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AFFORDABLE CARE ACT
D UMM IES
the
for
@rock_health
@mgxtro
Presentation Ⓒ 2013 Rock Health
August 25, 2009
Presentation Ⓒ 2013 Rock Health
A TENSE MOMENT
January 19, 2010
9:13pm EST
Massachusetts Special Election, United States Senate
following the death of Ted Kennedy, a leading proponent of healthcare reform
MARTHA COAKLEY SCOTT BROWN
47.1% 51.9%
“41st vote”
U.S. SENATE SEATS
Presentation Ⓒ 2013 Rock Health
SKILLSHARE SCOPE
AFFORDABLE CARE ACT WE WILL NOT COVER
• Patient Protection and
Affordable Care Act (2010)
• Health Care and Education
Reconciliation Act (2010)
• American Recovery and
Reinvestment Act (2009)
- Health Information Technology for
Economic and Clinical Health Act
(HITECH)
• Children’s Health Insurance Program
Reauthorization Act (2009)
Presentation Ⓒ 2013 Rock Health
SKILLSHARE SCOPE
AFFORDABLE CARE ACT WE WILL NOT COVER
• Patient Protection and
Affordable Care Act (2010)
• Health Care and Education
Reconciliation Act (2010)
• American Recovery and
Reinvestment Act (2009)
- Health Information Technology for
Economic and Clinical Health Act
(HITECH)
• Children’s Health Insurance Program
Reauthorization Act (2009)
Presentation Ⓒ 2013 Rock Health
ANOTHER TENSE MOMENT
June 28, 2012
10:00am EDT
GINSBURG SOTOMAYOR KAGAN BREYER KENNEDY ROBERTS ALITO SCALIA THOMAS
INDIVIDUAL
MANDATE ✓ ✓ ✓ ✓ ✕ ✓ ✕ ✕ ✕
MEDICAID
EXPANSION ✓ ✓ ✓ ✓ ✕ ✓ ✕ ✕ ✕
United States Supreme Court Decision
National Federation of Independent Business, et al. v. Kathleen Sebelius
Presentation Ⓒ 2013 Rock Health
A CENTURY OF ATTEMPTS
FAILED
FAILED
FAILED
FAILED
FAILED
?
Children’s Health
Insurance Program
(1997)
PASSED PASSED
PASSED
Medicare &
Medicaid
(1965)
Medicare
Part D
(2003)
Affordable
Care Act
(2010)
1910s 20s 30s 40s 50s 60s 70s 80s 90s 00s 2010
Presentation Ⓒ 2013 Rock Health
WHY REFORM?
$8,953
$2.8T total
spending
per
capita
$
C O S T
49% of adults do
not receive
recommended
screening and
preventive care
Q U A L I T Y
lack health
insurance49M
A C C E S S
300M AMERICANS
Presentation Ⓒ 2013 Rock Health
OVERVIEW
~91provisions
to be implemented from
2010-2018+
BIG PICTURE OBJECTIVES
• Expand insurance coverage to all
Americans
• Further regulate health insurance and
increase regulatory oversight
• Pilot new payment models for
healthcare services
• Figure out how to make Medicare
sustainable
• Increase focus on preventive care
Presentation Ⓒ 2013 Rock Health
TIMELINE
2011 2013 2018
2010 2012 2014
• Small business tax credits
• Dependent coverage to age 26
• No recission
• No lifetime benefit maximums
• Premium reviews
• Patient-Centered Outcomes
Research Institute (PCORI)
• MLR floors
• Free preventive care
• CMS Innovation Center
• Independent Payment Advisory
Board (IPAB)
• Medicaid Health Homes and
chronic disease prevention
• Accountable Care Organizations
• Hospital readmissions penalties
• Hospital value-based purchasing
program
• Medicaid bundled payments
• Pharmaceutical company fees
• Administrative simplification
• Medicare bundled payments
• Medical devices excise tax
• Health insurance exchanges
• Medicaid expansion
• Individual mandate
• Premium subsidies
• Employer penalties
• Guaranteed issue
• No annual benefit maximums
• Essential health benefits
• Medicare Advantage bonuses
• Insurance industry fees
• Cadillac Tax for
high-priced
plans
Presentation Ⓒ 2013 Rock Health
COST-BENEFIT
U.S. Government
Washington, DC
2013-2022
PPACA
Costs
$1,620B
Offsets
($455B)
Net Costs
$1,165B
2013 15 17 19 21
No ACA
ACA
$
C O S T Q U A L I T Y A C C E S S
? -27M
uninsured
NATIONAL HEALTH EXPENDITURES
