The Patient Protection and Affordable Care Act 101

Transcription

1 The Patient Protection and Affordable Care Act 101 Kavita K. Patel, MD, FACP Managing Director at the Engelberg Center for Health Care Reform, The Brookings Institution

2 Where We Were: Our Broken Health System Rising Health Insurance Premiums: Family premiums for employer coverage increased from nearly $6,000 to over $13,000 between 1999 and 2009 Loss in Employer Coverage: Percent of employers offering health coverage fell from 66 to 60 percent from 1999 to 2009 Drain on the Economy: Health spending increased as a percent of GDP from 14 to nearly 18 percent from 1999 to 2009 Low Scores on Key Health Indicators: U.S. lags on infant mortality, obesity, and health system performance Growing number of Uninsured: Close to 50 million uninsured in 2009 Concentrated Health Markets: Individuals and small employers experience highest premium increases, and many markets dominated by one or two major insurers 2

3 Health Spending as a Percentage of GDP ( ) 3

4 The Affordable Care Act: Highlights Coverage: Seeks to expand access to affordable coverage by building on the existing health care system Focus on Transparency: Intended to create more competitive and transparent health care markets Insurance Market Reforms: Many provisions to reform the health insurance market and hold insurers accountable System Efficiencies: Strong emphasis on administrative simplification and efforts to reduce waste, fraud and abuse Delivery System Reform: Incentives for quality improvement and delivery system reform to lower costs Focus on Prevention and Wellness: New requirements for virtually all plans and new employer incentives 4

5 ACA Health Insurance Reforms Guaranteed Issue No coverage denials or rescissions No preexisting condition exclusions Community Rating No medical underwriting Premiums vary only by age, smoking status, geography, and family size Essential Health Benefits (EHB) Minimum coverage that counts for an individual No discrimination in EHB design or design implementation No annual or lifetime limits on benefits Limits on Policies that Impose Cost Sharing Standard metal tiers (i.e., Bronze, Silver, Gold, Platinum) Annual cap on cost sharing Preventive care with no cost sharing 5

6 Health Insurance Marketplaces Timeline: Open enrollment began 10/1/13 Coverage started 1/1/14 State Decisions: 16 states running their exchange 7 states have partnership exchange 27 states have a Federally-facilitated exchange In Utah, state is running small business exchange Implications: Early IT problems combined with high premiums and/or cost sharing could mean lower than expected enrollment Narrow networks to reduce premiums could have implications for access (and future employer coverage) High cost sharing could also impact access (e.g., VT non-preferred drug coinsurance set at 50%) Source: Kaiser Family Foundation ( 2014/01/state-health-insurance-marketplace-decisions-healthreform.png) as of January 27, 2014.

7 Overview The Affordable Care Act (ACA) was passed by Congress on March 23 rd 2010 The Goals of Health Care Reform: Expanding health insurance coverage Improving the quality of care Decreasing overall health care costs The bill includes ten titles or parts

8 Title 1: Quality Affordable Health Care for all Americans Young Adult Coverage - Dependant coverage is expanded up to age 26 Lifetime & Annual Limits - Prohibits dollar limits on benefits received Policy Rescissions - Prohibits insurance companies from cancelling policies Pre-Existing Conditions Prohibits insurers from refusing to cover, limiting benefits, or charging higher premiums for individuals with pre-existing conditions. The Early Retiree Reinsurance Program Helps employers provide retirees with health insurance.

9 Title 1: Quality Affordable Health Care for all Americans (Cont.) Medical Loss Ratio (MLR) - Insurer-based large employer plans must spend at least 85% of premium dollars on health care services (i.e. not on non-medical, administrative expenditures) Established American Health Benefit Exchanges - Four levels of qualified health plans are offered: Platinum, Gold, Silver and Bronze - Affordable Coverage: Tax credits for (1) individuals with incomes up to 400% of FPL about $95, 400 for the 2015 benefit year; (2) individuals whose employer coverage exceeds 9.5% of income or employer pays less than 60% of premium; (3) small businesses with less than 25 employees Shared Responsibility Individuals: must sign up for coverage or pay a penalty Large employers (<200 employees): must automatically enroll new full-time employees in coverage or pay a penalty. Exceptions: individuals who already have insurance, and employers who already offer insurance, can keep these plans if they wish under the grandfather provision.

10 Title 2: The Role of Public Programs Medicaid Expansion Source: Kaiser Family Foundation, August 28 th 2014, Available from: Dual Eligible Coverage and Payment Coordination Disproportionate Share Hospital (DSH) Allotments To be reduced by $14.1 billion starting in 2014

11 Title 3: Improving the Quality and Efficiency of Health Care Promoting Alternative Payment Models The Center for Medicare & Medicaid Innovation (CMMI) Medicare Shared Savings Program Patient-Centered Medical Homes Bundled Payments Hospital Readmission Reduction Program Linking Medicare Payments to Quality Outcomes Value-based purchasing program The Physician Quality Reporting Initiative (PQRI) Long-term care provider quality reporting Closing the Medicare Part D Donut Hole

12 Title 4: Prevention of Chronic Disease and Improving Public Health National Prevention Strategy Prevention and Public Health Fund: $15 billion through 2014 Medicaid incentives for the prevention of chronic diseases Beneficiary incentives for completing healthy lifestyle programs Increasing HHS grants for programs focused on: community health; chronic disease prevention; and public health innovation

13 Title 5: Health Care Workforce National Health Workforce Commission Projections and planning for workforce needs Increasing Health Care Worker Supply Federal student loan program modifications Improving education and training for specific health care workers e.g. primary care physicians; long-term care workers; and rural physicians State Health Care Workforce Development Grants

