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Affordable Care Act & changes to Wisconsin Medicaid
July 2013
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Overview
Individual Mandate Federal Exchanges (SHOP & Marketplace) Changes to Badgercare Future of HIRSP Changes to employer group health plans
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The Individual Mandate
Starting January 1, 2014, most people required to have health insurance or pay penalty.
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Individual Mandate
Purpose of mandate Challenge to Individual Mandate Acceptable Insurance Exemptions to insurance requirement Penalties for failure to have insurance Employer shared responsibility
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Purpose of Individual Mandate Conceived in 1990s by conservative
economists as alternative to Hillarycare.
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Purpose of Individual Mandate One Goal of insurance is have healthy
people subsidize unhealthy people. Because insurers no longer able to prohibit
people with pre-existing conditions from obtaining insurance, no mandate may mean: People may wait until sick to obtain. Thus, only sick will have insurance. Claims will be higher. Will drive up cost of insurance.
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Challenge to Individual Mandate Challenged in court by conservative
governors. Upheld as Constitutional in June 2012 by
United States Supreme Court.
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Acceptable insurance under Individual Mandate Insurance acceptable to meet mandate:
Medicare Medicaid Employer Group Health Insurance Individual health insurance COBRA Tri-care Etc.
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Exemptions to requirement to have insurance Most required to have health insurance. As with every rule, there are exceptions.
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Exemptions from Individual Mandate Undocumented immigrants (illegal aliens) Incarcerated persons Members of an Indian Tribe Religious conscience objection
Mainly Mennonite and Amish groups
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Exemptions from Individual Mandate Member of health care sharing ministry Income below requirement to file tax return
$9,350 for individual Out-of-pocket cost for health insurance more
than 8% of income Based on cost of bronze plan
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Exemptions from Individual Mandate Hardship exemption
Homelessness Eviction Domestic violence Death of close family member Disasters damaged individual’s property Income between 100 & 138% of FPL
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Exemptions from Individual Mandate Also get three month slide. Can go three months, one time, without
health insurance before penalty kicks in.
After that, people assessed 1/12th of annual penalty for each month with no coverage.
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Exemptions from Individual MandateObtaining an exemption:
Hardship & Religious exemptions determined by exchange (Marketplace). Person must file application with exchange. Exchange then issues certificate.
Remaining exemptions claimed by individual at time taxes filed.
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Penalty for no insurance
Called a “shared responsibility payment” 2014:
Greater of $95 or 1% of family income 2015:
Greater of $325 or 2% of family income 2016:
Greater of $695 or 2.5% of income After 2016:
Penalty amount increases with cost of living
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Penalty for no insurance
Max penalty per family capped at no more than 300% of the minimum penalty. For example, in 2016, max penalty would be $695
x 300% = $2,085.
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Payment of penalty
Penalty due when taxes are otherwise due. Assessed and collected like any other tax. Persons who fail to pay not subject to
criminal penalties or liens and levies. After application of exemptions, estimated
only 2% of Americans will have to pay the penalty.
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Employer Responsibility
Delayed until at least 2015 Penalty between $2,000 to $3,000 if:
Employer has equivalent of 50 or more full-time workers;
Employer does not offer affordable health insurance with minimum essential coverage;
At least 1 Employee purchases health insurance in Exchange; and
Employee receives subsidy in Exchange.
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Health Insurance Exchanges Background SHOP Exchange Individual Exchange (Marketplace)
Eligibility requirements Coverage Plan tiers Subsidies Enrollment & Applications
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Health Insurance Exchanges November 2012, Governor Walker decided
against state-run health insurance exchange. Thus, Federal Government will run
exchanges in Wisconsin.
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Health Insurance Exchanges Two types of exchanges in Wisconsin:
SHOP Exchange for small businesses. Exchange for individuals.
Federal government has rebranded Individual exchange as “Marketplace.”
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Health Insurance Exchanges Wisconsin Department of Health Services
estimates approximately 700,000 people will enroll in exchanges (SHOP & Marketplace).
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Health Insurance Exchanges Open enrollment begins October 1, 2013.
Insurance starts January 1, 2014.
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SHOP Exchange
Small Business Health Options Program. In 2014 & 2015, businesses with up to 50
employees can buy insurance in exchange. Some aspects of SHOP Exchange delayed
until 2015. In 2016, businesses with up to 100
employees will be able to buy insurance in exchange.
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Individual Exchange (Marketplace) Eligibility
Individuals can buy individual and family health insurance on Marketplace if: Not undocumented immigrant (illegal alien); Not incarcerated; and Meet state residency requirements.
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No more underwriting
Anyone will be able to purchase health insurance on Marketplace regardless:
Pre-existing conditions Health status History of claims
Premium cannot be higher because of health condition.
Cannot charge women higher price.
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No more underwriting
Price can vary on: Age – but limited.
Cannot charge more than 3 times for older person compared to younger person.
