The Affordable Care Act: The Short and Longer Term Implications for Oral Health

Peter C. DamianoProfessor and Director

Public Policy CenterUniversity of Iowa

Institute for Oral Health ConferenceSeptember 13, 2013

Today’s Topics

• What’s driving health reform discussion

• The Patient Protection and Affordable Care Act (ACA)– Already enacted

– Implementation issues for 2014

• Issues facing Dentistry and Oral Health

• Discussion

Our current political environment and the need for information

Why Reform Health Care in US

• Cost• Access to Care• Quality

What do we spend on health care in US?

A. $500 Billion

B. $1 Trillion

C. $3 Trillion

D. $10 Trillion• 1/3 waste*

Average cost-$8086/person4 times 1990 spending10 times 1980 spending

*IOM Study: Best care at lower cost, September 2012

Health Care CostsAverage spending on health per capita ($US )

Access (insurance coverage)

• 50 million uninsured (16.3%)– Up 13 million in past 10 years

• 25 million underinsured• Among insured

– 55% have employer based insurance (from 64% in 1999)– 15% Medicare– 16% Medicaid

Uninsured > one year: 41% of lower income 4% of higher income

Uninsured by income in US

Many Workers are Lower-Wage

Many Workers are Higher-Wage

Family Coverage

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$4,977* $3,968*

$9,716 * $12,459 *

$14,694*

$16,427*

Average Premium Contributions at Higher- and Lower-Wage Firms, 2012

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2012.

Worker Premium ContributionEmployer Premium Contribution

The Patient Protection and Affordable Care Act (PPACA)• Signed into law March 2010

• Emphasis on:– Individual insurance market

– Small business insurance market

• Few implications for large employer-sponsored insurance– Already self-insured

How the ACA feels to most

Market-based reform

• Right of center approach to reform:– Similar to proposals by Richard Nixon, Robert Dole

and Mitt Romney

– Left of center approach: single payer

• Majority private insurance expansion– Especially states without Medicaid expansion

How bad is the problem?

Cost of reform

• Total cost: $940 billion first ten years• Impact on deficit:

$124 Billion in reductions in the deficit first ten years

$1.2 Trillion second ten years

Source: Congressional Budget Office, March 2010

Cost of reform

• Impact on Medicare/SS solvency:– Extend Medicare trust fund solvency 12 years

(2017 to 2029)

– higher payroll taxes (0.9%) on those making over $200,000

– lower hospital payment rates

• SS improved by taxing highest benefit plans in 2018

Source: Medicare and Social Security Trustee Report, August 2010

Financing of ACA

• Tanning tax (2010)– 10% on indoor tans

• Non-profit hospitals must conduct community needs assessment and develop a financial assistance policy – Can oral health be included?

• Reduced deductions for OTC drugs for Flex or Health Saving Accounts (2011)

• Reduced deductions for non-medical distributions from Flex or Health Saving Accounts (2011)

Financing of ACA

• Medicare payroll tax on investments (2012)– 3.8% on investment income for families >$250,000

• Medical device tax (2013)– 2.3% of sale price

• Health insurance Co. net premium tax (2014)– Estimated to add about 2% to insurance company

costs per policy-increase over time to 3.5%

• Excise tax on investments (2019)– 40% on “Cadillac” plans

Coverage in new plan

• Net 25 million more insured

• Decline of 32 million estimated in 2010

• 31 million will remain uninsured

• Some shifting from employer-sponsored

New insureds

Private insurance via MarketplacePublic insurance

13 million

24 million

Source: CBO report to Congress, May 2013

ACA Policies Already in Place

Over 50 components of reform enacted thus far

Policies in place (2010)

• Coverage of children up at age 26 on parent’s policies

• Development of state/federal high risk pools

• Elimination of pre-existing conditions for children

• Free preventive service coverage for all new health plans

Policies in place (2010)

• Insurance companies prohibited from– Rescinding coverage because of illness

– Imposing yearly and lifetime caps on coverage

• Small-business tax credits: up to 35% of premiums for 2 years– Fewer than 25 employees and average wages under

$50,000)

Policies in place (2010)

• Establish process for reviewing health plan premium increases and justify increases.

• Require states to report on trends in premium increases and recommend if plans should be excluded from Exchange based on unjustified premium increases.

