The Affordable Care Act: What You Need to Know

1. The Affordable Care Act: What You Need to Know John Fallon John.Fallon@csh.org October 16,2012

2. The ACA is Confusing

3. Health Care Videos – Insurance 101 • How Does Medicare Work? • How do Deductibles Work? • PPO.flv

4. The National Story of Health Care-It is not a New Idea!

5. Health Care History • 1854 – Dorothea Dix proposed to Franklin Pierce the “Bill for the Indigent Insane” to establish asylums for the insane, blind, deaf, and dumb. She wanted federal land grants to the states. • Pierce vetoed it because he did not want to commit the Federal Govt to social welfare. That was the role of the states.

6. Health Care History • Teddy Roosevelt and the Progressives tried to pass Sick Pay Insurance in 1912. This failed. Opposition was AMA England began national health care for workers in 1911. • 1933 Franklin Roosevelt proposed “compulsory health insurance” but AMA opposed. Bill died 1935. • 1949 – Truman proposed the “Fair Deal” but AMA stripped health care.

7. Health Care History • 1965- Lyndon Johnson muscled through Medicare and Medicaid. AMA complained bitterly. • 1974 – Richard Nixon tried to create single payer national insurance. Teddy Kennedy opposed it and it lost. • 1993- Hillary-care lost. • 2003 – Medicare Part D – Optional Prescription Coverage • 2010 – Affordable Care Act Passed – 2014 full implementation.

8. The National Story of Affordable Care Act

9. Major Provisions of the ACA Affecting Low Income Populations • Signed into law on March 23, 2010 • Establishes a floor, not a ceiling • Medicaid Expansion to 133% FPL for Childless Adults. • Establishment of State Health Care Exchanges and Premium Tax Subsidies up to 400% FPL. • Phases-in changes to private health insurance coverage and expands public coverage • States are largely responsible for implementation • Individual Mandate Requires taxpayers to pay a penalty if they do not purchase insurance. • Ban on lifetime limits, pre-existing conditions, gender and health rating, and rescissions. • Coverage for dependent children up to age 26. • Medicare Part D Donut Hole Closing.

10. Medicaid Expansion • New Adult Group for Childless Adults • No need to meet disability criteria or be eligible for SSI • New income methodology under MAGI. • No Asset Test • Real Time Enrollment and Data Matching • Streamlined Citizenship/Identification Documentation • Proposed regulations set forth guidance to the states on how to integrate new Medicaid with traditional Medicaid. • Our goal is to ensure that no one loses coverage or is “worse off” after 2014.

11. Essential Benefits Package • The minimum contents of the essential health benefits package, which will be detailed in regulations to be issued in 2012, comprise the following categories mandated in the Affordable Care Act (all health plans sold through the health care exchange must cover the essential benefits package at a minimum): • Ambulatory patient services; • Emergency services; • Hospitalization; • Maternity and newborn care; • Mental health and substance use disorder services; • Prescription drugs; • Rehabilative and habilitative services and devices; • Laboratory services; • Preventive and wellness services including chronic disease management; • Pediatric services including oral and vision care.

12. Providers and the Navigation Role • Navigators assist people seeking Medicaid or insurance coverage after 2014 enroll in and choose a health plan. • This is an unfamiliar process for low income vulnerable populations who have had no access to insurance. • ACA requires that Navigators must be coordinated with community based providers but could be insurance brokers. • Advocates and providers are supporting systems which use community based providers who have relationships with the populations they serve and are paid to enroll and counsel clients.

13. Managed Care and Coordinated Care • States have a wide range of delivery systems for Medicaid including fee for service, managed care, capitated HMOs and coordinated care such as primary care case management and disease management. • These are all different types of systems to pay providers and to coordinate care for recipients. • Depending upon the arrangement, Medicaid recipients may or may not be able to choose their providers or switch providers easily.