Currently, averages about 5 times more for older person – but can be as high as 10 times more.
Where person lives. Tobacco use. Plan tier.
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Plan coverage
Insurance obtained thru Marketplace called Qualified Health Plan (QHP)
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Plan coverage
All plans include Essential Health Benefits. This includes coverage for: Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including
behavioral health treatment 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
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Plan coverage
All plans will also include state mandates such as: Autism Cochlear implants coverage
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Similar plan coverage will allow apples-to-apples comparison In past, difficult to compare insurance plans
because differed on what was covered. Because all plans will cover EHB,
Marketplace will allow for apples-to-apples comparison.
Plans will materially differ only by provider network & by plan tier.
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Plan tiers
Different tiers based on actuarial coverage: Platinum - 90% Gold - 80% Silver - 70% Bronze - 60% Catastrophic
Must be under 30 years old Cannot have other affordable
insurance option Not eligible for subsidies
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Plan Tiers
Bronze plan: Insurance covers 60% health care costs for
average person. Enrollees, on average, responsible for paying
40% costs. Platinum plan:
Average individual would pay 10% out-of-pocket for covered benefits.
Insurer would pay 90%.
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Plan Tiers
However, individuals with high-cost health conditions could pay significantly more than average.
Premiums higher for Platinum plan, lower for Bronze plan.
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Subsidies
Subsidies available if: Not eligible for Medicare or Medicaid; and Cannot obtain affordable employer insurance; and Income between 100 & 400% of FPL.
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Subsidies
Congressional Budget Office estimates that 7 out of every 8 people buying insurance on Marketplace will receive subsidies
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Not Eligible for Medicare or Medicaid “Eligible” is key word. Person cannot obtain subsidy by disenrolling
in Medicare. If disability determination needed for
Medicaid, person not “eligible” for Medicaid until favorable disability determination made by SSA or state Medicaid.
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Affordable employer health insurance Employer insurance affordable if:
1. Worker’s share of premium less than 9.5% of household income.
Calculation based solely on what worker would pay for self-only coverage and not family coverage;
And
2. Insurance must provide also “minimum value.” Covers at least 60% of costs.
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Affordable employer health insurance By October 1, 2013, employers must give
employees notice about: Coverage that is available on the Marketplace; If employer-sponsored coverage is offered; and Whether that coverage provides minimum value.
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Subsidies
Premium reductions if income between 100 & 400% of FPL. Between about $23,000 to $94,000 a year for
family of four. Cost-sharing reductions if income between
100 & 250% of FPL. About $59,000 for family of four.
Out-of-pocket maximum reduced if income between 100 & 400% of FPL.
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Premium reductions(Based on Silver Plan)
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Also called advanced premium tax credits.
Premium reduction Example(Based on Silver Plan)
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2013 Household income 110% FPL = $12,639 Unsubsidized silver plan yearly premium = $3,018
Monthly premium = $251.50 With premium reduction, max % of income for
premium = 2% of income. 2% of yearly income = $253
Monthly premium = $21.08
Cost-sharing reductions
Won’t know exact details of cost-sharing reductions until plan info released in August or September
Can only obtain with Silver Plan
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Out-of-pocket maximum reductions 2013 maximum out-of-pocket limits:
$6,250 for self-only coverage $12,500 for family coverage
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Premium & cost-sharing estimates:(Based on taking Silver Plan)
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Premium & cost-sharing estimates: (Based on taking Silver Plan)
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Subsidies
Subsidy calculator at UC Berkeley Labor Center: http://laborcenter.berkeley.edu/healthpolicy/calcul
ator/index.shtml
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Open Enrollment Period for 2014
Open enrollment October 1, 2013 to March 31, 2014.
If enroll by December 15, coverage starts January 1.
If enroll between Dec. 16 & Jan. 15, coverage starts February 1.
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Open Enrollment Period for 2014 In future, if enroll between 1st & 15th of month,
coverage begins 1st of following month. Example: enroll Feb. 6, coverage begins March 1.
If enroll between 16th & end of month, coverage begins 1st day of 2nd following month. Example: enroll Feb. 18, coverage begins April 1.
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Future Open Enrollment
For 2015 and later years, Open Enrollment Period is October 15 to December 7 of the previous year.
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Special Enrollment Periods SEP triggered by “qualifying life event.” SEP 60 days from “qualifying life event.”
Only applies to individual market For employer plans, SEP is 30 days.
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Special Enrollment Periods Coverage start date similar to open
enrollment. Enroll between 1st & 15th of month, coverage
begins 1st of following month. Enroll between 16th & end of month, coverage
begins 1st day of 2nd following month. However, coverage effective on date of birth,
adoption or placement for adoption, when that is “qualifying life event.”
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Special Enrollment Periods Qualifying Life Events
Losing other minimum essential coverage unless caused by nonpayment of premium.
Becoming dependent through marriage, birth, adoption or placement for adoption.
