ACA upheld: Are we finally ready to act?
Reamer L. Bushardt, PharmD, PA-C
On June 28th, we all heard the news that the Supreme Court upheld the 2010 Affordable Care Act. The Court also granted states the right to opt out of a key provision of the ACA related to expanding Medicaid programs for the impoverished and disabled. So, now that the constitutionality of the federal health care law has been established, what does this mean for patients and our profession?
I allowed the news to settle in for a while as the first wave of highly charged, politicized praises and criticisms scattered across the media and dissipated. Over the weekend, I scattered reputable newspapers across my kitchen table, downloaded commentary from my “go-to” sources, and set out on a journey to try to make sense of what the next steps will be. Honestly, it's all remarkably complicated and frequently confusing. I've attempted to read the ACA in its entirety on three separate occasions, but migraine cephalgia, epistaxis, and a compelling desire to do something else—anything else—won out each time. This blog post is based on several attempts to deconstruct the key elements, and it's entirely likely I've missed a provision or two. I hope you and other frequenters to Musings will help me fill in the gaps by adding thoughtful responses to the conversation.
Flood gates opening
I felt like flood gates had opened the Friday morning after the Court released its opinion. A plethora of health insurance company executives, health product corporations, hospital and medical center administrations, state government teams focused on implementation, Congressional leaders armed with language for a repeal, and clinician administrators who had filled board rooms prior to the Court decision started emailing their constituents with guidance. The sentiment from medical center and hospital leaders in my neck of the woods and elsewhere across North Carolina seems to be consistent. Our leaders anticipate ongoing scrutiny of several provisions at the state and federal levels, and they predict attempts will be made to repeal the law. Ultimately, most seem to assume that the ACA will be enacted—thus we need to be ready to deliver.
The concept of health care as a right appeals to me on a personal level. I've watched socioeconomic and racial differences impact access to and quality of care all my life. At the same time, I'm deeply concerned about how our country will fund and supply health care services for all involved. I think each of us probably knows major changes have to occur to advance quality, safety, and access—otherwise we will surely bankrupt the Treasury. At the same time, the former incentives have not particularly valued these principles, and our health care industry and insurers have not been driven with intensity to improve quality as much as they have to sustain profits. I'm not an open critic of a profit-driven agenda when that is exactly the culture we established. I am interested, though, in seeing how the successful groups will re-engineer their focus toward improving quality and decreasing cost without losing the ability to recruit and retain the brightest clinicians and scientists. It is a daunting challenge to even consider. Change is easiest to accept when it doesn't affect us personally, as we all know. I wonder how we all will be affected personally by ongoing health reform.
What does the law mean for patients?
For patients who do not have health insurance, most will have to acquire it beginning in 2014 or pay a fine. The Kaiser Family Foundation produced a most informative flowchart, The Requirement to Buy Coverage under the Affordable Care Act, which walks consumers through the current provisions. For most, the penalty (or tax, as the Supreme Court described it) would start at $95 per year or up to 1% of income, whichever is higher, and then rise to $695 or 2.5% of income by 2016. For most families, the penalty would be the greater of $2,085 or 2.5% of income by 2016. The federal law also calls for increased access to Medicaid based on income levels and offers federal subsidies for others to purchase health insurance.
For patients, or PAs, who receive health insurance through our employers, it will probably stay that way. Whether we will see insurance plan changes or alterations to premiums, deductibles, co-payments, or network coverage isn't yet clear. Several provisions of the 2010 ACA have already begun to change insurance benefits, such as bans on lifetime coverage limits and coverage guarantees for adult children up to age 26 years through their parents' plan.
A few other provisions of the federal law will impact many patients: some preventive services will be available at no cost; policies cannot be cancelled when patients get sick; children with pre-existing conditions cannot be denied coverage; and consumers will receive rebates if they spend a significant amount less on care than they do on premium payments (the “medical loss ratio” provision). Insurers will be also barred from rejecting applicants based on health status once exchanges are operating in 2014.
I was fascinated by the medical loss ratio provision of the ACA, which requires insurance companies to spend 80% to 85% of premium dollars on medical care and health care quality improvement versus administrative costs. This provision started in 2011, and the Internet chatter around states that anticipate receiving these rebates is vibrant. The Department of Health and Human Services reports that 1 in 5 consumers who purchase health insurance in the commercial market are in plans that spend more than 30 cents on the dollar for administrative costs, and 1 in 4 are in plans that spend between 25 and 30 cents on the dollar on administrative costs. Rebates in the individual market will likely come back to consumers in the way of a rebate check, a refund to a credit card or debit card (if that's how the premium was paid), or reduction in premiums. Rebates coming back to employers who provide health insurance may stay there or be passed along to employees.
I'm waiting to hear if these rebates are taxable; I'm assuming they are if deductions were claimed. There's something appealing, though, about getting a rebate check from your insurance company if your new diet and exercise plan makes you a relatively inexpensive member of the insurance pool. I'm pretty competitive by nature, so I might do well in that scenario (unless I have a genetic predisposition that a healthy lifestyle can't overcome).
What does the law mean for states?
Now that the ACA has been declared constitutional, states have two major tasks in front of them. First, will states accept federal dollars to expand Medicaid, which historically has been a collaborative effort between states and the federal government to provide care for the poor and disabled?
