1 AFFORDABLE CARE ACT UPDATE San Francisco Health Commission July 17, 2012
2 Patient Protection and Affordable Care Act (ACA) Goals Expand health insurance coverage Improve coverage for those with health insurance Improve access to and quality of care Control rising health care costs Delivery System Changes Promote primary care and prevention Improve provider supply Create new models of coordinating and delivery care Expand use of information technology Reform provider payments to promote quality Triple Aim principles are imbedded in ACA
3 ACA Hurdles Public Support Funding and Costs Can we afford it Estimated $938B from 2010 to 2019 from federal savings and new revenue Will it reduce health care costs No consensus of opinion Comprehensive/Complex Legal Challenges
4 ACA Constitutionality U.S. Supreme Court Decision Can courts decide the constitutionality of the ACA s individual mandate provision now? Court ruling: YES If so, is the individual mandate provision constitutional? Court ruling: YES (Congressional taxing power) If unconstitutional, is the individual mandate provision severable? Court ruling: NONE issue moot Is the ACA s Medicaid expansion constitutional? Court ruling: YES & NO (expansion constitutional but threat of funding loss coercive; remedy voluntary State opt-in/opt-out provision)
5 ACA s Guts Preserved, But Coverage Expansion May Be Hit or Miss Individual mandate Medicaid expansion Entire ACA was at stake when Court agreed to take case, including: Delivery system reforms Employer responsibility/penalty provisions Health care workforce development Health insurance market reforms Medicare benefits expansion, payment reductions Public Health and Prevention Fund State health insurance exchanges Tax subsidies for premiums and cost-sharing Transparency and program integrity components
Views On ACA Remain Evenly Split After Supreme Court Decision As you may know, a health reform bill was signed into law in 2010. Given what you know about the health reform law, do you have a generally favorable or generally unfavorable opinion of it? 80% Favorable Unfavorable Don t know/refused 60% ACA signed into law on March 23, 2010 46 44 48 50 45 49 44 42 42 50 48 46 41 44 46 43 44 43 51 44 43 44 43 41 43 44 41% 40% 40 41 41 35 43 40 42 40 41 41 43 42 41 42 42 42 39 41 34 37 41 37 42 40 42 41% 37 20% 14 14 10 14 12 11 15 18 18 9 8 13 18 14 12 15 17 16 15 19 17 19 15 19 15 19 18% 0% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2010 2011 2012 Source: Kaiser Family Foundation Health Tracking Polls
7 $14.628B ACA Federal Funds (7/2012) To date, California has received $1.422 B ($340M to government and $1.082 to private sector) 9.7% of all funds distributed To Private To Government Employers-Business (43%) $170,255,271 $440,421,399 Health Centers (19%) Private Insurance & Exchange (13%) $8,266,131 $128,052,625 $61,038,630 $260,827,073 Medicare & Medicaid Special Projects (12%) Prevention & Public Health (4%) Maternal & Pregnancy-Related (4%) Workforce & Training (3%) Health Care Facilities & Clinics (1%) $4,555,637 $22,606,456 $36,068,982 $3,844,566 $53,410,460 $44,725,064 $3,150,000 $14,796,783 $3,874,995 $166,566,944
8 Center for Medicare and Medical Innovation (CMMI) Created under ACA to test new models of health care delivery & payment, and foster: (1) better healthcare, (2) better health and (3) lower costs through improvement Accountable Care Organizations Providers and suppliers work together to coordinate care for fee-for service Medicare patients Pioneer (different payment arrangements) 32 nationwide; 6 in CA; 1 in San Francisco (Brown & Toland) Medicare Shared Savings (shared savings) 116 nationwide; 6 in CA; none in San Francisco Advanced Payment (infrastructure investment & care redesign) 5 nationwide; none in CA Health Care Innovation Payment and service delivery models to reduce costs, while ensuring quality for Medicare, Medicaid or CHIP beneficiaries 109 projects funded nationwide at$1b with anticipated $1.9B in savings (3 year projects) 17 California projects received $158.2M in funding with anticipated savings of $329.3M San Francisco awards: Family Services Agency and San Francisco Community College
9 Californians Benefit from ACA Now Over 1 million Californians have already benefited from ACA coverage provisions Many millions more currently benefit from: 80/20 medical loss ratio Curtailing unreasonable health insurance premium increases Removal of lifetime limits on health benefits Affordable prescription drugs and no co-pays for preventive services in Medicare In future When fully implemented, ACA expands coverage to an estimated 5 million Californians and an additional 2.1 million expected to purchase insurance through Exchange without subsidies California could receive up to $16 billion annually for Medicaid expansion ($9B), subsidies under California Health Benefits Exchange ($6B) and increased Medi- Cal reimbursement ($700M)
