Needs for publicly funded behavioral health services under the Patient Protection and Affordable Care Act (ACA): What gaps will remain?

February 4, 2014

Stan Dorn (sdorn@urban.org)

Senior Fellow, Health Policy Center

Support for this Webinar provided by the Substance Abuse and Mental Health Services Administration

Overview

I. Key features of the ACA

II. Who will remain uninsured under the ACA?

III. Among the newly insured, what coverage gaps will remain?

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KEY FEATURES OF THE ACA

I

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Insurance affordability program (IAP) #1: adult Medicaid expansion • Median state pre-ACA Working parents covered up to 68 percent of the federal poverty level (FPL)

Non-working parents covered up to 41% FPL

Childless adults not eligible, unless they are pregnant or disabled

• ACA as enacted: mandatory coverage of adults up to 138% FPL

• Supreme Court decision in June 2012: state option to expand 25 states plus DC have chosen to expand

• Details of coverage for newly eligible adults Highly enhanced federal medical assistance percentage (FMAP)

100% in CY 2014-2016

Slow decline thereafter, reaching 90% in 2020 and beyond

Benchmark benefits package, subject to parity requirements Benefits based on commercial coverage; states pick a current private plan

“Medically frail” adults exempt from benchmark benefits

Without a formal disability determination, adults under 138% FPL are covered as newly eligible adults, with high FMAP Coverage category is a function of timing and individual choice

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IAP #2: Marketplace subsidies • Health insurance marketplaces (HIMs) offer competing qualified

health plans (QHPs)

16 states plus DC have state-based marketplaces (SBMs)

27 states have federally-facilitated marketplaces (FFMs)

7 states have partnership marketplaces, with duties split between federal and state governments

• Health insurance premium tax credits (PTCs)

Reduce premiums for the second-lowest-cost “silver plan” to specified percentages of income, depending on FPL

If a consumer chooses a QHP with a higher or lower premium, the consumer pays (or saves) the difference

PTCs payable “in advance” to QHPs monthly, when premiums are due

Advance PTC beneficiary must “reconcile” advance payments with PTC amount based on year-end federal income tax return. May owe money to IRS or get an additional refund.

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Marketplace “metal levels”

Metal level Minimum actuarial

value (AV)

Examples of cost-sharing

Deductible Primary

care copay Other features

Platinum 90% None $25 $2,000 out-of-pocket maximum (could be up to $6,350)

$500 $20 $1,000 OOP max

Gold 80% $1,000 $20 $3,000 OOP max

$1,000 $15 $3,000 OOP max

Silver 70% $3,000 $30 $150 ER copay

$2,400 $30 $5,000 OOP max

Bronze 60% $3,250 $30 40% ER copay

$6,300 None $150 ER copay

Catastrophic 50% $6,350 $30 $6,350 OOP max 6

QHPs (and other non-grandfathered plans) must cover essential health benefits (EHBs)

• 10 required general service categories

• Preventive services recommended by the US Preventive Services Task Force No out-of-pocket cost-sharing

• Mental health parity required

• State selects commercial plan that provides template for specifics (e.g., amount, duration and scope)

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Ambulatory patient services Preventive/wellness services, chronic disease management

Emergency services Pediatric services, including oral and vision

Hospitalization Prescription drugs

Maternity/newborn care Rehabilitative and habilitative services/devices

Mental health/substance abuse/ behavioral health

Laboratory services

Tax credits • Tax credit eligibility requirements:

Not offered employer-sponsored insurance (ESI) the ACA defines as affordable and offering minimum value Almost all ESI meets these definitions

Income not above 400 percent FPL

Income not below— 138% FPL in a state that expands Medicaid

100% FPL in a state that does not expand Medicaid

Citizen or lawfully present immigrant

• If enrolled in second-lowest-cost silver plan, consumer pays—

Up to 133% FPL, 2% of income

133% to 150% FPL, 3% to 4% of income

150% to 200% FPL, 4% to 6.3% of income

200% to 250% FPL, 6.3% to 8.05% of income

250% to 300% FPL, 8.05% to 9.5% of income

300% to 400% , FPL 9.5% of income

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For tax credit recipients at or below 250% FPL, subsidies can also include cost-sharing reductions that raise AV above the Silver (70%) level

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FPL Actuarial value

(AV)

0%-150% FPL 94%

150%-200% FPL 87%

200%-250% FPL 73%

• More than half of all subsidy beneficiaries are likely to receive cost-sharing reductions (CSRs)

• CSRs are limited to tax credit recipients enrolled in Silver-level plans

• Plan adjusts cost-sharing rules to meet AV standards

• HHS makes monthly CSR payments to the plan

• HHS and each plan reconcile CSRs after the end of the year, based on actual experience

Other features of ACA • Individual coverage requirement

ESI satisfies the requirement

Exemptions Income too low to be required to file income tax returns

Cost of insurance exceeds 8% of income

Religious prohibition against health insurance

“Hardship,” to be defined by HHS Includes people <138% FPL in states not expanding Medicaid

Undocumented immigrants

Penalty amount 2014: $95 or 1% of income, whichever is higher

2015: $325 or 2% of income

2016 and beyond: $625 or 2.5% of income

Enforcement limited to tax refund denial

• Employer penalties for firms with >50 FTE employees whose workers use tax credits to purchase coverage

Either firm does not offer ESI or ESI is unaffordable or < minimum value

• Streamlined and simplified eligibility determination

Supported by 90% FMAP for Medicaid eligibility IT investment

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WHO WILL REMAIN UNINSURED UNDER THE ACA?

II.

