San Francisco Department of Public Health – Office of Policy & Planning SAN FRANCISCO HEALTH COMMISSION 2013 UNIVERSAL HEALTHCARE COUNCIL FINAL REPORT February 4, 2013
Transcript
San Francisco Department of Public Health – Office of Policy & Planning
SAN FRANCISCO HEALTH COMMISSION 2013 UNIVERSAL HEALTHCARE COUNCIL FINAL REPORT
February 4, 2013
Universal Healthcare Council (UHC)
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Diverse 41-member body Studied interaction of the
federal Affordable Care Act (ACA) with the local Health Care Security Ordinance (HCSO)
Met 5 times September –December 2013
Final report issued January 6, 2014 Key findings Compilation of member
suggestions related to the intersection of ACA and HCSO
UHC Guiding Principles 1. Support the ACA 2. Maximize enrollment
into health insurance 3. Leverage state and
federal funding 4. Maintain Healthy San
Francisco 5. Maximize affordability 6. Shared responsibility
Presenter
Presentation Notes
Originally convened in 2006 and created the HCSO Includes representatives from local government, business, health and labor Chaired by Director Garcia and Dr. Sandra Hernandez, now the CEO of CHCF Commissioner Melara was a council member Looked at the interaction of HCSO with ACA Met 5 times between September to December 2013 Final Report Key Findings Compilation of 30 member suggestions
UHC Findings
For majority of employers covered, ACA does not present hurdles to compliance with either law
ACA changes affect how some employers comply and how some employees obtain coverage
Some individuals Some employers City’s PH system
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1. HCSO stays intact alongside the ACA
2. Certain groups may face affordability concerns
Presenter
Presentation Notes
Two key findings: HCSO remains intact alongside ACA For majority of employers, ACA does not change how employers comply with HCSO Does affect HOW some employers comply Some groups may face affordability challenges, which I will elaborate on in a few later slides Part time and low-wage employees Some small businesses and their employees I’ll provide a high level overview of the ACA and HCSO and discuss some of the data on the intersection of the two.
ACA Overview – Shared Responsibility
Individual mandate Requires minimum
essential coverage Some exceptions Proof of coverage via
federal income tax return
Penalties for noncompliance
Expanded Medicaid eligibility
Employer-sponsored coverage
On-line insurance marketplaces
Market reforms
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Requires Most People to Have Insurance
Provides More Affordable Options to Obtain Insurance
Presenter
Presentation Notes
Premise of ACA is shared responsibility – that multiple stakeholders bear some responsibility for implementation: individuals, insurers, employers and government. Individual Mandate Beginning 1/1/14 Some exceptions: Undocumented individuals Those experiencing hardship, such as homelessness, eviction or foreclosure, or significant health care debt, for example people with incomes below the threshold for filing federal taxes , which in 2012 was $9,750 for single person <65 The incarcerated Those with religious exemptions, and Members of Indian tribes MEC covers essential health benefits defined as: 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 “Excepted” benefits (e.g., vision, dental, hospital, etc.) not MEC Medi-Cal Currently, only for low-income people who are children, in families, over age 65, or disabled Healthy low-income adults have not been eligible and they comprise a significant portion of the uninsured. Health Reform changes this – beginning January 1, adults ages 18-64 with incomes between 0-138% of the federal poverty level, which is about $15,864 for a single person, will be eligible for Medi-Cal. The current Medi-Cal program that serves children, families, seniors, and people with disabilities will be unchanged. Those newly eligible will enroll into managed Medi-Cal It’s important to note, though, that eligibility does not equal enrollment. Enrollment is not automatic. Even today, approximately 1.3 million Californians are already eligible for Medi-Cal but have not enrolled. Individuals will have to apply for Medi-Cal, which they can do at any time during the year Covered California The second option represented on this slide is the State Health Insurance Exchange created by Health Reform, our exchange is called Covered California. Covered CA is an online marketplace where individuals can purchase health insurance Individuals who have incomes that are above Medi-Cal eligibility and small businesses can purchase insurance on the exchange 5.3 million Californians will be eligible for Covered California Plans are standardized so that they are easily compared across insurers There are four standard tiers – bronze, silver, gold, and platinum – the difference is the percentage of annual costs that the health plan covers There are sliding scale subsidies available to low income individuals up to 400% FPL, or $46k for a single adult Currently, 5 plans approved for San Francisco: Anthem Blue Cross Blue Shield Chinese Community Health Plan HealthNet Kaiser Like our insurance, enrollment can only occur in a specified period – October to March for the initial open enrollment, but October to December annually thereafter
