Patient Protection and Affordable Care Act
On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act (Public Law 111-148). One week later, on March 30, 2010, he signed the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152). Often referred to as Obamacare, these laws extend health care coverage to millions of Americans who were previously uninsured and greatly improve patients’ rights. The laws also invest billions of dollars in prevention and wellness programs, boost education opportunities for physicians and allied health workers, and increase the government’s capacity to fight fraud and abuse.
The Patient Protection and Affordable Care Act (ACA) has two main goals: (1) to make health care coverage more available, affordable, and acceptable and (2) to slow the growth of health care costs in the U.S.
Making Health Coverage More Available, Affordable & Acceptable
Several ACA provisions make it easier for individuals to get and/or keep health insurance. Under the law, people under age 26 can stay on a parent’s health insurance policy. Obamacare prohibits insurance companies from denying plan participation due to health status, medical history or condition, prior claims experience, genetic information, disability, or evidence of insurability. In other words, insurers are required to accept all applicants for individual and small group plans and to guarantee policy renewal, except in the case of fraud or nonpayment. Insurers are not allowed to impose pre-existing condition exclusions on children or adults, and excessive waiting periods are prohibited.
The ACA provides tax credits to individuals with limited incomes to make insurance premiums, deductibles, and co-pays more affordable. To obtain the tax credits, individuals must purchase health insurance plans through a Health Benefit Exchange. An exchange is a web-based marketplace, operated by the federal government or a state government, in which insurance companies sell qualified health plans to individuals and small businesses. Exchanges allow customers to compare the benefits and costs of multiple plans at once. The largest exchange is healthcare.gov, with all but 15 states using it as their marketplace. Obamacare also makes coverage more affordable by encouraging states to voluntarily expand their Medicaid programs to all legal residents under age 65 who have low incomes.
State insurance commissions have broad latitude to regulate health insurance companies in their states; however, the ACA requires states to adopt certain coverage standards and consumer protections. For example, all individual and small group health plans are required to meet or exceed an Essential Benefits Package that includes the following key categories of health services:
- Hospitalization, emergency services, ambulatory (i.e., outpatient) service
- Maternity and newborn care
- Prescription drugs and laboratory services
- Rehabilitative and habilitative services and devices
- Mental health and substance abuse disorder services including behavioral health treatment
- Preventative and wellness services and chronic disease management
- Pediatric services including dental and vision care
The law requires all insurers to implement an effective internal appeals process for coverage determinations and claims decisions and to comply with any applicable state external review process. For states without an external review process or for self-insured plans, the law requires insurers to meet minimum standards established by the U.S. Department of Health and Human Services (HHS). Among other things, these standards require insurance companies to: (1) consider the impact on the patient before denying a claim, (2) handle urgent claim appeals within 24 hours, (3) provide claimants with all back-up paperwork, (4) use plain English in their communications, and (5) follow all rules and directives published by HHS.
Under Obamacare, insurance companies are not allowed to charge women more than men for insurance. Instead, companies are required to set premiums based on family structure, geography, age, tobacco use, and the actuarial value of the plan. Companies must spend 85 percent of what they collect in premiums on claims or refund the difference to enrollees. The HHS Secretary is responsible for monitoring states’ adherence to these federal rules.
Slowing the Growth of Health Care Costs
Harvard economics professor David Cutler wrote in The Wall Street Journal that the Patient Protection and Affordable Care Act incorporates virtually every broad idea that has been offered for “bending the health-care cost curve.” Chief among these are the mandates on individuals and employers to obtain and keep insurance, as described below. Other provisions include:
Center for Medicare & Medicaid Innovation (CMMI)
This program was established by the ACA under the Centers for Medicare and Medicaid Services (CMS) to test models that promote broad payment and practice reform while preserving or enhancing the quality of care. The ACA gives the HHS Secretary significant leeway on the models to be tested.
