SESSION GOALS
1. Overview of the Affordable Care Act2. Updates on Medicaid Managed Care3. Brief description of KY’s Medicaid
Waiver programs
OUTLINE OF THE ACA Divided into five sections:
Employer-based insurance modifications
Health Benefit ExchangesFunding for low- and middle-income
consumersHealth insurance reforms“Individual Mandate”
EMPLOYMENT-BASED INSURANCE
the Act builds upon the existing system that most consumers are used to
Establishes tax incentives for small businesses to purchase health insurance for their employees Up to 50% of cost of health insurance
Penalties for certain large employers to offer health insurance to their employees
HEALTH BENEFIT EXCHANGES
What they should look like:Consumer-friendlyStandardized informationPromote competitionSimilar to Travelocity or Expedia
Provide buying power State flexibility but must be approved by
1/1/2013 or the federal government can step in with a federal exchange
Can be separate for individuals and small businesses
SUBSIDIES FOR CONSUMERS
Medicaid Expansion! Up to 133% FPL
($29,326/year for family of 4)
NO CATEGORIES!!! Premium Tax Credits
Up to 400% FPL Operates through
federal income tax No co-pays for
preventative services
SUBSIDIES FOR CONSUMERS (CONTINUED)
Medicare Donut Hole: 50% discount on brand name drugs and 7% for generic after $2,840 in total drug costs. The hole will disappear by 2020.
Picture Source: Consumer Reports
HEALTH INSURANCE REFORMS
Prevent denial of coverage for medical conditionsProhibit higher premiums for medical
conditions Prevent unfair rescission of coverage
Requires evidence of fraud or intentional misrepresentation
Require higher percentage of spending on care80% medical loss ratio (MLR)Refunds to consumers if requirements not
met Youth coverage on parents’ plan until
age 26
INDIVIDUAL MANDATE
“Requirement to Maintain Minimum Essential Coverage” (26 U.S.C. § 5000A)
Need to have essential minimum coverage or make “shared responsibility payment.”Penalty gets phased inPenalty at 2016: $695, per person per year,
or 2.5% of income, if higher Goals:
More preventative careSpread out the cost and lower premiums
2010 New health plans to cover preventative care
with no co-pays Young adults up to age 26 can stay on parents’
plans Health insurers prohibited from:
Denying coverage to children with pre-existing conditions
Places lifetime limits on coverage Dropping coverage due to illness
Federal pre-existing condition plan and temporary high risk pool
$250 Medicare donut hole rebate Initial tax credits for small employers (25
employees or less) that provide health insurance
2011 MLR
75% for KY; 80% in 2012 Discounts on drugs for Medicare
beneficiaries 10% bump in Medicare payments for
primary care providers
2012
Increased payments to accountable care organizations (ACOs)
More changes to Medicare!Payments linked to outcomesNo payments for preventable readmissions
(e.g. hospital-acquired infections)
2013 Limitations on medical deductions
Medical expenses must equal 10% of income to be deductible. (Currently, it is 7.5%) Exception: Individuals over 65 can use 7.5% until
2016
Flexible spending accounts limited to $2,500/year
2014 (AKA THE BIG YEAR) Minimum Essential Coverage
Requirement begins Exchanges open Medicaid expands to 133% of FPL Premium tax credits start Health insurance regulations begin
Cannot deny new or renewed coverage for medical conditions
No higher rates based on health
2016-2010 2016
States can band together to sell coverage and create larger markets
2018Tax on “Cadillac plans” begins (over
10,200/year for individuals)
2020Medicare donut hole completely eliminated
WHAT THIS MEANS FOR KY
920,000 – Persons with pre-existing health conditions that who cannot be denied coverage
261,000 – Eligible beneficiaries for Medicaid with expansion to 133% of FPL
221,000 – Families who will receive tax credits for health insurance
51,500 – Small businesses who will receive tax credits for employees health care coverage
129,000 – Benefitting from the elimination of Medicare donut hole
16,800 - Young adults who may be covered until age 26 on parent’s health insurance
63,200 – Support for early retirees
ACA LITIGATION Appellate cases
Individual mandate is unconstitutional but severable 11th Circuit - Florida v. HHS (26 states joined)
Everything constitutional under Commerce Clause 6th Circuit - Thomas More v. Obama
Dismissed for lack of standing 3rd Circuit - NJ Physicians v. Pres. of U.S. 4th Circuit -Virginia v. Sebelius; Liberty Univ. v.
