Patient Protection and Affordable Care Act and Medicare

Michael W PorterDirector of Health Services

Pension Fund of the Christian Church

WelcomeAgenda

Define AcronymsReview Changes by yearNew CongressQuestions

Definitions of AcronymsPPACA – Patient Protection and Affordable

Care ActCMS – Centers for Medicare & Medicaid

ServicesHHS – Department of Health & Human

ServicesMLR – Medical Loss Ratio

Review events of 2010President signs the Patient Protection and

Affordable Care Act on March 23,2010.First parts of PPACA goes into effect on

September 23, 2010 for most fully insured plans or anniversary date of health plan (Christian Church Health Care Benefit Trust changes went into effect January 1, 2011.)

Mid – Term elections in November 2010House control flips to Republican MajoritySenate still has Democratic Majority albeit

much smaller

2010Expand coverage to dependents up to Age 26 regardless of

student or marriage status as long as they are not eligible for other employer coverage

Eliminate pre-existing condition clause for dependents under age 19

Eliminate lifetime maximums from health plansProvide a $250 rebate to Medicare Part D participants who

reach the “Doughnut Hole”Plans to decide on “grandfathering” statusPreventive health services – first dollar coverageSmall business tax credit (up to 35% of employer

contributions to provide health insurance for employees, 25% for non-profits)

2011Employers must report health care coverage costs on

W-2 forms ( This has been deferred to 2012 W-2 by IRS).Over the counter medicines no longer eligible for

reimbursement under an FSA, HRA or HSA without a doctor’s prescription.

Increased taxes for withdrawals from HSAs for non qualified medical expenses.

Require pharmaceutical manufacturers to provide a 50% discount on brand-name drugs filled in the Medicare Part D “Doughnut Hole”

Begin phasing-in federal subsidies for generic drugs filled in the “Doughnut Hole”

20121099 reporting limit lowered to $500Comparative effectiveness fee $1 per participant

(increases to $2 per head 2013 – 2019)Reduce Medicare payments that would otherwise

be made to hospitals by specified percentages to account for preventable readmissions

Establish value-based programs for hospitals with the aim to expand to home health, skilled nursing facilities and outpatient surgery centers as well

2013Administrative simplification required – must adopt uniform

standards for electronic exchange of health informationHealth FSA contributions capped at $2,500 (much like

HSAs this amount will be indexed for cost of living)End of employer Medicare Part D subsidy taxBegin phasing in federal subsidies for brand-name

prescriptions filled in the Medicare Part D coverage gap (to lower patient share to 25% in 2020) in addition to the 50% manufacturer brand name discount

Establish a national Medicare pilot program to develop and evaluate paying a bundled payment for acute, inpatient hospital services, physician services, outpatient hospital services, and post acute care services for a care event

2014Pre-existing condition restrictions are eliminated for all

personsInsurers cannot charge higher rates due to health statusNo annual limits on amount of essential health benefits

coverage an individual may receiveHealth insurance exchanges are to be created to offer

insurance to individuals and small employers (< 100 employees)

Multi-state plan option established – provides coverage under nationwide health plans

Increase in small business tax credit as long as coverage purchased through exchanges

2014 continuedIndividual/employer mandates are to beginIndividual mandate

Individuals who do not enroll in qualifying coverage must pay a penalty

Health care tax credits for insurance purchased on exchange by low income individuals (400% of FPL or approx $44k in 2010)

Self – insured plans and insurers will be required to report certain coverage – related information to individual and IRS

2014 ContinuedEmployer Mandate

Automatic enrollment for employers with 200 + full time employees that offer at least one health plan benefit

Employees must be notified of exchanges & subsidiesNo waiting periods > 90 daysPenalties for employers with 50 + full time employees

No coverage - $2000 for each FT employee over the first 30 if even one employee receives tax credit; or

Unaffordable coverage - $3000 for each worker who actually receives a tax credit because the employer plan cost more than 9.8% of income

Free Choice Voucher – cost of employer plan >8% but <9.8% of household income; employee gets tax-free voucher = cost of employer contribution to buy coverage on exchange and keep the savings (if any)

2017 and 20182017

States may allow all employers of any size to offer coverage through exchange (< 100 employee rule goes away)

2018Cadillac plan tax goes into effect

Tax on cost of coverage in excess of $27,500 family and $10,200 single

Dollar thresholds are indexed for inflation Special provisions for employers with higher costs

because of age or gender demographics

CAVEATSThe 2012 electionSupreme Court will most likely have its say

on individual mandates/constitutional status of PPACA in 2012

Congress has yet to hold the line on a scheduled Medicare provider reimbursement reduction

Ability of self-insured plans to qualify for subsidies and state exchanges

More and more physicians are limiting and closing their practices to Medicare eligible patients

Questions

Christian Church Health Care Benefit Trust

Available to all participating churches, ministries and institutions of the Stone-Campbell Tradition