obama care (aca) – affordable care act or patient protection and affordable care act (ppaca)

Obama Care

(ACA) – Affordable Care Act or Patient Protection and Affordable Care Act

(PPACA)

Obamacare =

The Patient Protection and Affordable Care Act 42 USC 18001, Public Law 111-148(905 pages)

and

Health Care and Education Reconciliation Act,Public Law 111-152 (54 pages)

WHY? Census reports:

Over 48 million people in US without health insurance – 15%;

Over 197 million people have private insurance – 63%;

Medicare covers 44 million – 14%;

Medicaid covers 50 million – 16%

13%

15%

58%

14%

Health Insurance USA

Medicare

Medicaid

Private

Uninsured

To understand US healthcare must know at least five bodies of law:

MedicareMedicaid

Affordable Care Act Private Insurance

Uninsured Health Care

US Healthcare

THE COMMONWEALTH FUND

Exhibit 1. International Comparison of Spending on Health, 1980–2007

Note: $US PPP = purchasing power parity.Source: Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).

0

1000

2000

3000

4000

5000

6000

7000

8000

1980 1984 1988 1992 1996 2000 2004

United States

Canada

Netherlands

Germany

Australia

United Kingdom

New Zealand

Average spending on healthper capita ($US PPP)

0

2

4

6

8

10

12

14

16

1980 1984 1988 1992 1996 2000 2004

United StatesGermanyCanadaNetherlands

New ZealandAustraliaUnited Kingdom

Total expenditures on healthas percent of GDP

$7,290

$2,454

16%

8%

What is Medicare?

Medicare• What is it?• What kind of law is it?• How is a person eligible?• What is the benefit conferred?• Who administers it?• Who pays for it?• What is its constituency?• What is its history?• Who are collateral beneficiaries?• What size is it?

What is Medicare?

• Federal Law• Medicare is a nationwide federal health insurance program for

the aged and certain disabled persons. It has several parts.• Medicare covers 40 million people aged 65 and older AND

another 8 million disabled.• Total expenditures in 2011 were $549 billion• Total income in 2011 was $530 billion• Assets in “trust” were $324 billion

Medicare has four parts

What are Medicare Parts?

• Hospital Insurance (HI) known as Medicare Part A helps pay for hospital, skilled nursing and hospice care for aged and disabled.

• Supplementary Medical Insurance (SMI) is Part B and Part D.• Part B pays for outpatient costs like doctor visits.• Part D provides subsidized access to drug insurance coverage on

voluntary basis.• Part C is an alternative to Parts A and B, eg Medicare Advantage

plans which contract with Medicare.

Eligibility for Medicare – A & B

• Part A is premium free for people over 65 who have paid Medicare taxes for 10 years

• Part A has a premium for people over 65 who have not paid Medicare taxes for 10 years - $451 monthly

• Part A is also available for people who have been on SSD for 24 months

• Everyone over 65 who wants Part B must pay for it - $99 (higher for 5% of people with incomes over $80,000)

Medicare Benefits? Part A

• Inpatient hospital coverage – semi-private room, meals, nursing care, drugs and supplies, but not all doctor services in the hospital (Part B helps cover some of those)

• Skilled nursing facility (up to 100 days a year) NOT CUSTODIAL CARE; patient pays copayment of up to $120 a day from day 21 to 100;

• Hospice care if you are certified terminally ill and have less than 6 months to live

• There are copayments eg $1000+ per hospital stay

Medicare Part B Benefits

• Medically necessary doctor visits, lab tests, surgeries• Supplies – like walkers or wheelchairs• Preventive services• Ambulance, mental health services• Annual deductible, monthly premium, usually pay 20% of

Medicare approved cost of services as copayment – combined usually total about 25% of overall cost of services

Not Covered by Parts A or B

• Custodial long term care• Dental or eye care• Hearing aids

Medicare Part C

• Medicare Advantage Plans• Allow people to receive all their health care through one

provider and usually extra services offered for additional fees

Medicare Part D

Medicare Part D

• Begun in 2004• Provides subsidized access to prescription drug insurance

coverage• Voluntary• Pay premiums• Either through Medicare Prescription Drug Plans or through

Medicare Advantage Plans

Medicare Supplemental Insurance – Private Medigap

Policies• Coverage for costs Medicare does not pay• Co-insurance, copayments, deductibles• Not available for Part C Medicare Advantage

Plan participants• Cannot turn you down if you apply as soon as

you are 65, otherwise can.

