their income toward single coverage ($4,366). • An individual making more than $45,960 would not be eligible for a subsidy. • A family at 400% of the FPL ($94,200) would have to pay 9.5% of their income ($8,949) toward their premium for family coverage. • A family of four earning more than $94,200 a year (four times the FPL) would not be eligible for a federal subsidy toward coverage and would pay the full cost of a plan.

34. Will Employers Remain Committed to Providing Health Benefits? • Employers with more than 50 employees will pay a fine of $2,000 per worker. • Any health plan contribution the employer converts to wages would be taxable income (income and payroll taxes) to the worker as well as subject to additional payroll costs for the employer. • But the wage will increase at the wage rate not at the health insurance cost trend increase which has tended to be two to four times larger. • The employee will be eligible for premium payment support from the federal government based upon their family income.

35. Will Employers Abandon Health Benefits? • Likely no quick or dramatic change. • After adjusting for the fine, increased payroll costs, and employee income tax consequences an employee with a middle class family income will not be better off—likely far worse off. • But likely a different conclusion in the small group market that is already shrinking at a rapid rate. • An employers commitment to benefits will likely have more to do with how competitive their labor market is.

36. The Supreme Court Decision • A surprise. • Justices Kennedy, Scalia, Thomas, and Alito wanted to throw the individual mandate and the entire law out. • The four liberals wanted to uphold all of it and eventually joined Roberts’ interpretation of the mandate as a tax in order save it. • The Roberts Court upheld the ACA but it did narrow the Commerce Clause for the Congress by calling the mandate penalty a “tax.” • And, the Roberts Court narrowed Congress’ ability to “coerce” state policy (“unfunded mandates”) by withholding federal money. • The states will now have the option of participating in the Medicaid expansion.

37. Only About Half of the States Will Expand Their Medicaid Programs

38. Number of People That Would Be Covered Under the ACA’s Medicaid Expansion in States That Brought the SCOTUS Suit

39. 2014 to 2019 Cost for Key States to Expand Medicaid and the Federal ShareSource: Kaiser Commission on Medicaid and the Uninsured

40. Findings of the Wisconsin Legislative Fiscal Bureau • Governor Walker’s Medicaid plan would offer those above 100% of the federal poverty level coverage in the new federal health insurance exchange rather than in Medicaid. • Federal Medicaid expansion under the new health law would cover 84,700 more people. • Governor Walker’s plan would boost the state budget by $119 million over the next two years even after the cost of adding the additional people to Medicaid under the new health law. • Accepting the federal Medicaid expansion would save the state an additional $340 million through 2021.