Kansas Insurance Department

Transcription

1 Kansas Insurance Department The Affordable Care Act What Happens Now? Kansas Society of CPAs June 5, 2013 Linda J. Sheppard, Special Counsel & Director of Health Care Policy and Analysis 2010 Affordable Care Act Provisions In Effect NOW No pre existing condition exclusions for children Dependent coverage to age 26 Small Business Tax Credit For businesses with 25 or fewer employees Average wages less than $50,000 Employer must contribute at least 50% of premium Tax credit phases out as number of employees and wages increases : Up to 35% of total employer contribution 2014 and later up to 50 % 1

2 2010 Affordable Care Act provisions in effect NOW No rescissions, except in cases of fraud or intentional misrepresentation Coverage of preventive health services with no out of pocket costs Enhanced appeals procedures Federal Pre existing Condition High Risk Pools no longer accepting participants No lifetime limits and phase out of annual limits 2014 ACA provisions Elimination of pre existing condition exclusions Guaranteed issue and renewability of coverage Rating factors limited to age, tobacco use, geography and family structure Tax credits and subsidies to help pay premiums and out of pocket costs; up to 400% of the Federal Poverty Level Limits on out of pocket costs in qualified health plans 2

3 2014 ACA provisions Mandated coverage for essential health benefits Uniform explanation of benefits and standardized definitions Individual mandate to ensure consumers do not wait until they are ill to seek coverage healthy and young people needed to keep down costs You will be penalized for no coverage (with some exceptions) push for more incentives Establishment of an online marketplace (formerly referred to as the exchange) Essential Health Benefits Essential Health Benefits in health plans must contain at least the following 10 categories: Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including behavioral treatment Prescription drugs Rehabilitative and habilitative services and devices Laboratory services Preventive and wellness services and chronic disease mgmt. Pediatric services, including oral and vision care 3

4 Kansans & Insurance Now Approximately 365,000 Kansans are uninsured 13.1 percent of the state s population Of all Kansans, 51.8 percent are covered by employment based insurance Public insurance (Medicare, Medicaid, other) covers 29.6 percent of all Kansans A total of 5.5 percent of Kansans have individual (other private) insurance (Source: Kansas Health Institute, 2012) Kansans & Insurance Now Kansas s Medicaid eligibility threshold for adults (less than 32 percent of the Federal Poverty Level) is among the lowest in the country Currently, childless adults who are not disabled cannot qualify for Medicaid Approximately 380,000 Kansas adults and children are enrolled in Medicaid or CHIP (Source: Kansas Health Institute, 2012) 4

5 Kansans & Medicaid Predictions Federal Medicaid expansion, if approved by the state, would provide eligibility to ALL adults earning </= 138 percent of the Federal Poverty Level ($32, 499 for a family of four, $15,856 for an individual) More than 240,000 Kansans are expected to enroll in Medicaid if the state expands the eligibility as set forth in the ACA. (Source: Kansas Health Institute, 2012) Additional Medicaid considerations Kansas hospital officials worry about disproportionate share phase out Concern over KanCare changes and for profit managed care oversight State cost of expansion Public awareness of programs IT infrastructure success 5

6 Kansas & Insurance Future Under the ACA, each state will have an American Health Benefit [online] Marketplace (Exchange) by January 1, 2014 If a state has not chosen to operate an online marketplace, the federal government will operate it for the state Kansans will have the opportunity to buy insurance (or be eligible for Medicaid assistance) through the federal marketplace Marketplace Operations 17 states and the District of Columbia are going to operate state based marketplaces 7 states are partnering with HHS 26 states have opted to have the federal government run the marketplace 6

7 Marketplace Provisions People who apply to buy insurance through the online marketplace who are eligible for a public program (like Medicaid) will be enrolled in that program The basic concept is much like Expedia or Travelocity you are directed to the proper area depending on the information you give Marketplace Timeline Insurance companies were able to start submitting applications to be on the Kansas Marketplace on March 29, 2013 All applications were due on May 1, 2013 KID will have about 3 months to review and approve applications (including policy forms and rates), must submit data to HHS by July 31, 2013 Open enrollment begins on October 1, 2013 and ends March 31,

