Bo Ryall President and CEO Arkansas Hospital Association October 22, 2014

1. Bo Ryall President and CEO Arkansas Hospital Association October 22, 2014

2. Arkansas Health Care Payment Improvement Initiative

14. The Arkansas Health Insurance Marketplace

16. State vs. Partnership Models Source: Manatt Health Solutions

17. Insurance Companies offering QHPs • Ambetter of Arkansas • Arkansas Blue Cross Blue Shield • Blue Cross Blue Shield, Multi-State Plan • QC Life and Health • QualChoice Health Insurance

18. Meanwhile … • Arkansas Health Insurance Marketplace Board • Created by Act 1500 of 2013 • Among other duties, evaluate whether to move to state-based exchange as early as 2016

19. Arkansas Private Option

20. Legislative Party Shift

21. The Arkansas Health Care Independence Act of 2013 “Private Option” unique to Arkansas Federal $$ pays premiums for those who would have been eligible for expanded Medicaid CMS approved waiver to implement Private Option April 23, 2013

23. Eligibility for Private Option • Adults between 19 and 65 with incomes ≤ 138% FPL • Adult parents/caretakers above 17% of FPL with incomes ≤ 138% FPL • Not eligible (at least in Year 1) • Children • Those who qualify for standard Medicaid under pre-2014 requirements

24. Private Option Coverage • Eligible individuals will choose between at least 2 “high value” silver plans • 94% actuarial value if income between 101% and 138% FPL • Zero cost sharing if income ≤ 100% FPL • FFS Medicaid fills in “gap” until QHP coverage begins • Plus, 3 months retroactive coverage

25. Medically Frail Individuals • Exempt from ABP Enrollment • May choose “standard” Medicaid in order to get necessary services such as • Personal care • Private duty nursing • Custodial/long-term nursing home care • State still receives 100% federal match if a newly eligible who is “medically frail” chooses standard Medicaid coverage

27. Private Option by Ageas of September 30, 2014 • 19 to 44= 67% • 45 to 65= 33%

28. Co-pays and Deductibles • < 100% FPL or $11,670 • No co-pay or deductible in 2014 • Waiver for co-pay on 50-100% FPL in 2015 and 2016 • 100-138% FPL or $11,670-$16,104 • Subject to Medicaid cost-sharing rules • Maximum of 5% of 100% FPL • $604 yearly

29. Hospital Reimbursement Comparisonby Costs

30. Impact of hospital payment cuts since 2010 $250 billion Billions of Dollars Affordable Care Act, Middle Class tax Relief Act, American Taxpayer Relief Act, Sequester

31. Medicare cuts impacting AR hospitals

32. Medicare Losses Accruing to Arkansas Hospitals 2011-2022

33. 2014Arkansas Medicare Reductions $130,000,000 Uncompensated Care $400,000,000 Subtotal Impact $530,000,000 Private Option Impact Est. $200,000,000 Total Impact $330,000,000

34. Impact on HospitalsJanuary – March, 2014 • 30% Reduction in Uninsured for inpatient admissions • 24% Reduction in Uninsured in the Emergency Department • 2% Decrease in Emergency Department use

35. Impact on HospitalsJanuary – July, 2014 • 46% Reduction in Uninsured for inpatient admissions • 35% Reduction in Uninsured in the Emergency Department • 36% Reduction in Uninsured in Outpatient Clinic Care • 1.9% Increase in Emergency Department use

36. Reasons to Retain Private Option • 204,811 uninsured have now completed enrollment for the Private Option and more than 211,611 have been deemed eligible. • A Gallup poll issued in August showed that the uninsured has been reduced from 22.5% to 12.4%. The 10.1% reduction leads the nation.

37. Reasons to Retain Private Option • 81% of those enrolled in the Private Option have an income below 100% of the Federal Poverty Level or a yearly income of $11,670 or less. • 67% of those enrolled are between the ages of 19-44.

38. Reasons to Retain Private Option • Social Security Disability claims have been reduced by 15%. • $100 million State General Revenue budget savings • Healthier population keeps working

39. Thank you! Questions???? Bo Ryall President and CEO Arkansas Hospital Association (501) 224-7878 boryall@arkhospitals.org www.arkhospitals.org