The Supremes vs Obamacare: Act II What it Means for States and Public Health. King vs Burwell

Transcription

1 The Supremes vs Obamacare: Act II What it Means for States and Public Health King vs Burwell Daniel Derksen MD College Wide Seminar March 16, 2015

2 A Top Topic for Governors: Supreme Court Case on Health Law States eager to know what Congress, president will do if high court strikes down tax credits By LOUISE RADNOFSKY and JANET HOOK WASHINGTON If the Supreme Court overturns the Affordable Care Act s tax credits in most of the country, governors firmly expect the next move is Washington s. SCOTUS Hearings: March 2015 SCOTUS Decision: June 2015 February 22, 2015:

3 Legislative Branch - ACA 12/24/09 HR 3590 passed by Senate Patient Protection and Affordable Care Act v: /21/10 HR 3590 passed by House vote: /23/10 HR 3590 President signed PL (906 pages)

4 Affordable Care Act Titles TITLE V HEALTH CARE WORKFORCE Subtitle B Innovations in the Health Care Workforce Sec Increasing Teaching Capacity-Teaching Health Centers Dan Derksen MD Senator Jeff Bingaman

5 The Supremes vs Obamacare Act I

6 Act I: Supreme Court Upholds Affordable Care Act June 2012 Medicaid Expansion Tax Mandate Alito No No Breyer Yes Yes Ginsburg Yes Yes Kagan Yes Yes Kennedy No No Roberts Yes Yes Scalia No No Sotomayor Yes Yes Thomas No No Total Y/N Tax Mandate UPHELD Medicaid Expansion UPHELD* *States can choose not to expand Medicaid unduly coercive to lose all Medicaid funding if a state doesn t choose to expand Medicaid

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8 Gov. Romney Massachusetts Exchange Having 30 million people in this country without health insurance and having those people show up when they get sick, and expect someone else to pay, that s a Democratic approach. The Republican approach is to say, Everybody should have insurance. They should pay what they can afford to pay. If they need help, we will be there to help them, but no more free ride.

9 The Role of Think Tanks in Health Policy Heritage Foundation CATO Institute Competitive Enterprise Institute

10 Heritage Foundation Robert Moffit The real trick is to retain what is best in American health care while correcting its deficiencies and expanding upon its indisputable benefits. Massachusetts has done just that. Robert Moffit 4/12/06 YouTube video:

11 ACA THE TAX MANDATE 2015 tax penalty fee for individuals without coverage is $95 per person or 1% of household income, whichever is greater 2016 penalty is 2% or $325 per person 2017 penalty is 2.5% or $695 per person Large businesses >50 employees w/o insurance $2000/fte (after the first 30 FTEs) The most unpopular ACA provision!

12 SCOTUS Act II: King vs Burwell Health Insurance Exchanges Must Be established by the state ACA page 58 For the Plaintiffs Michael Carvin Failure to Establish Exchange. The secretary shall establish and operate such exchange within the State. p68 For the Government Solicitor General Donald Verrilli

13 CATO Institute Michael Cannon Are you 100% convinced it was Congress s intent to withhold subsidies in the federal exchanges? Sarah Cliff I m 100 percent convinced they meant to do that. Michael Cannon Meet Michael Cannon, the man who could bring down Obamacare.

14 Competitive Enterprise Institute On the subject of Obamacare This bastard has to be killed as a matter of political hygiene. I do not care how this is done, whether it s dismembered, whether we drive a stake through its heart, whether we tar and feather it and drive it out of town, whether we strangle it. Michael Greve CEI Chairman, 2010 Washington, DC CEI Donors: Charles and David Koch, Exxon, General Motors New Yorker:

15 Act II: Justice Anthony Kennedy if your argument is accepted, the States are being told either create your own Exchange, or we'll send your insurance market into a death spiral. Justice Anthony Kennedy We ll have people pay mandated taxes which will not get any credit on the subsidies. The cost of insurance will be sky high, but this is not coercion. Transcripts 3/4/15 King v Burwell at:

16 Act II: Justice Anthony Kennedy It seems to me that under your argument, perhaps you will prevail in the plain words of the statute, there s a serious constitutional problem if we adopt your argument. Justice Kennedy Justice Anthony Kennedy Mr. Carvin: The government never made that argument. Justice Kennedy: Sometimes we think of things the government doesn t. (LAUGHTER) Transcripts 3/4/15 King v Burwell at:

17 Act II: Chief Justice Roberts Mr. Carvin, we ve heard talk about this other case. Did you win that other case? (Laughter) Chief Justice Roberts Transcripts 3/4/15 King v Burwell at: So maybe it makes sense that you have a different story today?

