Patient Protection and Affordable Care Act:

Timeline for Implementation

Commissioner Kim Holland

Oklahoma Insurance Department

Oklahoma Health Stats:Oklahoma ranks 49th out of 50 States in the overall health of its citizens.

3

Overall State Ranking 2008

Commonwealth Fund(Measures Performance of State Health Systems)

50United Health Foundation(Measures Health of State Populations)

43

4

Percentage of Citizens Without Health Insurance

State Rank

Texas 1

New Mexico 2

Oklahoma 6

Arkansas 10

Louisiana 12

Colorado 16

Missouri 27

Kansas 30

17.2 %12.2 %13.0 %

19.5%21.4%

24.1%

18.0%

17.8%

U.S.= 15.1%Source: U.S. Census Bureau, American Community Survey

Release Date: September 22, 2009

There are ManyUnansweredQuestions

Effective 2010• Coverage for Children with Preexisting Conditions

• Guarantee Issue for Children

• Temporary High Risk Pool Funds– Provides $5 Billion to states to pay claims for individuals with Pre-X

who have been without coverage for at least 6 months– Premium Required ─ 100% of Standard Risk Rate

• Coverage for Preventive Services– Requires plans to provide coverage without cost sharing for:

• Preventive services, Immunizations recommended by CDC, and preventive screenings for infants, children, adolescents & women

Effective 2010• Adult Dependent Coverage

– Requires plans that provide dependent coverage to extend coverage to adult children up to age 26

• Prohibition of Lifetime Dollar Limits– Applies to plans on their first renewal date after September 23, 2010

• Tax Credits for Small Business– Employers with 25 or fewer employees and annual wages < $50k/yr

Effective 2010• What is a Grandfathered Plan?

– A plan in existence on 3-23-2010

• Grandfathered Plans are Excluded From:– Covering young adults to age 26 if they have other employer coverage– Waiver of pre-x for individual plans only– Annual limit provisions for individual plans only– Choice of provider requirements– Pre-authorization restrictions for emergency room services– Preventive care coverage requirements– New claims and appeal processes

Effective 2010• Causes for Loss of Grandfathered Status:

– Entering into a new policy, contract or certificate on or after 3-23-2010 (fully insured)

– Eliminating all or most benefits to diagnose or treat a particular condition– Increasing coinsurance percentage– Increasing a deductible or out-of-pocket limit more than 15% + medical

CPI– Increasing a copay by the greater of: more than $5 or 15% + medical

CPI– Decreasing the employer contribution for any tier of coverage by more

than 5%– Any change to annual limits (includes adding or deleting)

Effective 2014• Guarantee Issue & Renewability

– Standards developed by HHS

• Prohibition of Excessive Waiting Periods– Group plans may not impose waiting periods that exceed 90 days

• Prohibition of Annual Dollar Limits on Plans

• Include Essential Benefits

Effective 2014• Individual Mandate

– Penalty for Noncompliance:• Greater of $695/yr (3X that $ for family) OR 2.5% of household income

– $95 in 2014 (or 1% taxable income)– $325 in 2015 (or 2% taxable income)– $695 in 2016 (or 2.5% taxable income)

• After 2016, penalty will be increased at COLA rate

• Individual Incentives– Advanceable Premium Credits

• Available for those making between 133-400% FPL – Cost-sharing Subsidies

• Available for those making between 100-400% FPL• Native Americans <300% FPL─ No cost sharing (Approx. 8% of Population)• Available only for Exchange purposes

Effective 2014• Employer Mandate

Employers with 50+ employees must offer coverage or face a penalty• If a large employer does not offer minimum essential coverage and one of its

employees receives a subsidy through the Exchange, it will be subject to a penalty of up to $2,000 per employee. When calculating applicable penalty, the number of employees is reduced by 30.

• Large employers who do offer coverage but the coverage is insufficient or not “qualified” or “affordable” and whose employees receive a subsidy through the Exchange will be subject to a penalty of $3,000 per employee receiving a subsidy. The penalty shall not exceed $2,000 times the number of fulltime employees.

• Employers of 50 or fewer employees are exempt from these requirements.

• Reinsurance Pool for High Dollar Claims

Effective 2014• State-Based Exchanges

– Would allow individuals and small businesses with up to 100 employees to purchase coverage

– Beginning in 2017, businesses with more than 100 employees would be allowed to purchase coverage

• Benefit Tiers Established for Exchange Plans

• Rating Standards

Q & ACommissioner Kim Holland

Oklahoma Insurance Department