Part I (Mandates to Medicaid) State Bar of California, Business Law Section Health Care Committee

1. Mandates to Medicaid
The Future of Health Care
State Bar of California, Business Law Section
Health Care Committee
Teleseminar:
February 1, 2013
9:00 AM
Presented by Craig B. Garner
PAGE: 1

2. Mandates to Medicaid
The Future of Health Care
Minimum Essential Coverage
(Meeting the Mandate)
PAGE: 2

3. Mandates to Medicaid
The Future of Health Care
Statutory Authority
• The Patient Protection and Affordable Care Act (Pub. L. 111-148) +
• Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) +
• Tricare Affirmation Act (Pub. L. 111-159) +
• Clarification of Health Care Provided by the Secretary of Veterans Affairs
(Pub. L. 111-173) =
________________________________
• 26 U.S.C. § 5000A
PAGE: 3

4. Mandates to Medicaid
The Future of Health Care
What Satisfies the Mandate?
• Government sponsored programs (Medicare, Medicaid, CHIP, Tricare,
Veterans, Peace Corps); or
• Employer-sponsored plan; or
• Plans in the individual market (Exchange, Basic Health Program or CO-OP); or
• Grandfathered health plan; or
• Other
PAGE: 4

5. Mandates to Medicaid
The Future of Health Care
Minimum
Essential
The Penalty
Yes
Coverage?
1. Self-funded student coverage
2. Foreign health coverage
3. Refugee medical assistance
NEW WAYS TO QUALIFY (1/30/13)
4. Medicare Part C
No 5. State high risk pools
6. AmeriCorp volunteers
1. Religious?
2. Not Present?
Exception? Yes 3. In Jail?
4. Low Income?
5. Hardship?
6. Indian Tribe?
No
$695 (or less)
PENALTY (in 2016)
or not to Bronze Level of
the greater of exceed Coverage
2.5% of
household income
PAGE: 5

6. Mandates to Medicaid
The Future of Health Care
Collecting the Penalty
• Waiver of criminal penalties
• Limitations on liens and levies
PAGE: 6

7. Mandates to Medicaid
The Future of Health Care
Essential Health Benefits
PAGE: 7

8. Mandates to Medicaid
The Future of Health Care
What Are Essential Health Benefits?
• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventative and wellness services and chronic disease management
• Pediatric services, including oral and vision care
42 U.S.C. § 18022
PAGE: 8

9. Mandates to Medicaid
The Future of Health Care
What Could Be Essential Health Benefits?
• Emergency room visits
• Ambulance services
• Diabetes care management
• Kidney dialysis
• Physical therapy
• Durable medical equipment
• Prosthetics
• Infertility treatment
• Organ and tissue transplantation
Institute of Medicine, Essential Health Benefits
PAGE: 9

10. Mandates to Medicaid
The Future of Health Care
What Are the Levels of Coverage?
• Bronze (60% of the full actuarial value of the benefits)
• Silver (70% of the full actuarial value of the benefits)
• Gold (80% of the full actuarial value of the benefits)
• Platinum (90% of the full actuarial value of the benefits)
• Catastrophic (29 years old or younger or exempt from Section 5000A)
42 U.S.C. § 18022(d), (e)
PAGE: 10

11. Mandates to Medicaid
The Future of Health Care
Precious Metals (January 2013)
• Platinum 30-day average = $1,585
• Gold 30-day average = $1,673
• Silver 30-day average = $31
PAGE: 11

12. Mandates to Medicaid
The Future of Health Care
Health Insurance Exchanges
PAGE: 12

13. Mandates to Medicaid
The Future of Health Care
The Health Insurance Marketplace is
designed to help you find insurance
that fits your budget, with less hassle.
No matter where you live, you’ll be
able to buy insurance. . . . New laws
mean plans must treat you fairly and
can’t deny you coverage because of
pre-existing conditions.
Source: CMS Toolkit
PAGE: 13

14. Mandates to Medicaid
The Future of Health Care
How Do Exchanges Work?
• Make comparison shopping easy
• Lower barriers for new competition in the insurance market
• Provide savings and choice through transparency
• Determine individual tax credits/subsidies
• Compete for enrollees
• Focus on the uninsured
PAGE: 14

15. Mandates to Medicaid
The Future of Health Care
State-Based Exchange
Each individual state operates all Exchange activities, but a state may use federal
government services for the following activities:
• Premium tax credit and cost sharing reduction determination
• Exemptions
• Risk adjustment program
• Reinsurance program
PAGE: 15

16. Mandates to Medicaid
The Future of Health Care
State Partnership Exchange
State operates activities for:
• Plan management (and/or)
• Consumer assistance
State may elect to perform or can use federal government Services for the following
activities:
• Reinsurance program
• Medicaid and CHIP eligibility assessment or determination
PAGE: 16

17. Mandates to Medicaid
The Future of Health Care
Federally-Facilitated Exchange
HHS operates, but state may elect to perform or can use federal government services for
the following activities:
• Reinsurance program
• Medicaid and CHIP eligibility assessment or determination
PAGE: 17

18. Mandates to Medicaid
The Future of Health Care
Exchange Transparency
As part of the application process, each state should post certain sections from its
application on the appropriate state website, including:
• Exchange board and governance structure
• Stakeholder consultation plan
• Outreach and education plan
• Role of agents and brokers
• Coordination strategy
• Pre-Existing Condition Insurance Plan (PCIP) transition
• Long-term operational cost plan
PAGE: 18

