2. A Cursory Look at PPACA
Patient Protection and Affordable Care Act
by Alan W. Gallagher, CES, ACBC, LTCP
Licensed Insurance Producer
3. Disclaimer . . .
Whereas the Patient Protection and Affordable Care
Act (PPACA) is overly complex and lengthy; and
Whereas the time allotted for this presentation is
limited;
It is therefore understood that this presentation is
merely a simplified, cursory overview of PPACA!
Additionally, I do NOT in any way, shape or form
mean to imply that I am an Expert on PPACA. In
reality, I suspect No One can be, given its volume
and complexity; and the fact it has yet to be
completely put into Federal Regulations.
4. Before PPACA became law . . .
House Speaker Nancy Pelosi told
an audience-
audience-
“pass the bill so you can find out
what’s in it, away from the fog of
controversy.
controversy.”*
*As reported Kevin Hassett, August 1, 2010; Bloomberg Opinion
5. Baucus Indicates He Did Not
Read Entire Healthcare Bill
The Hill (8/26, Fabian) reports in its Blog Briefing Room,
26,
"Senate Finance Committee Chairman Max Baucus
(D-Mont.), one of the chief authors of the healthcare law,
(D-Mont.
suggested Tuesday he did not read the entire piece of
legislation.
legislation. Speaking at a forum in his home state, Baucus
and Health and Human Services Secretary Kathleen
Sebelius were asked by an audience member if they had
read the whole bill and 'if not, that is the most despicable,
irresponsible thing.'" Baucus stated, "I don't think you
thing.
want me to waste my time to read every page of the
healthcare bill," although his office later said, "There is
simply no question that he understands the provisions in
the health care law and knows it is a historic improvement
that will make our health care system more affordable and
accessible for families."
families.
6. PPACA Did Reform Health-Care
Health-
Do you believe that PPACA will Stop the
Spiraling Cost of Health-Care?
Health-
If you are a business owner, do you believe
PPACA will save you money on the cost of your
group health insurance?
If you are on Medicare, do you believe PPACA
will Save You Money on the cost of your
healthcare?
You be the Judge!
7. Patient Protection and Affordable Care Act (PPACA)
Officially Known as: Public Law 111-148
Regulations will be issued in several phases, over
the next four years by 3 Federal Departments!
The Department of Health & Human Services (HHS)
The Department of Labor (DOL)
The Treasury (i.e., the IRS)
And with In-put from the National Association of
Insurance Commissioners (NAIC)
8. An Explanation Was Ordered of
How the New Law Will Work
In an effort to gain some understanding of the
new health care law, Congressman Kevin
Brady, R-TX, directed his staff to prepare a
summary of the law, to include a Flow Chart
that would illustrate how the major provisions
will work . . . Following is their Chart!
9.
10. PPACA aka - Affordable Care Act
There are new fees, bureaucracies, and
programs to pay for what it created-
159 new entities in all!
▪68 Grant Programs ▪47 Bureaucratic Entities
▪29 Pilot Programs ▪6 Regulatory Systems
▪6 Compliance Standards ▪2 Entitlements
11. PPACA Undermines the
Concept of Insurance
The purpose of insurance is to protect you from
a Huge, Unlikely, and Unpredictable expense.
You pay a small premium up front, and in
return, the insurer agrees to pay for a massive
cost that will probably never be incurred.
12. How Insurance is Suppose to Work
If you purchase homeowner's insurance for
say, $500 per year, so that you will be
reimbursed up to $300,000 for damages in the
improbable event of a fire.
Similarly, you could buy auto insurance for
$600 per year so that your $50K car would be
replaced in the unlikely event that it was
"totaled" in an accident.
13. Health Insurance Mindset Today
That is how insurance works for most things,
but it is not how it works in the U.S. for most
health insurance.
Today people are spoiled as they have come
to 'expect' their health insurance to pay
benefits for non-risk hazards such as
Preventative Care and routine health care.
That is a Major reason health Insurance costs
so much today; because it now covers More
than just Unlikely Events!
14. PPACA-
Undermines the Very Concept of Insurance
PPACA is more like Pre-Paying for Health Care
than it is about making Health Insurance more
affordable for the masses.
PPACA prohibits the sale of 'insurance policies'
that do NOT cover all of its Mandates. So in
essence, Health Insurance is now a financial
vehicle used to pre-pay for Health Care that one
may not want or ever expect to use. Put simply-
That is Not the true purpose of Insurance!
