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1 Progressive States Network: ACA 101 Sara Rosenbaum, J.D. Harold and Jane Hirsh Professor, Health Law and Policy June 10, 2013.

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Presentation on theme: "1 Progressive States Network: ACA 101 Sara Rosenbaum, J.D. Harold and Jane Hirsh Professor, Health Law and Policy June 10, 2013."— Presentation transcript:

1 1 Progressive States Network: ACA 101 Sara Rosenbaum, J.D. Harold and Jane Hirsh Professor, Health Law and Policy June 10, 2013

2 What Key Problems Was the ACA Designed to Address? 1.The lack of an accessible pathway to affordable insurance coverage for millions who –lack employer coverage –do not qualify for Medicaid because they don’t fit the traditional coverage pathways and have incomes that are too “high” –face a broken individual insurance market that barred people on the basis of health, cost, or both 2

3 What Key Problems Was the ACA Designed to Address? 2. Coverage that lacked value, leaving people without protection against both preventive benefits and catastrophic costs –At one end, failure to cover high-value preventive benefits such as immunizations and screening for cancer, high blood pressure and other conditions –At the other end, annual and lifetime limits on coverage that left persons with uncovered catastrophic costs –Commonwealth Fund: 125 million Americans uninsured or underinsured 3

4 What Key Problems Was the ACA Designed to Address? 3. Poor access to health care services, especially urban and rural medically underserved communities lacking primary care 4. A health care system characterized by high costs and poor quality –The highest per capita health spending in the world –Failure to deliver services of known value in appropriate settings –Failure to connect patients with medical and health homes –Insufficient attention to prevention –Payment systems that incentivize volume over value –Excessive readmissions and preventable hospital-acquired conditions 4

5 Affordable Care Act Provisions Focus and Opportunities Cathy Schoen, Senior Vice President The Commonwealth Fund Progressive States Network ACA 101 Webinar June 10, 2013

6 6 National Legislation – State/Local Reforms: Resources and Opportunities to Improve Insurance reforms: expand and improve coverage –Enhance affordability and new market rules Payment reforms to support and stimulate innovation –Primary care and Patient-Centered Care Teams –Accountable Care Organizations –Medicare, Medicaid and Private Initiatives Innovation Center: flexibility to partner/try new ideas Information systems and transparency New resources and tools to improve –Access, quality/outcomes, and lower costs

7 7 Source: Modification of S. Guterman, et al. “Innovation in Medicare And Medicaid Will Be Central To Health Reform’s Success,” Health Affairs 29, no. 6 (June 2010). ACA Timeline: Insurance, Payment and System Innovation Reforms 201020112012201320142015 Initial insurance reforms 10% Medicare Primary Care Increase Innovation Center (CMMI) Value-based Purchasing for Hospitals Primary Care and Health Homes Reduce Payment for Preventable Readmissions Medicare Shared Savings (ACOs) National Medicare Payment Bundling Pilot Major Insurance Expansions Insurance Exchanges + Credits Medicaid Insurance Market reforms Value-based Purchasing for Physicians Medicaid Primary Care Payment up to Medicare Levels Reduce Payment for Hospital Acquired Infections Patient Centered Outcomes Research Pioneer ACOs Bundled Payment Improvement Initiative State Innovation Grants October Enrollment Starts for Insurance Exchanges for Jan 1, 2014

8 8 Insurance Expansion and Market Reforms New insurance marketplaces in all states for individuals and small business –Choice of qualified plans – web-based enrollment –Federal credits to lower premiums and cost sharing –State-based: federally run, partner, or state-run –Enrollment starts Oct 2013 for coverage in 2014 Medicaid expansion to 138% of poverty ($ ) at state option –First 3 years 100 percent federal financed –Phase to 90 percent federal Insurance market reforms for all states –Premium oversight and benefit standards –Prohibition on higher premiums based on sex or health –Requirement to have insurance (low penalty starts 2014)

9 AdultsChildren 50 Million Uninsured 2010/11 Percent of Adults (19-64) and Children (0-18) Uninsured Data Source: Commonwealth Fund analysis U.S. Census Bureau, March 2011-12 Current Population Survey 9 9

