1. Health Care Reform Overview Providers’ View Employers’ View What we all need to watch William Custer, PhD Patricia Ketsche, PhD Institute of Health Administration, GSU

2. Agenda Overview of reform What does it mean for providers? What does it mean for employers? What we need to watch

3. Total National Health Expenditures:$’s and as Share of GDP

4. The Employment-Based Coverage System is Eroding

5. ESI Benefits Limited for Small Firms

6. Percentage of Uninsured by Firm Size of Family Head Source: Tabulations of the March supplement to the Census Bureau’s Current Population Survey for 2002 and 2010

7. Overview of Reform: Major Change Components Medicaid Expansion Changes in Private Coverage Improving Health Care Quality Focus on Health

8. Major Change Component: Medicaid Expands Eligibility (2014) From “Poor AND….” to “Poor” Everyone under 133% poverty eligible In 2010 ~$20,000 for family of 2 Federal Gov’t pays for the expansion through 2016 Phase in state payments of 10% for newly eligible

9. Major Change Component Private Coverage Changes 2010-2013 Insurance regulation Expansions for children (no pre-existing conditions) & young adults Rate reviews Preventive Care No lifetime/limited annual benefit caps Medical Loss Ratio Small Employer Tax Credits Targeted to low wage, smaller firms Offset portion of premiums paid Even available to NP

10. Major Change Component: Private Coverage Changes 2014 Community Rating Health Insurance Exchanges Individuals Small employers Individual Mandate Subsidies for those without employer coverage “Pay or Play” for employers with 50+ workers

11. Overview of Reform: More Americans with health insurance coverage

12. Remaining Uninsured Over Non-citizens (25-35%) Low income populations (100-250% FPL) High income volatility Frequent moves between Medicaid and insurance subsidy categories Remaining uninsured are likely to be younger and healthier than those currently uninsured

13. Overview of Reform: Financing Insurance Premium Subsidies Medicare Savings +/- 1 trillion +/- 1 trillion Fees, Taxes and Penalties Medicaid

14. Major Change Component:Improving Health Care Quality Information Focus on collecting, sharing and using Coordinated Care Focus on integration Pay for provider quality Bonuses Penalties

15. Major Change Component:Focus on Heath National health strategy council Research & public health innovation Mandatory preventive care benefits Funding for state/community based wellness initiatives

16. Provider View Payer mix changes Payment changes Regulatory changes

17. Providers: Payer mix changesMore Georgians with health insurance coverage

18. Providers: Payment Changes Incentives for integration Accountable Care Organizations Bundled payments Incentives for Medical Homes Value based purchasing Reimbursement tied to quality Expanded beyond inpatient hospitalizations

19. Providers: Payment Changes Rate cuts Reduced Medicare Advantage payments Reduction in update formula Cuts to DSH funding Infrastructure for future payment innovation Center for Medicare and Medicaid Innovation Independent Medicare Payment Advisory Board

20. Providers: Regulatory Changes to promote transparency & oversight

21. Employer View Why anemployer focus What does it mean for employers right now? Employer implications depend on size

22. Why an Employer Sponsored System? Risk pools -> stabilize premiums ↓administrative costs Purchasing expertise in HR Tax exclusion of premiums Over $250 billion in subsidy of private coverage BUT…….

23. Affordability Declining participation rates Employers shifting more cost to workers: Increases since 2005: Inflation 12% Wages 18 % Overall premiums 27 % Employee contributions 47% Source: Kaiser HRET Survey

24. What Does Reform Mean for Employers Now? 2010 Changes Add in dependents < 27 Eliminate lifetime and annual benefit limits Eliminate pre-ex restrictions for children Cover preventive case without cost sharing Exemption: Grandfathered plans 2011 changes Limits on use of FSA/HSA for OTC medications Report value of health care benefits on W-2 2012 changes Additional 1099 reporting

25. <25 Employees <50 Employees >50 Employees >200 Employees Employer Implications Depend upon Number of Workers (FTEs)

26. <25 Employees Tax Credits Full Credits <10 FTEs Wages < $25,000 Phased out credits 10 to 24 FTEs Wages to $50,000 Credit as share of premium: 2010-2014: 35% 2014-2015: 50%

27. <25 Employees Tax Credits – 2010: Examples

28. State Decisions on Exchanges

29. American Health Benefit Exchange Individual Coverage Administration of Subsidy Medicaid Enrollment Choice of Plans Quality Information

31. <50 Employees SHOP Exchange Purchasing Certify, price and rate plans Standardized benefit information Administer small business tax credits

32. >50 Employees Pay or Play Penalties if full time workers obtain coverage in the Exchange $2,000 per full time worker (exclude first 30) if no coverage offered $3,000 per worker obtaining the subsidy if coverage offered that is not sufficiently generous High cost sharing High employee premiums

33. >200 Employees Employer Must: Auto enroll new workers Employee only Lowest cost plan Employee can still opt out or change selection

34. What we all need to watch Federal Regulations Benefit Package Exchange regulations Definitions/regulations for ACOs Bundled payments Pay for performance State Decisions Exchange structure and functions Insurance market regulation Medicaid Eligibility and Enrollment Processes Provider incentives and payments Workforce strategy

35. What we all need to watch…..Political developments

36. Health Care Reform Overview Providers’ View Employers’ View What we all need to watch William Custer, PhD Patricia Ketsche, PhD Institute of Health Administration, GSU