HEALTH CARE CONSUMER’S CONCERNS ABOUT THE AFFORDABLE CARE ACT — THE LAW OF THE LAND (Part B)

This blog begins where the PART A left off as we continue to walk through the various provisions of the ACA and how repeal might impact you the health care consumer.

health care concerns - repealling aca

OTHER INSURANCE MARKET REFORMS

PROVISION

INSURERS MUST PROVIDE SERVICES IN TEN ESSENTIAL BENEFIT CATEGORIES

ESSENTIAL HEALTH BENEFITS

WHAT: TEN CATEGORIES OF SERVICES health insurance plans must cover under the Affordable Care Act. Specific services may vary based on each State’s individual and particular requirements. [1] [2]  [3] [4] [5]

LIFETIME OR ANNUAL PAYMENT LIMITS

WHAT: “Insurers are prohibited from limiting the amount of health care dollars for these benefits.” In other words-no caps on what the insurance payment will be for each service or condition associated with that service.

 

AGE BANDS

The ACA limits age bands, meaning that there’s a limit to how much insurers can charge older people compared with younger people.

WHAT ARE AGE BANDS? [6]

  1. Older age is thought to equate with higher health care costs for care and treatments
  2. Enter the age band rating which governs what health care insurers can charge by way of higher premiums from older consumers over younger, healthier ones as a means of covering that expected increased cost of health care
  3. Prior to the ACA, the age band rating was at a 5:1 ratio-insurers “cannot charge seniors more than five times what younger patients pay in premium value”
  4. The ACA limits this to a 3:1 ratio.
  5. Costs comparisons can be drawn across age, race, gender, occupational groups, categories of injuries and illnesses. [7] [8] See the chart below. [9]

health care costs by age chart

IF REMOVED

  1. Premiums could be lower, but coverage would be less
  2. Annual or lifetime payments would be limited
  3. The likelihood of patients obtaining these services decreases

The next provision is really aligned with the one above.  Think of it as the Teeter Totter of healthcare coverage (only a Pediatrician would think of that metaphor). The two are provisions (nine categories of care and preventative care) which are fundamentally linked in an inverse relationship. Messing with one impacts the other.

COST-FREE PREVENTIVE SERVICES FOR PATIENTS

PROVISION

WHAT: The United States Preventive Task Force services previously mentioned lists the “screening tests, counseling services, and preventive medicine” [10] which are have been shown to be effective to prevent illnesses before they cause you symptoms or problems

  1. Cost-free preventive services must be covered
  2. “Getting the best health care means making smart decisions about preventive services”
  3. GOAL:

(a) Provide a pathway for “doctors, nurses and other primary care professionals “

(b) Provide you the patient and your families “the most accurate and up-to-date information on ways to prevent illness and improve health and well-being”

IF REMOVED

Ultimately, the risk is that people will wait until their disease is more advanced. This means more cost and lower life expectancy-see Chapter Eleven.

MEDICAID EXPANSION

medicaid expansion

PROVISION

WHAT: This lynchpin issue has become how to maintain insurance coverage obtained under the ACA as Medicaid has become the “largest source of funding for medical and health-related services for people with low income in the United States.” [11]

  1. States get subsidies for expanding Medicaid -Although this figure is up to 133% of the Federal Poverty level (FPL), because of the math (the way this is calculated), it turns out to be actually 138%
  2. Medicaid eligibility expanded to “eligible childless adults (previously excluded in many states)”
  3. Other factors (besides income) which enter into eligibility discussion include “household size, disability, family status” but eligibility rules differ amongst the various states. Generally-“Medicaid recipients must be U.S. citizens or legal permanent residents, and may include low-income adults, their children, and people with certain disabilities” [12]
  4. In 2012 the Supreme Court weighed in (much like Mr. Thompson predicted) and “made the expansion voluntary”
  5. By 2017 it provided “health insurance to 74 million low-income and disabled people” with thirty-two ‘States’ (including Washington D.C.) participating
  6. In 2018, “states including Idaho, Utah, Nebraska, and North Carolina are weighing expanding their programs, and the debate is also playing a central role in the midterm contests in Florida, Georgia, and Kansas.”[13] The Virginia General Assembly “approved expansion of Medicaid.”[14] Their Governor is expected to ink his name to the bill. Unlike Maine, where their head of the state government has absolutely refused to endorse this legislative initiative even after Maine voters voted overwhelmingly to approve Medicaid expansion. [15]