Presentation Ⓒ 2013 Rock Health
• ACOs
• MLR floors
• IPAB
• CMS Innovation Center
• Premium reviews
• Administrative
simplification
• Value-based purchasing
• Hospital readmission
penalties
• PCORI
• Health insurance
exchanges
• Medicaid expansion
• Subsidies
• Individual mandate
PROVISION FOCUS
$
C O S T Q U A L I T Y A C C E S S
Presentation Ⓒ 2013 Rock Health
THREE THEMES
1 EXPANSION
Increased coverage
State Medicaid expansion
The price paid by insurers
2 RETAIL
Marketplaces for insurance
Consumer-driven market
Federal and State Exchanges
3 VALUE
Shift away from volume
Accountable Care Organizations
Defining and paying for value
Presentation Ⓒ 2013 Rock Health
COVERAGE FOR EVERYONE
Employer
-8M
Medicaid
+11M
Individual
-3M
Exchanges
+27M
Uninsured
-27M
HEALTH INSURANCE COVERAGE (2018 RELATIVE TO 2013)
• Temporary tax credits for
companies <25 employees
• No requirements for
companies <50 employees
• $2,000 per employee penalty
for companies that don’t offer
coverage (2014)
• $3,000 per employee penalty
for companies that don’t offer
“affordable” coverage (2014)
• Expand
coverage to all
non-elderly
individuals with
incomes up to
133% of FPL
• Refundable and advanceable
premium tax credits for those
between 133-400% of FPL
• Cost sharing subsidies for
those up to 250% of FPL
• $695 ($2,085 for a family) or
2.5% of family income penalty
for those who do not elect
coverage
1 2 3
E X P A N S I O N
Presentation Ⓒ 2013 Rock Health
WHO WANTS MONEY?
Announced or Governor in
support of expansion
Not participating or highly
unlikely to participate
Undecided or
undeclared
STATE MEDICAID EXPANSION PLANS AS OF APRIL 30, 2013
1 2 3
E X P A N S I O N
Presentation Ⓒ 2013 Rock Health
NO FREE LUNCH FOR INSURERS
20-30M
new customers
in a market that has grown by only
4% in the last 20 years, while the
population grew by 20%
THE PRICE
• Guaranteed issue
• Essential health benefits
• No caps on liability
• Limited ability to “tax” unhealthy
• Price (premium) reviews by the state
• Medical loss ratio floors (profit caps)
• New fees for the industry
1 2 3
E X P A N S I O N
Presentation Ⓒ 2013 Rock Health
RETAIL HEALTHCARE
HEALTH INSURANCE EXCHANGES
• Online marketplaces for individuals
and small businesses to buy health
insurance
• Managed by Feds and States (and
private sector)
• Enrollment begins October 2013
1 2 3
R E T A I L
Presentation Ⓒ 2013 Rock Health
THIS CHANGES EVERYTHING
$
PAYERS CONSUMERS
• Massive shift from B2B to B2C
• Fully transparent marketplace
• Limited product variation
• Basis of competition moves
quickly to price
• Significantly increased choice and
freedom of movement
• Responsibility for healthcare and
health decisions
• Most plans likely to be high deductible
or include cost sharing component
POWER
1 2 3
R E T A I L
Presentation Ⓒ 2013 Rock Health
STATES’ RIGHTS
State- or state-partnership
based Exchange
Federally-facilitated
Exchange
STATE HEALTH INSURANCE EXCHANGE PLANS AS OF APRIL 30, 2013
1 2 3
R E T A I L
Presentation Ⓒ 2013 Rock Health
SHIFT FROM VOLUME TO VALUE
$ $ $ $
Fee-for-service PAYMENT
Bundled, Shared Savings,
Capitated
Patient FOCUS Population
Treat INCENTIVE Prevent
$
1 2 3
V A L U E
Presentation Ⓒ 2013 Rock Health
ACCOUNTABLE CARE ORGANIZATIONS
4M
Medicare
beneficiaries
covered
encompassing 222 Shared Savings
ACOs and 32 Pioneer ACOs
PAYMENT TERMINOLOGY
• Benchmark
• One-sided versus two-sided
• Share of savings and losses
• Minimum savings rate (MSR)
• Quality threshold
• First dollar savings
• Sharing and loss caps
• Population-based
1 2 3
V A L U E
Presentation Ⓒ 2013 Rock Health
WHAT ACTUALLY WORKS?
