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1
The Affordable Care Act and Texas Implementation
Texas Statewide Independent Living Conference
April 5, 2011
Stacey Pogue, Senior Policy Analyst, pogue@cppp.org Center for Public Policy Priorities
900 Lydia Street - Austin, Texas 78702 (512) 320-0222 – www.cppp.org
2
Health Reform: The Big Picture
• Establishes a system for making comprehensive care available to all lawfully present Americans at an affordable price
• Competition in health insurance marketplace cannot be based on avoiding risk
• Lays a foundation for controlling costs and improving quality of care
3
Timeline
2014 2013 2012 2011 2010
• 2010: Early insurance market reforms begin.
• 2010-2014: Start building new systems needed to support covering large numbers of uninsured.
• 2014: Big expansion of coverage starts.
4
Health Reform Building Blocks
• No lifetime limits• Parent’s coverage for young adults to age 26• No pre-existing condition denials for kids• More accountability for premiums• New federal high risk pool: www.pciplan.com • Small employer tax credits• Medicare improvements
First Year Reforms
2010 - 2011
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Health Reform Building Blocks
• Can’t deny coverage• No pre-existing condition exclusions• Can’t charge more if you get sick• Limits on premium increases based on age• Minimum essential benefits and more
standardized plans• Small business tax credits increase
Private Market
2014
6
Health Reform Building Blocks
• Eligibility up to 133% of the federal poverty level ($29,300/yr for family of four)
• Adds ≈ 1.3 million adults in Texas– Need improved eligibility system
• Full federal funding 2014-2016
• Maximum state share of 10%– Significant new state costs
Medicaid Expansion
2014
7
Health Reform Building Blocks
• Exchange = state-based, organized insurance market
• Clear, comparable information on cost, coverage, value
• Open to:– Individuals without job-based insurance– Small employer groups – Members of Congress
• Premium assistance for <400% FPL ($88,000 for a family of four)
• Sliding-scale deductibles/copays and out-of-pocket caps
Exchange & Affordability
2014
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Coverage Level Options in the Exchange
4 standard levels, plus a catastrophic plan (for people under age 30 or if no other coverage is affordable)
Options vary by % of covered benefits paid by the plan on average vs % covered through out-of-pocket enrollee cost sharing
40%
30%
20%
90%
80%
70%
60%
10%
0% 20% 40% 60% 80% 100%
% covered by plan% enrollee cost share
All coverage has essential benefits, to be defined by HHS: hospital, ER, mental health, maternity, Rx, preventive care, chronic disease management and more.
Platinum
Bronze
Gold
Silver
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>$88,400 for a family of four;>400% of FPL
Job-based coverage, or Full-cost coverage in the exchange
$66,200-$88,400; 300-400% of FPL
Job-based coverage, or Subsidized exchange coverage: premiums capped
at 9.5% of income
$44,100-$66,200;200-300% of FPL
Job-based coverage, or Subsidized exchange coverage: premiums capped
at 6.3 – 9.5% of income
$29,300-$44,100;133-200% of FPL CHIP
• Job-based coverage, or• Subsidized exchange coverage:
premiums capped at 3% - 6.3% of income
<$29,300 for a family of four; < 133% FPL
Medicaid Medicaid
Children Adults (non-disabled adults,
not eligible for Medicare)
Fam
ily
Inco
me
Health Reform Coverage Options by Income
Family income based on 2009 federal poverty income levels for a family of four
1010
Texas Uninsured by Income Today… 88% of 6.4 million uninsured <400% FPL
<100% FPL<$22,100/yr for family of four
100-200% FPL$22,100-$44,200
200-300% FPL$44,00-$66,200
300-400% FPL$66,200-$88,200
>400% FPL>$88,200/yr
758K
628K
2.1 Million
1.8 Million
1.2 Million
Annual income limits given for a family of four, 2009-10 federal poverty level U.S. Census, CPS
6.4 million includes 1.6 million non-citizens;
~2/3 of ( just over 1 million) likely undocumented
11
Health Reform Building Blocks
• Requirement to have coverage if you have an affordable option
• Several exemptions
• Needed for affordable coverage after market reforms
• Penalty is 1/6 of the cost of coverage
Individual Mandate
2014
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Health Reform Building Blocks
• Larger employers face penalties if full-time workers get subsidized exchange coverage– Penalty is ≈1/4 of the cost of coverage
• Small employers have no new obligations; won’t face penalties– May qualify for tax credits (2010)– Can purchase at a fair price in exchange – Or employees can directly get affordable
exchange coverage
Employer Responsibility
2014
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Under Reform - 2019
Employer
159 million
56%
Medicaid/CHIP
51 million
18%
Nongroup &
Other
26 million 9%
Private Exchanges
24 million
9%
Uninsured
23 million
8%
Employer
162 million
57%
Medicaid/CHIP35 million
12%
Uninsured
54 million
19%
Nongroup & Other
30 million 11%
Without reform - 2019
Source: The Congressional Budget Office Cost Estimate of H.R. 4872, Reconciliation Act of 2010, Mar. 20, 2010
282 Million U.S. Residents Under Age 65
Americans’ Coverage in 2019:If nothing changed compared to health reform law
1414
Which Texans would Gain Coverage If Reform were Fully Implemented Today?
Exchange with help
Exchange at full cost
Medicaid adults: newly eligible
Medicaid/CHIP kids: eligible NOW but not enrolled
Remain uninsured
≈ 2 Texans gain private coverage for each 1 gaining through Medicaid
Of the 6.4 Million Uninsured Texans today…
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Who Will Still be Uninsured?U.S. Citizens
• Not subject to mandate; will not owe penalty
– those with very low income
– those who would pay more than 8% of income for most affordable exchange coverage
• Subject to mandate; will owe penalty
– Some may choose not to buy coverage
– Others may still find coverage unaffordable
Undocumented:
• not covered by the mandate
• no Medicaid/CHIP (not before, not now),
• no premium help, and cannot buy at full cost from exchange
Legal Permanent Residents:
• Adults are excluded from Texas Medicaid under state law, but
• Can purchase from exchange and qualify for help with premiums
161616
Best Steps for Texas to take in 2011 to Implement Health Reform
• Start building a strong Texas insurance exchange to help families and small businesses get affordable insurance in 2014.
• Make sure the Texas Department of Insurance can enforce popular insurance reforms—like no pre-existing denials for kids, keeping kids on your policy until age 26, and making sure rate hikes are fair.
• Give state agencies and the exchange the authority and tools to build consumer-friendly systems for enrolling in health coverage.
• Fed law requires “No Wrong Door” and online application between exchange and Medicaid. Need integration between two enrollment systems from the start
17
Use of This Presentation
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If you reproduce these slides, please give appropriate credit to CPPP.
The data presented here may become outdated.
For the most recent information or to sign up for our free E-Mail Updates, visit www.cppp.org.
© CPPP
Center for Public Policy Priorities900 Lydia StreetAustin, TX 78702
P 512/320-0222 F 512/320-0227
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