Transcript: Bob Seifert’s Brainshark™ Presentation
Health Care Reform Update & The Road Ahead
January 2013
Slide 1:
Title Slide: Health Care Reform Update and the Road Ahead
Slide 2:
Video Slide: This is a brief update on what’s ahead in health care reform since the election of 2012. In short, 2013 will be a very busy year. There are many things to do in preparation for full implementation of Affordable Care Act, beginning in 2014. State governments in particular will be quite active preparing to implement the federal requirements and in choosing some of the options that the federal law provides to them. Even in Massachusetts, considered a pioneer in health reform, there’s much to do to get ready for the ACA.
Slide 3:
As a preview, I want to start with a couple of slides from the Kaiser Family Foundation’s monthly tracking poll of health care issues. This first one shows a decidedly indecisive nation in terms of its opinion of the
Affordable Care Act or the ACA. Opinion is very split throughout, since the passage of the law in April of
2010 really until the present day, very divided in terms of favorable, unfavorable opinions of the ACA, and a fairly steady level of people who really don’t know or have an opinion.
Slide 4:
Similarly, a plurality of people on this polling question expressed confusion about the ACA, and equal numbers are still saying that they are either enthusiastic about the law or angry about the law. So, far from universal support and enthusiasm about ACA, as we head into a very intense period of preparation for the full implementation.
Slide 5:
For the next few minutes I’m going to talk about the story so far, that is where we have come from since the passage of the ACA, the timeline for the future implementation of the law, the latest developments and guidance that states have received from the federal government, some of the current issues that states are facing as they are preparing for the implementation, and I’ll talk for a few minutes at the end about progress that Massachusetts in particular has been making in implementing the ACA.
Slide 6:
Title: The Story so Far
Slide 7:

To begin, I want to remind you that the Affordable Care Act is a large, omnibus piece of legislation. It contains ten titles, dealing with all different topics, only the first two or three of which have been getting most of the attention since its passage; about the expansion of coverage for people, and the role of public programs such as Medicare and Medicaid programs. But, there are many other elements of the law that states and the federal government are implementing at the same time as these higher profile parts of the law.
Slide 8:
The affordable care act became law in the spring of 2010 so major transformations are already underway in healthcare system. There've been coverage expansions in particular more than 3 million uninsured young adults ages 19 to 25 have gained coverage between September 2010 and December of 2011. In the insurance market pre-existing condition exclusions for children have been eliminated. Insurance companies are no longer allowed to rescind coverage when one of their subscribers get sick. Lifetime limits are no longer allowed on new insurance plans. In the realm of infrastructure has been a lot of funding in the ACA for IT improvements and states to improve how health care is tracked and recorded.
Money for community health centers to improve their primary care delivery and funding for the development of workforce. In the Medicare program the so-called doughnut hole is being gradually filled in over the next few years, that is the gap in coverage for Medicare beneficiaries for their prescription drugs is being slowly eliminated and will be gone within a few years. Medicare is also now not requiring cost-sharing for preventive services and is experimenting with new delivery models through the Pioneer
ACO program - Accountable Care Organizations. In the Medicaid program states now have new options for offering community-based, long-term services and supports. There is an option to provide health home services, that is care management and care coordination for people with complex, chronic conditions.
And, Medicaid now prohibits payments for health care acquired infections. In public health the ACA creates the prevention and public health fund a $15 billion fund that has already started to issue grants to states. $42 million of that fund has already come to Massachusetts. The ACA also created the National
Prevention Council which in turn created a national prevention strategy. And there's a great deal of innovation that's encouraged by the Affordable Care Act. It creates within the federal agency CMS the
Center for Medicare and Medicaid innovation which supports payment and delivery reform experiments.
There's funding for countable care organizations, for new payment models such as bundled payments.
There is an advanced primary care practice demonstration for community health centers, a demonstration for reducing avoidable hospitalizations among nursing facility residents, and many, many more contained in the affordable care act that are now being funded and developed in experimental ways all across the country.
Slide 9:
Title Slide: What’s Next. That’s a quick update on what’s happened so far. Now, I’m going to spend some time talking about what’s coming up.
Slide 10:
Here's some major milestones in ACA implementation for the next couple of years and again for these dates I'm indebted to the Kaiser Family Foundation for an excellent timeline that they have on their website. Just passed in December 2012, is the deadline that states faced for letting the federal

