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HomeMy WebLinkAboutAgenda - 10-12-2010 - Board of Health MeetingAgenda Joint BOCC - BOH Dinner Meeting Southern Human Services Center Room A/6 5:30 pm October 12, 2010 Introductions 2. Message from Board of Health Chair 3. Overview Patient Protection and Affordable Health Care Act (ACA) 4. Discussion 5. Closing Remarks Joint Board of Health Board of County Commissioners Meeting October 12, 2010 Slides Courtesy of NC Institute of Medicine Overview of "Health Care Reform" - Opportunities provided by the Patient Protection and Affordable Care Act (ACA) ^ Underlying reasons for health reform ^ Coverage expansion '_` Qther ACA provisions Prevention and Wellness • Cost containment and financing 3 Overview Elements - By 2014, the bill requires most people to have health insurance and large employers (50+ employees) to provide health insurance--or pay a penalty. • Builds on our current system of public coverage, employer-sponsored insurance, and individual (non- , ,.group) coverage -- - New.furiding for prevention, expansion of the health`workforce, long-term care services, ~.- increasing the healthcare safety net, and '' improving quality Why Focus on Population Health? - North Carolina ranks 37~ in overall health status and 40~ in premature deaths in 2009 (with "1" being the state with the best health status). - North Carolina ranks in the bottom third for many heath indicators including: • A~lults.who are current smokers (37'^) • ©bese.adults (41~ • Air pollution (36r^) •~ 4-gear graduation rate (37~^) -°North Carolina can not "treat" its way to health Underlying Reasons - Estimates of the uninsured: • Recent Census numbers showed approximately 1_7 million non-elderly uninsured in NC (2009) ^ 2~/0 of Orange County adults under 65 uninsured - Lack of health insurance impacts on a person's health` - • ?ec9ple"ivho are uninsured are less likely to receive preventive se+vice5-more likey to end up in the hospital for preventable cor~dikions or late stage cancer, and more likely to die prematurely ,u Lack of insu2nce coverage affects a family's financial security s•u2.: us c«~. H..^, wv..e. ew.n.y. sma,s.,,e type ei ceve<.9. ey st„~r•ron• una•r ~. r•a. nwa. Expansion of Public Programs - Expands Medicaid to cover all low-income people under age 65 (including childless adults) with incomes up tp 133% FPL (begins FY 2014) ~s~ zooi, zaoz) • States must maintain current income eligibility for children in Medicaid and CHIP until 2019 cs«. arouo~, ro zap. • Beginning 2014, special outreach requirements to ' vulneraple populations (sauoi} Enhances Medicare preventive services 2 1 Essential Benefits Package - HHS Secretary will recommend an essential health care benefits package that indudes a comprehensive set of SerVICeS: (Sec. 1302) • Hospital services; prQesslonal services; pre,aiption drugs; rehabilitation and habilitative services; mental health and sut)stance use disorders; and maternity pre • Well=baby, well-chtld care, oral health and vision services for chifdreirvnder age 21 rs.c w•s, uozl • Recomihended preventive services with no cost-sharing and all recommended immunizations (s.~ Ion, lows) Mental health parity law applies to qualified health plans ts« vrlrp> Subsidies to Individuals - Refundable, advanceable premium credits will be available to individuals with incomes up to 400% FPL on a sliding scale basis (#43,320/yr. for one person, 558,280 fior two,;73,240 for three, #88,200 for a family of four in 2010).* (sec Iwl, as antatdetl M Se[3001 of RecatdGatlon) • individuals not eligible for subsidies if they have ,, em~l0yer-based coverage, TRICARE, VA, Medicaid, or Medicare (sa. I,o>c~xzxBx~, rso=) • No)#h;Carolina's median household income in 2008 " was $46,574 (avg. household = z.s people). °" •IOtO FMerr Pow,ry revr. n« Sto,po tar m IMV1aw1 iu.Ar roe, t..,rywrw,ivatororae.,rywtur..,«sa.ooo r«.r.mxywro«. us ' Csns„c Buruu. NorM Lrri,u. Ouiek PMC p my:rpumA.as.u,nucyoayra~. tHe•rJrooo. none Employer Responsibilities - Employers with 50 or more full-time employees required to offer insurance or pay penalty (s«.1201, 3513, amended s«. IOORec«duznoB) - Employers with less than 50 full-time .:employees exempt from penalties. (Sec. 1533(dx2>) • Employers with 25 or fewer emplo ees and average anntjal wages of less than $50,000 can receive a -tax credit. (sK. r,n, sew lu lus7 Orange County has approximate)y 2,991 employees with less than 50 employees. Individual Mandate - Citizens and legal immigrants will be required to pay penalty if they do not have qualified health insurance, unless exempt. (Sec 1312(Q, 3501, xnatded Stx 1002 M RecancilWbon) Sliding Scale Subsidies <333% FPL 2% of 6% #1,983 (Ind)/#3,967 (tarn) Income (1/3'• HSA limit) :• 133-150% 3-4% 6% #1,983 /;3,967 FPL -'~ 150-200% 46.3% 13% #1,983/ X3,967 FPL 200-250% 6.3-8.05% 27% #2,975/ #5,950 (I/1 x5A FPL limn) 250-300% 8.05-9.5% 30% ;2,975/;5,950 ~ ~ FPL u<br~.r wr rwq tidua. a,a, w.n•mcs, copsy.. ` 300-400% :,ei~w~ .nos .mb' r ~ ' t ' FPL ,oz, m •ma,a.e sae. toot rn i Health Benefits Exchange - States will create a Health Benefits Exchange for individuals and small businesses. (srr.1311, Isz1) • Limited to citizens and lawful residents who do not have access to employer-sponsored or govemmental- sup„ported health insurance and to small businesses f with~1Q0 or fewer employees. (sx 1313(m - Exchanges will: • Provide standardized information (including quality and costs) to help consumers choose between plans • Determine eligibility for the subsidy tz 3 2 4 Health Benefits Exchange (HBE) -"No wrong door approach" between Medicaid and HBE (sec 1311, 1411, 1413) • Individuals who ap ply for health insurance throw gh the HBE will have their eligbbi ity determined for Medicaid; those who apply for Medicaid will have their eligibility determined for HBE subsidies - Patierit_:navigators to help link individuals to Medicaid or private insurance through HBEs Safety Net Overview - Federally qualified health centers: Appropriate a total of $96 over five years for operations, $1.56 for construction and renovation (FY 2011-2015) (sec. 10503, Sec. 2303 of Retorxiliatlon) - School based health centers: Appropriates $50M in each.. FY 2010-2013 (sec. a1a1,1o4oi> - Funding authorized, but not appropriated for other sa1'ety,;nek,organizations ---New_rec~uirements for charitable 501(c)(3) hospitals: • Must conduct a community needs assessment and identify an z. imp)ementation strategy (cave a flnandal assistance policy provide emer2jency services• aril hmtt charges to people eligible for assistance to amounts generally billed Prevention and Wellness: Overview - Federal government providing more funding to support prevention efforts at national, state and local levels • Grant funds will be made available for prevention, wellness aRd public heaRtl activities • Some of the focus areas include: healthy lifestyle changes, reduction and control of chronic diseases, health disparities, nuh!ic health infrastructure, obesity and tobacco reduction, m~proSed oral health, immunizations, maternal and child health, worksite wellness Income Eligibility for Subsidized Insurance (2010, 2014) Annual income elgibility based on famly size of four (based on 2010 federal poverty levels) Elly for E~lig bilily for E~ligi~bility for Medicaid or NC Medicaid or NC Subsidy in the Health Choice Heakh Choice Health aenent (2010) (2014) Exchange (zola) rnlla s;aa,loo s;•w,1oo ;4a,1oo- ;sa,zoo 'Paren[a!'- ~~ 5;11,246 Sf29,327 ;29,327- dependeM clilld ;88,200 /Ul other adults Not eligible 5;29,327 Q29,327- ,_„(non-disabled, X8,200 rion-elderry) u Long-Term Care - Establishes a national voluntary insurance program to purchase community living assistance services and supports (CLASS) financed through payroll deduction. tsx.eooreooz, - New Medicaid state options to expand home and ,community-based services ie Prevention and Public Health Fund - National Prevention, Health Promotion and Public Health Council ,sK.,~~, - Prevention and Public Health Fund to invest in prevention, wellness, and public health activities csx. 4ooz) ~:=dppropriates;500 million In FY 2010,;750 million in FY F;20t°r~.;1 billion in FY 2012,;1.25 billion in FY 2013, ~i.$. billion in i°lf 2014, and ;2 billion in PY 2015 and each fiscal year thereafter • taay be used to fund programs authorized by the Public Health ~~rvice Act and for prevention, wellness, and public health ai-tivttes • Half of this funding will be used for health professional workforce training „ 3 Examples of New Prevention Activities - Expands access to dinical preventive services in Medicare and private plans (with no cost sharing) - Public-private partnership to support health promotion outreach and education campaigntse<400,1 - Sorli~,example of grents for prevention and wellness: Maternal, infant, and early childhood home visiting programs lac zesil.. -- •-.Personal responsibility education tsx. xss~ '• Diabetes prevention (sec losol> • Dental caries management ts,e.,lo:> Prevention: Worksite Wellness - Worksite wellness initiatives • CDC to provide tedlnipl assistance, tbrsultatlon, tads, and oher resources in evaluating welhess programs offered by employers d all sizes csr~. 430 • Grants to encourag: sma//!ws/rl~ses(S00 employees or fewer) to offer comprehenshe worl~lace wellness programs csec la0ei Autrgrhes ;200 mlgbn fro the perbd of FY 2011-2015 • Employers can trove wellness programs that indude requirements thaf`enrpllees satisry Health status factors (i.e., tobacco cessation -_ ' cx wegtit) if the finartdal consequences (reward a penalty) do rid czceed30% of the txst of empbyee-only coverage (or 30% of famiy coverage if dependents pattkipate)* cser_ iz01i 'HHS Secretary can adhodze simlar wetness programs in the individual market in u0 to 10 dates; however, states must showme ~ program will not resuh in a decease h coverage. Congressional Budget Office (CBO) Projections - Covers 92% of all nonelderly residents (94% of legal, nonelderly residents) • Would cover an additional 32 million people (leaving 23 million nonelderly res(dents uninsured by 2019) - Expansion of insurance coverage and new "appropriations included in PPACA will cost $938 bllliQn over 10 years. • However, with new revenues and other spending cuts, PPiXCA is estimated to reduce the federal deficit by $124 billion over 10 years.* . raorc reeent coo estimela suggeeb ma. earn woua increase or s11s en~on w«loyeen:xc•nPeu nonce .wme prmwiom mm .rc.umoNZea el cerbm kvea eM n•1 yN approprlalea. a•un:ea: L80 NIr« mtea Marts D 20, 2010, R1•Y 11,1010. Prevention Competitive Grants - Community transformation grants csec. 4201, ta,o3r • To be used for the implementation, evaluation, and dissemtnatlorof evidence-based community prevenfve health actNlL'es to reduce chronic diseases, prevent the devebpment of seconday conditions, address health disparities, and develop evidene based effective preventbn prog2ms. Available to state and local government agendas and communlty- based organizations. Adrvltie3:may focus on healthier school environments, alive living rommumbes, atxess to nutritious foods, chronic disease, worksite w~Jln?;5 healthy food options, and redudng disparities. • Alithonzes funds necessary. May be funded by the Prevention and Public Health fund. Prevention Research and Evaluation - Funding for research to optimize the delivery of public health services. (sec. 41gi1 • Research shall indude examining evidence-based practices reladnn, gg to pr~en~ion, with a partlcular fans an high pn areas as IdenMled yy the HHS Secretary in the National Prevention S~h-aotegy or HealNy People 2020, and comparing community-based public health m lions In terms of effelxiveness and cost. -'IiHS= cretary must ensure that all publicly-funded heaRh ' pilwogra , ~ surveys, and reports collect data on race, ethnicrtyisex, primary language, and disability status and that data be collected at the smallest geographic level possibie,(effective no later than March 23, 2012). lsec 4wz1 • %+~ rthortzes sorb sums as necessary through FY 2014. •- iiti5=secretary will evaluate the effectiveness of federal ;- health and wellness initiatives. (sec 44oA 5 4 ~~`:~ 6 FY2010 Prevention and Public Health Fund Allocations The Prevention and Public Health Fund created by the Affordable Care Act provides for an expanded and sustained national investment in prevention and public health programs. In FY2010, there will be $500 million in funding available, with gradual funding increases each year to reach $2 billion in FY2015 and totaling to $15 billion over 10 years. In mid-June 2010, the Department of Health and Human Services announced the allocation of the $SOOM in the Prevention and Public Health Fund available for FY2010 (grant applications for these initiatives are beginning to be posted on w«rW.arants.gov): $250M for workforce development in primary care sector (For more information, go to: http://www.hhs.