>> well, i what they 20 what the statute says throughout is that qualified individuals are eligible to purchase on exchanges, and it's the necessary meaning of that phrase that if you are not a qualified individual, then you are not eligible to purchase health care on an exchange because otherwise, the word qualified would not have any meaning. the whole the meaning of the word qualified is to distinguish between people who are eligible and people who are ineligible. and as a policy matter, it wouldn't make any sense because think of the people who are not qualified individuals. the people who don't live in the state, the people in prison, and they're unlawfully documented. >> this is part of section 1312. a person qualified to purchase on an exchange must, quote reside in the state that established the exchange. >> right. and there are no such people in 34 states under mr. carvin's theory of the statute. so it just doesn't it just you just run into a textual brick wall. >> i understand your argument is that it's a it's a logical inference from a number of provisions that only a qualified individual may purchase the policy, but i gather there is no provision that you can point to that says that directly.

>> it's well, that's what qualified means, justice alito. it means that, you know, if you're not qualified, you're unqualified. and so, i mean, that's what it means. and so you're just reading the word "qualified" out of the statute if you read it that way. >> "qualified" is used in the in the lay sense of the term, it's not a technical term here. >> well, i think -- well, given the way it's defined, it's defined as a person who resides in the state. it excludes people out of state. it does that because the statute was quite clear that you weren't going to be allowed to shop for insurance policies across state lines because that would infringe on traditional state prerogatives regulating insurance. and it and with respect to prisoners, it doesn't make any sense to say that prisoners should be able to get insurance. mr. carvin says, yes, it does because they get out of prison. well, there's a specific statutory provision that says when you face a changed-life circumstance, such as getting out of prison, you can sign up for insurance at that point. he makes the point about unlawfully present persons being both unqualified and not being able to be covered, but that's

not that's not surplus, that's there for a very important reason, which is that someone can be in lawful status and, therefore, be eligible for health care, but then lose lawful status and at that point, they can no longer be covered. so, just none of that works for them. none of that works for them. and but to really, to get to the fundamental point here that both at the level of text, you have clear irresolvable conflicts so that the statute can't work if you read it mr. carvin's way. >> is that a synonym for ambiguity? >> i think so, exactly right justice scalia i mean, excuse me, justice kennedy that you have ambiguity there precisely because you have to you know

this is a statute that's going to operate one way or the other. and the question is how it's going to operate. and when you read it their way >> well, if it's if it's ambiguous, then we think about chevron. but it seems to me a drastic step for us to say that the department of internal revenue and its director can make this call one way or the other when there are, what, billions of dollars of subsidies involved here? hundreds of millions? >> yes, there are billions of dollars of subsidies involved here. but two points about that -- >> and it seems to me our cases say that if the internal revenue service is going to allow deductions using these, that it has to be very, very clear. >> so -- >> and it seems to me a little odd that the director of internal revenue didn't identify this problem if it's ambiguous and advise congress it was. >> so a few points about that with respect to chevron deference. first, we do think chevron deference clearly supports the government here and i'll explain why. but before you get to that, you can resolve and should resolve this statute and the statute's meaning in our favor even without resort to chevron deference. that's what the canon of reading a statute as a whole to make it work harmoniously directs you to do.

it's what the very important principles of federalism that we've been describing here direct you to do. if you think there's a constitutional problem with the statute, it's what the doctrine of constitutional avoidance directs you to do. now, with respect to chevron section 36b(g) of the statute expressly delegates to the irs the specific authority to make any decisions necessary to implement section 36b. so you don't have any ambiguity. congress said the irs should do this. it is a big question, but as the court said in city of arlington two terms ago, chevron applies to big questions as well as small. your honor raised this point about the need for clarity in a tax deduction and irs in the statutory reading of tax deductions, there is a learned treatise that describes that as a false notion.

and it is certainly not consistent with this court's unanimous decision in mayo two terms ago that chevron applies to the tax code like anything else. and so -- >> if you're right about chevron, that would indicate that a subsequent administration could change that interpretation? >> i think a subsequent administration would need a very strong case under step two of the chevron analysis that was a reasonable judgment in view of the disruptive consequences. so as i said, i think you can resolve and should resolve this case because the statute really has to be read when taken as a whole to adopt the government's position. but i do take -- >> general -- >> if there are any if there are any tax attorneys in the in the courtroom today, i think probably they wrote down what you just said. when we get future tax cases the united states is going to argue that we should not read them to you know, there should be no presumption that a tax credit is provided by that statute. >> you should you should read it according to its terms. and when you read this provision according to its terms and you read it in context and you read it against the background principles of federalism, you have to affirm the government's interpretation. thank you. >> thank you, general. four minutes, mr. carvin.

>> thank you, mr. chief justice. very quickly on standing. mr. hurst would be subject to a penalty absent relief by this court for 2014. as i've discussed, both he and mrs. leevy, of course, would face the same principle for 2015. if the government is suggesting that their case has become moot because of changed circumstances, under cardinal chemical 508 u.s. 83, it's their burden to raise it, not ours to supplement the record. in terms of the anomaly, in terms of all the states losing 34 states losing their medicaid funds, the solicitor general greatly distorted the statute. it's printed at 64a of their exhibit. it says, "a state shall establish procedures," so the notion that hhs established them is obviously contrary to that. it says, "the state will identify people to enroll on their exchanges." well, they can't enroll anybody on their exchanges if there are no such exchanges in the state. therefore, by the plain language, if you adopt the notion that "exchange

established by the state" means established by hhs, all of them need to lose their medicaid funding. >> could i follow up on something the general ended with, which and justice kennedy referred to, which is the need to read subsidies limited. but so is in a limited way. but so is the need to ensure that exemptions from tax liability are read in a limited way. and under your reading, we're giving more exemptions to employers not to provide insurance, more exemptions to states and others or to individuals, how does that work? i mean, you've got two competing -- >> no, no. you do get more exemptions for employers under our reading, but and the same principle applies. is it unambiguous? it's undisputed that one is unambiguous. >> well -- >> the dispute here is whether

or not if they win under ambiguity, and they don't because the canon requires unambiguous statutes not to afford the tax credit. in terms of the employer mandate, i think that's very helpful in terms of justice kennedy's concern about federalism. under their view of the statute, the federal government gets to unilaterally impose on states -- there's an amicus from indiana describing this a requirement that states insure their own individuals. it implies the employer mandate to states. under their theory, the states are absolutely helpless to stop this federal intervention into their most basic personnel practices. whereas under our theory, they are able to say, no. so actually, the more intrusive view of the statute is theirs. in terms of the funding condition, head on, your honor i think my short answer is as follows -- there's no way to view this statute as more coercive or harmful than the medicaid version of medicaid that was approved by this court in nfib and, indeed, the nfib

dissenting opinion pointed to this provision as something that was an acceptable noncoercive alternative. but in all events, even if there's a constitutional doubt under a novel constitutional question, as justice scalia pointed out, there's no alternative reading of the statute that avoids that because either way, you're intruding on state sovereignty. in terms of the anomaly, in terms of qualified individuals as predicted, solicitor general did not come up here and tell you, yes, if we prevail here under this theory, they're going to have to empty out the hhs exchanges. nor did he even respond to my argument that with respect to an exchange under the definitional section only applies to state exchanges. so i think we can view this as a complete tendentious litigation position and not a serious statutory interpretation. in terms of the qualified health plan that he discussed with you, justice alito, the complete answer to that is that is in 1311. 1311 only is talking about state established exchanges.

it has no application to hhs exchanges, therefore, it can't possibly create an anomaly with respect to those hhs exchanges. >> thank you, counsel. the case is submitted. >> >> after the oral argument, the wife of a plaintiff spoke to reporters. also speaking, the attorney representing lawmakers. the former acting solicitor general of the obama administration and health and human services secretary sylvia burwell. this is about 45 minutes. >> high, my name is pam hearst and i'm here with my husband doug. we are here today on behalf of all the plaintiffs in king versus burwell. decisions made here in washington directly affect middle-class families like ours.

