Affordable Care Act
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OREGON DEPARTMENT OF CONSUMER
AND BUSINESS SERVICES
INSURANCE DIVISION
Affordable Care Act – Primary Goal
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 Reduce the number of uninsured: It is estimated
that that Affordable Care Act (ACA) will provide health
insurance to 32 million uninsured when fully
implemented

It is hoped ACA will reduce health insurance costs through:
Reduction in cost-shifting
 Increase in preventative care
 Increase in access to health care
 Increase in size and health of insured pool

Most people will be required to have insurance in 2014
 Insurance made affordable with additional funding:

Significant expansion of Medicaid
 Subsidies/tax credits to buy insurance in exchanges

Affordable Care Act
Oregon Insurance Division Role
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 Regulate commercial insurance
o
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Ensure health policies include new consumer
protections/benefits
Review and approve small group/individual rates and reject
unreasonable rates
Provide technical insurance expertise to federal and state
officials as they plan/implement reforms
Consumer advocates to help people understand changes and
file complaints/appeals
Immediate Consumer Benefits
Dependent Coverage to Age 26
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 Under the new law, young adults will be
allowed to stay on their parent’s plan until
they turn 26 year old

An adult child
can be married or unmarried
 does not have to be a dependent on parent’s tax return
 does not have to be a student


For plan years beginning prior to January 1, 2014,
grandfathered group plans need only extend coverage to an
adult child on his or her parent’s plan if the child is not eligible
to enroll for coverage under his or her own employmentsponsored plan.
Immediate Consumer Benefits
Pre-X and Children Under Age 19
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 Children under age 19 can’t be denied coverage if
they apply during open enrollment periods
 Once enrolled, preexisting conditions must be
covered immediately
 Oregon rules establish two annual open enrollment
periods –


Months of February and August
Initial enrollment – Nov 1 – Dec. 31, 2010
Immediate Consumer Protections
Pre-x and Children Under Age 19
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 Employer plans already prohibited from denying
coverage to employees or dependents based on
health
 However, employer plans can no longer impose
pre-existing condition waiting periods for children
under age 19
 No one can be denied insurance because of pre-
existing condition beginning Jan. 1, 2014
Immediate Consumer Benefits
Lifetime/Annual Limits
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 Lifetime Dollar Limits - Eliminated for essential
benefits
 Annual Dollar Limits –Phased out over three year-
period. Must be at least:
 $750,000 in 2011
 $1.25 million in 2012
 $2 million in 2013
 No annual dollar limits on essential benefits for
plan years beginning on or after January 1, 2014
Immediate Consumer Benefits
Preventive Care
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 Providing Preventative Care With No Cost Sharing
 Effective for new health plans sold on or after September 23, 2010


You must still pay your health insurance premium
All new plans must cover certain preventative services such as
mammograms and colonoscopies without charging a deductible, copay or coinsurance:
 Immunizations;
 Chronic disease screenings
(heart disease, cancer,
diabetes, etc.); and

Pediatric care
Immediate Consumer Protections
Rescissions
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 ACA Prohibits Insurance Companies from
Rescinding Coverage
 Unless: An enrollee commits fraud or makes an
intentional misrepresentation of material fact on
an application.
 Effective for all health plans on or after September 23, 2010
Immediate Consumer Protections
Appeals/Grievances
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 Oregon already has a strong external review
process for people whose claims are denied
However, federal law will now give enrollees in
self-insured plans these same appeal rights –
through the federal government
 One area where Oregon will need to comply: IRO
decisions must be binding


To file a complaint: Consumers can call the
Insurance Division’s Consumer Advocacy Unit
at 1-888-877-4894 or visit: www.insurance.oregon.gov
Immediate Consumer Benefits
Emergency Services
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 Plans that provide emergency department
coverage must cover emergency services:
Without prior authorization and
 Cover nonparticipating providers at essentially the same
level (percentage) as they cover participating providers


