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The Affordable Care Act 2013 Update
This publication has been created by the Area Agency on Aging, Region One with Financial assistance, in whole or in part,
Through a grant from the Center forMedicare and Medicaid Services.
The Affordable Care Act
The Patient & Protection Affordable Care Act (PPACA) passed in 2010 has provisions that take effect each year until 2020.
The PPACA affects Medicare, Medicaid, Private and Group Health Insurance, and mandates the availability of affordable health insurance to all Americans beginning in 2014
Helpful Acronyms
ACA – Affordable Care Act (short for the PPACA)
CMS – Centers for Medicare and Medicaid Services
FPL – Federal Poverty Level (annual levels announced every February)
The ACA and Medicare
In general, the ACA will restructure payments made by Medicare with a combination of reductions in some areas, increases in others, as well as a combination of financial incentives and penalties based quality performance
The ACA and Medicare
the ACA will restructure payments made by Medicare to a “value-based” payment system measured by the health of patients versus a “volume-based” payment system measured by the number of services provided
2013 Part D Drug Costs
In 2013 the cost of prescription drugs to Medicare beneficiaries in the donut hole will continue to reduce
In 2013 beneficiaries will pay 47.5% for brand-name drugs, and 79% for generic drugs in the donut hole
The ACA & Part D Drug Costs
Part D drug co-insurance continues to gradually reduce for beneficiaries until 2020 when the donut hold goes away
In 2020 the donut hole coverage period will effectively become an extended initial coverage period where the costs of all drugs is 25% of the total drug cost
Hospital Reimbursements
Reduces or eliminates payments to hospitals for preventable and excessive hospital re-admissions effective October, 2012
Reduces Medicare payments to certain hospitals for hospital-acquired conditions by 1% beginning in 2015
Primary Care Physicians
Increases reimbursement rates to primary care physicians beginning in 2013
Provides for financial incentives to doctors for keeping patients healthy based on standardized criteria
Medicare Accountable Care Organizations
The ACA has selected medical networks as designated Accountable Care Organizations (ACO’s)
The ACO’s provide coordinated care through a network of primary care and specialty providers
Medicare Accountable Care Organizations
Accountable Care Organizations (ACO’s) are selectively available in some areas to Original Medicare beneficiaries
ACO’s are not HMO’s, and members have the same flexibility as all Original Medicare beneficiaries
Medicare Electronic Health Records
The ACA imposes penalties on medical providers not showing “meaningful use” toward the implementation of electronic health records beginning in 2015
Electronic Health Records (EHR) are envisioned as key to coordinated care
Medicare Demonstration Projects
Various demonstration projects (pilot projects) are being established to provide better care to beneficiaries and save costs
Care Transitions demonstration projects DMEPOS Competitive Bidding in Maricopa
and Pima Counties on 7-1-13
Medicare Fraud & Abuse
The ACA’s ongoing effort to prevent Medicare fraud and abuse continues with enhanced fraud detection capabilities
Senior Medicare Patrol programs empower beneficiaries to be watchful for fraud and abuse
Medicare Advantage Plans
Payments to Medicare Advantage Plans are gradually reduced between 2012 and 2016 to be more in-line with average fee-for-service payments
85% of plan expenditures must go toward members care to avoid penalties
Medigap Review Under the ACA
The ACA requires the NAIC to review Plans C and F for potential revision to include “nominal cost-sharing to encourage the use of appropriate physician services under (Medicare) Part B.” The new benefit standards are to be made available beginning January 2015
Independent Payment Advisory Board
Establishes a 15-member independent review board to reduce the per capita rate of growth of Medicare spending
The Board will regularly review expenditures and make recommendations to achieve reductions in payments beginning in 2015
Medicaid Expansion
States are permitted to opt into Medicaid expansion beginning in 2014
Medicaid would effectively be available to all U.S. citizens and legal, permanent residents with income below 138% (133% + 5%) of the Federal Poverty Level
Arizona & Medicaid Expansion
Arizona has passed legislation to fully participate in Medicaid Expansion. Beginning in 2014 the Expansion goes into effect.