we believe it's time that those who have been hurt by washington take a stand. that's why doug joined the case. we never imagined we would end up at the supreme court. but that just shows you how important this case is not just for us, but for others around the country who are affected by obamacare. there are millions of americans who have lost their plans or their doctors or who, like doug and i, are forced by the internal revenue service to either buy insurance we don't want or face a tax penalty. we want americans to have options. we believe there is a better way to take care of people who need help. but there is no reason to force millions of us to pay tax penalties if we don't join a government program.

we elect our state and national leaders to write laws. we do not elect the inch r.s. we believe preventing the inch r.s. from writing our health care laws is the right thing to do for our family and our country. this is why we are here. what the internal revenue service has done isn't fair, it isn't right, and it isn't legal. we look forward to the supreme court's decision and hope the rule tissue and hope that the court rules to protect our choice and the laws that govern our nation. thank you. >> is there a better way to cover the uninsured without some kind of subsidies? >> i'm mike carver, i argued on behalf of the plaintiffs in this case. very gratified that the court had a full and candid exchange

of viewpoints. i believe our case was very compelling so i'm hopeful and confident that the court will recognize the merits of our statutory interpretation and not let the i.r.s. rewrite the plain language of the statute. thank you. >> were you concerned about justice kennedy's question? >> justice kagan and i had a candid exchange but there are other justice. as i said approximately four types i very much want them to read the statute as a whole because it dramatically reinforces our point principally the point that a clear purpose of the statute was to encourage states to establish their own exchanges which is dramatically undermined and frustrated by the i.r.s. rule which provides subsidies regardless of whether the states do that required task. >> how concerned were you about

justice kennedy's question about your reading of the law would be the federal government coercing the states into creating exchanges? >> right, but after the conversation i think it became clear in everyone's mind that this reading would be far less coercive than the sthroferingse medicaid statute they'd upheld in nfib and it would be a greater intrusion on state sovereignty to accept the government's positions because this would allow the federal government to union latrlly impose the employer mandate on state and local employers as well as other employers in the state. >> you made different arguments about a year ago. >> last time we were arguing that affordable care act should not be the law of the land. here we are arguing that it should be the law of the land and shouldn't be dramatically altered by an unelected

bureaucracy. >> do you see any contradiction in that? >> i think it's perfectly consistent. in both circumstances i have to accept the court's decision that this is now the law of the land. now that it's the law of the land we need it to be neutrally and fairly interpreted. that's exactly why we're here, to vindicate the rule of law. >> you say it should be the life of the land but couldn't it be a death nell to the affordable care act? >> you've seen the poplar press. seems the leaders in congress are well prepared to deal with transition issues and i assume the states if they don't will have incentive to go ahead and create the exchanges they would have created but for the i.r.s.'s continue rah vention of the law. >> how do you cover millions of americans who might lose their health insurance without some kind of subsidy or whatever you're going to call it? >> if you're arguing there's a compelling policy reason to help these people i'm our -- i'm sure the elected officials at the state or federal level will listen to that and the court is not prepared or equipped to say they make policy rather than the legislative branch.

>> what about the issue that the states clearly did not feel they had this -- >> literally bizarre. they had three years, they read the statute, the only reason they were confused about it was because the i.r.s. pulled a bait and switch on it. it said state and federal. if they'd implemented the law the state woufs known what the deal was in the statute. it's a little -- it takes a lot of chutzpah to come in and say ince since we changed the statute and caused 2/3 of the states not to have state exchanges that's an argument in favor of our regulation, which is what the government was saying. >> are you surprised by how the argument went today in any way? >> i'm never surprised by vigorous questioning by well informed and articulate justices because that's certainly the norm. >> are you at all concerned about this causing the insurance system to collapse as some people fear?

>> if the theory is that insurance premiums will skyrocket for everybody, that simply confirms my political point that that would mean not only people receiving the subsidies but people in low income strata would demand that either congress or the states do this. the difference is that it would be done through the legislative process rather than the i.r.s. hijacking the legislative process. thank you very much. appreciate it. >> i'm scott pruitt, the attorney general from oklahoma. as the attorney general in oklahoma i was a part of leading the first case on this in september of 2012. i do want to speak to the states' interests. but first i want to thank you to the hursts for their comments today, the courage it took to participate in this case and i think they should be shown appreciation for the courage they've shown. and i want to say thank you to michael who has shown great leadership, great accruemen,

great advocacy in this case. but as a state, the state of oklahoma, like 36 other states across the country, had a very clear choice to make and made a decision not to set up a state health care exchange this issue is not just about subsidies. as michael indicated, when you invite the subsidy into your state, you're inviting the employer mandate in your state and the individual mandate enforcement. s that comprehensive challenge based upon a single section of law. it goes to the very structures of the federal government's ability to enforce the law. when states made the decision over the past -- the last couple of years, whether it set up an exchange or not, they made the decision understanding the policy consequences of subsidies, employer mandate penalties and the enforcement of individual mandate. the policy implications of a victory are significant. as michael indicated, both the state and federal government stand ready to respond to whatever policy implications may occur by the court doing what the statute intended, doing exactly what the statute says which is if the state chooses to set up an exchange. you have 37 states who said no

and that should be respected. it is not a power of the inch r.s. to disregard the plain reading of a statute, to offer a rule that they thue was inconsistent with the text of the statute. that's what the case is about today. this is an adherence to the rule of law. the argument that was presented by michael and the plaintiffs and the petitioners is spot on with respect to the text of the statute and the intent and decision that the states have made. thank you for the time today. >> my name is elizabeth wydra, i represent the members of congress who authored the law and more than 100 state legislators who helped implement the law and who support the obama administration's case. i'm join pid by neil, the former acting solicitor general. >> and a partner at hogan and logans. the court did what it does questioned both sides.

i told you yesterday i thought it would be a good day for ethe government, i would say it's an extraordinary day for the government with a magnificent performance by the solicitor general and questions that heavily indicated that the court is likely to rule in favor of the government. it's often hard to tell in oral argument. they're asking tough questions of both sides. but i have to say this is a pretty extraordinary day for the government. it began really about five minutes into mr. carvin's argument. my friend mr. carvin emphasizes what looks like a very strong point, the law says the words established by state in it to get subsidies. shouldn't that mean that only state-run exchanges have subsidies? within five minutes justice breyer said, hey, we're not reading the constitution, we're reading a tax code. it has defined terms and those defined terms quite clearly say that when the federal government runs an exchange it is such an

exchange just like the state one and should be eligible for the subsidies and when mr. barillo took the podium i think you saw that heavily hammered, the idea that this isn't an ambiguous provision, it's a provision that everyone understood at the time provide subsidies to both federal and state exchanges. >> thank you. i want to emphasize one of the points that justice kennedy made today which is that the law was written by congress to provide a affordable health care to all americans and to provide for state slecksability. but ironically, it's michael carvin and the petitioners' argument that would be coercive to the states, not respect the states' choice in this matters. congress specifically aloud for flexibility for states to set up their own exchange or to allow the federal government to run those exchanges in their stead. we believe that if the court

follows the plain text of the law, if they follow their clear precedents on the idea that you read a law in its entirety and in its context justice kagan made very strong points about the need to read the law in context, it's clear that tax credits are available to all americans no matter which state they live in, no matter which exchange new york matter which entity runs the exchange in their state. we saw members of congress in the audience and they know very well what they wrofmente we filed a brief in the case indicating to the court that everyone at the time understood the law to allow for tax credits regardless of whether the state or federal government facilitated exchanges and even opponents of the law, you know congressman paul ryan was in the

audience today he was on record during the time of enactment saying there wasn't any difference between state or federal run exchanges and that what mattered was your income eligibility for these tax credits, not who ran the exchanges. we believe it was a great day for the government and we are very confident in the results. >> just to pick up on one point elizabeth said, mr. barrilli mad an important point when he said these parts of the act weren't passed mt. middle of the night. they were things that had been debated for months openly in committee and not a single member of congress adopted or said a word about what these challenges are saying today. this that novel interpretation discovered as justice kagan said a year and a half after the law was enacted. it's not something congress had in mind at the time of the act. >> how worried were you by justice kennedy's question? >> i think it goes to the absurd interpretation that the petitioners are asking the court to adopt. it makes no sense that congress would have written the law to coerce the states when they were intentionally trying to give them a choice and also that they would have tried to coerce the states in a way that no one understood to actually be

