The Affordable Care Act (ACA)
APA's informal rulemaking procedures
*Agencies generally are required to publish notice of a proposed rule making, provide opportunity for the submission of comments by the public, publish a final rule and a general statement of basis and purpose in the Federal Register at least 30 days before the effective date of the rule
Implementation of ACA
*Began in 2010. Includes federal and state governments, employers, insurers, and health care providers. *Creates a variety of new commissions and advisory bodies. *Established the Health Insurance Reform Implementation Fund (HIRIF). *Established many new grant programs and provided for each an authorization of appropriations, and reauthorized funding for numerous existing programs whose authorization of appropriations had expired.
Medicaid expansion
*Federal government will provide 100% of the costs of the expansion for the first three years, phasing down the 90% in the years thereafter
Rules and Guidance Documents
*Federal rule making process is governed by the APA, other statues, and executive orders. *
Legal Challenges
*HHS vs. Florida, attorney generals and governors in 26 states seeked to invalidate individual mandate ad other provisions of the ACA
ACA incentives for promoting primary care and prevention
*Increases funding for community health centers and the National Health Service Corps to expand access to primary care services in rural and medically undeserved areas and reduce health disparities
Independent Payment Advisory Board
*Makes recommendations for achieving specific reductions if costs exceed a target growth rate(takes effect unless congress overrides them, in which congress would achieve the same level of savings)
What happened to coverage expansions beginning in 2014?
*Most individuals will be required to have insurance or pay a penalty *Certain employees with more than 50 employees who do not offer health insurance may be subject to penalties *Some employees may be required to pay a penalty if any of their full-time workers enroll in marketplace plans and receive premium tax credits.
U.S. Supreme Court Decision
*National Federation of Independent Business v. Sebelius on June 28, 2012. *States in violation of 10th amendment
What happened to market reforms beginning in 2014?
*No annual dollar limits allowed on essential health benefits *No coverage exclusions for preexisting conditions allowed regardless of age *Plans offered in the marketplace and certain other plans must meet essential benefit standards and cover emergency services, hospital care, physician services, preventive services, prescription drugs, and mental health and substance use treatment.
Congressional oversight
*Oversight hearings, confirmation hearings for agency officials, letters to and meetings with agency officials, and the Office of Information and Regulatory affairs regarding particular rules *Can request that the OIGs evaluate agencies actions to implement, or agency decisions not to implement
What happened in 2017 when it comes to coverage expansions and market reforms?
*States may allow larger employers to purchase health insurance through the marketplaces, but are not required to do so. *HHS will establish marketplaces in states that do not create their own approved marketplace. *Premium credits and cost-sharing subsidies will be available to individuals who enroll in marketplace plans(income must be at or above above 100% and not exceed 400% at the Federal Poverty Level
APA and agencies
*Subject to judicial review *More than 40 provisions in ACA require or permit agencies to issue rules *Rule making requirements do not apply to guidance documents
What are the aims of the ACA?
1.To achieve near-universal coverage and to do so through the shared responsibility of the government 2.To improve the fairness, quality, and affordability of health insurance coverage 3.To improve health-care value, quality, and efficiency while reducing wasteful spending and making the healthcare system more accountable to a diverse population 4.To strengthen primary health-care access while bringing long-term changes in the availability of primary and preventative health-care 5.To make strategic investments in the public's health through an expansion of clinical prevention care
What is the HHS secretary tasked with?
Implementation and oversight of many of ACA's key provisions. Issues regulations or interim final rules by a specific date.
Improving quality and lowering costs-2013
Improving Preventive Health Coverage,Expanding Authority to Bundle Payments
Legal challenges-post implementation (3)
In December 2018, a Texas federal judge, Reed O'Connor, ruled in favor of 20 Republican attorney generals and governors and two individuals challenging the constitutionality of the individual mandate. The plaintiffs argued that since the Trump administration's 2017 Tax Cut and Job Act effectively eliminated the penalty for not having insurance (i.e. individual mandate), it rendered the mandate and effectively the ACA unconstitutional. Following the Texas ruling, the State of Maryland has filed a countersuit with the goal of affirming the constitutionality of the ACA.