IF REMOVED- more than 10 million Americans will lose health care coverage (see Chapter Eleven). (CBO estimate)

SUBSIDIES IN THE MARKET PLACE

qualifing for subsidies chart

PROVISION

  1. WHAT: Subsidies to buy health care insurance available to eligible beneficiaries (household incomes up to 400% of the Federal Poverty level or FPL) [16]
  1. Two types of subsidies

(a) premium tax credit

(b) cost sharing subsidies

  1. Subsidized Coverage-How much money is enough to guarantee that there is adequate subsidy money and tax credits to offset the impact of any changes in this mandate? [17]
  2. There are calculators available to assist people[18]

IF REMOVED

  1. Without subsidies, “many of the estimated 12 million people who buy insurance would not be able to do so, or they might not adhere to prescriptions and other recommendations from doctors.”(CBO estimates)
  2. Removal of subsidies might also “spell the end of the Individual Healthcare Marketplace which relies heavily on subsidies” [19] (Or would it?)

INNOVATION CENTER AND VALUE BASED PAYMENTS

PROVISION

  1. WHAT: The Centers for Medicare and Medicaid Innovation (CMMI)
  2. The “capstone” for moving away from Fee-For-Service Medicare payments to value-based payments (See Chapter Five)
  3. Focus on Cost/Quality/Outcomes (see Major Pillars of Healthcare and Chapter Five)

IF REMOVED

  1. “A simple Senate majority could strip the agency of its funding, which amounted to $1.4 billion to operate in fiscal year 2015 (Centers for Medicare & Medicaid Services or CMS budget report) [20]
  2. If Congress removed the CMMI, it would lose potential savings of $34 billion that the agency is expected to generate from 2017 to 2026” [21]

CLOSING THE MEDICARE PRESCRIPTION DRUG ‘DONUT-HOLE’

PROVISION

  1. WHAT: ACA gradually reduces the ‘donut hole’ until it disappears in 2020
  2. Before the ACA

(a) “Medicare Part D drug coverage ended after a certain dollar amount

(b)  Drug payment would resume only when catastrophic coverage was triggered”

IF REMOVED

“This does not seem to be a provision that Republicans are targeting, but if they did remove the donut hole, it would affect millions of Medicare beneficiaries.” [22]

TAXES FUNDING THE ACA

PROVISION

  1. WHAT: “Levies significant taxes on

(a) pharmaceutical manufacturers

(b) medical device manufacturers

(c) health insurers

(d) wealthy citizens

(e) tanning booths

  1. Taxes help to pay for coverage expansion and the CMMI expenses
  2. Reduced payments to Medicare Advantage Plans
  3. Cuts Medicare Disproportionate Share Hospital payments which compensates hospitals for providing care to non-paying patients” [23]

Author’s note-

This Federal law requires that state Medicaid programs make “Disproportionate Share Hospital (DSH) payments to qualifying hospitals (3,109 hospitals) that serve a large number of Medicaid and uninsured individuals.”   The ACA expansion of Medicaid “aimed to reduce funding for the Medicaid DSH program by $17.1 billion between 2014 and 2020.” [24]

  1. The ACA “imposes an annual 40% excise tax on plans with annual premiums exceeding $10,800 for individuals or $29,500 for a family starting in 2020, to be paid by insurers”

The so-called ‘Cadillac Health Plans.’

“(a) PURPOSE OF THE PROVISION

– Reduce tax preferred treatment of employer provided health care

– Reduce excess health care spending by employees and employers

– Help finance the expansion of health coverage under the Affordable Care Act (ACA)

(b) AMOUNT

– For (your) planning purposes, the thresholds for high-cost plans are currently $10,200 for individual coverage, and $27,500 for family coverage

(c) APPLICABLE TYPES OF COVERAGE (would you be impacted?)