coercing the states at the time. it's not a good to threat if you don't articulate the threat and no one understands there's a threat being made until a year and a half lit -- later. i was herltened by his taking seriously the concern to the imbalance in state and federal relationship that would result from the interpretation being pushed by the petitioners. >> i suspect the government was hardened by justice kennedy's question which said if your interpretation is adopted, won't that really unconstitutionally coerce the states? but more heartening was the combination of justice kennedy's question read against justice kagan's preceding question which was, hey, if congress is trying to coerce the states why would they do it in this obscure provision about coverage? that's not the way to do it system of it really does look like a gotcha game that the challengers have brought today with no gotcha ultimately at the end of the day. >> let's say for your point of view -- \[inaudible] >> that's beyond what -- i'm the

lawyer so i'm not going to get into that. >> but we go do have studies showing there thereby disruption to the health care marget as a whole. economists have filed briefs noting there would be a death spiral resulting and you know as solicitor general said today it's beyond belief to think that this congress would do something to fix it. >> what does that mean? literally was what does it mean to the average person in california who happens to be covered by the exchange there? >> well so the question regarding the death spiral that would result in the states that idea that costs would rise people would become uninsured and you know, we have experts filing briefs on this matter you know, literally quantifying the number of people who could lose their lives as a result of losing coverage if the tax credits are taken away. >> but they wouldn't be taken away in states that have

exchanges, what's what -- that's what i'm asking? >> you have to read the expert briefs with the economists and experts who have weighed in with the court. everybody who has a stake in the health care system, doctors, patients, nurses, insurance companies, hospitals have filed in support of the government's position in this case and in support of the availability of tax credits. >> let me say one word about this. i represent the american hospital association. they filed a brief in this case with the opening line saying the health insurance of nine million americans plus are at stake in this case, all potentially taken away. these are people who have never had insurance before, many have never had insurance before, for the first time they've been able to have it under the affordable care act and if this novel interpretation by the challengers is accepted by the supreme court, it's going to be devastating for the consequences to americans and their health. we do have an expert -- >> we do have an expert who can speak shortly about the death

spiral consequences. my name is elizabeth wydra. i represent the members of congress and state legislators who filed a brief in support of the administration. i work with the constitutional accountability center. >> i'm -- what? i'm dr. emanuel. i happen to be on the brief with the economists system of let's just explain the death spiral scenario. imagine that you have 11 million people now in the exchanges losing their subsidies and you have the simultaneous requirement that you cannot exclude people or you have to sell insurance to people who have pre-existing conditions who are likely to be more expensive. the healthy people who are getting subsidies, who will no longer be getting subsidies will stop buying insurance. you're going to concentrate the people who are buying insurance are as those people who have

pre-existing conditions and are likely to have high medical bills and will drive up the premium for insurance. more people will exit the marget because the premium will be too expensive for them and you will then again raise the premium because you'll have very sick people buying insurance policy. the consequence is an unsustainable market. this is why the insurance industry does not oppose -- oppose this is position. it will kill the insurance market throughout the states without a state-based exchange. it is very destabilizing. it's been well establishes because no exchange worked without subsidies before. we tried exchanges before. and they would not work. and i think as correctly put by solicitor general verrilli, the federal exchanges would basically be a shelf game. they wouldn't -- they'd be a shadow exchange no one would guy and no one would sell on those exchanges. >> what would be the ripple

effect in other states? >> it probably -- insurance is done state by state. they would be relatively insulated but you're talking about 34 states in the majority of the united states. >> despite the fact that many insurance companies and hospitals are multistate or interstate corporations, again it wouldn't affect -- >> well, you can still have insurance in states and a lot of states have players that are only in their state. a lot of blue cross and blue shield plans, for example are state-based. but it would, the insurance companies are very, very nervous about this because it would totally destabilize the system. let me make one more point. one of the reasons congress can't easily solve this problem the way justice scalia suggested is there is a big scoring issue. you would have to find about $350 billion to actually remedy the problem based on the way the congressional budget office scores this. and there is no way of finding $350 billion to solve this problem. it is a very difficult problem.

not trivial as justice scalia suggested, they can just pass a law and say the federal exchange works in the state. there's a huge cost to that monetarily because suddenly if the subsidies aren't part of the affordable care act, you have to find the money to pay for these new subsidies in a new way. >> what was your first name? ezekiel emmanuel. >> i thought the government did an extraordinary job. i agree with neil. he provided a coherent explanation to why the interpretation they're offering is the right one. thank you very much.

>> it was directed to set up an exchange. i met up with governors starting day one. we talked about it. i don't think they were ever against it if the governor chose not to do the exchange. their citizens wouldn't have subsidies. >> you are arguing that it is a matter of semantics? >> it is semantics as established by the state seems be the hinging language. but there's nothing else in the framework that would suggest this would be a two-country business. i thought that again they were very clear -- i read the brief side. i saw the ruling. i mean, i thought the solicitor general did a very good job refuting at every step along the way why this could never have been the intent and particularly the notice provision is very strong. over three years there never has been -- if you don't do this this would be the

consequence. >> you've had these conversations with governors about prior to -- >> no, no, no. i said that we had -- the conversation as governors starting day one is what we've had. it was never instant. i sat through a lot of congressional testimony. no one ever suggested that only if a state established an ex-training -- exchange with their citizens. >> are you confident from the mandy case? >> i actually felt pretty confident about that too. i just think that this congress passed the bill in 2010 intended for a national program, nationally insurance companies have to play by different rules. nationally citizens are entitled to subsidies and nationally there's an individual responsibility. it doesn't say only if you choose not to set up these

exchanges would happen. the other pieces would stay in place. and the rest would fall back. i really have to go. i'm sorry. i really to go. >> next, a discussion about the operation of the affordable care act and the possible impact of the supreme court decision. then president obama at a town hall meeting with college students in south carolina. after that another chance to see the oral argument in king vs. bierwell on the constitutionality of the health care law. on the next "washington journal" bloomberg news reporter takes a look at the february jobs number and the overall health of the economy. william yeomans discusses ferguson missouri. an eugene o donald talks about the task force on 24-hour

policing. we'll be taking your calls and you can join the conversation on facebook and twitter. "washington journal" live at 7:00 a.m. eastern on c-span. >> here are some of our featured programs for this weekend on the c-span networks. on c-span's 2 book tv saturday night on "after words" former marine and war current david morris on the history of post traumatic stress disorder that affects 27 million americans including himself. >> and former navy seal scott taylor argues that the obama administration is hurting our national security. and on c-span 3 the commemoration of bloody sunday when 50 years ago voters rights advocates began a much in selma, beal. on saturday beginning at noon eastern, we're live from selma

with your phone calls followed by the commemorative ceremony by president o boom and and congressman john lewis. and we go to the church. find our television schedule and let us know about the programs you're watching. call us at 202-626-3400. join the c-span conversation. like us on facebook. follow us on twitter. >> next a discussion hosted by the alliance for health reform on the affordable care act. panelists analyze the expansion of medicaid, enrollment in health insurance marketplaces and what might come out of the king vs. birwell on health insurance subsidy. this is about an hour and a half.

>> good afternoon. my name is ed >> good afternoon. my name is ed howard. i want to welcome you on behalf of our board of directors to today's program on the affordable care act the a.c.a. we're joined in bringing you this program by the kaiser family foundation, one of america's most trusted voices in health policy. and i want to give you a special thanks for braving the elements and the travel uncertainties to get here. if you've decided that staying home was the better part of valor and you're watching on c-span, welcome to you too.

i'm glad you're safe. early in every new congress in recent years anyway, the kaiser family foundation and the alliance had partnered to sponsor a series of briefings for hill staff and others on some of the most important health policy topics that are the center of debate here in congress and for those of you trying to convey their views on these topics as well. after today's -- excuse me after today's briefings on the affordable care act, we're going to be conducting three more of these primmers that will be held not next friday but the two fridays following that the 20th and the 27th. then on wednesday april 1st on medicaid medicare and health care costs respectively. mark your calendars. we'll see you back here.

