January 1 was a key date in the rollout of the Affordable Care Act (ACA). New insurance policies sold on health exchange websites went into effect, as did a batch of new requirements for those policies. After the bitter controversy, sweeping predictions pro and con, and even a government shutdown in a failed attempt to stop it—what’s next?
Massachusetts is a natural place to look for guidance because the ACA is largely based on that state’s healthcare reform law that passed several years ago. The Massachusetts law contains many of the provisions in the ACA, such as a requirement that individuals carry health insurance or pay a penalty, requirements for policies, and fees and taxes.
And, based on the Massachusetts experience? One can expect incremental change, more patients with health insurance, and probably better outcomes associated with access to care. But, probably not revolutionary change. Polls in that state indicate that the reform is broadly popular among patients and physicians.
Approval in Massachusetts
Provided that the problems with the ACA’s rollout are adequately resolved and do not lead to major changes in the law, one can expect a substantial increase in the number of people with insurance coverage — in Massachusetts, some 98% of the population now has coverage.
This better coverage has led to improvements in overall care of many patients, in the experience of Enrico Cagliero, MD, an associate physician at Massachusetts General Hospital with an active practice in the diabetes center. Working in an academic center, Cagliero is accustomed to seeing indigent patients, but the number is down because “clearly the number of patients without insurance has decreased dramatically.” For many of these patients, the coverage translates to better care. For example, many diabetic patients need eye procedures that were unobtainable when they could not pay, but now patients with even the most basic kinds of insurance have options. Cagliero says he has also seen improvements in diabetes control because medications are more available. Even the greater availability of simple items like blood sugar test strips has improved glucose control for some patients.
The improved care of these poorest patients has apparently not come at the expense of other patients, says Ronald Dunlap, MD, president of the Massachusetts Medical Society. A poll by the society found that seven years into the reform, Massachusetts patients are as satisfied with the care they are receiving as they were before reform began, despite reporting longer wait times for appointments with physicians.
“We have managed to take more people into the system and deliver more care,” Dunlap told Endocrine News. Dunlap says that there are still gaps in care, and in areas that were already underserved by physicians prior to the law, the search to find and wait times to see a primary care physician may have worsened. But predictions that the system would become overloaded have not come true. “I think that physicians have adjusted relatively easily to universal healthcare, and most approve of it,” he says.
A trend that Dunlap senses Massachusetts physicians find stressful, however, is toward consolidation of practices in the state, perhaps in response to a feeling of needing more infrastructure to deal with electronic records and quality assessment systems as part of new payment models such as accountable care organizations. Hospitals and other healthcare organizations have been buying physicians’ practices all over the country in recent years, so whether this trend is related solely to healthcare reform is unclear.
On the subject of greater demand, in a 2013 study, one Boston University researcher found that healthcare reform did not result in a significant increase in hospitalizations, longer lengths of stay, or higher costs. An earlier study by another Boston University professor found that inpatient procedures increased among lowerand medium-income Hispanics and whites after the health reform law went into effect. Hispanic patients underwent 22% more elective surgeries, including knee and hip replacements. Massachusetts may not be representative of the rest of the country because it had a relatively low number of uninsured patients even before its health reform law. So, will its success translate to other parts of the country?
More Patients, Diverse Providers
A main goal of the ACA is to increase the number of Americans with health insurance coverage through incentives and subsidies for buying health insurance, penalties for not buying it, and an expansion of Medicaid and the Children’s Health Insurance Program (CHIP).
The nonpartisan Congressional Budget Offi ce estimates that the ACA will increase the number of people below Medicare age with health insurance coverage by 25 to 30 million people in the next decade. That growth represents an increase from today’s 82% to 92% of the nonelderly population, but is down from estimates made before last year’s Supreme Court decision that gave states the choice of opting out of the planned expansion of Medicaid. Only about half the states are expanding, but some may be reconsidering that decision (see sidebar above). The Obama administration’s decision to put off for a year, until Jan. 1, 2015, the mandate for employers with more than 50 employees to provide coverage will slow the growth in coverage as well.
An influx of millions of new patients will pose a challenge to the healthcare system, says Atul Grover, MD, PhD, chief public policy officer of the Association of American Medical Colleges (AAMC), particularly to the teaching hospitals that his organization represents. The extent of Medicaid expansion is a key concern of the AAMC because these hospitals face cuts in Medicare and disproportionate
share payments written into the ACA. They could accept the cuts when the provisions of the law were being worked out based on the assumption that more patients would have coverage to pay for the services they receive. “The hospital cuts in the ACA were hopefully to be balanced out by an expansion of insurance. If states fail to follow through on the Medicaid expansion, that could lead to further, severe losses for many of our safety-net teaching hospitals that are already barely breaking even,” Grover says.
The AAMC’s other big concern is that it had been projecting looming shortages of physicians and other healthcare professionals even before the ACA passed. An influx of patients from the ACA could accelerate those shortages, although Grover notes that in Massachusetts patients have not experienced diffi culty obtaining care: “In primary care in particular, they have figured out how to use other healthcare professionals, nurse practitioners and physician’s assistants, to improve access.”
