The Affordable Care Act in Kansas What is the Affordable Care Act? The Affordable Care Act (ACA) was enacted into law on March 23, 2010. This law is sometimes called “PPACA” or simply “health care reform.” The law addresses and attempts to fix problems in the current American health care system. Some of these problems include the cost and quality of care and gaps in insurance coverage. insurance exchanges. An insurance exchange will be an online marketplace where consumers can go to find out about health insurance plans available in their area. They will also be able to compare the costs and benefits of those plans. It will function like other online marketplaces. More details about these exchanges are on page 3. The law required several changes to be put into place in the first six months after the law was passed. Other parts of the ACA do not go into effect until January 1, 2014 or after. This booklet was designed to help you understand what the law says, what changes have or will need to be made, and how it can affect Kansans. One of the biggest changes to the current health insurance system will be the creation of health Changes already in place On September 23, 2010, nearly all adult children became eligible to stay on their parents’ health insurance policies until their 26th birthday. Adult children are eligible for these benefits regardless of marital status, financial dependency, enrollment in school or residency. Insurance companies were required to notify customers of their opportunity to enroll in coverage. Call your insurance company if you want to access this provision. You may also enroll your child during the next open enrollment period. Many preventive services are included in your policy with no out-of-pocket costs. Out-of-pocket costs include deductibles, copays and coinsurance. You must see an in-network doctor for these services. Some of these services include: • Colorectal cancer screenings for individuals over age 50. • Immunizations and vaccines for adults and children. • Counseling to help adults stop smoking. • Well-woman checkups, as well as mammograms and cervical cancer screenings. • Yearly “wellness” exams for Medicare-eligible Kansans. Through 2014, people with pre-existing conditions can get coverage through the Pre-existing Condition Insurance Plan – Kansas (PCIP-KS). In order to qualify for this coverage you must have been turned down for insurance coverage in the past, and have been without health insurance coverage for at least 6 months. The PCIP-KS is a federally-run program and will provide coverage until January 1, 2014. At that time everyone will be able to get coverage in the pri- Changes already in place (cont’d) vate market, even if they are already sick. Children age 19 and under can no longer be turned down for coverage because of a pre-existing condition. This coverage began on September 23, 2010, and applies to all group and individual health plans. Health insurance policies cannot put any lifetime limits on essential health coverage. This coverage began on September 23, 2010. In the next few years, annual limits will be gradually increased and will be eliminated completely on January 1, 2014. Insurance companies can no longer cancel coverage because of an honest mistake. Coverage can be canceled because of fraud or intentional misrepresentation. Companies must give a 30-day notice before rescinding coverage. The consumer can file an appeal during this time. Small businesses that provide health care for employees can apply for tax credits. The credits are available to employers who cover at least 50% of health insurance costs for some or all employees. The employer must have fewer than 25 full-time employees (or the equivalent) and pay annual wages of less than $50,000 per person. Seniors with Medicare prescription drug coverage were eligible for a rebate to help cover costs. This rebate helped close the “doughnut hole” gap found in Part D. This hole will continue to gradually close in the upcoming years. Additionally, seniors under Medicare coverage can now receive a number of preventive benefits without cost sharing. The ACA changes the appeals and external review processes. Consumers who have had a claim denied can continue to appeal their insurance company’s decision. The process for externally reviewing denied claims was also strengthened by the ACA. These processes include emergency claims. Incentives are put in place to bring primary care doctors to underserved areas of the state. These incentives include student loan repayment assistance and new scholarships. Any doctor, nurse or physician’s assistant who is willing to work in underserved areas of the state may receive these incentives. Changes coming on January 1, 2014 or after Nearly all individuals will be required to have health insurance or pay a penalty. Only certain religious groups or people with very low incomes will be exempt. Financial assistance will be available for people with limited incomes. No one will be turned down for health insurance just because they have a pre-existing condition. You cannot be charged more for your coverage just because you are sick, either. Women will no longer be charged more than men for equal coverage. Insurance companies must let you enroll in coverage regardless of gender or health status. However, this does not guarantee that all people will be charged the same amount. Insurance companies can decide what to charge you based on your age, your family size, whether or not you use tobacco, and where you live. All health insurance coverage can be renewed as long as you pay your premiums. Financial assistance will be available to everyone up to 400% of the federal poverty level. This assistance will only be