Affordable Care Act
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U.S. Navy photo by Photographer's Mate 1st Class Shane T. McCoy. [Public domain], via Wikimedia Commons
U.S. Navy photo by Photographer's Mate 1st Class Shane T. McCoy. [Public domain], via Wikimedia Commons
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Congress has struggled for decades to reform Medicare's fee-for-service payment system, which has driven up the cost of American health care by reimbursing medical providers for services, regardless of their value or quality. The most recent attempt at reform, the 2015 Medicare and CHIP Reauthorization Act (MACRA), seeks to quantify the value of care delivered and to get medical practices to bear some responsibility for the aggregate costs associated with a course of treatment.To do so, the law provides higher payments to clinicians who participate in Alternative Payment Models (APMs), in which practices are penalized for excessive aggregate costs associated with the delivery of a full course of treatment. Most medical practices have balked at APMs, which require them to bear substantial financial risks. These practices, however, will become subject to a complex grading mechanism, the Merit-based Incentive Payment System (MIPS), which will adjust Medicare payments to clinicians in line with their performance relative to peers on a vast array of performance metrics. Yet the federal agency tasked with overseeing this scoring system has publicly declared MIPS to be unworkable and called for its repeal.The fact that Medicare has inadvertently encouraged the proliferation of low-value services does not mean that it is capable of transforming health care for good by identifying and rewarding high-value care. It would be enough to avoid doing harm. That goal can be accomplished if APMs were to give clinicians full credit for treating patients enrolled in Medicare Advantage—which would eliminate the risk to taxpayers of inflated volumes of low-value services, while freeing medical practitioners from arbitrary and counterproductive regulations.
A substantial body of research has investigated effects of the Medicaid expansion under the Affordable Care Act (ACA) on coverage; access to care, utilization, affordability, and health outcomes; and various economic measures. This issue brief summarizes findings from 202 studies of the impact of state Medicaid expansions under the ACA published beginning in January 2014 (when the coverage provisions of the ACA went into effect) and updates earlier versions of this brief with studies through February 2018.1 More recent studies continue to support earlier findings but provide additional findings in key areas, including expansion's effects on health outcomes, access to services and medications for behavioral health and other needs, and providers' financial stability.
The role of government in regulating abortion coverage began to be debated shortly after the landmark Supreme Court ruling in Roe v Wade. Since 1976, the Hyde Amendment has blocked federal funds under Medicaid and other federal programs from being used to pay for abortion, allowing exceptions only for pregnancies that endanger a woman's life, or that result from rape or incest. The Affordable Care Act (ACA) interpreted the federal abortion-funding ban to include the federal tax credits that functioned as premium subsidies to help individuals afford Marketplace plans. This issue brief reviews current federal and state policies on private insurance coverage of abortion services, and how the Bipartisan Health Care Stabilization Act of 2018 would affect abortion coverage for women enrolled in the individual market.
Alabama is seeking federal permission through a Section 1115 Medicaid demonstration waiver to require parents and caregivers who rely on Medicaid to work 20 to 35 hours a week, prove they are looking or training for a job or do community service before receiving Medicaid. This proposal targets the very poorest and most vulnerable families with children in Alabama – many of whom will lose their health coverage.If approved, according to the state's own projections, this work requirement would result in as many as 8,700 of Alabama's poorest residents losing their Medicaid coverage in the first year alone.Alabama is not the first state to seek a work requirement, but it is one of the first to do so without accepting the Medicaid expansion provided under the Affordable Care Act. That expansion allows adults with incomes slightly above the poverty line (138 percent of the federal poverty level) to receive Medicaid. In Alabama, only the poorest parents and caregivers, those making 18 percent of the poverty level or less—$3,740 a year for a family of three or about $312 a month—now qualify. That is the strictest eligibility requirement in the nation (along with Texas). Because Alabama has not expanded Medicaid, the work requirement would apply only to these extremely poor parents.The new requirement would also affect workers using Transitional Medical Assistance (TMA) by cutting TMA benefits from 12 to six months despite eligibility rules, which ensure that these beneficiaries, by definition, are working more. This contradicts the stated goals of the state's Section 1115 proposal and suggests that this aspect of the proposal is not about encouraging work but rather about cutting enrollment and Medicaid spending.In addition, the proposal creates more red-tape and barriers to health coverage without any guarantee of new resources to help families overcome barriers to employment such as job training, transportation or childcare assistance so that very low-income mothers can fulfill their parental responsibilities while meeting the new restrictions on Medicaid coverage.
