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Implementation of the Patient Protection and Affordable Care Act in Delaware January 2011


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Title: Implementation of the Patient Protection and Affordable Care Act in Delaware January 2011

Implementation of the Patient Protection and
Affordable Care Act in DelawareJanuary 2011
Rita Landgraf Secretary, DHSS Bettina Tweardy
Riveros Chair, Delaware Health Care Commission
(No Transcript)
Public Law 111-148 Historic Legislation
  • Patient Protection and Affordable Health Care Act
    (H.R. 3590) was signed into law on March 23, 2010
  • Health Care Education Affordability
    Reconciliation Act (H.R. 4782) was signed on
    March 25, 2010
  • Expand Coverage and Increase Access to Care
  • 32 million uninsured will be covered
  • Estimated 17,000 - 25,000 additional Delawareans
  • Expansion of Medicaid Eligibility and Increased
  • Significant Insurance Market Reforms
  • New Insurance Exchange with Premium Sharing
    Subsidies, and Cost Sharing Caps
  • Emphasis on Prevention
  • Bending the Cost Curve over time

Key Provisions of PPACA
Expanding Access to Affordable Care Improving
Quality Focus on Prevention Holding Insurance
Companies Accountable Controlling
Costs Provisions of the Affordable Care Act, By
Year http//
Health Care Costs in Delaware
  • Health Care Costs
  • 6.5 billion was spent on personal health care in
    Delaware in 2008 highest point in 10 years.
  • 7,485 per person in Delaware
  • Average rate of increase is 5 per year.
  • Largest share of spending is on
  • Hospital care at 39
  • Physicians at 25.4
  • Prescription drugs at 14.8
  • U.S. average- 7,538/person (2007) 8,160 (2009
  • Projected Health Spending in 2009 17.9 GDP
    2.5 trillion
  • Per capita health care costs range from 3,129 -
    4,079 for Australia, Canada, France, Germany,
    Sweden, and UK (2007)

Where is Delaware Now?
  • Medicaid Population in Delaware
  • May 2010
  • 179,963 Delawareans enrolled in Medicaid
  • September 2010
  • 185,000 Delawareans enrolled in Medicaid
  • 6,100 children enrolled in the Delaware Healthy
    Children Program (CHIP)
  • December 2010
  • 194,249 Medicaid recipients enrolled in Medicaid,
    Delaware's health insurance program for the poor,
    disabled and aging.
  • State Costs
  • Majority of Medicaid costs are paid by federal
    government and that percentage is increasing
    however, the program is expected to cost Delaware
    taxpayers more than 534.4 million this year,
    consuming 16 percent of the States 3.3 billion
    operating budget.

Uninsured in Delaware
  • Delawares Uninsured Population
  • Over the past few years uninsured in Delaware has
    risen from 9.9 to 11.2
  • Approximately 101,000 are without insurance at
    any given time- (this is a 2008 estimate)
  • Approximately 28 - or 28,000 - uninsured
    Delawareans are eligible for public benefit
    through Medicaid (21,000 or CHIP 7,000)
  • Another 20 are eligible for Community Health
    Access Program
  • CHAP - Incomes below 200 of FPL (44,000 for
    family of 4).

Who Are the Uninsured
  • 23 - under the age of 19
  • 54 - male
  • 69 - white
  • 59 - own or are buying their home
  • 21- live alone
  • 80 - are above the poverty line
  • 34- with household income over 50,000
  • 59 - are working adults
  • 9 - are self-employed
  • 21 - are non citizens

Uncompensated Care Who Pays
  • Cost Shift providers attempt to recover unpaid
    or underpaid costs of care delivered to one
    patient by increasing costs and passing it on to
    another patient population
  • 1999 28 cost shift in DE Hospitals due to
    uncompensated care to the uninsured.
  • For every 100 of hospital costs, the total
    commercial insurance market paid an extra 28.