~ov/newslpressl2010nres/06/20100616a.html) •$168M for training more than 500 new primary care physicians by 2015 • $32M for supporting the development of more than 600 new physician assistants • $30M for encouraging over 600 nursing students to attend school full-time • $15M for the operation of l Onurse-managed health clinics which provide comprehensive primary health care services to populations living in medically underserved communities • $5 million for states to plan and implement innovative strategies to expand their primary care workforce by 10 to 25 percent over ten years $250M for prevention and public health (For more information, go to: h ttp://www.healthreform.~ov!newsroom/acaprevention.html) • $126M for Community and Clinical Prevention: To support federal, state and community prevention initiatives; the integration of primary care services into publicly funded community-based behavioral health settings; obesity prevention and fitness; and tobacco cessation • $70M for Public Health Infrastructure: To support state, local, and tribal public health infrastructure and build state and local capacity to prevent, detect, and respond to infectious disease outbreaks • $31M for Research and Tracking: For data collection and analysis; to strengthen CDC's Community Guide by supporting the Task Force on Community Preventive Services; and to improve transparency and public involvement in the Clinical Preventive Services Task Force • $23M for Public Health Training: To expand CDC's public health workforce programs and public health training centers CEIEBRR71 NG i y j -.~- -~-----=~- ~n 7tta Vbata ~1'.Arnaric~~r t~anues * 19,2~it7 Health Reform Implementation FAOs This Frequently Asked Questions document is intended to cover some of the basic elements of the health reform law, the Patient Protection and Affordable Care Act (PPACA). This document is categorized by topic area and will be updated as needed. Please note that some specific details of how provisions will be implemented will not be available until regulations aze issued by govenunent agencies. For more information, please see additional resources available at www.naco.org/healthreformim lep meet. Please submit any health reform implementation questions to healthreforminfona,naco ore. Health Insurance Coverage Changes How does the health reform law expand health insurance coverage for individuals? In 2014, all U.S. citizens and legal residents, with a few exceptions, will be required to have qualifying health insurance coverage or they must pay a tax penalty. Which individuals are exempt from the 2014 requirement to have health insurance coverage and will not be penalized? There aze exemptions from the mandate to have health insurance coverage for the following individuals: 1) individuals claiming financial hardship 2) individuals with religious objections 3) American Indians 4) individuals without coverage for less than three months 5) undocumented immigrants 6) incazcerated individuals 7) individuals for whom the lowest cost health plan exceeds 8 percent of their income 8) individuals with incomes below the tax filing threshold in 2009. How will individuals be able to obtain health insurance coverage to meet the law's requirements? Individuals can obtain coverage through their employer, Medicare, Medicaid, other federal programs such as veterans' health Gaze, or by purchasing coverage through state-based health insurance exchanges, which are essentially regulated insurance mazketplaces. Medicaid will be expanded in 2014 to include all non-Medicaze eligible individuals under age 65 who have incomes up to 133% of the federal poverty level (FPL), including adults without children. How~many uninsured individuals are expected to gain health insurance coverage through the law's changes to the health care system? The Congressional Budget Office (CBO) has estimated that an additional 32 million non-elderly individuals will have health insurance coverage by 2019 through the state-based health insurance exchanges and the Medicaid expansion. Before 2014, will individuals currently lacking health insurance be able to obtain coverage? Yes, some currently uninsured individuals will be able to obtain coverage before 2014. In 2010, a temporary national high-risk pool program will be established for individuals with pre-existing medical conditions so they can purchase coverage. The temporary high-risk pool program offers eligible individuals coverage until 2014, when insurers will not be permitted to deny coverage to any individual based on pre-existing health conditions, the state-based health insurance exchanges are established and Medicaid coverage is expanded. (For more information, please see the temporary high-risk pool section.) 1 Medicaid Expansion (for more information also see the Maintaining the Salty Net sectionZ How specifically will Medicaid be expanded? Medicaid will be expanded to cover a new population of adults who are currently not eligible for the program-non- Medicare eligible adults under age 65 without dependent children with incomes up to 133% FPL (based on modified adjusted gross income). This means that all individuals under age 65 (children, pregnant women, parent, and adults without dependent children) who meet the income criteria will be eligible for Medicaid, and most asset and resource tests will be eliminated. When will the Medicaid expansion occur? The expansion of Medicaid will occur in 2014. However, states do have the option to implement the expansion as soon as April 1, 2010. What type of benefit package will individuals newly eligible for Medicaid receive? All newly eligible adults will be guaranteed to receive a benefit package that meets the essential health benefits available through the state-based health insurance exchanges. Who or what entity will determine what is in the essential health benefits package? The elements of the essential health benefits package will be determined by the Secretary of the Department of Health and Human Services. How will the Medicaid expansion be financed? The expansion of coverage through Medicaid will be fully federally financed from 2014 to 2016, with progressively less federal financing each year until 2020 when the federal medical assistance percentage (FMAP) will cover 90 percent of the costs of covering the newly eligible. Will states that choose to expand Medicaid eligibility prior to 2014 receive a higher FMAP rate? No-while states do have the option to expand Medicaid eligibility as soon as April 1, 2010, states that choose to do so will not receive the higher FMAP rate until January 1, 2014. What will the FMAP rate be for states that have already expanded Medicaid coverage to adults with incomes up to 100% FPL? States that have already expanded Medicaid eligibility to adults with incomes up to 100% FPL will receive an increase in the FMAP for non-pregnant adults without children that is phased in so that their federal financing matches other states' by 2019. What will be the role of counties in the expansion of Medicaid to new individuals? Counties that currently determine individuals' eligibility for Medicaid will be directly involved in implementing the law's requirement to expand Medicaid to individuals who meet the new eligibility criteria. Temporary National High-Risk Pool What is the temporary high-risk pool? Prior to the expansion of Medicaid and the creation of state-based health insurance exchanges in 2014, a temporary national high-risk pool program funded by the federal government will be established for individuals with pre-existing medical conditions to be able to purchase health insurance coverage. 8 Who is eligible to participate in the temporary high-risk pool? Individuals with pre-existing medical conditions are eligible to receive benefits through the temporary high-risk pool if they have not had health insurance coverage for the past six months. When will the temporary high-risk pool be created? The temporary high-risk pool will be effective July 1, 2010. How will the temporary high-risk pool operate? States have the option to run the high-risk pool program themselves, but if states choose not to run the high-risk pool program, eligible individuals can apply for coverage through a federal fallback high-risk pool. The Department of Health and Human Services gave states notification on April 2, 2010 about the different options available for operating the temporary high-risk pool, as follows: 1) Create a new high-risk pool if the state currently lacks one; 2) If the state already has ahigh-risk pool, operate a new high-risk pool alongside the existing state high-risk pool; 3) Build upon other established coverage programs for high-risk individuals; 4) Provide subsidized coverage by contracting with current HIPAA insurance carriers or carriers of last resort. States were required on April 30, 2010 to indicate which option they would pursue. For states that did not select one of the options outlined by the HHS Secretary, how will the temporary high-risk pool operate in their state? In states that elected not to choose one of the options for operating the temporary high-risk pool, the Department of Health and Human Services will operate the temporary high-risk pool in the state. What type of health care coverage will be available through the temporary high-risk pool? The Secretary of the Department of Health and Human Services will establish a minimum set of benefits to be included in the health plans. Pre-existing medical conditions will be required to be covered, and the plans must cover at least 65 percent of health caze costs. How will premium rates for the temporary high-risk pool be set? Although the population participating in the temporary high-risk pool will have higher health risks due to their pre- existing health conditions, premiums will be set according to standard population rates. Premiums will be based on age, geographic area, family composition and tobacco use. Will there be limits on out-of-pocket medical spending for individuals participating in the temporary high-risk pool? Yes-excluding premiums, annual out-of-pocket spending will be limited to $5,950 for individuals and $11,900 for families participating in the temporary high-risk pool. How much federal funding is available for the temporary high-risk pool? The health reform law contains $5 billion for the administration of the temporary high-risk pool. Will individuals who currently receive coverage through a state high-risk pool be transferred to the temporary high- riskpool? No-individuals receiving coverage through an existing state high-risk pool (currently 34 states operate these types of high-risk pools) will keep their current coverage through those high-risk pools. 