16. The Primary Reason for Health Care
Reform – Was to Cover the Uninsured
Through out the health care debate, the
"Majority Party" repeated ad nauseum
that there were upwards of 46 million*
'people' in America who lacked health
insurance.
insurance.
*That figure comes from the U.S. Census Bureau, which
reported in 2009, in its Current Population Survey (CPS)
2009,
that the number of people without insurance rose from
45.7 million in 2007, to 46.3 million in 2008.
45. 2007, 46. 2008. The
percentage of uninsured remained unchanged at 15.4%.
15.
17. Understanding Who is Uninsured . . .
So who makes up those counted as
uninsured in America?
9.7 million or 21% earn more than $75K
21% 75K
14 million are eligible for existing
government healthcare programs i.e.,
Medicare, Medicaid, CHIP etc., but chose
etc.
Not to enroll
18. Understanding Who is Uninsured . . .
Who makes up those counted continued-
continued-
6 million are eligible for employer
sponsored health insurance, but chose
Not to opt-in their employer's plan
opt-
5 million Recent "Legal Immigrants" were
counted (10.8%)
5.2 million Recent "Illegal Immigrants"
were counted (11.2%)
19. Understanding Who is Uninsured . . .
Assuming some overlap with the
numbers, there are at most 10 million
U.S. Citizens without health insurance,
which is a Much Less Scary Number than
46.3 million!
46.
So the "Reform" to 'help' 3% to 4% of
the Population will affect approximately
90% of the population*
90%
*Congress Allowed Exceptions- for Religious Reasons!
Exceptions-
20. The Timeline for Implementing Reforms
Beginning 23 Sept 2010 through 2018
21.
22. PPACA - Reforms in 2010
▪No lifetime benefit limits1
-based on dollar amounts
▪No coverage rescissions/cancellations2
-except for fraud or intentional misrepresentation
▪New internal and external appeal processes3
1Always available as an option, for a correspondingly higher premium
2Already covered under a 1997 law
3 Many insurers already had external appeal process in place
23. PPACA - Reforms in 2010
▪ Must have dependent coverage up to age 26
▪ No pre-existing condition exclusions for
dependent children
▪ No cost-sharing for preventative services
▪ All employers must include on their W-2s the
aggregate cost of employer-sponsored health
benefits
▪ $250 rebate for Medicare members who reach
the ‘Donut Hole” in the Prescription Coverage
24. PPACA Reforms in 2012
All plans must provide new summary of
benefits to enrollees at specified times.
– Can be no more than 4 pages in length
– Must be cultural and linguistically appropriate
25. Summary of Changes to PPACA—
PPACA—
First Anniversary Edition
March 2011 marked the one-yearone-
anniversary of the Affordable Care Act
being signed into law. As Health Care
law.
Reform leaves its first year behind,
here's a look at seven key changes to
the provisions affecting employers and
employer-sponsored
employer- group health
plans under the Affordable Care Act.
Act.
26. Changes Announced in April 2011
Repeal of Form 1099 Filing Requirement
The requirement that businesses report
on Form 1099 all purchases of goods and
services of $600 or more annually is
repealed.
repealed.
27. Changes Announced in April 2011
Elimination of
Free Choice Voucher Requirement
The requirement that employers offering
health insurance coverage provide "free
choice" vouchers to certain employees
for purchasing health care through state-
state-
based Exchanges, beginning in 2014, is
2014,
repealed as part of the Department of
Defense and Full-Year
Full- Continuing
Appropriations Act of 2011.
2011.
28. Changes Announced in April 2011
Early Retiree Reinsurance Program
Stops Accepting New Applications
Effective May 6th, 2011- the Early
2011-
Retiree Reinsurance Program (ERRP) will
no longer accept new applications due to
the availability of funds.
29. Changes Announced in March 2011
Relief from Reporting Employer-Sponsored
Employer-
Health Coverage on Form W-2
W-
The IRS provided further relief for smaller
employers filing less than 250 W-2 forms by
W-
making the requirement to report the cost of
coverage under an employer-sponsored group
employer-
health plan on Form W-2 optional for them at least
W-
for 2012 (continuing until further guidance is
issued).
This requirement, set to begin in tax year 2011,
was previously made optional for all employers in
2011 last fall.
30. Changes Announced in March 2011
Enforcement Grace Periods for Select Internal
Claims and Appeals Procedures
The Department of Labor further extended the
enforcement grace period for select new standards for
internal claims and appeals processes until plan years
beginning on or after Jan. 1, 2012.
Jan. 2012.
