the affordable care act – after the supreme court ruling

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Robert Semro - Policy Analyst, The Bell Policy Center

The Affordable Care Act – After the Supreme Court

Ruling

September 22, 2012

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The Affordable Care Act timeline:– 46 reforms were implemented in 2010 and 2011– 10 reforms are scheduled to be implemented in 2012 – 13 reforms are scheduled to be implemented in 2013 – 19 major reforms are scheduled to be implemented in 2014

Guaranteed issue of coverage Expanded Medicaid coverage and presumptive eligibility Individual requirement to have insurance Community rating for private insurance Health Insurance Exchanges and Essential Health Benefits No annual limits on coverage Lower income premium and cost sharing subsidies for affordable coverage Employer requirements / penalties

Implementation Timeline for the ACA

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Benefits From the Affordable Care Act in Colorado:

(As of July 31, 2012)

Health plans are now required to allow parents to keep dependent children under age 26 on their family coverage: As of December 2011, 50,000 young adults in Colorado gained insurance coverage.

In 2010, 42,580 people with Medicare in Colorado received a $250 rebate to help cover the cost of their prescription drugs

To date Colorado residents with Medicare have saved a total of $40,079,421 on their prescription drugs

7,806 people with Medicare received a 50% discount on covered brand-name prescription drugs when they hit the “donut hole”

This discount has resulted in an average savings of $666 per person, and a total savings of $5,202,213 in Colorado

Source: Healthcare.gov.: http://www.healthcare.gov/law/resources/co.html

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(As of July 31, 2012)

This discount has resulted in an average savings of $666 per person, and a total savings of $5,202,213 in Colorado

In 2011, 382,143 people with Medicare in Colorado received certain free preventative services (including mammograms and colonoscopies), or a free annual wellness visit

158,067 people with Medicare received free preventive services 973,000 Coloradans with private health insurance gained preventive health

services with no cost sharing 1,227 previously uninsured Colorado residents with pre-existing

conditions have coverage through the ACA high risk pool


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(As of July 31, 2012)

As many as 208,197 Colorado residents with private insurance coverage may receive rebates in 2012 from health insurance carriers that fail to Medical Loss Ratio targets. These rebates will average $227 for as many as 121,000 families in Colorado

The Affordable Care Act prohibits insurance companies from imposing lifetime caps on health benefits. To date 1,902,000 Colorado residents (including 696,000 women and 521,000 children) are no longer subject to lifetime benefit limits.

To date, 1,227 previously uninsured Colorado residents with pre-existing conditions have coverage through the ACA high risk pool


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(As of July 31, 2012)

Colorado has received $18.9 million in grants for research, planning, IT development, and implementation of COHBE

Colorado has received $17.2 million in grants from the Prevention and Public Health Fund created by the ACA

Colorado has received $5 million to improve insurance premium rate review Health centers in Colorado have received $78.8 million in grants to:

– Create new health center sites in medically underserved areas– Enable health centers to increase the number of patients served – Expand preventive and primary health care services– Support construction and renovation projects


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(As of July 31, 2012)

Colorado has received more than $106.4 million for its work to build the health care workforce, crack down on fraud, and support public health.

Additional smaller grants include: – $500,000 to support the National Health Services Corps– $1.3 million for the expansion of the Physician Assistant Training Program– $3.5 million for school based health centers.– $210,000 to support outreach to eligible Medicare beneficiaries– $492,000 to support Aging Disability Resource Centers– $473,700 for Family to Family Health Information Centers– $7.9 million for Maternal, Infant, and Early Childhood Home Visiting Programs


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The Supreme Court Ruling

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Definitions

Individual Mandate: The ACA requires most U.S. citizens and legal residents with incomes above the federal income tax filing threshold to obtain minimum health care coverage or pay a tax penalty.

Medicaid Expansions: The ACA requires participating states to cover nearly all people under age 65 at or below 133% of the Federal Poverty Level. Originally non participation would lose a state all Medicaid funding. The federal government will pay:

– 100% of costs for the first 3 years (2014 through the end of 2016)– 95% federal financing in 2017– 94% federal financing in 2018– 93% federal financing in 2019– and 90% federal financing from 2020 on (10% state financing)

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The Supreme Court Ruling on June 28, 2012

Legal Question: Is the individual mandate constitutional?– Decision: The individual mandate is constitutional under Congress’s

power to tax. To comply with the ACA, individuals have a choice – to purchase health insurance or to pay a small tax.

