Presentation on the Affordable Care Act given by Daren Allen, Vice President of Sales & Business Development for the Common Ground Healthcare Cooperative to De Pere Area Chamber of Commerce on 9/11/13.
5. Major Changes to Health Plans
Premium Rate Calculations
Expanded
Benefits
Insurer
Fees
No
Underwriting
New Rate
Formulas
Premium
Cost Sharing
Limits
(Community
Rate)
Adjustments
Actuarial Values
Probationary
Periods
Marketplace
Guarantee
Issue
6.
7.
8. Expanded Benefits
• Ambulatory Patient
Services
• Emergency Services
• Hospitalization
• Laboratory Services
• Maternity and Newborn Care
• Mental Health and Substance
Abuse Services
• Prescription Drugs
• Rehabilitative Services
• Preventive and Wellness
• Pediatric Services including
dental and vision care
Essential Health
Benefits
Out of Pocket
Maximums
$2,000 single / $4,000
Family Deductible
$6,350 Out of Pocket
Max
Metallic Coverage
Levels
Platinum, Gold,
Silver, Bronze
9. Community Rating
• In 2014, Insurers shift to a community rating structure
•
Insurers will only be allowed to set premiums based on four
factors:
•
•
•
•
Coverage category (Individual vs. Family)
Geographic Rating Area (Set by State)
Age
Tobacco use
10. Health Insurance Marketplace
(Exchange)– What is it?
Insurance Companies need to manage
care – price driven marketplace
New ways for employers to
fund premiums for employees
Health Insurance
Plans
Defined
Contribution
In every market, competition
reduces cost – e.g. Cooperatives
Competition
Reduce Cost Trends
Remove Volatility
Ensure Sustainability
Choice and
Flexibility
Freedom to move across
insurers will keep costs low
and service levels high
Best-in-market
Efficiencies
Consumerism
Consumers will make economic choices if
they reap the full economic benefit – not
only price!
Regional rate bands allows market
specific insurer /provider strengths
to emerge
12. Why Common Ground or any
Cooperatives
•
•
•
•
•
•
•
We are a Cooperative - Member Governed
We are a NonProfit Organization
We are Locally Managed and Operated
We Specialize in serving the Individual and Small Group Market
We promote patient-centered care, and put our member’s health
first
We will offer Choices in plans at Competitive Prices
We are committed to Transparency to both members and
providers with the goal of improved health
13. Why Common Ground or any
Cooperatives
• Eight Individual Plans
• Six Small Group Plans
• Large Group Plans
• PPO – Two network options
•
•
Aurora – Envision Plans (Integrated Network)
Trilogy – Empower Plans (Broad Network)
15. Overview of Projected Impacts to
Medicaid/BadgerCare Plus
BadgerCare Plus Enrollment Impacts
• An estimated 87,000 parent and caretaker relatives and 5,000
childless adults will transition to coverage in the new federal
marketplace
• An estimated 84,000 childless adults and 9,000 parent and caretaker
relatives that are currently uninsured will be enrolled in BadgerCare
Plus
• Overall BadgerCare Plus enrollment is projected to stay between
770,000 to 800,000 over the next biennium
• DHS assumed that the uninsured rate for non-elderly (nonpregnant) adults would be reduced by 50%- from 14% to 7%. The
following take-up rates were used in our modeling:
-Parents/Caretakers - 25%
-Childless Adults (new adult group)- 65%
17. Help Paying the Cost
The maximum an individual will pay for their premium is a
percentage of their income based on cost of the Silver
Plan:
Up to 133% FPL
2% of income
133 - 150% FPL
3 - 4% of income
150 - 200% FPL
4 - 6.3% of income
200 - 250% FPL
6.3 - 8.05% of income
250 - 300% FPL
8.05 - 9.5% of income
350 - 400% FPL
9.5% of income
Calculator: http://kff.org/interactive/subsidy-calculator/
It is important to remember why we have reform in the first place… What were the average rate increases prior to reform? What did you get for the increases?It was just too expensive and it was only getting worse. It is Math not Politics
Let’s talk about how dynamic the health care market is becoming as a result of the Patient Protection and Affordable Care Act, which I’ll call “ACA” or the health reform law.These are obviously National numbers, but are significant nonetheless.Approximately 30 million individuals will be newly insured. 80 million are likely to switch their coverage. More than 20 million are anticipated to purchase their health insurance through an Exchange. And more than 15 million are expected to be affected by Medicare increases (Wisconsin declined Federal Funding to increase Medicaid to 150% FPL). Many of these individuals may have lower income and may be more diverse, in poorer health and less sophisticated and educated.Many folks will be coming off of Small Business plans as Small Employers make financial decisions to eliminate coverage and move people to Individual plans.
The biggest question is “how will premiums adjust”?The truth is that premiums will adjust to account for the significant changes being made to the system – Guarantee Issue, The creation of the Exchange, changes in rate formulas, expanded benefits, increases in fees. Numbers are all over the place…40% increase in Group, 80-100% increase in Individual. We will not know where the market is until JulyThe premiums should stabilize as the system matures and consumers take a more active role in their health.So let’s look at the primary components…
Expanded Benefits – Self Explanatory – Every plan on the exchange has to have these benefitsOut of Pocket MaximumsMaximums– On average Deductibles will be around $2,000/$4,000 (Silver Level). However, it can be higher on Bronze. All plans cannot exceed $6,400 (single) for a Maximum Out Of PocketMetal Plans and AV - On the Exchanges, there are going to be at least four tiers of benefits, the so-called “precious metal” plans, defined as plans with 60%-70%-80%-90% actuarial values for Bronze-Silver-Gold-Platinum plans. Applying the definition of “actuarial value” literally, this means that one would expect Bronze plans to cover 60% of the medical expenses for those on that plan. What about these metallic plans and “AV”
The purpose is to do all of these things……it creates a new playing field for the consumer where…Is it easy to find? No, it will be confusing because…..
It is important to remember the purpose o the new marketplace….
SO why us?
It is important to remember the purpose o the new marketplace….