The Affordable Care Act required non-grandfathered
non-
group health plans beginning a new plan year on or
after Sept. 23, 2010, to implement an effective
Sept. 23, 2010,
internal appeals process for coverage determinations
and claims. The enforcement of certain standards was
claims.
previously delayed until July 1, 2011.
2011.
31. Changes Announced in
December 2010
Nondiscrimination Requirements
Delayed for Insured Group Health
Plans - The IRS delayed the requirement
that non-grandfathered insured group
non-
health plans comply with the prohibition
on discrimination in favor of highly
compensated individuals, for plan years
beginning on or after Sept. 23, 2010,
Sept. 23, 2010,
until after regulations or other
administrative guidance of general
applicability has been issued (so any
sanctions for failure to comply currently
do not apply).
apply).
32. Changes Announced in
November 2010
Group Health Plans May Change
Health Insurance Issuers Without
Losing Grandfather Status
An amendment to the original interim
final regulations allows employers to
offer the same level of coverage through
a new issuer and remain grandfathered,
so long as the change does not result in
significant cost increases, a reduction in
benefits, or other prohibited changes.
changes.
Previously, one of the ways a group
health plan could lose its grandfather
status was if the employer changed
34. Medicare Will Fund More Than
Half the Cost of PPACA!
According to the CBO, PPACA will cost $938
Billion over the next decade. So, Who is going
to pay for it?
– Medicare Recipients!
PPACA will cut Medicare by $575 Billion over
ten years* according to Centers for Medicare
and Medicaid Services (CMS).
*Data available at- http://www.cbo.gov/
35. CBO Letter to Senator Reid- re: Medicare Cuts to Fund PPACA
Reid-
36. PPACA- Seniors Hit Hard*
Medicare Actuary Rick Foster confirmed that the
health overhaul law will result in "less generous
benefits packages" for seniors on the popular
Medicare Advantage program and that the
coverage will cost them more. Foster estimates
seniors' costs will go up by $346 in 2011 and as
much as $923 by 2017.
*As reported by Grace-Marie Turner, The Galen Institute; October 22, 2010
38. Government Minimum Coverage
Mandates, Cause Maximum Cost
Government regulations governing health
insurance dictate what people can buy and
cannot buy by implementing a series of
Mandates i.e., benefits that policies Must
Cover; whether you want them or not.
The Result- It is generally accepted that the
"mandates" are a primary reason many
Americans cannot afford health insurance.
39. The Number of Government Mandates
Is Ever Increasing!
In 1979, there were just 252 mandates in place
through out the U.S.- for an average of 5
Mandates per state.
Fast Forward to 2009, there were 2,133
mandates through out the U.S.- for an average
of 42 per state.
Today, thanks to PPACA, there are several
more mandates- and More Costly Ones at that!
40. PPACA-
Mandates Preventative Care at "No Cost!"
PPACA Mandates that all insurance policies
not only cover preventative care, but cover
it completely- there can not be any cost
sharing whatsoever! In other words, insurers
can no longer have co-pays for preventative
care.
41. Examples of Government Mandates for
Health Insurance Policies*
In vitro fertilization
Contraceptives
Breast Reduction Surgery
Acupuncture
Hormone Replacement Therapy
Addiction Counselors
Mental Health Parity
*Varies by state
42. Why Mandates Don't Make Sense
One Size Does Not Fit All! Not everyone wants
all that coverage; certainly not a 25 year old
'invincible' young man entering the work force
who would be required to contribute a couple
hundred dollars a month for coverage he would
not use.
The average, Added Cost for Mandates before
PPACA was estimated to be over 10%!
43. The Great Grant Give-Away
Give-
PPACA Authorizes 100s of Million$
in Discretionary Grants by HHS
50. Congressman Ryan: Waivers "A Devastating
Indictment" Of Healthcare Law . . .
CQ (5/17,
17, Adams, Subscription
Publication) reports, "House Budget
Chairman Paul D. Ryan defended his
Medicare proposal and criticized the
health care overhaul Monday, saying
that more than 1,300 waivers from
requirements for insurers to increase
annual coverage limits are 'a devastating
indictment' of that law." His "comments
law.
about the waivers come shortly after the
Centers for Medicare and Medicaid
Services (CMS) had released an updated
list of companies and other entities that
have been exempted from the annual
51. Nevada Receives Health Reform
Waiver
The Las Vegas Sun (5/17, Demirjian)
17,
reports, "Nevada got a partial waiver
from the health care law -- a significant
development that Democrats are
dismissing as par for the course and
Republicans are claiming as a political
victory.
