Health Reform and the Impact of the Supreme Court Decision: What does it mean for Missouri businesses?

1. Health Reform and the Impact of the Supreme Court Decision: What does it mean for Missouri businesses? Ryan Barker, Director of Health Policy Missouri Foundation for Health 7/17/12

2. Supreme Court Case: What was decided? • Four Main Questions: • Too soon? (Anti-Injunction Act) No 2) Constitutional authority for individual mandate? • Commerce Clause No • Necessary and Proper Clause No • Tax and Spend Clause Yes

3. Supreme Court Case: What was decided? • Four Main Questions: • Severability Did not need to answer • Medicaid Expansion Yes, but… Can not force states to expand by penalizing them (taking all federal funding for Medicaid), must be optional for states.

4. Topics Covered in the ACA • Medicaid • Medicare • Workforce/Access to Care • Quality of Care • Prevention • New Models of Care • Health Insurance Exchanges • Tax Credits for Individuals • Impact on Small Businesses • Employer Requirements • Private Insurance • Individual Mandate

5. Major Themes of the ACA • Expanding Health Insurance Coverage • Insurance Regulations • Focus on Prevention • New Models of Care • Increasing Quality

7. Health Insurance Exchanges • Like a Farmer’s Market for health insurance • Individuals and small businesses (<100) • Larger employers beginning in 2017 • Creates four benefit plans, plus catastrophic plan • Guarantee issue and renewability • Rating rules (only for age, family size, and tobacco)

9. Cost of Administering Health Insurance as a Percentage of Claims, by Group Size

10. Benefit Design • Prescription drugs • Maternity care • Mental health and substance abuse • Essential health benefit package includes: • Preventive care • Hospitalization • Emergency services • Benefits features: • No cost-sharing on preventive care • No annual or lifetime dollar limits on coverage • Coverage for dependents up to age 26

11. Premium Subsidies to Individuals/Families

12. Small Business • No requirement that small employers must offer health insurance or pay a fine (<50 employees) • Sliding scale tax credits for small employers (<25 employees) • Access to the Exchange in 2014 and must use tax credit within the Exchange starting then

13. Employer Premium Tax Credits • Must have fewer than 25 FTE • Less than $50,000 average wages • Must pay at least half of employee premiums • Up to 35 percent credit for health coverage • Increases to 50 percent in 2014 • Slight differences for nonprofit organizations

14. Employer Requirements • Employers with >50 employees • If do NOT offer coverage • If do offer coverage • If employer offers coverage, the employee’s share of premium must exceed 9.5% of income in order for them to be eligible for a tax credit in the Exchange • Employers with >200 employees • Report health coverage on W-2 forms

15. Changes to Private Insurance • No annual/lifetime limits and no rescinding coverage • No pre-existing condition exclusions • Rating rules • Guaranteed issue • Dependents up to 26 • 80-85% of premium on medical services (MLR) (~$65 million in rebates in Missouri) • Health Insurance Rate Authority

16. Payment System Reform • Problems: • Fragmented and uncoordinated care • Variable quality • High and rapidly-growing costs • Pay for number of services provided • New Models of Care and Payment: • Medical Homes • Accountable Care Organizations • Bundled Payments

17. Wellness Programs • Five-year grants for small employers to establish wellness programs • Technical assistance to evaluate employer-based wellness programs • Permit employers to offer employees rewards • Require chain-restaurants and vending machines to disclose nutritional content

18. Individual Mandate • All individuals must have “qualifying” coverage • Those without coverage: • Pay a tax penalty of $695 of 2.5% of household income (up to a maximum of three times that amount or $2,085) • The penalty will be phased-in: $95 in 2014, $325 in 2015, and $695 in 2016 or 1.0% of taxable income in 2014, 2.0% of taxable income in 2015, and 2.5% of taxable income in 2016 • Exemptions for financial hardship, religious objections, or 8% rule

19. Expansion of Medicaid • Expand Medicaid to 133% of FPL for non-Medicare individuals and families • Guaranteed benchmark benefit package • 100% federal funds at first, then step-down to 90%

21. 2012 Federal Poverty Levels (FPL)

22. 400% Federal Poverty Level 133% 100% 18%

23. CoverMissouri.org Follow us on Facebook and Twitter Sign up for our Cover Missouri E-Bulletins

24. Contact Information: Ryan Barker rbarker@mffh.org 314-345-5510

25. Medicare Spending $105 billion in Medicare spending (10 years) • $43 billion to gradually close the Part D • $5 billion for prevention benefits • No cost-sharing for preventive services • Health risk assessments and personalized prevention plans • Incentives to complete behavior modification programs • $8 billion for primary care physicians and other providers

26. Medicare Savings

27. Impact on Medicare