The Affordable Care Act: What Does the Future Hold?
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1 The Affordable Care Act: What Does the Future Hold? BY KEVIN REED REED CLAYMON MEEKER & HARGETT, PLLC
2 Tuesday, November 7, 2016 Elections have consequences. President Barack Obama
3 The Future of the ACA We have a disaster called the big lie: OBAMACARE. It must be repealed and replaced. It s destroying our country. President Donald Trump
4 60+ votes in Congress last 6 years to repeal, delay, or hinder implementation of ACA
5 [They] are going to fix Obamacare I shouldn t call it repeal-and-replace, because it s not going to happen. Most of the framework of the Affordable Care Act that s going to be there.. Republicans never ever agree on health care. John Boehner February 23, 2017
6 Uninsured Rate All time low 8.6% of all Americans 2009 Approximately 16% before ACA 46.8 million Americans uninsured ObamaCareFacts.com
7 2017 ACA Numbers 9.2 million enrollees November 1, 2016 February 1, ,000 decrease from 2016
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9 10 Good Parts of ACA 1. Free preventive services to Medicare patients Bone density Cervical cancer screen Colon cancer screen 2. Free women s health services Breastfeeding Diabetes Wellness visits Contraception Domestic violence HIV screening STD 3. No denial for pre-existing conditions
10 10 Good Parts of ACA 4. Premium equity no increase for pre-existing conditions 5. No denial for pre-existing conditions for children 6. Adult children to age 26 stay on parents coverage 7. No lifetime limits 8. Medicaid loss ratio limits 85% of premium spent on health care 9. Uniform health coverage reports 10.Closed donut hole - Medicare Part D will no longer stop covering claims for drugs that exceed a specific dollar amount
11 Good Parts (Little Discussion) HIV Broadly expanded coverage through Medicaid expansion Children with Special Needs new coverages no preexisting conditions habilitative services Black Lung ACA made benefits more accessible and obtainable
12 How to Pay for Repeal? ACA is Paid For TAXES Individuals > 200,000 Health Insurers Medical Device Drug Makers Tanning Salon Users Cadillac Tax REDUCTIONS Medicare Medicaid Reductions to hospitals & insurers Increased premiums
13 Canceled taxes GOP Repeal January 2016 Canceled health premium subsidies on exchanges Canceled Medicaid expansion Kept reductions (cost was too high) Will future repeal be paid for with further reductions?
14 December 2016 Uninsured rise million by 2019 Share of uninsured rise 11% to 21% Higher than 2009 due to market disruption 82% of newly uninsured working families 38% years of age 80% - no college degree 12.9 million less Medicaid / CHIP 2019
15 December 2016 Government spending on health care down 1.3 trillion Medicaid expansion Tax credits Cost sharing Newly uninsured would seek 1.1 trillion in uncompensated care
16 Rep. Tom Price Congressman Georgia House Budget Chair HHS Secretary Confirmed Opposes Children s Health Insurance Program Opposes research on drug and medical treatment effectiveness - move to rationing ACA dark day for America Opposes ACA requirement for free coverage for birth control Opposes Center for Medicare and Medicaid Innovation Opposes FDA regulation of tobacco Opposes negotiating prescription drug prices under Medicare Part D
17 Empower Patients First Act Repeal ACA Incentives for HSAs Tax credits for health insurance Federal grants for state high risk pools Allow insurance sales across state lines Tort reform Claimant s coverage mandates Keeps ACA denial of coverage / pre-existing condition rules but only if continuous cause for 18 months Repeals Medicaid expansion
18 Seema Verna CMS Director Designate Indiana Medicaid expansion architect Developed Indiana 1115 Waiver Ohio 1115 Waiver Assisted with design of Tennessee Medicaid expansion Indiana Plan encourages Personal responsibility Missed payment 6 months locked without insurance Persuasive, resourceful, intelligent
19 Where are we? 12/22/16 The enrollment numbers announced today show just how important health care coverage is to millions of Americans. The Trump administration will work closely with Congress, governors, patients, doctors and other stakeholders to fix the Affordable Care Act s welldocumented flaws and provide consumers with stable and predictable health plan choices. Phillip J. Blando Spokesman for the Trump Transition Team