Expanding Coverage
Expanding Coverage
  • Coverage for Dependents (IRS Definition) (6
    months September 23, 2010)
  • Must provide coverage to a beneficiarys
    dependent child until the child turns 26
  • Child does not have to live at home
  • Temporary High Risk Pool (90 days - July 2010 -
    to 2014)
  • Citizens with pre-existing conditions who were
    uninsured 6 months prior to applying for coverage
    in the pool
  • 5 billion provided
  • Pool operated by HHS or states
  • Delaware participates in HHS Pool Premiums
  • Health Benefits Advisory Committee led by Surgeon
    General will recommend essential benefits package

Expand Coverage
  • Expands Medicaid eligibility to 133 of Federal
    Poverty Level (2014)
  • Approximately 14,600/ individual 29,400/family
    of 4
  • Includes childless adults
  • Provides national base of seamless coverage
  • Federal Share (FMAP)
  • 100 for newly eligible first 3 years (2014
  • Phases down to 90 for 2020 and subsequent years
  • Provides full funding for CHIP through 2015 and
    continues authority through 2019. Children on
    CHIP would be transitioned to Medicaid or into

Delaware Focus
  • Medicaid Expansion to Newly Eligible
  • States are required to extend Medicaid
    eligibility to everyone younger then 65 with
    incomes up to 133 of FPL(29,327 family of 4).
  • 2014 2016 - Federal government pays 100
  • 2017 Delaware will pick up 5 of cost
  • 2020 - Federal government pays 90 of cost
  • Increase FMAP for Delawares Already Expanded
  • Delaware currently provides expanded coverage
    to 27,000 Delawareans up to 100 FPL
  • Currently - Federal government pays 53 of the
    cost (after ARRA funds expire)
  • 2014 the federal match will increase to 75 and
    by 2020 will cover up to 90 of cost

Market Reforms Employers
Employer Sponsored Plans Increasing Choice for
Small Business
  • Sixty-one percent of working age individuals and
    their families receive employer-sponsored
    insurance coverage, and this coverage is
    increasingly in jeopardy.
  • The primary source of instability in the
    employer-sponsored insurance market is the
    decrease in employers offering health insurance
    coverage to workers and their families.
  • Between 2000 and 2008, the percentage of firms
    offering health insurance coverage to their
    employees declined from 69 to 63.
  • For firms employing fewer than 10 workers, the
    decline was even greater from 57 to 49 percent.
  • Coverage outside the employer-sponsored market is
    unaffordable or does not provide adequate
    coverage for most Americans.
  • Only five percent of non-elderly Americans
    receive coverage on the individual market, where
    coverage is more expensive and limited than in
    employer-sponsored plans.

Small Business Issues
  • Health Care and Small Business
  • Health care costs are a huge cost driver for
    businesses. Small business owners, in
    particular, have a hard time negotiating and
    paying for healthcare coverage for their
  • Over the past decade, average annual family
    premiums for workers at small firms increased by
    123 percent, from 5,700 in 1999 to 12,700 in
    2009, while the percentage of small firms
    offering coverage fell from 65 to 59 percent.
  • National studies indicate that small businesses
    on average pay 18 more for their healthcare
    coverage compared to larger businesses.
  • ACA addresses these issues through small business
    tax credits and an improved insurance marketplace
    for small business.

Tax Credits for Small Business
  • Tax Credits for Small Business
  • Under ACA, small employers with fewer than 25
    full-time equivalent employees and average annual
    wages of less than 50,000 that purchase health
    insurance for employees are eligible for a tax
  • For 2010 through 2013, that small business tax
    credit is up to 35 percent of their contribution
    toward the employees health insurance premium.
  • Starting in 2014, small businesses will have
    access to state-based Small Business Health
    Options Program (SHOP) Exchanges, which will
    expand their purchasing power, reduce costs and
    increase competitive pressure on insurers, with
    the goal of driving down premiums for small
  • For 2014 and beyond, small employers who purchase
    coverage through the new Health Insurance
    Exchanges can receive a tax credit for two years
    of up to 50 percent of their contribution.
  • Tax exempt organizations eligible for similar

Expanding Coverage Small Business Tax Credits
  • Eligibility Employers with fewer than 25 full
    time employees (or a firm with fewer than 50 half
    time workers) who
  • pay average annual wages of less than 50,000
  • who provide health insurance to their employees
  • Value
  • Worth up to 35 of employers premium costs in
  • January 1, 2014 worth up to 50
  • Non-Profits
  • eligible for payroll tax deduction if they fit
    above criteria
  • worth up to 25 of employers premium costs
  • 2014 35 credit

Market Reforms Employers
  • Small Business Health Options Program Exchange
    Non-profits eligible (2014)
  • Small group plans must accept every employer and
    individual who applies (2014)
  • Small Employer/Non-Profit 100 employees or
    state can define as 50 or less (2014)
  •  Large Employers Can participate in Exchange,
    at each state's discretion (2017) 