18 Federal Government Facilitating Health Exchanges in States Prediction: ACA Upheld Federal Government Can Operate Exchanges in States Prediction Alito Breyer Ginsburg Kagan Kennedy Roberts Scalia Sotomayor Thomas ACA Upheld No Yes Yes Yes Yes Yes No Yes No Total Y/N 6-3

19 ACA Tax Reform Advance Premium Tax Credit to Make Buying a Plan Affordable Tax Expenditures Tax Code Subsidies Delivered as: Deductions Exclusions Employer sponsored health insurance costs excluded from taxable individual and payroll income, costs U.S. $248 billion These subsides have been in place for decades 02/23/15 Dan Derksen MD

20 ACA in 2014 Created health insurance marketplaces Mandated coverage (levied a tax penalty) Expanded Medicaid: <138% FPL Subsidized premiums: % FPL Guaranteed issue (prohibited coverage denial for pre-existing conditions) FPL Federal Poverty Level 2013 Household Size 100% 138% 400% 1 $11,490 $15,856 $45,960 2 $15,510 $21,404 $62,040 3 $19,530 $26,951 $78,120 4 $23,550 $32,499 $94,200 Accessed 11/23/14 at:

21 U.S. Health Coverage 2012 Before the Affordable Care Act (Pre-ACA) Private Health Insurance Employer Sponsored ESI Individual Purchase # covered (millions) Medicaid 51 Medicare 49 Uninsured 48 Total Population 311 Note: Many covered have dual coverage: for example, many on Medicare have supplemental private health insurance, most in long term care have both Medicaid and Medicare. US Census Bureau, accessed 11/22/14 at:

22 Uninsured Rates Among Nonelderly by State, : Before ACA NH WA MT ND VT ME AK CA OR NV ID AZ UT WY CO NM SD NE KS OK TX MN WI IA IL MO AR MS LA NY MI PA OH IN WV VA KY NC TN SC AL GA MA RI CT NJ DE MD DC FL HI National Average = 18.2% <14% Uninsured (13 states & DC) 14 to 18% Uninsured (20 states) >18% Uninsured (17 states) SOURCE: KCMU/Urban Institute analysis of 2011 and 2012 ASEC Supplement to the CPS (two-year pooled data).

23 Pre-ACA Half U.S. Uninsured in 10 States 7.3m 0.6m 1.2m 0.4m 6.2m 0.8m 0.5m 1.9m 0.9m 3.9m Average US Census Uninsured over 3 years

24 Pre-ACA: 4 US-Mexico Border States: 57% U.S. Hispanic Uninsured 7.3M uninsured total in CA 4.1M uninsured Hispanic 1.2M uninsured total in AZ 0.7M uninsured Hispanic 47.3M US Total Uninsured M US Total Unins. Hispanics 8.7 M (57%) in 4 Border States Hispanic Marketplace Participation Was Low in M uninsured total in NM 0.2M uninsured Hispanic 6.2M uninsured total in TX 3.8M uninsured Hispanic Accessed 10/14/14 at: 06/05/14 03/16/15 Dan Derksen, MD

25 ACA Medicaid Expansion in 2014 é 10.8m Medicaid Enrollees in 2014 Accessed 01/07/15 at: Accessed 11/23/14 at:

26 ACA Marketplace Decisions by State >10M Enrolled in the 34 FFM / Fed Partner exchanges, 85% receive subsidies averaging 72% of premium costs 13 state + 3 fed-supported state run 27 fed-facilitated, 7 fed-state partner Accessed 2/23/15

27 2014 ACA Coverage Medicaid-Marketplace Take Up

28 2014 ACA Coverage Medicaid-Marketplace Take Up

29 ACA Marketplace Round 1: Oct 2013-Apr 2014 % Eligible Pop. Selecting a Marketplace Plan U.S. 28% Participation Rate 43% 17% In the 10 states with highest % uninsured pre-aca and having half the nation s uninsured 19% 21% 24% 20% 21% 29% 27% 39% Accessed 02/23/15 at:

30 ACA Marketplace Round 2: Nov 2014-Feb 2015 % Eligible Pop. Selecting a Marketplace Plan U.S. 41% Participation Rate 28% 44% 33% 33% What s going on in Florida? 48% 39% 35% 37% 49% 64% Accessed 02/23/15 at:

31 Medicaid Enrollment: Through 2014 % Eligible Pop. Enrolling in Medicaid U.S. 59% Medicaid Take Up Rate 89% 71% State Marketplace R-Gov No Medicaid Expansion R-Gov childless adults not eligible: gap 0 to 100%FPL 60% 91% Medicaid Expansion R-Gov 26% 19% 94% 67% 81% 63% Analysis by Dan Derksen MD, Arizona Center for Rural Health

32 STATE Round 2 Marketplace Sel/ Renewed Plan Nov 2014-Feb 2015 ACA in 2014 Round 2 Marketplace %Eligible Sel/Renewed Net Gain Medicaid Pre- ACA to 2014 %Eligible for Medicaid that Enrolled CA 1,418,000 44% 2,762,314 89% AZ 204,187 33% 294,896 60% NM 51,857 33% 183,975 91% TX 1,189,316 39% 223,019 26% US Total 11,636,073 41% 10,751,820 78%

33 Pre-ACA: AZ, NM Health Coverage Payer Source # AZ #NM Medicaid 1,200, ,000 Uninsured 1,200, ,000 Medicare 800, ,000 Private Insurance 3,300, ,000 Total Pop. AZ 6,500,000 2,200,000 Medicaid + Uninsured Comprised 40-45% AZ, NM Pop