There are many including (but not all shown)

– Health Flexible Spending Accounts (FSAs)

– Health Savings Accounts (HSAs), employer and employee pre-tax contributions

– Health Reimbursement Accounts (HRAs)

– Executive Physical Programs

– Federal/State/Local government-sponsored plans for its employees

– Retiree coverage

– Multi-employer (Taft-Hartley) plans” [25]

IF REMOVED

  1. ACA would lose funding for coverage expansion placing that at risk
  2. Some other “money tree” or source of funding sources would need to be found to fund replacement plans for the ACA

INDEPENDENT PAYMENT ADVISORY BOARD

PROVISION

  1. WHAT: The Independent Payment Advisory Board, or IPAB

(a) fifteen-member United States Government agency

(b) GOAL: Medicare savings “without affecting coverage or quality.” [26]

  1. It was not triggered in 2017
  2. WHAT THE IPAB DOESN’T DO

(a) Reduce current Medicare benefits, premiums or co-payments.

(b) Raise taxes

  1. WHAT THE IPAB DOES DO

(a) Impact spending by decreasing provider/device makers/drug company Medicare payments

(b) Send the “recommended reductions to Congress to trigger an expedited review” [27]

(c)” If Congress does not choose to legislate the cost savings, the IPAB’s recommendations ‘automatically go into effect”

  1. FLAWS(?)

(a) No “accountability”’ (to elected representatives/ voters)

(b) Cannot enact reform or “efficiencies such as recommend a structural change in healthcare”

IF REMOVED

Another way to control Federal healthcare spending would need to be initiated in its stead.

FOOTNOTES:

[1] www.dictionary.com/browse/hospitalization

[2] www.investopedia.com/terms/p/preventive-services.asp

[3] https://www.healthcare.com/info/health-insurance/lab-services-aca-essential-health-benefit

[4] https://definitions.uslegal.com/m/maternity-care/

[5] www.news-medical.net/health/What-is-Pediatrics.aspx

[6] http://www.naifa.org/practice-resources/prp/age-band-rating-(aca)

[7] Am. J. Ind. Med. 2006

[8] http://www.healthcostinstitute.org/files/Age-Curve-Study_0.pdf

[9] https://www.quora.com/Why-is-the-per-capita-spending-on-healthcare-so-high-in-the-US

[10] https://www.uspreventiveservicestaskforce.org/Tools/ConsumerInfo/Index/information-for-consumers

[11] “Evidence on the Value of Medicaid | Econofact”. Econofact. 2017-07-02.

[12] http://familiesusa.org/product/50-state-look-medicaid-expansion

[13] https://www.wsj.com/articles/medicaid-expansion-gains-popularity-in-red-states-1528974001

[14] https://www.wsj.com/articles/virginia-is-poised-to-expand-medicaid-1527727529

[15] https://www.healthinsurance.org/maine-medicaid/

[16] https://resources.ehealthinsurance.com/affordable-care-act/aca-obamacare-subsidies

[17] https://www.kff.org/medicaid/fact-sheet/summary-of-the-2018-chip-funding-extension/

[18] https://www.kff.org/interactive/subsidy-calculator/

[19] The Wal Street Journal, U.S. News: Pressure Grows to Fund Health Program by Stephanie Armour. August 30, 2017.

[20] US Department of Health and Human Services. HHS FY2015 budget in brief. Centers for Medicare & Medicaid Services (CMS): Center for Medicare & Medicaid Innovation. https://www.hhs.gov/about/budget/fy2015/budget-in-brief/cms/innovation-programs/index.html

[21] Cubanski J, Neuman T, Jacobson G, Boccuti C. What are the implications of repealing the Affordable Care Act for Medicare spending and beneficiaries? Kaiser Family Foundation. December 13, 2016. http://kff.org/medicare/issue-brief/what-are-the-implications-of-repealing-the-affordable-care-act-for-medicare-spending-and-beneficiaries/

[22] What’s At Risk in Repealing the ACA? How Will It Affect You? Leigh Page  |  February 23, 2017

[23] https://www.medicaid.gov/medicaid/financing-and-reimbursement/dsh/

[24] https://fas.org/sgp/crs/misc/R42865.pdf

[25] https://www.cigna.com/health-care-reform/cadillac-tax n

[26] Vaida B. The IPAB: the center of a political clash over how to change Medicare. Kaiser Health News. March 22, 2012.

[27] http://www.acsh.org/news/2017/02/16/independent-payment-advisory-board-first-skirmish-repealing-obamacare-10867

By | 2018-10-15T12:17:09+00:00 October 24th, 2018|Categories: Healthcare|Tags: |0 Comments

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