Health Care Reform: Understanding the Affordable Care Act

What’s really in the new law?

Presented by Amy Smoucha, Missouri Jobs with Justiceand Missouri Health Care for All

Health care legislation is designed to:

• Reduce health care costs, both for families and for the government.

• Provide Americans guaranteed access to affordable health coverage.

• Strengthen and protect Medicare and Medicaid.

• Modernize our health care delivery system.

Here’s how:

Significant Changes to Private Health

InsurancePurchased by Individuals and

Small Businesses

The ACA gives us more security security and control control

• Insurance companies won’t be able to turn people down because of pre-existing conditions. This took effect in 2010 for children and in 2014 for everyone.

• Insurance companies can’t drop your coverage because you get sick.

• Insurance companies won’t be able to charge higher premiums because of pre-existing conditions, gender, or occupation, and there will be a limit on how much they can charge based on age.

Health insurance plans must cover essential servicesessential services.

• Insurance plans will have to cover preventive care, hospitals, physicians, prescription drugs, mental health, DME, rehabilitation, habilitation services, substance abuse, dental and vision care for children, maternity care, and other services.

• Insurance companies won’t be able to charge deductibles or copayments for preventive services.

Financial protectionsFinancial protections for people with insurance

• Insurance companies can’t impose annual or lifetime limits on how much they will cover.

• Spending caps will limit the amount consumers pay out of pocket each year.

• Insurance companies have to spend at least 80-85% of premiums on medical care.

• Modest income Americans will be eligible for tax credits to help pay for insurance premiums.

Health reform makes it easier to buy easier to buy

insuranceinsurance.

• New Insurance Exchanges allow people to compare plans, apples to apples

• The ACA limits insurance company overhead costs (administrative and marketing) so more of our premiums go to our health care

• Allows individuals and small businesses to get better rates because they are in a bigger pool

Strengthening Critical Public Health

Insurance Programs

Improves MedicareMedicare.

• Closes the “donut hole” in drug coverage and lowers cost of brand name drugs

• Provides preventive services with no co-pays or deductibles

• Provides incentives for better coordinated care and use of evidence- based medicine

• Enhanced payments for primary care physicians and general surgeons

Improves MedicareMedicare.• Free preventive services in 2011• Medicare Advantage plans

cannot charge higher co-pays than traditional Medicare.

• Enhanced payments for primary care physicians and general surgeons

• Medicare Trust Fund solvency is extended by 9 years

ACA fixesMedicare Part DMedicare Part D.

• Closes the “donut hole” in drug coverage and lowers cost of brand name drugs– As many as 15% of seniors with chronic illness

stop taking their medicines when they hit the gap.

• Expands the Medicare Part D low-income subsidy to help struggling seniors afford their prescription costs.

• Extends annual Part D enrollment period

Supports early retireesearly retirees.Federal funds are currently available to help businesses afford the cost of health insurance for early retirees (ages 55-64).

Access to home and community-based home and community-based services services for people with disabilities

• The Community First Choice option makes community-based services mandatory and there are no cost caps or waiting list restrictions.

• Law originally included a voluntary long term care insurance program, the CLASS. This has since been put on hold and is not funded.

The law expands State expands State health insurance programshealth insurance programs

for those who need it.

• State health insurance programs under Medicaid will cover all families and individuals with incomes up to 133% of the Federal Poverty Level– $24,348 for a family of three.– Currently in Missouri, a family of three must make less

than $4,584 a year to qualify for Medicaid

• For the first time ever, childless adults without a disability can qualify for Medicaid.

Tax Credits for Individuals and Small

Businesses

Support for small businessessmall businesses• Premium subsidies to employers

Employers with up to 25 employees and annual wages that average less than $50,000 who purchase health care for their employees get a tax credit

• Affordable choicesEmployees of small businesses may purchase insurance through the Exchange

Help for moderate-incomemoderate-income

Americans

• Families and individuals will receive tax credits to help pay for health insurance, depending upon our income.

• Tax credits will be available to families earning between 133-400% of the Federal Poverty Level ($29,327-88,200 for a family of four).

• Tax credits are designed to keep premium costs between 2%-9.5% of income, on a sliding scale.

ACA protects ChildrenChildren.