>> as for today's program, one might ask why there's a need for a primmer on a law that's a few weeks short of five years old and has been in the spotlight virtually every day since from the day it was signed into law. >> there are at least two fairly large reasons. one is this is a complicated law as some of you may have found with lots of different provisions and even without major congressional action to amend it, it's -- none of those provisions have changed since its enactment. secondly bright people come and go and sometimes come back here on the hill. even when they say they're duty shifts, they need to understand society or something like that. and we're hoping to help you understand the new language. so we're going to dig into the

affordable care act. that's the patient protection and affordable care act to be problem, sketching out the main parts of the law. we're not going to try to give you arguments for or against either the provisions or the law in it's totality. but we want you be better informed about what the law actually says. the briefing comes at a timely juncture. we just included the second open enrollment period in the individual marketplaces. and we've heard oral argument this is week in the supreme court on a case that could radically reshape the scope of the. a c.a. maybe even threaten its continued existence. >> we're pleased to have as i mentioned as a co-sponsor of today's briefing the kaiser foundation tonses of information about tough policy

topics. the executive vice of the president and herself one of the leading health policy experts in the country. diane? >> thank you, ed and welcome to all of you. i want to share with ed my appreciation for you braving the weather to be with us today. we weren't quite sure whether the audience would have to be via media as opposed to in the presentation but we really welcome you today. i wanted to really emphasize ed's point -- i noted we're going to talk about what the law actually says. but we're not going to talk about the supreme court debate over state based exchanges. those topics will come up much later. what we want to do today is make sure the basic framework of the law is clear and that you have an understanding of whether to dig deeper when you want to look at other issues.

>> so with that, let's start. we have a lieutenant to cover in a very short amount of time and all the speakers have been given really short time frames to talk about a very complex set of changes that really has revamped much of our health care system. ed? >> terrific. thank you, diane. just a little bit of housekeeping before we get started, if i can. first of all if you are in a mood to tweet, you can see the #aca 101 on the screen there. feel free to make use of it. in your packets you're going to find some important information including speaker bios. and you may have noticed that one of our speakers char lean came dressed as an empty seat today. charlize's flight back to d.c. got canceled. and her flight this morning was delayed.

so since char lean was scheduled to cover the a.c.a.'s changes to medicaid and chip, we are very lucky that we have on the desk one of america's foremost experts on that program. diane rolland who happens to chair as many of you know the cade and chip payment and access commissionment. she's graciously agreed to fill in for char lean. there will be a video recording of this briefings. you'll be available on monday or tuesday on the kaiser website. . and thanks very much to the foundation for taking care of that very important aspect of our work. a few days later there will be a transcript that you can look at on the alliance website. those of you watching on c-span, you may -- if you have acksose to the community go to

oh health.com. you can follow along as we go. and for those of you in the room you can go back to the materials all of the presentations and as i mentioned the biographical sketches as well. at the appropriate time those of you in the room can ask our panel a question by filling out the green question card and it will be brought forward or you can go to a microphone. at the end of the briefing there's a great organization that we could improve these briefings and respond to your needs as well. >> so we have a great panel. and we're very pleased to start with jennifer tolbert. >> she's the director of state health reform. and associate director of the keiser commission of in

ininsured. as such she's been playing close i tension with how states are implements and its cover provisions. jen, thanks for joining us today. >> thanks, ed. and thanks to all for committing. it's a pleasure to be here. so i'm going to start with just a broad overview of the main coverage provisions of law and my fellow panelist will dig a little deeper on each of these issues. just starting off. one of the main goals to the a.c.a. is to provide insurance and improve the quality of care. it does that by building on the base of our om employer -- of our current system which is supported primarily through the employer sponsored by -- they

cover a more low income adult by raising the eligibility thresh hole to 138% of the poverty level. the it is $11,170 for an individual in 2015. it also creates the new health insurance marketplaces where exeem go to shop for and enroll in private insurance. these marketplaces do you think they have previous subsidies that are available without access to another coverage and who has incomes between 100 and 400% to make that coverage more affordable. >> and then all of these -- the expansions are made to work by health insurance market we form that prohibits insurers from denying people coverage because they are sick.

it also imposes new requirement on individuals to purchase hale insurance with some exceptions and for a large employ year to provide affordable coverage to their employees. so turning to the marketplaces -- these are online marketplaces where consumers can -- can apply for. shop around. learn what plants are available to them using standardized information. and i actually enrolled in coverage. the pre yum subsidies lowered the cast to many. people with north carolinas between 100. i wanted to be another 50% and that is the out of pocket cost in the form of deductibles and co prashes.

they would splish a mark places. but it did create a fall back provision whereby the federal government that did not setth sit it up. we have 16 states and the district of the columbia that are running their own marketplaces and 14 of those states the marketplaces are fully state run. while three states are nevada, new mexico and oregon. they're relying on the federal health care.government went. i'm seven states have established a partnership marketplace where they are responsibility for the marketplace but then the state is sharing in some of those responsibility. and that lead, that have defaulted to a fully federally run marketplace. now these decisions by states on how to set up the marketplaces have taken on

renewed importance as a result of the latest as i mentioned. >> in the. that is before the supreme court. the playoffs are. zes can only be provide through states that are running their own marketplaces. >> so it would have effectively invalidate the subsidies that are centerly made. in the 14 states-place. i think is we'll talk about it implication starring her presentation. >> turning to medcaid. the idea of the law that is that all stairs would exchange the supreme court rulings. effectively made the decision whether to expand medicaid a

state option. so currently 29 states including the district of columbia have expanded their medical program. nornt can stop at any time. that means the exchanges under a discussion in a number of states. and while most of the 29 faint states that have dropped the expansion have done so the through the process which is the standard process for making her comfortable through the med kay program. you received 11 waivers to implement the -- and arkansas is enrolling their medicaid expansion population through qualified health plans. and you think diane will talk a little bit more about this, as well. >> so turning now the impact of the a.c.a. and what we know

today -- so the a.c.a. does provide affordable coverage options for many. according to analysis, data i worry about 55%. estimated to be eligible for medicare of -- so again overhalf of those who were not sure in 2015. was he able to access affordable health care actions. the implement men of the coverage in the a.c.a. the decisions by 22 states not to expand medicaid has left many poor adults in those states without k says to affordable coverage. rewiment they're about. in the states that have not. you have two high to qualify for medicaid in their state

based on kirnt el jinlt level. >> yep they are too poor to qualify for cities in the health insurance marketplaces. >> and as i a result they have remained uninsured. we refer to this as the coverage gap. and you can see that. that's the orange slice. in addition. now do they argue. in fact, to purchase coverage at all. here's two of the market plays. so they are left out of the ex-pangeses as well. so millions of people have gained coverage through he is government. so as of february 15th, which was the official end date of the second open enrollment period. now, we -- that number has

increased already because of exchanges that were granted to people who >> in line as of february. and we expect it. due to announce this government the federal government and most have a special enrollment period. they oh a penalty for not having your sheerns when they file tax this is year. . you sign up for coverage that point. so i should note that and over half of people who sibed for coverage during this ecked enrollment period. we're new. about 40% renew their coverage from 20814. >> there were 10.8 million people who gained.

since we compare through a baseline beard. he wants the coverage expansions that went into affect. we're stronger and in states that cawsb. in states that exchanges. only about 7%. but one of the more important sheeshes of the success of the e.f.a. is the impact on the ininjure driss. i because of the lag and available data. initial day at from the through june of 2011. . there's been a significant drop in the inin. . the most important or bigger

dropses han been -- the poor and near fall. among his panges and black awell as states that have adopting and just very briefly. we are to using can the coverage expansions and the f. a. dds impact on coverage. it continues a number of provisions that reform the hillary system. as well as to expand the capacity of the health care work. and to acome dat. they created the innovation center at the center for medicare and medicaid services and. this. is changes such at providing

cord nair cares with high medical needs. as welt as pain providings based on a quality as a quality. it a bundle payment. and again on the capacity side it does a lot to increase payments to pry mer health care pro ciders. it's i makes investments and training a few health care providings. . and so with that, i will turn it over to sabrina. >> thanks very, general. >> sabrina this the case, we could say insurance shaurns reforms.