9 10 Will the temporary high-risk pool last indefinitely? No-the temporary high-risk pool will terminate on January 1, 2014 when the state-based health benefit exchanges aze created. At that time, individuals receiving coverage through the temporary high-risk pool will be able to obtain coverage through the new health insurance exchanges, as all insurance plans will be required to cover all individuals with pre- existing conditions. State-Based Health Insurance Exchan es What are state-based health insurance exchanges? State-based health insurance exchanges are essentially regulated insurance marketplaces where individuals without employer-sponsored health insurance can purchase coverage or small businesses can obtain coverage for their employees. Initially the exchanges will primarily serve individuals purchasing coverage on their own and small employers. How will the state-based health insurance exchanges be structured? State-based exchanges for individuals will be called the American Health Benefit Exchanges, and exchanges for small businesses will be called the Small Business Health Options Program (SHOP). States can decide to create a single exchange that serves both individuals and small businesses, or offer coverage options through separate entities. When will the state-based health insurance exchanges be implemented? The American Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchanges will both be created in 2014. Are all individuals eligible to purchase coverage through the American Health Benefit Exchange? No-only non-incarcerated U.S. citizens and legal immigrants will be able to purchase coverage through the American Health Benefit Exchanges. Is there funding available for states to create the exchanges? Yes-funding is available to states for establishment of the exchanges within a year of enactment until January 1, 2015. After then, states must ensure their exchanges aze self-sustaining. Funding for the exchanges can be generated by charging participating insurers assessments or user fees. How specifically will the state-based health insurance exchanges operate? Beginning in 2014, individuals will be able to select and purchase health insurance coverage through the state-based American Health Benefit Exchanges and small businesses with up to 100 employees will be able to purchase coverage for their employees through the Small Business Health Options Program (SHOP) Exchanges. However, the law permits states to limit exchanges to small businesses with 50 or fewer employees until January 1, 2016. When and how will standards for the state-based health insurance exchanges occur? In 2010 the Secretary of the Department of Health and Human Services will begin developing standards for both the American Health Benefit Exchanges and the Small Business Health Options Program (SHOP) exchanges. How will the state-based health insurance exchanges be administered? The exchanges will be administered by a governmental agency or non profit organization, to be determined by each state. If a state elects to not establish an exchange by January 1, 2014, the HHS Secretary will establish and operate the exchange in the state. 4 11 Can more than one health insurance exchange exist in a state? Yes-more than one exchange can exist in a state, and a state can choose to form a regional exchange, but each exchange must cover a distinctive geographic area. Can employers with more than 100 employees purchase coverage for their employees from the exchange? Not initially-however, in 2017, states have the option to allow businesses with more than 100 employees to purchase insurance from an exchange. Will there be subsidies to help low-income individuals afford coverage through the exchange? Yes-there will be premium credits for individuals and families with incomes between 133-400%FPL based on a sliding income scale to help them purchase coverage through the exchanges as well as cost-sharing subsidies for individuals and families with incomes between 100-400% FPL based on a sliding income scale to help pay for high out-of-pocket costs. Will plans within the exchange need to meet certain benefit package standards? Yes-the Secretary of the Department of Health and Human Services will define an essential health benefits package which provides a comprehensive array of services and meets certain criteria, such as limits on annual cost sharing and that it is not more expensive than an average employer plan. All plans offered through the exchange aswell asnon- grandfathered (new plans created after March 23, 2010) individual and employer sponsored plans offered outside of the exchange are required to provide at a minimum the essential health benefits package. What specific levels of coverage will be available through the exchange? The exchange will have five benefit categories of plans offering different levels of coverage, as follows: • Bronze: Offers minimum essential health benefits; covers at least 60 percent of the benefit costs of the plan; out- of-pocket limit same as current limit on Health Savings Accounts ($5,950 for individuals, $11,900 for families) • Silver: Offers minimum essential health benefits; covers at least 70 percent of the benefit costs of the plan;. out-of- pocket limits same as current limit on Health Savings Accounts • Gold. Offers minimum essential health benefits; covers at least 80 percent of the benefit costs of the plan; out-of- pocket limits same as current limit on Health Savings Accounts • Platinum: Offers minimum essential health benefits; covers at least 90 percent of the benefit costs of the plan; out-of-pocket limits same as current limit on Health Savings Accounts • Catastrophic: Only available to individuals up to age 30 or individuals who are exempt from the insurance coverage mandate; will operate like ahigh-deductible health plan and will offer catastrophic coverage only; also, this plan is only available on the individual market, and not through an exchange. Will individuals with pre-existing conditions be able to obtain coverage through the health insurance exchanges? Yes-in 2014, insurers will not be permitted to deny coverage to any individual based on pre-existing health conditions, including plans offered through the exchange. What will individuals with coverage through state-based high-risk pools do when the state-based health insurance exchanges are created in 2014? Individuals that receive coverage through state-based high-risk pools will most likely transition into the American Health Benefit Exchanges because they may be able to obtain more affordable coverage through the exchanges, since the plans on the exchanges cannot deny coverage or charge higher rates due to health status. Will there be assistance for individuals enrolling in the exchanges? Yes-there will be a web portal will help consumers navigate their options in the individual and small business private market so they can determine if they may be eligible for a variety of existing public programs, including existing state 5 12 high risk pools, new high risk pools, Medicaid, Medicare and the Children's Health Insurance Program (CHIP). For more information about the web portal, see: http://www.hhs.Gov/ociio/reeulations/index.html#health care reform. The first version of the web portal (www.healthcare.gov) was launched July 1, 2010. The law also requires exchanges to establish a Navigator program that will award grants to entities to promote public education about and enrollment in the exchanges. For more information about the exchanges, see the National Association of Insurance Commissioners' document: http://www.naic.or~/documents/committees b Exchanges.pdf Other Coverage Questions Is there a provision in the health reform law for all children to have health insurance? Most children would be covered through their parents' employer-provided health insurance plans, Medicaid, the Children's Health Insurance Program (CHIl'), or through a plan their parents purchase through the health insurance exchanges that will begin operating in 2014. However, some children will remain without coverage, such as children whose parents do not choose to purchase coverage through the exchange and do not get enrolled in Medicaid or CHIP, as well as children who do not meet citizenship requirements. Does the health reform law offer any other coverage plan options? Yes, potentially-in 2014 states will be allowed the option to create a Basic Health Plan for uninsured individuals who have incomes between 133-200% FPL, who would otherwise be eligible for premium tax credits on the exchange. The benefits in the Basic Health Plan must be at least equivalent to the essential health benefits package determined by the Secretary of the Department of Health and Human Services and that premiums do not exceed those in the exchanges. Important Issues for Employers What are some of the key initial health insurance changes that counties will need to implement in terms of the health benefits they provide their employees? There are provisions that expand dependent coverage requirements, a new voluntary, self-funded, insurance program for opt-out long-term care insurance and other changes related to reporting requirements, some of which will occur in 2010 and 2011. Will all employer health plans be affected by these changes? Not necessarily-plans in effect on March 23, 2010 are considered "grandfathered plans" and are exempt from some of the new requirements, such as requirements to provide coverage that includes preventive services, immunizations and screenings without beneficiary cost-sharing requirements. (Rules for grandfathered plans were published jointly by the Treasury Department, the Department of Labor, and the Deparhnent of Health and Human Services in the Federal Register on June 17, 2010 and are available here: http://edocket.access.~o.~ov/2010/pdf/2010-14488.pdf.) Will there be changes for nonprofit organizations that provide health insurance benefits for their employees? All employers are treated the same under the law, whether non-profit or for-profit. The differences will depend on the number of employees and the kind of health insurance benefits that are offered. 13 2010 & 2011 Changes to Employer-Sponsored Health Insurance Changes to Retiree Health Plans What types of changes will there be in 2010 that affect retiree health plans? The Department of Health and Human Services has created a reinsurance program to reimburse employers for costs associated with providing health insurance to non-Medicare eligible .retirees over age 55, as well as their spouses and dependents, called the Early Retiree Reinsurance Program. How might the reinsurance program help employers and retirees? The payments from the reinsurance program are intended to provide financial relief to employers for high cost claims and to help them maintain health care coverage for early retirees. Additionally, the savings gained through the program can help employers lower their health care costs or offer employees reduced premiums. What types of employer plans are eligible to participate? Self-funded and insured plans can apply for reimbursement, including plans sponsored by private entities, state and local governments, nonprofits, religious entities, unions and other employers. What types of health benefits are eligible for reimbursement? Medical, surgical, hospital, prescription drug benefits qualify, as well as mental health services and any other benefits that may be specified by the Secretary of HHS. What is the amount of reimbursement available to employers? Employers can receive up to 80 percent of claims costs for health benefits between $15,000 and $90,000. How does the reimbursement formula work? Claims incurred between the start of the plan yeaz (often January 1) and June 1~` are credited towazds towazd the $15,000 threshold for reimbursement. However, only medical expenses incurred after June 1, 2010 aze eligible for reimbursement under this program. For example, if an individual incurs costs of $30,000 between the start of the plan year and June 1, and $40,000 after that date, the amount which may be reimbursed is $40,000 -the costs above the $15,000 threshold that occur after June 1. If a plan incurs $90,000 or more in expenses before June 1, it is treated as having met the $15,000 threshold and is eligible for reimbursement for costs incurred after June 1. How much money in total is available in the fund? The health reform law contains $5 billion for the Eazly Retiree Reinsurance Program. When will this reinsurance program be effective? The program is effective on June 1, 2010 (in advance of the June 21 start date required by the law) and will end on January 1, 2014, or before then if funds are exhausted. In 2014, early retirees will be able to select coverage from the health insurance exchanges. How can employers apply for the Early Retiree Reinsurance Program? Employers can submit applications to the Department of Health and Human Services and applications are processed in the order they are received. To receive assistance, plans must first have their applications approved, and then document and demonstrate claims have been paid as well as implement programs and procedures that have or have the potential to generate cost savings for participants with chronic and high-cost conditions. Drag applications were made available in early June at to help employers become familiar with the application process and HHS began accepting official 7 14 applications on June 29, 2010. Applications and more information is available at: http://www.hhs.