14. Overview of Affordable Care Act – Health Care Reform • Enacts tax credits to help individuals and small businesses access more affordable insurance options • Reforms Medicare • Individual and employer responsibility provisions • Authorization of numerous grant programs and pilot projects

15. Key Components of the Affordable Care Act Available Now… In 2014…and beyond Individual Mandate Employer Responsibility State or federal “Health Insurance Exchanges” – new marketplaces with Essential Health Benefits package Large Medicaid Expansion to Adults up to 138% FPL No pre-existing condition exclusion Consumer protections – no annual limits, no rating except by age/location & smoker/non-smoker Closing Medicare Part D Donut Hole • IPXP (IL Pre-Existing Condition Plan) • (2,000 people) • Dependent Coverage up to age 26 • (102,659 young adults in adults, 2.5 million nationwide) • No pre-existing condition exclusion for children • No insurance rescissions except in cases of fraud/intentional misrepresentation • Small business tax credits • Preventative Services – no co-pay • (1.35 million people) • Consumer protections – no lifetime limits • (4.67 million people)

16. Essential Benefits Package: What is it? • All health plans sold through the health care exchange must cover these essential benefits at a minimum • States can use State Employee Health Plan, large insurers, or largest small group plan as benchmark package. • States have to decide on their benchmark plan by 3rd Q -2012. • Ambulatory patient services; • Emergency services; • Hospitalization; • Maternity and newborn care; • Mental health and substance use disorder services; • Prescription drugs; • Rehabilitative and habilitative services and devices; • Laboratory services; • Preventive and wellness services including chronic disease management; • Pediatric services including oral and vision care.

17. ACA and Non-Citizens • Medicaid eligibility remains the same for non-citizens; in general, must be a legal prior resident in country for 5 years exceptpregnant women and children. • To purchase insurance through exchange with subsidy only need to be lawfully present. • No coverage for undocumented non-citizens.

18. Status of ACA Litigation in Supreme Court • Supreme Court Decided Case in June 2012. • Individual Mandate found to be constitutional as a tax. • States cannot be financially penalized for failing to expand Medicaid. • What will Illinois do in terms of exchange and Medicaid? • Political Considerations in Congress of the “threat” to repeal and replace. • “Defunding” of Innovations Grants and other provisions.

19. The Individual Mandate • Requires most individuals to carry “minimum essential” health coverage • According to Kaiser Family Foundation, Almost 9 in 10 non-elderly people in the US would either satisfy the mandate automatically or be exempt from it. • Exemptions include: religious reasons, undocumented immigrants, very low income so do not file taxes, insurance premiums exceed 8% of family income • If individual mandate applies, the penalty is assessed per individual or dependent without coverage and will be phased in over three years: $95 for 2014; $325 for 2015; and $695 in 2016 & thereafter. Capped at three times this amount per year

20. How Many Could be Affected by the Individual Mandate in 2016? 32 millionpreviously uninsured affected by the mandate 24 million qualify for exemptions from the mandate 219 million insured by employers, Medicaid, Medicare’s disability coverage, or individual insurance and not affected by the mandate Projected Non-Elderly in 2016 = 275 million Source: Kaiser Family Foundation analysis; Congressional Budget Office; Jonathan Gruber

21. Medicaid Expansion: What is it? • In 2014, anyone under 65, not in Medicare and under 138% of the Federal Poverty Level (about $1,400 per month) will be eligible for Medicaid. • Federal government pays for much greater percentage of this expansion than for Medicaid now (100% in the first three years – 90% after) • Primary Care rates increased to 100% of Medicare for 2013 and 2014. • Most applications will be filed electronically through an Integrated Eligibility System with Medicaid and Health Insurance Exchange. • 138% FPL = ($32,000 for a family of four/ $15,400 for a single person) • 100% federal payment in the first three years, phasing to 90% in subsequent years

22. Medicaid Expansion: Who is it?

23. Medicaid Expansion: Who is it? • 610,821 uninsured individuals in Illinois will be eligible for new Medicaid “Adult Group” in 2014 • Less than those who become eligible to purchase insurance through the exchange (1,036,706 with or without a premium subsidy.) • In Cook County, 330,923 will be newly eligible for Medicaid and394,135 will be eligible to purchase insurance through the exchange with a subsidy.

