affordable care act: a washington insider’s perspective · 2017-12-31 · more than $250,000...
TRANSCRIPT
Affordable Care Act:
A Washington Insider’s Perspective
Sean M. McGuire
Principal
Objectives
• What are the key problems of the current system?
– Why some people feel reform is needed.
• How did the legislation evolve over time?
– The legislative version of “March Madness”
• What are the key provisions of the new law?
– How will it impact YOU?
– What is the implementation timeline?
Key Problems of the Current System
• Health care costs are too high.
• Too many people are uninsured or underinsured.
More spending does
NOT Guarantee Quality Care
� Nearly one-third of US health care spending is on administration of our complex system.
� Huge regional variation in spending:� Minneapolis: $3,341 per Medicare enrollee
� Miami: $8,414 per Medicare enrollee
� Average health outcomes do not vary by region.
�Actually a trend for more spending � worse outcome• From: Dartmouth Atlas of Health Care: http://www.dartmouthatlas.org
� U.S. ranks #19 in preventable mortality• From: Nolte E, McKee M.Health Affairs 2008;27:58-71
From: Brownlee S. Overtreated: Why too much medicine is making us sicker and poorer. 2007
The Cost of Insurance is
Skyrocketing
The Legislative Process
The Legislative Process(The Congressional Version of March Madness)
The ACA: The Bigfoot of American LawThe ACA: The Bigfoot of American LawThe ACA: The Bigfoot of American LawThe ACA: The Bigfoot of American Law
What’s Next for the States
•Lack of federal regulation challenges states &
law includes lack of forthcoming regulations
makes it a moving target.
•The federally run exchange may create
problems over government control.
•Exchanges are a clearing house for…
FIVE AGENCIES OF GOVERNMENT.
State Government Responsibilities
• Medicaid Expansion
• Insurance Exchanges
• High Risk Pools
• Insurance Regulation
Can We Afford it?
• The non-partisan Congressional Budget Office
says there will be a modest increase in health
care spending, but that the deficit will be
reduced over ten years.
• There is a lot of uncertainty in such long-range
forecasts and funding comes from reduced
Medicare growth and new taxes.
How Your Taxes Were Spent in 2009
With these added costs…
Expect to be paying your fair share…
• Rising insurance premiums, thus less take
home pay due to rising healthcare costs.
• Increased taxes for individuals and
businesses will face new requirements,
taxes and fees for non-compliance.
• Per person share of national debt is +/-
$52,000 and increasing.
New Taxes in 2013
• New Medicare Taxes
– Increased Medicare payroll tax for individuals
earning more than $200,000 and couples earning
more than $250,000 annually (1.45% => 2.35%).
– New Medicare tax on unearned income for those in
the above income brackets (3.8%).
• Flexible spending accounts will be limited to
$2500 annually.
Implementation Costs
• Unknown
• Added IRS Costs for non-compliance
• Hundreds of new Federal
Government employees to
implement 10,000 pages of
regulations and counting.
Expansion of the
Internal Revenue Service:
What Small Businesses Need to Know
• The cut off for major penalties is 50 FTEs, are
you going to be OK?
• Think long-term, what will your client’s business
look like in 3-5 years? If they plan on
expanding, knowledge of ACA is paramount.
What Small Businesses Need to Know
• Employees need to be aware of the Health
Insurance Exchanges and coverage options and
exchanges begin in October, 2013.
• Regulations contain critical details.
• Expect full-steam ahead with regulations and
compliance with existing laws could be enforced
aggressively across multiple departments.
Essential Benefits
•Section 1302 of the ACA lays out essential health benefits.
• Ambulatory patient services
• › Emergency services
• › Hospitalizations
• › Maternity and newborn care
• › Mental health and substance use disorder services, behavioral health
• › Prescription drugs
• › Rehabilitative and habilitative services and devices
• › Laboratory services
• › Preventive and wellness services and chronic disease management
• › Pediatric services, including oral and vision care
Employer Strategies
•The 49’r - This option is where an employer
purposefully trims their workforce to not be
qualified as a large employer . (50 is the magic
number, remember).
•The Roaring 20’s - Under this option, an employer
reduces employee hours to fewer than 30 (usually
28). Popular among restaurants, service industries,
and other employers with a lower wage and
younger workforce
Employer Strategies
•Empty Nester –Employer who does not have
group coverage and sends their employees out of
the nest and to the Marketplace to obtain coverage
•Cherry Picker - This is an employer that may have
an opportunity to establish a self-funded plan
•Old Faithful – Maintain coverage no matter what!
Employer Strategies
•Main Street – The employer establishes a Private
Marketplace where employees can choose from a
variety of health insurance options and services.
Look Back Period
• Use 130 hours of employment per month as the
basis for full-time employment status.