~ov/ociio/regulations/index.html#early_retiree For more information about the Early Retiree Reinsurance Program, see: http://www. Whitehouse. aov/the-press-office/fact-sheet-early-retiree-reinsurance-program http://www.hhs.gov/ociio/regulations/index.html#early retiree Changes to Coverage Requirements Does the health reform law contain provisions preventing rescission? Yes-in the first plan year after September 23, 2010, all health insurance plans will not be allowed to rescind coverage, except in cases of fraud or abuse. (Rescission is a practice where insurance companies rescind an individual's existing health insurance policy when s/he becomes ill as a way to avoid covering the individual 's health care costs.) Does the health reform law contain changes to coverage requirements based on health conditions? Yes-in the first plan year after September 23, 2010, all health insurance plans.will not be permitted to restrict coverage for children under age 19 based on health status conditions. (Additionally, in 2014, this provision will apply to all individuals.) Does the health reform law contain changes regarding coverage based on income? Yes-on January 1, 2011, non-grandfathered plans (new plans created after March 23, 2010) will not be permitted to limit eligibility for coverage on the basis of salary or wages. Changes to Coverage for Beneficiaries' Dependents What types of changes will occur in 2010 that affect how employers provide coverage to beneficiaries' dependents? The law requires all individual and group health insurance plans that provide coverage to beneficiaries' dependent children to provide them coverage until they reach age 26. This rule applies to all plans in the individual market and new employer plans. It also applies to existing employer plans (plans in existence on March 23, 2010, which are considered grandfathered health plans) unless the adult child has another offer of employer-based coverage. However, in 2014, this exception for grandfathered health plans will not apply and young adults up to age 26 will be able to remain on their parent's employer-sponsored plan even if the young adult is eligible for coverage through their employer. When will employers that provide dependent health care coverage have to implement this change? This provision takes effect on September 23, 2010, and health insurance plans are expected to implement these changes when they start a new plan year. However, some large employers are permitting uninsured young adults to enroll on their parent's health plan prior to September 23, 2010. Are beneficiaries' dependent children eligible for this coverage if they are married? Yes; however the coverage does not extend to a young adult's spouse or children. Some states already offer coverage to beneficiaries' adult children-how will these laws be affected? About 25 states currently have laws that extend the age that children can remain on their parents' health insurance plans, but eligibility rules vary by state and state requirements to extend coverage to adult children do not apply to self-funded insurance plans. The dependent coverage requirements in the health reform law apply to all states and will apply to self- funded plans as well as private insurance plans. However, states with broader eligibility rules for dependent coverage can continue operating under these current state policies. 8 15 How will health insurance premium costs be affected by the requirement to expand coverage to beneficiaries' dependent adult children? Currently, premium costs depend on who is covered by the plan, and an employee's portion of the premium may increase when additional individuals are added to a family plan. Since the health reform law does not stipulate how premium costs will be affected by this particular change, whether premium costs rise will depend on how employers respond to the change. According to an analysis by the Department of Health and Human Services, average family premiums would increase by an average of 0.7 percent by adding coverage for approximately 1.2 million young adults through their parents' plans. For more information about the extension of dependent coverage, see: Regulations on the extension of dependent coverage: http://edocket.access.gpo.gov/2010/pd:f/2010-11391.pdf FAQs on the extension of dependent coverage: http://www.hhs.gov/ociio/relations/adult child faq.html Changes to Benefit Requirements Does the health reform law contain changes to dollar limits on benefits? Yes-in the first plan year beginning after September 23, 2010, all health insurance plans will not be permitted to implement lifetime caps on coverage. Does the health reform law contain changes to the types of services that are required to be covered? Yes, for new plans-in the first plan year beginning after September 23, 2010, non-grandfathered plans (new plans created after March 23, 2010) will be required to provide coverage that includes preventive services, immunizations and screenings without beneficiary cost-sharing requirements. (Also mentioned in the Public Health and Wellness section) Other Changes That Will Affect Employer-Sponsored Health Insurance 2010-2011 Is there a provision in the health reform law regarding a new program for long-term care? Yes- the Community Living Assistance Services and Supports (CLASS) Act program is a new voluntary long-term care insurance program that provides participants with a cash benefit to cover the costs of long-term care services. Employers determine whether or not to participate in the program. How will the CLASS payroll deductions operate? Employers that choose to participate will automatically enroll employees for the CLASS payroll deductions beginning January 1, 2011; however, employees may choose to opt out of the program. For individuals whose employers choose not to participate, the HHS Secretary will establish other participation mechanisms. (For more information about CLASS, see the Long Term Care section.) Are there any new reporting requirements for employers and/or health plans? Yes-effective in 2012, the cost of health insurance coverage must be reported on W-2 forms, reflecting coverage in 2011. Additionally, in 2010 health plans will be required to report the amount of premium dollars spent on clinical services, quality and other costs. Effective January 1, 2011, for the amount spent on these items that is less than 85 percent for large group market plans or 80 percent for individual or small group market plans, the plans will be required to provide consumers with rebates. 9 16 What types of tax changes related to drug coverage costs are in the health reform law? Costs for over-the-counter drugs, unless physician-prescribed, will not be eligible for reimbursement through Flexible Spending Accounts (FSA) or Health Savings Accounts (HSA). This change will occur January 1, 2011. Are there measures in the health reform law that are designed to help prevent large premium increases? Yes-in 2010, the Department of Health and Human Services will develop a review process to assess health plan premium increases. Plans will be required to justify premium increases, and states will be required to report on premium increase trends. Other Chances That Will Affect Employer-Sponsored Health Insurance What other changes in the health reform law affect employee payroll deductions besides the CLASSAct? In 2013, the Medicare Part A tax rate on wages will be increased by 0.9 percent on earnings over $200,000 for individuals and $250,000 for married couples filing jointly (from current rate of 1.45 percent to 2.35 percent) Are there other changes related to Flexible Spending Accounts (FBAs) in the health reform law? Yes-in 2013, the law caps annual FSA contributions at $2,500 per year. Does the health reform law contain changes retating to waiting periods? Yes-in the first plan year beginning in 2014, all health insurance plans will not be permitted to have waiting periods for coverage longer than 90 days. Does the health reform law affect the payroll deduction of health benefit premiums before taxes? For most cases, no; however, begmning in 2018, if health insurance plans have aggregate values that exceed $10,200 for individual coverage and $27,500 for family coverage, then the plan will be subject to the excise tax, which will presumably be passed on to the plan beneficiaries. Does the health reform law require employers to offer affordable health insurance coverage? No, but the law contains fmancial incentives that they do offer affordable coverage to their employees. Beginning in 2014, employers with 50 or more employees that do not offer affordable health coverage to their employees will face a financial penalty if their employees seek coverage on the state-based health insurance exchanges and receive a premium tax credit. What is the amount of the penalty that will be imposed on employers? The penalty amount that would be imposed on employers is based on different factors, as follows: • Employers with 50 or more employees that do not offer coverage and that have at least one full time employee that receives a premium tax credit through the exchange o Assessed $2,000 per full time employee, though the first 30 employees are exempt from the assessment • Employers with more than 50 employees that offer coverage but have at least one full time employee that receives a premium tax credit through the exchange o Assessed the lesser amount. of either: $3,000 for each employee receiving a premium credit or $2,000 for each full time employee, exempting the first 30 employees from the assessment Will employers with less than SO employees face penalties for not providing employees with health insurance coverage? No-employers with less than 50 employees that do not provide health coverage are exempt from these types of penalties. 10 17 Does the health reform law contain any assistance for small businesses that would like to provide their employees with health insurance coverage? Yes-beginning in 2010, employers with 25 employees or fewer and annual wages averaging less than $50,000 can receive a tax credit if they offer health insurance for their employees. How much will the tax credit be for small employers? Small employers that purchase health insurance for employees will be provided with a tax credit of up to 35 percent of the employer's contribution to employee health insurance premiums in tax years 2010-2013. For tax years 2014 and beyond, eligible small employers that purchase coverage through a health insurance exchange will be provided with a tax credit of up to 50 percent of the employer's contribution to employee health insurance premiums. The credit phases out as the size of the firm and the average wage increases. Are there any special requirements for large employers? Yes-in 2014 employers with more than 200 employees will be required to automatically enroll their employees into employer health insurance plans, although employees may choose to opt out of the plans. Are individuals who are offered health benefits through their employer eligible for premium credits on the exchange? No, unless the plan offered by their employer does not have an actuarial value of at least 60 percent or if the employee's share of the premium is in excess of 9.5 percent of his/her income. Are there any provisions in the health reform law to assist employees who receive health insurance coverage through their employer but cannot afford their share of the premium? Yes-for employees with incomes below 400% FPL and who have health insurance premium costs in excess of 8 percent but less than 9.8 percent of their income, all employers that offer coverage to their employees will be required to provide these employees with a free choice voucher. This voucher can be used to purchase coverage through the American Health Benefit Exchange. Will employers that provide free choice vouchers be subject to the employer penalties associated if their employees receive premium tax credits on the exchange? No---employers that provide these free choice vouchers will not be assessed with the employer penalties if any of their employees obtain health insurance coverage through the exchange and receive a premium tax credit. Public Health and Wellness What new funding is available in the health reform law that supports the prevention and wellness efforts of state and local health departments? One of the ways the health reform law supports investment in prevention and public health programs is through the creation of