24. Medicaid Expansion: Health Status of Population • Fair/Poor Health: 17.7% • Two or More Chronic Conditions: 18.2% • Limited or Unable to Work: 14.8% • More Likely to Be Childless Adults Than Parents • Likely to be healthier than nondisabled adults currently enrolled in Medicaid, but the least healthy and older individuals are among the new Medicaid expansion group and are more likely to enroll. Source: Robert Wood Johnson Foundation and the Urban Institute, The Health Status of New Medicaid Enrollees Under Health Reform, August 2010

25. Homeless Individuals – Most likely a subset of New Medicaid Group “Chronically homeless individuals are homeless repeatedly - four or more times in the past three years - or for long periods of time. They suffer from serious mental illnesses, substance abuse disorders, and physically disabling conditions. Typically uninsured, they frequently use emergency room services to address complicated health needs exacerbated by living on the streets or in shelters.” -National Alliance to End Homelessness

26. What about Illinois and the ACA?

27. Health Care Exchange Legislation • SB 1555 (now Public Act 097-0142) was signed into law in August 2011 by the Governor. • Created a Legislative Task Force to Recommend Implementation and Design of the Illinois Health Care Exchange. • Governance and Financial Sustainability are the major issues. • State must continue to progress toward an implementation design and then get approval for final implementation by January 1, 2013 to continue to get federal funding. • Several bills including HB 4141 were introduced to establish exchange board and rules but did not pass; Governor will announce soon that Illinois will opt to have a state-federal partnership exchange for first year.

28. Enrollment and Eligibility Issues in 2014 • Enrollment Procedures for Medicaid and Health Care Exchange applications online, by mail and in person. • Eligibility Determinations. • Roles for Community Based Providers such as clinics, permanent supportive housing providers, homeless service providers, hospitals. • Navigator System will be created using community based providers, medical providers (most likely only for individual enrollment) and the insurance broker community (most likely only for the small business market.)

29. Going Backward Before Going Forward • Medicaid Reform Legislation passed in Illinois in December 2010 and signed by Governor. • Caps AllKids at 300% FPL for new enrollees after 7/1/2011 (grandfathers in current AllKids enrollees over 300% FPL until 7/1/2012.) 4,000 children will be affected. • Imposes new verification of residency, a potential eligibility barrier, for Medicaid. • Requires 50% of Medicaid enrollees to be in risk based coordinated care by 2015. • Moratorium on Medicaid expansions until 2013.

30. Overview of 2012 Medicaid Reform Legislation • IL SB 2840: Save Medicaid Access and Resources Together Act (cuts) • IL SB 2194: Cigarette Tax • IL HB 5007: authorizes Cook County Medicaid waiver, extends moratorium on expansion to 2015, with an exception for those that don’t cost Illinois any money • IL SB 3397: Reforms practice of pushing Medicaid bills to next year • IL SB 3261: Hospital charity care

31. Overview of SB2840 • Assumes $1.3B in savings for FY13 • Eligibility and program cuts • Utilization controls • New cost-sharing requirements • Other: • Rate reductions • Care coordination

32. Eligibility and Program Cuts in SB2840 • Family Care – Reduced eligibility for adults and relative caregivers to 133% FPL (~$30,600/year for family of four) • Illinois Cares RX – Eliminated prescription drug assistance program for seniors and persons with disabilities • General Assistance – Eliminated • Medically Fragile/Technology Dependent waiver program – Capped eligibility at 500% FPL and new cost-sharing requirements

33. Utilization Controls in SB2840 • 4 prescription drugs/month • Annual limits on certain adult therapy services • Elimination of dental for adults, except in an emergency • Elimination of podiatry for adults, except for diabetics • Elimination of adult chiropractic services • Eyeglasses for adults limited to every two years • Change in DON from 29 to 37 • Payment for non-medically necessary c-sections