34 Governor Brewer Medicaid Expansion Weigh the evidence and do the math $2 billion per year 20,000 jobs 250,000 uninsured covered Governor Brewer restored Medicaid eligibility to 100% FPL for childless adults in 2014 (Prop. 204 passed in 2001), & expanded it from 100% to 138% FPL as ACA allows 10/26/14 03/16/15 Dan Dan Derksen MD

35 Governor Ducey Medicaid Cuts Do the math! 5% Medicaid Provider Cut Saves state $127 million/2 yrs Costs 0.5 billion fed match Eliminates est. 5,000 jobs Levies hidden tax to Arizona hospitals & docs >$0.6 Billion! 10/26/14 03/16/15 Dan Dan Derksen MD

36 Health Insurance Coverage Disparities Persist in U.S. Pre-ACA Uninsured %Uninsured thru Feb 2015 #Uninsured Gaining Coverage (Millions) Whites 14.3% 9.0% 6.6 African Americans 22.4% 13.2% 2.3 Latinos 41.8% 29.5% 4.2 Total US 20.3% 13.2% 16.4 Outreach Programs Needed to Assist Populations with Low Participation Rates

37 2015 ACA Medicaid Gain + Round 2 Marketplace Enrollment for U.S. / AZ Jan 2014-Feb 2015 Income < 138% Income 138% to 400% Medicaid Million UNITED STATES Age <26 Parents Plan +2.3 Million ARIZONA ACA ENROLLMENT Marketplace Million AHCCCS AZ Medicaid <138% FPL ($32,499 Family of 4) Jan 2014-Feb 2015 Net Gain AZ <26 Parents Plan +323, ,000 AZ MARKETPLACE % FPL ($32,499-$94,200) Round 2 Enrollment thru 2/15/ ,166 Arizona ACA Total: +600,

38 Round Two ACA Marketplace Enrollment 11/15/14-2/15/15 Percent Uninsured Pre-ACA 2012 Number Uninsured Pre-ACA 2012 Round One Round Two Oct 2013-Apr 2014 Nov 2014-Feb 2015 # Selected Plan Sel/Renewed Plan in 6.5 Months in 3 Months AZ ,201, , ,666 NM ,000 32,062 52,358 TX ,192, ,757 1,205,174 US ,183,000 8 million 11.7 million 03/16/15 06/05/14 Dan Derksen, MD

39 Pima County, Arizona Marketplace Insurers and Plans Second Enrollment Period: 11/15/14 to 2/15/15 Compiled by: DJ Derksen: Data Accessed at: healthcare.gov 11/10/14 Dan Derksen MD

40 ACA in 2014 to nd Marketplace enrollment 11/15/14 2/15/15 Marketplace Tasks renew, enroll uninsured, in 3 months (1 st enrollment was 6.5 months) é 25% Insurers offering plans ê $5.7B hospital uncompensated care % of that ê is in Medicaid expansion states Special Enrollment: 3/15/15 to 4/30/15 Accessed 2/23/15: Accessed 1/11/15 at:

41 18% Avg. Annual Percent Increase in National Health Expenditures % 14% 12% 10% 8% 6% Last 5 years: Lowest spending 13.1% 11.0% 10.6% growth in 50 year history 9.7% 8.6% 8.4% 7.1% 7.2% 6.7% 6.8% 6.4% 6.5% 6.3% 5.8% Proj % 4% 2% 4.7% 3.8% 3.8% 3.6% 3.7% 0% SOURCE: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at (see Historical; National Health Expenditures by type of service and source of funds, CY ; file nhe2012.zip). NHE Projections Health Affairs Sept At healthaffairs.org 02/23/15 Dan Derksen MD

42 AZ Marketplace 2014 to 2015 AZ: 10% Decrease monthly Silver premiums (ex. 40 y.o. making $30,000 /yr) AZ: 2 nd Lowest Silver premiums in U.S. AZ: 5 th Lowest Bronze premiums in U.S. Choice: Min.7 Insurers 60 plans in all counties 628,000 uninsured Arizonans were eligible for Arizona Marketplace coverage in ,187 (33%) renewed or selected plan /10/14

43 Did you know? Arizona s land area of 113,594 sq. miles would encompass the state of New York, the six New England States (CT, ME, MA, NH, RI, VT) and DC + Delaware

44 Access to Care 75% Pop. Lives-Phoenix, Tucson 86% Physicians-Phoenix, Tucson CHALLENGE: Distributing the health workforce to the areas of high need HPSA = federally designated health professions shortage area 8/8/14 03/16/15 Dan Dan Derksen, Derksen MD MD

45 State Pacesetters Teaching Health Centers Teaching Health Centers move the primary care training pipeline to areas of need. Grads have higher rates of practicing in rural and medically underserved areas. States: AL, AK, AZ, CA, CT, ID, IL, IA, KY, ME, MA, MI, MO, MT, NM, NY, NC, OK, PA, TX, WA, WV Accessed 5/17/14 at: 10/26/14 03/16/15 Dan Dan Derksen MD