The Affordable Care Act: Opportunities to Influence Implementation

Transcription

1 The Affordable Care Act: Opportunities to Influence Implementation Dylan H. Roby, PhD Assistant Professor of Health Policy and Management UCLA Fielding School of Public Health Director of Health Economics and Evaluation Research UCLA Center for Health Policy Research April 12, 2013

2 Sources of Health Policy At both the national and state level: Legislative Power over budgets and proposing legislation Executive Controls agencies that implement and enforce policies Regulatory Authority Spending budget appropriations Judiciary Interprets laws and statutes Initiatives Popular in California and other progressive states Advocates Academics, trade associations, think tanks/consultants, consumer groups, lobbyists, etc.

3 Your role influencing policymaking Many opportunities for advocates, lobbyists, and the public to influence the process Power and Resources can come in many forms Knowing the decision making process and points of attack is very important for public health advocates Advocates are often the source of policy, acting as policy entrepreneurs to make change

4 The Affordable Care Act

5 What Problems was the ACA designed to address? The Uninsured Overall growth in health care spending Solvency of Medicare Private insurance premiums and market failures Individual Market: Rescissions, Adverse Selection, and Pre Existing Condition Exclusions Group Market: Reductions in benefits, and move toward high deductible plans

6 Access Fixing Insurance Market Failures

7 Insurance Status in the U.S., 2009 Type of Coverage Number (millions) Percent Private % Employment Based % Individual % Government % Medicare % Medicaid/SCHIP % Uninsured % Note: Percentages exceed 100% because type of coverage is not mutually exclusive; individuals can have more than one category of coverage. Source: U.S. Census Bureau Analysis of March 2009 Current Population Survey Does not include military-based insurance

8 Prior to ACA, where did we see market failures in health insurance? In the Group Market Rising premiums, passed on to employees More people buying very High Deductible Plans Small group market has more volatile premiums, forcing small firms to reduce choice, benefits, etc. In the Individual Market Rescission & Rejection due to pre existing conditions Limitations to cover benefits and spending Lots of uninsured people and cost shifting!

9 Early Implementation ( ): Children cannot be excluded from the individual market due to pre existing conditions Went into effect for all policy years starting after 9/23/10 No pricing protection, unless in state law Children less than age 26 can be added to parent s plan Small Business Tax Credits to buy coverage (<25 emp) Reinsurance program for early retirees (55 64) State high risk pools (pcip.ca.gov) For people with pre existing conditions & 6 mos. uninsured Medical Loss Ratio enforcement (80 85%) Annual Benefit Limits & Lifetime Maximums phasing out

10 Guaranteed Issue Coverage (2014) No denials due to pre existing conditions No rescissions No individual underwriting Any legal resident or citizen can obtain health insurance, regardless of health status Premium prices in the individual and small group market based on modified community rating: Age (3:1) / Location / Family Size / Smoking Status (1.5:1) Competition in the individual and small group (<50) insurance markets

11 The Minimum Essential Coverage Requirement (a.k.a. Individual Mandate ) With guaranteed issue coverage comes a risk of adverse selection Concerns about free riders who would sit on the sidelines until they were sick, then buy coverage In order to avoid adverse selection, there are penalties for not carrying qualified coverage 2014 to 2016 (penalties phased in) $95 (or 1%) to $695 (or 2.5% of income) per person For many, insurance coverage will be more expensive than the penalty Exclusion criteria mean that only 3.2% of California residents will pay penalty by 2019

12 The Health Insurance Exchange State based marketplaces for uninsured individuals and small group (SHOP) purchasers Health insurers can compete in each state or regional area Essential Health Benefits package Standalone and integrated dental plans required for children Risk Adjustment, Reinsurance, and Risk Corridors Subsidies available to individuals not offered coverage by employers Sliding scale cap on out of pocket premiums from 2 to 9.5% of income (for households earning 100% 400% of FPL) Out of pocket spending caps based on income Out of pocket maximum for everyone

13 Essential Health Benefits The Essential Health Benefits package is supposed to be based on a typical employer based plan, and include at minimum: Acute inpatient services, and ambulatory patient services, emergency services, maternity and newborn, mental health and substance abuse (incl BH treatment), prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services (including smoking cessation), chronic disease management, and pediatric services, including oral and vision care.