A new report, supported by the Robert Wood Johnson Foundation and authored by Georgetown CHIR and Urban Institute researchers, examines how uncertainty over the long-term future of the ACA have affected insurers' participation and premium setting decisions for the 2018 and 2019 plan years. We interviewed 10 insurance companies participating in the individual market in 28 states and D.C. and a few key takeaways include:The rollback of the ACA's individual mandate led insurers to implement higher premiums in 2018 and will likely drive premiums even higher in 2019. However, insurers' views differed on the impact of repealing the individual mandate. Some felt it would ultimately lead to a collapse of the market and are considering further retrenchment; others felt confident that a market for highly subsidized, low-income consumers would continue.The midyear loss of the ACA's cost-sharing reduction plan reimbursements drove 2018 premium increases ranging from 10 percent to 20 percent. However, several insurers noted that proposed federal legislation to restore cost-sharing reduction funding could result in significant disruption and sticker shock for consumers receiving premium tax credits.All insurers had concerns regarding an expansion of short-term and association health plans under the President's October 12, 2017 executive order. Insurers worry that an expansion of these plans could siphon healthy people away from the individual market, leaving a sicker, costlier population.Insurers with narrow provider networks reported concerns about the potential exit of competing insurers, noting that their network providers lacked capacity to take an influx of new, often sicker enrollees. They further noted that unexpected insurer exits can produce considerable disruption, particularly if remaining insurers lack sufficient time or ability to readjust their pricing.A worsening of the risk pool will likely cause many insurers to reduce their market presence, will cause all insurers to raise their premiums, and may lead to more exits.
Key Healthcare Proposals in Governors' Proposed Budgets for SFY 2019 from a Preliminary Look at 32 States.
Public health-care entitlements in the U.S. have traditionally been designed to supplement rather than to supplant privately purchased health insurance. About 40% of the entitlement funds disbursed under the Affordable Care Act (ACA), however, have gone to individuals who already had private coverage. This displacement of private-sector spending by public-sector activity is called "crowd-out." While the ACA has reduced the share of the American population without health insurance, its spending has been poorly-targeted to fill gaps in care, and 28 million remain uninsured.This paper reviews estimates of ACA crowd-out and examines the potential for block grants to allow states to target assistance at individuals otherwise lacking coverage. Under such a reform, the same level of federal funding could do more to expand access to care and to provide protection from catastrophic medical costs for those who need help the most.
