"Implementing the Affordable Care Act in Georgia" presented by Dr. Bill Custer on September 23, 2013 at 2014 is Now: Addressing Healthcare Access, Cost & Quality in Georgia.

1. William S. Custer, Ph. D.
Institute of Health Administration
Georgia State University
Healthcare Leadership Forum
Healthcare Georgia Foundation
September 23, 2013
Implementing the Affordable Care Act
in Georgia

2. Major Components of Affordable Care Act
• Expand Medicaid for the low income individuals
• Expand private insurance to working families through:
– Insurance regulation
– Employer Mandate
– Health insurance markets (“Exchanges”):
• American Health Benefit Exchange for individuals
– Subsidies (refundable tax credits)
• SHOP exchange for small business
– Individual mandate

3. Major Components of Affordable Care Act
Medicaid Expansion Delayed
Employer Mandate Delayed
SHOP Exchange Partially Delayed
Individual Exchange On time
Individual Mandate On time

4. Projected Costs of Medicaid Expansion In Georgia
Year
Total Medicaid
Expenditures
State Expenditures Net Federal Expenditures New Enrollees
2014* 1,675,406,373 $79,600,000 $1,494,900,000 620,172
2015 3,360,744,966 $224,900,000 $3,034,100,000 625,326
2016 4,198,807,865 $210,100,000 $3,885,500,000 634,317
2017 4,473,049,385 $324,200,000 $4,044,300,000 642,562
2018 4,713,308,152 $404,900,000 $4,202,500,000 650,913
2019 4,941,484,491 $458,500,000 $4,375,700,000 659,372
2020 5,315,878,891 $655,900,000 $4,551,300,000 667,942
2021 5,550,591,351 $710,000,000 $4,730,500,000 676,623
2022 5,765,622,197 $737,000,000 $4,917,100,000 685,417
2023 5,989,065,391 $764,996,900 $5,111,096,900 694,325
Total for
Decade
45,983,959,06
1
$4,570,096,900 $40,346,996,900

5. Impact Type Employment Labor Income Output
Direct Effect 36,676 $2,115.10 $4,037.20
Indirect Effect 11,587 $526.40 $1,478.40
Induced Effect 22,079 $916.30 $2,661.50
Total Effect 70,343 $3,557.70 $8,177.10
Table 1: Georgia State Average Annual Economic
Impact
(in millions of 2012 dollars)

6. Jobs Created by Medicaid Expansion In Georgia
by Service Delivery Area

7. Table 4: Estimated State and Local Average
Annual Tax Collections
(in millions of 2012 dollars)
Local Tax collections $146.10
State Tax collections $130.50
Total State and Local Tax $276.50

8. American Health Benefit Exchanges
• Provides one-stop insurance shopping for individuals
• Offers a selection of “Exchange qualified” plans that meet minimum
standards
– Creates administrative mechanism for enrollment
– Standardizes presentation of insurance options for plan comparability;
provides a “rating” system for plans and significant transparency
provisions
• “Navigators” to assist consumers
• All plans sold in the Exchange must be certified by Insurance
Commissioner as meeting minimum federal benefit standards
– Four levels of plans: bronze, silver, gold, platinum
– Catastrophic plans available to individuals under age 30 or those
exempt from insurance requirement
– Insurers must offer children-only plans
• Exchange must provide a seamless application and enrollment process
for individuals who qualify for subsidies, requiring coordination with
state Medicaid Program.

9. ACA Requirement – Essential Health Benefits
• All health plans participating in the Exchange and in a Medicaid Benchmark Plan must provide 10 services
identified as Essential Health Benefits.
• States must select an essential health benefits benchmark plan by the 3rd quarter 2012.
– If no plan is selected, the default plan (the largest plan by enrollment in the largest small group
insurance product in the state) will become the state’s benchmark plan.
• State can select their benchmark health insurance plans from the following:
– One of the three largest small group plans based by enrollment;
– One of the three largest state employee health plans by enrollment;
– One of the three largest federal employee health plan options by enrollment;
– The largest HMO plan offered in the state’s commercial market by enrollment.
• States pay the cost of benefits required by state law in excess of essential health benefits.
Essential Health Benefit
Ambulatory Patient Services Pharmacy
Emergency Services Rehab & Habilitation Services/Devices
Hospitalization Lab Services
Maternity & Newborn Care Preventative & Wellness Services & Chronic Disease Management
Mental Health & Substance Abuse Treatment Pediatric Services – includes Dental & Vision

10. 2014 - Individual Mandate
• Required to show proof of coverage with tax
return
– Penalty for non compliance:
• $95 per individual or up to 1% taxable income (2014)
• Increases to $325 or 2% (2015) and $695 or 3% (2016)
• What counts as coverage?
– Bronze, Silver, Gold or Platinum benefit plans or their
equivalent

11. Insurance Regions for Exchange Premiums

12. Exchange Offerings by Insurance Region
Regions BCBS Peach State Kaiser Alliant Humana
1 Y
2 Y Y Y Y
3 Y Y Y Y Y
4 Y Y Y
5 Y Y
6 Y Y
7 Y Y
8 Y Y Y
9 Y Y
10 Y Y Y
11 Y Y
12 Y Y
13 Y Y Y
14 Y Y
15 Y
16 Y Y

13. Source: Analysis of HHS Proposed Rules On Reinsurance, Risk Corridors And Risk Adjustment
Prepared by Wakely Consulting Group –
Ross Winkelman, FSA, MAAA, Julie Peper, FSA, MAAA, Patrick Holland, Syed Mehmud, ASA, MAAA, James Woolman
The State Health Reform Assistance Network, RWJ
Risk Adjustment, Reinsurance and Risk Corridors
Under ACA