victory." HHS announced Friday that
Nevada "had secured a statewide waiver
from certain implementation
requirements of the Obama
administration's health care law,
because forcing them through, the
department found, 'may lead to the
destabilization of the individual
market.
market.'" This announcement makes
52. Nursing Home Industry Seeking
Waiver From Healthcare Law
The National Journal (5/17, Fung,
17,
Subscription Publication) reports,
"Officials for trade groups representing
nursing homes are asking the Health
and Human Services Department for a
waiver that would allow the facilities not
to provide health insurance to their
employees.
employees." Notably, "the American
Health Care Association, a trade group
for nursing homes, is lobbying to get an
exemption from the measure. AHCA
measure.
President Mark Parkinson said that
nursing homes depend on Medicare and
Medicaid for revenue, but the programs'
54. PPACA Already Causing Higher
Premiums and Most Likely Less
Medical Care in the Future!
55. Under PPACA- Medicaid Will Expand
PPACA-
Likely Causing Your Premiums to Increase!
It has already been reported many
times in the press from several
sources, that the expansion of
Medicaid will most likely cause
insurers to charge private plans more,
in order to compensate for what they
view as under reimbursement by
Government Plans.
Plans.
56. The $6-an-Hour Health Minimum Wage*
$6-an- Wage*
Most people intuitively know that the worst thing government can
do in the middle of the deepest recession in 70 years is enact
policies that increase the expected cost of labor. Yet that is exactly
labor.
what happened last spring, with the passage of the Affordable
Care Act.
Act.
How bad is it? Right now we’re estimating the cost of the minimum
benefit package that everyone will be required to have at $4,750
for individuals and $12,250 for families — understanding that the
12,
proclivity in this Congress and in this Department of Health and
Human Services is to add benefits, not reduce them, making the
package even more expensive. That translates into a minimum
expensive.
health benefit of $2.28 an hour for full time workers (individual
coverage) and $5.89 an hour (family coverage) for fulltime
employees.
employees.
*As reported by John Goodman, National Center for Policy Analysis; October 18, 2010
Analysis; 18,
57. PPACA-
PPACA- Keeping Employers from Hiring*
Job-killing mandates: The U.S.
Job- mandates:
Chamber of Commerce said that
nearly eight in 10 small business
leaders expect their costs to increase
as a result of the new law. Many are
law.
fearful of the impact of new health
insurance mandates, and the
majority say they will be less likely to
hire new employees and more likely
to reduce current benefits.
benefits.
*As reported by Grace-Marie Turner, The Galen Institute; October 22, 2010
Grace- Institute; 22,
58. PPACA-
PPACA- Already Causing Loss of
Group Sponsored Health Insurance*
Millions losing coverage:
coverage: The
Principal Group announced it plans to
drop health coverage for 840,000840,
policyholders;
policyholders; millions of seniors will
lose Medicare Advantage plans; child-
plans; child-
only policies already are vanishing from
the market because of HHS rules; rules;
retirees are losing supplemental
coverage;
coverage; and major employers such
as AT&T, Caterpillar, John Deere,
Verizon, and countless others are
considering dropping health benefits
over the mid- to long-term.
mid- long-term.
59. McKinsey: One-third of employers
One-
will drop health coverage
An early-2011 survey of more than 1,300 employers by
early-
McKinsey & Company found 30 percent of respondents will
"definitely" or "probably" stop offering employer-sponsored
employer-
health insurance after 2014.
2014.
According to the June 2011 McKinsey Quarterly, health care
Quarterly,
reform "fundamentally alters the social contract inherent in
employer-
employer-sponsored medical benefits and how employees value
health insurance as a form of compensation."
compensation.
By guaranteeing the right to health insurance regardless of
medical status, reform minimizes any moral obligation employers
would feel to cover the sickest employees, who would otherwise
be denied coverage.
coverage.
JUNE 7, 2011; BY JENNY IVY, managing editor for
IVY,
BenefitsPro.com
60. Some of What We Did Not Discuss
– Pennsylvania's PPACA Guaranteed Issue
Plans
– The Exchanges
– Mandatory Coverage
– Medicare Changes and Cuts
– Community Living Assistance Services &
Support
– Several New Taxes
– Penalties for Non-compliance
Non-
– Subsidies for Low Income Individuals
– Who is going to pay for all this New
Coverage?
61. Do You Believe PPACA is Good for . . .
You and your family?
The American Workers?
Our Country's Small Employers?
The Country in General?
