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What health reform means for the people of Illinois

A blog by IllinoisHealthMatters.org

Friday, August 26, 2011

Common Questions about the Competitive Health Care Marketplace

If done well, proponents say, the Competitive Health Care Marketplace (formerly called the insurance exchange) would make it easier to buy health insurance and lead to lower prices because of increased competition. But, if designed poorly or if this process is controlled by the insurance industry and their friendly allies in the Illinois General Assembly, experts warn, healthy people could avoid the exchanges, leaving them to sicker people with rising premiums.

Here are some common questions:

What is a Competitive Health Care Marketplace, as envisioned by the health law?
It's a marketplace where individuals and small employers will be able to shop for insurance coverage. They must be set up by Jan. 1, 2014. The exchanges will also direct people to Medicaid if they're eligible.

Will all states have Competitive Health Care Marketplaces?
States have the option of setting up their own Competitive Health Care Marketplace, forming coalitions with other states to create regional exchanges - or opting out altogether. In that case, the federal government will run the Competitive Health Care Marketplace for their residents.

Will anyone be allowed to buy from the Competitive Health Care Marketplace?
No. Initially, exchanges will be open to individuals buying their own coverage and employees of firms with 100 or fewer workers (50 or fewer in some states). Most Americans will continue to get insurance through their jobs, not via the Competitive Health Care Marketplace. The Congressional Budget Office estimates 11.5 million people will use the Competitive Health Care Marketplace in 2014 and 27.1 million in 2018. Most will be people who are eligible for subsidies, which will average an estimated $4,600 per person in 2014. Undocumented immigrants will be barred from buying insurance on the Competitive Health Care Marketplace.

What about federal workers?
Members of Congress and their staffs will be required to buy through Competitive Health Care Marketplace if they want coverage from the federal government. Other federal employees won't be required to use a Competitive Health Care Marketplace.

Will exchanges be like travel websites or some existing health insurance sites? In some ways. People will be able to compare policies sold by different companies. Purchasing insurance is complex and can be confusing, so information on the plan benefits will be standardized in an effort to make it easier to compare cost and quality. Plans will be divided into four different types, based on the level of benefits: bronze, silver, gold and platinum.

What will the coverage sold on the Competitive Health Care Marketplace look like?
Plans will have to offer a set of "essential benefits." Those details, still being developed by the Obama administration, will include hospital, emergency, maternity, pediatric, drug, lab services and other care. Annual cost-sharing, or the amount consumers must fork over before insurance payments kick in, will be capped at the amounts allowed for health savings accounts -- currently, nearly $6,000 for individual policies and $12,000 for family plans.

How much will the policies cost?
The premiums will vary by type of plan and location. Insurers won't be able to charge more based on gender or health status. They will be able to charge older people up to three times more than younger ones.

Will the states negotiate premiums with the insurers?
The law doesn't require states to set or negotiate premiums. However, states may have some influence over prices. For example, states can decide whether to open the Competitive Health Care Marketplace to all insurers, or to limit the number. State insurance commissioners will be able to recommend whether specific insurers should be allowed to sell in the Competitive Health Care Marketplace, partly based on their patterns of rate increases.

What if I can't afford the premiums?
People who earn less than 133 percent of the federal poverty level, $14,484 this year, will qualify for Medicaid in all states, under the law. Above that, sliding scale subsidies for private insurance on the exchanges will be available for residents who earn up to 400 percent of the poverty level, about $43,560 this year. Most people will be required to have coverage of some sort beginning in 2014.

Will all insurers have to offer policies through the Competitive Health Care Marketplace?
No. Insurers won't be required to sell through the Competitive Health Care Marketplace.

Will all state Competitive Health Care Marketplaces be the same?
No. States can design their Competitive Health Care Marketplace differently, an issue that's sparking debate in statehouses nationwide. Some states may choose to set additional standards for insurers beyond the federal law. Another important issue: The makeup and power of the governing boards overseeing the Competitive Health Care Marketplace. Some states, such as Maryland, are considering barring insurance industry and sales agents from their governing boards. Others, like North Carolina, have pending legislation that includes representatives from those groups on their governing boards.

Kathleen Duffy
Campaign for Better Health Care

Wednesday, August 17, 2011

Neighborhood Stories: The Impact of the Affordable Care Act on the South and West Sides of Chicago

“We don’t talk about health care much,” Henry Edwards admits.

Henry is a 24-year-old father, husband and life-long resident of Garfield Park and suffers from asthma. Henry works 30 hours a week – just under full-time – so employer-based insurance isn’t available to him. His wife, Renee, is hoping to be promoted to a full-time position soon so they can apply for insurance coverage through her job.