ACA for Employers
Large employer = >50 FTEs Must provide affordable
insurance to >95% of full-time employees
Penalties for non-compliance begin in 2015
Small employer = <50 FTEs Not required to offer
insurance May participate in Small
Business Health Options Program through Covered CA
May be eligible for tax credits
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Large Employers Small Employers
Presenter
Presentation Notes
Technically, there is no mandate on employers to provide health insurance. Instead, there are incentives and penalties for employers to offer coverage. Small employers can purchase more affordable coverage on the exchange Insurance offered through Covered CA Now for businesses with 1-50 FTEs In 2016, up to 100 FTEs May cover part-time workers 20+ hours/week Six health plans available: Chinese Community Health Plan Blue Shield HealthNet Kaiser SHARP Western For large employers (>50FTEs, with FTEs defined as those who work on average 30+ hours per week), there is a financial penalty structure if employers either offer no coverage or unaffordable coverage No coverage is defined as an employer that offers coverage for fewer than 95% of FTEs The penalty is imposed if at least employee receives a low income subsidy through Covered California [Penalty is $2,000 annually multiplied by the number of FTE employees minus 30] Unaffordable coverage is defined as health insurance that pays for less than 60% of covered health care expenses OR health insurance that pays for ≥60% of covered health care expenses but the employee would have to pay >9.5% of their family income for the coverage Again, the penalty is imposed if at least employee receives a low income subsidy through Covered California [Penalty is $3,000 annually for each FTE receiving tax credit up to a maximum of $2,000 multiplied by the number of FTE employees minus 30] At a minimum, large employers who offer insurance that covers at least 60% of health expenses at a cost to employees of no more than 9.5% of family income would avoid penalties. These provisions were scheduled to become effective in 2014 but the Administration recently delayed implementation until 2015.
Employer Spending Requirement: Requires covered employers to make health care expenditures for their covered employees Covered Employers
Covered Employees Employed at least 90 calendar days; and Work >8 hours per week in San Francisco
Health Care Expenditures (HCE) Amount paid by an employer to provide
or reimburse health care services Minimum HCE for 2014 = total hours paid
to covered employee x $1.63 for medium employers or $2.44 for large employers
Healthy San Francisco: Established Healthy San Francisco as a health access program for the uninsured
HCSO Overview
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Presenter
Presentation Notes
Created in 2006 Codified as Chapter 14 of the San Francisco Administrative Code Has two prongs: the Employer Spending Requirement and Healthy San Francisco The chart on the right shows minimum health expenditures made by employers by employee hours worked. So, a full-time San Francisco employee is entitled to $3,300 -$5,000 in annual HCSO expenditures.
Common HCSO Compliance Methods Before the ACA
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Generally the two prongs of the HCSO function independently, but there is some overlap through the City Option under the Employer Spending Requirement. ESR: 4,204 covered employers made expenditures totaling ~$1.9B for 263,764 covered employees in 2012 88% of those expenditures were made through health insurance premiums Employers may choose how they wish to make health expenditures, and there are many ways to comply. The three main compliance methods are health insurance, the City Option, and health reimbursement accounts. Health insurance may be dental, vision, or comprehensive. For small employers, it may be purchased through Covered CA. HRA funds must be made available to the employee for 24 months. After that time, any unused funds revert to the employer. City Option payments are made to the City, which determines if an employee is eligible for the City MRA or HSF The City MRA is different from an HRA in that the funds are available in perpetuity and may be used for a wide variety of health related expenses including health insurance premiums.
Changes to Common HCSO Compliance Methods After the ACA
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Presentation Notes
The HCSO remains the same, except the HRA option, which must change to accommodate ACA rules. Beginning in 2014, employers may not offer HRAs unless The HRA reimburses for excepted benefits only (i.e. dental, vision) or the HRA is offered with a comprehensive health plan. This change potentially affects a minimum of 658 (16%) of HCSO covered employers For employees who have non-excepted carryover HRA balances in 2014, this change means losing eligibility for federal subsidies on Covered CA during each month they carry a balance. This potentially affects at least 35,000 employees, because the HCSO requires employees to have access to HRAs for a minimum of 24 months Of note: an advantage of the City MRA is that these funds do not disqualify the account holder from accessing subsidies on Covered CA. .