14 Title 6: Transparency and Program Integrity Fraud and Abuse Provisions Preventing the practice of fraudulent providers in Medicare and Medicaid programs The Sunshine Act: requires drug, device and medical supply companies to publically report payments/gifts to physicians Increasing transparency on the quality of long-term care institutions and nursing homes Establishment of the Patient-Centered Outcomes Research Institute (PCORI)

15 Title 7: Improving Access to Innovative Medical Therapies Biologics Price Competition and Innovation Creates approval pathways for biosimilar or interchangable products Improving Drug Affordability for Underserved Communities and Children 340B Drug Discount Program

16 Title 8: Community Living Assistance Services and Supports CLASS Program A national voluntary, self-funded, insurance program for assisted living and support services

17 Title 9: Revenue Provisions How are we paying for the ACA?

18 The Cost of Health Reform Health Coverage Uses $938 billion Exchange credits and subsidies $464 Medicaid & CHIP $434 Small business tax credits $40 Medicare & Medicaid $75 billion Part D donut hole $43 Medicare annual wellness visit $4 Incentives for greater use of HCBS $6 Community First Choice Program $6 Medicare primary care bonuses $4 Medicaid primary care increase $8 Extenders for 2010 $4 Revenues Sources $569 billion Cadillac tax on high cost plans $32 Revenue effects of coverage $117 (e.g., penalties) HI tax on high earners $210 Taxes / fees on mfgs & insurers $107 Other revenue provisions $103 (e.g., black liquor, economic substance) Medicare & Medicaid $530 billion Updates & productivity adjustment $157 Medicare Advantage $202 Other Prevention & public health fund $13 CHCs & Nat l Health Service Corp $12 Medicare & Medicaid DSH $38 Home health payments $40 Part B/D income-related premiums $36 Medicare Improvement Fund $21 Administrative Simplification $20 IPAB $16 Other (e.g., imaging) 18 NOTE: This list includes highlighted policies but is not CLASS complete. Act Source: CBO, Cost estimate for PPACA and reconciliation (March 20, 2010). $70 billion

19 Health Care Reform and the Federal Deficit 19 Source: Congressional Budget Office (April 2010)

20 Title 10: Strengthening Quality, Affordable Care Further improvements, for example: Financial incentives to states for transitioning Medicaid beneficiaries from nursing homes into community services. Development of the Physician Compare website to aid consumers better choose providers. Allows grants to medical schools to establish recruitment programs for students from rural areas to practice in those underserved areas.

21 PUBLIC EXCHANGE LAUNCH Think Wright Brothers. Not Indianapolis 500

22 HOW TO PICK A HEALTH PLAN ON AN EXCHANGE Step 1. Decide on the diseases you and your family are going to have in the coming year Step 2. Find the best doctors and hospitals for those diseases Step 3. Identify which plans offer those doctors and hospitals Step 4. Select the cheapest plan Step 5. If there are no affordable plans with all the doctors and hospitals you want, go back to Step 1 and pick some new diseases

23 HEALTHCARE.GOV Congratulations, you made it through those annoying security questions. Sorry about the delays, we got hacked by the Koch Brothers. what can you do? Good news is we rummaged around in your IRS records and some stuff we got from that Snowden guy and found out you make $12 an hour. We know you lie about your tips, but we all do, right? If you ever get a raise you will be eligible for Health Insurance through the exchange which will allow you to buy a very high-deductible health plan with a limited network for FREE!!!! Meantime, the news gets better, you are probably eligible for Medicaid, that will provide totally free access to a very limited network of providers (maybe the ones you see now because you are uninsured). Q: So what state do you live in? A: Texas Good luck with that. Come back when you get a raise.

24 WHAT HAPPENS WHEN THE LANDSCAPE CHANGES?

25 National Health Spending at Record Lows Growth in health spending over the past four years has been the slowest rate on record in 53-year history of the CMS National Health Expenditure (NHE) estimates Total U.S. health spending grew only 3.7% in 2012 the fourth year in a row that growth has been below 4% Medicare trend also at historic lows (0.4% in 2012) Between March 2010-May 2013, CBO estimates for Medicare spending decreased by 15% in 2020 and 11%, or $785 billion, over the ten year period Economists disagree on the reasons for slowdown Recession and sluggish recovery account for some but not all Larger health system change occurring? Health care spending expected to increase this year as a result of expanded coverage under the ACA Federal spending for Medicare, Medicaid, and CHIP still represent fiscal challenges in the future 25

26 Medicaid & Medicare Part D: Similar Story When Medicaid was implemented in 1966: Only six states signed up initially 27 states quickly followed 11 more states in states in 1970 Last state to adopt Medicaid was Arizona in 1982 Upon rollout in 2005, Medicare Part D: 27% understood the law Only 21% were in favor of the law Computer glitches in moving dual eligibles from Medicaid to Medicare 26

27 Implementation Challenges Tight implementation timeframes Scarce administrative funds (ACA vs. MMA) Complicated statute (e.g. undocumented immigrants) Reality of pre-aca market Well-funded and fervent opposition Public confusion and misinformation Reluctant governors 27 Late start on enrollment

28 ACA in Historical Context It s Taken the U.S. More Than 100 Years to Get Here Early 1900s Progressive platform National health insurance excluded from the final draft New Deal Social Security took precedence over health care benefits Fair Deal Labor split and AMA vigorously opposed Great Society (Medicare & Medicaid) AMA opposed creation of Medicare but lost the debate Nixon vs. Kennedy Competing plans split the cause Clinton s attempt Opposed by every major health care stakeholder group Obama s success Legislation passed despite significant (and continuing) opposition 28

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