The U.S. Department of Labor (DOL) received over 900 comments on its proposed rule, which aims to promote the growth of Association Health Plans (AHPs) by making it easier for self-employed individuals and small employers to buy coverage through professional and trade associations. The proposed rule suggests relaxing the definition of AHPs so that eligible members can join together to act as a single, large group under the Employee Retirement Income Security Act (ERISA). In doing do, members would be regulated as large-group coverage, and therefore, would be exempt from many of the Affordable Care Act's (ACA) critical standards, including the provision of essential health benefits and compliance with the risk adjustment program
Although the Congress repeatedly failed to repeal and replace the Affordable Care Act (ACA) in 2017, ACA policies have changed extensively over the past year. December's tax bill eliminated the financial penalties enforcing the individual mandate, starting in 2019. The Trump administration used its executive powers to slash ACA advertising spending and shrink the ACA enrollment period, and it ceased making cost-sharing reduction payments to insurers. These changes did not appear to have a big impact on ACA's 2018 enrollments, which were only slightly below the previous year's total, but there has been a decline in the number of participating insurers, and premiums increased in many rating areas.It is still too early to know the longer-term effects of these changes, much less anticipate future developments. They do, however, suggest that states are implementing the ACA in a dynamic, uncertain environment even after the act escaped wholesale replacement. To deal with these and future changes, or to modify policies that would make state ACA programs more effective, or more to their political liking, state governments may turn to the ACA's Section 1332 State Innovation Waivers. The 1332 waivers are not the only way in which states can modify ACA policies, and their role has been limited to date. But the waivers have potential as a means for widespread policy change, and that potential may grow. As of this writing, there are bipartisan proposals in the Congress to expand the authority under the ACA's section 1332 provision to foster even more state innovation.This paper discusses the 1332 waiver — its origins, powers and limitations, and uses thus far — and how it may be used to address major challenges facing the ACA. We note, for example, a shift in the purposes of planned 1332 applications before and after the 2016 elections, a shift that suggests a new and challenging function for waivers — not simply to allow states to adopt different pathways to common policy goals, but to respond effectively and quickly to rapid changes in healthcare markets. We discuss the practicality and implications of this shift along with ways in which 1332 waivers may be used to serve other purposes, including how they may be used in combination with other waivers and instruments to bring about comprehensive reforms in the delivery of healthcare. We also discuss the prospects for 1332 waivers in the coming years, their potential roles in adapting the ACA to changing and diverse circumstances, and ways in which the waiver process may be improved.
Through Section 1332 of the Affordable Care Act (ACA), states may apply for innovation waivers to alter key ACA requirements in the individual and small group insurance markets. States can use the flexibility granted by 1332 waiver authority to shore up fragile insurance markets, address unique state insurance market issues, or experiment with alternative models of providing coverage to state residents. With Congressional efforts to repeal and replace the ACA on hold, attention will likely turn to 1332 waivers as states explore ways to address access and affordability issues in their individual and small group markets.While the ACA provides states with some flexibility to alter certain provisions using 1332 waiver authority, it establishes guardrails that limit the extent of the changes states may make. The current statutory language requires that state waiver applications must demonstrate that the innovation plan will provide coverage that is at least as comprehensive in covered benefits; at least as affordable (taking into account premiums and excessive cost sharing); cover at least a comparable number of state residents; and not increase the federal deficit. The ACA requirements states may seek to waive using Section 1332 authority include:Individual and employer mandates;Essential health benefits (EHBs);Limits on cost sharing for covered benefits;Metal tiers of coverage;Standards for health insurance marketplaces, including requirements to establish a website, a call center, and a navigator program; andPremium tax credits and cost-sharing reductions.Additionally, states may request an aggregate payment of what residents would otherwise have received in premium tax credits and cost-sharing reductions, referred to as subsidy pass-through funding. States may not waive certain provisions through section 1332, including guaranteed issue, age rating, and prohibitions on health status and gender rating. While states can submit ACA innovation waivers in conjunction with Medicaid waivers (under Sec. 1115 of the Social Security Act), innovation waivers cannot be used to change Medicaid program requirements.
Key Findings:Proposed reforms to the ACA would likely mean that fewer people with disabilities would have coverage at all. For those who did, a smaller number would have the comprehensive coverage necessary to meet their health care needs, and their coverage would cost more. However, neither current economic models nor evidence from studies on the effect of the ACA conclusively predict what consequences health reforms would have on the employment status of individuals with disabilities.In this brief, we focus on the effects the proposed policy changes could have on individuals with disabilities and individuals with chronic conditions that could become disabling. We begin by discussing the likely effects on coverage and access to care, and review the potential effects the coverage changes would have on employment.
An overview of 1332 waivers, state examples of 1332 waivers to support reinsurance programs, information on other 1332 waivers, and options for Georgia.