What Will Health Reform Look Like in Tennessee? - PowerPoint Presentation

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What Will Health Reform Look Like in Tennessee?

Christopher ColemanTennessee Justice Centerccoleman@tnjustice.org

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Cumulative Changes in Health Insurance Premiums, Inflation, and Workers’ Earnings, 1999-2012

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The Massachusetts Plan

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guaranteed

coveragepersonalresponsibilityactualaffordabilityThe three-legged stool

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Consumer

Protections

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Consumer Protections

Today2014Medical Underwriting Denials for pre-existing conditionsGuaranteed Issue No denials based on health statusExclusions and Riders Pre-existing conditions are not coveredFull Coverage All conditions covered on day oneRating Factors

Premiums adjusted for age, tobacco, gender, health status, etc.

Modified

Community rating

Premiums

adjusted for age, tobacco, and geography only

Rescission

Plans can drop enrollees if they get sick

No

Rescission

Plans can only drop coverage for deliberate misrepresentationBenefit Limits Plans can impose annual and lifetime dollar limitsNo Annual or Lifetime Limits

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No Wrong D

oor

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Marketplace Phone Number

1-800-318-2596

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Marketplace Plans – Metal Levels

Plan LevelActuarial Value Platinum 90%Gold 80% Silver 70% Bronze 60%

Lower enrollee cost-sharing

Higher enrollee cost-sharing

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If your CLIENT falls between

100-250% of FPL, she should pick a SILVER plan.

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Individual Responsibility Requirement

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Individual Responsibility Requirement

2014 – Greater of$95 per adult family member without coverage ($47.50 per child); or 1% of taxable income (family maximum of $285).2016 – Greater of$695 per adult family member without coverage ($347.50 per child); or 2.5 % of taxable income (family maximum of $2,085).

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Individual Responsibility Requirement

Exemptions:People with low incomes not required to file taxesCertain religious groupsIncarcerated peopleUndocumented residentsMembers of Indian tribesPeople who go without coverage for less than 3 monthsPeople who do not have an affordable offer of coverage

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What is “affordable” coverage?

Monthly premium < 8 % of household income

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Premium Tax Credits

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Who is Eligible?

Individuals and families with income between 100% and 400% FPLMust be lawfully present in the U.S.Must not be eligible for other “minimum essential coverage”

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FPL and Eligibility

FPLAffordability ProgramAnnual Income by Household Size

1

2

3

4

100% FPL

Medicaid (?)

$

11,490

$ 15,510

$ 19,530

$ 23,550

138% FPL

Medicaid (?)

$ 15,856

$ 21,404

$ 26,951

$ 32,499

150% FPL

PTC & CSR1

$ 17,235

$ 23,265

$ 29,295

$ 35,325

200% FPL

PTC & CSR2

$ 22,980

$ 31,020

$ 39,060

$ 47,100

250% FPL

PTC & CSR3

$ 28,725

$ 38,775

$ 48,825

$ 58,875

300% FPL

PTC

$ 34,470

$ 46,530

$ 58,590

$ 70,650

400% FPL

PTC

$ 45,960

$ 62,040

$ 78,120

$ 94,200

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How is the Amount of the Tax Credit Determined?

Credit amount=Cost of benchmark plan-Expected premium contribution

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Benchmark Plan

Plan LevelActuarial Value Platinum 90%Gold 80% Silver 70% Bronze 60% The benchmark plan is the second-lowest cost silver level plan.

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How is the Amount of the Tax Credit Determined?

Credit amount=Cost of benchmark plan-Expected premium contribution

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Expected Premium Contribution

(for an individual)Annual Household IncomeExpected Premium Contribution

% of FPL

Income

Amount

% of Income

Annual Dollar Amount

100-150%

$11,490

- $16,755

2 - 4%

$230

- $670

150-200%

$16,755 - $22,340

4 - 6.3%

$670 - $1,407

200-250%

$22,340

- $27,925

6.3 – 8.05%

$1,407 - $2,262

250-300%

$27,925 - $33,510

8.05 – 9.5%

$2,262 – $3,183

300-400%

$33,510 - $44,680

9.5%

$3,183 - $4,245

> 400%

> $44,680

n/a

n/a

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Gunnar

25 years oldIncome of $22,340 (200% FPL)Expected contribution: 6.3% or $1,4483 Lowest Cost Silver Plans for GunnarPlan A: $4,800Plan B: $5,000  Benchmark

Plan C: $5,200

Premium Credit

$5,000 - $1,448 =

$3,552

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Gunnar

Premium Credit$5,000 - $1,448 = $3,5523 Lowest Cost Silver Plans for GunnarPlan A: $4,800Plan B: $5,000  BenchmarkPlan C: $5,200Bronze Plan: $3,500If Gunnar purchases the Bronze Plan, he would not have to pay any premiums because the tax credit ($3,552) would cover the cost of the entire premium ($3,500).

