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Sunday, September 29, 2013

A Forgotten (?) Aspect of the Affordable Care Act

There are many aspects of the Affordable Care Act that have been getting some mention lately, such as:
--state marketplaces
--young people up to age 26 being added to their parent’s health care policies
--no more pre-existing conditions being used as excuses for denying coverage
--no more lifetime caps to allow insurance companies to avoid further coverage
--no more cut-off of insurance coverage because of onset of an acute illness
--women pay equally for same coverage as men, not more
--all plans must provide services in 10 essential health benefits categories.

These are all examples of how the Affordable Care Act is meant to aid the consumers of health care plans.  But strangely enough, those sections that are meant to advocate for consumers receive nary a mention.  Why is that?  Could it be that it’s not “sexy” enough?  Or that it’s not important? Or that Tea Party-types don’t want it known that consumers can get lots of attention and support in this law?  I tend to believe that the latter thought begins to get at the truth.  Right wing radicals just do not want to tout something—even negatively-- that might give consumers a reason to actually like this law! 

First, let’s take a quick look at some consumer-oriented items that perhaps have received a mention:
1)    Subsidies-- for small businesses and for individuals who qualify. One of the main features of ObamaCare is the creation of a new federally-financed health care provision that will subsidize the insurance premiums for low and moderate income Americans, beginning in 2014. The amount of the subsidy is inversely related to family income and will be administered by the new state-based ”exchanges.”
    There are also subsidies available to Seniors for the cost of medicines under Medicare Part D, along with a gradual lessening to zero of the “donut-hole” provision involved in providing huge profits for drug companies when Part D was promulgated. 
    Medicaid will be extended to those who earn up to 133% of the Federal poverty level. That's $15,281 for an individual, or $31,321.50 for a family of four in 2013. The poverty level usually increases each year to keep up with inflation.  About.com reminds us that “not all states have elected to expand Medicaid, even though the Federal government will subsidize it.  If you live in a state where you are eligible for Medicaid, but the state won't give you coverage, you won't have to pay the tax if you can't get insurance.”

Small Business Owners, with 25 employees or less, can get a tax credit of 35% of the costs of health insurance. This goes up to 50% in 2014.  Employers with fewer than 50 employees, don't have to pay a fine if their workers get tax credits through an exchange. Those with 50 or more employees must provide health insurance or pay a tax of $2,000 per employee (for all but the first 30 employees) starting in January 2015.  Those businesses with fewer than 100 employees   can shop for insurance in exchanges in 2014 that should provide cheaper alternatives than are available now. In addition, companies that offer health insurance as a benefit to early retirees 55-64, can get Federal financial assistance.

2)    Rebates—from insurance companies when they fail to meet the 80-20 split on health care provision/administration; some people have already started receiving these rebates which began on August 1, 2012.  ABC News tells us: “A new provision of the Affordable Care Act — called the Medical Loss Ratio, or the “80/20″ provision — could mean some Americans will see a rebate from their health insurance companies. The provision is aimed at holding health insurance companies accountable for how they spend the money collected through premiums. It compares the dollars they spend on health care costs vs. other overhead costs — like marketing, salaries and administrative expenses.”
Under the law, small-group and individual-plan insurance companies that annually spend less than 80 percent of premium dollars on medical care owe their customers a rebate. For insurers to large businesses, the percentage split is 85-15.  Last year was the first year the provision was in effect, and insurance companies that owed rebates had to pay them out starting Aug. 1, 2012.  Here’s a look at the health care rebates, by the numbers:

Health insurance companies in 2012 had to pay out a total of $1.1 billion in rebates.  About 12.8 million Americans received a rebate, according to the Department of Health and Human Services.  The average privately insured family saw a $151 rebate from this provision, but payouts varied by state.
About 31 percent of Americans who have individual insurance are eligible for a rebate. They’ll get their checks directly in the mail, averaging about $127, according to a study by the Kaiser Family Foundation.
For people who buy insurance through their employers, those rebates won’t come directly in the mail. They’ll first go to the employer, who decides how to distribute it. Employers who offer insurance can either send out individual checks to their employees, or put those rebates toward lowering future premium costs.
The employer could also use the rebates as a lump-sum reimbursement to the accounts that pay premiums, or spend it in other ways that “benefits its employees,” according to the Department of Health and Human Services.  This can include lowering co-pays or adjusting cost-sharing to cut group insurance costs.  Employees should contact their employer for details about how their rebates will be distributed.
Whether they owe a rebate or not, insurance companies in every state have to notify their customers if they’ve met or failed this part of the law.