Geithner (AIA prohibits suit) 9th Circuit - Baldwin v. Sebelius
Will be heard by SCOTUS in Spring 2012
ACA CONCLUSION 32 million more people estimated to
covered Current system is confusing and
complicated A lot of details are still being worked out
WHAT IS MANAGED CARE? One health plan that coordinates all or
most of an individual’s care Aim is to control costs Plans are called “managed care
organizations” or “MCOs”
WHAT ARE THE PROS TO MANAGED CARE?
Money savingsState pays a set amount per person ahead
of timeEasier to budget
Coordinated careBetter alignment of physical and mental
healthChronic disease management Incentive is to encourage preventative care
WHAT ARE THE POTENTIAL PROBLEMS?
Cutting care saves money
Incentive to make it more difficult to get more expensive services, medications
Lower reimbursement rates for providers Reduces access to
care
HOW WILL THIS WORK IN KY?
Change from fee-for-service model
Should receive same services as before, with potential for additional services
Who is covered? Everyone, EXCEPT: Passport region Nursing homes Waiver programs (e.g. Michelle P., SLC) Only Medicare Savings Plans Spend-down Time-limited Medicaid Qualified Medicare Beneficiaries (QMBs), specified low
income Medicare beneficiaries (SLMBs) or qualified Disabled Working Individuals (QDWIs)
A few other groups
HOW WILL THIS WORK FOR KY?
What services will the MCOs cover?All Medicaid services for these beneficiaries,
EXCEPT: Non-emergency transportation School-health services First Steps HANDS
Medical, behavioral and (some) dental
WHO ARE THE MCOS? Coventry Care of Kentucky
In seven other states www.coventrycaresky.com 1-855-300-5528
Kentucky Spirit Health Plan Subsidiary of Centene Will have office in KY www.kentuckyspirithealth.com 1-866-643-3153
WellCare of Kentucky Large company serving over 2 million Americans www.kentucky.wellcare.com 1-877-389-9457
PICKING A MCO
Provider networks will differ Look at your clients’ PCP, specialists,
pharmacy, hospital Medicaidmc.ky.gov Toll-free hotline: 1-855-446-1245 Beneficiaries will have chances to
change later
TIMELINE 7/7/2011: Governor signed contract with
MCOs 7/2011-10/2011: MCOs establish
networks Mid-Aug., 2011: Beneficiaries received
auto-assignment 10/5/2011: New initial change deadline 11/1/2011: New implementation date 11/2011-1/2012: Change period (90
days) Open enrollment yearly during
recertification period
WHAT IF THERE IS A PROBLEM?
Internal grievances State fair hearings
Do not need to exhaust internal remedies Impact litigation
MEDICAID WAIVER PROGRAMS AND DEMONSTRATION PROJECTS
Alter normal Medicaid rules for flexibility Must be cost neutral Section 1115 Research & Demonstration
Projects: policy innovations Section 1915(b): Managed
Care/Freedom of Choice Waivers Section 1915(c): Home and Community-
Based Services Waivers
KY PROGRAMS Managed Care Passport (KY Health Care Partnership) Non-Emergency Transportation System Brain Injury Waivers (general and long-
term care) Home and Community-Based Services
(seniors) Model Waiver II (respiratory services) Michelle P. Supports for Community Living
QUESTIONS? www.kyequaljustice.org [email protected] (859) 233-0323 And dancing!