and you can ack as d pro veder. her maim area of interests these days is a.c.a. reforms to health insurance emphasizing prems. we've asked her do can chair the interaction monk health insurance market reforms and the requirements that jen mentioned that individuals have coverage and the subsidies to help make that coverage for affordable. >> is britaina. >> thaw all for braves us the ice and snow. as they indicated i've been asked to talk to you about three of the sensetial legs of the afford fobble care act. to the uninsured and make sure ha the coverage makes. i will talk to you. . or also called the mandate and then also the funniest system

that's available for people to buy that private coverage and make it more affordable. the first the insurance market reform and generally when you -- when you sigh the forms pulling and has taken on individually. they seen to be very popviss. they were implemented in two primary phases. the first phase was implemented just a fun months after the law. it included a sweet of reform that include thing that requires more. up to age the 26 to stay on their parent's policy. an annual dollar lift. and for people who feel that -- you know health plan is made the

wrong decision to coverage a benefit or -- january 1st 2014 was when i first saw the lift. and it -- trying to keep away the people of high risk. in other words that had health problems or issues and only keep the healthy people on a roll. so first and mother most health insurances are no longer to deny based on their cheating standards. >> they are also not allowed to impodse anymore. this is called preexisting condition. this was a family common practice before the affordable care about. you signed up for a policy. the company might say we'll cover you but we see yous ma sbfmenter or you had cancer five years

ago and you're better now but we're not going to cover anything related to cancer. those kinds of exclusions are no longer permitted. the law also requires companies, big insurers to cover our basic package on what's being called essential benefits. they include things like hospitalization, doctor visit, lab tests drugs maternity care. it's designed to be modeled on your typical employ year based plan. everybody can have a basic standard of health benefits. they're also not allowed to charge people more based on their health status or their jend herb. and they have to tap into people's cost. it was a massive cost. they are required to offer college that are commonly found

the precious medal here. bron's the least coverage comping an average of 60% of cost and platinum being the but, of course to get these insurance reforms and ensure that we have a sustainable market with affordable premiums, the law included this individual mandate. the second leg of the stool. you have to maintain coverage, or pay a penalty or tax. for 2014, the penalty was the greater of $95 or 1% of your household income minus the tax filing threshold. h&r block came out with an analyst saying that on average the penalty is $75. -- $175

because the law says the greater of $95 or 1%, in fact, most people's greater of is that 1%. people can get exemptions from the mandate. you can get an exemption if there is no coverage that is affordable to you. affordable is defined as a percent of your income. if you are not a citizen, and therefore not eligible for subsidies. and if you fall into coverage gap. if you are going to require people to maintain coverage, you have to have a place for people to buy it and a place for them to get it at an affordable price. jen already talked a little bit about the exchanges or the market place, so i will not go into great detail. the marketplace is designed as a

way to have or managed competition so they can compete on price and quality, and people can really see very clearly the differences between plans on dimensions like benefits and costs. the marketplaces are the only place these and get the financial assistance that the government provides. first therefore most is the premium tax credits and these are sliding scale subsidies based on your income between 100% and 400% of poverty. the slide shows how they are somewhat progressive and how they allocate. subsidies are paid to the second lowest cost silver plan available in your area. you can take your tax credit either by, or by, pay a little more, or by down to perhaps of bronze level plan. and garner more savings.

however, if you choose to do that, you need to be careful because for people between 100% and 250% of the federal poverty level, they are eligible for something called the car sharing reductions or subsidies. -- cost-sharing however, you only get to take advantage of those if you sign up for a silver level plan. if you buy down to the bronze plan, you lose the advantage of these subsidies. i think that we is they boost up the value of the silver plan by lowering the deductible and cost sharing so you have to pay less out-of-pocket during the year than you otherwise would. the federal government reimburses ensures for the cost of those subsidies. unlike the tax credit, which if

you missestimate your income when you sign up for coverage, you have to pay back any extra tax credit that you receive, the cost-sharing subsidies do not have to be reconciled at text time -- tax time. you do not pay those back. lastly, i would just say a couple of words about king versus burwell, which is on everyone's mind this week as the supreme court heard oral arguments. in case you have not been following the litigation so closely, the crux of the issue is that there is a statute that says the federal government can provide financial help to people who buy coverage established by the state. the king plaintiffs are arguing that because 34 states have exchanges run by the federal government that the tax subsidies provided through those

exchanges are illegal. it is important to note that almost 90% of people that have purchased insurance through the exchanges armor s are receiving subsidies. if the king plaintiffs prevail and subsidies through the federal exchanges are deemed to be illegal, you have vast majority of people buying policies through these exchanges, they will no longer be getting subsidies. according to one study, these individuals will face on average a 255% premium increase. the government, of course, in its argument to the court is saying that if you look at the full text and context of the statue, it's pretty clear that congress intended for all eligible individuals to receive the subsidies, no matter who is operating the exchange. that affects the way the statue is structured.

if you're eligible for subsidies because of your income, it does not matter who runs the exchange. the bottom line here is that if the plaintiffs prevail, it knocks out the third leg of ours stool, making financial assistance not available in 34 states. importantly, it significantly weakens that second leg of our stool, the individual mandate. that is because most people who are currently getting subsidies, once those are taken away, coverage will be unaffordable for them and they will qualify for an exemption from the individual responsibility requirement. if the plaintiff prevail, we lose two legs of the stool. with that, i will turn it over to paul, i think. >> thank you very much, sabrina.

paul fronstin is in fact our next speaker. he is a researcher at the employee benefit research institute. he is here to remind us that most working age americans get coverage through their jobs. the aca effects that coverage too. >> you have already seen two basic presentations and mine will be -- i will talk about the basics of employment base health benefits and how it is affected by aca. i was at someone else's presentation on wednesday and i sat through their presentation which was two hours long. there's just so much to cover on this which we do not have the time to do it justice, any of us.

there are some extra slides in the packet for you to see during your own time. one of the things to keep in mind is the environment before the aca passed and that is the percentage -- as jennifer showed on her first slide, and employment-based coverage is growing on. before it passed, that was falling. by 2010, it was down to 69%. when you look at where workers get their coverage from, we're at the point now where only 50% of workers get coverage through their own job. i don't know if that some psychological level that we made a breakthrough, and what it means if we do, but i think it is important to point out. what's happening now with the labor market now employment being at 5.5%, you should not be surprised if you see this downward trend reversed itself

in the near future. the other thing to keep in mind is what's happening with benefits being offered. what workers were seeing when they were offered health benefits. you saw increasing deductibles increasing copayments, increased use of 4-tiers. there were some exceptions of this cost shift onto workers whether it was on wellness programs, what medicine, lots of changes going on with benefits offered to workers. some of this was already covered. the next slide goes through a timeline of all the different things that affect employment

based coverage. you have the slide so i will not go through them individually. you see 2010 was the year -- a big year. 2014 was a big year. now through 2018, you have the tax on high-cost plans, also known as the cadillac tax, which we will talk about more and a few moments. just a couple of items to go over. one, the employee shared responsibility provision, i'm assuming you are all familiar with this, either the employer offers coverage or they offered $2000 per full-time employee penalty. that's the piece to really focus in on. an employee that does not offer coverage does not have to pay a penalty if none of the employees

receive a tax credit. that has implications for the supreme court case as well which we will talk about in a minute. currently, employers must offer coverage to at least 70% of their full-time employees. in 2006, that goes up to 95%. employeesrs with 49 employees are fewer are excluded. only employees with 40 plus hours are included in the assessment. in cases of employees of businesses with -- there is a provision to look under whether or not businesses are under common control and if businesses would be subject to the penalty. this was moved to this year for employers with 100 or more full-time employees and next year, it takes effect for employers with 59 to 99