available to people who buy their coverage through the exchange. All health plans offered through the exchange will be required to cover certain basic categories of health Kansas Insurance Department Consumer Assistance Program www.ksinsurance.org • 1-800-432-2484 care. These categories include emergency services, hospitalization, maternity and newborn care, mental health and substance disorders, prescription drugs, laboratory services, and pediatric services. More details about these “essential health benefits” will be available in the future. Tax credits for small businesses who provide health insurance will increase. Small businesses who have fewer than 25 full-time employees and pay an average wage of $50,000 or less are eligible for even more of a tax credit. Insurance companies cannot drop or limit coverage if an individual chooses to participate in a clinical trial. This includes all clinical trials for cancer or other lifethreatening illnesses. Health insurance exchanges in 2014 An insurance exchange is an online website where people and small businesses can go to buy health insurance. The website will allow them to compare the benefits and costs of those plans and to enroll in coverage. Consumers may also be eligible to receive tax credits and/or subsidies to help pay for their coverage. There are several features of these exchanges: Essential health benefit coverage: Health plans sold through the exchange will be required to meet minimum standards for coverage, including ambulance services, hospital coverage, maternity and newborn coverage, mental health coverage, laboratory services, prescription drugs, and pediatric services, to name a few. Tiers of coverage: Four tiers of coverage will be available through the exchange: Bronze: Silver: Gold: Platinum: Insurance covers 60% of covered expenses Insurance covers 70% of covered expenses Insurance covers 80% of covered expenses Insurance covers 90% of covered expenses Small businesses will be able to use these tiers to offer coverage to their employees. Employers will have the option of choosing the tier level of coverage and employees may then be able to select a plan within that level. All plans within the same tier will have the same level of coverage, but prices of plans will vary from company to company. A catastrophic plan will also be available for purchase through the exchange. It will only be available to individuals under the age of 30 and those exempt from the requirement to purchase insurance. Financial assistance: The exchange will look at your financial information to help determine if you qualify for federal subsidies or tax credits. Even if you are unsure of what you are eligible for, the exchange can help you find coverage you can afford. Taking this financial assistance is optional. No one will be forced to accept it. “No wrong door” policy: The exchange will also help anyone who is eligible for Medicaid services find coverage. Kansas Insurance Department Consumer Assistance Program www.ksinsurance.org • 1-800-432-2484 STATE VS. FEDERAL CONTROL OVER THE EXCHANGE The ACA says that there must be a health insurance exchange ready to function in every state by January 1, 2014. Like all other states, Kansas was given the option of running its own exchange or allowing the federal government to run the exchange. States could also choose to partner with the federal government and run a “partnership” exchange. The following graph visually demonstrates where each of these options lie on a spectrum of state and federal control: INSURANCE EXCHANGE OPTIONS State control State-based exchange Federal control Partnership exchange Federally-facilitated exchange Because of time constraints, Kansas can no longer implement a state exchange by January 1, 2014 (though a state exchange can be put into place at any time in the future). This means that Kansas will either partner with the federal government to create an exchange or let the federal government create it without state input. IF KANSAS HAS A PARTNERSHIP EXCHANGE In a partnership exchange, the state would control some parts of the exchange and the federal government would control the rest. The state and federal governments would work together to create an exchange best suited for Kansans. The following graph outlines which branch of government would control which parts of a partnership exchange: KANSAS CONTROL FEDERAL GOVERNMENT CONTROL • Consumer Assistance, including educating Kansans and operating an in-person assistance program to help people compare insurance options and enroll in coverage. • Eligibility, including deciding who is eligible for private insurance and who is eligible for Medicaid coverage and enrolling them into that coverage. • Plan Management, including authorizing which insurance plans will be offered to Kansans in the exchange and handling consumer complaints about those plans. • Enrollment, which includes enrolling consumers into health plans and gathering and transmitting that information to insurance companies. • Financial Management, which includes collecting fees from consumers and maintaining the financial integrity of the exchange. In a federally controlled exchange, the federal government would control all aspects of the exchange. The Kansas Insurance Department will remain in place regardless of who controls the exchange. We will continue to work for Kansans, regulating the insurance industry in Kansas and providing the same consumer assistance that we offer now. Any questions about this booklet or health reform in general can be directed to our department by calling our Consumer Assistance Division at 800-432-2484. Kansas Insurance Department Consumer Assistance Program www.ksinsurance.org • 1-800-432-2484