Policies in place (2011)

• Prevention and Public Health fund established ($15 billion)

• Infrastructure support for community health centers

• Medicare prescription drug 50% discount

• Free preventive care for seniors in Medicare

• Medical loss ration begins (85% on services)

• Reduce payment for Medicare Advantage

Policies in place (2012)

• Accountable Care Organizations begin in Medicare– Spread to privately insured and Medicaid in

some states

• Free preventive care coverage for women’s health

ACA: 2014 and Beyond

Next policies (2014)

• Individual mandate begins.– Affects 6% of population

(Urban Institute study)

– Most of whom want coverage

• Medicaid expansion begins in select states– Eliminates categorical eligibility

• Health insurance Marketplaces begin in all states– Some state, some partnership, some Federal

Eligibility for Children*

• Medicaid– up to 138% of FPL

• Children’s Health Insurance Program– 139-300% FPL

• Health Insurance Marketplace– 300-400% of FPL

• Traditional insurance market– >400% FPL

*Should not change much with ACA expansion

Eligibility for Adults w/Expansion*

• Medicaid (all-eliminates categorical eligibility)– Up to 133% FPL

• Health Insurance Marketplace– 134-400% of FPL

• Traditional insurance market– >400% FPL

*Adults are defined as age 19-64

Medicaid Expansion by State:Welcome mat affect and newly eligible populations

As of July 1, 2013Source: kff.org

Health Benefits Marketplaces

• On-line health insurance marketplace– e-insurance like

• Offer regulated qualified health plans (QHPs) that meet state regulated standards

• Require two multi-state plans in each Marketplace (e.g., federal employee plans)– Not clear how this will work in Iowa

• At least one plan must be offered by a non-profit entity

Who is likely to be in Marketplace?

• Uninsured• Those with inconsistent coverage from

employers or employers who drop coverage• Some existing Medicaid eligibles may

become eligible for Marketplace (or vice-versa)– New way to calculate Medicaid eligibility based

on tax return• Modified Adjusted Gross Income (MAGI)

Types of models for marketplace

• State based• Federal facilitated• Partnership

Types of models for marketplace

Source: Pew states.org

Small Business Health Options Program: SHOP• On-line Marketplace for small businesses• Should provide lower cost, standardized options

for businesses under 50 employees– No mandate to provide coverage but would gain

buying power• Employers only have to offer one plan but can

allow more options in states marketplaces (not federal yet)

• Can work with current brokers to select plan or choose one on their own

PLANS IN MARKETPLACE

Qualified Health Plans (QFPs)

• In good standing in a state• Offer at least one gold and one silver level

plan• Cost must be same through Marketplace or

outside• Numbers of plans varies by state

– Largest plan may not be participating

Levels of coverage*

Actuarial Value0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

60%

70%

80%

90%

BronzeSilverGoldPlatinum

*Proportion of all costs paid by plan on average

Costs of plans in Marketplace

Big question and will vary by state/plan richness• 100-200% FPL

– $1,983/individual and $3,967/family;

• 200-300% FPL– $2,975/individual and $5,950/family;

• 300-400% FPL– $3,987/individual and $7,973/family

• Limit on out-of-pocket costs, (w/ deductibles and co-payments) not to exceed $6,350 for an individual and $12,700 for a family– Delayed until 2015

Essential Benefits Package Includes:

• Ambulatory patient services• Emergency services• Hospitalization• Maternity and newborn care• Mental health and substance use disorder services,• Prescription drugs• Rehabilitative and habilitative services and devices• Laboratory services• Preventive and wellness services and chronic disease

management, and• Pediatric services, including oral and vision care

Consumer attitudes about selecting plans*

For those most likely to use Marketplace:• Current coverage and access worse• Much less aware/knowledgeable about ACA

and marketplace– Similarly supportive of ACA components

• Cost most important factor in choosing plans• Need help with choice

– Not as comfortable with on-line system– Prefer one-on-one help

*Recent UI PPC study with 500 Iowans

Navigators (Federal)

• Assist with the selection of Marketplace plans• 105 groups received federal support

– Funding based on number of uninsured in state• FQHCs also received funding for this• Will help consumers

– apply for coverage, – answer questions about coverage options– help them select option best for them

• 20-30 hour training, pass exam

Certified application counselors (CACs)

• CMS designation via application process• -Hosp, CHCs, MH prov, non profits,

libraries, local health Depts• -marketplace.cms.gov no www had info• -also champions for coverage to provide

help• -Can apply now and complete training• -5 hrs plus 2-3 hrs of state training