20 Market Stabilization Rule February 27, 2017 Proposed ACA Rule amendments: Availability of Coverage Rule Open Enrollment Shortened end date moves from 3/31/18 to 12/15/17 Tighter Special Enrollment Periods Network Adequacy rely on states Decrease Essential Community Providers in QHP from 30% to 20%
21 Republican Leaked Plan Actual Legislative Text February 27, 2017 Repeal Premium Subsidies Repeal Medicaid expansion Repeal Individual Mandate Eliminate all Related Taxes Significant Medicaid Cuts Fund High Risk Pools
22 Senator Paul s Plan January 25, 2017 Obamacare Replacement Act Repeals individual and employer mandate Repeals essential health benefit requirements Repeals Medicaid loss ratio requirements Two-year pre-existing condition window Premiums on employer-provided health insurance are tax deductible $5,000 tax credit for HSAs Physician tax deduction - charity medical care - 10% gross income
23 Future Concerns HSAs Typically higher income users No documented ability or willingness to shop High Risk Pools Historically high costs due to concentrating high users Not affordable to every potential user Funding Repeal of ACA taxes will leave Congress w/o funds to address replacement
24 What might this mean to hospitals? Uncertainty makes planning difficult Reimbursement from federal health care programs Medicare/Medicaid is likely to get worse not better The number of uninsured is likely to increase Hospitals will likely be expected to carry greater cost of the uninsured Cost pressure will continue to drive patients to outpatient settings
25 President Trump lower numbers - much lower deductibles January 15, 2017 We are going to have insurance for everybody There was a philosophy in some circles that if you can t pay for it, you don t get it. That is not going to happen with us. Much less expensive, much better. Washington Post Interview
26 Comparison DEMOCRATS Managed Market Health Care as Right Subsidized REPUBLICANS Free Market Consumer Choice Individual Payment - HSAs
27 Where are we? Uncertainty Repeal days, 2017 Delay effect, 2-3 years Conservatives 2 years Leadership 3 years
28 President Trump Monday, February 27, 2017 Nobody knew healthcare could be so complicated. Wednesday, February 22, 2017 Maybe by mid to early March we ll be submitting something that I think people will be very impressed by.
29 Rural Healthcare
30 Rural Facts 46.2 million in % of U.S. residents spend across 72% land mass Non-metro lost population over last 4 years Median income in 2012: $41,198 rural $51,988 metro 80 rural hospitals have closed nationally since 2010 Texas now has 64 out of 254 counties without a hospital That is 36% of all rural counties 283 more rural hospitals are at risk of closure according to NRHA in 2015 Hospitals in states that did not expand Medicaid most vulnerable
31 673 Vulnerable Index 210 most vulnerable to closure 463 less vulnerable 68% are CAHs Texas has highest number 75 Mississippi has highest percentage 79%
32 Texas Rural Hospitals Approximately 150 Texas hospitals are rural 79 critical access 138 Hospital Districts 13 Hospital Authorities 13 County / City 849 miles from El Paso to Beaumont!!
33 What Helps? Critical Access Payment (1,300 hospitals in 2011) Sole Community (420 in 2009) 35 miles from nearest PPS hospital Low Volume Adjustment (529 in 2011) Medicare Dependent Adjustment (½ of all PPS hospitals)
34 Challenges Faced by Many Medicaid reimbursement ACO models / Population Health Lack of commercial payors in rural markets New technology Access to capital
35 Challenges Faced by Some No Medicaid expansion No Critical Access No or little local tax support Low volume No specialty care
36 What Hurts Rural? Sequestration 2% cut in Medicare $2.8 Billion to rural hospitals 7,200 jobs in rural over 10 years Bad Debt Cuts CAH reduced reimbursable bad debt from 100% to 65% Swing Bed OIG recommends CAH cap swing bed at $275/day 462% reduction
37 AHA Task force on ensuring access in vulnerable communities Rural population declining Inability to attract new business Aging Population
38 Rural Strategies Inpatient/Outpatient Transformation Emergency Medical Center (EMC) Urgent Care Center (UCC) Virtual Care Rural Hospital Health Clinic
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43 The future belongs to those who prepare for it today. Malcolm X
44 Reed Claymon Meeker & Hargett, PLLC 5608 Parkcrest Drive, Suite 200 Austin, Texas Kevin Reed
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