The ACA calls for states to extend Medicaid to everyone with incomes up to 133% of the poverty level. The Supreme Court's decision on the constitutionality of the Medicaid expansion provision of the ACA was more complicated. There appear to be three major take away points from their ruling: (1) Congress is able to provide federal funds to states to expand Medicaid coverage to millions of new patients; (2) states can agree to expand this coverage and accept the money from Congress, but they have to follow the rules that come along with the monies; and (3) a state can refuse to take part in the expansion without losing all of its Medicaid funds. The Court described the initial intent of ACA—to force states into the expansion—as unconstitutionally coercive. Major news stations reported that for the first 2 years, the federal government pays for 100% of the expansion costs. Starting in 2017, the states start contributing but will not be responsible for more than 10% of the cost.
The second big decision for states is whether to implement their own health insurance exchange. An exchange is basically a way to help eligible individuals and small businesses to shop for and purchase health plans. The federal government will help pay for people to buy insurance on the exchange if their incomes are up to 400% of the poverty level. Based on current poverty guidelines, 400% of the poverty level translates to $44,680 for individuals or $92,200 for a family of four.
States are heading in different directions with the health insurance exchange decision. As I write, 15 states have established a state exchange, one is planning for a partnership exchange, 18 are “studying their options,” 14 report no significant activity, and 3 have decided not to create a state exchange. California was the first state to initiate the development of a state exchange when the ACA was passed in 2010, and the state appears to be moving forward on the Medicaid expansion. Mississippi, which was among the states to challenge the ACA, has been working for months to build a health insurance exchange. Press releases from their state government describe this action as an attempt to maintain state control over the development of the exchange process for Mississippians. An estimated 275,000 Mississippians will be eligible to buy insurance through the exchange. Government leaders in Texas have been among the most vocal in opposition to the ACA. So far, the state has not taken any official action to create a health insurance exchange or pursue the optional Medicaid expansion. You might want to go online and find out what your state is doing in response to these two key issues.
What does the law mean for our country's bottom line?
The Supreme Court was asked to rule on the constitutionality of the federal health care law, not our country's ability to pay for it. So, the real question everyone is asking is, how do we afford it? The United States is already struggling with revenue shortfalls. National newswires report that Congress is supposed to cut $1.2 trillion from the federal budget over the next 8 years through sequestration of defense spending, Medicare, and/or Medicaid. All major political candidates for the White House are talking about job creation. I hope they all mean it, because funding health care will likely depend on much needed growth of our economy and the related federal tax income.
In 2006, Dr. Robert Steinbrook published an article in the New England Journal of Medicine, in which he explored promoting personal responsibility for health and for obtaining health care. At the time, personal responsibility was getting press as a part of the federal government's “Roadmap to Medicaid Reform.” This issue of personal responsibility is also getting plenty of press in nearly every newspaper, news channel, and online media outlet focusing any energy on health care right now. Dr. Steinbrook posed some interesting questions in his article and called for controlled trials to validate which system measures actually work to empower healthy living and reduce costs. He described many programs at that time that emphasized personal responsibility as “sketchy” in the details, often leaving important questions around individual freedom and patient autonomy unanswered. What more do we know about the success of personal responsibility programs now than we did in 2006? What measures actually promote behaviors that improve health or reduce cost? What measures are frequently counterproductive or merely shift dollars spent from one party to the other? The quicker we figure out the answers, the better our federal bottom line will be when it comes to funding health care.
The ACA created high-risk insurance pools to help patients acquire health insurance, but enrollment in these pools has been lower than expected. The cost and requirements (waiting periods, higher premiums) have been challenging for some people to manage. States will likely need to take steps to bolster enrollment in these high risk pools if they are to serve their original purpose effectively.
What does the law mean for physician assistants?
Well, we may have to figure this out together. The fundamental principles of improving population health, lowering costs per capita, and focusing on outcomes such as quality, safety, and access to care are always smart. The health care system, in its entirety, will be looking for solutions and proven strategies to reach these benchmarks. My position is that PAs are frequently integral to strategies that have done all of the above. We understand how to practice in resource-constrained environments, our training teaches us to leverage team-based care to improve outcomes, and we are excellent communicators and motivators of positive change among the patients we serve. I think we need to start speaking up—contribute some suggestions for how we move forward in our clinics, hospitals, operating rooms, board rooms, court houses, and anywhere else decisions are being made.
Whether you support or oppose the ACA, it is law and we need to act collaboratively to ensure PAs contribute to its implementation in a meaningful way. In their press releases, medical and other health professional associations are taking different postures about the federal health care law. Our Academy needs to be wise in communicating its values when so many Americans and PAs are divided on specific elements of the ACA. Focusing on what is important—our patients and our profession—will be critical to moving forward in a way that advances our opportunities to care for our patients, inspires unity among PAs, and attracts new members to our Academy. A strong, clear voice for PAs is vital if we are to have seats at the table as health care in this country is redesigned and a new paradigm is implemented.
Reamer Bushardt is professor and chair of the Department of Physician Assistant Studies, School of Medicine, Wake Forest University Baptist Medical Center, Winston-Salem, North Carolina. The views expressed in this blog post are those of the author and may not reflect AAPA policies.