afederally-operated Prevention and Public Health Fund. How much funding is available through the Prevention and Public Health Fund? In FY2010, there will be $500 million in funding available, with gradual funding increases each year to reach $2 billion in FY2015 and totaling to $15 billion over 10 years. How will funding from the Prevention and Public Health Fund be made available? The fund will be administered by the Secretary of the Department of Health and Human Services, who will transfer funds to programs authorized by the Public Health Service Act, including new programs such as the Community Transformation 11 18 gants which will be available to state and local health departments (however these gants are authorized but not appropriated). How specifically has the funding for FY2010 in the Prevention and Public Health Fund been allocated? On June 16, 2010 the first $250 million allocation of the fund for fiscal year 2010 was announced for efforts to strengthen the primary care workforce and on June 18, 2010 the second $250 million allocation of the fund for fiscal year 2010 was announced for initiatives that support prevention and enhance public health infrastructure. For more information about the funding for development of the primary care workforce, see: http://www.hhs.gov/news/press/2010pres/06/20100616a html and for more information about the funding for prevention and public health, see: http://www.healthreform.goy/newsroom/acanrevention html. What other provisions in the health reform law support efforts to provide preventive services? In the first plan year beginning after September 23, 2010, non-gandfathered plans (new plans created after March 23, 2010) will be required to provide coverage that includes preventive services, immunizations and screenings without beneficiary cost-sharing requirements. (Also mentioned in the Important Issues for Employers section) Does the health reform law contain any broad federal efforts to enhance public health? Yes-in 2011, the National Prevention, Health Promotion and Public Health Council will be created and will include representatives from a range of federal agencies. The council will be charged with developing a national prevention and health promotion strategy. Does the health reform law contain provisions that are designed to help individuals make healthier food choices? Yes-in 2011, the law requires chain restaurants and food sold from vending machines to provide information about each item's nutritional content. Maintaining a Safety Net Under the health reform law, can states require counties to contribute additional funds for the non federal share of Medicaid? No-the law stipulates that states cannot require counties to contribute a Beater percentage of the non-federal share of Medicaid than they contributed in 2009; however, this does not apply to the normal administrative FMAP. Will there be any changes in Medicaid provider payment rates to help increase access to care? Yes, there will be temporary increases-in 2013 and 2014, Medicaid payments for primary care services will be increased to match Medicaze payment levels. How will this increase in Medicaid provider payment rates be financed? This temporary increase in Medicaid provider payment rates will be fully federally-financed. How does the health reform law affect current eligibility standards for Medicaid & the Children's Heath Insurance Program (CHIP)? The health reform law includes maintenance-of--effort (MOE) requirements designed to help ensure current levels of Medicaid and CHIP coverage, meaning that states must maintain current eligibility standazds for Medicaid and CHIP. This means that states cannot reduce adults' existing Medicaid eligibility until January 1, 2014 when the state-based health insurance exchanges are implemented, and for children, states cannot reduce their Medicaid or CHIP eligibility until September 30, 2019. 12 19 How does the health reform law affect Medicaid disproportionate share hospital (DSIIJ payments? The health reform law does implement Medicaid DSH reductions-from 2014 to 2019, the law contains a total of $14.1 billion in Medicaid DSH cuts. Does the health reform law contain any new requirements for nonprofit hospitals? Yes-in 2010, there are additional requirements for nonprofit hospitals to provide charity care, as well as conduct and implement a community health needs assessment in coordination with public health experts and community leaders. These new requirements will be enforced through a $50,000 annual fee for noncompliance. Delivery Systems, Health Care Access and Ouality Improvement Does the health reform law contain measures that may help improve health care access, delivery and quality? Yes there are a number of provisions within the law that are designed to improve access to quality health Gaze. Medicaid, Medicare & CHIP Delivery System, Access and Quality Improvement Measures Does the health reform law contain initiatives that are designed to improve Medicare, Medicaid and the Children's Health Insurance Program (CHIP)? Yes-the health reform law authorizes the creation of a Center for Medicaze and Medicaid Innovation. This unit within the Centers for Medicaze and Medicaid Services will be responsible for coordinating pilot and demonstration projects for payment and service delivery models to improve the efficiency and quality of Medicaze, Medicaid and CHIP. What types of provisions within the health reform law may help improve care for individuals who are eligible for both Medicare and Medicaid? For individuals who aze eligible for both Medicare and Medicaid (often referred to as "dual eligibles"), the law creates the Federal Coordinated Health Care Office within the Centers for Medicare and Medicaid Services. This office, to be created in 2010, will be charged with improving Gaze coordination for dually eligible individuals to increase their access to quality health caze. What other Medicaid program innovations designed to improve care are in the health reform law? The health reform law contains a number of new Medicaid demonstration projects: • Bundled payments for episodes of care involving hospitalization (effective January 1, 2012-December 31, 2016) • Global capitated payments to safety net hospital systems (effective FY2010-FY2012) • Allow pediatric medical providers to share in cost-savings if they are organized as accountable Gaze organizations (effective January 1, 2012-December 31, 2016) • Provide Medicaid payments to institutions of mental disease for adult enrollees who require stabilization of an emergency condition (effective October 1, 2011-December 31, 2015) Also, the law extends the Medicaid Money Follows the Person Rebalancing Demonstration program through September 2016. Additionally, in 2011, there will be a new state plan option to permit certain Medicaid enrollees to designate a provider as a health home. Eligible enrollees would be individuals with at least two chronic conditions, one condition and the risk of developing another, or at least one serious and persistent mental health condition. Participating states would be given a 90 percent FMAP for two years. 13 20 For Medicaid, are there any changes in terms of the drug rebate program? Yes-in 2010, the drug rebate is expanded to Medicaid managed care plans. Also, for brand name drugs the Medicaid drug rebate percentage is increased to 23.1 percent, and for non-innovator, multiple source drugs, the rebate is increased to 13 percent of average manufacturer price. For Medicare, what are some of the important changes included in the health reform law? In addition to the Center for Medicare and Medicaid Innovation and the Federal Coordinated Health Care Office, some other important changes include: • In 2010, the annual market basket updates for inpatient and outpatient hospital services, long-term care hospitals and inpatient rehabilitation facilities. and psychiatric hospitals and units will be reduced. In 2012, the annual market basket updates will be reduced for home health agencies, skilled nursing facilities, hospices and other Medicare providers. Subsequently these payments will be adjusted for productivity. • In 2011, there will be no coinsurance or deductibles charged in traditional Medicare for certain preventive services, and Medicare will offer a free comprehensive wellness visit annually as well as a personalized prevention plan • Providing additional Medicare payments to qualifying hospitals in counties with the lowest quartile of Medicare per enrollee spending for 2011 and 2012 • In 2011, the benchmarks (the maximum amount Medicare pays plans per county) will remain the same as in 2010, and in 2012, federal payments to Medicare Advantage plans will be restructured by aligning payments closer to the average costs of Medicare beneficiaries by county and reduced over time. In 2012 bonus payments will be provided to plans that receive high quality ratings. (Currently Medicare Advantage plans receive federal government payments that vary by county to provide benefits, and on average, Medicare payments to Medicare Advantage plans are higher than local fee-for-service costs.) • Implement a Medicare pilot program by January 1, 2013 that will test a bundled payment model for acute, inpatient hospital services, physician services, outpatient hospital services and post-acute care services to better coordinate care and payment practices for an episode of care • In 2014, a new Independent Payment Advisory Board will be created to provide Medicare spending reduction recommendations if the growth in Medicare per capita spending surpasses a certain rate Does the health reform law provide any relief for individuals affected by the Medicare Part D "doughnut hole"? Yes-below are some of the changes that the new law contains: • In 2010, Part D enrollees who are affected by the doughnut hole coverage gap will receive a $250 rebate check (qualifying enrollees do not need apply for the rebate; they will automatically receive them) • In 2011, if enrollees have spending within the coverage gap, they will be able to receive a 50 percent discount on brand-name drugs • The coverage gap will be gradually phased out so that by 2020, enrollees will only pay for 25 percent of the cost of both brand name and generic drugs in the coverage gap Other Delivery System, Access and Quality Improvement Measures What measures in the health reform law help coordinate care for low-income uninsured and underinsured individuals? In 2011, the Collaborative Care Network Program will be established to support consortiums of health care providers to coordinate and integrate health care services for low-income uninsured and underinsured individuals. 