Assignment 1 - Flashcards
Prior to the ACA, aside from low-income pregnant women, very few nondisabled adults were eligible for Medicaid. With the enactment of the ACA, beginning in 2014, U.S. citizens and legal residents between the ages of 19 and 64 who have household incomes below ___ of the federal poverty level (FPL) are eligible for Medicaid coverage.
138%
The three key features of the individual mandate are:
- First, individuals incur penalties for going without coverage. The penalty amount is negligible initially but is set to increase substantially in the future.
- Second, subsidies are provided for lower income people.
- Third, the coverage is required to be adequate—more precisely, people must have “qualifying” coverage.
How does the ACA deal with the problem of those who are financially unable to buy coverage?
The ACA provides a refundable, advanceable premium tax credit to individuals and families with incomes between 100% and 400% of the FPL (federal poverty level)
Bronze plans must be designed such that the plan pays ___ of the actuarially determined cost of the essential benefits.
60%
The individual health insurance exchanges will offer catastrophic coverage plans (i.e., high-deductible health plans), but these are only to be available for people age __ or under.
30
Discuss the limitations within the ACA legislation concerning the factors allowable in establishing health insurance plan rates. (2)
- the policies must be guaranteed issue and guaranteed renewal.
- insurers may only use age, geographic location, family composition and tobacco use to set rates.
The play-or-pay mandate is likely to have little effect on large employers because
workers are paid what they are worth.
Beginning in 2018, the law involves an excise tax on so-called Cadillac plans. These are plans that have a value that exceeds_____ for individual coverage or ____ for family coverage. The excise tax is 40% on the amount above these thresholds
$10,200
$27,500
Describe how the ACA affected:
a) dependent children;
b) lifetime maximum benefits; and
c) prescription drug claims for retirees.
- (a) The legislation required all employer plans to cover dependent children up to the age of 26.
- (b) Plans had to eliminate lifetime maximums.
- (c) Employer deductions for retiree prescription drug claims were eliminated. (These deductions were allowed when the prescription program (Part D) was added to Medicare in 2006. The deduction was to encourage employers to continue providing prescription drug benefits to their retirees.)
The ACA limits the proportion of premium dollars that insurers may spend on administrative costs, marketing and profits. Individual and small group plans are required to spend 80% of premiums on medical claims; large group plans must spend 85%. The measure used to monitor compliance is the
medical loss ratio (MLR).
There are three major spending items in the ACA.
- The first is the costs of the subsidies provided to individuals through the exchanges together with the initial cost of setting up the exchanges— estimated to be the largest expenses.
- The second cost is the Medicaid expansion to cover most adults between the ages of 19 and 64—estimated to be nearly as costly as the individual subsidies.
- The third cost is the small-employer credit which relates to the short-term tax credits that employers with fewer than 50 workers can receive for providing coverage.
Other than changes in the Medicare Part A tax, how will the ACA be financed? (3)
- Reductions in the payments to Medicare Advantage plans
- physician fees.
- reduction in disproportionate share hospital (DSH) payments.
The four strategic paths that employers might take to manage their health insurance issues in the age of ACA represent scenarios with varying levels and forms of employee engagement
- Annual Trend Migration
- exit health care completely.
- private market exchanges or state/federal exchanges.
- House Money, House Rules
has employers shifting some costs to employees via design changes and payroll deduction increases, changing from health plan A to health plan B, and perhaps introducing newer ideas such as an account-based health plan as an option. The focus is on finding the mix of tactics that reduces the year-over-year increase in costs to a level the organization can tolerate.
Annual Trend Migration
Under this approach employers are seeing ways to spend money differently. Employers can reward good health behaviors with financial incentives/consequences and access to better benefits, features and programs
House Money, House Rules.