    So, how many have gotten rebates this year?  Well, the numbers range from about 5 million to 8.5 at about $100 on average, in the range of maybe $500 million to $850 million.
    Fox News disagrees with the President’s numbers, as one might expect: “In his speech defending his health care law Thursday, Obama said rebates averaging $100 are coming from insurance companies to 8.5 million Americans. In fact, most of the money is going straight to employers who provide health insurance, not to their workers, who benefit indirectly.”  Of course, what Fox doesn’t bother to say is that the Law is quite specific on the fact that companies supplying health care as a benefit to their workers are made recipients of these checks, which are used to benefit consumers of health care, albeit indirectly, by perhaps being applied to the cost of the company plan.  One thing seems clear – last year checks went out that totaled $1.1 billion; this year they only totaled around $850 million.  The government points to this as an indication that administrative costs in private insurance companies may be coming down because of the ACA ratio requirement.

3)   Tax credits – Those who earn too much for Medicaid will receive tax credits if their income is below 400% of the federal poverty level. In 2013, that's $45,960 for an individual, or $94,200 for a family of four. The credit is applied monthly, rather than as an annual tax rebate. There are also reduced co-payments and deductibles.
4)    Choice of plans in the marketplaces – already, vendors are coming out of the woodwork in some states to take part in the marketplaces; in this area of New York, there are 18 different vendors offering plans – a totally unexpected number!  There are reports that the same is true elsewhere.  Exchanges will allow you to compare health plans before you buy one. The exchanges will also help you find out if you qualify for tax credits or other government health benefits. States are being given substantial Federal grants to fund the exchanges.

Second, we also need to look more closely at other-than-monetary supports for consumers:
1)    Navigators & Counselors -- The Affordable Care Act recognizes the vital role of community outreach in successfully connecting people with coverage. “Navigator” programs will be set up in each state to help consumers enroll in and retain coverage by providing fair and impartial information about qualified health plans and available subsidies.  Community outreach will also play a vital role in the success of reaching newly-eligible Medicaid beneficiaries.
    As we are reminded by Georgetown University Center for Families and Children: “Navigator-type programs are a tried-and-true concept. In Medicare, the State Health Insurance Assistance Program (SHIP) has been in place assisting seniors for more than two decades. And community partners who assist with outreach and the application process have been a key aspect of our nation’s success in covering children.”  So Navigator programs are tried and tested, and: “The fact is consumers need navigators. Applying for means-tested public benefits isn’t as simple as filling out a form. And while there are many positive changes coming with new high performing eligibility and enrollment systems, and modernized requirements to use electronic data to cut red tape in verifying eligibility, it will be a while before things are running smoothly. And consumers deserve formal programs – like those managing navigators and certified application counselors.”

2)    Public Health Council - The Act established the “National Prevention, Health Promotion, and Public Health Council.”  It's overall goal is to support preventive health care. It is chaired by the Surgeon General, and composed of the heads of 17 Federal agencies. It will coordinate Federal health efforts around seven priority areas: 1.Tobacco-free living. 2.Preventing drug abuse and excessive alcohol use 3.Healthy eating. 4. Active living. 5.Injury and violence-free living. 6.Reproductive and sexual health. 7.Mental and emotional health.

3)    Medicare improvement - The Affordable Care Act (ACA) requires that the Centers for Medicare and Medicaid Services (CMS) issue employer group health plan quality improvement reporting that covers specified quality improvement activities regarding plan or coverage benefit and provider reimbursement structures. Those requirements include efforts to improve health outcomes, ensure patient safety and reduce medical errors, prevent hospital readmissions, and implement wellness and health promotional activities.
The Innovation Center leads CMS efforts to test new models of care so that care is more coordinated, resources are used more efficiently, and the health care system works better for patients, families, and providers.
Under the Affordable Care Act, the Independent Payment Advisory Board (IPAB) is a feedback mechanism to Congress ensuring Medicare remains solvent without shifting costs to beneficiaries or reducing the level of care that they receive. When Medicare growth per beneficiary exceeds a certain target, IPAB − an independent group of doctors, nurses, patients, and health care experts − will recommend to Congress policies to reduce the rate of growth to meet specified savings, without harming beneficiaries’ access to needed services, beginning January 15, 2014. The Board is prohibited by the Law from recommending any measures that would ration care, increase revenue or change benefits.
The ACA also allows the establishment of Accountable Care Organizations (ACOs) that voluntarily meet quality thresholds to share in the costs savings they achieve for the Medicare program.  These organizations began in 2012.

4)    Appeal process -- For health plans created on or after September 23, 2010, the ACA ensures the right to an appeal or reconsideration when services or payment for services are denied by a health insurer or plan. Regulations were issued by the Departments of Health and Human Services, Labor, and Treasury on July 23, 2010, that set out standards for internal and external processes that consumers can use to appeal “adverse” coverage and benefit decisions (e.g., pre-existing condition exclusions, provider network exclusions). A subsequent regulation issued in July 2011, gave states options for implementing consumer protections.

