This is a dicussion about the 2010 Health Reform Laws, what they mean to the local community, employers, business, and citizens of the community, and what the opportunity is under health reform for communities to retake control of their health care finance plan and build on their personal relationship with their health care providers.

1. Patient Protection and
Affordable Care Act of 2010
Affordable Care Act of 2010
…and what it means to the
employers, employees and
l l d
individual citizens of the CSRA
individual citizens of the CSRA
Dr. Gordon Jones
HealthYncubator.com
June 1st, 2010

2. Are things going to Change?
“It was the best of times, it was the worst of times,
it was the age of wisdom it was the age of
wisdom,
foolishness, it was the epoch of belief, it was the
epoch of incredulity, it was the season of Light, it
was the season of Darkness, it was the spring of
hope, it was the winter of despair, we had
everything before us, we had nothing before us, we
were all going direct to heaven, we were all going
direct the other way ‐ in short, the period was so far
like the present period.”
period.
Charles Dickens, A Tale of Two Cities
English novelist (1812 – 1870) 2

3. “This is a big @#$! deal!”
Quoted by VP Biden at the Doesn’t Biden
Passing of Health Reform
P i f H lth R f remind you of Dan
remind you of Dan
Quayle, VP of Bush I

4. Triple Legislation
Patient Protection and Affordable Care Act
P ti t P t ti d Aff d bl C A t
Signed by President Obama March 23, 2010
Health Care and Education Reconciliation Act
Signed by President Obama March 30 2010
Signed by President Obama March 30, 2010
Amends PPACA and adds new provisions
Financial Regulatory Reform Bill 2010
Health Insurance Rate Authority
y
“The Health Reform Laws”
The Health Reform Laws

5. Polling Question # 1
How surprised were you that the health reform
bill was enacted?
1. Not at all surprised – I knew it would pass
2. Somewhat surprised – I th
2 S h t i d I thought we‘d get
ht ‘d t
something, but not this dramatic
3. Very surprised – I thought it was dead after
the January special election in Mass
4. Shocked – I never thought it would happen
5

6. Evidently just a Flat
6

7. “Experts” Make Their Contributions
1,400 Special Interest Groups
Spent $400+ Million
p $
Lobbying Congress on Health Reform
7

8. Trust in our Government
April 2010 Pew Family Research Poll
April 2010 Pew Family Research Poll
found only 20% trust the Federal Gov’t
Eisenhower
Kennedy
Johnson
80%
Nixon
Ford
60%
Carter
Reagan Bush
eaga Bush
Clinton
40%
Obama
20%
0%
1960 1970 1980 1990 2000 2010 8

9. Trust them with statements like this?
“We have to pass the bill so that you
“W h t th bill th t
f
can find out what is in it” ….
Speaker Nancy Pelosi
9

10. Presidential Initiatives on Health
10

11. Presidential Initiatives on Health
In the early 20th
Century, National
Century National
Health Insurance
efforts were killed by
the AMA because
the AMA because
they believed
physicians would lose
their autonomy.y
11

12. Post Medicare/Medicaid by Johnson
Administrators Physicians
2500%
2000% HMO
1500%
1973
PART D
COBRA 2003
1000% HIPAA
ERISA 1985
500%
1996
1974
0%
1970 1975 1980 1985 1990 1995 2000
Source: BLS & Himmelstein/Woolhandler/Lewontin Analysis of CPS Data

13. Shortage of Physicians
13

14. Polling Question # 2
What type of reform act is this?
What type of reform act is this?
1. Health Reform: will we be changing the
health status of individuals in the US?
2 Healthcare Reform: will we be changing
2. Reform: will we be changing
the way medical services are provided in
the US?
th US?
3. Health Finance Reform: will we be
changing the way healthcare is paid for in
the US?
the US?
14

15. What is health insurance in the US?
Insurance: the
promise of
promise of
reimbursement in
case of an
f
unexpected loss
15

16. “BUCAH” healthcare payers …
payers…
Well baby check
Well baby check Annual Physicals
Annual Physicals
16

17. … compared to …
… compared to …
Oil change
Oil change Gym Membership
G M b hi
17

18. “BUCAH” healthcare payers…
ASO
Administrative Services Only
Administrative Services Only
Serving the Self‐insured Employer
~47%
47%
18

19. How did we get in this mess?
19

20. How did we get in this mess?
Illness and medical bills were linked to at least
62.1% of all personal bankruptcies in 2007
equaling 866,000 and involving 2.346 million
Americans
Most were middle class
60.3% of them had attended college
66.4% had owned a home;
;
20% included a military veteran or active‐
duty soldier
soldier.
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21. How did we get in this mess?
21