full-time employees. keep in mind the environment before the aca past. in 2009, when you look at employers affected by this mandate, those with 90 to 99 workers, 95% of them were already offering coverage. in some ways, this provision isn't necessarily a mandate to offer coverage, but a mandate to give an incentive for employers to continue offering coverage if they already were. it also affect employers in that not all of them offer coverage to all of their employees, or their dependents, and then you have all the other provisions,

such as the requirement to offer affordable coverage. that took effect as well. and those are some of the qualifications here. for example, the definition of a full-time worker change. it is now effectively 30 hours or more per week. employers must offer coverage to not only employees, but also dependents. dependents include children up to the age of 26. dependents do not include spouses. they must also offer affordable coverage. one of the things to keep in mind is this family glitch. basically, affordability is determined by the premium for employee only coverage. it is not determined by the family premium. so, an employee may not able to afford the family premium, despite the fact that the

employers are providing an affordable package. when the employer offers coverage to the family that is not affordable to the employee spouse and children are not necessarily eligible for a tax credit in the market. they may be exempt. they may be eligible for medicaid or chip as well. it has been estimated that between two and 4 million sauces and children may be affected. -- spouses there is a $3000 penalty that takes effect when the employer does offer coverage by at least one employee off out because coverage is either not minimum value or not affordable, and goes to the exchange and get subsidized coverage. if no one opts out, there's no assessment. when it comes to king versus burwell, if the supreme court rules that subsidies are not allowed in federal exchanges that affects employers. employers only have to pay the assessment when an employee gets

a tax credit. if it is deemed that that employee in these 34 states cannot get a tax credit, then essentially be an employer does not have to offer coverage because there is no penalty because their employees cannot go out and get a tax credit. there are all kinds of other issues that,, especially for employers, the operating across state lines and what this may mean for them. there's the small business health program, the shop exchanges. one of the advantages of this is that it increases choice of carriers and plan options for both employers and workers. it allows employers to set a fixed or defined contribution. it was delayed until this year. in 2016, it will cover

businesses with up to 200 employees. in 2017, states may allow employers with 100 or more employees into the shop exchange, but that is at the states' discretion. there are tax credits available to small businesses. if a business has less than 25 employees and an average wage under $50,000, those tax credits can cover up to 50% of the employer's contribution. if the employer contributes at least at least 50% of the premium, credits are available. there are wellness programs in the aca. and allows employers to provide financial incentives, as much as 30% of the total cost of average when tied to participation in a wellness program.

hippa allowed for 50% of interventions designed to prevent or reduce tobacco use. financial incentives can come in the form of premium discounts, cost-sharing reductions or other benefits. finally, the cadillac tax takes place in 2018. it is a 40% excise tax on the cost that exceeds these levels. there are higher threshold for plans that cover, adjustments for age and gender, and the mix of workers -- well, we have not seen exactly how that will take affect, as far as calculating the tax, it takes an account reimbursements, as well as employer contributions.

note, released last week, there was information from the irs saying that if the worker contributes to the reduction that is largely considered an employer contribution for tax purposes. as a result, that would be counted towards the threshold. there's all kinds of questions that still have not been answered yet because we have not seen regulations on this. the effective date is 2018. >> when talking about the threshold for applying the cadillac tax, if they exceed 10,200, how does that compare to the cost of individual policies through the employer at this

point? >> at this point, i think the average from the kaiser survey is 6600. if i'm not mistaken. obviously there are people up here who could correct me. 15,000 or so for family coverage. certainly there are some plans that are going to trigger it. it's not as straightforward as looking at the premiums. if you're counting if it is a contribution, that will boost up how many plans may be above that threshold. i think the issue is that premiums have been increasing faster than inflation, though the gap has shrunken recently. the cadillac tax is indexed to overall inflation. after the first year. the expectation is while there may not be any plans affected by the tax initially, over time more and more plans will be affected if they do not make changes to avoid it.

>> paul is exactly right. diane's organization is a cosponsor of the definitive survey of employer-based coverage. the kaiser survey. a renaissance woman, diane is stepping in to pick up the thread of questions about medicaid and chip. i should say, we do not have her slides in the packet. we will have them on our website after the briefing. diane, thanks very much for being so flexible today. >> you do not have the slides because they were done at 10:00 a.m. this morning. [laughter] medicaid clearly, as jim's overview noted, is the key building block within the affordable care act. one of the program is that if then around for 50 years. it has a lot of other changes

that were embodied in the affordable care act. today, i will just go over some very high level changes. i urge you to come back for the medicaid 101 to go into greater depth. clearly one of the main things it was doing was extending coverage to young adults. it was also seeking to water it was also seeking to water nice the way that eligibility happens. to streamline the way determination was made, and the way income was counted. it also provided substantial federal funds to the state to help them put in place the expanded coverage. as well as supported a wide range of changes in the delivery system, not just in care, but long-term services. the key piece that the affordable care act was seeking to do was fill in the gaps of eligibility that had occurred

for medicaid, especially for adults. one of those key provisions was that medicaid was never available for adults without dependent children, unless they qualified on the basis of disability. the affordable care act change the way medicaid eligibility would be set to be based solely on income and not the characteristics of the individuals. and it was going to try and put in place a uniform standard across all states to eliminate some of the variations and who was eligible on the basis of income to 138% of the poverty level, or around $11,000 for an individual. that was because of the tremendous variation that occurred and who was eligible for the program by income, as

well as category. here, you see the medicaid program together with chip. it provides very broad coverage for children across the nation virtually all states cover children at at least 200% of the federal poverty level, as well as pregnant women. there was a great disparity in the income eligibility. the affordable care act sought to fill that, but the supreme court, not in the king versus burwell case, but in its previous case, decided it was course of on the states to require them to expand coverage, even in the early years. there was a full federal dissipation, and it gave states the option to not provide coverage to the expanded adult

situation so that would have been some of the working parents above the old eligibility level, as well as the childless adults. this creates a coverage gap between medicaid eligibility standards and eligibility in the marketplace. as one of the glitches that occurred when the supreme court intervenes and did not change other aspects. individuals under the federal poverty level would all be covered, so they were therefore left in a eligible for gaining access to coverage in the marketplace subsidies that have been talked about earlier. anyone below the federal poverty level, who was not already eligible for medicaid by the old standards, was left without coverage. those between 100% and 138% of

the federal poverty level could gain coverage in the marketplaces in the states. what you see is that in the states that expanded medicaid, there is a very nice flow -- childless adults get coverage through medicaid and then they face into getting coverage from the marketplace if their income goes up. parents are covered equally. children have higher coverage. in the states that did not expand, those who are childless adults below the federal poverty level have no coverage option. those who are parents can be covered if they meet their states very stringent, early income eligibility levels. sometimes it is 70%, 25% of

poverty. many states they did not a fan had the lowest coverage levels. if they were a childless adult they were in eligible. then, they fall into the coverage gap, and once they earn enough to be over 138% of poverty, then they can go into the exchange, or between 100% and 138% they can gain exchange coverage. children, again, because of coverage with chip and medicaid, remain covered at much higher income levels. nationwide, as a result of the trade to states that not expanded coverage, we see about 3.7 million low income adults

fall into this coverage gap where they are too poor to go into exchanges. many of them fall into the southern states. you see in states that have the highest uninsured rates, some of the highest poverty rates. they are the most limited coverage for the poor. now, an addition to the coverage, which has gotten all of the attention in terms of medicaid's choices, every state did have to modernize and improve its application and enrollment process, and try to coordinate that with the federal or state-based exchanges.

you see, i great deal of effort put into replacing paper applications, in person applications, places where there was no data exchange about eligibility to try and have this vision of no wrong door, anyone can go and apply. simplify the way in which they get through, try and really get the doors open so the emerald and processes more available. as a result, even in some of the states that did not expand medicaid coverage, the process has become more consumer friendly for people already eligible.

