American Health Care System U S Health Insurance

American Health Care System U. S. Health Insurance Before and After the Affordable Care Act March 2016 David Riemer, Senior Fellow Mike Bare, Research and Program Coordinator 1

Why Reform? Millions Uninsured 2

Why Reform? Millions Uninsured 3

Why Reform? Millions Uninsured 4

Why Reform? Weak Outcomes 5

Why Reform? Excessive Costs Total Health Expenditure per Capita, U. S. and Selected Countries, 2008 6

Why Reform? Excessive Costs 7

Before the Affordable Care Act (ACA) TRICARE Military VA Uninsured Some Veterans Government Coverage Medicare Seniors and SSDI Medicaid Individuals and Self-Employed Insured Private Coverage Low-Income, EBD, SSI, Pregnant Women & Children Insured Products HMOs PPOs FFS Etc. Providers Doctors Specialists Hospitals Clinics Rx Drugs Etc. Small Groups 1 -50 FTEs Large Groups 50+ FTEs Self. Insured Employer 8

Health Insurance Options: Before the ACA VA for some veterans and their dependents TRICARE for some active members of the military and their dependents Medicare for 65+ and SSDI Recipients Q: Medicaid for Children, Parents, Pregnant Women Q: MA for Childless Adults % of 0% FPL 100% 133% 150% 200% 250% 300% 400% Individual Insurance in the Private Insurance Market with No Tax Credits Small Employer-Sponsored Insurance in the Private Insurance Market with No Tax Credits Large Employer-Sponsored Insurance in the Private Insurance Market or Self-Insured with No Tax Credits 9

ACA’s “Individual Mandate” TRICARE Exempt Military VA Uninsured Some Veterans Government Coverage Medicare Seniors and SSDI Medicaid Insured Individuals and Self-Employed Private Coverage Low-Income, EBD, SSI, Pregnant Women & Children Insured Products HMOs PPOs FFS Etc. Providers Doctors Specialists Hospitals Clinics Rx Drugs Etc. Small Groups 1 -50 FTEs Large Groups 50+ FTEs Self. Insured Employer 10

Medicaid Expanded TRICARE Exempt Military VA Uninsured Some Veterans Government Coverage Medicare Seniors and SSDI Medicaid Insured Individuals and Self-Employed Private Coverage < X% of FPL, EBD, SSI, Pregnant Women & Children Insured Products HMOs PPOs FFS Etc. Providers Doctors Specialists Hospitals Clinics Rx Drugs Etc. Small Groups 1 -50 FTEs Large Groups 50+ FTEs Self. Insured Employer 11

New Exchanges (aka “Marketplaces”) TRICARE Exempt Military VA Uninsured Some Veterans Government Coverage Medicare Seniors and SSDI Medicaid Insured Individuals and Self-Employed Private Coverage Small Groups < X% of FPL, EBD, SSI, Pregnant Women & Children Individual Marketplace SHOP Marketplace Insured Products HMOs PPOs FFS Etc. Providers Doctors Specialists Hospitals Clinics Rx Drugs Etc. Grand. Fathered Plans 1 -50 FTEs Large Groups 50+ FTEs Self. Insured Employer 12

How the Marketplace Works www. healthcare. gov By phone By mail In person 13

Levels of Coverage Available Source: Community Catalyst & Georgetown University Health Policy Institute 14

What Will It Cost? http: //aspe. hhs. gov/health/reports/2013/Marketplace. Premiums/longdesc/wi. cfm 15

What Do Individuals Pay? Premiums Based on Income Individuals who use Marketplace to buy insurance must pay premiums = % of their income based on the Federal Poverty Level. Income Level Up to 133% of FPL Premium as a Percent of Income 2% 133 - 150% FPL 3 - 4% 150 - 200% FPL 4 - 6. 3% 200 - 250% FPL 6. 3 - 8. 05% 250 - 300% FPL 8. 05 - 9. 5% 300 - 400% FPL 9. 5% Source: Adapted from Kaiser Family Foundation, http: //kaiserfamilyfoundation. files. wordpress. com/2013/01/7962 -02. pdf 16

Estimated Premiums for Individuals ACA Estimated Premium Payments: Individuals: 2016 Percentage of Poverty Line 100% 150% 200% 250% 300% 400% Individual Annual Income Percentage of Income Towards Premium $11, 770 2. 00% $17, 655 4. 00% $23, 540 6. 30% $29, 425 8. 10% $35, 310 9. 50% $47, 080 9. 50% Annual Premium $235 $706 $1, 483 $2, 383 $3, 354 $4, 473 Angeles, January. “Making Health Care More Affordable: The New Premium and Cost. Sharing Assistance. ” Adapted from Center on Budget and Policy Priorities. Updated April 3, 2013. http: //www. cbpp. org/cms/? fa=view&id=3190. (These amounts assume the coverage provisions in health reform were in effect in 2013. The 2014 FPL has not yet been calculated). 17