PCORI
• Non-governmental institute
• Funds comparative
effectiveness research (CER)
• Will receive funding totaling
$3.5B through 2019
• Already disseminated hundreds
of millions in funding
CMSIC
• Part of the Centers for
Medicare and Medicaid
Services
• Focus is on testing new
payment and service models
• Currently oversee ACOs,
bundled payments, primary
care transformation
IPAB
• U.S. Government Agency
• Tasked with developing
proposals to slow spending
growth without affecting
coverage or quality
• Requires Congress to enact
the proposal, come up with
an equivalent alternative or
have a 2/3 majority in the
Senate to modify
• Currently non-functional
1 2 3
V A L U E
+ + =NICE?
Presentation Ⓒ 2013 Rock Health
TAKING ADVANTAGE
Helps employers confidently
navigate health care reform
Unlocks the potential of
health data to maximize
outcomes and minimize costs
Streamlines insurance
eligibility checks for
doctors and patients
Improves access to care
for the newly insured and
underserved
Extends the provision of
care from the hospital to
the home
Presentation Ⓒ 2013 Rock Health
FURTHER STUDIES
BACKGROUND UPDATES
Presentation Ⓒ 2013 Rock Health
@rock_health
malay@rockhealth.orgGET IN
TOUCH

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The Affordable Care Act for Dummies by @Rock_Health

  • 1. AFFORDABLE CARE ACT D UMM IES the for @rock_health @mgxtro
  • 2. Presentation Ⓒ 2013 Rock Health August 25, 2009
  • 3. Presentation Ⓒ 2013 Rock Health A TENSE MOMENT January 19, 2010 9:13pm EST Massachusetts Special Election, United States Senate following the death of Ted Kennedy, a leading proponent of healthcare reform MARTHA COAKLEY SCOTT BROWN 47.1% 51.9% “41st vote” U.S. SENATE SEATS
  • 4. Presentation Ⓒ 2013 Rock Health SKILLSHARE SCOPE AFFORDABLE CARE ACT WE WILL NOT COVER • Patient Protection and Affordable Care Act (2010) • Health Care and Education Reconciliation Act (2010) • American Recovery and Reinvestment Act (2009) - Health Information Technology for Economic and Clinical Health Act (HITECH) • Children’s Health Insurance Program Reauthorization Act (2009)
  • 5. Presentation Ⓒ 2013 Rock Health SKILLSHARE SCOPE AFFORDABLE CARE ACT WE WILL NOT COVER • Patient Protection and Affordable Care Act (2010) • Health Care and Education Reconciliation Act (2010) • American Recovery and Reinvestment Act (2009) - Health Information Technology for Economic and Clinical Health Act (HITECH) • Children’s Health Insurance Program Reauthorization Act (2009)
  • 6. Presentation Ⓒ 2013 Rock Health ANOTHER TENSE MOMENT June 28, 2012 10:00am EDT GINSBURG SOTOMAYOR KAGAN BREYER KENNEDY ROBERTS ALITO SCALIA THOMAS INDIVIDUAL MANDATE ✓ ✓ ✓ ✓ ✕ ✓ ✕ ✕ ✕ MEDICAID EXPANSION ✓ ✓ ✓ ✓ ✕ ✓ ✕ ✕ ✕ United States Supreme Court Decision National Federation of Independent Business, et al. v. Kathleen Sebelius
  • 7. Presentation Ⓒ 2013 Rock Health A CENTURY OF ATTEMPTS FAILED FAILED FAILED FAILED FAILED ? Children’s Health Insurance Program (1997) PASSED PASSED PASSED Medicare & Medicaid (1965) Medicare Part D (2003) Affordable Care Act (2010) 1910s 20s 30s 40s 50s 60s 70s 80s 90s 00s 2010
  • 8. Presentation Ⓒ 2013 Rock Health WHY REFORM? $8,953 $2.8T total spending per capita $ C O S T 49% of adults do not receive recommended screening and preventive care Q U A L I T Y lack health insurance49M A C C E S S 300M AMERICANS