Legal challenges-post implementation (1)
In June 2012, the US Supreme Court, in a 5-4 decision, ruled that the individual mandate provision of the ACA was constitutional under Congress's power to levy taxes. In the same ruling, the court ruled that Congress overstepped by forcing states to expand Medicaid via threats to cut federal funding to states that did not expand. With this ruling, the court left the decision of whether or not to expand Medicaid solely to individual states.
Legal challenges-post implementation (2)
In a second Supreme Court ruling on the ACA in June 2015, the Court upheld (in a 6-3 decision) a key provision of the ACA authorizing subsidies (tax credit) to certain individuals who purchased insurance on federally run Health Insurance Exchanges.
Implementation by year-2013
Increasing Medicaid Payments for Primary Care Doctors. Open Enrollment in the Health Insurance Marketplace Begins Oct 2013. Providing New Funding to State Medicaid Programs That Choose to Cover Preventive Services for Patients at Little or No Cost.
Key provisions-what is in the ACA law?
Individual mandate Employer requirements Changes to private insurance Expansion of public programs American Health Benefit Exchanges
Implementation by year-2011
Offering Prescription Drug Discounts for Seniors who Reach Coverage Gap. Improving Health Care Quality and Efficiency by Establishing a new Center for Medicare & Medicaid Innovation. Full (no cost sharing with patient) Coverage for Preventive Care for Seniors on Medicare.
Improving quality and lowering costs-2011
Offering Prescription Drug Discounts,Providing Free Preventive Care for Seniors,Improving Health Care Quality and Efficiency,Improving Care for Seniors After They Leave the Hospital,Introducing New Innovations to Bring Down Costs,Increasing Access to Services at Home and in the Community,Bringing Down Health Care Premiums,Addressing Overpayments to Big Insurance Companies and Strengthening Medicare Advantage
Implementation by year-2014
Prohibiting Discrimination Due to PreExisting Conditions or Gender. Ensuring Coverage for Individuals Participating in Clinical Trials. Eliminating Annual Limits on Insurance Coverage. Establishing the Health Insurance Marketplace. Expanding Access to Medicaid. Individual Mandate.
Increasing access to affordable care-2010
Providing Access to Insurance for Uninsured Americans with Pre-Existing Conditions,Extending Coverage for Young Adults,Expanding Coverage for Early Retirees,Rebuilding the Primary Care Workforce,Holding Insurance Companies Accountable for Unreasonable Rate Hikes,Allowing States to Cover More People on Medicaid,Increasing Payments for Rural Health Care Providers,Strengthening Community Health Centers
Improving quality and lowering costs-2010
Providing Small Business Health Insurance Tax Credits,Offering Relief for 4 Million Seniors Who Hit the Medicare Prescription Drug "Donut Hole.",Providing Free Preventive Care,Preventing Disease and Illness,Cracking Down on Health Care Fraud
2010-New customer protections
Putting Information for Consumers Online,Prohibiting Denying Coverage of Children Based on PreExisting Conditions,Prohibiting Insurance Companies from Rescinding Coverage,Eliminating Lifetime Limits on Insurance Coverage,Regulating Annual Limits on Insurance Coverage,Appealing Insurance Company Decisions,Establishing Consumer Assistance Programs in the States
ACA provides tools to help with what?
Reduce fraud, waste, and abuse in both medicare and medicaid
Implementation by year-2012
Regulations Targeting Health Plans to Reduce Paperwork and Administrative Costs. Linking Payment to Quality Outcomes by Establishing a Hospital Value-Based Purchasing (VBP) program in Traditional Medicare.
List some of the provisions of the ACA
Restructures the private health insurance market. Sets minimum standards for health coverage. Creates a mandate for most U.S. residents to obtain health insurance coverage. Provides for the establishment by 2014 of state-based insurance marketplaces (previously called exchanges) for the purchase of private health insurance.
What are the costs of spending public and health insurance coverage and other spending's offset by?
Revenues from new taxes and fees, and by savings from payment and health care delivery system reforms designed to reduce spending on Medicare and other federal health care programs.