What this means? Cost sharing for out-of-network
emergency services cannot exceed cost sharing for innetwork emergency services, but for out-of-network
services, the insurer may require the insured to pay the
difference between the amount billed by the provider and
the amount paid by the insurer and insured (coinsurance
and copayment).
Immediate Consumer Protections
Medical Loss Ratios
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 Medical loss ratio: amount insurers spend
on medical care vs. admin costs
 Insurers must provide annual rebate to enrollees
if spending on covered benefits/quality
improvement is less than:
85 cents of every premium dollar (large group)
80 cents (small group/individual)
 First rebates to be issued in 2011
Immediate Consumer Protections
Rate Review
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 What does the bill say about rapid growth of
premiums?
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

Requires “unreasonable” increases to be reviewed by federal
officials
If a request is found to be unjustified, HHS can recommend
exclusion from a state’s exchange
However, no new federal authority to reject rates
 NAIC is working with HHS to develop process for
reviewing “unreasonable” increases
Other Reforms Already in Effect
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 Early retirees: Temporary re-insurance program to
help offset the costs of expensive premiums for
employers and retirees age 55-64.
 High-risk pool for Oregonians who are denied
coverage because of health conditions.
Individual Responsibility
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 In 2014 most Americans will be required to
have (minimum essential) coverage
 Penalty: The greater of
 1% of gross income or$95 in 2014
 2 % of gross income or $325 in 2015
 2.5% of gross income or $695 in 2016.
 Exceptions:
 Religious (health care sharing ministry, adherent of a recognized
religious sect)
 Income (cost of coverage exceeds 8% of household income; income is
below filing threshold).
 Lawfully present non-citizens
 Incarcerated individuals
 Hardship
Individual Tax Credits (2014)
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 Federal tax credits for individuals who:

purchase through the Exchange
with no access to employer-sponsored insurance
 earn between 133% and 400% federal poverty level (about
$88,200/yr. for a family of four).

 For those that earn 133% and less, Medicaid
and SCHIP programs are available.
Small Employer Tax Credits
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 2010
– 2013: Eligible for a small business tax
credit up to 35% of its contribution amount if:
 Employs fewer than 25 full-time equivalent employees,
 Has average annual wages of less than $50,000 , and
 Contributes at least 50% of the health insurance
(including dental and vision) premium cost for
employees
 2014:
small employers who buy coverage
through an exchange are eligible for a tax credit
for two years of up to 50%percent of their
contribution.
Employer Responsibility (2014)
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 In 2014 Large Employers (50 +) must offer
health insurance coverage
 Annual penalty:
 If no coverage offered an employee receives subsidy
 Amount: $2,000 per fulltime employee excluding the first 30
 Example: Employer with 70 employees would pay penalty of
$80,000 ($2,000 x 70-30)
 If coverage offered but
 An employee’s share of premium exceeds 9.5% of household
income, and
 The employee obtains a tax subsidy,
 Employer pays annual penalty of the lesser of
• $3,000 per employee that receives subsidy
• $2,000 per fulltime employee beyond the first 30
Small Employers: 2014
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 Employers with fewer than 50 employees are
not required to provide health insurance
Cost Impact
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 Short-term:

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The benefits now in place will increase costs somewhat
But other factors – ongoing increase in cost and use of medical
care, new technology, new Rx continue to produce the more
significant increases
 Long-term: Federal reform intends to reduce
health insurance costs through:


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Better health (with focus on preventive care/access to care)
Less cost-shifting (since more people are insured)
New innovations to bring down costs by eliminating waste
Affordable Care Act – Web Portal
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www.healthcare.gov
Identifies affordable insurance options by state
Affordable Care Act – Questions
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http://www.insurance.oregon.gov/
 http://www.cbs.state.or.us/ins/FAQs/fedrealhealthreform-
oregon.html
 http://www.irs.gov/newsroom/article/0,,id=223666,00.html
 http://www.sba.gov/healthcarereform/index.html