The Affordable Care Act –
After the Supreme Court
Ruling
September 22, 2012
Robert Semro - Policy Analyst, The Bell Policy
Center
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Implementation Timeline for the ACA
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The Affordable Care Act timeline:
– 46 reforms were implemented in 2010 and 2011
– 10 reforms are scheduled to be implemented in 2012
– 13 reforms are scheduled to be implemented in 2013
– 19 major reforms are scheduled to be implemented in 2014
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Guaranteed issue of coverage
Expanded Medicaid coverage and presumptive eligibility
Individual requirement to have insurance
Community rating for private insurance
Health Insurance Exchanges and Essential Health Benefits
No annual limits on coverage
Lower income premium and cost sharing subsidies for affordable coverage
Employer requirements / penalties
Benefits From the Affordable Care Act in Colorado:
(As of July 31, 2012)
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Health plans are now required to allow parents to keep dependent children
under age 26 on their family coverage: As of December 2011, 50,000
young adults in Colorado gained insurance coverage.
In 2010, 42,580 people with Medicare in Colorado received a $250
rebate to help cover the cost of their prescription drugs
To date Colorado residents with Medicare have saved a total of
$40,079,421 on their prescription drugs
7,806 people with Medicare received a 50% discount on covered brandname prescription drugs when they hit the “donut hole”
This discount has resulted in an average savings of $666 per person, and
a total savings of $5,202,213 in Colorado
Source: Healthcare.gov.: http://www.healthcare.gov/law/resources/co.html
Benefits From the Affordable Care Act in Colorado:
(As of July 31, 2012)
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This discount has resulted in an average savings of $666 per person, and
a total savings of $5,202,213 in Colorado
In 2011, 382,143 people with Medicare in Colorado received certain free
preventative services (including mammograms and colonoscopies), or a
free annual wellness visit
158,067 people with Medicare received free preventive services
973,000 Coloradans with private health insurance gained preventive health
services with no cost sharing
1,227 previously uninsured Colorado residents with pre-existing
conditions have coverage through the ACA high risk pool
Source: Healthcare.gov.: http://www.healthcare.gov/law/resources/co.html
Benefits From the Affordable Care Act in Colorado:
(As of July 31, 2012)
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As many as 208,197 Colorado residents with private insurance coverage
may receive rebates in 2012 from health insurance carriers that fail to
Medical Loss Ratio targets. These rebates will average $227 for as many
as 121,000 families in Colorado
The Affordable Care Act prohibits insurance companies from imposing
lifetime caps on health benefits. To date 1,902,000 Colorado residents
(including 696,000 women and 521,000 children) are no longer subject to
lifetime benefit limits.
To date, 1,227 previously uninsured Colorado residents with preexisting conditions have coverage through the ACA high risk pool
Source: Healthcare.gov.: http://www.healthcare.gov/law/resources/co.html
Benefits From the Affordable Care Act in Colorado:
(As of July 31, 2012)
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Colorado has received $18.9 million in grants for research, planning, IT
development, and implementation of COHBE
Colorado has received $17.2 million in grants from the Prevention and
Public Health Fund created by the ACA
Colorado has received $5 million to improve insurance premium rate
review
Health centers in Colorado have received $78.8 million in grants to:
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Create new health center sites in medically underserved areas
Enable health centers to increase the number of patients served
Expand preventive and primary health care services
Support construction and renovation projects
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Source: Healthcare.gov.: http://www.healthcare.gov/law/resources/co.html
Benefits From the Affordable Care Act in Colorado:
(As of July 31, 2012)
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Colorado has received more than $106.4 million for its work to build the
health care workforce, crack down on fraud, and support public health.
Additional smaller grants include:
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$500,000 to support the National Health Services Corps
$1.3 million for the expansion of the Physician Assistant Training Program
$3.5 million for school based health centers.
$210,000 to support outreach to eligible Medicare beneficiaries
$492,000 to support Aging Disability Resource Centers
$473,700 for Family to Family Health Information Centers
$7.9 million for Maternal, Infant, and Early Childhood Home Visiting Programs
Source: Healthcare.gov.: http://www.healthcare.gov/law/resources/co.html
The Supreme Court Ruling
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Definitions
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Individual Mandate: The ACA requires most U.S. citizens and legal
residents with incomes above the federal income tax filing threshold to
obtain minimum health care coverage or pay a tax penalty.
Medicaid Expansions: The ACA requires participating states to cover
nearly all people under age 65 at or below 133% of the Federal Poverty
Level. Originally non participation would lose a state all Medicaid funding.