Independent Payment Advisory Board (IPAB)
Obamacare established an Independent Payment Advisory Board (IPAB) that must submit recommendations to Congress if the projected 5-year average growth in per capita Medicare spending exceeds a specified target. The recommendation must maintain or improve the quality of care delivered. The HHS Secretary is required to implement the recommendations unless Congress passes an alternative proposal that provides an equivalent amount of budgetary savings. So far, the growth in Medicare spending has fallen below the level that would trigger an IPAB recommendation.
Payment Reforms to Support Primary Care Workforce Capacity
Strong primary care leads to higher quality care and lower cost. The ACA contains a number of provisions to encourage clinicians to enter into primary care and help maintain the current primary care workforce. These incentives include increases in the number of medical school slots for primary care students, bonuses for Medicare practitioners, and payment parity for treating Medicaid patients.
Medicare Shared Savings Program
The ACA allows for physicians and other health providers to voluntary establish Accountable Care Organizations (ACO) that can contract directly with Medicare and share in any cost saving achieved while meeting specified quality thresholds. These collaborations can consist of physicians and other healthcare practitioners, networks of individual practices, partnership or joint venture arrangements, hospitals that employ accountable care professionals, and other arrangements approved by the HHS Secretary.
Identifying and Correcting Misvalued Services Paid Under the Medicare Physician Fee Schedule
Medicare payments are determined by a Resource Based Relative Value System (RBRVS) that takes into account the amount of physician work, practice expense, and professional liability costs associated with a given clinical service. Over time, some services become overvalued while others become undervalued. Under the ACA, the HHS Secretary is required to establish a review process to identify and correct misvalued services.
Medicaid Health Homes for Enrollees with Chronic Conditions
The ACA provides for a Medicaid state plan option, called Health Homes, to address the needs of beneficiaries with chronic conditions in which the federal government will provide 90 percent of the cost for the first 2 years to each state that picks up this option. The programs can focus on specific high-need chronic care populations or within specific geographic areas of the state. Services provided under this program include comprehensive transitional care, patient and family support, community referral and social support services, and use of health information technology to link services as feasible and appropriate.
Patient Centered Outcomes Research Institute (PCORI)
PCORI is a non-profit, tax exempt corporation established by the ACA to examine the “relative health outcomes, clinical effectiveness, and appropriateness” of different medical treatments by evaluating existing studies and conducting its own. PCORI’s work is intended to assist patients, clinicians, purchasers, and policymakers in making more informed and effective health care decisions.
Provisions of Interest to the Brain Injury Community
Several sections of the Affordable Care Act are of interest to the brain injury community. These include:
Section 2010 – Additional Federal Financial Participation for CHIP
This provision authorizes the Children’s Health Insurance Program (CHIP) through 2019. States are required to maintain their current rules regarding income eligibility for CHIP between November 23, 2010 and through FY 2019 in order to receive matching Federal Medical Assistance Percentage (FMAP) rates. The provision increases FMAP by 23 percent up to a maximum of 100 percent funding, beginning in FY 2014 and extending through FY 2019.
Section 2405 – Aging and Disability Resource Centers
ARDCs serve as a single point of entry for individuals with disabilities and elderly persons who need home and community services and supports. These Centers are funded through grants awarded by Administration on Aging (AoA) and the Centers for Medicare and Medicaid Services..
Section 3505 – Grants to States for Trauma Care
This section establishes grants to states to promote universal access to trauma care services provided by trauma centers and trauma-related physician specialties.
Section 4101 – School-based Health Centers
This section requires the HHS Secretary to establish a program to award grants to eligible entities to support the operation of school-based health centers.
Section 4201 – Community Transformation Grants
The Centers for Disease Control and Prevention (CDC) is authorized to award competitive grants to state and local governmental agencies and community based organizations for the implementation, evaluation, and dissemination of evidence-based community preventive health activities in order to reduce chronic disease rates, prevent the development of secondary conditions, address health disparities, and develop a stronger evidence-base of effective prevention programming, with not less than 20 percent of such grants being awarded to rural and frontier areas.