  • 9. Presentation Ⓒ 2013 Rock Health OVERVIEW ~91provisions to be implemented from 2010-2018+ BIG PICTURE OBJECTIVES • Expand insurance coverage to all Americans • Further regulate health insurance and increase regulatory oversight • Pilot new payment models for healthcare services • Figure out how to make Medicare sustainable • Increase focus on preventive care
  • 10. Presentation Ⓒ 2013 Rock Health TIMELINE 2011 2013 2018 2010 2012 2014 • Small business tax credits • Dependent coverage to age 26 • No recission • No lifetime benefit maximums • Premium reviews • Patient-Centered Outcomes Research Institute (PCORI) • MLR floors • Free preventive care • CMS Innovation Center • Independent Payment Advisory Board (IPAB) • Medicaid Health Homes and chronic disease prevention • Accountable Care Organizations • Hospital readmissions penalties • Hospital value-based purchasing program • Medicaid bundled payments • Pharmaceutical company fees • Administrative simplification • Medicare bundled payments • Medical devices excise tax • Health insurance exchanges • Medicaid expansion • Individual mandate • Premium subsidies • Employer penalties • Guaranteed issue • No annual benefit maximums • Essential health benefits • Medicare Advantage bonuses • Insurance industry fees • Cadillac Tax for high-priced plans
  • 11. Presentation Ⓒ 2013 Rock Health COST-BENEFIT U.S. Government Washington, DC 2013-2022 PPACA Costs $1,620B Offsets ($455B) Net Costs $1,165B 2013 15 17 19 21 No ACA ACA $ C O S T Q U A L I T Y A C C E S S ? -27M uninsured NATIONAL HEALTH EXPENDITURES
  • 12. Presentation Ⓒ 2013 Rock Health • ACOs • MLR floors • IPAB • CMS Innovation Center • Premium reviews • Administrative simplification • Value-based purchasing • Hospital readmission penalties • PCORI • Health insurance exchanges • Medicaid expansion • Subsidies • Individual mandate PROVISION FOCUS $ C O S T Q U A L I T Y A C C E S S
  • 13. Presentation Ⓒ 2013 Rock Health THREE THEMES 1 EXPANSION Increased coverage State Medicaid expansion The price paid by insurers 2 RETAIL Marketplaces for insurance Consumer-driven market Federal and State Exchanges 3 VALUE Shift away from volume Accountable Care Organizations Defining and paying for value
  • 14. Presentation Ⓒ 2013 Rock Health COVERAGE FOR EVERYONE Employer -8M Medicaid +11M Individual -3M Exchanges +27M Uninsured -27M HEALTH INSURANCE COVERAGE (2018 RELATIVE TO 2013) • Temporary tax credits for companies <25 employees • No requirements for companies <50 employees • $2,000 per employee penalty for companies that don’t offer coverage (2014) • $3,000 per employee penalty for companies that don’t offer “affordable” coverage (2014) • Expand coverage to all non-elderly individuals with incomes up to 133% of FPL • Refundable and advanceable premium tax credits for those between 133-400% of FPL • Cost sharing subsidies for those up to 250% of FPL • $695 ($2,085 for a family) or 2.5% of family income penalty for those who do not elect coverage 1 2 3 E X P A N S I O N
  • 15. Presentation Ⓒ 2013 Rock Health WHO WANTS MONEY? Announced or Governor in support of expansion Not participating or highly unlikely to participate Undecided or undeclared STATE MEDICAID EXPANSION PLANS AS OF APRIL 30, 2013 1 2 3 E X P A N S I O N