we have seen increases in coverage in those states of the people who were previously eligible, but not enrolled largely due to many of these improvements in the way the process works up front. second, most of the states have been seeing -- that have expanded coverage, have seen real benefits to the population. reduction in the number of uninsured. these have been particularly important among the low income population and expansion states have seen greater reductions in the uninsured, then obviously occurred in non-expense and -- non-expansion states. increase state savings in the expansion states, as they began to provide less uncompensated care, move some of the other services that had been provided to the indigent population to medicaid coverage, and increase stay economic activity. in addition to trying to really

focus on getting the coverage right, and making the process seamless to gain the coverage that they need, the aca also thought to improve what happened after you get coverage to improve access to primary care services, to improve the way the health system works for the low income ovulation, and to try and develop other ways to provide services, especially to the population in need of home and community-based services as an alternative to long-term care and nursing home facilities. a two-year booth has unfortunately expired, though some states have kept them in place. it had invested heavily in expanding community health centers so there would be facilities to take care of the new lely insured population. and they try to develop, within medicaid and medicare and the private sector, more patient center is an accountable care models being tested in many areas.

and you options for the elderly and disabled population to be able to control more of their home and community-based services and options for care. we are really seeing at the end of the day, both a coverage expansion and medicaid, but a real reform of the ministry of structure, especially for determining eligibility and determining how to get people connected to manage care plans and other health system reforms. so, medicaid may be 50 years old, but it is entering the next 50 years because of the aca as a much more modern and change program that is much more responsive to some of the ongoing changes in our overall health care system. outstanding question is what will happen to states that are still on the offense of providing expansion or not. many are seeking exchanges or waivers to come in with a different tilt to the affordable care act provisions so they can provide coverage to their citizens. the story is still out on where we will finally end up. i would only remind us that medicaid is health was phased in over many years. not everyone took up the arson when it was first passed in

1965. >> thank you, very much diane. one quick question for you too if i can. you mention the standardizing that the aca brought. what happened to the asset tests that were in place for medicaid recipients from the time that the law was enacted? >> as the children's asset tests were expanded, -- medicaid covers a substantial number of individuals who are elderly and have disabilities who qualify some through the supplemental security program,

and others through their provisions in the medicare program that still require the tests. >> i should also say, if i am over my time, i will say it anyway, the other provision that is one clearly coming to congress in any affordable care act was the children's program that has actually boost the coverage of children and the income eligibility levels for children. that was funded through the affordable health care act for the end of 2015, which is fast approaching. the requirements that states operate those programs and

continue the eligibility were intended to go through 2019, but congress is going to have to make a decision fairly soon, very soon actually about whether to extend the funding beyond 2015. as they extended, are they going to extend it is a straight up program the way it is currently structured or will they make other changes to it. we at the mac pack commission have recommended a two-year extension of the program just as it is, and has -- have also said that is important over the next few months, and in the next two years, if that is the length of the extension, to figure out how to integrate coverage for children into either the exchanges and to the medicaid program, or whether to continue the program as it is can -- currently structured as a middle

ground program. >> thank you very much. as you can and for from that response medicaid itself is one of the most complicated programs that we have going. let me reiterate, diana suggested that you plan to be here on the 20th of march for the specific primer on medicaid. if you have questions that you would like to have addressed by one of our panelists, you should either go to one of the microphones, or take out that green question card, write it down, hold it up, and we will bring it down for you. let me just take advantage of how long it takes you to position, spoke too soon. we ask everyone at the microphones to identify themselves and to keep their questions as brief as possible so we can get to as many questions as possible.

>> tony hauser, formally with cmf, last few years volunteer the affordable care act. one of the things i have seen over the past year or so is budget and policy priorities that have made it more clear for me. both consumers and advocates have comparisons to make in both deductibles, different co-pays there are quite a few different. i was overwhelmed by how many things they have to compare. i have seen one tool simplify that. i am wondering what solutions the panel has for that kind of dilemma that is confronting consumers who are signing up for the affordable care act. >> we will turn to sabrina. how many in the audience know what a navigator is?

good number, but nowhere near a majority. you might remedy that. >> sure, the affordable care act requires exchanges to establish a navigator program. navigators are responsible for conducting outreach and education activities to let people know what is available to them, and know what their rights and obligations are under the law. they also helped enroll people. they help figure out what they are eligible for, and what the gentleman indicated, it sounds like he is been serving as one help them figure out what is available to them, and what is their, and optimal plan choice. although the law does include some new standardization for health plans, and other words they have to cover the essential health benefits, there are still

some and norma's amounts of flexibility for the carriers particularly around cost-sharing, but also services. as a result, it can be overwhelming for consumers to figure out what is right for them. . the consumer checkbook has helped develop tools help people figure out their choices. we are hopeful, in addition to illinois more will employ those tools. other states are looking at greater standardization of help -- health plan options. narrowing even further, the kind of flexibility the insurers have, for example buried

copayments or deductibles for specific services. that may be something to look to the future. some states did it in the first year and the second year, but are looking to do it going forward now that we are past some of the hurdles. >> thank you. >> high, i'm dr. coplin, mi primary care physician among other things. one follow-up to his question, has there been any studies looking at whether the carriers are deliberately structuring their choices in such a way as to attract healthy people, and push deliberately away six, costly people since they are getting the same premiums for the healthy as the sick. my question was about employee sponsored insurance, and the requirements of the aca, how

does the benefit package compare because they have to cover the same benefits, or is it, can make employer get away with a much compare because they have stingier, less useful package. >> good question. >> i can cover the benefit design issues, and then turn it over to paul. one of the shortcomings as having 10 minutes to present three and i did not get a chance to cover all of the provisions of the affordable care act. one of them is a provision that prohibits insurers from using benefit design to discriminate against high-risk individuals. that said, there is not a lot of clarity about what that discrimination looks like, and there has been early evidence that some insurers have been doing what you suggested, which is trying to design benefits to discourage people from ensuring.

some insurers were recently sued because they put all of the aids drugs and the highest cost formulary tier, even the generic ones. it is really incumbent on the federal and state regulators to put out clearer guidelines about what benefit design is and then actually provide the oversight to prevent land -- plans from doing that. then i will turn it over to paul for the other question. >> yes, i think your question is about the essential health benefits and whether it applies to other plans -- >> and one other thing out-of-pocket costs. >> ok, we will get to that. it depends on the employer. for employers purchasing insurance through the exchange by definition may have to comply it depends on the employer. with the essential health

benefits. for those outside, they have to comply with a. for large self-insured employers, they still have to provide minimum while you -- value coverage. they have to cover 65% of something and there are guidelines which basically make sure they do not not provide hospital coverage, which i think was the big issue. if you look at what they were already providing, they were for the most part in compliance. i am not sure that that was a concern that needed to be addressed. as far as out-of-pocket, they have to comply with the same out-of-pocket as all the other plans do. >> the exchange plans? >> i believe so. or maybe it was the lifetime limits were removed and the annual limits as well. >> can i ask also -- it seems to me we have heard a lot about what people call the three r's. is there and after the fact adjustment if you end up with a

risk pool that you have sicker or un sicker -- unsicker than average? >> i do not want to hog all the time, but yes. that is a point. the health law provides a risk adjustment, a risk corridor, and reinsurance program, and all our three risk mitigation programs to help insurers take on more risk than they anticipated in the first years. the risk adjustment is a permanent programs, so if you get sicker people than a competitor, it is a rob peter to pay paul program. and the hope is it will encourage insurers to take on secure people, chronically ill people, but if they can manage

their care really well and keep them out of the hospital, they actually end up winning under a risk adjustment system. but that has not gone into full effect yet. and there's a lot of questions about how it will work. >> yes, ma'am. >> hello, i am a senior scholar at academy health. and i have a question about the funding schemes that were -- funding streams that were available before the aca, the 334 federally qualifying health planners and disproportionate share payments to hospitals. i believe that those were reduced or cut off because the presumption was everyone would be covered. i am wondering what the status was and what is happening in the

state, and what might still be happening for these uninsured? >> currently, the schedules have not gone into place in the administration is charged with trying to develop a formula for how they would be reduced over time. clearly, those provisions were put into the law with the expectation that all states would be expanding the medicaid program, and now that it remains a safe choice, it throws that kind of provision a little bit down the road to be fixed or look at -- looked at. the availabilities of community kind of provision a little bit health services and health centers, the 330 program, was substantially expanded by the affordable care act, and that is irrespective of which states have expanded or not. there has been a real infusion of assistance into many areas where the low income population live.