10 Four levels of cost-sharing: 1st tier (Bronze) actuarial value: 60% 2nd tier (Silver) actuarial value: 70% 3rd tier (Gold) actuarial value: 80% 4th tier (Platinum) actuarial value: 90% Premium Tax Credits and Cost-Sharing Protections Under the Affordable Care Act Federal Poverty Level Income Premium contribution as a share of income Out of Pocket limits Actuarial value: Silver plan < 100% S: $11,490 F: $23,550 Medicaid No credits available Medicaid 100 to 133% S: <$15,282 F: <$31,322 2% if credit (or Medicaid) S: $1,983 F: $3,967 94% 133%- 149% S: $15,282 - <17,235 F: $31,322 - <35,325 3.0%–4.0%94% 150%–199% S: $17,235 - <22,980 F: $35,325 - <47,100 4.0%–6.3%87% 200%–249% S: $22,980 - <28,725 F: $47,100 - <58,875 6.3%–8.05% S: $2,975 F: $5,950 73% 250%–299% S: $28,725 - <34,470 F: $58,875 - <70,650 8.05%–9.5%70% 300%–399% S: $34,470 - <45,960 F: $70,650 - <94,200 9.5% S: $3,967 F: $7,933 70% 400%+ S: $45,960+ F: $94,200+ — S: $5,950 F: $11,900 — Note: Actuarial values: average percent of medical costs covered by plan. Premium and cost-sharing credits are for silver plan. Source: Federal poverty levels are for 2013; Commonwealth Fund Health Reform Resource Center: What’s in the Affordable Care Act? (PL 111-148 and 111-152), 10

11 Source of Insurance Coverage Pre-Reform and Under Affordable Care Act, Assuming Partial Expansion of Medicaid, 2016 * Employees whose employers provide coverage through the exchange are shown as covered by their employers. Note: ESI is employer-sponsored insurance; “Other” includes Medicare. Implementation of Affordable Care Act assume not all states implement Medicaid expansion. Source: Congressional Budget Office, February 2013 Estimate of the Affordable Care Act on Health Insurance Coverage, February 2013. Among 277 million people under age 65 Under Prior LawAffordable Care Act 45 M (16%) Medicaid/ CHIP 24 M (9%) Exchanges (Private Plans) 23 M (8%) Nongroup/Other 31 M (11%) Uninsured 154 M (56%) ESI 160M (58%) ESI 34 M (12%) Medicaid /CHIP 57 M (21%) Uninsured 26 M (9%) Nongroup/Other 11

12 Source: National Conference of State Legislatures, Federal Health Reform: State Legislative Tracking Database.; Avalere State Reform Insights; Center of Budget and Policy Priorities; Commonwealth Fund Analysis. Medicaid Expansion State Action on Establishing Health Insurance Marketplaces and Participation in Medicaid Expansion, As of May 2013 Health Insurance Marketplaces Expanding (22 + DC) Not expanding (16) Unclear/undecided (9) Expanding with variation (3) Pursuing state-run exchange (17 + DC) Pursuing state-federal partnership exchange (7) Pursuing federally facilitated exchange (26) 12

13 Affordable Care Act: Key Insurance Reform State Implementation Issues, 2013-2014 Readiness of insurance marketplaces for October 1, 2013 enrollment –Plans certified to be sold with network capacity and systems in place? –Plan premiums and cost-sharing. Are they viewed as “affordable”? –Outreach strategy, awareness of new choices and subsidies? –Experience of people choosing plans and access to tax credits? State Medicaid participation and alternate “private plan” approaches –Final decisions on State Medicaid expansion to 138% poverty –Coverage of people with incomes under poverty not eligible for tax credit –Coordination of Medicaid and new marketplaces –Offer a Basic Health Plan for those with incomes up to 200% poverty? Insurance market reforms –Oversight of premiums increases and insurance market –Prohibition on rating based on sex or health conditions –Essential benefit standards 13