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Coleman

62 years oldIncome of $22,980 (200% FPL)Expected contribution: 6.3% or $1,4483 Lowest Cost Silver Plans for ColemanPlan A: $14,800Plan B: $15,000  BenchmarkPlan C:

$15,200

Premium Credit

$15,000

- $1,448 =

$13,552

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Benchmark Premium, $5,000

Benchmark Premium, $15,000

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Who is Eligible?

Individuals and families with income between 100% and 400% FPLMust be lawfully present in the U.S.Must not be eligible for other “minimum essential coverage”

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Minimum Essential Coverage

Most employer sponsored coverage is MECAn offer of coverage - even if it’s not taken - can make someone ineligible for premium tax creditsBUT Wait…

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Exception

An individual may be eligible for premium tax credits if the employer plan is unaffordable or inadequate.

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Is it Affordable?

Affordable = employee contribution for self-only coverage is less than 9.5% of household income

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Affordability of Employee-Only Coverage

Example 1:Income: $40,000Juliette’s share of the premium: $200/monthIs the plan affordable?Cost: $2,400Share of income: 6%Example 2:Income: $25,000Juliette’s share of the premium: $200/monthIs the plan affordable?Cost: $2,400Share of income: 10.4%

Juliette

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Affordability of Family Coverage

(Conrad-James Family) Rayna works at Edgehill Records and earns $35,000.Edgehill offers health insurance. Teddy is a politician and earns about $12,000.Teddy does not have an offer of coverage from his employer.Household Income: $47,000Premium Cost for Employer-Sponsored Plan Covering Just Rayna: $2,350/year (5% of household income for a family of 4)Premium Cost for Employer-Sponsored Plan Covering the Whole Family: $6,110/year (13% of household income for a family of 4)

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Affordability of Family Coverage

(Conrad-James Family) Household Income: $47,000Premium Cost for Employer-Sponsored Plan Covering Just Rayna: 5% of household incomePremium Cost for Employer-Sponsored Plan Covering the Whole Family: 13% of household income

13%

9.5% - - - - - - - - - - - - - - - - - - - - -

Bottom Line:

No one is eligible for

premium tax credits

b

ecause family coverage

i

s considered affordable.

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Affordability of Family Coverage

(Conrad-James Family) Household Income: $47,000Premium Cost for Employer-Sponsored Plan Covering Just Rayna: $2,350/year (5% of household income for a family of 4)Premium Cost for Employer-Sponsored Plan Covering Rayna and kids: $4,700/year (10% of household income for a family of 4)

5%

5%

10%

9.5% - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Rayna

and Kids

-

Rayna

+ kids

plan is considered

affordable

because employee-only plan is affordable.-Rayna and kids are not eligible for premium tax credits.Teddy-Teddy has no offer of coverage.-He may be eligible for premium tax credits.

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When is Coverage Adequate?

Coverage is adequate if it has a minimum value (MV) of 60% This generally means that the plan pays at least 60% of spending for coverage of essential health benefits for a typical population, after accounting for cost-sharing charges required under the plan.

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Part-Time Job

Cost: $85/month6% of incomeMV: 40%Marketplace-$150% FPLCost: $57/month after premium tax creditsMV: 94% after cost-sharing reductionDad’s PlanCost: $0 to Juliette(Dad pays for family coverage)

Juliette could accept

t

his offer, BUT

because the plan

h

as MV under

60%, the offer

d

oesn’t preclude

p

remium tax credit

eligibility.Coverage Choices for Young AdultsJuliette is 24 years old. She holds two part-time jobs.One of the jobs offers coverage. Income: $17,000Juliette can apply forpremium tax credits & cost-sharing reductionsJuliette can join herDad’s family plan because she is under age 26. Offer does not make her ineligible for a premium tax credit.

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How Will an Employee Know if

Her Offer is Affordable or Adequate?Application has an appendix to be completed by the applicant (with help from his employer to indicate value and cost of the plan)

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Verification of Employer Offer

Final rules issued 7/5In most cases marketplaces will rely on information presented in the applicationFederally facilitated marketplace (FFM) will check a sample of cases by contacting employersState marketplaces can rely on information provided in the application until 2015

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TJC is a non-profit, public interest law and advocacy firm serving

Tennessee families.We focus on policies and cases where the basic necessities of life are at stake,and where our advocacy can benefit families statewide.301 Charlotte Avenue, Nashville, TN 37201(615) 255-0331 or toll free: 877-608-1009info@tnjustice.org