Gaining status as citizen, national or lawfully present individual in USA.
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Special Enrollment Periods Qualifying Life Events
Experiencing an error in enrollment. QHP substantially violated material provision of its
contract. Losing exemption from individual mandate Becoming newly eligible or newly ineligible for
different amount of subsidies.
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Special Enrollment Periods Qualifying Life Events
New QHPs becoming available as result of permanent move.
Individual is Indian, as defined by the Indian Health Care Improvement Act.
Other exceptional circumstances, as determined by the Exchange or Health & Human Services Error by exchange employee or agent, etc.
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Applying thru Marketplace
Consumers will be able to enroll in QHP: Online
www.healthcare.gov. Website will have chat capabilities;
Phone 24 hour call center: 1-800-318-2596;
Mail; or In person at certain locations.
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Applying thru the Marketplace Call Center
Massive call centers expected to handle 42 million calls by end of 2013.
Caveat: call centers may be inaccurate. When Part D launched, about one-third of callers got an
inaccurate or incomplete answer from new call center.
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Navigators
Navigators will assist people with
enrolling in insurance in Marketplace. Federal government offering around
$800,000 in grants for Wisconsin Navigator program.
Grants to be awarded in August 2013. Also may be Certified Application Counselors
to help apply.
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Applying thru the Marketplace Marketplace should know previous year’s
income thru tax return automatically. Individuals will be able to apply for Medicaid
thru Marketplace Will not be a real-time decision.
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Termination of coverage
Persons with subsidized policy qualify for three-month grace period on premium payments after paying at least one month's premium.
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Potential Medicaid Expansion Background Under Affordable Care Act, states were required to
expand Medicaid to all adults with incomes less than 133% FPL or lose all Federal funding for Medicaid.
Supreme Court held states could decide not to expand Medicaid without losing Federal funding for all Medicaid.
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Potential Medicaid Expansion No deadline for states to decide whether to
take Medicaid Expansion. Could take in future years or drop after taking
Expansion.
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Cost of potential Medicaid Expansion Currently, Wisconsin pays approximately
40% cost of Medicaid, and Federal government pays 60%.
For expanded Medicaid population, Federal government would pay 100% costs for 2014, 2015, and 2016.
After 2014, Federal government share would be reduced to 90% by 2020.
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Badgercare Plus Changes
2013 – 2015 budget rejects Medicaid expansion.
Instead, alternative plan in budget.
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Badgercare Plus Changes
Currently, parents with children eligible for Badgercare Plus if income below 200% of FPL.
Budget lowers eligibility for Badgercare Plus to 100% of FPL on January 1, 2014.
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Badgercare Plus Changes
Currently, some childless adults receive Badgercare Plus Core if income below 200% of FPL.
However, enrollment closed in Core. Budget terminates anyone above 100% of
FPL from Core on January 1, 2014. Childless adults below 100% will be eligible
for new Badgercare Plus plan. Cannot be eligible for Medicare
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Badgercare Plus Changes
Coverage for new Badgercare Plus plan for childless adults will be Badgercare Plus Standard Plan.
Thus, coverage for childless adults will be better than current Core plan.
No annual enrollment fee for childless adults.
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Badgercare Plus Changes
DHS estimates approximately 93,000 childless adults will gain Badgercare coverage under Badgercare Plus changes.
Approximately 92,000 adults will lose Badgercare Plus and Core on Jan 1, 2014. They will have to purchase health insurance
through the Marketplace. Only affects Badgercare Plus & Core; does
not affect Elderly, Blind, & Disabled Medicaid.
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Future of HIRSP
Because people with pre-existing conditions will be able to obtain insurance in Marketplace, HIRSP ending January 1, 2014.
HIRSP non-Medicare members will: Below 100% FPL, be eligible for new Badgercare
Plus benefit. Above 100% FPL, obtain insurance in Exchange.
HIRSP Medicare members will have guaranteed issue into traditional Medicare Supplement.
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Changes to employer group health insurance Beginning January 1, 2014 – out-of-pocket
maximum for non-grandfathered plans $6,350 for individual $12,700 for family Includes copayments, coinsurance & deductibles
but not premiums May not apply to drug cost if plan uses separate
administrator
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Changes to employer group health insurance Beginning January 1, 2014 – maximum 90
day waiting period.
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Changes to employer group health insurance Currently, employer plans may exclude
coverage for preexisting conditions for 12 months.
Exclusion period reduced by 1 day for every day of previous creditable coverage.
On January 1, 2014, preexisting condition exclusions prohibited for all employer plans.
Thus, HIPAA provisions re creditable coverage obsolete after January 1, 2014.
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End of Presentation
These materials are current as of July 11, 2013. Because federal government & state responses to
implementation of ACA has frequently changed, materials may not be correct after July 11, 2013.
Any questions – contact Jason Klimowicz (608) 267-0214 [email protected]
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