Impact on Individuals and Families
Age Income Household Size Employment Status Health Status
Undocumented immigrants
Part-time employees Small business employees Families Individuals with carryover
balances in existing HRAs Individuals choosing to
pay penalties
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Financial Considerations Groups Facing Potential Affordability Concerns
Presenter
Presentation Notes
The intersection of the ACA and HCSO impacts many groups in San Francisco, all of whom must make decisions related to health care. For individuals and families, health care related financial considerations include: Age Insurance pricing may be based on age Healthy 25-year old less expensive than a healthy 50-year old Rates for younger adults likely to increase, though may decrease for older adults under ACA Income Low-income individuals eligible for assistance – Medi-Cal or premium and cost-sharing subsidies Also, for very low income or those for whom expenses are >8% of cost of insurance, exempt from the mandate Household Size Determining how many people and the age of each factors into the cost of coverage. Not simply the cost of an individual multiplied by the number of people in the household Employment Status Under the ACA, certain employers have obligations and incentives to offer coverage Coverage not required to employees working less than 30 hours and, may not be available at all to employees working less than 20 hours. Under the HCSO, certain employers make financial contributions If they have employer-sponsored insurance, employees contribute on average $999 per year for individual and $4,500 for family coverage. Health Status People with chronic conditions are likely to have higher out-of-pocket costs The average annaul OOP cost for an individual with employer-sponsored insurance was ~$1,100 in 2012. _________________________________________________________________________________ Given these considerations, the UHC identified the following groups as facing affordability concerns: Undocumented immigrants Not eligible for benefits under Medi-Cal or Covered CA Part-time employees Less likely to have employer sponsored coverage Small business employees Small business employers less likely to offer employer-sponsored coverage And, employees face higher costs than in large businesses Families Health insurance costs are 3-4 times higher for families Family glitch, which may preclude some family members from accessing federal subsidies Individuals with carryover balances in existing HRAs Will lose eligibility for federal subsidies on Covered CA for each month they carry a balance A minimum of 35,469 employees had a stand-alone HRA in 2012 Individuals choosing to pay penalties May appear to be the less expensive choice But, exposes individuals to high health care costs in the event of illness or injury
Impact on Employers
Employer size Large v. small employer Subject to ACA, HCSO,
or both Employee work status
Full-time v. part-time employees
Uptake Eligibility Enrollment
Businesses with a high proportion of low-wage or part-time workers
Small businesses Businesses relying on
stand-alone HRAs Businesses choosing to
pay penalties
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Financial Considerations Groups Facing Potential Affordability Concerns
Presenter
Presentation Notes
Key financial drivers for employers include: Employer size Determines how and whether an employer must comply with the ACA or HCSO Calculated differently Employee work status Requires large employers to provide insurance to individuals working 30+ hours per week HCSO requires HCE for 8+ hours per week Part-time workers – insurance companies don’t provide coverage for <20 hours Small businesses have less affordable coverage since they lack strength in numbers to negotiate rates and spread risk Uptake Based on employee eligibility for insurance and their actual enrollment Not all employees are eligible – In most cases, to be eligible, employees must have full-time status and also pass through a waiting period after commencement of employment, and must have documentation. Then, once offered to eligible employees, insurers will only provide insurance if a minimum percentage of them to enroll ___________________________________________________________ Given this information, here is a list of some of the potential affordability and coverage concerns for employers: Businesses with a high proportion of low-wage or part-time workers Survey data shows that these businesses are more likely to have low health insurance uptake rates They have limited ability to find an insurer willing to insure their workforce And, if they can, those costs are often higher Small businesses Similar to the situation for businesses with low-wage or part-time workers In addition, while small businesses <25 employees may qualify for tax credits, SHOP rates may still be unaffordable And, tax credits are not available for businesses with >25 employees Businesses relying on stand-alone HRAs 190 businesses rely solely on stand-alone HRAs 806 additional businesses rely on a HRAs in combination with some other HCSO compliance method At least 658 used at least one stand-alone HRA in 2012 Because HRA funds revert to the employer, the inability to use stand-alone HRAs to comply with the HCSO into the future creates a potential financial problem for those employers that rely on them. Small employers make up half of the employers known to rely on stand-alone HRAs exclusively. No penalties for business for administering carryover HRA funds in 2014, but those funds may jeopardize the employee’s eligibility for federal subsidies. Businesses choosing to pay penalties