14 Employer Involvement Employers with 50 or more Full Time Employees Penalties for not offering coverage to employees $2,000 per employee (after first 30) if anyone accepts tax credit in Exchange, or $3,000 per tax credit if an employer only covers part of workforce Some employers will have access to better policies through the Exchange (if fewer than 50 employees) Tax exempt insurance premiums maintained In 2018, the Cadillac excise Tax could result in some employers not choosing high premium plans

15 Access Medicaid Expansion & State Decisions

16 Medicaid Expansion Income based eligibility determination Anyone under 133% (plus 5% income disregard) of Federal Poverty Level will be eligible if they are a legal resident for over 5 years, or U.S. Citizen Categorical eligibility often meant Medicaid was dominated by mothers, children, and disabled Childless Adults and higher income parents will be newly covered by Medicaid in January of 2014 Federal government pays majority of the bill 100% in 2014 to 2016, phased down to 90% by 2020

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18 Medicaid expansion is now voluntary, due to Supreme Court Decision. Some states have further to go Source: Rosenbaum, NEJM, 10/14/09

19 Coverage in California By 2019, we expect: 1.4 million people eligible for Medi Cal, but only between 800k and 1m are likely to enroll Approximately 480k from LIHP (0 133% of FPL) Exchange enrollment (1.8m to 2.1m) will enroll in subsidized coverage Depends largely on employer reaction There could still be 1.28 million uninsured in LA

20 California s Medi Cal Program Currently, California has transitioned the Seniors & Persons with Disabilities Population into Managed Care Plans (from Fee for Service) Denti Cal services have already been cut for adults, still available for children (low fees) Addition of cost sharing requirements New Medi Cal beneficiaries subject to Essential Benefits package after 2014, which will still only guarantee dental coverage for children

21 Non Coverage Investments in Access Enhanced Primary Care Payments for Medicaid Providers 100% of the Medicare rate from 2013 to 2014 $11 billion invested in FQHCs and National Health Service Corps National Health Care Workforce Commission Primary Care, Nursing, Dental, & Pediatrics Loan Re allocation of Residency Slots CDC grants to improve oral health infrastructure

22 Bending the Cost Curve via Insurance Reform and Medicare

23 Reductions in Commercial Spending: Reduced cost shifting through insurance mandate Uncompensated care will be reduced, Disproportionate Share Hospital Subsidies reduced by 75% over 10 years Significant cuts to both Medicare and Medicaid DSH funding by 2022 Mandated Medical Loss Ratio (80 85% of premiums spent on medical care) in commercial market Rate Review (already authorized in CA, report to DHHS) Cadillac Tax on employee plans with rich benefits 40% excise tax on premiums over $10,200 (individuals)/$27,500 (families) State insurance compacts to permit purchasing coverage across state lines (via Exchanges)

24 Medicare and Medicaid: Pilots and Demonstrations Innovation Center within CMS created to test new payment methods and fund innovation grants (up to $30M for 3 years) Accountable Care Organizations Incentives for integrated delivery (2012) through profit sharing based on one or two sided risk Criteria for participation already released and 50+ ACOs started in 2012 Allow for groups of providers to develop their own budget and payment mechanisms Report on 33 quality measures Integration of services for dual eligibles (Medicaid+Medicare) Increases in home care and integration using telehealth, etc.

25 Direct Attempts at Payment Reform Pay for Performance in Medicare Advantage Plans will receive 5 to 10% bonuses for reaching quality benchmarks Medicare Value Based Purchasing Use 1% growth reductions for quality bonuses Hospital Readmissions Bans states from reimbursing for 30 day readmissions under Medicaid Medicare reimbursement penalties (max of 1% to 3%) for high readmission hospitals from 10/1/12. Based on Pneumonia, Acute Myocardial Infarction, and Heart Failure readmission rates

26 Improving Quality through Government Incentives and Programs

27 Several New Patient Centered Programs Various medical home and primary care interventions in the ACA: Independence at Home Demonstration Medicaid health home Community based Collaborative Care Network Comprehensive Primary Care Initiative Direct Primary Care Practices Patient Centered Outcomes Research Institute FQHC Advanced Practice Demonstration

28 Preventive Services, Wellness and Public Health Investment

29 Free Preventive Services For Group, Individually Insured and Medicare enrollees No Co Pay or Deductible if in network Went into effect with policy years starting after 9/23/10 Medicaid beneficiaries in states could start 2013 (+1% FMAP) Insurers are required to cover: US Preventive Services Task Force (A or B recommendations) DHHS Women s Health (based on IOM Panel Recs) Health Resources and Services Administration CDC Advisory Committee on Immunization Practices Oral health risk assessments and flouride supplements for children

30 Prevention and Public Health Fund $500m distributed to states by DHHS in FY2010 In 2011 ($750m), building on the initial investment, new funds are dedicated to expanding on four critical priorities: Community Prevention ($298 million) Clinical Prevention ($182 million) Public Health Infrastructure ($137 million):. Research and Tracking ($133 million) In 2012, $1 billion was allocated and the amount continues to grow until it hits $2 billion per year

31 Opportunities and Challenges Essential Health Benefits Package Rules require states to pick an existing plan as benchmark In Medicaid, each state could select a different benchmark benefit that may include dental for children and adults New Coverage will be in commercial HMOs Exchange Qualified Health Plans in Covered California Medi Cal managed care plans or county LIHP programs Reimbursement driven by new payment models and passing risk to providers Unfunded provisions include early childhood caries surveillance

32 Questions? Contact Info: Dylan Roby