14 21 Does the health reform law contain changes that will affect the Medicaid and CHIP Payment and Access Commission (MACPAC) that is set to start operating in 2010? Yes-MACPAC, created through the Children's Health Insurance Program Reauthorization Act of 2009, will advise Congress on Medicaid and CHIP issues, similar to the role of the Medicare Payment and Advisory Commission (MedPAC). In 2010 the health reform law provides funding for MACPAC to include assessments of adult services, including services for dual eligibles. Are there provisions within the health reform law that support efforts to incorporate evidence-based practices in health care delivery? Yes-the law contains a provision that establishes a nonprofit Patient-Centered Outcomes Research Institute in FY2010 that will support comparative effectiveness research to determine how to improve health care quality measures. Will community health centers receive additional federal support through the health reform law? Yes-in FY2011, funding for community health centers will be increased by $11 billion over five years. Does the health reform law contain measures that improve data collection about health disparities? Yes the health reform law requires greater collection of data on race and ethnicity, sex, socioeconomic status, geographic location, disability status and primary language at the smallest geographic level available. The law also requires enhanced data collection about access and treatment for individuals with disabilities. The Department of Health and Human Services will assess any health disparity trends in the data. Health Workforce Will there be any broad federal efforts to enhance the health care workforce? Yes-in 2010, the National Healthcare Workforce Commission will be created to develop a national healthcare workforce strategy and build a strong healthcare workforce. The commission will be comprised of 15 members appointed by the Comptroller General and must include at least one representative from state and local workforce boards. Does the health reform law provide any financial assistance to support health workforce training? Yes-some of the health workforce provisions in the law support scholarships and loans for training programs for health professionals. Specifically, the law creates a loan repayment program for individuals receiving public health training, establishes allied health recruitment and retention programs and mid-career training programs for public health professionals. How notch funding is available for these health workforce training supports? For the loan repayment program, $195 million for FY2010 is authorized as well as necessary sums for FY2011 through FY2015. Another $60 million is authorized for FY2010 as well as necessary sums for FY2011 through FY2015 for training for mid-career public and allied health professionals. What other provisions in the health reform law support health workforce training? In 2010, the health reform law establishes Teaching Health Centers. These will provide Medicare payments for primary care residency programs that are based in a federally qualified health center (FQHC). What about the National Health Service Corps-does the law contain any changes or additional funding for that? Yes the National Health Service Corps is permanently reauthorized through the law, and funding for the program is enhanced through the law; specifically $1.5 billion is provided for FY2011-FY2015, in addition to the existing 15 22 discretionary funding. (The National Health Service Corps provides scholazships and loan repayments for medical professionals who serve for a specified number of yeazs in a Health Professional Shortage Area.) Is there an estimate on how many new primary care providers this additional funding will support? The new funding for the National Health Service Corps will provide for an estimated 15,000 primary care providers in azeas where there is a shortage of health care providers. LOIIE Term Care What are some of the provisions in the health reform law that help address long term care issues? • In 2010, states will have new options for providing home and community-based services through a Medicaid state plan rather than through a waiver for certain individuals • In 2011, the State Balancing Incentive Program will be created in Medicaid to provide increased federal matching payments for non-institutionally based long-term care services • In 2011, the health reform law establishes a new voluntary long-term caze insurance program, the Community Living Assistance Services and Supports (CLASS) • In 2011; the Community First Choice Option in Medicaid will be established, which will provide certain individuals with disabilities with community-based attendant support services. • Also, the law extends the Medicaid Money Follows the Person Rebalancing Demonstration program through September 2016. Community Living Assistance Services and Supports (CLASS) What is the CLASSAct program? The Community Living Assistance Services and Supports (CLASS) Act program is a new voluntary long-term care insurance program that provides a cash benefit to cover the costs of long-term Gaze services. Employers that elect to participate in CLASS will be required to automatically enroll employees in the program; however employees have the option to opt out of the program. How will CLASS be funded? CLASS will be funded by beneficiary premiums which will be collected through a voluntary payroll deduction. The Congressional Budget Office has estimated that the average monthly premium would be about $123. How do individuals become eligible for CLASS? Individuals who opt to pay the CLASS premiums will be eligible for benefits through the program after contributing for at least five years, if they have a disability that is expected to last for at least 90 days and also meet the other eligibility criteria established by the Department of Health and Human Services. What types of benefits will be available through CLASS? For individuals who choose to participate, CLASS provides a daily cash benefit to individuals who develop limitations in performing a number of basic activities of daily living. Recipients decide how to use the benefit, and it is intended to supplement family care, personal savings and private insurance to pay the cost of care needed. How much will the CLASS cash benefit be? The amount of the benefit will vary depending on level of disability, but the amount cannot average less than $50 per day and there will not be any lifetime limits. 16 Jail Health What is the health care law's impact on pre-trial inmates in jails? The opportunity for pre-trial inmates to be eligible for insurance on the state exchanges will not occur unti12014. For additional details, please see NACo's Health Reform Implementation Timeline, available at www.naco.or~/healthreformimplement. Also, please send questions about health reform implementation to healtlu'efonninfo(c~naco.ora. 17 23 DETAILED SUMMARY OF AFFORDABLE HEALTH CARE FOR AMERICA ACT HEALTH CARE REFORM INSURANCE REFORMS: Insurance reforms. Prohibits insurance rating based on health status orpre-existing conditions, and limits age rating to 2:1. Prohibits annual or lifetime limits on medical spending. Grandfathers current individual policies. Applies these reforms to the entire market (inside and outside the Exchange), although employers have afive-year grace period to come into compliance. Establishes important consumer protections, including internal and external appeal requirements, provider network adequacy requirements, and greater transparency by insurance companies. Exchange. Creates a new marketplace called the national "Health Insurance Exchange", with an option for states that agree to meet federal standards to run their own exchange. U.S. Territories will also have the option of operating an exchange if they meet all of the insurance reforms and requirements as established by this Act. Eligibility. People are eligible to enter the Exchange and purchase health insurance on their own as long as they are not enrolled in employer sponsored insurance, Medicare or Medicaid. The Exchange is also open to businesses, starting with small firms and growing over time. Firms with twenty-five or fewer employees are permitted to buy in the Exchange in 2013, firms with fifty or fewer employees in 2014, and firms with at least one hundred employees in 2015 with discretion to the Commissioner to open the Exchange to larger businesses in that year and the future. Benefits. Outlines broad categories of covered services in the law, and creates a Health Benefits Advisory Commission, with physicians and other expert members, to help the Secretary of HHS define the essential benefit package. Cost-sharing varies by four tiers ranging in actuarial value (AV) from 70 percent to 95 percent ("basic," "standard," "premium," and "premium plus"). In other words, in a 70 percent plan, the plan pays 70 percent of the costs and an individual would pay the other 30 percent of expenses on average. The fourth tier plan ("premium plus") will offer additional benefits such as adult dental or vision, gym memberships, or private hospital rooms. All plans will limit annual out-of-pocket expenses for enrollees at a maximum of $5,000 for an individual and $10,000 for a family, with lower levels for lower- and middle-income families. Public health insurance option. The bill establishes a public health insurance option available within the Exchange to ensure choice, competition and accountability. Like other private plans, the public option must survive on its premiums. The Secretary of Health and Human Services will administer the public option and negotiate rates for providers that participate in the public option. The public health insurance option is provided startup administrative funding, but it is required to amortize these costs into future premiums to ensure it operates on a level playing field with private insurers. New health insurance options. The legislation authorizes start-up loans to assist states with the creation of health insurance co-operatives as an additional option. It also permits states to enter into agreements to allow for the sale of health insurance across state lines when the state legislatures agree to such compacts. Grants are also awarded to help states with this endeavor. Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & Labor 1 October 29, 2009 24 DETAILED SUMMARY OF AFFORDABLE HEALTH CARE FOR AMERICA ACT Repealing the antitrust exemption for insurers. The bill promotes competition among health insurers and medical malpractice insurers by removing the antitrust exemption so that it no longer shields these insurers from liability for fixing prices, dividing up territories, or monopolizing their market. Help for early retirees (temporary reinsurance program). Creates a $10 billion fund to finance a temporary reinsurance program to help offset the costs of expensive health claims for employers that provide health benefits for retirees age 55-64. Limitation on post-retirement reductions of retiree healthcare benefits. Prohibits employers from reducing retirees` health benefits after those retirees have retired, unless the reduction is also made to benefits for active participants. SHARED RESPONSIBILITY.• Employers. Employers must either provide health insurance to their employees or make a contribution to help fund affordable health insurance. Employers that choose to offer coverage contribute at least 72.5 percent of premium for workers, 65 percent for families. However, if the coverage is unaffordable for low-wage workers, that worker can choose subsidized coverage in the Exchange and the employer makes a contribution to the Exchange. Employers who do not offer qualified coverage contribute 8 percent of their payroll to help cover expenses of employees who seek coverage through the Exchange. Small business protections. Small businesses with annual payrolls below $500,000 are exempt from requirements to offer or contribute to coverage, including the 8 percent payroll contribution for failure to provide health benefits to their workers. As a result of this exemption, 86 percent of America`s businesses are exempt from any requirement to provide coverage to their employees. The 8 percent requirement is phased in for small businesses with an annual payroll between $500,000 and $750,000. There is also a tax credit program to help low-wage small businesses offer coverage to their employees. Small business tax credits. Small business tax credits are available for businesses with 10 or fewer employees and $20,000 or less in average wages. The credits phase-out if the employer has 25 or more employees or if average wages are $40,000 or more. The credits are available on rolling basis for the first two years that an employer offers qualified coverage. Individuals. Individuals are required to obtain health insurance coverage or pay a fee equal to lower of 2.5 percent of their adjusted income above the filing threshold or the average premium on the Exchange. Individuals and families below the income tax filing are exempt. (NOTE: /n 2009, the threshold for taxpayers under age 65 is $9,350 for singles and $18,700 for couples). Individuals may apply for a hardship waiver if coverage is unaffordable and selected exemptions from the mandate are provided in the statute. Those with coverage through the VA or who are eligible for government- sponsored healthcare because they are a member of a tribe are considered to have fulfilled the requirement to obtain coverage. Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & Labor 2 October 29, 2009 25 DETAILED SUMMARY OF AFFORDABLE HEALTH CARE FOR AMERICA ACT Government responsibility. It is the responsibility of the federal government to ensure that essential health coverage is affordable and available to all Americans by establishing consumer protections and insurance reforms, affordability credits and overseeing a fair marketplace for people to choose among options. MAKING COVERAGE MORE AFFORDABLE: Affordability credits. Provides financial assistance for premiums and cost sharing for individuals and families with incomes up to 400 percent of the federal poverty level (FPL). Affordability credits are offered on a sliding scale such that premiums range from 1.5 percent of income at the lowest tier to 12 percent at 400 percent FPL. Provides additional assistance for households with incomes up to 400 percent FPL by limiting cost-sharing to 3 percent of plan costs at the lowest tier rising to 30 percent of plan costs at 350-400 percent of FPL. Specific out-of-pocket maximums are added to protect individuals at each income tier. Income Premium Limit as Percent of Income Percent of Plan Costs Paid by Families Annual Out-of-Pocket Cap Individual/Family Under 133 - 150% FPL 1.5 - 3% 3% $500/$1000 150 - 200% FPL 3 - 5.5% 7% $1,000/$2,000 200 - 250% FPL 5.5 - 8% 15% $2,000/$4,000 250 - 300% FPL 8 -10% 22% $4,000/$8,000 300 - 350% FPL 10 -11% 28% $4,500/$9,000 350 - 400% FPL 11-12% 30% $5,000/$10,000 Eligibility. Affordability credits are available to American citizens and legal residents whose employers do not offer coverage or whose share ofemployer-sponsored health insurance costs more than 12 percent of their family income. Those eligible for other government health care programs, such as Medicare or Medicaid, cannot receive affordability credits. Establishes a mechanism by which the Commissioner must verify that individuals are citizens or legal immigrants in order to receive affordability credits. Caps out-of-pocket spending and limits. Helps prevent medical bankruptcy by limiting out-of pocket costs to no more than $5,000 for individuals and $10,000 for families; these levels are indexed to inflation. Those receiving affordability credits have lower out-of-pocket caps. Medicaid and CHIP. Expands Medicaid coverage to everyone within income at or below 150 percent FPL ($33,100 per year for a family of 4) who is not eligible for Medicare. Eliminates assets tests for eligibility groups other than for long-term care. Requires States that now cover those above 150 percent FPL to maintain eligibility. States receive full federal funding for costs of expansion populations in 2013 and 2014. Thereafter, States pay 9 percent and the federal government pays 91 percent. CHIP-eligible children move to the Exchange or Medicaid in 2014. Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & Labor October 29, 2009 26 DETAILED SUMMARY OF AFFORDABLE HEALTH CARE FOR AMERICA ACT FINANCING: Revenue. The bill would impose a surcharge on taxpayers with adjusted gross income in excess of $1 million (married filing a joint return) and $500,000 (single) at a rate of 5.4 percent. The bill also: delays implementation of worldwide interest allocation until 2020; limits eligibility for reduced treaty withholding rates; codifies economic substance doctrine; information reporting for payments made to corporations; eliminates nontaxable reimbursements of over the counter medications from HSAs, HRAs, and health FSAs; limits contributions to health FSAs to $2,500; increases the penalty for non- health related distributions from HSAs (from 10 percent to 20 percent); eliminates the tax deduction for employers who receive a government subsidy for providing retiree prescription drug coverage; impose an excise tax of 2.5 percent on medical devices used in the United States; and ensures tax parity for employer-provided coverage for domestic partners and other non-dependents. The bill also clarifies that an employee's share of premiums for employer-provided coverage offered through the Exchange may be paid on a pre-tax basis through a cafeteria plan, but Exchange coverage that is not employer-offered is not eligible to be offered through a cafeteria plan. MEDICARE The Affordable Health Care for America Act proposes major improvements and investments in the Medicare program. It closes the donut hole while providing discounted drugs to beneficiaries; protects the doctor-patient relationship for Medicare patients by promoting primary care, care coordination and other payment reforms; and promotes wellness by eliminating cost-sharing for preventive services and increasing access to vaccines. In addition, Affordable Health Care for America Act strengthens Medicare by extending solvency of the Trust Fund for five years through its provisions that attack waste, fraud and abuse and reform the payment and delivery systems. Part A: Hospitals. Substantial delivery and payment system reforms, including productivity adjustments and reductions in market basket updates for most providers, per recommendations from MedPAC, OIG, GAO and others. Skilled nursing facilities. Follows recommendations from MedPAC and others to encourage payment accuracy that more accurately reflects the costs of services provided. Nursing home transparency provisions provide regulators and families additional information on nursing home ownership and control and more information on nursing home staffing and quality through Nursing Home Compare. Tougher penalties on nursing homes that fail to provide adequate care to their residents and improved training for nursing home staff to increase quality of care. See Medicaid section for additional nursing facility-related policies. Medicare DSH payments. Directs the Secretary of HHS to study Medicare DSH payments and report to Congress with recommendations on how best to ensure that DSH is properly targeted to adequately reflect the higher costs of care associated with treating low-income patients. Reduces Medicare DSH payments starting in 2017 if the uninsured rate drops by a certain number of percentage points between 2012 and 2014. Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & Labor 4 October 29, 2009 27 DETAILED SUMMARY OF AFFORDABLE HEALTH CARE FOR AMERICA ACT Graduate medical education. Provides incentives for the training of primary care physicians. Encourages medical residency training in non-hospital settings so that the future physicians of America will be able to provide coordinated care across the spectrum of provider settings. Hospice moratorium. Extends a one year moratorium on regulatory changes that would phase out the budget neutrality adjustment factor for Hospice providers to ensure that hospices continue to receive the same reimbursement rate for wages for fiscal year 2010. Parts A & B: Reducing potentially preventable hospital readmissions. Changes payment incentives to hospitals and post-acute care providers to discourage preventable hospital readmissions. Post-acute care bundling. Promotes bundled payments that encourage providers to coordinate a patient's care across the entire spectrum, from the doctor's office, to the hospital, through a rehabilitative or nursing facility stay, and back to home. Center for Medicare & Medicaid Innovation. Establishes a Center for Medicare & Medicaid Innovation to empower CMS to pursue additional payment and delivery system reforms. Healthcare-associated infections. Requires hospitals and ambulatory surgical centers to report public health information on healthcare-associated infections to the Centers for Disease Control and Prevention. IOM study of the appropriateness of Medicare payment rates based on geography. Within one year of enactment, the Institute of Medicine is required to report to CMS on the validity of the geographic adjusters that apply to Medicare physician and hospital payments and include any recommendations for improvements. CMS is instructed to respond to such recommendations and may spend up to $4 billion per year, for two years, to increase payment rates as appropriate. IOM study of the extent of geographic variation in health spending. Instructs the IOM to study the extent and cause of geographic variation in spending on health care (including all payers). The study will focus on major contributors to that variation such as input prices, health status, socioeconomic factors, and access to services. The IOM will make recommendations for addressing such variation in Medicare, which will take into account the need to maintain beneficiary access to services. CMS will implement changes to Medicare payment systems unless Congress votes to disapprove the planned changes. Home health study. Requires MedPAC to undertake a study to examine the significant variation in Medicare margins among home health agencies. Factors considered will include patient characteristics (including health and socioeconomic factors), agency characteristics, and the types of services provided by different agencies. Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & Labor October 29, 2009 28 DETAILED SUMMARY OF AFFORDABLE HEALTH CARE FOR AMERICA ACT Part B: Productivity adjustments. Expands productivity adjustments to Medicare providers who receive CPI updates in addition to those that receive market basket updates. These providers are: ambulatory surgical centers, ambulances, clinical laboratories, and durable medical equipment not competitively bid. Hospital outpatient department updates. Expands productivity adjustments to hospital outpatient departments. Accountable Care Organization program. Establishes a new program that allows providers to share in Medicare savings they help create through care coordination and quality improvement initiatives. Ensures that doctors can join with hospitals and others when forming these organizations. Telehealth. Expands Medicare's telehealth benefit to beneficiaries who are receiving care at freestanding dialysis centers. Also establishes a Telehealth Advisory Committee to provide HHS with additional expertise on the telehealth program. Quality measures. Creates a timely process to allow for amulti-stakeholder group to provide the Secretary with input into the selection of quality measures and provides for consultation by the Secretary of aconsensus-based entity in the use of quality measures. Demonstration program on shared decision making. Uses decision aids and other technologies to help patients and consumers improve their understanding of the risks and benefits of treatment options and make informed decisions about medical care. Medical home pilot program. Creates a pilot program to reward providers who agree to provide services necessary to make their practice a "medical home" by ensuring full access to patients and providing for coordinated and comprehensive care. Cost sharing for preventive services. Eliminates deductibles and co-payments for all preventive services covered by the Medicare program. Improved access to vaccines. Makes it easier for Medicare beneficiaries to get access to needed vaccinations by covering all vaccines under Part B of the program rather than Part D. Extend Qualified Individuals (QI) program. Extends the QI program two years to help low-income beneficiaries pay their Part B premiums. Extends months of coverage of immunosuppressive drugs for kidney transplant patients. Lifts the current 36-month limitation on Medicare coverage of immunosuppressive drugs for kidney transplant patients who would otherwise lose this coverage on or after January 1, 2012. 