19. Mandates to Medicaid
The Future of Health Care
California Health Benefit Exchange
The California Health Benefit Exchange posts the following vision, mission and values on
its website (www.healthexchange.ca.gov):
• Consumer-focused
• Affordability
• Catalyst
• Integrity
• Partnership
• Results
PAGE: 19

20. Mandates to Medicaid
The Future of Health Care
New Regulations To Ensure Fairness
• Limit premium variation to age and tobacco use
But what is tobacco use?
• Accept all applicants and guarantee renewal
Are there capacity limits?
• Effective Rate Review
Who will conduct the reviews?
• Medical Loss Ratio
Who will monitor?
PAGE: 20

21. Mandates to Medicaid
The Future of Health Care
Medicaid Expansion
PAGE: 21

22. Mandates to Medicaid
The Future of Health Care
Statutory Authority for Medicaid
Pub. L. 103-448 + Pub. L. 110-90 +
Pub. L. 104-226 + Pub. L. 111-3 +
Pub. L. 105-12 + Pub. L. 111-5 +
Pub. L. 105.33 + Pub. L. 111-148 +
Pub. L. 106-113 + Pub. L. 111-152 +
Pub. L. 106-169 + Pub. L. 111-309 +
Pub. L. 108-448 + Pub. L. 112-78 +
Pub. L. 109-91 +
_____________________________
42 U.S.C. § 1396d
PAGE: 22

23. Mandates to Medicaid
The Future of Health Care
What Is Medicaid?
Health insurance for individuals who qualify financially, as well
as families with dependent children, the aged, blind or disabled.
• Medi-Cal
• KanCare
• SoonerCare
• Hoosier Healthwise
• MassHealth
• SALUD!
• TennCare
PAGE: 23

24. Mandates to Medicaid
The Future of Health Care
Medi-Cal
• Created in California during its 1975 Second Extraordinary Session
• (First Extraordinary Session only considered Medi-Cal, while paying the
Assembly and Senate $240,600)
• Cal. Welf. & Inst. Code § 14000:
“The purpose [of Medi-Cal] is to afford to qualifying health care and related remedial
or preventative services, including related social services which are necessary for
those receiving health care under [Medi-Cal].”
• Includes 25% of California’s population
PAGE: 24

25. Mandates to Medicaid
The Future of Health Care
Medicaid Expansion
77 Federal Register 17144 (Mar. 23, 2012) (Final Rule)
• Implemented provisions of the Affordable Care Act related to Medicaid eligibility, enrollment
and coordination with the Exchanges, CHIP, and other programs
• Simplified the eligibility rules in Medicaid and CHIP
• Set the minimum Medicaid income eligibility level of 133 percent of the Federal Poverty Level
for most non-disabled adults under age 65
Proposed Rule (Jan. 14, 2013)
• Reflects new statutory eligibility provisions
•Proposes changes to provide states more flexibility to coordinate Medicaid and CHIP eligibility,
appeals and other administrative procedures
• Modernizes and streamlines existing rules
PAGE: 25

26. Mandates to Medicaid
The Future of Health Care
Medicaid Expansion and the Supreme Court
• The United States Supreme Court held that Congress has the authority to offer funding
for states to expand Medicaid by 2014 without imposing retroactive financial conditions.
National Fed. of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2606-07 (2012).
• Congress never dreamed that any State would refuse to go along with the expansion of
Medicaid. Congress well understood that refusal was not a practical option. (Id. at 2665
(Scalia, Kennedy, Thomas and Alito, JJ, dissenting).
PAGE: 26

27. Mandates to Medicaid
The Future of Health Care
Medicaid Expansion (Nov. 2012)
Not Participating
Leaning Toward No
Undecided
Participating
Leaning Toward Yes
PAGE: 27

28. Mandates to Medicaid
The Future of Health Care
Medicaid Expansion (Jan. 2013)
After Election refers to views as of
January 13, 2013.
In states with newly elected governors,
before election refers to the views of
the outgoing governor, and after
election refers to the views of the
governor-elect.
Source: Sommers, U.S. Governors
and the Medicaid Expansion, New
Engl. J. Med. (Jan. 2013)
PAGE: 28

29. Mandates to Medicaid
The Future of Health Care
Medicaid Expansion By the Numbers
• The Federal Government will pay 100% of added expense for newly eligible
beneficiaries through 2016, 95% in 2017, 94% in 2018, 93% in 2019 and 90% in 2020
and thereafter.
• States must pay “qualified” physicians Medicaid fees at least equal to Medicare rates
starting in 2013.
• Pay increase applies to family physicians, internists and pediatricians (and in some
instances specialists) provided (1) they are Board-certified or (2) at least 60% of the
Medicaid codes they billed in the previous year were primary care codes identified in the
Affordable Care Act.
PAGE: 29

30. Mandates to Medicaid
The Future of Health Care
Questions?
• www.healthcare.gov (U.S. Government)
• www.healthreform.kff.org (The Henry J. Kaiser Foundation)
• www.hhs.gov (The U.S. Department of Health and Human Services)
• www.cms.gov (Centers for Medicare & Medicaid Services)
• www.oshpd.ca.gov/reform (Office of Statewide Health Planning & Development)
• www.chhs.ca.gov (California Health & Human Services Agency)
• www.ppaca.me
PAGE: 30

31. The End