LAWSUITS CHALLENGING THE ADMINISTRATION OF THE ACA IN THE TRUMP ADMINISTRATION
Several other separate lawsuits have been filed by some states, cities, health plans and individuals challenging the Trump administration's regulation of the ACA. Some of these include those challenging current regulations that allow the marketing of health plans that are not ACA- compliant (including short-term health plans that are exempt from all ACA consumer protections)
Criticisms of the law: medicaid expansion and disparities
There are other concerns about disparities in access among states that expanded Medicaid versus states that did not expand Medicaid. 1. Uninsurance rates remain higher in non expansion states, compared to expansion states, leading to disparities in access to care.
What does the HHS do?
To develop a national strategy for health care quality to improve care deliver, patient outcomes, and population health.
What is the primary goal of the ACA?
To increase access to affordable health insurance for the millions of Americans without coverage and make health insurance more affordable for those already covered.
the Center for Medicare and Medicaid Innovation (CMMI)
To pilot payment and service delivery models. Establishes new pay-for-reporting and pay-for-performance programs within Medicare that will pay providers based on the reporting of selected quality measures.
Why does ACA incorporate numerous medicare payment provisions?
To reduce the rate of growth in spending. *Includes reductions in Medicare Advantage play payments *Lowers annual payment update for hospitals and certain other providers
The ACA, What is it?
❖Also known as Obama Care. ❖Passed into law by President Obama in March 2010. ❖Most significant reform to the health system since the passage of the Medicare and Medicaid programs in 1965. ❖Largely a reform to health insurance coverage. ❖Politically contentious law. ❖Roll out of the law occurred between 2010 and 2014.
Criticisms of the law: lack of competition among marketplace insurance plans over time
1. Also driving the increases in premiums is the fact that over time, several health insurance plans have dropped out of the marketplace, limiting the number of choices consumers have.
Employer requirements
1. Employers with greater than 50 employees will be subject to penalty if they do not offer coverage and/or if they have at least one employee who received premium credit through an Exchange
Update on the ACA: 2019
1. In 2017, a Republican-led Congress attempted and failed to repeal and replace the Affordable Care Act. 2. Congress passed the 2017 Tax Cut and Job Act that effectively eliminated the tax penalty for not having insurance (i.e. individual mandate) as of 2019. 3. A Texas federal judge ruled in December 2018 that the law was effectively now unconstitutional following the elimination of the individual mandate by the 2017 Tax Cut and Jobs Act. This ruling is being challenged by several counter lawsuits. We await the outcome(s) of these countersuits. 4. Current regulations, allow the proliferation of new, more loosely-regulated and in many cases non-ACA compliant plans to compete with ACA marketplace plans.
Individual Mandate
1. Individuals are required to have health insurance beginning 2014 or pay a yearly financial penalty 2. Exemptions will be given under certain circumstances, including financial hardships and religious objections
American Health Benefit Exchanges
1. Individuals can purchase health insurance on health Exchanges created by States. 2. Individuals whose states' do not offer a state-run exchange can purchase coverage on the Federal Exchange. 3. Insurers on the health insurance exchanges (also known as Marketplace) will offer different levels of coverage based on premiums, benefits and out-of-pocket costs. Coverage should meet minimum set of standards 4. Subsidies for premiums and cost sharing will be available for individuals with low income. Only citizens and legal residents are eligible for Medicaid and other government financial assistance for purchasing healthcare under the ACA.
Expansion of public programs
1. Subject to state decision, the ACA provides for the expansion of Medicaid eligibility to 138% of the federal poverty level for individuals less than 65 years old.
Changes to Private Insurance
1. Young adults can remain on their parents' insurance until 26 years 2. Health insurers cannot deny coverage based on pre-existing conditions 3. Certain preventative services should be covered with NO cost sharing 4. Health insurers are prohibited for imposing lifetime limits on coverage 5. Insurers are required to spend at least 80% of premiums on medical services 6. Premiums can only vary based on age, geographic area, tobacco use and number of family members 7. The law define "10 essential benefits" that should be provided by health plans
ACA'S temporary programs to increase access and funding for targeted groups
1.Temporary high-risk pools for uninsured individuals with preexisting conditions. 2.A reinsurance program to reimburse employers for a portion of the health insurance claims costs for their 55-64 year old retirees. 3.Small business tax credits for firms with fewer than 25 full-time equivalents (FTEs) and average wages below $50,000 that choose to offer health insurance. *Prior to 2014, states may choose voluntarily to expand their Medicaid programs.