The federal government will pay:
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100% of costs for the first 3 years (2014 through the end of 2016)
95% federal financing in 2017
94% federal financing in 2018
93% federal financing in 2019
and 90% federal financing from 2020 on (10% state financing)
The Supreme Court Ruling on June 28, 2012
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Legal Question: Is the individual mandate constitutional?
– Decision: The individual mandate is constitutional under Congress’s
power to tax. To comply with the ACA, individuals have a choice – to
purchase health insurance or to pay a small tax.
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Legal Question: Is the mandated expansion of Medicaid constitutional? Is
the expansion a valid exercise of Congress’s spending power or coercion of
states?
– Decision: The federal government cannot terminate all funding for
Medicaid if states don’t comply. Only new funding for expansion is
affected. States may opt out of the expansion
States and the Expansion of Medicaid
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Arguments against Medicaid expansions
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Some state budgets cannot absorb even 10% of these additional Medicaid
costs
Other programs like education will suffer because states must balance budgets
The federal government may reduce it’s Medicaid expansion contribution in the
future requiring states to absorb more costs
States may have to absorb administrative / infrastructure costs
States may not have enough Medicaid providers or infrastructure
Health care costs will increase making the expansions unsustainable over time
States and the Expansion of Medicaid
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Arguments for Medicaid expansions
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17 million currently uninsured Americans would qualify for coverage
There is no effective private insurance alternative
The federal government will pay the entire cost of covering these newly enrolled
populations for the first 3 years and after 2019, states will only be required to pay
10% of coverage costs
Expanding Medicaid will reduce uncompensated care costs that are currently
passed on to providers and people who are insured
Expanding Medicaid will provide regular access to care and preventative services
that improve health and reduce costs
State government should not base their participation decisions on economic
circumstances that will change over the long term
States and the Expansion of Medicaid
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Not participating:
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Leaning toward not participating:
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Massachusetts, Vermont, Connecticut, Maryland, Delaware, Minnesota,
Illinois, California, Hawaii
Leaning toward participating:
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Texas, New Jersey, Missouri, Iowa, Nevada, Nebraska, Kansas
Participating:
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Florida, Louisiana, Mississippi, South Carolina and Wisconsin
Washington, Oregon, Rhode Island, Arkansas
Undecided or no comment:
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All other states including Colorado
Medicaid Expansions: the Decision for Colorado
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The Colorado Health Care Affordability Act (Hospital Provider Fee)
The size of the new Medicaid eligible population in Colorado
The per parson cost of the new Medicaid eligible population
The impact on Colorado’s budget (General Fund)
Depending upon the results of the national elections in November,
This may be the single biggest healthcare issue in the 2013 Colorado
legislative session
Implementing the Colorado Health
Benefits Exchange
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Health Insurance Exchanges
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National Status of Health Insurance Exchanges
– 16 states (32%) are establishing State Insurance Exchanges (including
Colorado)
– 16 states (32%) are studying options
– 3 states (6%) are planning for a State Federal Partnership Exchange
– 9 states (18%) have not made a decision but are engaged in no significant
activity
– 7 states (14%) have made the decision to use a federal exchange and not
create a state exchange
Health Insurance Exchanges
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Colorado Health Benefits Exchange
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The Colorado Health Benefits Exchange (COHBE)
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Funding
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Website: http://www.getcoveredco.org
Created through bi-partisan legislation in 2011 (Senate Bill 200)
COHBE will open for business in October 2013 and is on schedule
Coverage will begin on January 1, 2014
Colorado has received about $19 million in federal grant funding to implement
the exchange
Individual and SHOP Exchanges (Larger Risk Pools)
Standards for Qualified Health Plans (QHP) and Essential Health
Benefits Requirements (EHP)
No “Active Purchasing”
Potential impact of “ACA defunding” and “state mandates”
The Future of the Affordable
Care Act
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Where Will the Affordable Care Act Be in 2013?
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It depends on the November 2012 elections…………….
– If President Obama wins the Presidential election the Affordable Care
Act will be likely be implemented.
– If Republican candidate Romney wins the Presidential election and the
Republicans win control of the U.S. Senate the Affordable Care Act may
not be repealed but it will likely be significantly de-funded
It will also depend upon Budget Reduction efforts regardless of the
outcome of the elections
– Budget Control Act of 2011, the “sequester” and the “fiscal cliff”
– Simpson Bowles Commission and other budget reduction plans
– The U.S. House budget proposal
If the Affordable Care Act is De-Funded
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Some things will probably stay in place
– It will be difficult for Congress to repeal those provisions that have
already been implemented
– Provisions to limit waste fraud and abuse in Medicare and Medicaid will
probably stay in place
– Some cost cutting provisions in the Affordable Care Act will stay in
place
THANK YOU
Robert Semro
Policy Analyst
Bell Policy Center
semro@bellpolicy.org
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