Legal Question: Is the mandated expansion of Medicaid constitutional? Is the expansion a valid exercise of Congress’s spending power or coercion of states?

– Decision: The federal government cannot terminate all funding for Medicaid if states don’t comply. Only new funding for expansion is affected. States may opt out of the expansion

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States and the Expansion of Medicaid

Arguments against Medicaid expansions– Some state budgets cannot absorb even 10% of these additional Medicaid

costs– Other programs like education will suffer because states must balance budgets– The federal government may reduce it’s Medicaid expansion contribution in the

future requiring states to absorb more costs – States may have to absorb administrative / infrastructure costs – States may not have enough Medicaid providers or infrastructure – Health care costs will increase making the expansions unsustainable over time

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Arguments for Medicaid expansions– 17 million currently uninsured Americans would qualify for coverage– There is no effective private insurance alternative – The federal government will pay the entire cost of covering these newly enrolled

populations for the first 3 years and after 2019, states will only be required to pay 10% of coverage costs

– Expanding Medicaid will reduce uncompensated care costs that are currently passed on to providers and people who are insured

– Expanding Medicaid will provide regular access to care and preventative services that improve health and reduce costs

– State government should not base their participation decisions on economic circumstances that will change over the long term

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Not participating:– Florida, Louisiana, Mississippi, South Carolina and Wisconsin

Leaning toward not participating:– Texas, New Jersey, Missouri, Iowa, Nevada, Nebraska, Kansas

Participating: – Massachusetts, Vermont, Connecticut, Maryland, Delaware, Minnesota,

Illinois, California, Hawaii Leaning toward participating:

– Washington, Oregon, Rhode Island, Arkansas Undecided or no comment:

– All other states including Colorado


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The Colorado Health Care Affordability Act (Hospital Provider Fee) The size of the new Medicaid eligible population in Colorado The per parson cost of the new Medicaid eligible population The impact on Colorado’s budget (General Fund) Depending upon the results of the national elections in November,

This may be the single biggest healthcare issue in the 2013 Colorado legislative session

Medicaid Expansions: the Decision for Colorado

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Implementing the Colorado Health Benefits Exchange

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Health Insurance Exchanges

National Status of Health Insurance Exchanges– 16 states (32%) are establishing State Insurance Exchanges (including

Colorado)– 16 states (32%) are studying options– 3 states (6%) are planning for a State Federal Partnership Exchange– 9 states (18%) have not made a decision but are engaged in no significant

activity– 7 states (14%) have made the decision to use a federal exchange and not

create a state exchange

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Health Insurance Exchanges

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Colorado Health Benefits Exchange

The Colorado Health Benefits Exchange (COHBE)– Website: http://www.getcoveredco.org– Created through bi-partisan legislation in 2011 (Senate Bill 200) – COHBE will open for business in October 2013 and is on schedule – Coverage will begin on January 1, 2014

Funding– Colorado has received about $19 million in federal grant funding to implement

the exchange Individual and SHOP Exchanges (Larger Risk Pools) Standards for Qualified Health Plans (QHP) and Essential Health

Benefits Requirements (EHP) No “Active Purchasing” Potential impact of “ACA defunding” and “state mandates”

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The Future of the Affordable Care Act

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Where Will the Affordable Care Act Be in 2013?

It depends on the November 2012 elections…………….– If President Obama wins the Presidential election the Affordable Care

Act will be likely be implemented. – If Republican candidate Romney wins the Presidential election and the

Republicans win control of the U.S. Senate the Affordable Care Act may not be repealed but it will likely be significantly de-funded

It will also depend upon Budget Reduction efforts regardless of the outcome of the elections

– Budget Control Act of 2011, the “sequester” and the “fiscal cliff”– Simpson Bowles Commission and other budget reduction plans – The U.S. House budget proposal

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Some things will probably stay in place – It will be difficult for Congress to repeal those provisions that have

already been implemented– Provisions to limit waste fraud and abuse in Medicare and Medicaid will

probably stay in place– Some cost cutting provisions in the Affordable Care Act will stay in

place

If the Affordable Care Act is De-Funded

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THANK YOU

Robert Semro

Policy Analyst

Bell Policy Center

[email protected]

the affordable care act – after the supreme court ruling

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