Health Insurance Exchanges that begin in 2014 can only offer the premium subsidies to residents with more than 100% of FPL
Health Insurance Marketplace
The ACA mandates that states either establish their own health insurance exchanges by October 1, 2013 or use the federal exchanges
The health insurance marketplace will offer citizens and legal residents affordable health care options regardless of pre-existing conditions
Arizona’s Marketplace
Arizona has decided not to establish its own exchange, as have 30 other states
Arizona’s exchange will be established and operated by the Federal Government
Administration by CMS, and will be available to consumers on 10/1/13
Eligibility
Citizens and legal residents Premium subsidies are available to
individuals and families with income less than 400% of FPL
Employees offered coverage by their employer are not eligible for premium credits
Individual Premium Limits
Premium payment limits based on income 100-133% FPL: 2% of income 133-150% FPL: 3-4% of income 150-200% FPL: 4-6.3% of income 200-250% FPL: 6.3-8.05% of income 250-300% FPL: 8.05-9.5% of income 300-400% FPL: 9.5% of income
Income Examples
For a single person (annual income 100% of FPL = $11,490; 400% of FPL =
$45,960 For a couple (annual income)
100% of FPL = $15,510; 400% of FPL = $62,040
For a family of four (annual income) 100% of FPL = $23,550; 400% of FPL =
$94,200
Essential Benefits Package
Creates an essential health benefits package that provides a comprehensive set of services
Coverage for at least 60% of health costs Limits annual cost-sharing to the HSA limits
($5,950/individual and $11,900/family); lower limits for those with income less than 250% FPL
Benefit Tiers
Bronze Plan pays 60% of costs Silver Plan pays 70% of costs Gold Plan pays 80% of costs Platinum Plan pays 90% of costs All Plans must provide essential benefits
The Individual Mandate
Requires U.S. Citizens and Legal Residents to have qualifying health coverage beginning in 2014
Those without coverage face tax penalties beginning in 2014 if not covered
The Individual Mandate
2014 penalty is $95 or 1% of taxable income, whichever is greater
2015 penalty is $325 or 2% of taxable income, whichever is greater
2016 penalty is $695 or 2.5% of taxable income, whichever is greater
The Individual Mandate
Exemptions to the tax penalties are available for financial hardship, religious objections, American Indians, those without coverage for less than 3 months, undocumented immigrants, and incarcerated individuals
Assisters and Navigators
The ACA requires that Assisters be available in 2013 to facilitate people shopping for new health insurance
The ACA requires Navigators in 2013 and beyond to help people shopping for insurance on the exchange
Private & Group Health Insurance
The ACA bans annual or lifetime limits on the cost of care
The ACA mandates preventive health services without a co-pay
The ACA requires that 85% of insurance revenue be spent on healthcare, and that shortfalls be refunded to members
Private & Group Health Insurance
Requires dependent coverage for children up to age 26
Prevents denials or increased premiums due to pre-existing conditions, and limits waiting periods to 90 days
Employer Requirements
Assess employers with 50 or more FT employees that do not offer group coverage, and have at least one FT employee who receives a premium tax credit, a fee of $2,000 per FT employee (excluding first 30 employees)
This provision has been delayed to 2015
Employer Requirements
Employers with 50 or more FT employees that offer coverage, but have at least one FT employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium tax credit or $2,000 for each FT employee (excluding first 30 employees)
This provision has been delayed to 2015
Employer Requirements
Employers with more than 200 employees are required to automatically enroll employees into employer sponsored group health insurance coverage
Employees may opt out This provision has been delayed to 2015
Small Business Tax Credits
Employers with 25 or less employees and average annual wages of less than $50,000 that offer their employees group health coverage are eligible for business tax credits
ACA Information Resources
Marketplace 1-800-318-2596www.healthcare.gov
www.cms.govwww.kff.org