Estimated Premiums for a Family ACA Estimated Premium Payments: Family of Four: 2016 Percentage of Poverty Line 100% 150% 200% 250% 300% 400% Family of Four Annual Income Percentage of Annual Premium Income Towards Premium $24, 250 $36, 375 $48, 500 $60, 625 $72, 750 $97, 000 2. 00% 4. 00% 6. 30% 8. 10% 9. 50% $485 $1, 455 $3, 056 $4, 911 $6, 911 $9, 215 Angeles, January. “Making Health Care More Affordable: The New Premium and Cost-Sharing Assistance. ” Adapted from Center on Budget and Policy Priorities. Updated April 3, 2013. http: //www. cbpp. org/cms/? fa=view&id=3190. (These amounts assume the coverage provisions in health reform were in effect in 2013. The 2014 FPL has not yet been calculated). 18

How Do Insurers Get All Their Money? Premium Tax Credit Subsidies • Subsidy formula: Cost of 2 nd lowest Silver Plan – Individual’s share of premium Amount of subsidy • Subsidy is provided by U. S. Treasury, as federal tax credit…but paid directly to health insurance plan • Reconciliation at the end of the year on tax returns between: • What individual actually paid vs. • What individual should have paid 19

Also: Low-Income Cost-Sharing Subsidies ACA cost-sharing subsidies—paid directly to doctors, hospitals, and other providers by U. S. Department of Health and Human Services— reduce “out-of-pocket” costs of deductible and co-pays for low-income people…thus “stretching” the actuarial value of chosen plan Income Level Actuarial Value Out of Pocket 100 - 150% FPL 94% 6% 150 - 200% FPL 87% 13% 200 - 250% FPL 73% 27% Source: Adapted from Kaiser Family Foundation, http: //kaiserfamilyfoundation. files. wordpress. com/2013/01/7962 -02. pdf 20

Essential Health Benefits TRICARE Exempt Military VA Uninsured Some Veterans Government Coverage Medicare Seniors and SSDI Medicaid Individuals and Self-Employed Insured Private Coverage Status Quo System ACA Changes Essential Health Benefits Small Groups < X% of FPL, EBD, SSI, Pregnant Women & Children Individual Marketplace SHOP Marketplace Insured Products HMOs PPOs FFS Etc. Providers Doctors Specialists Hospitals Clinics Rx Drugs Etc. Grand. Fathered Plans 1 -50 FTEs Large Groups 50+ FTEs Self. Insured Employer 21

Expanded Coverage Package Medicaid < 100% of FPL, EBD, SSI, Pregnant Women & Children Individual Marketplace SHOP Marketplace Individuals and Self-Employed Small Groups 1 -50 FTEs • 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 22

Free Preventive Care The ACA provides first dollar coverage of all preventive care in Medicaid, Medicare and new plans. 23

ACA Insurance Reforms Several across-the-board reforms of insurance system: • Coverage of children up to age 26 on parents’ plans; • Bans lifetime and annual limits on coverage; • Ends rescissions of coverage; • A process for appealing insurance company decisions; • Medical Loss Ratio (MLR) rule (80% of premium must go towards care and not admin costs); and • Ban on discrimination because of pre-existing condition. 24

ACA and Medicare Seniors and SSDI • The ACA does not affect eligibility • Expands preventive care benefits with no copays or deductibles Questions? www. medicare. gov or 1 -800 -633 -4227 • Fills “Donut Hole” • Open enrollment is Oct. 15 -Dec. 7 25

Health Insurance Options: Before the ACA VA for some veterans and their dependents TRICARE for some active members of the military and their dependents Medicare for 65+ and SSDI Recipients Q: Medicaid for Children, Parents, Pregnant Women Q: MA for Childless Adults % of 0% FPL 100% 133% 150% 200% 250% 300% 400% Individual Insurance in the Private Insurance Market with No Tax Credits Small Employer-Sponsored Insurance in the Private Insurance Market with No Tax Credits Large Employer-Sponsored Insurance in the Private Insurance Market or Self-Insured with No Tax Credits 26