Henry and Renee have a six-month-old son, making them eligible for health insurance from FamilyCare, an Illinois Medicaid program. But the cost of living and caring for a family while trying to afford Henry’s more than $200-a-month asthma medication is a constant concern for the Edwardses.

Henry’s struggle is profiled in a new Local Reporting Initiative called Neighborhood Stories, released today by Illinois Health Matters and supported in part by The Chicago Community Trust. The Neighborhood Stories series will showcase articles and videos of people living and working in the underserved neighborhoods of Chicago’s South and West sides and how the Affordable Care Act affects them.

Neighborhood Stories also profiles small businesses, such as Ruby's in Garfield Park, formerly Edna’s, a soul food landmark. At one time, Ruby’s employees bought health benefits through AFLAC; today, Ruby’s owner Henry Henderson says he can’t afford to help out, even though he wants to.

To see and share the videos profiling Henry Edwards and Ruby’s restaurant, go here and here. Under the new health care law, people who have a pre-existing condition can no longer be disqualified from affordable private insurance. Health care reform will also provide a range of options for health coverage through a health insurance exchange to those who do not have such coverage through their employers. In addition, small business tax credits are now available for those who want to provide coverage.

Still, experts say that many individuals and small businesses on the South & West sides of Chicago either don't know much about the new health care law or are wary of how its provisions might affect them. To that end, Neighborhood Stories will also publish a series of articles that discuss how to better disseminate information about the Affordable Care Act. The first of these articles focuses on what small business leaders think about the new law, and how to help educate business owners.

For more information about the impact of the Affordable Care Act, check out our Individuals & Families and Small Business pages. And be sure to bookmark our Neighborhood Stories page – next month we’ll highlight what local policymakers are doing to implement the new health care law in Illinois.

Thursday, August 4, 2011

“What does the Affordable Care Act mean for me?”

FamiliesUSA Sheds Light on the ACA

The Affordable Care Act (ACA) and the health care reform it brings can be difficult to understand. FamiliesUSA has recently made it a bit easier to understand by making available two different resources.

In a partnership with Herndon Alliance and Anzalone Liszt Research, FamiliesUSA started conducting research to identify the most frequent questions surrounding the ACA. The project began by polling state advocates across the country to find out the most often asked, but also most difficult to answer, questions. The result is a series of Q&A’s that help to de-mystify these common questions. The 10-page document, entitled “Mastering the 30-Second Sound Byte,” offers up straightforward, comprehensive information. In an effort to pass on some of that information to you, our readers, Illinois Health Matters will be posting a series of summaries from the document.

One of the Families USA Q&A’s sheds light on the claim that the ACA does not cut health care costs sufficiently. The answer explains that the ACA does put emphasis on providing good, quality care to citizens, but that it also employs cost-saving measures that do not detract from that quality, for both citizens and those funding health care. One element to this is the free preventative care that the ACA guarantees. Although there will be costs to insurance companies in order to pay for the preventative care in the short term, in the long run, it will end up saving costs from hospital visits and medical care for health conditions that will be detected and treating conditions before they grow serious enough to require more expensive treatment. Thus, both the consumer and the insurance companies are able to save money and still receive and provide quality care. A different step, on the administrative side, is to weed out fraud and abuse from Medicare.

A primary way that costs will be reduced for the consumer is through the health care exchange, a competitive health care marketplace that will be created in each state. The marketplaces will work to allow consumers to easily compare and find the best plan, while providing a competitive incentive for insurance companies to keep costs down. As the FamiliesUSA document describes it, it’s like “comparing airfare at a travel website like Travelocity.”

Finally, long-term efforts to lower costs and to increase quality of care turn towards innovation and ingenuity. The ACA will draw on new ideas from policy specialists that are as of yet untested, and to set up trials in order to see if these ideas will actually operate effectively. If the ideas are successful in test trials, they will be implemented widely in efforts to improve health care for all—without increasing costs!

Annika Yates
Illinois Health Matters

Monday, August 1, 2011

Illinois General Assembly Taking on Immensely Important Task: Creating Competitive Health Insurance Marketplace

The stage is set for the Illinois General Assembly to complete one of the most important tasks of its members’ legislative lifetimes: creating the competitive health insurance marketplace (officially called the Illinois Health Benefits Exchange) to begin operations in January 2014.

Recently enacted Illinois Public Act 97-0142 calls for the creation of a 12-member Legislative Study Committee tasked with reporting to the General Assembly and the Governor by September 30, 2011, on implementation and establishment of a centralized marketplace where individuals and small businesses can shop for affordable health insurance, qualify for public subsidies to purchase insurance, or be enrolled in public programs (Medicaid or All Kids). The full General Assembly will take up the Exchange legislation during the fall veto session, which begins October 26.