  • 16. Presentation Ⓒ 2013 Rock Health NO FREE LUNCH FOR INSURERS 20-30M new customers in a market that has grown by only 4% in the last 20 years, while the population grew by 20% THE PRICE • Guaranteed issue • Essential health benefits • No caps on liability • Limited ability to “tax” unhealthy • Price (premium) reviews by the state • Medical loss ratio floors (profit caps) • New fees for the industry 1 2 3 E X P A N S I O N
  • 17. Presentation Ⓒ 2013 Rock Health RETAIL HEALTHCARE HEALTH INSURANCE EXCHANGES • Online marketplaces for individuals and small businesses to buy health insurance • Managed by Feds and States (and private sector) • Enrollment begins October 2013 1 2 3 R E T A I L
  • 18. Presentation Ⓒ 2013 Rock Health THIS CHANGES EVERYTHING $ PAYERS CONSUMERS • Massive shift from B2B to B2C • Fully transparent marketplace • Limited product variation • Basis of competition moves quickly to price • Significantly increased choice and freedom of movement • Responsibility for healthcare and health decisions • Most plans likely to be high deductible or include cost sharing component POWER 1 2 3 R E T A I L
  • 19. Presentation Ⓒ 2013 Rock Health STATES’ RIGHTS State- or state-partnership based Exchange Federally-facilitated Exchange STATE HEALTH INSURANCE EXCHANGE PLANS AS OF APRIL 30, 2013 1 2 3 R E T A I L
  • 20. Presentation Ⓒ 2013 Rock Health SHIFT FROM VOLUME TO VALUE $ $ $ $ Fee-for-service PAYMENT Bundled, Shared Savings, Capitated Patient FOCUS Population Treat INCENTIVE Prevent $ 1 2 3 V A L U E
  • 21. Presentation Ⓒ 2013 Rock Health ACCOUNTABLE CARE ORGANIZATIONS 4M Medicare beneficiaries covered encompassing 222 Shared Savings ACOs and 32 Pioneer ACOs PAYMENT TERMINOLOGY • Benchmark • One-sided versus two-sided • Share of savings and losses • Minimum savings rate (MSR) • Quality threshold • First dollar savings • Sharing and loss caps • Population-based 1 2 3 V A L U E
  • 22. Presentation Ⓒ 2013 Rock Health WHAT ACTUALLY WORKS? PCORI • Non-governmental institute • Funds comparative effectiveness research (CER) • Will receive funding totaling $3.5B through 2019 • Already disseminated hundreds of millions in funding CMSIC • Part of the Centers for Medicare and Medicaid Services • Focus is on testing new payment and service models • Currently oversee ACOs, bundled payments, primary care transformation IPAB • U.S. Government Agency • Tasked with developing proposals to slow spending growth without affecting coverage or quality • Requires Congress to enact the proposal, come up with an equivalent alternative or have a 2/3 majority in the Senate to modify • Currently non-functional 1 2 3 V A L U E + + =NICE?
  • 23. Presentation Ⓒ 2013 Rock Health TAKING ADVANTAGE Helps employers confidently navigate health care reform Unlocks the potential of health data to maximize outcomes and minimize costs Streamlines insurance eligibility checks for doctors and patients Improves access to care for the newly insured and underserved Extends the provision of care from the hospital to the home
  • 24. Presentation Ⓒ 2013 Rock Health FURTHER STUDIES BACKGROUND UPDATES
  • 25. Presentation Ⓒ 2013 Rock Health @rock_health malay@rockhealth.orgGET IN TOUCH