The potential impact on the City’s public health system is heavily influenced by the costs of indigent and uncompensated care. Section 17000 Indigent care mandate Provided largely by SFDPH, along with nonprofit hospital and clinic partners Reimbursement changes related to ACA implementation will affect the DPH budget heavily Fee-for-service to capitation $70 million in revenues for serving the uninsured Plus 80% of any savings we realize as a result of Health Reform Residually uninsured 51,000 estimated by DPH The state estimates this number to be higher (between 60-85,000) using our share of the state’s population This number, which is important in considering uncompensated care costs, will continue to be monitored and updated with ongoing ACA implementation. The City supports SFDPH in local general fund $500 million annually The largest proportion of DPH expenditures is allocated to delivering care to patients, including those who are seen through Healthy San Francisco and DPH hospitals and clinics. In the last three years, DPH has required $248.7-$336.5 million per year from the General Fund to cover shortfalls resulting from the cost of delivering health care services. Using General Fund dollars to provide care to people eligible for health insurance may not reflect best use of City money
Projected Impact of the ACA
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Estimates show that while the insured in SF will rise, those accessing charity care services will decline from 2013 to 2015 by 42%.
Charity Care is provided to the uninsured through all SF hospitals. SFGH provides the majority of this care (80% of the patients and 75% of the expenditures).
Numbers of Insured SF Residents and Charity Care Recipients (Projected Numbers for 2013 - 2015)
2013 UHC Member Suggestions: Modify the City Option
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Medical Reimbursement Accounts Allow unused City medical reimbursement account
funds to revert to employers after a certain time.
Petition Covered California to accept direct payments from City medical reimbursement accounts, saving employees the need to pay for premiums up-front.
Enforce the HCSO policy that allows unclaimed City medical reimbursement account funds to be transferred to the Department of Public Health to help defray the costs of indigent care.
Presenter
Presentation Notes
Among the 30 suggestions offered by members of the UHC as San Francisco moves forward with Health Reform, are many that seek to mitigate affordability concerns and gaps in coverage. The following are recommendations specifically addressing affordability for individuals and relating to the City Option or to the City’s health system. The first group of suggestions would alter the City MRA.
2013 UHC Member Suggestions: Modify the City Option
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Healthy San Francisco Expand Healthy San Francisco eligibility to cover
populations not eligible for ACA coverage, including seniors without coverage, people exempt from the individual mandate, immigrants not eligible for publicly-subsidized coverage, individuals barred from subsidies due to the “family glitch,” and those for whom insurance would cost more than eight percent of family income.
Delay the disenrollment of current Healthy San Francisco participants until after confirming that they have enrolled through Covered California.
Presenter
Presentation Notes
Another group of suggestions proposed modifications to HSF eligibility and enrollment.
2013 UHC Member Suggestions: Modify the City Option
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Create a New City Option Create a wrap-around program funded by health care
expenditures to pay for services not covered by Medi-Cal or Covered California plans (e.g., dental, vision).
Create a public benefit program that pools health care expenditures to support Healthy San Francisco for those ineligible for ACA coverage and to assist with premiums and out-of-pocket costs to ensure the affordability of health insurance for those eligible for ACA coverage
Presenter
Presentation Notes
A third set of suggestions proposed creating a new program under the City Option.
2013 UHC Member Suggestions: Conduct Outreach & Research
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Conduct an extensive outreach campaign to educate employees about the consequences of and options for use of carryover health reimbursement account balances.
Disseminate educational materials highlighting the difference that City medical reimbursement accounts could make to the affordability of health insurance on Covered California.
Promote the City Option to employers as a means of complying with the HCSO for employees for whom they do not provide health insurance.
Aggressively market availability of unused City medical reimbursement accounts funds to account holders, in conjunction with a campaign to help enroll account holders into insurance on Covered California.
Presenter
Presentation Notes
Outside of City Option modifications, several suggestions promote outreach and research to help people enroll in health insurance.
