information on the new wv health care act
DESCRIPTION
Information on the new WV health care act as presented by Gibbs Kinderman and Perry Bryant, with West Virginians For Affordable Health CareTRANSCRIPT
An Overview of the Affordable Care
Act and Its Impact on West Virginia
Greater Greenbrier
Chamber of Commerce September 21, 2011
2
ACA Has Three Main Goals
Expands health insurance. 95% of all
Americans covered by 2016
Strong regulations of the insurance
industry
Cost containment, particularly for
Medicare
3
Expansion of Health Insurance
Beginning in 2014, expands Medicaid to 133 % of the Federal Poverty Level, an estimated 122,000 to 157,000 low-income West Virginians will gain coverage.
Federal government pays almost all of the costs (95.9%).
4
Expansion of Health Insurance
Creates state health exchanges for
individuals and small businesses.
An exchange is a marketplace that
allows consumers to compare and
choose policies that best suits their
needs. Policies offered through a web
site, 1-800 number, or in person.
Expansion of Health Insurance
Beginning in 2014, significant tax credits for
individuals between 100% and 400% of the
Federal Poverty Level. An estimated 178,000
West Virginians will qualify for premium tax
credits in the exchange.
Small employers may also be eligible for tax
credits
6
An Example of Tax Credits for
Individuals in the Exchanges
Family of four with annual income of
$55,000. The total monthly premium is
$1,1 85 and the tax credits equal $840 a
month, 70% of the premium.
Source: Kaiser Family Foundation’s
Subsidy Calculator at www.kff.org
7
The Exchange and
Small Businesses
Eligibility for the exchange is 50 or
fewer employees, about 42,000 West
Virginia businesses employing 280,000
people.
Businesses with fewer than 25 employees
may be eligible for tax credits
8
Health Exchanges
Offer the promise of higher quality
while containing cost.
Central issues:
Who governs the exchanges?
What is their mission?
9
Senate Bill 408
Adopted last Spring, SB 408 establishes the West Virginia Health Benefit Exchange. Only the second exchange established in the country, since passage of the ACA.
Housed in the Offices of the Insurance Commissioner, and governed by a ten member board.
10
Insurance Reforms for Plan Year
Beginning After September 23, 2010
End pre-existing limitations for children
Young adults can stay on their parent’s
policy until age 26
Prohibits lifetime caps and limits annual
caps on benefits
11
Insurance Reforms for Plan Year
Beginning After September 23, 2010
For new plans sold after September 23,
2010:
Must cover effective preventive
measures with no cost sharing
Patient protections
12
Insurance Reforms 2014
An end to pre-existing limitations
An end to gender underwriting
Guarantee issuance and renewal
Impact on entrepreneurship and
impact on industry competition
13
Individual Responsibility
Beginning in 2014, individuals must
have health insurance or pay a penalty.
Exemptions for religious objections
and financial hardship.
Without individual responsibility, we
cannot adopt the major insurance
reforms.
14
Individual Responsibility
If individuals are free to sign up for
health insurance only when they face
major expenses, and drop the
insurance once their treatments have
been paid for, the rest of us will have
to cover the cost of their care. This
individual mandate is the flip side of
the abolition of exclusion for pre-
existing conditions.
15
Cost Containment
“The current (payment) system, based
on volume and intensity, does not
disincentivize, but rather pays more for
overuse and fragmentation.”
Mark McClellan
16
Cost Containment Continued
Payment reform – moving from fee-for-
service to payment that promotes
quality and coordination of care
Accountable Care Organizations
Reduced payment for hospital acquired
infections and preventable hospital
readmissions
17
Emphasis on Prevention, Primary
Care and Public Health
All new plans must cover and may not charge for preventive services that are clinically appropriate.
Annual wellness visits in Medicare. Preventive services covered without cost sharing.
Doubles appropriations to community health centers and National Health Service Corp and increases appropriations for public health.
18
Reduction in the Growth
of Medicare
These reductions reduce the annual
growth in Medicare from 6.8% to 5.5%,
according to the Commonwealth Fund
Commonwealth Fund: The Impact of Health Reform
on Health System Spending, May 2010
19
Employer Responsibility
Free Rider Provision
An employer with more than 50 employees that does not provide insurance, and if
One or more of its employees receives a tax credit for an individual policy purchased in the exchange, then
The employer pays a penalty
Penalty is $2,000/year/FTE minus the first 30 employees
20
Small Business Tax Credits
Phase I: 2010 through 2013
Employers with 10 or fewer employees
and average salary of $25,000 or less
qualify for a 35% tax credit on the
premium the employer pays. Phased out
to employers with 25 or fewer employees
making on average $50,000 or less.
Employer must pay at least 50% of the
premium. Owners do not qualify.
21
Small Business Tax Credits
Phase II: 2014 and beyond
Same focus on very small businesses.
However, the tax credit is increased to
50% of the employers’ premium
contribution.
Limited to two years after 2014.
22
32%
67%
88%95% 98%
0%
20%
40%
60%
80%
100%
Less than
10
10 to 49 50 to 99 100 to 249 250 +
Percentage of Employers Who
Offer Health Insurance
Source: Employee Benefits in West Virginia, Workforce (April 2006)
23
Other Impacts on Employer
Medical Loss Ratios:
Insurance companies must report the
percentage of premiums collected spent
on paying claims and improving quality
versus administrative cost.
Must meet minimum medical loss ratios:
80% for small group market, 85% for large
group market spent on benefits for policy
holders, or provide rebates to their
customers.
24
Other Impacts on Employer
The ACA originally required businesses
to file 1099-MISC forms on all their
vendors. This requirement was finally
repealed. Took a year to repeal after
both Democrats and Republicans
agreed that it should be repealed.
25
Overall Impact of the
ACA on Employers
By 2016
The impact on premiums for the small
group market will be between a 1%
increase and a 2% reduction.
The impact on the large group market will
be between zero impact and a 3%
reduction.
Source: Congressional Budget Office, November 30, 2009
26
Contact Information
Gibbs Kinderman
West Virginians for Affordable Health Care
HC 69, Box 88
Marlinton, West Virginia 24954
www.wvahc.org