Employer Responsibility (2014)
  • In 2014, the Affordable Care Act requires large
    employers to pay a shared responsibility fee only
    if they do not provide affordable coverage
  • Employers with 50 or more full time employees
    (FTEs) who do NOT offer coverage must pay
  • for every full-time employee that receives a
    premium credit for the Exchange
  • FTE 30 or more hours per week
  • Part-time employees Less than 30 hours per week

Pressing TimelineHealth Benefit Exchanges (2014)
  • Creates state-based Health Benefit Exchanges,
    or marketplace to increase choice, provide
    competition, transparency on services and cost
  • Private insurance plans that meet minimum
    standards on benefits and cost-sharing set forth
    in regulations
  • Multi-state Exchanges run by HHS for states that
    choose not to operate their own Exchange

Increases Quality, Affordable Options
  • Health Benefits Exchange
  • These Exchanges would include web portals that
    provide standardized, easy-to-understand
    information that make comparing and purchasing
    health care coverage easier for small business
    employees, and reduce the administrative hassle
    that small businesses currently face in offering
  • Starting in 2017, the Affordable Care Act also
    provides states flexibility to allow businesses
    with more than 100 employees to purchase coverage
    in the SHOP Exchange.
  • If businesses dont offer coverage, workers at
    small firms and their families would be eligible
    for their own tax credits to purchase coverage
    through the Exchange.
  • The Affordable Care Act streamlines health plans
    to keep premiums lower by instituting a premium
    rate review process and setting standards for how
    much insurance companies can spend on
    administrative costs, also known as the medical
    loss ratio.

Delawares Role in Health Benefit Exchange
  • Exchange Requirements
  • Certify qualified health plans
  • Establish toll free telephone access
  • Web portal development with standardized,
    comparative information on health plan options
  • Choice of plan options
  • Electronic calculator to determine cost of plan
    and premium tax credit
  • Seamless with Medicaid enrollment/eligibility

Essential Benefits Package for Exchange Plans
  • Hospitalization, emergency services, ambulatory
    (i.e. outpatient) services
  • Prescription drugs and laboratory services
  • Rehabilitative and habilitative services and
  • pre-health care reform insurance policies did not
    cover them or severely limited the number of
  • Mental health and substance use disorder services
    including behavioral health treatment
  • Preventative and wellness services and chronic
    disease management
  • Pediatric services including dental and vision
  • Maternity and newborn care

Health Insurance Exchanges
  • Insurance Marketplace - Health Insurance Exchange
  • The Affordable Care Act provides Delaware with
    resources to plan for the best implementation for
    Delawareans of a competitive, private health
    insurance marketplace for consumers that provides
    lower costs, one-stop insurance shopping, and
    greater benefits and protections.
  • State Flexibility around Health Exchanges
  • States have substantial flexibility to dictate
    the design and operation of new competitive
    marketplaces Health Insurance Exchanges that
    will provide affordable private insurance to
    individuals and businesses beginning in 2014.
    Under the Act we can work to implement provisions
    of the Act in a manner that can be very helpful
    to small businesses in our state, so that they
    can provide affordable healthcare coverage to
    their employees.
  • Delawares DHSS was awarded a 1 million planning
    grant to engage key stakeholders across the state
    in a planning process to determine the best
    implementation of an Exchange in Delaware.
  • Stakeholder outreach process to consumers,
    small business, agent/broker community and others
    - is already beginning, in collaboration with the
    Delaware Health Care Commission. Additional
    federal funds will be available for

Defining Exchanges Essential Benefits
  • HHS Secretary must ensure that scope of benefits
    are equal to scope of benefits provided by
    typical employer sponsored plan
  • Establish that benefits are not denied based on
  • Individuals present or predicted disability,
    degree of medical dependency, quality of life,
    age or expected length of life
  • Department of Labor to conduct survey of employer
    sponsored plans, provide report to inform HHS
    Secretarys determination
  • Will be a chance for public comment

Security and Stability that Promotes
  • In 2014, the Affordable Care Act ends the
    discriminatory insurance industry practices of
    jacking up premiums by up to 200 percent because
    an employee got sick or older.
  • It will also reduce job lock the fear of
    switching jobs or starting a small business due
    to concerns over losing health coverage by
    guaranteeing access to coverage for all
    Americans. This will encourage more people to
    launch their own small businesses, or join
    existing small employers.
  • Reviews the Impact of Reform on Small Businesses
  • The Affordable Care Act requires the Government
    Accountability Office (GAO) to specifically
    review the impact of Exchanges on increasing
    access to affordable health care for small
    businesses to ensure that Exchanges are indeed
    making a difference for small business owners.