5)    Other -- The ACA funds scholarships and loans to double the number of health care providers in five years. It cuts down on fraudulent doctor/supplier relationships. It also requires background checks of all nursing home staff, to prevent abuse of seniors.  Insurance companies must submit justification to the states for all rate hikes. ObamaCare provides funding to the states to administer this.  Title VI also cracks down on fraud by identifying high-risk providers, and preventing them from setting up in another state. It gives states the ability to test legal reforms to reduce waste, enhance patient safety, encourage efficient resolution of disputes, and improve access to liability insurance.
In addition, the Attorney General, the Secretary of the Department of Health and Human Services (HHS), and the Chairwoman of the Federal Trade Commission (FTC) announced an interagency initiative to prevent consumer fraud and privacy violations in connection with the Affordable Care Act’s Health Insurance Marketplace.  Officials noted that the initiative builds on a successful consumer fraud infrastructure that already exists and highlighted that the new initiative will:
--Dedicate a Marketplace Call Center as a resource and referral to FTC for consumer fraud concerns, with trained staff to refer consumer threats and complaints;
--Connect consumers to FTC’s Complaint Assistant through HealthCare.gov;
--Develop a system of routing complaints through the FTC’s Consumer Sentinel Network for analysis and referral as appropriate;
--Establish a rapid response mechanism for addressing privacy or cyber security threats; and
--Ramp up public education to empower consumers to know the facts and avoid scams.

Finally, it is clear that the promises inherent in this law tend to enhance the standing of millions of consumers:
1)    Quality plans
2)    Lower premiums
3)    Enhanced benefits
4)    Improved access
5)    The end of paying an average of $1000 extra premiums per family to cover the uninsured who use emergency rooms as their primary care

The point is: this law is a broad-based approach to insurance reform, delivery of services, medicine costs and the need for quality health care that provides all necessary basic services at lower costs.  It is not what its right-wing opponents have painted it.  It never was.  This is destined to be a strong Law favoring consumers once its promises begin to be fulfilled by its many reforms and provisions. Even Senator Ted Cruz of Texas, who is leading the fight against funding this Law with an all-night filibuster, has admitted to a reporter in an interview that once ObamaCare provisions take hold, it will be impossible to do anything to stop it! 

This re-formation of health care is long overdue and no amount of negative press will delay its advantages.  However, an editorial on the Kaiser Family Foundation website demands serious consideration:

“Typically the process of learning from experience culminates in Congress with new legislation. Welfare reform legislation, for example, began in the Reagan years but was revisited comprehensively in the Clinton years. And both Medicare and Medicaid have been substantially modified through successive waves of legislation over the years. Laws are changed as we learn what works, as needs and circumstances change, and as political support for needed changes coalesces. Can today’s hyper-partisan, largely paralyzed Congress agree on legislation to improve ACA as we learn from implementation? Would Republicans agree to anything Democrats want? Would Democrats open up the ACA for legislative tinkering? It is not easy to envision agreement on ACA-related legislation any time soon.
One thing that could change the picture somewhat is the current negotiations occurring between several states and the administration over the Medicaid expansion. If HHS and these states can successfully negotiate arrangements that give the states the flexibility they want and at the same time provide adequate protections for beneficiaries, it will bring more red states and their governors into the fold and create a much more bipartisan base for the ACA in the states than it has had in Washington, as well as a broader constituency for changes to improve the law over time. This will not happen overnight.
Another factor that will affect the ability to learn and adapt as implementation proceeds is media coverage. If journalists focus on both what is working well as well as what is not, they can make a real contribution not only to public judgment about the ACA but future efforts to improve it. If they focus only on gotcha outlier horror stories that do not reflect general experience with the ACA, their reporting will do more to fuel political partisan debate than inform future policy.”
 
That there will need to be amendments and changes is inevitable. Already the tax on large medical devices is being re-considered, for instance.  But that is the way with any decent comprehensive plan.  First, it must be constructed, then tested, then evaluated fairly, and then adjusted.  The fact that it will need adjustments and amendments is not a sign of failure.  It is, rather, a sign of strength and endurance.  Just as with any great change – like Medicare and Social Security – the proof is in the implementation.  This is such a grand plan on behalf of healthcare consumers that, in this writer’s opinion, it is going to be unstoppable and eminently successful once all its provisions, with necessary adjustments, are in place. Then, as we did with Medicare, we are going to wonder:  “why all the fuss?  This is great!”  And, we may even hear people proclaim: “I actually got a real live person to help find the best plan for me, and she guided me through the whole process!  WOW!  I love it!”