PpacaconLEGISLATIVE COUNSEL " ! 111THC2d Session PCOMPILATION OF PATIENT PROTECTION AND AFFORDABLE CARE 0ct 09 2002 14:17 Jun 09, 2010Jkt 000000PO 00000Frm 00001Fmt 6012Sfmt OF THE LEGISLATIVE COUNSEL SANDRA L.STROKOFF, Legislative Counsel EDWARD G.GROSSMAN, Deputy Legislative CounselVerDate 0ct 09 2002 14:18 Jun 09, 2010Jkt 000000PO 00000Frm 00001Fmt 0486Sfmt O N T E N T S [For continuous pagination in electronic, PDF version, add 19 pages] Patient Protection and Affordable Care Act (Public Law title; table of to the Public Health Service insurance consumer that consumers get value for their access to insurance for uninsured individuals with a preexisting for early information that allows consumers to identify af-fordable coverage to the Public Health Service of right to maintain existing reforms must apply uniformly to all health insurance issuers and group health report on self-insured of large group health plan health benefits 0ct 09 2002 14:18 Jun 09, 2010Jkt 000000PO 00000Frm 00002Fmt 0486Sfmt choices of health benefit flexibility in operation and enforcement of Exchanges and related program to assist establishment and operation of non-profit, member-run health insurance health insurance option .........................92Sec.1323.Funding for the playing flexibility to establish basic health programs for low-income individuals not eligible for for State relating to offering of plans in more than one reinsurance program for individual market in each of risk corridors for plans in individual and small group tax credit providing premium assistance for cov-erage under a qualified health cost-sharing for individuals enrolling in qualified health for determining eligibility for Exchange participa-responsibility determination and payment of premium tax credits and cost-sharing of procedures for enrollment through an ex-change and State Medicaid, CHIP, and health subsidy to carry out eligibility requirements for certain tax credit and cost-sharing reduction payments dis-regarded for Federal and Federally-assisted of geographic variation in application of for employee health insurance expenses of small 0ct 09 2002 14:18 Jun 09, 2010Jkt 000000PO 00000Frm 00003Fmt 0486Sfmt to maintain minimum essential of health insurance enrollment for employees of large requirement to inform employees of coverage responsibility for of employer health insurance of Exchange-participating qualified health plans through cafeteria in against discrimination on assisted to not to participate in Federal health insurance for certain eligible for of information technology enrollment standards and study regarding the rate of denial of coverage and en-rollment by health insurance issuers and group health business [sic].Conforming [sic].Sense of the Senate promoting fiscal coverage for the lowest income eligibility for nonelderly determined using modified gross to offer premium assistance for employer-spon-sored coverage for former foster care to adjustment to FMAP determination for certain States recovering from a major Improvement Fund federal financial participation for Simplification and coordination with State Health Insurance 0ct 09 2002 14:18 Jun 09, 2010Jkt 000000PO 00000Frm 00004Fmt 0486Sfmt hospitals to make presumptive eligibility deter-minations for all Medicaid eligible for freestanding birth center care for eligibility option for family planning of definition of medical First Choice of barriers to providing home and community-based Follows the Person Rebalancing for recipients of home and community-based serv-ices against spousal to expand State Aging and Disability Resource of the Senate regarding long-term drug of exclusion of coverage of certain adequate pharmacy share hospital period for demonstration Federal coverage and payment coordination for dual eligible health quality Adjustment for Health Care-Acquired Conditions.....Sec.2703.State option to provide health homes for enrollees with chron-ic project to evaluate integrated care around a Global Payment System Demonstration Project........Sec.2706.Pediatric Accountable Care Organization Demonstration emergency psychiatric demonstration assessment of policies affecting all Medicaid rules relating to of sunset for reimbursement for all medicare part B services furnished by certain indian hospitals and 0ct 09 2002 14:18 Jun 09, 2010Jkt 000000PO 00000Frm 00005Fmt 0486Sfmt , infant, and early childhood home visiting programsSec.2952.Support, education, and research for postpartum depression...Sec.2953.Personal responsibility of funding for abstinence of information about the importance of having a out of foster care and independent living Value-Based purchasing to the physician quality reporting to the physician feedback reporting for long-term care hospitals, inpatient reha-bilitation hospitals, and hospice reporting for PPS-exempt cancer for a Value-Based purchasing program for skilled nurs-ing facilities and home health payment modifier under the physician fee adjustment for conditions acquired in Working Group on Health Care measure collection; public of Center for Medicare and Medicaid Innova-tion within shared savings pilot program on payment at home demonstration readmissions reduction Care Transitions of gainsharing of the work geographic index floor and revisions physician fee of exceptions process for Medicare therapy caps......Sec.3104.Extension of payment for technical component of certain phy-sician pathology of ambulance of certain payment rules for long-term care hospital and 0ct 09 2002 14:18 Jun 09, 2010Jkt 000000PO 00000Frm 00006Fmt 0486Sfmt of physician fee schedule mental health physician assistants to order post-Hospital ex-tended care of certain pharmacies from accreditation B special enrollment period for disabled TRICARE for bone density to the Medicare Improvement of certain complex diagnostic laborator
Healthbill52The Patient Protection and Affordable Care Act
The Patient Protection and Affordable Care Act will ensure that all Americans have access to quality, affordable health care and will create the transformation within the health care system necessary to contain costs.
The Congressional Budget Office (CBO) has determined that the Patient Protection and Affordable Care Act is fully paid for, ensures that more than 94 percent of Americans have health insurance, bends the health care cost curve, and reduces the deficit by $118 billion over the next ten years and even more in the following decade.
The Patient Protection and Affordable Care Act addresses essential components of reform: Quality, affordable health care for all Americans The role of public programs Improving the quality and efficiency of health care Prevention of chronic disease and improving public health Health care workforce Transparency and program integrity Improving access to innovative medical therapies Community living assistance services and supports Revenue provisions
Quality, Affordable Health Care for All Americans
The Patient Protection and Affordable Care Act will accomplish a fundamental transformation of health insurance in the United States through shared responsibility.Systemic insurance market reform will eliminate discriminatory practices by health insurers such as pre-existing condition exclusions.Achieving these reforms without increasing health insurance premiums will mean that all Americans must have coverage.
Tax credits for individuals, families, and small businesses will ensure that insurance is affordable for everyone.
These three elements are the essential links to achieving meaningful reform.
Implementing health insurance reform will take some time.
However, many immediate reforms will take effect in 2010
The Patient Protection and Affordable Care Act will:
Eliminate lifetime and unreasonable annual limits on benefits, with annual limits prohibited in 2014 Prohibit rescissions of health insurance policies Provide assistance for those who are uninsured because of a pre-existing condition Prohibit pre-existing condition exclusions for children Require coverage of preventive services and immunizations Extend dependant coverage up to age 26
Develop uniform coverage documents so consumers can make apples-to-apples comparisons when shopping for health insurance 2
Cap insurance company non-medical, administrative expenditures Ensure consumers have access to an effective appeals process and provide consumer a place to turn for assistance navigating the appeals process and accessing their coverage Create a temporary re-insurance program to support coverage for early retirees Establish an internet portal to assist Americans in identifying coverage options Facilitate administrative simplification to lower health system costs
Health Insurance Market Reform.
Beginning in 2014, more significant insurance reforms will be implemented.
Across individual and small group health insurance markets in all states, new rules will end medical underwriting and pre-existing condition exclusions.
Insurers will be prohibited from denying coverage or setting rates based on gender, health status, medical condition, claims experience, genetic information, evidence of domestic violence, or other health-related factors.
Premiums will vary only by family structure, geography, actuarial value, tobacco use, participation in a health promotion program, and age (by not more than three to one).
A qualified health plan, to be offered through the new American Health Benefit Exchange, must provide essential health benefits which include cost sharing limits.
No out-of-pocket requirements can exceed those in Health Savings Accounts, and deductibles in the small group market cannot exceed $2,000 for an individual and $4,000 for a family.
Coverage will be offered at four levels with actuarial values defining how much the insurer pays: Platinum 90 percent; Gold 80 percent; Silver 70 percent; and Bronze 60 percent.
A less costly catastrophic-only plan will be offered to individuals under age 30 and to others who are exempt from the individual responsibility requirement.
American Health Benefit Exchanges.
By 2014, each state will establish an Exchange to help individuals and small employers obtain coverage.
Plans participating in the Exchanges will be accredited for quality, will present their benefit options in a standardized manner for easy comparison, and will use one, simple enrollment form.
Individuals qualified to receive tax credits for Exchange coverage must be ineligible for affordable, employer-sponsored insurance any form of public insurance coverage.
Undocumented immigrants are ineligible for premium tax credits.
Federal support will be available for new non-profit, member run insurance cooperatives, and the Office of Personnel Management will supervise the offering by private insurers of multi-State plans, available nationwide.
States will have flexibility to establish basic health plans for non-Medicaid, lower-income individuals; states may also seek waivers to explore other reform options; and states may form compacts with other states to permit cross-state sale of health insurance.
No federal dollars may be used to pay for abortion services.
Making Coverage Affordable.
New, refundable tax credits will be available for Americans with incomes between 100 and 400 percent of the federal poverty line (FPL) (about $88,000 for a family of four).
The credit is calculated on a sliding scale beginning at two percent of income for those at 100 percent FPL and phasing out at 9.8 percent of income at 3
Chbrp interaction btw ca state benefit mandates and the aca 27s ehbsBenefits March 2012CHBRP Issue Brief: California Health Benefits Review Program 1111 Franklin Street, 11Tel: 510-287-3876 Fax: 510-763-4253
and other publications and CHBRP bill analyses may be www.chbrp.orgCalifornia Health Benefits ReIssue Brief: fit Mandates and the Affordable Care Acts Essential Health Benefits.Oakland, CA: CHBRP.Current as of 3/12/12 www.chbrp.org Page 2 of 33 TABLE OF CONTENTS Executive Summary 3Introduction 5State Benefit 7California State Benefit Mandates 7Health Insurance Subject to State Benefit Mandates in California The Complexities of California State Benefit Mandates ____________________________ 9 Summary: California State Benefit Mandates 11 California State Benefit Mandates and the Health Benefits Exchange ________ 11Federal Benefit Mandates 13Essential Health Benefits 14The Ten Categories of Essential Health Benefits in the Affordable Care Act ____ 14Plans and Policies Subject to the Essential Health Benefits Coverage
Requirement in California 14The Essential Health Benefits Bulletin ________________________________ 16The Secretary of Labor and Institute of Medicine Reports The Essential Health Benefits Bulletin: Benchmark Plan Approach __________________ 17 Benchmark Plan Approach to Dewith State Benefit Mandates 19 Benchmark Plan Approach to Defining Essential Health Benefits: Additional
Complexities 21 Conclusion 24Appendix A.Comparison: Benefit Mandate Elements of Two State-Level
Mandates 25Appendix B.Federal Benefit Mandates _________________________________ 26Appendix C.
The Ten Essential Health Benefit Categories: Potential Interaction
with State Benefit Mandates 29Acknowledgements 31Current as of 3/12/12 www.chbrp.org Page 3 of 33 EXECUTIVE SUMMARY In March 2010, the federal government passed the federal Patient Protection and Affordable Care Act (P.L.111-148) and the Health Care and Education Reconciliation Act (H.R.4872), enacting health care reform laws that dramaticahealth insurance market and its regulatory environment.
These laws, referred to as the Affordable Care Act (ACA), include a number of provisions that would affect benefits covered by California health insurance products.The focus of this issue brief is on a spovision of the ACA that requires coverage of essential health benefits (EHBs) for most health insurance products sold in the individual and small group markets, including those that will be provided through state health benefit exchanges.
The California Health Benefits Review Program (CHBRP), a program established in 2002, responds to requests from the California State Legislature for independent evidence-based analysis of the medical, financial, and public health impacts of proposed health insurance benefit mandates and repeals.Since the federal EHB requirements would interact with Californias existing laws and proposed mandate (or repeal) legislation, CHBRP has produced this issue brief to provide context for potential interaction effects between these federal requirements and the state bills CHBRP is charged with analyzing.Specifically, this issue brief aims to describe the complexities of state benefit mandates in California and how these state benefit mandates may potentially interact with the EHBs, as defined by the regulatory approach proposed in a Bulletin released by the federal Department of Health and Human Services (HHS) in December 2011.
California State Benefit Mandates California has a bifurcated system of regulation for health insurance subject to state benefit mandates.State benefit mandates only apply to health insurance regulated at the state level by either the California Department of Managed Health Care (DMHC), which regulates health plans, or the California Department of Insurance (CDI), which regulates health .About 59% (21.9 million) of Californians currently have health insurance subject to state benefit mandates.Once Californias State Health Benefits Exchange is operational, qualified health plans (QHPs) sold in the Exchange will be regulated by either bject to state benefit mandates.
Although a majority of Californians have health or more state benefit mandates, the number of enrollees affected varies by mandate, depending on the DMHC-regulated plans and CDI-regulated policies and the markets (individual, small group, and large group) included in the particular mandate law.
In addition, benefit mandate laws are not uniform as to what condition(s) or disorder(s) they address or what kind(s) of requirements they impose.There are 53 state benefit mandates in California known to CHBRP that each apply to a subset of DMHC-regulated plans and CDI-regulated policies and health insurance markets, and that require coverage for specific tests, treatments, and services for often overlapping conditions or diseases.Therefore, though state benefit mandates may be discussed in the aggregate, close analysis of each mandate is necessary in order to understand what impacts may result from it for some number of Californians.
Additional information about the program is available on CHBRPs website at
Health insurance benefits generally involve screening, diagnosis, and/or treatment for a condition or disease.
Current as of 3/12/12 www.chbrp.org Page 4 of 33 The Affordable Care Acts Essential Health Benefits The ACA requires coverage of EHBs for most plans and policies in California sold in the individual and small group markets, both inside and outside the states Exchange.Broadly, inside the states Exchange, DMHC- and CDI-regulated QHPs are required to provide coverage of the EHBs, and outside of the states Exchange, nongrandfathered plans and policiesindividual and small group markets will be required to cover EHBs.Section 1302(b) of the ACA requires that at lecategories of benefits must be included in the EHBs, but that the Secretary of HHS must define the EHBs through regulation.In December 2011, HHS releas