government know whether they plan to operate their own state-based exchange or were going to defer to the federal government for their exchange. This is a very significant amount stone in the implementation of the law. To date HHS has conditionally approved nine state exchanges – there are more that have declared their intention to to run a state exchanged and I will talk about the exchange situation in greater detail in a few minutes. In 2013, HHS has its own deadline of approving the statebased exchange plans coming up in January.
In February states that are opting for a partnership, that is a transitional type of exchange where the federal government will help a state run an exchange until the state is ready to do it on its own, those that were Russians are due by February 15th. In 2013 there are a number of important milestones regarding delivery of primary care; Medicaid payments for primary care at the Medicare level, that is all primary care delivered to Medicaid recipients will have to be reimbursed for two years at a level that Medicare pays for primary care services. This is an incentive for more primary care to be delivered in the Medicaid program. There will be an increase in the federal match for the primary care Medicaid payment to states that that provide Medicaid coverage for primary care with no cost sharing to its beneficiaries, so that's an incentive for states to make that sort of service available to its members without any cost.
Slide 11:
Also in 2013, a number of the funding provisions of the ACA will go into effect. There will be an increase in the Medicare tax on high earned and unearned income. There will be an excise tax going into effect on medical device manufacturers, and also the allotment of Disproportionate Share Hospital payments under both the Medicare and Medicaid programs that states receive will be reduced and some of that will finance the act. And, of course, in 2014 major parts of the ACA go into effect; the exchanges begin to operate, the individual mandate goes into effect, premium and cost sharing subsidies will be available to people who qualify for them. There are requirements on employers to provide coverage or to pay into exchanges. And, additional insurance market reforms will also go into effect.
Slide 12:
I want to talk now about a couple of the major issues that are facing states at this moment as they prepare to implement the ACA, including decisions about the exchanges, decisions about Medicaid expansions and things that states must do in order to update their eligibility and enrollment systems to be ready for the ACA. There are of course many other decisions, large and small that are coming rapidly now for states that they are needing to deal with at the same time that they are thinking about these much bigger questions.
Slide 13:
As I mentioned the deadline for states to declare their intention of having their own state-based exchange up and running by January of 2014 has just passed. Nineteen states have declared such an intention, and the federal agency, Health and Human Services has already approved conditionally nine of those plans.
Another 25 states have decided not to have a state run exchange and are defaulting to a federally run exchange. And, seven more are planning for a partnership exchange, that is shared exchange responsibilities between the state and federal government.
In addition to making the decision to have a state-based exchange those states have all also needed to make a decision about how their exchanges will operate, and in particular deciding whether the exchange will be an active purchaser, that is one that tries to shape the market in terms of the products that are offered and the premiums that are charged, versus an exchange that operates more or less as simply a clearinghouse that is a directory of the marketplace where people can come and purchase their coverage

but where the exchange exerts very little or no further influence on what is being offered beyond meeting some minimum standards that the exchange sets out.
A number of states have chosen the active purchaser route and others have chosen the clearinghouse route. It will be interesting to see how those changes differ in their operations and the different results that they obtain in terms of people purchasing coverage through the exchange and the quality and extent of the of the coverage that that results from that.
Slide 14:
In June of this year (2012) the Supreme Court issued its decision on the Affordable Care Act and found it constitutional. One part of its decision though made the Medicaid expansion part of the law optional to states. The law had specified that Medicaid be expanded in states to make eligible anyone with incomes below 133% of the federal poverty level. Now states have the choice of whether or not they want to expand their Medicaid programs in this way. This map shows in dark red the states that have decided not to expand their Medicaid programs. The full Medicaid expansion under the under the law was projected to account for about half or about 16 million of the 32 million newly insured people that were to come about as a result of the ACA.
A new Congressional Budget Office estimate since the Supreme Court decision is now that only 10 million not to 16 million will get coverage through Medicaid. Of the 6 million who will now not be covered through Medicaid, about 3 million will be eligible for coverage through the exchange, although will be more expensive than the Medicaid programs in their states. The other 3 million will most likely remain uninsured.
Slide 15:
Slide Title: What could go wrong? So the law has been passed, the Supreme Court has ruled, the election is over, the Affordable Care Act is moving towards full implementation in 2014. What could possibly go wrong?
Slide 16:
To start with, I want to return to one of the tracking poll slides that I showed at the beginning of this presentation. That four in ten Americans still say that they are confused about the health reform law, nearly three years after its passage, suggests that not enough has been done to promote the law, to explain to people what’s in it and to get them ready for the full implementation that’s coming. Clearly building public awareness is a crucial part of the strategy over the next year.
Slide 17:
There’s continued legal action on other parts of the ACA. The requirement that health plans provide coverage for contraception is being challenged in law courts. The Independent Payment Advisory Board, which is a board created by the law to find cost saving opportunities in the Medicare program is also being challenged. And the fact that some states have opted for a federally run rather than a state run exchange is also now the subject of a challenge, because the law provides for subsidies, that is premium tax credits and cost sharing reductions for people who are purchasing coverage through state run exchanges, the challenge here is that federally run exchanges are not explicitly permitted to offer these subsidies.
Slide 18:

To the extent that Congress, or parts of Congress, are still interested in blocking the implementation of the ACA, a number of tools are available to them for disruption and slow down. In the House in particular, which is controlled by the Republicans, who were strongly opposed to passage of the law, they control assignments to the oversight committees that will be watching the implementation of the law very closely. The Appropriation Committees, which have to fund some of the provisions of the law that are not yet funded. And, of course, the budget negotiations that are going on now on the so-called “Fiscal
Cliff” and budget negotiations to come in the next year to two years will also have an important impact on the implementation of the ACA.
Slide 19:
The federal government has also been very busy. In addition to some of the funding activities that I mentioned, and the review of exchange plans, they been issuing new regulations and guidance to the states. There was a logjam in these regulations prior to the election. Some of the guidance that was very important to state planning had been delayed and now they're coming out fast and furious. Some of the more recent regulations have dealt with insurance market reforms such as the elimination of pre-existing condition exclusions, not just for children but for all people. Guaranteed issue renewal of insurance plans, the rate bands that are that are being put in place now to make sure that no insurance is too expensive relative to other plans. New regulations or final regulations around essential health benefits have been issued by giving the states a lot of latitude in defining for themselves what constitutes essential health benefits under the ACA.
There've been new benefit and payment parameters issued such as rules for risk adjustment to reduce the incentive for insurance plans to avoid insuring people with pre-existing conditions. Stabilizing premiums in the individual market through a transition reinsurance program, and rules around the advance payment of the individual premium tax credits, the subsidies that people under 400% of the poverty level will be getting when they purchase coverage through the exchange. Also, in wellness programs new rules will allow insurance companies to offer discounts for employers who offer wellness benefits to their employees.
Slide 20:
The health reform law that Massachusetts passed in 2006 was a model for a lot of the important features of the Affordable Care Act, yet Massachusetts must make a number of changes is in its own system to come into compliance with the new federal law. For example the Massachusetts exchange known as the
Health Connector must make some important changes to how it operates, and in support of that the
Connector submitted in November 2012, a so-called Level Two Exchange
Establishment Grant proposal to assist the Connector and supporting state agencies in successfully transitioning the health connector to an ACA compliant state-based exchange, while maintaining a commitment to the seamless coverage transition of existing members. The state has also received a demonstration grant to institute a Money Follows the Person demonstration and also demonstration for dual eligible, that is Medicaid members who are also eligible for Medicare and are receiving services from both of those programs.
The State has received a total of $246 million in grants to date under the ACA, the largest of those grants has been for the Money Follows the Person demonstration and for the exchange, but there have been many smaller grants to the Department of Public Health for things like strengthening immunization capacity, for childhood obesity research demonstration and to the Executive Office of Elder affairs for the
ADRC options counseling program, as well as to MassHealth, The Division of Insurance and the Executive

Office of Workforce Development. A number of operational changes must be put into place to come into compliance with the ACA, and of course the state also passed this past year further state-level reform dealing mainly with cost containment under its Chapter 224 of the Acts of 2012.
Slide: 21:
We’re nearly three years out from the enactment of the Affordable Care Act, and yet if feels in many ways as if we’re still at a beginning. Especially in the year to come, in which states and the federal government will be preparing for the full-blown implementation of the law beginning in 2014. There’s much work that’s been done, but there is much still to do. So I close with this slide, which is a line from the Philip
Roth novel Portnoy’s Complaint, which incidentally happens to be the last line of the book. I leave you with the thought that as much as you think you have done so far, you may very well be just at the beginning.