Overview of the health care law
2010: A new Patient's Bill of Rights goes into effect, protecting consumers from the worst abuses of the insurance industry. Cost-free preventive services begin for many Americans. 2011: People with Medicare can get key preventive services for free, and also receive a 50 percent discount on brand-name drugs in the Medicare "donut hole." 2012: Accountable care organizations and other programs help doctors and health care providers work together to deliver better care. 2013: Open enrollment in the Health Insurance Marketplace begins on October 1. 2014: All Americans will have access to affordable health insurance options. The Marketplace allows individuals and small businesses to compare health plans on a level playing field. Middle- and low-income families will get tax credits that cover a significant portion of the cost of coverage. The Medicaid program will be expanded to cover more low-income Americans. All together, these reforms mean that millions of people who were previously uninsured will gain coverage from the Affordable Care Act.
When did major expansion and reform provisions in ACA take effect?
2014 *States are expected to establish health insurance marketplaces that provide access to private health insurance plans with standardized benefit and cost-sharing packages for eligible individuals and small employers
Impact of the law on insurance coverage
A key goal of the ACA was to expand health insurance coverage to Americans. 1. Following the passage of the ACA, United States uninsurance rates declined for nonelderly 0-64 years, from about 18% in 2010 to 11% in 2015 and 10% in 2017. 2. Declines in children (0-18 years) uninsurance rates were also observed. 3. Uninsurance rates also dropped among young adults, 19-26 years (who are allowed to stay on their parent's plan until 26 years). According to Kaiser Family Foundation's analysis of the National Health Interview Survey, uninsurance for this age group dropped from 32% in 2010 to 14% in 2017.
What are premiums for individual and small group coverage based on?
Age, family size, geographic area, tobacco use. *Plans must sell and renew policies to all individuals and may not discriminate based on health status.
Rules for major medical plans prior to 2014
Can no longer impose any lifetime dollar limits on essential benefits. Plans may only restrict annual dollar limits on essential benefits to defined amounts (such annual limits will be prohibited altogether beginning in 2014). Plans must cover preventative care with no cost-sharing, and they cannot rescind coverage,except in cases of fraud. Must establish an appeals process for coverage and claims. Insurers must also limit the ratio of premiums spent on administrative costs compared to medical costs, referred to as medical loss ratios, or MLRs.
Provisions of ACA: Health care quality and payment incentives
Establish pilot, demonstration, and grant programs to test integrated models of care, including accountable care organizations, medical homes that provide coordinated case for high-need people, and bundling payments for acute-care episodes.
Other provisions of the ACA
Expands eligibility for Medicaid. Amends the Medicare program in ways that are intended to reduce the growth in Medicare spending. Imposes an excise tax on insurance plans found to have high premiums. Makes numerous other changes to the tax code, Medicare, Medicaid, the States Children's Health Insurance Program (CHIP) and other federal programs.
Examples of expanding their Medicaid programs
Extending dependent coverage to children under age 26. Not allowing children under age 19 to be denied insurance and benefits based on preexisting health conditions.
How do families and individuals reduce the cost of purchasing coverage through the insurance marketplaces?
Federal subsidies
National Federation of Independent Business vs. Sebelius
Found the medicaid expansion violated the constitution by threatening states with the loss of their existing federal medicaid matching funds if they fail to comply with the expansion.
HIRIF
Fund obligated by the end of FY2012.
Two main parts of the ACA
Insurance reform(more people, better coverage) and Delivery Reform(integrated care, quality focus, innovation)
Improving quality and lowering costs-2012
Linking Payment to Quality Outcomes,Encouraging Integrated Health Systems,Reducing Paperwork and Administrative Costs,Understanding and Fighting Health Disparities,Providing New, Voluntary Options for Long-Term Care Insurance
When did the ACA become law?