•
• “Look back” from 3 to 12 months to determine
full-time status. Thus, for PPACA purposes, an
employer may determine that an employee
needs to work at least 130 hours each and every
month for up to 12 months to qualify as full-
time.
Look Back Period
•These proposed new methods of determining full-
time status could allow employers to define many
seasonal/high turnover employees as not full-time,
eliminating the related employer penalties.
•The Look-back period is currently in effect right
now. If you plan to drop coverage you should
explore this issue in depth and all should figure out
the best measurement for them.
Controlled Group
• Two or more corporations connected through
common control or stock ownership in any of the
following ways.
• A "parent-subsidiary" controlled group exists
wherever a parent organization owns 80% or
more of the equity in a subsidiary organization.
Controlled Group
• (For corporations, the 80% + test is based on
attaining that level of voting power or total value
based on all classes of stock; for partnerships,
the 80% + test is based on attaining that level of
profits, interest etc,).
• Same concept applies for brother-sister
controlled group. The key numbers are 80
percent of one or more than 50 percent of two.
2014 for the Individual
– Health insurance mandatory for everyone…• Except… Native Americans, religious
objectors, those with financial hardship• Those under 30 have option for
catastrophic-only coverage.• Expansion of Medicaid to 133% of poverty
level.• Need-based government subsidies to buy
insurance.• Penalties up to $2,085 per family phased in
through 2016
Recommended Strategies
• Determine if you will be impacted by
compliance and penalties immediately.
• Align yourself with visionary individuals who
think outside the box. (Two ideas: Defined
Benefit vs. Defined Contribution & Telehealth).
• Inform employees of their total compensation
and compare to other organizations.
Other Strategies
• Take the time to understand what your
employees want and educate them about their
health and the Affordable Care Act.
• Benefits are moving from a two prong approach
to a three prong. Consequently can you react in
time to new compliance beginning in 2013?
Access Concerns
• Wait time: less face time with your doctor due to additional administrative burdens.
• Quality: universal coverage does not guarantee quality care and workforce shortages will persist if not addressed.
• Choice of provider: may be limited by provider choice due to lower reimbursement rates.
National Obstacles
• Chronic disease management and changing health behavior.
• Medications result in new diagnoses.
– Example: a side effect of schizophrenia medications is diabetes and weight gain.
Recommendation: creative solutions for this problem and others at the State level are desirable and possible in 2017, maybe sooner.
Unknown Unknowns
• Authority given to executive branch to define
ambiguity and implement fines.
• The devil is in the details and hidden fines and
penalties will be detrimental to some companies.
Recommendation: make unknown unknowns
known by seeking professional advice and be
proactive not reactive with regulators.
How E.D. Bellis Helps Businesses
Preparing business owners and executives
with synthesized information on healthcare
reform and providing ongoing regulatory
management during the entire Affordable
Care Act implementation.
2018
– Tax on “Cadillac” employer-sponsored insurance
Plans.
• Affects plans costing more than $10,200 for individuals
and $27,500 for families.
– Increases threshold for deducting unreimbursed
medical expenses to 10% of adjusted gross income.
How to Contact Me
Sean M. McGuire
Principal
E.D. Bellis
Email: [email protected]
Blog: HealthReformExplained.com
Twitter @SeanMMcGuire, & @AmericasCanary
Useful Web Sites
• Up to date information on health reform in language you can understand.– http://HealthReformExplained.com
• Kaiser Family Foundation Summary:– http://www.kff.org/healthreform/upload/housesenatebill_final.pdf
• Washington Post Calculator:– http://www.washingtonpost.com/wp-srv/special/politics/what-health-bill-means-for-you
• Fact Checking Web sites:– http://www.politifact.com/
– http://www.factcheck.org/
Questions
On the Books: Year One, 2010
– Temporary insurance program for the uninsured.
– Insurers cannot deny coverage for children with pre-existing conditions.
– Dependents up to age 26 can keep parents’ insurance.
– Insurers cannot set lifetime coverage limits and cannot cancel insurance.
– Medicare prescription “Doughnut Hole” starts closing
• $250 rebate: about 48,000 Nebraskans may qualify.
– Tax credits for small businesses wanting to buy insurance.
– 10% Tax on indoor tanning salon services began.
On the Books: Year Two, 2011
– Medicare prescription drug “Doughnut Hole” closes
further:
• Cost of drugs in the “hole” reduced by 50%
Government payments to Medicare Advantage
insurance plans will be reduced.
• Affects about 13% of Nebraska Medicare beneficiaries.
On the Books: Year 3, 2012
– Insurance companies spending more than 15 or 20
percent on administrative costs will have to provide
refunds to consumers.
• Experts predict these costs to be passed along to the
consumer in the form of higher premiums, and firms are
seeing former employees, demand rebate check.
– Employers must provide a summary of Benefit
Coverage to employees regardless of size.
• Insurance companies do not have final regulations.