>> and, diane, you have dominion over the numerous cards that have been sent forward. >> so, sabrina, one of the first questions i would like you to explain in depth is the difference between cost-sharing subsidies and premium tax credit. just to clarify how those work together and what they are? >> sure, i will give it my best shot. the premium tax credits are designed to make your premiums more affordable. those are the upfront monthly payments you pay for your health plan. they're available for people at 100 and 400 percent of the federal poverty level on a sliding scale basis. basically you get your tax credit. you can get it on an advanced basis or you can wait until the end of the year and collected at that point. most people will get it on an advanced basis, with essentially reduces the amount of their

monthly premium payment. the cost-sharing reductions or subsidies, often you will see csr's, are available to people between 100% and 250% of the federal poverty level, and they are only available if you enroll in a civil lever -- silver level plan. these are designed to increase the value of that silver level plan by reducing deductibles and copayments. and again, with the tax credit they are provided on a sliding scale basis. it is 100%, 150% of poverty when you sign up for that silver level plan. it boosts the value of that silver level plan to, i think, 97% -- 94% actuarial value. that is really covering most of your copayments and deductibles, between 150% and 250% of poverty

poverty, it covers to 80%. so, again, making it a little bit more than a gold level plan and then between 200% and 250% it is slightly increasing the level of that plan to, i think 73 percent. thank you for keeping me honest. 73% actuarial value. it is actually -- you're eligible for the premium tax credits. your premium payments are reduced. when you enter into service, going to the doctor or the hospital, you're also paying less of your out of pocket costs . if that covers in-depth. >> jen, maybe you can comment, since this will be occurring in april, on the reconciliation process? >> yes, another key difference

between the premium tax credits and the cost-sharing reductions are the premium tax credits have to be reconciled because they are a tax credit. people who accept advance payment of those premium tax credits, they are based on what people project their income to be for the coming year. people who sign up in january project their income for 2015, what they thought they would make, and then come tax time in 2016, the amount of the premium tax credit they received gets reconciled against what they actually made over the course of the year. so, if they made more than they projected, they may oh some of that tax credit back, and they would pay it in the form of additional tax when they file their taxes. if they in fact made less income than they anticipated, than they would get an additional refund on their taxes. and so, importantly, the

cost-sharing reductions do not are not required to be reconciled in the same way as the premium tax credit. >> to follow up on discriminatory health packages -- to your knowledge, is there any data on the prevalence of those packages, particularly with drugs, and are there any lawsuits in either the states or the providers to prevent these discriminatory packages? health resources. >> thank you. >> to my knowledge there is no data on how widespread the potentially discriminatory benefit design is. hhs, i think, and has tried to

put out some guidance for insurance companies about what they would think would be discriminatory benefit design, but it is still pretty vague. to date, what has happened is you have individual organizations looking at these health plan benefits designs. and those can be pretty tough to get a hold of if you are not enrolled in the planned. so, we are aware of some lawsuits at hhs. -- at hhs, alleging the benefit designs are discriminatory. i believe some of those lawsuits have been settled, but my personal opinion is ideally, you would have the feds or the states giving clearer guideposts for insurance companies to prevent the practice in the first place, as opposed to waiting for it to be litigated.

>> this has been a particular issue in the state of florida and there has been some on depth -- in-depth look there at plan availability and some of the researchers at kaiser family foundation are looking at case studies that look particularly -- in-depth look there at plan at the drug benefit offerings for different plans inside different states to see of there are any patterns there that might be discriminatory. >> al millican, a.m. media -- depending on how the supreme court decides, how many people would you estimate are going to be affected by the decision? i was curious that all of you have -- if all of you would have similar opinions about that? >> when we look at the states in the federally run marketplace there are 7.5 million people

receiving subsidies in the state . so, the subsidies for those people would immediately go away. many of those people would then know longer be able to afford that coverage. the expectation is they would so, the subsidies for those immediately drop the coverage. but the implications go beyond that, because, as sabrina pointed out, when you take away the legs of the stool, the requirements that insurance guarantee, issue, and restrict rates based on health status remain in place. so, what you're likely to have happen in the state is what is referred to as a death spiral in the individual market. in other words, many of those people, young and healthy adults leaving the market, the people who are going to stay and do what they can to afford coverage

are those who need it the most those who are sick or. so what you will see an insurer's doing to the extent that they can is increasing premiums and possibly eventually without any changes made to the law, everyone are most people would be priced out of that market. it affects not only people receiving subsidies, but everyone purchasing coverage in the marketplaces in the states. >> and from the low income perspective, in those states that elected not to expand medicaid coverage, many of the individuals between 200% to 38% of poverty have gone into the marketplace and most of those are federal marketplaces. we estimate 2 million people who would be covered by medicaid if the states had expanded are benefiting by being eligible for coverage in the marketplace and most of them would lose that coverage as well.

>> and one other aspect, jen -- i'm thinking if you are in insurance executive in your trying to figure out what to do for rates you are going to file in 2016, you are facing a strange timetable, are you not? >> yes -- >> oh, i am sorry. >> yes, that is one of the difficulties. you have to file for 2016 five may 15 of this year. that will be before the supreme court hands down its decision. the rates have to be filed like current law, so the insurance companies cannot build into the rates the favor of the plaintiff. there is real concern they could be locked into a rate that does not represent the risk status of their pool for all of 2016 which i can tell you is making a lot of these executives

extremely nervous. >> one of the questions from the floor would be what is a possible plan b if the plaintiff prevails in king versus burwell, and "be realistic." [laughter] one plan would be for congress to clear the ambiguity and say that subsidies are available in the exchange, whether federally facilitated or state faced, but i will let my fellow panelists come up with a different plan b if they have one. [laughter] >> there is no good plan b. the problem is -- i am not a budget expert, but i understand it -- cbo will almost immediately readjust the baseline. if congress goes back to fix the language, that costs money in the budget, right? so, not only do you have a congress that is probably not

inclined to make a quick fix you also have the budget problem, right? it is also not easy for states at this point to on a dime establish a state-based exchange. there are significant costs involved. the cost to have state authority , which means getting it through your legislature, or even those that could potentially do it through executive order, there are questions about how you could raise the revenue, rate the exchange area there were a lot of unanswered questions. i do not see an easy or simple plan b at this stage. >> hello. my name is daniel. i wanted to ask a little bit about -- have you all studied what the aca does in terms of cost savings and specifically you had numbers about how states have seen savings as a result of medicaid and these insurance plans, but how much is really

from savings as opposed to the government giving them money and the states claiming that as savings, in that they are not spending the money and it is more the federal government spending the money? >> actually, some of the state income from programs that they have been operating for the indigent population, once that population gets insurance company -- coverage, they do not need to continue to operate that program. so, they are able to go to a hospital and have their care paid for through the program instead of the state having to come in and provide uncompensated care. some of the community health centers have been able to stretch grants that they get to operate care for the uninsured to now have more people with insurance to provide additional revenues for the health centers.

we need to remember there are still going to be uninsured populations because of the fact that many were excluded -- the immigration issues excluded some from coverage. there are others who will not have signed up for coverage, who need to continue to rely on some uncompensated care. but states have seen improved revenues from the fact that it generates economic activity in the state, and that gives the states better revenues, which helps offset some of the budgetary costs. >> thank you. >> thank you. >> thank you so much for presenting the breakdown of the 2015 open enrollment data. i was curious if you had any estimation has to to what percentage of rural residents

were involved in 2015 plans? >> i have not looked at this in-depth 42015, but there is data available from hhs by zip code. what we did analysis for 2014, enrollment in rural areas did like behind urban areas. there are a number of reasons for that. a lot of the people's signing up for coverage, especially those for the first time it needed the help from the sisters. sisters are easier to access in urban areas. i think they were efforts put in place during the second open enrollment. -- enrollment period in rural