10 California s Jump Start on ACA Enacted various pieces of legislation to implement ACA California Health Benefits Exchange Bridge to Reform 1115 Medicaid Demonstration Waiver Integrated care for dual-eligibles (from pilot to statewide) Managed care experience/existing reimbursement landscape
11 Full ACA Implementation Requires Addressing a Range of Access Issues State Qualified health plans in the Exchange Future of State health coverage & service programs Affordability of Exchange Simplified eligibility and enrollment System Marketing, outreach & public education Individual What services, how much, from whom and when Within the context of the following factors: (1) inadequate provider supply and workforce development, (2) Uneven distribution of access/providers to health Care and (3) low provider participation in Medi-Cal.
12 Sampling of State Policy/Legislative Considerations Affecting Localities Potential Basic Health Program (SB 703 Hernandez) Federally qualified health center participation in the Exchange Expansion of managed care in public programs Continued State funding for indigent population who will remain uninsured
13 San Francisco Preparations Collaborative Effort San Francisco Health Reform Task Force (4/2011) HealthShare Bay Area Joint applications for ACA-funded initiatives DPH and Human Services Agency workgroup Long Term Care Integration Design Group Delivery System Specific Efforts Applying for CMMI initiatives Internal provider and staff preparations
14 San Francisco Local Program Reassessment Reassess San Francisco s local health care coverage options Healthy Kids Healthy San Francisco Healthy Workers Current policy is that local health care coverage programs serve as a safety net, not as a substitute for state/federal health insurance Promote and ensure eligible residents and non-residents enroll in the appropriate State program and are disenrolled from the local program Benefits of approach: For those in the health access program, health insurance is preferable Some local health care costs will be funded by the federal/state
15 Since ACA is a Go in California Estimated 47,000 may be eligible for ACA health insurance options Healthy Kids Healthy Workers HSF SF PATH Est d 30% (700) of population eligible for federal health options 100% (11,000) of population likely eligible for federal health options 51% (24,000) of population eligible for federal health options 100% (11,000) of population eligible for federal health options
16 ACA and CCSF Employer Provisions Health Care Accountability Ordinance (HCAO) ACA does not appear to pre-empt HCAO functions as a City and County contracting requirement, not an employer health insurance mandate Health Care Security Ordinance (HCSO) ACA review found no language which suggests the intent to interfere with the Employer Spending Requirement (ESR) If any inconsistency may arise during ACA implementation, can potentially address with federal or local regulation ACA only applies to employers with 50+ employees - ESR applies to for profit employers with 20+ employees and non-profit employers with 50+ employees
17 Marching Toward 2014 - Timeline 2012 No cost-sharing for preventive services in Medicare New delivery system models in Medicare and Medicaid Reduced payments for Medicare providers Regulations on health plan quality reporting requirements Data collection to reduce health disparities Tax changes and new health industry fees 2013 No cost-sharing for preventive services in Medicaid Increased Medicaid payments for primary care Reduced payments for Medicare providers and health plans Nat l pilot program for payment bundling (Medicare) Extend authorization for CHIP Temp. high-risk pool ends Tax changes and new health industry fees 2014 Individual mandate with penalty Medicaid expansion (voluntary) Health Insurance Exchanges Premium subsidies Medicaid DSH reductions Insurance market rules prohibition on denying coverage or charging more to those who are sick, standardized benefits Employer requirements (subsidies and penalties)
Moving forward, what federal ACA provisions and/or State/local implementation and policy issues is the Health Commission interested in receiving information on? 18