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Vol. 106 July 1, 2014 Whas’up with Obamacare?

In health care reform, politics, current events, government on July 1, 2014 at 10:48 PM

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My nomination to the
“Understatement Hall of Fame”

“I think that probably no one fully anticipated when you have a law
that phases in over time how much confusion that creates for a lot of people.”

- Health and Human Services Secretary Kathleen Sebelius, April 8, 2013

The news media (and a lot of republicans) have not been ranting or raving about Obamacare lately. They seem to be preoccupied with Immigration laws, Tea Party challengers in Congressional primaries, and Hilary’s uptick in her campaign (aka “book tour”). I thought it might be helpful to look at “where Obamacare is at”.

82 out of 87 provisions are in effect
Of the 87 provisions in the Affordable Care Act signed March 3, 2010 (over 4 years ago!) 82 are in effect in today. Granted there have been some postponements in deadlines for enforcement and some delays in implementation of certain sections, but overall Obamacare is apparently plugging along very well. Only 3 additional provisions are slated to go into effect for 2015 to 2018. Kaiser Foundation has an interactive website to track each provision and its implementation status if you really want to know all the details.

27 states have decided to expand their Medicaid coverage
The ACA offers federal reimbursement for 100% of the initial years cost to states expanding coverage by raising the income level of eligibility for Medicaid. The federal subsidy to the states who expand coverage will gradually decrease each year, but the maximum cost to the state will be 10% by 2020.Medicaid ACA status by state
Three more states are openly discussing the move and 29 are not moving at all.

Enrollment targets continue to be met.
As of April 2014  13.5 million individuals have been determined to be eligible to enroll (“buy health insurance”) in a “marketplace plan” (either state-created or federally run) 8.5 million individuals or two-thirds of these could be eligible for financial assistance in the form of an advanced tax credit for their health insurance purchase. 8.1 million individuals of the 13.5 million total eligible have actually selected a plan. However, no premiums have actually been billed or paid just yet.

ACOs are blossoming nationwide, particularly in the northeast corridor.
Creation of Accountable Care Organizations (ACOs) which incentivize health care providers (physicians, hospitals, and other members of the health care team) to band together to provide patient care more efficiently (“less costly”) and with improved quality. It is a lynch pin of Obamacare. According to the Levitt Partners (yes, creation of the ACOs legal entities has become another guarantor of lawyers’ retirement funds), a total 626 ACOs covering 20 million patients, or 17% of the U.S. population, now exist. Most of these individuals have purchased commercial health insurance policies (another reminder of the boon of ACA to health insurance companies)  AND most patients don’t even know that they are now in an ACO. About 2/3 of the U.S. population lives in localities with ACOs mostly concentrated in the Northeast, 40% of the general population have access to at least two ACOs, and 10% of Medicare patients are patients of an ACO.

MSSP participating ACOs
As of May 2014 about one-half of the ACOs (338) are participating in the Medicare Shared Savings Program (MSSP) covering 5 million patients in 47 states, DC, and PR. In the MSSP the ACO that “saves money” by reducing costs without compromising defined quality standards gets to keep some of that money for its providers. This is usually called “risk sharing”, and though dismissed initially as “managed care in different clothes”  reluctant providers have clearly jumped on the bandwagon. In May of 2012 the first report  period identified 27 MSSP ACOs. There are different levels of risk to ACO providers so “when you see one ACO you have seen just one ACO”. About 50% of ACOs include hospitals as members. Preliminary data about ACO performance is currently mixed, and credible  data about which models will work the best is still unavailable.

What about the cost of ACA?
Of course, increased access of individuals to effective health insurance is going to cost money. In April of this year the non-partisan Congressional Budget Office (CBO) working with the Joint Committee on Taxation REDUCED their estimate of the cost of ACA in 2014 by $5 billion (from the $36 billion originally estimated). The estimated cost over 2015-2024 wa REDUCED by $104 billion (of $1,400 billion total originally estimated).CBO est. cost of Obamacare

 

Billions of Dollars, by Fiscal Year graph

 Wrap Up Of  Whas’up with Obamacare
“First, all major parts of the ACA except the individual mandate are popular — including the insurance-market reforms, the subsidies to make insurance affordable, closure of the drug-benefit “doughnut hole,” and the incentives for most employers to provide affordable insurance as a fringe benefit. Second, lawmakers who support repeal will not want to snatch insurance coverage from an estimated 37 million people who will be insured thanks to the ACA in 2017. Third, repeal would cut into the sales and profits of health care providers and suppliers of all stripes.”  (1)

The Supreme Court ruled that the individual mandate penalizing people (via their annual tax return) who don’t purchase some form of health insurance was constitutional because the court considered it  “a tax, not a fine”. Justice Robert’s unexpected vote in favor of the ruling prompted Jay Leno to quip,”The Obamacare ruling makes Roberts the first Republican to favor an insurance law with an individual mandate since, well, Mitt Romney.”

1. “Here to Stay- Beyond the Rough Launch of the ACA”,  HJ Aaron, NEJM, June 12, 2014

 

 

 

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