Administration of Medicare?

Who Pays for Medicare?

• Part A is financed by FICA HI. • Part B is financed by premiums (25%) and US general funds

(75%)• Part D is financed by beneficiary premiums and general

revenues• The Medicare tax has gone up for people earning more than

$200,000 by 0.9%, with no maximum income cap - there is no employer match on the new tax.

2007 Medicare Changes for Higher Income Recips

• The Part B premium is linked to income for the first time, starting in 2007.

• People with incomes over $80,000 ($160,000 for couples) pay more on a sliding scale

• Indivs up to $107k – extra $40/month• Over $214k – extra $219/month• Will impact 1-2 m recips (of 40+)

• Robert Pear, “Medicare Premiums to Rise,” NYT 2006

Medicare History

• Enacted in 1965, the Medicare program immediately covered 19.1 million people when it went into operation on July 1, 1966.

• Before 1966, only about half of all older Americans had health insurance.

• In 1972, Congress extended eligibility for Medicare to permanently disabled people who have received Social Security Disability Insurance (SSDI) payments for two years and individuals with end-stage renal disease (ESRD).

Who are Medicare collateral

beneficiaries?

:                                              

Where Do Medicare Dollars Go?

Financial OutlookMedicare Trustees Report

• For the last 7 years, Trustees have issued Medicare Funding Warning

• “Medicare’s actual future costs are highly uncertain” • “Congress and the executive branch must work together with a

sense of urgency to address” exhaustion of HI trust fund and the growth in Parts A, B and D.

Affordable Care Act of 2010 - Medicare

• Phases out the Part D donut hole by 2020• Freezes Part C Medicare Advantage Plans and provides bonuses to plans

with high quality ratings• Creates new Independent Payment Advisory Board to recc ways to

reduce Medicare spending• Reduces annual increases to Medicare providers• Increases HI from 1.45 to 2.35% for individuals with incomes over

$200,000• Increases premiums for Part D for higher income for those over

$85,000/year

Clear so far?

What is Medicaid?

Medicaid• What is it?• What kind of law is it?• How is a person eligible?• What is the benefit conferred?• Who administers it?• Who pays for it?• What is its constituency?• What is its history?• Who are collateral beneficiaries?• What size is it

Medicaid

• Federal State Partnership for Healthcare (doctor visits, hospital stay, custodial care, prescriptions etc)

• For indigent (low income and low resources)• Children• Aged• Disabled or Blind• Non-disabled adults – parents caretakers and pregnant women

Medicaid Facts

• Covered 54 million people in 2010• Cost $404 billion in 2010• Federal share was $272 b or 68%• State share was $131 b or 32%• Federales pay sliding share (low of 50% to high of 83%)

depending on poverty of state

Who Receives Medicaid?

• Provides health coverage to 43 million children – half the low income children in the US

• Provides health care to 11 million non-elderly, non-disabled low income adults

• For 8 million disabled people• For 4 million low income seniors

Medicaid Eligibility

• Indigent• Low income – less than $20,000 / year• Low resources - $2000 individual, $3000 couple• Citizenship

Children Eligible

• CHIP – Children’s Health Insurance Program and Medicaid work together

• State by state decisions about eligibility• Under 100% of poverty children are usually Medicaid• Over 100% of poverty children enrolled in CHIP – in some

states up to 250% of federal poverty level

Medicaid Mandatory Coverage

• SSI elderly and disabled • Pregnant women under 133% of federal poverty level• Children under 6 up to 133% of FPL• Children over 6 up to 100% of FPL

Medicaid BenefitsMandatory• Inpatient hospital• EPSDT• Nursing home• Lab and Xray• Doctor visits