22. Polling Question # 3
How well do you think you understand what
H ll d thi k d t d h t
is in the 2,409 page legislation?
1. Very well – I‘ve read parts, all, a summary
2. Pretty well – I‘ d
2 P tt ll I‘ve done some research, but I
h b tI
only understand a few components
3. Not very well –what I heard on the news
4. Not at all – l d t b
4 N t t ll glad to be participating today
ti i ti t d
5. Don‘t know
22

23. “The Act” Affects Everything & Everybody
Healthcare Finance System
lh i S
23

24. Overview
Overall Approach
Overall Approach
 Individuals must have health coverage or pay
a tax/penalty (IRS regulated)
 Employers with 50+ FTEs will face a tax
Employers with 50+ FTEs will face a tax
penalty if they don’t cover their employees
 Federal subsidies to start up health exchanges
d l b idi h lh h
and CO‐Ops to help the individual and small
employer purchase coverage
l h
 Many new regulations over health insurance
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companies and employer plans
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25. Overview
Coverage expanded
Coverage expanded
 Pay for 31 of the 54 million currently
uninsured
 Expanded Medicaid eligibility to 133% of FPL
Expanded Medicaid eligibility to 133% of FPL
 Parents coverage of dependents until age 26
 An individual may choose any in‐network
p y
physician (no matter the specialty) as their
( p y)
Primary Doctor
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26. Overview
Effect on Medicare
Effect on Medicare
 Lowers the income threshold for increased
individual Medicare premium requirements
 Extends the Medicare Trust to 2026 (9 years
Extends the Medicare Trust to 2026 (9 years
beyond the 2017 insolvency mark of today)
26

27. Overview
No longer allowed
No longer allowed
 Lifetime benefit limitations
 Annual benefit limitations
 Pre‐existing conditions
i i di i
 Unreasonable premium increases
p
 OTC drugs paid out of HSA funds
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28. Overview
Each state must have a health benefit exchange
Each state must have a health benefit exchange
by 2014 to pool the funds and spread the risk of
individuals and group health benefits
individuals and group health benefits
 Not a health plan in‐and‐of themselves
 A marketplace of Federally Qualified Health Plans
 Oversight and rates all plans based on quality
Oversight and rates all plans based on quality
 IDs to IRS the employer of employees who have
enrolled in an exchange plan
enrolled in an exchange plan
 Manages employer‐provided Free Choice Vouchers
for individuals to purchase through the exchange
for individuals to purchase through the exchange
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29. Overview
Federal Funds to assist MDs adopt Health
Federal Funds to assist MDs adopt Health
Information Technology
 American Recovery and Reinvestment Act of 2009
grants $48 Billion for HIT: $63,750 per provider
Health Plan must adopt HIT SOP:
 Allow providers to determine patient’s eligibility and financial
Allow providers to determine patient s eligibility and financial
obligation at the point‐of‐care
 Requires no or minimal augmentation of paper
q g p p
 Provide timely status of medical claims
 On 4‐1‐2014 health plans will be assessed $1 per‐life‐per‐day
On 4 1 2014 health plans will be assessed $1 per life per day
penalty for non‐compliance to HIT SOP
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30. The Cost
Cost generally agreed by CBO
Cost generally agreed by CBO
 First 10 years it will cost $938 Billion
 Projected to reduce the deficit $134 Billion
 Requires $1.072 trillion in new tax revenues
i $ illi i
p y
Who will pay
 138 million eligible US tax payers (2007)
 ~42.5 million do not net‐contribute
 95.5 million will pay an additional $11,225
95.5 million will pay an additional $11,225
in taxes over the 10 year period
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31. IRS is now in the Healthcare Business
Tax implications will also apply
Tax implications will also apply
 All taxes and penalties are driven through the
IRS Code giving the IRS new power over
healthcare in the US
 $2 per employee per year tax to go to medical
research
 Increase in Medicare payroll taxes for earned
income over $200,000 (ind) & $250,000 (fam)
i $200 000 (i d) & $250 000 (f )
 40% nondeductible excise tax on high‐dollar
g
coverage plans “The Cadillac Plans”
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32. IRS is now in the Healthcare Business
 New fees and taxes on several health care‐
New fees and taxes on several health care
related industries including medical device and
pharmaceutical companies starting in 2010
pharmaceutical companies starting in 2010
 10‐percent tax on indoor tanning services
Tanning Industry
Tanning Industry
Lobbyist
32

33. Employer Plan Mandates
Penalties begin 2014 for the 50+ employer
P lti b i 2014 f th 50 l
who provides:
 No coverage
I d
Inadequate coverage
t
 Excessive coverage
cess e co e age
This health plan is
“Just Right”
g
33