Fear of the Marketplace
Many of these newly covered patients will be buying insurance on the exchanges that have experienced so much trouble in starting up, despite their aim of providing easier access for individuals and small employers. Businesses with fewer than 25 workers can receive tax credits up to 50% of premiums, and the exchanges could benefit physician practices.
“Most physicians are small businessmen who provide health insurance to their employees” and so may find the offerings and subsidies available at the exchanges helpful, according to Allan R. Glass, MD, an adviser to the Endocrine Society on policy, advocacy, and physician payment issues.
These online marketplaces are designed to allow individuals and small businesses to easily compare insurance policies. Although originally envisioned as being run by the states, most states declined to do so, and left the task to the federal government. The exchanges certify plans as containing standardized essential benefit packages to make it easier for buyers to know what they are being offered and provide information to help consumers understand the options. Because they will also streamline the process for enrolling in Medicaid and the Children’s Health Insurance Program, they could lead to an increase in Medicaid rolls if consumers shopping for a policy learn of their eligibility for Medicaid.
The contents of the essential benefits packages are defined primarily by the states where they are offered based on the customary local policies already available, but they also have to meet standards for deductibles and out-of-pocket costs.
A state’s choices can greatly affect the policies. For example, any plans sold in Maryland will include coverage of bariatric surgery, but just across the Potomac River in Virginia, bariatric surgery coverage will be an expensive add-on that could cost an extra $1,500 a month, according to an analysis by Kaiser Health News.
And although benefits like those will be determined by states, the ACA has been phasing in “patient protection” requirements over time, with the final ones kicking in on Jan. 1. The ACA eliminates annual and lifetime limits on coverage, restricts the conditions under which insurers can cancel coverage, requires plans to allow parents to include any children under 26 in their plans, eliminates pre-existing conditions exclusions, prohibits insurers from charging higher rates due to gender or health status, requires insurers to cover patients in clinical trials, and requires policies to cover preventive services such as mammograms and colonoscopies without charging a deductible, co-pay, or co-insurance.
Unwelcomed Surprises
All of the provisions do not apply to “grandfathered” plans, which are most health insurance plans that were in force when the ACA became law in March 2010. These plans do not have to follow rules such as providing preventive care without patient cost-sharing. Some 36% of those enrolled in employer plans in 2013 were enrolled in such plans, down from 48% in 2012, reports the Kaiser Family Foundation. A plan loses this status if significant changes are made in it.
Many policies do not meet this grandfathering criteria, and that led to millions of consumers who buy their own coverage receiving cancellation letters from insurers. The cancellations were an unwelcome surprise, given President Obama’s promise that people could keep their plans if they liked them. The cancellations occurred because the policies did not meet the ACA’s greater coverage requirements, and Obama’s change in policy to allow insurers to continue to offer them is a partial and difficult-to-implement fix. Theseindividualbuyers who will need to seek new policies are the very ones most dependent on the exchanges that have been so troublesome, and that could mean trouble for the ACA. “If the start-up problems and computer issues that the health exchanges have encountered turn out to be severe and prolonged, there could be a major impact on the size and composition of the risk pool. These factors are critical to the viability of the entire program,” says Endocrine Society adviser Glass. If a higher proportion of sicker patients — those most motivated to have coverage — plod their way through the exchanges while healthy patients find the process too troublesome, insurers would need to raise premiums to compensate.
Opportunities Yield Concerns
In addition to the opportunity for buying insurance, Glass says that there are some things in the ACA that endocrinologists will generally like, along with some concerns. On the positive side, there are some demonstration grants for new ways of looking at medical liability, proposals for simplification of claims processing, and a provision for collecting additional statistics and reports and funding studies aimed at improving diabetes care. A provision that raised Medicare reimbursement for bone density testing expired after two years, and medical societies are trying to get the level restored.
The ACA also created a pair of potentially significant initiatives. The Patient-Centered Outcomes Research Institute is a nonprofit organization created to back difficult-to-fund comparative effectiveness research. The Center for Medicare and Medicaid Innovation is another new creation, within the Centers for Medicare and Medicaid Services, with a mission of finding new payment and delivery methods that improve care and health while lowering costs, including the effort exploring accountable care organizations (see related story, page 20).
Glass said a new entity is causing some people concern — the Individual Payment Advisory Board is a 15-member panel appointed by various political officials that is “set up as the court of last resort with regard to keeping Medicare expenditures in check … . If Medicare expenditures are rising too fast, then this committee will be allowed to make recommendations to bring those expenditures in line.” The board can cut payments to physicians and other providers, but can’t change anything related to the beneficiaries or their costs. The board’s proposals go into effect unless Congress stops them, and it is doubtful that the current Congress could agree on any response. Glass says that some observers fear that this panel could put the burden of cutting costs of Medicare on providers even further. But because Medicare’s cost growth rate has slowed, the trigger provisions for this board to act have not been met in recent years. “It’s a potential concern, but at this point it has not been in effect,” Glass says.
Glass acknowledged that the ACA remains very controversial and full of unknowns, but says that providing greater access to health insurance is a laudable goal considering that, for many conditions that occupy endocrinologists such as diabetes, earlier intervention can improve outcomes. The ACA’s success in that endeavor remains to be seen.
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