Health Insurance Options: What Congress Intended VA for some veterans and their dependents TRICARE for some active members of the military and their dependents Medicare for 65+ and SSDI Recipients Medicaid for Children, Parents, Pregnant Women No reduction possible until 2017 MA for Childless Adults % of 0% FPL 100% 133% 150% 200% 250% 300% 400% FFM-facilitated QHP for legal aliens, no subsidy Individual FFM-Facilitated QHP Actuarial Value with Cost-Sharing Subsidies 94% 87% 73% Percent of Income Paid Towards Premium 2% 3% 4% 6. 3% 8. 1% 9. 5% FF-SHOP-Facilitated Small Employer-Sponsored Insurance with Tax Credits for the Business Individual Insurance in the Private Insurance Market with No Tax Credits Small Employer-Sponsored Insurance in the Private Insurance Market with No Tax Credits Large Employer-Sponsored Insurance in the Private Insurance Market or Self-Insured with No Tax Credits 27

Health Insurance Options: After the Supreme Court Ruled VA for some veterans and their dependents TRICARE for some active members of the military and their dependents Medicare for 65+ and SSDI Recipients Q: Medicaid for Children, Parents, Pregnant Women No reduction possible until 2017 Q: MA for Childless Adults % of 0% FPL 100% 133% 150% 200% 250% 300% 400% FFM-facilitated QHP for legal aliens, no subsidy Individual FFM-Facilitated QHP Actuarial Value with Cost-Sharing Subsidies 94% 87% 73% Percent of Income Paid Towards Premium 2% 3% 4% 6. 3% 8. 1% 9. 5% FF-SHOP-Facilitated Small Employer-Sponsored Insurance with Tax Credits for the Business Individual Insurance in the Private Insurance Market with No Tax Credits Small Employer-Sponsored Insurance in the Private Insurance Market with No Tax Credits Large Employer-Sponsored Insurance in the Private Insurance Market or Self-Insured with No Tax Credits 28

Health Insurance Options: Medicaid “Non-Expansion” States VA for some veterans and their dependents TRICARE for some active members of the military and their dependents Medicare for 65+ and SSDI Recipients Medicaid for Children, Parents, Pregnant Women No reduction possible until 2017 No MA coverage for Childless Adults % of 0% FPL 100% 133% 150% 200% 250% 300% 400% FFM-facilitated QHP for legal aliens, no subsidy Individual FFM-Facilitated QHP Actuarial Value with Cost-Sharing Subsidies 94% 87% 73% Percent of Income Paid Towards Premium 2% 3% 4% 6. 3% 8. 1% 9. 5% FF-SHOP-Facilitated Small Employer-Sponsored Insurance with Tax Credits for the Business Individual Insurance in the Private Insurance Market with No Tax Credits Small Employer-Sponsored Insurance in the Private Insurance Market with No Tax Credits Large Employer-Sponsored Insurance in the Private Insurance Market or Self-Insured with No Tax Credits 29

Health Insurance Options: Medicaid “Expansion” States VA for some veterans and their dependents TRICARE for some active members of the military and their dependents Medicare for 65+ and SSDI Recipients Medicaid for Children, Parents, Pregnant Women No reduction possible until 2017 MA for Childless Adults % of 0% FPL 100% 133% 150% 200% 250% 300% 400% FFM-facilitated QHP for legal aliens, no subsidy Individual FFM-Facilitated QHP Actuarial Value with Cost-Sharing Subsidies 94% 87% 73% Percent of Income Paid Towards Premium 2% 3% 4% 6. 3% 8. 1% 9. 5% FF-SHOP-Facilitated Small Employer-Sponsored Insurance with Tax Credits for the Business Individual Insurance in the Private Insurance Market with No Tax Credits Small Employer-Sponsored Insurance in the Private Insurance Market with No Tax Credits Large Employer-Sponsored Insurance in the Private Insurance Market or Self-Insured with No Tax Credits 30

Health Insurance Options: Special Cases: Wisconsin, Etc. VA for some veterans and their dependents TRICARE for some active members of the military and their dependents Medicare for 65+ and SSDI Recipients Badger. Care Plus for Children (With a Premium) (After Spend Down) Badger. Care Plus for Pregnant Women (After Spend Down) Badger. Care Plus for 18 -64 % of 0% FPL 100% 133% 150% 200% 250% 300% 400% FFM-facilitated QHP for legal aliens, no subsidy Individual FFM-Facilitated QHP Actuarial Value with Cost-Sharing Subsidies 94% 87% 73% Percent of Income Paid Towards Premium 2% 3% 4% 6. 3% 8. 1% 9. 5% FF-SHOP-Facilitated Small Employer-Sponsored Insurance with Tax Credits for the Business Individual Insurance in the Private Insurance Market with No Tax Credits Small Employer-Sponsored Insurance in the Private Insurance Market with No Tax Credits Large Employer-Sponsored Insurance in the Private Insurance Market or Self-Insured with No Tax Credits 31

Thank you! Please feel free to contact us: David Riemer, Senior Fellow driemermil@yahoo. com, 414. 270. 2943 Michael Bare, Research and Program Coordinator mbare@communityadvocates. net, 920. 242. 1639 32