Insurance Market Reforms
  • Bars pre-existing condition exclusions for
    everyone (2014)
  • Bars pre-existing condition exclusions for
    children under 19 (6 months after enactment
    September 23, 2010)
  • No coverage exclusions for specific conditions
  • No higher premiums or fees for such conditions
  • Prohibits coverage rescissions (6 months
    September 23, 2010)
  • Insurers drop individual when s/he gets sick or
    apparent pre-existing condition is discovered
  • Prohibits annual limits (2014)
  • Prior to 2014 Restricted annual limits, to be
    defined by HHS Secretary are permitted
  • Prohibits lifetime limits on coverage (6
    months/September 23)

Insurance Market Reforms
  • Bans discrimination based on health status,
    medical condition (mental or physical illness),
    disability (2014)
  • Guaranteed issue and renewability
  • Small group and Individual plans must accept
    every employer and individual who applies.
  • Increased Rates for Primary Care Providers
  • The ACA requires Medicaid programs to reimburse
    PCP at 100 of Medicare rates, with additional
    2 funded by federal government. Delaware
    Medicaid currently reimburses at 98 of Medicare
  • Requires 80-85 of premiums to be spent on health
    care services and health care quality

Insurance Rates
  • Improved Transparency around Health Insurance
  • Initiatives by Insurance Commissioner
  • Delaware access to federal funds to help improve
    the review of proposed health insurance premium
    increases, take action against insurers seeking
    unreasonable rate hikes, and ensure consumers
    receive value for their premium dollars.
  • Delaware to address the Health Insurance Premium
    Review Process by developing new premium filing
    requirements, improve its ability to review
    rates post premium filings on its website
    employ a new rate comparison feature, and host
    public meetings and hearings on proposed rate

Individual Responsibility (2014)
  • Those who are  uninsured add over one thousand
    dollars to the average premium of families with
  • Everyone will be asked to share responsibility
    for lowering costs and covering more people
  • Tax penalties for no coverage - IRS
  • 2014 95
  • 2015 325
  • 2016 695 OR
  • Percent of household income 1 in 2014, 2 in
    2015, 2.5 - 2016 and after
  • Exempts individuals with incomes too low to pay
    taxes (9,350) or if premiums exceed 8 of income

Making Coverage Affordable
  • Tax credits provided for individuals/families
    between 133 - 400 Federal Poverty to buy
    coverage in Exchange (2014)
  • approximately 11,000/individual 88,000 family
    of four
  • Paid by government directly to insurer
  • Limits on cost sharing deductibles, coinsurance,
  • 100-200 FPL 1,983/individual 3,967/family
  • 200-300 FPL 2,975/individual 5,950/family
  • 300-400 FPL 3,987/individual 7,973/family
  • Small group market plans are prohibited from
    deductibles greater than 2,000 for individuals
    and 4,000 for families

State Preparation and Planning
  • Challenge for Delaware
  • Maximize benefits for Delaware citizens and
    businesses to support the goals of
  • widespread access to affordable health insurance
    and health care
  • improving quality and reducing costs
  • supporting people in community-based settings
  • promoting healthy lifestyles and prevention
  • supporting economic development and job growth.

State Preparation and Planning
  • State leadership team Led by DHSS
  • OMB State Employee Benefit and Budget
  • Department of Revenue income exemption
  • DMMA Medicaid
  • DSS process applications
  • DOI oversight and certification of plans and
    regulate rate bands
  • DPH prevention measures and services
  • DTI and DHIN health information network
  • Health Care Commission

State Preparation and Planning
  • DHSS and Health Care Commission
  • ? Public Discussions
  • ? Coordination with Private Sector
  • Small Business
  • Brokers/Agents
  • Doctors
  • Hospitals
  • Other Providers
  • Community Based Health Centers
  • Insurance Companies
  • Employer Network
  • Consumer Groups
  • Educators

  • Overseeing planning, development and
  • Identifying ways to build on existing
    infrastructures and programs, or to create a new
    entity within state government to house
    governance and oversight
  • Ensuring appropriate coordination and
    collaboration across state agencies
  • Engaging with relevant stakeholders to get
    insights and collaboration on reform
  • PPACA in general broader issues
  • Health Benefit Exchange