Section 4203 – Removing Barriers and Improving Access to Wellness for Individuals with Disabilities
This section amends Title V of the Rehabilitation Act of 1973 by establishing standards for accessible medical diagnostic equipment used in physician’s offices, clinics, emergency rooms, hospitals, and other medical settings. The standards must ensure that such equipment is accessible to and usable by individuals with accessibility needs and must allow independent entry to, use of, and exit from the equipment by such individuals to the maximum extent possible.
Section 5302 – Training For Direct Care Workers
This section authorizes HHS to award grants to eligible entities to provide new training opportunities for direct care workers who are employed in long-term care settings such as nursing, assisted living facilities and skilled nursing facilities, intermediate care facilities for individuals with mental retardation (ICF-MR), home and community based settings, and any other setting the Secretary determines to be appropriate.
Section 5306 – Mental and Behavioral Health Education & Training Grants
This section authorizes grants to schools for the development, expansion, or enhancement of training programs in social work, graduate psychology, professional training in child and adolescent mental health, and pre-service or in-service training to paraprofessionals in child and adolescent mental health.
Section 6201 – Background Checks on Long-term Care Facility Workers
This section requires HHS is to establish a program to identify efficient, effective, and economical procedures for long term care facilities or providers to conduct background checks on prospective direct patient access employees on a nationwide basis.
Section 10202 – Incentives for States to Offer Nursing Home Alternatives
This is an initiative to help states rebalance their long-term care services to reflect community living alternatives. The state must provide a “no wrong door – single point entry system” for accessing HCBS.
Section 10410 – Centers of Excellence for Depression
This section authorizes grants to establish a network of health-advancing National Centers of Excellence for Depression.
Paying for the Law
The Affordable Care Act requires most Americans to obtain and maintain health insurance or pay a penalty. The penalty fee is assessed for each month the person is uninsured and is paid when filing the individual’s federal income tax returns. The annual fee for not having insurance in 2016 is $695 per adult and $347.50 per child (up to $2,085 for a family), or 2.5 percent of household income above the threshold depending on the filing status (e.g., single, married, or with dependents). Several exemptions are available. For example, individuals with low incomes, those who were uninsured for a short time, inmates, religious objectors, members of Indian tribes, and American citizens living abroad may apply for exemptions.
Obamacare also requires businesses with 50 or more full-time equivalent employees (FTEs) to provide health insurance to at least 95 percent of their full-time employees and their dependents up to age 26 or pay a fee. The mandate does not apply to employers with 49 or fewer FTEs. Some employers with small workforces may qualify for employer tax credits when shopping for group plans through the online exchange marketplace. For employers who don’t provide coverage, the fee is $2,000 per full-time employee (minus first 30 full-time employees). In general, the fee is only triggered if at least one employee shops on the marketplace and is eligible for a federal premium subsidy. According to the U.S. Department of the Treasury, approximately 96 percent of employers are small businesses with fewer than 50 FTEs and are exempt from the employer mandate. Almost all of the remaining four percent of employers offer qualifying coverage.
The ACA also includes several new taxes and spending cuts to existing programs to cover its costs. For example, there’s an excise tax on high-cost “Cadillac” health plans, which begins in 2018 and raises a projected $32 billion through 2019. There are also annual fees on health care providers, taxes on medical devices, surcharges on individuals earning over $200,000, penalties on individuals and employers who remain uninsured, and other new taxes. The revenue generated under the ACA is offset by the costs of the exchanges, new Medicaid outlays, and small employer tax credits. According to the Congressional Budget Office, the U.S. was set to achieve a net savings of $143 billion from 2010 to 2019, while simultaneously providing more available, affordable, and acceptable care.
The Affordable Care Act has survived many repeal attempts in the U.S. House of Representatives and a few major court challenges. The law has had varying degrees of success with some provisions performing better than expected, such as dependent coverage to age 26, while others have proven unworkable. According to Obamacarefacts.com, the number of Americans who are uninsured is at a long-time low, and health care spending grew at the slowest rate since 1960. In addition, health care price inflation is at its lowest rate in 50 years.