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Many people ineligible for IAPs will be uninsured 1. Undocumented immigrants

2. In states that do not expand Medicaid:

Childless adults under 100% FPL

Parents between pre-ACA maximum and 100% FPL

3. People with incomes above 400% FPL

4. People offered ESI that the ACA defines as affordable

If the worker’s premium for worker-only coverage is 9.5% of income or less, the coverage is deemed affordable

Cost for dependents is irrelevant, under IRS interpretation of ACA’s language

Generally won’t hurt children, as long as CHIP is around

Spouses may be left without coverage

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Some people eligible for IAPs will be uninsured • People who don’t know—

About IAPs

That they might qualify for IAPs

• People who don’t enroll, for behavioral reasons

Procrastination, aversion to paperwork, perceived difficulty of enrollment process

• People who find QHP coverage unaffordable, even with subsidies

• People who qualify for advance tax credits but don’t take them, fearing adverse tax consequences

• People who oppose the ACA

• What about the individual coverage requirement?

Will induce some coverage, but probably not 100% effective

Nearly universal coverage in Massachusetts—but

13.9% of drivers didn’t have auto insurance in 2009, according to the Insurance Research Council

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Among pre-ACA uninsured, eligibility for IAPs under the ACA (millions)

10.4

2.3

4.7

7.5

7.4 16.3

States expandingMedicaid

States not expandingMedicaid

Ineligible

Eligible for HIMsubsidies

Eligible forMedicaid/CHIP

Includes 6.6 million poor adults who would qualify for Medicaid under expansion

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Estimated number of uninsured under full ACA implementation(millions)

4.7

1.5

2.7

3.1

6.1 12.2

States expandingMedicaid

States not expandingMedicaid

Ineligible

Eligible for HIMsubsidies

Eligible forMedicaid/CHIP

Includes 6.6 million poor adults who would qualify for Medicaid under expansion

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13.6

17.2

Estimated impact of ACA on number of uninsured (millions)

23.9 25.0

13.6

17.2

States expanding Medicaid States not expanding Medicaid

Uninsured without ACA Uninsured under ACA

43% drop

31% drop

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If all states expanded Medicaid eligibility, who would be uninsured?

Subject to mandate, 28%

Exempt from mandate b/c of

affordability, 8%

Undocumented immigrants,

26%

Medicaid/CHIP eligibles, 38%

N=22.1 million 17

AMONG THE NEWLY INSURED, WHAT COVERAGE GAPS WILL REMAIN?

III.

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Medicaid

• Traditional limitations, such as: Exclusion of coverage for Institutions for Mental Disease (IMDs) Limitations on residential substance abuse treatment Coordinating physical and behavioral health care services Provider networks

• New questions, in states that expand Medicaid How robust will benchmark benefits be? What are the comparative advantages, for beneficiaries, of

benchmark benefits vs. standard Medicaid for adults? How will states define and administer exemptions from benchmark

benefits? What is the impact of the state’s incentive to have people with

disabilities <138% FPL covered as newly eligible adults, rather than through a disability-based category? Key to FMAP: obtaining a formal disability determination Are beneficiaries able to choose their coverage category? 19

HIM coverage • Will people save money on premiums by choosing bronze plans, with

very high deductibles?

• Will people eligible for cost-sharing reductions understand that those reductions only apply to silver-level QHPs?

• Will QHPs structure their benefits to deter enrollment by costly consumers? Potential liability for treble damages under the Federal False Claims Act

• Will QHPs unduly limit provider networks to keep their premiums low, thereby gaining market share?

• How will QHPs meet the ACA’s requirement that members can request and obtain “clinically appropriate drugs” not otherwise covered?

• Will out-of-pocket cost-sharing deter utilization of needed care?

• Will benchmark benefit packages derived from commercial plans meet the needs of people with severe mental illness?

• How will mental health parity be defined, administered, and enforced?

• How will “habilitation services” to help patients achieve functionality be defined and covered? ACA gives states especially great flexibility to define this benefit

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Conclusion • The ACA will greatly reduce the number of uninsured

• Many people will remain uninsured, especially in states that do not expand Medicaid eligibility

• Publicly administered behavioral health programs should be able to tap into new revenue sources, especially in states that expand Medicaid eligibility

• Publicly funded behavioral health programs will still be needed to—

Serve the uninsured

Help the uninsured qualify for Medicaid and other subsidized health coverage

Fill gaps in Medicaid and private coverage

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Sources • Slide 4:

Donna Cohen Ross and Caryn Marks. Challenges of Providing Health Coverage for Children and Parents in a Recession: A 50 State Update on Eligibility Rules, Enrollment and Renewal Procedures, and Cost-Sharing Practices in Medicaid and SCHIP in 2009. Center on Budget and Policy Priorities and the Kaiser Commission on Medicaid and the Uninsured (KCMU). January 2009.

KCMU. Status of State Action on the Medicaid Expansion Decision. http://kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/.

• Slide 5: KCMU. State Decisions For Creating Health Insurance Marketplaces. http://kff.org/health-reform/state-indicator/health-insurance-exchanges/.

• Slide 6: Selected QHPs on various websites for insurers and state-based marketplaces

• Slide 13: Insurance Research Council. Uninsured Motorists, 2011 Edition. April 1, 2011. http://www.insurance-research.org/research-publications/uninsured-motorists-2011-edition-march-2011.

• Slides 14-16: Matthew Buettgens, Genevieve M. Kenney, Hannah Recht, and Victoria Lynch. Eligibility for Assistance and Projected Changes in Coverage Under the ACA: Variation Across States. Prepared by the Urban Institute for the Robert Wood Johnson Foundation (RWJF). October 2013.

• Slide 17: Matthew Buettgens, Bowen Garrett, and John Holahan. America Under the Affordable Care Act. Prepared by the Urban Institute for RWJF. December 2010.

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