8 Marketplace Requirements Under the ACA, the Kansas Marketplace must be interoperable with the Medicaid eligibility system so that Medicaid eligible Kansans will be directed to that portal Insurance companies operating in the Kansas Marketplace must be approved by the Kansas Insurance Department (KID) Five Core Marketplace Functions 1. Consumer assistance Support, education, outreach, Navigator mgmt. 2. Plan management Active purchaser or any willing plan; data collection 3. Eligibility Applications verification; connection to Medicaid, CHIP if needed 4. Enrollment Transactions, transmission 5. Financial management User fees; risk adjustment 8

9 The Marketplace(s) Individual Exchange: Provides information on subsidies and Medicaid eligibility and facilitates enrollment Small Group (SHOP) Exchange: For small employers ( 1 defined as employer and one employee) 70% participation rate allowed in federal SHOP State may elect to define as 1 50 until Jan. 1, 2016 Beginning in 2015 employer may choose coverage level and allow employees to choose from carriers offering at that level Beginning in 2015 the marketplace will collect and combine premiums and sends to carriers Large Employer Responsibility (50 or more FTEs) difficult formula If an employer doesn t offer minimum coverage and one of its employees receives a subsidy through the Exchange, the employer will be subject to a penalty: $2,000 annually, times the number of employees, minus 30. If an employer does offer coverage, but an employee receives a subsidy through the Exchange to pay for the premium, the employer will be subject to a penalty of $3,000 annually for each employee receiving a subsidy, up to a maximum of $2,000 times the number of full time employees, minus 30. 9

10 Adjusted community rating For the small group and individual markets: No rating based on health status Maximum age variation of 3:1 (ages 21 to 64) Maximum variation based on tobacco use of 1.5:1 Actuarially justified variation based on geographic areas (state may set areas) Family rates built up based on age and tobacco use of each member Plus, single risk pool in small group market and individual market (except for grandfathered plans) This will significantly impact rates for younger/healthier enrollees in most states. Benefit design & cost sharing Individual and small group plans must include Essential Health Benefits (EHBs). Large group and selfinsured plans may not have annual or lifetime limits on EHBs. EHBs based on benchmark plan in each state Cost sharing levels: Bronze = 60% actuarial value Silver = 70% actuarial value Gold = 80% actuarial value Platinum = 90% actuarial value Catastrophic plan (limited to < age 30 and those without affordable option in the market) 10

11 Qualified Health Plans At a minimum, QHPs must: 1. Be licensed and provide Essential Health Benefits 2. Offer at least one Silver (70%) and one Gold (80%) plan 3. Charge same price in and out of Exchange for same plan 4. Meet marketing requirements (state rules in ) 5. Meet network adequacy requirements (state rules in ) 6. Include essential community providers in network 7. Be accredited by organizations recognized by Secretary 8. Implement quality improvement strategies (2016) 9. Utilize uniform enrollment form and standard format for presenting plan options Note: HHS and/or states could impose additional certification requirements Other Plans Available in Marketplace Co Op Plans New, non profit insurers with consumer focus Receive loans from federal government for initial funding BUT future funding has been cut off Must be fully licensed comply with state and marketplace regulations Multi State Plans Must be licensed and comply with state regulations 11

12 Navigators Marketplaces must make grants to Navigators. Trade, industry & professional associations Fishing, ranching, and farming organizations Community and consumer focused nonprofits Chambers of commerce Unions Licensed agents & brokers (if they do not receive any compensation from carriers) Navigators conduct public education and distribute information Navigators facilitate enrollment, but may not advise or enroll Navigators provide referrals to consumer assistance offices Navigators (cont d) HHS is developing standards for training and certification of Navigators Navigators may not be insurers or receive direct or indirect compensation from insurers for enrollment in a QHP States may not require a Navigator to be licensed as an agent or broker States should be careful to ensure that Navigators do not perform functions that would require an agent s license 12

13 Other Assisters In person Assisters (federal grant funds available) Certified Application Counselors Primarily in hospitals and clinics Volunteers with training and certification Agents and Brokers Listed on the Exchange Commissions paid by insurers Appointment issues Cost Control Rate review, medical loss ratio provisions attempt to deal with administrative costs of insurance companies Accountable Care Organizations (ACOs) and bundled payments are attempts to influence underlying costs These are not enough. Unless we get underlying costs under control, we will not solve the long term crisis 13

14 Kansas Insurance Department 420 SW 9 th St. Topeka, KS [email protected] Phone: Consumer Assistance: Fax: