Presentation by James Smith of the American Continental Group at the Sept. 30, 2013 83rd Texas Post-Legislative Conference hosted by One Voice Texas, United Way of Greater Houston and the Harris County Healthcare Alliance.

1. Jim Smith
American Continental Group
900 19th Street, NW, #800
Washington, DC 20006
202-327-8100
Health Care Reform

3. *Tobacco-related disease
*Poor diet
*Lack of exercise
*Excessive use of alcohol
*American Medical Association

4. How Will the ACA Affect
the Cost of Health Insurance?
*Methodology is
Insurance, rather
than public health
*Essential benefits
package is
comprehensive
• Subsidies
• Individual mandate
penalties
• Reform initiatives

5. Affordable Care Act
As Healthcare exchanges open for
registration across the country, the
Affordable Care Act (ACA) still has a
number of hurdles to overcome.
Budget battles, information
technology concerns, and debate
over the employer mandate all
feature prominently, while conflicting
interpretations of the facts
surrounding state-level exchanges
continue to distort perceptions of the
law.

6. ACA Deadlines
Medicaid Payments for Primary Care: Increases Medicaid payments for primary care services
provided by primary care doctors to 100% of the Medicare payment rate for 2013 and 2014.
Implementation: January 1, 2013 through December 31. 2014 –
CO-OP Health Insurance Plans: Creates the Consumer Operated and Oriented Plan (CO-OP) to
foster the creation of non-profit, member-run health insurance companies. Implementation:
CO-OPs established by July 1, 2013 –
Employer Requirements: Assesses a fee of $2,000 per full-time employee, excluding the first
30 employees, on employers with more than 50 employees that do not offer coverage and have
at least one full-time employee who receives a premium tax credit. Implementation:
Basic Health Plan: Permits states the option to create a Basic Health Plan for uninsured
individuals with incomes between 133-200% FPL who would otherwise be eligible to receive
premium subsidies in the Exchange. Implementation: January 1, 2014 –
Limitation on Out-of-Pocket Costs: Limit on out-of-pocket costs, including deductibles and co-
payments, not to exceed $6,350 for an individual and $12,700 for a family. Implementation:
ON TIME
ON TIME
DELAYED
ON TIME
ON TIME

7. ACA Deadlines
Multi-State Health Plans: Requires the Office of Personnel Management to contract with insurers
to offer at least two multi-state plans in each Exchange. At least one plan must be offered by a
non-profit entity and at least one plan must not provide coverage for abortions beyond those
permitted by federal law. Implementation: January 1, 2014 –
Accountable Care Organizations in Medicare: Allows providers organized as accountable care
organizations (ACOs) that voluntarily meet quality thresholds to share in the cost savings they
achieve for the Medicare program. Implementation:
Medicare Bundled Payment Pilot Program: Establishes a national Medicare pilot program to
develop and evaluate making bundled payments for acute, inpatient hospital services, physician
services, outpatient hospital services, and post-acute care services for an episode of care.
Implementation:
Medicare Tax Increase: Increases the Medicare Part A (hospital insurance) tax rate on wages by
0.9% (from 1.45% to 2.35%) on earnings over $200,000 for individual taxpayers and $250,000 for
married couples filing jointly and imposes a 3.8% assessment on unearned income for higher-
income taxpayers. Implementation:
ON TIME
UNDERWA
Y
UNDERWAY
UNDERWAY

8. Employer Mandate
On July 2nd, the Obama Administration announced that it would push back
enforcement of the employer mandate until January 1, 2015.
• White House officials have also said more time was needed to work out
information reporting requirements so they would not be too burdensome
for businesses. Delaying the mandate also defused a potential political
problem for Democrats in next year's congressional elections.
• The Treasury Department said it will be soliciting feedback on its proposals
through early November, and will use the comments to develop final rules.
• Although the one-year delay of the employer coverage requirement remains
in effect, the administration says it hopes employers will voluntarily begin
reporting information next year to smooth the transition in 2015.

9. Medicaid Expansion

10. Health Exchanges by State

11. Accountable Care Orgs
One of the main ways the Affordable Care Act seeks to reduce health care costs is by
encouraging doctors, hospitals and other health care providers to form networks to
coordinate care better, which could keep costs down. To do that, the law is trying an
balanced incentive structure in the Medicare program: Accountable Care Organizations.
• Roughly 4 million beneficiaries are currently in an ACO
• 428 hospitals nationwide have already signed up
• An estimated 14% of the U.S. population is now being served by an ACO
• Pursuant to the ACA, each ACO has to manage the health care needs of a minimum of 5,000
Medicare beneficiaries for at least three years.

13. “The relatively low penalties associated with
the individual mandate make the effectiveness
of the mandate uncertain, particularly in the
first few years of reform when stability is
essential and the penalty can be expected to
fall well below the annual cost of the minimum
standard of coverage required under the ACA.”
Oliver Wyman study
Penalties for Uninsured

15. Promoting Medicare Stability
*Radical management redesign to impose forward-
looking cost-containment capabilities
*Develop Chronic Care Payment Pathways
*Reduce silos of care/cost (Accountable Care)
*Align responsibility and authority to eliminate
microeconomic profit maximization
*Data collection:
*Real time data
*Better encounter data from providers and
patients

16. Jim Smith
American Continental Group
900 19th Street, NW, #800
Washington, DC 20006
202-327-8100
Health Care Reform