Health Promotion and Prevention
  • Prevention and Public Health Fund
  • Administered by HHS Secretary
  • Expand investment in public health program
  • Support programs authorized by Public Health
    Service Act
  • Including prevention research, health screenings
    and education and awareness
  • Graduated increases in annual funding
    availability from FY10 500 million to FY2015 and
    beyond 2 Billion
  • Position Delaware to be an incubator for
    innovation in this arena

Health Promotion
  • Coverage without imposing cost sharing
  • Certain immunizations
  • Infants, children and adolescents evidence
    informed preventative care and screenings
  • Incentives for business to provide wellness
  • Establishes National Prevention, Health Promotion
    Public Council
  • Coordination and leadership at the Federal level,
    among departments and agencies - Cabinet level
    Secretaries - Surgeon General (Chair)

Promotion of Healthier Outcomes
  • Medicaid/Chronic Disease Prevention
  • 5 Year Grants to states (2011 or when HHS Sec.
    develops program) for incentives for
    beneficiaries for
  • Tobacco cessation, weight reduction and control,
    cholesterol reduction, blood pressure reduction,
    diabetes onset reduction or improved management
    of diabetes
  • States can provide sub-grants/contracts to
    Medicaid providers, community based or
    faith-based organizations

Medicaid and Medicare Wellness
  • Annual wellness visits and personalized
    prevention plans for Medicare beneficiaries (Jan.
  • No co-pays or deductibles for preventive services
    for Medicare patients (2011)
  • 1 FMAP increase for States if Medicaid program
    covers clinical preventive services recommended
    by the Preventive Services Task Force (2013)
  • Grants to provide incentives to Medicaid
    beneficiaries who successfully participate in a
    wellness program and healthy lifestyle program
    Must demonstrate changes in health risk and

Health Promotion and Prevention
  • Community Health Centers and National Health
    Service Corp
  • Education and Outreach Campaign national
    public-private partnership
  • School Based Health Centers access in hard to
    reach communities
  • Oral Health Demonstration grants for
    preventative care
  • Community Transformation Competitive grants
    evidence based activities to reduce
  • Chronic disease rates, prevent secondary
    conditions, address health disparities, create a
    stronger evidence base of effective programming
  • Examples healthier schools, worksite wellness
    healthy food venues, special populations

Health Promotion and Prevention
  • Nutritional Labeling of Standard Menu Items at
    Chain Restaurants
  • Demonstration of Individualized Wellness Plan
    to those utilizing community health centers
  • Optimizing the delivery of Public Health Services
    organize finance or delivering public health
    services in real world community settings
  • Funding for Childhood Obesity Demonstration
  • Better Diabetes Care National report card
    study impact on medical practice medical
    education requirements prior to license- Grants
    through National Diabetes Prevention Program
  • Centers of Excellence for Depression
  • National Congenital Heart Disease Surveillance

Workforce Impact
  • National Workforce Commission
  • State Workforce Development Grants
  • Workforce Program Assessment Identify trends,
    gaps, issues
  • Public Health Workforce Recruitment and Retention
    loan repayment
  • Training for Mid-Career Public and Allied Health
  • Grants to Promote Community Health Workforce
  • Preventative Medicine Training Grant Program
    training to graduate medical residents in
    preventive medicine specialties
  • Additional primary care residency slots
  • Funding to support physician assistant training
    in primary care

Workforce Initiatives
  • Funding to encourage students pursue full time
    nursing careers
  • Establishes new nurse practitioner led clinics
  • Encourages states to plan for and address health
    professional workforce needs
  • Expanding tax benefits to health professionals
    working in underserved areas

Grant Awards To Date
  • Health Benefit Exchange Planning Grant - 1
  • Premium Review Grant - 1 million
  • Aging and Disability Resource Center - 400,000
  • Maternal, Infant and Child Visitation Program -
    1.280 Million
  • Personal Responsibility Education - 250,000
  • Public Health Infrastructure Grant - 1 -
  • Supplemental Funding Behavioral Risk Factor
    Survey - 37,860
  • Strengthen Epidemiology, Lab and health
    information system capacity - 435,942
  • Healthy Communities Tobacco Cessation - 54,554
  • HIV Surveillance Enhanced Lab Reporting - 51,218

Grant Awards To Date
  • Primary Care Workforce Nursing Training _
  • DSU - 20,480
  • Wesley - 44,521
  • Wilmington University - 55,062
  • U. D. - 36,608

Important Websites to Watch
  • Contacts for more information and participation
  • and
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