34. What does a business owner need to do?
I.
I Talk with your Healthcare Consultants and
T lk ith H lth C lt t d
your CPAs ASAP!
II. If you offer any type of coverage now, you
will need to tweak it to comply with the
earliest of regulations:
By 6/23/10:
By 6/23/10:
 35% Tax Credit for Small Businesses
 Report coverage value on employee’s W‐2
 Early Retiree Reinsurance program starts
y p g
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35. What does a business owner need to do?
Plan years beginning after 9/23/10:
Plan years beginning after 9/23/10:
 Prohibition of lifetime limits
 Only restricted annual limits allowed
 P hibi i
Prohibition on rescissions
i i
 Prohibition on preexisting exclusion for
p g
dependents under age 19
 Plans are required to offer first dollar
Plans are required to offer first dollar
coverage of preventative health services
 Plans to cover dependents up to age 26
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36. What does a business owner need to do?
Plan years beginning after 9/23/10:
Plan years beginning after 9/23/10:
 Prohibition of discrimination based on salary
 Medical Loss Ratio limitations for plans
I
Implement new claims admin procedures
l l i d i d
 Required coverage of emergency services
q g g y
 Individual choice of primary care provider
 Required coverage of OB/GYN care
 Make benefit plan details transparent
Make benefit plan details transparent
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37. Individual Mandates
By 2014, American citizens and legal residents
By 2014 American citizens and legal residents
must purchase qualified health coverage with
the exception to:
the exception to:
 Religious objectors
 Incarcerated individuals
 Members of Indian tribes
b f d b
 Those who were not covered for a period of
p
less than three months during the year
 People with no income tax liability
People with no income tax liability
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38. State’s Rights Initiatives
38

39. High Risk Pools and Georgia
 6‐23‐2010 $5 Billion in federal funds will be
6 23 2010 $5 Billi i f d l f d ill b
provided to the states for high‐risk pools
 Employers of risk pool participants will be
audited to assure they were not discouraged
from remaining in the company plan
 John Oxendine GA Insurance Commissioner
John Oxendine, GA Insurance Commissioner,
declined to receive the funds because they are
due to run out by 2012 which is 2 years before
due to run out by 2012 which is 2 years before
the 2014 coverage mandates kick in (also
participating in the State s Rights initiatives)
participating in the State’s Rights initiatives)
39

40. “Transparency”
All health plans will be required to make
All health plans will be required to make
public disclosure through HHS:
 Claims payment policies and practices
 Periodic financial disclosures
 Data on enrollment and disenrollment
 Data on number of claims denied
Data on number of claims denied
 Data on rating practices
 Information on Out‐of‐Network cost sharing &
payments
 Information on enrollee and participants rights
40

41. Organizational Confusion – US Healthcare
Organization Chart
g
of Health Reform

42. Don’t Panic
Confused – Implementation overload!!
There will be more
to come…
Only 20% of the
work has been done
work has been done
thus far…
We are only at the
End of the Beginning
—7 to 10 years of
7 t 10 f
rule making and
changes ahead.
changes ahead

43. But now is not the time!
43

44. Consumer Operated & Oriented Plans
Locally Organized and Managed CO‐OPs
Locally Organized and Managed CO OPs
 Non‐profit, member‐run health insurance issuers
 May not be sponsored by State or Local government
or current health insurers
 Must be organized under State law as a non‐profit
 Must meet all State insurance regulations
Must meet all State insurance regulations
 All profits will be used to lower premiums and
increase quality for its members
increase quality for its members
 $6 Billion will be provided for Start‐up Costs
 Loans to be repaid in 5 years
 Grants to be repaid in 15 years 44

45. There is an opportunity for the CSRA
The Act has provided us the opportunity to
The Act has provided us the opportunity to
take control of our own healthcare
 Healthcare is local!
 Its paid for by local employers and consumers
 Health services are provided by local health
p
professionals
 Families follow traditional patterns for their care or
they get recommendations from their friends who
they get recommendations from their friends who
have experience these providers
45

46. Consumer Operated & Oriented Plans
Local
Employers
E l
Local
Consumers
C
CO O
CO‐OP TPA/ASO
Local
Healthcare
Providers
46

47. So what are we doing in SCRA?
Central Savannah River Area
47

48. CSRA Health CO‐OP, Inc.
Local
Employers American
Association
of Health CO‐OPs
Local CSRA TPA/ASO &
600,000+ Consumers
CO‐OP Services Georgia Association
CSRA of Health CO‐OPs
f H lth CO OP
Residents Local To bring the resources
Healthcare together on a national
g
bases to each state and
Providers each community CO‐OP.
Physician
y
Groups
Allied Medical
Health Supply 48

49. Thank You!
Gordon Jones, DHA
www.CSRAHCO‐OP.org
Gordon@HealthYncubator.com
G d @H lthY b t
706‐564‐9275
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