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

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Implementation of the Patient Protection and
Affordable Care Act in DelawareJanuary 2011
Rita Landgraf Secretary, DHSS Bettina Tweardy
Riveros Chair, Delaware Health Care Commission
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(No Transcript)
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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
  Funding
• Significant Insurance Market Reforms
• New Insurance Exchange with Premium Sharing
  Subsidies, and Cost Sharing Caps
• Emphasis on Prevention
• Bending the Cost Curve over time

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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 Healthcare.gov http//www.healthcare.gov/law/
about/order/byyear.html
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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
  projection)
• 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)

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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.

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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).

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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

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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.

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Expanding Coverage
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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

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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
  2016)
• 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
  Exchange.

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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
  Population
• 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

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Market Reforms Employers
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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.

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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
  workforce.
• 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.

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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
  credit.
• 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
  businesses.
• 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
  credits.

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Expanding Coverage Small Business Tax Credits
(2010)

• 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
  2010.
• 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

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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) 

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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
  penalty
• 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

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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

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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
  plans.
• 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.

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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

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Essential Benefits Package for Exchange Plans

• Hospitalization, emergency services, ambulatory
  (i.e. outpatient) services
• Prescription drugs and laboratory services
• Rehabilitative and habilitative services and
  devices
• pre-health care reform insurance policies did not
  cover them or severely limited the number of
  treatments

• 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
  care
• Maternity and newborn care

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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
  implementation.

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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

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Security and Stability that Promotes
Entrepreneurship

• 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.

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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)

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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
  rates.
• Requires 80-85 of premiums to be spent on health
  care services and health care quality
  improvements.

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Insurance Rates

• Improved Transparency around Health Insurance
  Rates
• 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
  increases. 

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Individual Responsibility (2014)

• Those who are  uninsured add over one thousand
  dollars to the average premium of families with
  insurance. 
• 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

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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,
  co-payments
• 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

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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.

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State Preparation and Planning

• State leadership team Led by DHSS
• OMB State Employee Benefit and Budget
  preparation
• Department of Revenue income exemption
  determinations
• 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

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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

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Responsibilities

• Overseeing planning, development and
  implementation
• 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
  implementation
• PPACA in general broader issues
• Health Benefit Exchange

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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

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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
  programs
• Establishes National Prevention, Health Promotion
  Public Council
• Coordination and leadership at the Federal level,
  among departments and agencies - Cabinet level
  Secretaries - Surgeon General (Chair)

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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

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Medicaid and Medicare Wellness

• Annual wellness visits and personalized
  prevention plans for Medicare beneficiaries (Jan.
  2011)
• 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
  outcomes

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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

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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
  Project
• 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
  System

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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
  Professionals
• 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

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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

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Grant Awards To Date

• Health Benefit Exchange Planning Grant - 1
  million
• 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 -
  100,000
• 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

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Grant Awards To Date

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

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Important Websites to Watch

• www.HealthCare.gov
• www.dhcc.delaware.gov
• Contacts for more information and participation
  opportunities
• Rita.Landgraf_at_state.de.us and
  Bettina.Riveros_at_state.de.us