Optional• Prescription drugs• Clinic services• Physical or occupational

therapy• Eyeglasses• Dental services

Medicaid Administration

Medicaid varies considerably among states

Affordable Care Act - Medicaid

• 2014 – all people with incomes below 133% of federal poverty level will be eligible for Medicaid in every state

• States have options to expand that coverage• Expansion of Medicaid is key component for reducing number

of people without insurance• Estimate an additional 26 million people will be added to

Medicaid by 2020 under ACA

Law of the Uninsured

Recall there are 48 million uninsured

What Happens When Some of the 40+ million Uninsured Get REALLY Sick?

EMTALA

• Emergency Medical Treatment and Active Labor Act

• Anti-Dumping Law, 42 usc 1395dd

History of EMTALA

• Hill-Burton was passed in 1946, authorizing grants to construct hospitals. In return the hospitals were to provide a certain amount of uncompensated indigent care to the community. In 1974, it was found that hospitals actual provision of care was minimal. New rules and regs were promulgated and hospitals were forced to notify patients in writing of their obligation to provide hill-burton care. That did not work either.

• IN 1986, Congress passed EMTALA.

Two Duties on Hospitals

1. appropriate medical screening to determine whether patient has emergency medical condition

2. hospital cannot transfer a patient with an emergency medical condition until that condition has stabilized

All Hospitals?

• duty on "participating hospitals" (42 usc 1395dd (e)(2))• Take public funds $ and• hospitals with emergency rooms to screen incoming

emergency patients (whether or not they have insurance) to determine:

What Emergency Conditions Must Hospitals Treat?

• Health in serious jeopardy• Or• Woman in labor

If Emergency Condition

If so, must stabilize prior to transfer or discharge• transfer is allowed if doctor certifies, in writing, that:

– 1. the benefit to the patient outweighs the risk– 2. the receiving hospital has the space, personnel, and agrees to

receive

Remedies for EMTALA Violations?

• if violated, civil penalties, atty fees, personal injuries action, but most importantly

• "if the violation is gross and flagrant or is repeated, ...exclusion from participation." 42 usc 1395dd (d) (1)

Actual Logo of Personal Injury Firm of

Friedman, Domiano and Smith, Cleveland, Ohio

Who pays for the uninsured do for healthcare?

• Who pays for the cost of uncompensated care?

• Public health care subsidies • or • Private health insurance plans

Which brings us to Obamacare

What is it?What kind of law is it?How is a person eligible?What is the benefit conferred?Who administers it?Who pays for it?What is its constituency?What is its history?Who are collateral beneficiaries?What size is it

Obamacare =

The Patient Protection and Affordable Care Act 42 USC 18001, Public Law 111-148(905 pages)

and

Health Care and Education Reconciliation Act,Public Law 111-152 (54 pages)

The Health Law Rollout, May 2, 2013http://online.wsj.com/article/SB10001424127887324482504578453011880989472.html?mod=WSJ_HealthLaw_MiddleTopSummaries

Goal of Affordable Care Act is to provide health care insurance

to 2/3 of those without it – about 30 million people

by 2018.

Eligibility for ACA Insurance?

Low income – Poverty Line – should get free or very low cost

100% to 400 % of poverty line – eligible for tax credit subsidy on health insurance

How will people get health insurance?

Either – Expanded state Medicaid

or

EXCHANGES of private insurance run by states or federal government – where people can receive subsidized health insurance

Expansion of Medicaid coverage for low income people is a state by state decision due to USSCT decision.

NFIB v Sibelius, 132 S Ct 2566 (2012).

If in a state which expanded Medicaid and the applicant is at or near poverty line,

they can receive health insurance coverage through their state Medicaid program.

If not in a state which expanded Medicaid and/or between 100 and 400% of poverty line,

then get health insurance through Health Insurance Exchanges.

WHAT ARE THE EXCHANGES?

The State or Federal Government provide health insurance exchanges. Coverage will begin January 1, 2014.