14. Actuarial
Value
Deductible Coinsurance
Premium
(40 Yr. Old)
Bronze 60% $6,300 0% $251
Silver 70% $3,000 10% $310
Gold 87% $750 0% $394
Source: : “Insurance company filings with Georgia Insurance Commissioner
Features of Exchange Plans
Blue Cross Plans
Region 3

15. Health Insurance Exchange: Tax Credits
• Individuals/families with incomes from 100% to 400% FPL qualify for tax credits to reduce
Exchange premium cost.
– 100% FPL = $11,170 individual, $23,050 family of 4
– 400% FPL = $44,680 individual, $92,200 family of 4
• Assistance paying out-of-pockets costs is available for members with incomes from 100% to
250% FPL.
• Tax credit and payment subsidies are based on the cheapest Exchange Silver Plan .
• Members contribute toward their premium costs based on a sliding fee by percent of FPL:
– Up to 133% FPL = 2% of income.
– 133% -150% FPL = 3.0% to 4% of income.
– 150% - 200% FPL = 4.0% to 6.3% of income.
– 200% - 2505 FPL = 6.3% to 8.05% of income.
– 250% - 300% FPL = 8.05% to 9.5% Of income.
– 300% - 400% FPL = 9.5% Of income.
• The Congressional Budget Office estimates the average tax credit will cost about $5,000 a year
per tax return, which includes individuals and families.

16. Family Income
$12,000 $24,000 $36,000 48,000
Regions BCBS/
Silver Plan
Age 40
Subsidy Net
Costs
Subsidy Net Costs Subsidy Net Costs Subsidy Net Costs
1 $460.86 $440.86 $20.00 $328.61 $132.25 $175.86 $285.00 $0.00 $460.86
2 $310.43 $290.43 $20.00 $178.18 $132.25 $25.43 $285.00 $0.00 $310.43
3 $310.90 $290.90 $20.00 $178.65 $132.25 $25.90 $285.00 $0.00 $310.90
4 $387.69 $367.69 $20.00 $255.44 $132.25 $102.69 $285.00 $0.00 $387.69
5 $321.16 $301.16 $20.00 $188.91 $132.25 $36.16 $285.00 $0.00 $321.16
6 $406.94 $386.94 $20.00 $274.69 $132.25 $121.94 $285.00 $0.00 $406.94
7 $356.11 $336.11 $20.00 $223.86 $132.25 $71.11 $285.00 $0.00 $356.11
8 $321.03 $301.03 $20.00 $188.78 $132.25 $36.03 $285.00 $0.00 $321.03
9 $329.61 $309.61 $20.00 $197.36 $132.25 $44.61 $285.00 $0.00 $329.61
10 $295.19 $275.19 $20.00 $162.94 $132.25 $10.19 $285.00 $0.00 $295.19
11 $380.24 $360.24 $20.00 $247.99 $132.25 $95.24 $285.00 $0.00 $380.24
12 $314.99 $294.99 $20.00 $182.74 $132.25 $29.99 $285.00 $0.00 $314.99
13 $369.94 $349.94 $20.00 $237.69 $132.25 $84.94 $285.00 $0.00 $369.94
14 $342.09 $322.09 $20.00 $209.84 $132.25 $57.09 $285.00 $0.00 $342.09
15 $422.42 $402.42 $20.00 $290.17 $132.25 $137.42 $285.00 $0.00 $422.42
16 $317.76 $297.76 $20.00 $185.51 $132.25 $32.76 $285.00 $0.00 $317.76
Out of Pocket Costs for a Blue Cross Silver Plan
for a 40-Year-Old by Region and Income

17. Tax Subsidy in Exchange
Age Number of People Average Monthly Subsidy
19 to 26 69,888 $408
26 to 35 91,225 $316
35 to 50 123,016 $300
50 to 64 87,877 $285
Total Adults 372,006 $263

18. Employer Coverage Requirements
• Small employers with 50 are exempt from requirement.
• Employers with more than 50 full-time employees must offer insurance
meeting certain cost requirements or pay penalties:
– Large employers who do not offer insurance and whose employees
receive public subsidies pay 1/12 of $2,000 per FTE per month, with a
waiver for first 30 FTEs
– Large employers who offer insurance but have employees who receive
premium assistance because they cannot afford the insurance
(affordability is 9.5% of income) pay the lesser of 1) 1/12 of $3,000 per FTE
receiving subsidy per month, or 2) 1/12 of $2000 per month for the total
number of full-time employees with a waiver for first 30 FTEs
– Penalties calculated monthly based on number of applicable employees
• Employers with 200 or more workers who offer coverage must automatically
enroll new employees and continue enrollment of current employees;
employees may choose to opt-out

19. Small Business Health Options Program (SHOP)
• Provides purchase option for and small businesses
– Offers a selection of “Exchange qualified” plans that meet
minimum standards
– Redefines small businesses as 1-100 employees; states
may limit to 50 until 2016
– States can expand coverage to large employers (greater
than 100 employees)in 2017.

20. SHOP Exchange
• Law’s intent:
– Employees of small employers have increased choice of
plan
– Reduce small employer costs
• Aggregate premiums over all employee choices and
present employer one bill
• 2014:
– Employers only have choice of one plan
– No Aggregation
– Tax Credits for small employers only offered in Exchange

21. Consumer Assistance: Navigators
• What: Navigators will help educate people about their
coverage options, and they’ll help applicants figure out if they
are eligible for assistance with the cost of the private plans
sold through the marketplaces.
• Who: Community-based and consumer-focused nonprofit
organizations are required to be among the types of groups
that serve as navigators. Must have existing relationships with
populations served. Must not have financial relationship with
insurers.