29 Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & Labor October 29, 2009 DETAILED SUMMARY OF AFFORDABLE HEALTH CARE FOR AMERICA ACT Part B premium clarification. Allows capital gains from the sale of a primary residence to count as a life-changing event for purposes of using a more recent tax year for determination of the Part B income-related premium so that the use of a nest egg doesn't increase the Part B premium owed. Durable medical equipment in Medicare. Provides protections for beneficiaries receiving oxygen therapy in the event an oxygen supplier goes out of business. Exempts certain pharmacies from the surety bond requirement and the need to be accredited to sell diabetic testing supplies and certain other items. Payment for imaging services. Instructs CMS to pay more accurately for imaging services in Medicare. Excludes low-tech imaging devices (such as ultrasound, mammograms, EKGs, and x-rays) from the adjustment in payment. Pa rts C & D: Medicare Advantage payment. Beginning in 2011, reduces MA payments over three years to achieve parity with 100 percent FFS rates; provides targeted bonuses tohigh-quality plans in high-enrollment areas where reductions likely to be most disruptive. Medicare Advantage reforms. Changes the annual enrollment period for beneficiaries to enroll in Medicare Advantage to November 1-December 15. Medicare Advantage administrative costs and consumer protections. Beginning in 2014, requires MA plans to maintain medical loss ratios of at least 85 percent, ensuring that payments to plans are predominantly spent on providing healthcare, not overhead and profit. Limits Medicare Advantage cost-sharing to no greater than cost-sharing in traditional Medicare. Medicare drug benefit. Eliminates Part D donut hole over time and provides 50 percent discount in donut hole for Part D enrollees. Restores manufacturer rebate for Part D drugs used by dual eligibles, as well as low-income subsidy eligibles after 2015. Funds raised by this provision are used to close the Part D donut hole. Medicare low-income subsidy. Increases eligibility limits by raising assets test and clarifying what counts toward the asset test. Eliminates cost-sharing for certain non-institutionalized dual eligibles. Encourage accurate dispensing of drugs. Requires that Part D and MA-PD plans develop methods to reduce waste of drugs in the long-term care setting. Increase use of generics. Increases generic drug utilization by eliminating current requirements that prevent Part D and MA-PD plans from creating incentives for seniors to use lower-cost generic drugs. Other: Follow-on biologics. Creates an FDA licensure pathway for "biosimilar" generic biological products, allowing these products to come to market and compete with brand name biologics. The Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & Labor 7 October 29, 2009 30 DETAILED SUMMARY OF AFFORDABLE HEALTH CARE FOR AMERICA ACT biosimilar product must have no clinically meaningful differences in safety, purity or potency from the reference product, and may not be licensed until at least 12 years after the date that the brand-name product was licensed. Physician Payment Sunshine. Requires manufacturers or distributors to electronically report to the HHS OIG any payments or other transfers of value above a $5 de minimis made to a "covered recipient" (physician, physician group practice, other prescribers, pharmacy or pharmacist, health insurance issuer, group health plan, pharmacy benefit manager, hospital, medical school, sponsor of a continuing medical education program, patient advocacy or disease specific group, organization of health care professionals, biomedical researcher, group purchasing organization.) Requires hospitals, manufacturers and group purchasing organizations to report the nature of ownership arrangements by physicians. Failure to report is subject to civil monetary penalties from $1000 to $10,000 (max $150,000 per year) per payment, transfer of value, or investment interest not disclosed; penalties for knowing failure to report range from $10,000 to $100,000 per payment, not to exceed $1,000,000 in one year or .1% of revenues for that year. Comparative Effectiveness Research (CER). Creates a new Center at the Agency for Healthcare Research and Quality, supported by a combination of public and private funding that will conduct, support and synthesize CER. An independent stakeholder Commission makes recommendations to the Center on research priorities, study methods, and ways to disseminate research. The Commission has its own source of funding and is responsible for evaluating the processes of the Center and is authorized to make reports directly to Congress. A majority of the Commission members would be required to be physicians, other health care practitioners, consumers or patients. The blended bill contains improved protections to ensure that subpopulations are appropriately accounted for in research study design and dissemination. The bill contains protections to prevent the Center and Commission from mandating payment, coverage or reimbursement policies. In addition, the bill contains protections to ensure that research findings are not construed to mandate coverage, reimbursement or other policies to any public or private payer, and clarify that federal officers and employees will not interfere in the practice of medicine. Reducing Waste, Fraud, and Abuse Increases funding by $100 million annually for the Healthcare Fraud and Abuse Control Fund to fight Medicare and Medicaid fraud; improves provider and payment screening to prevent fraud and abuse before it occurs; creates enhanced oversight for Medicare and Medicaid programs at risk of fraud and abuse; creates new penalties for providers and suppliers that defraud federal health care programs; partners with the private sector to reduce waste and abuse by requiring that all Medicare and Medicaid providers establish compliance programs to reduce waste, fraud, and abuse. Prevention & Wellness Creates a grant program to help small and mid-sized employers begin or strengthen workplace wellness programs. These grants will assist in improving the health of our nation's workforce and will reduce employer health care costs. Participating employers must offer the programs to all employees Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & tabor 8 October 29, 2009 31 DETAILED SUMMARY OF AFFORDABLE HEALTH CARE FOR AMERICA ACT and cannot mandate participation nor use participation as a condition to receive any financial incentive. MEDICAID (provisions relating to Health Care Reform are above) Preventive services. Requires State Medicaid programs to cover recommended preventive services without cost-sharing. States will receive their regular federal matching rate for the cost of these services. Payments for primary care services. Requires that physicians and other practitioners are paid for primary care services they provide to Medicaid patients at 100 percent of Medicare rates beginning in 2012. The federal government will pay 100 percent of the increased costs in 2012 through 2014, 90 percent thereafter. Additional federal funds to states with high unemployment. Assists States in maintaining access to Medicaid services during the recession by extending the current Recovery Act increase in federal Medicaid payments to states with high unemployment rates. Coverage for HIV-positive individuals. Allows State Medicaid programs to cover low-income individuals who are HIV positive through December 31, 2013, after which coverage will be available through the Health Insurance Exchange or, for those with incomes at or below 133 percent of poverty, Medicaid. States would receive the enhanced federal matching rate for these costs. Nurse home visitation. Allows State Medicaid programs to cover nurse home visitation services for first-time pregnant women and mothers with children under 2. The federal government would match these costs at the state's regular rate. Increasing prescription drug rebates. Increases the minimum percentage rebate on brand-name drugs to 23.1 percent of average manufacturer price; extends rebates to new formulations of brand-name drugs; and extends rebate requirement to drugs prescribed by Medicaid managed care organizations. Reductions in Medicaid DSH payments. Directs the Secretary of HHS to reduce Medicaid DSH payments to States by a total of $10 billion ($1.5 billion in FY 2017, $2.5 billion in FY 2018, and $6.0 billion in FY 2019) using a methodology that imposes the largest reductions on states with the lowest percentages of uninsured individuals or the least effective targeting of funds on DSH hospitals. Payments to pharmacists. Increases the ceiling on payments for generic drugs to 130 percent of the weighted average of monthly average manufacturer prices. Medical home pilot program. Establishes a 5-year pilot program to evaluate medical home models for beneficiaries including medically fragile children. A total of $1.235 billion is made available for increased federal matching for administrative costs. Managed care organizations. Requires that Medicaid MCOs meet a medical loss ratio standard set by the Secretary of HHS at not less than 85 percent. Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & tabor 9 October 29, 2009 32 DETAILED SUMMARY OF AFFORDABLE HEALTH CARE FOR AMERICA ACT Territories. Raises federal payment ceilings and matching rates for Puerto Rico, Virgin Islands, Guam, Northern Mariana Islands, and American Samoa by a total of $10.35 billion from FY 2011 through 2019. Supplemental payments to certain nursing facilities. Directs the Secretary to make supplemental payments to nursing facilities with high percentages of Medicare and Medicaid residents that are efficiently and transparently operated and that provide quality care. Provides a total of $6 billion over the period 2010 through 2013 ($1.5 billion each year) for this purpose. Directs the Medicaid and CHIP Payment and Access Commission ("MACPAC") to study the adequacy of Medicaid payments to nursing facilities and to provide recommendations to the Congress by December 31, 2011. Prohibitions on Medicaid and CHIP payment for undocumented Immigrants. Provides that the Medicaid title does not change current prohibitions against Federal Medicaid or CHIP payments for persons not lawfully present in the U.S. PUBLIC HEALTH AND WORKFORCE DEVELOPMENT Funding for public health and workforce development.. Provides funds for years FY 2015 through FY 2019. Community health centers. Provides significant increases in funding for community health centers. Primary care residencies in community health centers. Establishes a new grant program to support the development and operation of primary care residency programs in community-based settings such as community health centers. Health workforce. Provides new and increased investments in training programs designed to increase the number of primary care physicians, nurses, and public health professionals. Treatment of teaching as obligated service. Provides discretionary authority to the Secretary to allow up to 20 percent of teaching time to count toward meeting obligated service requirements under the National Health Service Corps program. Provides increases in support for Corps scholarship and loan repayment programs. Data collection and analysis on health disparities. Directs a new Assistant Secretary for Health Information to set standards for the collection of data on a broad set of population and subpopulation categories and to facilitate and coordinate analyses of health disparities within HHS and in collaboration with other departments. Community preventive services grants. Establishes new grants program for states to provide prevention and wellness services to communities, with a special emphasis on health disparities. Research and requirements for healthy behaviors and community wellness. Provides for the research and inclusion of proven healthy behaviors in the essential benefits package and in community wellness programs. Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & Labor 10 October 29, 2009 33 DETAILED SUMMARY OF AFFORDABLE HEALTH CARE FOR AMERICA ACT School-Based health clinics. Establishes a new grants program to support school-based health clinics that provide health services to children and adolescents. Public health infrastructure. Provides new investments in state, local, and tribal health departments to build their capacity to address public health epidemics such as tobacco use and obesity, and to be prepared for public health emergencies such as the H1N1 flu epidemic or breakouts of foodborne diseases. National medical device registry. Establishes a national directory for class III medical devices and class II devices that are permanently implantable, life-supporting, orlife-sustaining. Device information in the registry would be linked with patient safety and outcomes data from various public and private databases to facilitate analyses of post-market device safety and effectiveness. Expanded Participation in 3406 Program. Extends the section 3406 outpatient drug discounts to certain rural and other hospitals, including Critical Access Hospitals. IHS reauthorization. Anew division is added to provide for the reauthorization of the Indian Health Care Improvement Act (IHCIA). IHCIA provides the main legal authority for the provision of health care to American Indians and Alaskan Natives. The main provisions of this new division address: improvements in workforce development and recruitment; facilities construction, maintenance and improvements, access to and financing of health services; provision of health services for urban Indians; organization improvements within the Indian Health Service (IHS); and the provision of behavioral health services. Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & Labor 11 October 29, 2009 34