Health status of new enrollees

• Most new enrollees will be relatively health IF adverse selection does not occur– Young, healthy adults select plans outside of

Health Insurance Marketplace• About one-sixth of uninsured have

multiple chronic conditions including significant oral health problems

IowaCare Program

• For uninsured adults up to 200% FPL• Limited provider network, limited benefits

– No dental coverage

• 70,000 but phasing out by end of 2013• Very low health status (self-reported)*

– 3 or more chronic conditions–60%

– Physical health fair or poor–40%

– Mental health fair or poor–34%

– High unmet need for mental health, oral health, prescription medications

*From UI PPC study about IowaCare program, 2013

IowaCare Chronic health conditions*

Chronic Health conditions % reporting

Dental, Tooth or Mouth Problems 39%

Back or Neck Problems 37%

Arthritis, Bone or Joint Problems 36%

Hypertension 34%

Overweight/Obesity 31%

Allergies or Sinus Problems 29%

Recurrent Indigestion, Heartburn or Ulcers

27%

Migraine Headaches 16%

Bladder or Bowel Problems 15%

Diabetes 15%

Bronchitis, Emphysema, Lung Problems

14%

Heart Problems 11%

Asthma 11%

*Self-report, 2013 surveyUIPPC Study

Oral health status

IowaCare 2013 Medicaid 20110%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

7%15%

12%

20%22%

31%27%

22%34%

13%

Poor

Fair

Good

Very Good

Excellent

What about Dentistry:Near Term Issues

Medicaid Dental Expansion

• 13 million new enrollees• Children (under 19)-

– All will gain comprehensive dental coverage– Most from woodwork affect

• Adults– Only states with adult dental benefits will gain

coverage– Some looking at options that could be related to ACO

development

Dental Coverage in Health Insurance Marketplace

Children• Essential Health Benefit (EHB)-required

– 3 million could gain coverage (ADA)

– Most stand alone dental plans• Must be offered-not purchased in federal marketplace

• Procedures covered-based on state benchmark – Separate out of pocket maximum

(~$1000) from medical policies

– Medically necessary orthodontia

Dental in Health Benefit Marketplaces

Adults• Not an essential benefit• Stand alone private dental insurance policies

available for purchase from Marketplaces

Dental Coverage in Private Health Insurance Marketplaces• Purchasing outside of official health insurance

marketplace– No tax credits– E.g., ehealthinsurance.com

• For those over 400% FPL • Young adults who might get a cheaper policy

than through marketplace with subsidy (no community rating)

• Dental coverage must be purchased for kids• Dental still optional for adults

What about Dentistry:Longer term issues

Reorganized health care delivery system and role for dentistry• ACOs• State Health Information Networks• Health Homes• Role for the safety net• Impact on dental education

Accountable Care Organizations (ACOs)

• Few if any ACOs now involve dentistry– Might in the future

• Could bring pay for performance/risk based contracting to dentistry

• Accountability for health outcomes– Lack of diagnosis codes an issue

• Paying for value

Health Information Networks

• All offices supposed to be moving toward electronic health records

• Share health and billing information• Potential for improved quality and

reduced costs• Integrate dentistry into health care

system

Health Homes

• Important for both ACOs and Medicaid• Population-based care

– Brings social determinants into equation

• Often focus on those with chronic diseases– Better coordination of care

• Dentistry can be a part– How not clear– Iowa I-Smile program– NC Community Utility model

Safety Net Providers

• Likely to remain essential for portions of population– FQHCs for Dentistry

» 12 in Iowa and 2 look-a-likes

• How best to integrate with private sector– Medicaid providers also dental safety net– Not all see Medicaid patients

Impact on Dental Education

• Training for value-based purchasing

• Interprofessional education

• EHR/IT infrastructure, understanding and how it can be used

• Being part of a “health home”

• Alternative levels of providers– EFDAs

– Dental therapists

Other Challenges

• Inadequate workforce to provide care to the newly covered population

• Dental professionals minimally involved in healthcare reform discussions

• Dental community’s role in implementation is not clear

• Dental coverage for adults is a gap not addressed by the ACA– Children coverage might not improve as much as could

have

Devil is in the details

• Implementation is critical and likely rocky– State and Federal level

• Cost issues are critical– Products in the Marketplace

– Non-covered costs (dental)

• Won’t know results for several years– Only next step in process

Discussion

Vinny