• Insurance companies can’t deny children insurance because of a pre-existing condition (will also apply to adults in 2014)

• No yearly or lifetime limits on coverage• Free preventive care• All insurance plans will cover

kids’ dental and vision care• Young adults can stay on their

parents’ plan until age 26

ACA helps people with medical conditionspeople with medical conditions.

• People with a disability or mental illness can work part-time and still qualify for Medicaid.

• Mental health parity – mental health care must be covered just like physical health care.

• Insurance companies won’t be able to refuse or charge more to cover people with pre-existing conditions.

• A new, temporary high-risk poolwill help people with pre-existingconditions gain immediate accessto insurance.

ACA gives caretakers more choices.

• People in the sandwich generation and caretakers will have guaranteed coverage and affordable choices.

• Young adults can stay on their parents’ plan until age 26.

ACA protects seniors in nursing homesnursing homes.

• Elder Justice Act:– Authorizes new criminal background checks on

long-term care workers – Requires greater transparency of nursing homes– Requires better information about the quality of

nursing care and improves complaint process.

Reform strengthens the delivery system.

• Doctor incentives for better coordinated care

• Pilot projects in evidence-basedmedicine

• Enhanced payments for primary care physicians and general surgeons

Health Reform, Mental Health and Social Services:

Paradigm ShiftsParadigm Shifts

Paradigm Shift #1:Paradigm Shift #1:Affordable, quality health insurance coverage will not be tied to a particular job or employer.

• People with temporary or long-term illnesses will have coverage options.

• People in the sandwich generation and caretakers will have guaranteed coverage and affordable choices.

• If we are laid off or choose to work less (for example to start a small business), we will be able to purchase affordable coverage.

Paradigm Shift #2:Paradigm Shift #2:People with chronic illness, mental illness or other disabilities will not have to go into complete poverty or quit all work just to get health care.

• They will have affordable coverage options through the Health Insurance Exchanges and new Medicaid program.

• Coverage will not be dependent upon being disabled or having children. Those in poverty or with limited incomes will get significant help affording coverage.

Paradigm Shift #3:Paradigm Shift #3:

The Affordable Care Act takes huge leaps forward:

• Preventive care will be free or very low cost• All insured children will have dental and vision

coverage.• Essential benefits package will close a lot of the

“gaps” people encounter.• Caps on out of pocket costs, and

deductibles will mean less medical debt, less bankruptcy, etc.

Sounds great – but how do we pay for it?

Shared responsibilityShared responsibility

Costs and responsibilities are shared among state and

federal government, businesses and individuals

Shared responsibilityShared responsibility

Federal Government• Pays for 100 percent of Medicaid expansion

from 2014-2016• Pays for 90-95 percent of Medicaid expansion

in 2017 and beyond• Shares in cost of tax credits and premium

subsidies

Shared responsibilityShared responsibilityIndividuals• U.S. citizens and legal residents must purchase

health insurance or pay a penalty• Penalties are phased in for those who do not• Exemptions granted for financial hardship,

religious objections, those without coverage for less than 3 months, undocumented workers, incarcerated individuals, or if the lowest cost plan exceeds 8% of income

• Tax changes for some high-income individuals

Shared responsibilityShared responsibilityBusinesses• Large employers (50+ employees) may have to

pay a penalty if they do not provide coverage and one or more of their employees receives an insurance premium subsidy.

• Taxes on insurance companies that offer very high cost plans

• Fees or taxes on producers of some medical equipment and pharmaceuticals

NOW WHAT???

The key to all of this is making sure reform is implemented in Missouri without delay.

Health Insurance Exchange Legislation.•A bill passed the MO House last session.

– Generally it’s a strong bill based on good models.– Serious problems with governance and conflict of interest

provisions•Missouri Senate leaders are currently trying to block funding and planning for a “Health Insurance Exchange”Federal Budget Cuts pose huge threats to existing programs and federal funding.

Continue strongcivic engagement

Decide •What we like about the ACA•What we want improved•What we want changed

Work to separate fact from spin

In 1962 the AMA released an album featuring Ronald

Reagan warning that Medicare will lead to

socialism and destruction of

American Democracy

Getting beyond spinAnd political divides

Build a MovementFrom the New York Times, February, 1964

And the Civil Rights Act of 1964 did not include voting rights.

Stay Informed!

www.healthcare.gov

www.kff.org

www.mohealthcareforall.org

www.paraquad.org/Policy/HealthcareReform

http://hcfgkc.org/resources/health-reform

www.covermissouri.org