14 Common ACA Myths 1. The federal government will control the health care system –A fundamentally state-based approach to system reform, within very broad federal parameters 2. Medicaid is costly and broken and needs an entire makeover –Medicaid is effective in improving health care access and population health –Per capita Medicaid costs well below private insurance –States get $9.00 for every $1.00 invested. The 2014 adult expansion = virtually no new net costs to states compared to current spending levels 3. Health Insurance Marketplaces are too complicated to work –Similar to any online shopping experience –Prior experience in Massachusetts and Utah –Outreach and assistance through Navigators & enrollment assisters 14

15 Common ACA Myths 4. Reform will harm small employers –Smaller low-wage employers without health plans are the biggest beneficiaries of the new Marketplaces and Medicaid expansions 5. Health insurance costs will skyrocket Early reports: premium costs below projections without taking premium subsidies and cost-sharing assistance into account. 15

16 16 Moving Forward: Improving Care System Performance and Confronting Cost Uninsured Rates Quality of Care Chasm Costs of Care Fragmentation & Complexity

17 Affordability a Shared Concern: Premiums Rising Faster than Incomes Across the Country: 2003 and 2011 Sources: 2003 and 2011 Medical Expenditure Panel Survey–Insurance Component (for total average premiums for employer-based health insurance plans); 2003–04 and 2010–11 Current Population Surveys (for median household incomes for under-65 population). Less than 14% 14%–16.9%17%–19.9% 20% or more ND SD DC ID DE IA IN WI CA HI KS UT AZ NM AR LA KY VA VT NH MA CT RI NJ AK AL MS MI ME WV MDCO NE WY OR IL TN NC SC GA FL PA NY OH MO MN OK TX MT NV WA ND SD DC ID DE IA IN WI CA HI KS UT AZ NM AR LA KY VA VT NH MA CT RI NJ AK AL MS MI ME WV MD CO NE WY OR IL TN NC SC GA FL PA NY OH MO MN OK TX MT NV WA 80 percent of under-65 population live where premiums amount to 20 percent or more of median (middle) income SOURCE: Schoen et al., State Trends in Premiums and Deductibles, 2003–2011: Eroding Protection and Rising Costs Underscore Need for Action, The Commonwealth Fund, December 2012. 17

18 ACA: Payment and Health System Reforms: Improving Outcomes and Lowering Cost Payment reforms to support and stimulate system innovation –Primary care: enhance payment and “medical homes” –Accountable care organizations: provider networks accountable for outcomes and total costs –More “bundled” payments: total costs of care episode –Pay for value: reduced payment for infections, readmissions Partnership with State Medicaid and Private Payers Federal Innovation Center: support private and state initiatives Investment in Information Systems & Data: guide and inform 18

19 19 Medicaid Medical Home Payments and Multi-Payer Initiatives Source: National Academy for State Health Policy State Scan, April 2013. WA OR TX CO NC LA PA NY IA VA NE OK RI AL MD MT ID KS MN NH MA ME AZ VT MO CA WY NM IL WI MI WV SC GA FL HI UT NV ND SD AR IN OH KY TN MS AK States with Multi-Payer Initiatives States making Medical Home payments NJ

20 HawaiiPuerto Rico Accountable Care Organization Adoption, Jan. 2013 Note: the sum of the ACOs reflects the total number of unique, publicly identifiable, confirmed private-payer ACOs as of 08/2012 and public-payer ACOs as of 01/2013. Source: Dartmouth Institute for Health Policy and Clinical Practice. 20

21 Reduced Payments for Avoidable Complications Medicare Advantage Plan Bonuses Bundled Payments Physician Quality Reporting System Meaningful Use Value Based Purchasing Accountable Care Organizations Hospital Inpatient Quality Reporting Medical Homes The Affordable Care Act 21 Prevention and Population Health

22 ACA and Beyond: State Actions ACA reforms provide a foundation + new resources, tools –State policy and care system leaders’ action to move forward Key opportunities to build on momentum –Payer partnership with Medicare, Medicaid, private –Build innovation into state supported programs –Transparent all-payer data on quality and costs –Targets and benchmarks: populations and geographic areas Strategic action for public health as well as delivery systems Oversight to hold care systems and insurers accountable –Licensure and regulatory authority –Malpractice and other market reforms Future webinar: Delivery system and payment reforms 22

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