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

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Presentation on theme: "Obama Care (ACA) – Affordable Care Act or Patient Protection and Affordable Care Act (PPACA)"— Presentation transcript:

1 Obama Care (ACA) – Affordable Care Act or Patient Protection and Affordable Care Act (PPACA)

2 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)

3 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%


5 To understand US healthcare must know at least five bodies of law: Medicare Medicaid Affordable Care Act Private Insurance Uninsured Health Care

6 US Healthcare


8 THE COMMONWEALTH FUND Exhibit 1. International Comparison of Spending on Health, 1980–2007 Note: $US PPP = purchasing power parity. Source: Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009). Average spending on health per capita ($US PPP) Total expenditures on health as percent of GDP $7,290 $2,454 16% 8%

9 What is Medicare?

10 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?

11 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

12 Medicare has four parts

13 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.

14 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)

15 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

16 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

17 Not Covered by Parts A or B Custodial long term care Dental or eye care Hearing aids

18 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

19 Medicare Part D

20 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


22 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.

23 Administration of Medicare?

24 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.


26 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

27 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).

28 Who are Medicare collateral beneficiaries?

29 : Where Do Medicare Dollars Go?

30 Financial Outlook Medicare Trustees Report For the last 7 years, Trustees have issued Medicare Funding Warning Medicares 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.

31 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

32 Clear so far?

33 What is Medicaid?

34 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

35 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

36 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

37 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

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

39 Children Eligible CHIP – Childrens 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


41 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

42 Medicaid Benefits Mandatory Inpatient hospital EPSDT Nursing home Lab and Xray Doctor visits Optional Prescription drugs Clinic services Physical or occupational therapy Eyeglasses Dental services

43 Medicaid Administration

44 Medicaid varies considerably among states

45 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

46 Law of the Uninsured

47 Recall there are 48 million uninsured What Happens When Some of the 40+ million Uninsured Get REALLY Sick?


49 EMTALA Emergency Medical Treatment and Active Labor Act Anti-Dumping Law, 42 usc 1395dd

50 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.

51 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

52 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:

53 What Emergency Conditions Must Hospitals Treat? Health in serious jeopardy Or Woman in labor

54 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

55 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)

56 Actual Logo of Personal Injury Firm of Friedman, Domiano and Smith, Cleveland, Ohio

57 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

58 Which brings us to Obamacare

59 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

60 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)

61 The Health Law Rollout, May 2, 2013

62 Goal of Affordable Care Act is to provide health care insurance to 2/3 of those without it – about 30 million people by 2018.

63 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

64 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

65 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).

66 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.


68 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.

69 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.

70 What if States do not want to run EXCHANGES? If State chooses not to, the federal government will do so.

71 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.

72 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 years taxes.

73 How do people actually sign up? Go to create a Marketplace account (must have email address) or call

74 What options for health insurance are available on the exchanges? Bronze Silver Gold Platinum All have different premiums, deductibles and copayments.

75 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.

76 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.


78 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.

79 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.

80 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.

81 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.

82 Arent 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.

83 Why disallow caps on benefits, wont 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.

84 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.

85 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.

86 Stay Tuned!

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