The leaders of the General Assembly should immediately appoint members to the Study Committee—legislators who understand that establishing this marketplace is extremely important to millions of Illinois residents (including the 1.7 million currently without insurance) and small businesses.

Once appointed, the Study Committee members need to educate themselves on what the different and better world of health insurance will be like in 2014. For starters, they need to recognize that by 2014 (sooner in some cases) due to insurance market reforms required by the federal Affordable Care Act, all health insurance companies must:

  • offer insurance to all applicants (no rejections  due to health status or pre-existing health conditions),
  • set rates based on applicants’ age, geographic location, and smoking status (no charging women or sick people more),
  • spend most of the premiums they collect on health care, not on administration, and
  • cover preventive health services with no deductible or co-payments, cover care in approved clinical trials, and have no lifetime or annual limits on coverage.
Come 2014, most Americans will be required to have health insurance; that means some 25 million new customers for insurers. The federal government will subsidize the purchase of insurance by people under 400% of the Federal Poverty Level (that’s $43,560 per year for one person and $89,400 for a family of four), and all citizens (and some non-citizens) with incomes under 133% of the Federal Poverty Level will be eligible for Medicaid. Insurers will be able to put their energies into competing by offering the best value and highest quality to customers rather than into avoiding insuring people with health problems, rescinding coverage, or not renewing policies when people file insurance claims.

Study Committee members also need to recognize that the Exchange is about both private health insurance and public health insurance programs. On the private insurance side, the Exchange needs to make it easy for individuals and small businesses to compare health plans, find out if they are eligible for subsidies, and enroll in a health plan that meets their needs. On the public side, the exchange needs to screen people seeking health coverage for eligibility for Illinois public health programs (Medicaid and All Kids), verify their eligibility, and enroll them and reach out to those newly eligible for Medicaid.
Committee members need to understand what the U.S. Department of Health and Human Services (HHS) expects from and offers to the states regarding exchanges, most of which is set out in the newly issued proposed rules announced by HHS head, Kathleen Sebelius, on July 11, 2011.

The Study Committee members also need to get up to speed on the substantial work already done or in progress in Illinois:

First, they need to review the Illinois Health Care Reform Implementation Council Initial Report (March 2011). The Implementation Council, established by Governor Quinn, was comprised of the heads of the several Illinois state agencies responsible for various aspects of federal health reform. In 2010 and early 2011, it held meetings around the state to hear from legislators, medical providers, individuals, and organizations on how to best implement the federal reforms, including the Exchange. The report contains detailed recommendations regarding the Exchange (most importantly, that Illinois establish its own Exchange as a quasi-governmental agency with power to negotiate with insurers and require them to compete on price and quality to sell on the Exchange), with accompanying discussion and summaries of the positions of various interests.

Second, they need to examine carefully Illinois Senate Bill 1729, the Illinois Health Coverage Exchange Act. It was the product of months of Department of Insurance-convened open meetings of five stakeholder working groups (patient and family advocates, employers, insurers, providers, and insurance agents). These groups met separately and then together on the key issues of Exchange governance options, operating models, and financing options. S.B. 1729 was based on all that thoughtful input. Study Committee members should also visit the Illinois Department of Insurance’s website pages on Health Insurance Reform, where they will find much important background information on Exchanges and statutes from other states.

Third, on the public programs side, the Department of Healthcare and Family Services (HFS) is moving ahead in developing the automated processes for screening people for eligibility for Medicaid and All Kids, verifying their eligibility, and enrolling them in the appropriate program via the Exchange. The Study Committee needs to invite HFS Director Julie Hamos to give a detailed briefing on those activities.

Finally, the Study Committee can learn from other states that are going down the same road—some far ahead of Illinois. The Study Committee should take advantage of all these existing reports and resources and should use its approximately 10 weeks to drill down into the issues, perhaps by inviting recognized experts to meet with it to answer questions members may have and debate various options. And, of course, it should allow the public to describe their needs and express their opinions. 

What it should not do is start from scratch, ignoring the work of the Council, the state agencies, and the input of the hundreds of individuals and organizations who already have participated in good faith in earlier processes. Its September 30 report should aim to educate the entire General Assembly about the importance of this competitive health insurance marketplace. It should be based on facts and sound economic and policy analysis, should explain the reasons for the policy choices that underlie its recommendations, and should include any substantial conflicting evidence, so that General Assembly members can have a full and fair understanding of the choices they will be making in passing Exchange legislation.

Margaret Stapleton
Originally posted here in the Shriver Brief.