Signed into law by President Obama in 2010 and upheld as constitutional by the Supreme Court in 2012, the Affordable Care Act (ACA) is withstanding yet another assault. Efforts to repeal or at least delay implementation of the complex, multi-part ACA are entangled with the current government shutdown. However, because many parts of the ACA rely on mandatory spending, the act is moving forward as planned. In fact, the health insurance exchanges called for under the bill opened last week.
John McDonough, DPH, MPA, of the Harvard School of Public Health, briefing clinicians at Boston Children’s Hospital just before the shutdown, maintained that Americans are “just three months away from a fundamental turning point in U.S. health care policy.” Efforts to derail the ACA, he said, are the “death throes” of the anti-Obamacare movement.
For the bill to work, many changes have to be made to the health insurance system. Some of those changes are already in place, through a series of reforms implemented between 2010 and 2011, including:
- the ability of young adults to stay on their parents’ plans until age 26
- the banning of lifetime and annual benefit limits on insurance policies
- the regulation of medical loss ratios in insurance, requiring that 80 to 85 cents of each premium dollar be spent on medical expenses
- closing of the Medicare Part D prescription drug “donut hole”
“If the ACA just did these things and nothing else,” McDonough declared, “people could rightfully proclaim that this is the most extensive health care reform ever in the history of the country.”
Health insurance exchanges
On October 1, Americans began enrolling in health insurance plans through exchanges. Once current glitches are fixed, consumers will be able to visit Healthcare.gov and experience a site that McDonough likened to “a Travelocity or Expedia for health insurance,” offering currently uninsured consumers “apples-to-apples” comparisons of different plans. Last week, the site received more than 8.6 million visits, according to the Department of Health and Human Services.
The opening of the health insurance exchanges marks a major shift. At the turn of the year, when many of these new insurance policies go into effect, McDonough stated, “private health insurance in the United States will undergo a thorough and huge transformation. It will never be the same again.”
McDonough pointed out that under the ACA, “states have the right of first refusal to set up an exchange or default to the federal government.” Many “progressive” states have created exchanges, but “more conservative states, which want nothing to do with Obamacare, have defaulted to the federal government—ironically, creating a federal exchange.”
More changes are coming at the beginning of next year, including:
• Guaranteed issue: This provision concerns pre-existing conditions. As McDonough explained, “in all 50 states, it will be illegal for any insurance company to rate or write any policy based on anybody’s prior status.”
• Individual mandate: This provision is “not really a mandate,” McDonough said. “It is a tax penalty on individuals who can afford to buy health insurance, but choose not to do so.” Aimed mostly at young people, the provision encourages individual responsibility and gives people “an incentive to buy coverage or keep coverage,” he said.
• Medicaid-related provisions: Central to the ACA is an expansion of Medicaid. At the turn of the year, in 29 states to date, individuals and families below 138 percent of the federal poverty line can enroll in their state’s Medicaid program (those above this threshold can go to their state exchanges). McDonough adds that the ACA creates “a single national standard for how income is calculated for Medicaid eligibility and for how income is calculated for the exchanges.”
The original Medicaid provisions were altered by the Supreme Court’s June 2012 decision, which held that individual states could opt out. Now, McDonough says, “there will be a revolution, but only in states that agree to the expansion of Medicaid.” Still, he predicted that “within five years, all states will get involved, because the financing incentives are so strong.”
Health care delivery under the ACA
Steps to improve the health care delivery system are a large part of the ACA, said McDonough, with many provisions to “move away from a reimbursement system based on fee-for-service and toward a system based on quality.” The ACA will create more patient-centered medical homes, introduce accountable care organizations (ACOs) into the Medicare system, push for value-based purchasing, institute tough standards on hospital readmissions and much more.
“Reform of the delivery system is here,” McDonough asserted. “It’s getting stronger and it won’t go away.”
These changes, he added, are not limited to the United States. “I don’t know of a single advanced nation right now that is not actively engaged in efforts to reform their health care delivery system. There’s no advanced nation that is satisfied with what they’ve got.”
Overall, McDonough believes that those involved in the health care system are living through “a very challenging and difficult time and a very exciting time.” More changes—and more controversy—surely lie ahead, but, as McDonough says: “after January 1, there’s no going back.”