34. New Cost-Sharing Requirements in SB2840 • Cost-sharing increased to maximum allowed by federal law • MF/TD cost-sharing based on co-payment for certain services • Adults must now pay $3.65 for most medical services, including doctor and clinic visits. • Adults and children must pay $3.65 for using the emergency room when they do not • have an emergency. • Adults must pay $2.00 for each generic prescription and $3.65 for each name brand • prescription. • Children and pregnant women continue to be exempt from co-pays

35. Other Provisions Contained in SB2840 • Medicaid payment reductions for Nursing Facility Services and some hospitals • Supports moving forward with care coordination • Elimination of technical assistance payments to All Kids Application Agents • Requires contact with private vendor for verification of renewal applications

36. Implementation of SB2840 • Information and notices to Medicaid beneficiaries and providers -- doctors, hospitals, pharmacies, etc. • http://www2.illinois.gov/hfs/agency/Pages/Budget.aspx • Rules issued in Illinois Register and available for public comment                           • http://www.cyberdriveillinois.com/departments/index/register/home.html • Regular and emergency rules - Joint Committee on Administrative Rules • http://www.ilga.gov/commission/jcar/ILRulemakingProcess.pdf

37. Managed Care and Coordinated Care in Illinois • States have a wide range of delivery systems for Medicaid including fee for service, managed care, capitated HMOs and coordinated care such as primary care case management and disease management. • These are all different types of systems to pay providers and to coordinate care for recipients. • Depending upon the arrangement, Medicaid recipients may or may not be able to choose their providers or switch providers easily. • State embarking on Care Coordination Entities and expanded managed care. • Integrated Care Pilot operates in Collar County for over 19 with disabilities. • Cook County Waiver Pending.

38. What Can You Do?

39. How Can Tenants Improve Health Care? • DO NOT WAIT! READ YOUR MAIL. OPEN YOUR MAIL. DO NOT PANIC. BRING LETTERS TO YOUR CASE MANAGERS. • Ask questions of other consumers. Find out who you should ask. • Do math. What providers and services do you need? What are the co-pays? How do you access services? • Demand more. Be informed, Vote, Speak to researchers, Fill out surveys, Speak for those who can’t.

40. How Can Agencies Improve Payments? • DO NOT WAIT! READ YOUR MAIL. OPEN YOUR MAIL. DO NOT PANIC. BRING LETTERS TO YOUR CASE MANAGERS. • Build billing capacity for multiple customers. Managed care, MH, DHS, individual insurance, SSI, SSDI, VA, HUD, DCFS • Streamline reporting. • Build or use other’s electronic reporting capacity. • Are you a medical / mental health / SA Medicaid provider? • Do you want to be a biller or should you partner? • What can you do for a managed care company? For a biller? • Ask questions of other consumers. They are your customers.

41. How Case Managers Can Improve Client Health Outcomes? • People get paid for outcomes. Be efficient, versatile, and accomplish something for your tenants and payers. • Maintain stable housing. • Provide medication management. • Arrange for medical appointments. • Provide transportation to medical appointments. • Link clients to income supports and food security. • Link clients to behavioral health care on site or off site. • Build relationships with community health centers to provide primary care.

42. What is IllinoisHealthMatters.org? Mission of IHM: • To help Illinois individuals, small businesses, policymakers and community organizations understand and benefit from improvements and access to health care under national health care reform.

43. Illinois Health Matters – a way to organize and mobilize • Find HCR resources: Helpful for grant writing, program development, client questions • Ask HCR questions: Your Questions/Answered. Submit questions to our experts, we will feature on website • Read blog posts…or become a guest blogger! Good way to communicate your story or advocate for your cause – we promote to social network • Share “Neighborhood Stories” How is health care reform impacting real people? • Find out about local HCR events/webinars: Publicize your events or find out about other events • Connect with others about HCR: Engage with us on Facebook/Twitter/YouTube/LinkedIn to amplify message

44. Interactive health insurance data by regions and community areas throughout the State of Illinois

45. Questions? About Illinois Health Matters? Or Health Care Reform? • Questions: • John Fallon • John.fallon@csh.org • Stephanie Altman, saltman@hdadvocates.org • Please Join IHM Listserv, Facebook or Follow us on Twitter