Families with incomes between 100 and 400% of poverty level will qualify for tax credits to make premiums more affordable.

What if States do not want to run EXCHANGES?

If State chooses not to, the federal government will do so.

WHAT IS THE SUBSIDY?

If at or below poverty line and state agrees they can enroll in Medicaid.

Up to 400% of poverty line are eligible for some subsidy (tax credits) in purchasing health insurance on EXCHANGES.

What is the penalty for not having healthcare insurance?

In 2014 penalty is $95 or 1% of taxable income. Goes up in each year by 2016 it sill be $695 for each adult or 2.5% of taxable income. The fines cannot be higher than the cost of purchasing health insurance. Penalty paid in following year’s taxes.

How do people actually sign up?

Go to www.healthcare.gov create a Marketplace account(must have email address) or call 1.800.318.2596

What options for health insurance are available on the exchanges?

BronzeSilverGoldPlatinum

All have different premiums, deductibles and copayments.

All plans will cover essential health benefits:Addiction treatment, care for newborns and children, chronic disease treatment (diabetes and asthma), emergency services, labwork, maternity, mental health services, physical therapy, prescription drugs, preventive and wellness services, etc. http://www.forbes.com/sites/investopedia/2013/10/01/how-to-choose-between-bronze-silver-gold-and-platinum-health-insurance-plans/2/

All plans – Bronze, Silver, Gold and Platinum – cover the same Essential Health Benefits. The monthly health insurance premium will be higher if you choose a higher level plan, such as Gold or Platinum. But consumers will also pay less each time they visit a health care provider or get a prescription filled. Conversely, the monthly premium will be lower if choose a Bronze or Silver plan, but will pay more for each doctor visit, prescription or health care service that you use.

http://aspe.hhs.gov/health/reports/2013/MarketplacePremiums/ib_premiumslandscape.pdf

Impact on Medicare?

The law does not directly cut benefits for people on Medicare. It does increase free preventive services and rebates towards cost of prescription drugs in Part D Medicare. The ACA expects to receive $700 billion from Medicare savings over the next 10 years – savings from performance changes from hospitals and doctors.

WHAT ABOUT DEATH PANELS?

The law does not set up death panels.

It does set up an Independent Payment Advisory Board (IPAB) to recommend spending cuts if Medicare costs exceed targets. The 15 member board can reduce Medicare reimbursement rates for treatment and drugs if Congress does not.IPAB cannot ration care, increase taxes or reduce low income subsidies.

IMPACT ON INSURANCE COMPANIES

Expands the pool of potential customers but rewrites many of the industry rules.Now have federal and state oversight – used to be state oversight.Have to spend 80% of premiums on healthcare costs.Cannot exclude pre-existing conditions or set premiums based on individual health history.Has to provide free preventive care services. Has to allow parents to enroll children up to age 26.

IMPACT ON EMPLOYERS

Companies with 50 full-time (over 30 hours a week) employees will have to provide health insurance or pay penalties. Penalty pushed back to 2015.

Aren’t some companies dropping health coverage?

Yes. Several companies have been offering what is called “mini-meds” to their employees. These plans have covered 4 million people but cap total benefits to employees, as high as $100,000 but sometimes as low as max of $3000 per year.New law prohibits annual benefit caps.

Why disallow caps on benefits, won’t that cost more?

The goal of the law is to prevent people from having to go bankrupt because of huge medical bills. Two million people per year go bankrupt due to medical bills – making it #1 cause of bankruptcy.That should end. There may be a switch to high deductible plans to save money.

Cost of Obamacare?

The Congressional Budget Office estimated the cost of the ACA at $1,168 billion dollars from 2012 to 2022. This does not try to offset current costs for the uninsured.http://www.cbo.gov/sites/default/files/cbofiles/attachments/43472-07-24-2012-CoverageEstimates.pdf

What is going to happen next?

Expect considerable changes in all phases of these laws. E.g. Medicare was changed in over 50 ways from 1965 to 2000. http://www.ssa.gov/history/pdf/hlth_care.pdf

Stay Tuned!