March 23, 2010
Impact of the law on preventative care
One of the provisions of the ACA was eliminate cost sharing for most preventative and screening services. Research suggests that the law has been effective in improving the use of preventative care by Americans. 1) In the years immediately following the passage of the ACA (2011/2012), Han et al., 2015) estimated the impact of the ACA on the likelihood of receiving certain preventative and screening services among privately insured individuals and observed the following: i. A 3% increase in the likelihood of receiving blood pressure checks among non-elderly adult privately insured population ii. A 13% increase in the likelihood of receiving cholesterol checks among non-elderly adult privately insured population iii. A 4% increase in the likelihood of receiving the flu shot checks among non-elderly adult privately insured population iv. In comparison, no changes were observed in the use of these services among those who were uninsured. 2) Other studies have found evidence in support of small early improvements in certain preventative care utilization following the passage of the ACA across insured population subgroups including the elderly (Goodwin & Anderson, 2012) and young adults (Lau et al., 2014)
Improving quality and lowering costs-2015
Paying Physicians Based on Value, Not Volume
Implementation by year-2010
Prohibiting Denying Coverage of Children Based on Pre-Existing Conditions. Process to Allow Consumers Appeal Insurance Company Decisions. Prohibiting Insurance Companies from Rescinding Coverage. Full (no cost sharing with patient) Insurance Coverage for Preventive Care. Eliminating Lifetime Limits on Insurance Coverage. Extending Coverage for Young Adults to Allow them Stay on Parents Plan till 26 years. Allowing States to Cover More People on Medicaid.
New consumer protections-2014
Prohibiting Discrimination Due to Pre-Existing Conditions or Gender,Eliminating Annual Limits on Insurance Coverage,Ensuring Coverage for Individuals Participating in Clinical Trials,Making Care More Affordable,Establishing the Health Insurance Marketplace,Increasing the Small Business Tax Credit,Increasing Access to Medicaid,Promoting Individual Responsibility
Impact of the law on healthcare delivery system
Some of the provisions in the ACA focused on improving the quality of delivered through the creation of value-based programs, intended to reimburse hospitals based on value (i.e. quality relative to cost) rather than quantity of services provided. The Hospital Readmission Reduction Program was one of such programs. Under this program, reimbursements were reduced for hospitals with excessive 30-day Medicare readmission rates. Evidence suggest that hospital readmission rates have declined following the implementation of the ACA.
How is the ACA projected to have a significant impact on federal spending and revenues?
Spending to subsidize the purchase of health insurance coverage through the state health insurance marketplaces. Increased outlays for the expansion of the Medicaid program. Numerous mandatory appropriations to fund temporary programs to increase access and funding for targeted groups. Provide funding to states to plan and establish health insurance marketplaces. Support many other research and demonstration programs and activities.
In addition to the expanding private health insurance coverage, ACA requires what?
State Medicaid programs to expand coverage to all eligible non-pregnant, non-elderly legal residents with incomes up to 133% of the FPL or risk losing their federal Medicaid matching funds. Federal government will initially cover all costs for this group with the federal matching percentage phased down to 90% of the costs by 2020. Law requires states to maintain the current CHIP structure through FY2019 and provides federal CHIP appropriations through FY2015 (provides a two-year extension on CHIP funding)
Criticisms of the law: premium increases
The most significant criticism of the Affordable Care Act have related to the affordability of insurance premiums. 1. One of the criticisms relating the increase in premiums has been concerns about disparities in access particularly for the middle class. Low income families have largely been protected from premium increases because they receive insurance subsidies which rise as premiums rise. This allows them, for the most part, to offset premium increases. 2. On the other hand, individuals with incomes at 400% of more of the federal poverty level ($48, 560 for an individual or $100,400 for a family of 4 in 2019) are not eligible for subsidies, as such, they have to bear the entire cost of premium increases. 3. The effect of this is evident in the statistics. Between 2015 and 2018, the number of individuals who enrolled for health insurance on the marketplace and received government subsidies increased by 6%. Over the same time period, and in response to increasing premiums, the number of individuals not eligible for subsidies who enrolled in marketplace insurance plans fell by 39%.
