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Excellence Through Innovative Research
The Affordable Care Act And Its Effect On
American Healthcare
Apurva A Mande
Graduate Student
Systems Science and Industrial Engineering
State University of New York at Binghamton
April 10, 2015
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Agenda
 Background of US Healthcare
 The Affordable Care Act
• Aims
• Aspects
 Impact of ACA on
• Nursing
• Medicare and Medicaid
• Employer based insurance
• Health insurance marketplace and private insurance
• Pharmacy
• Mental health services
• Dental and vision benefits
• Economy
 Conclusion
 Future work
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US Healthcare Background
Healthcare industry comprises of 18% of Gross Domestic
Product (GDP) of the country and expected to rise up to
18.4% till 2016
Till 2022, healthcare expected to comprise of 19.9% of
GDP
Fiscal Year Expected healthcare growth rate
(%)
2013 4.1
2014 6.1
2015 6.2
[Blahous, 2013; CMS, 2013]
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US Healthcare Background (Cont’d)
Fragmented in nature
Lack of universal access to quality and affordable health
services
High spending on healthcare
Percent of spending population Amount spent per person on
healthcare
30 12000
10 27000
1 90000
[Shi, 2014; Hoffman, 2014]
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Implications Of Absence Of Coverage
Providers have a right to deny health services to the
uninsured (except ER)
Missed diagnosis and preventable hospitalization in case
of critical health conditions
Low chances of receiving follow-up treatments resulting
in further deterioration of health
Forgoing and postponing of essential care due to high
costs
High medical bills leading to financial insecurity, medical
debts and bankruptcy
[KFF, 2014]
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Need For ACA
Significant number of uninsured individuals (41 million)
Healthcare spending very high
20% projected share of healthcare in GDP by 2020
Increased rate of loss of insurance under 2008-2010
recession
Emphasis on curative treatment instead of preventive
[APHA, 2012]
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The Affordable Care Act
8Binghamton University | March 2015
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1. The Affordable Care Act (ACA)
Popularly known as the Affordable Care Act, the Patient
Protection and Affordable Care Act (PPACA) (Public Law
111-148) is a federal decree, signed by the President of
the United States on 23rd March 2010
Primarily consists of 2 pieces of legislation
• Patient Care and Affordable Care Act
• Health Care and Education Reconciliation Act
Serves with the aim to
• Provide health insurance to every American citizen
• Easy access to affordable and quality heath services
[Gruber, 2011]
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2. Aims Of Affordable Care Act
Significant expansion of health insurance coverage
Mandatory health insurance to residents
Expanding eligibility criteria under insurance schemes
Ease of access [Ease Of Access]
• Coverage
• Services
• Timeliness
• Clinical staff
[Shi, 2014; DPHP, 2014; CMS, 2012]
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2. Aims Of Affordable Care Act (Cont’d)
Equality in insurance coverage
• No discrimination on the basis of pre existing conditions
• Insurance coverage to all individuals regardless of
• Healthcare costs
• Severity of injuries
• Access to employer
• Limit on out of the pocket expenditure
Individual Family
Out-of-pocket
expenditure limit
per year
$6350 $12,700
[Matheson, et al., 2012; Hoffman, 2014]
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Subsidies for people with low income
• Low costs for insurance premium
• Particularly for individuals uninsured by government or
employer
Mandating individual insurance
• Any individual must be insured either by
• Employer
• Public health insurance
• Individual market
• Fee payable in absence of insurance
Individual Family
Amount charged 2% of annual
income or
$325
$975
2. Aims Of Affordable Care Act (Cont’d)
[Matheson, et al., 2012; Healthcare.gov, 2015]
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3. Aspects Of ACA
Allows young adults up to the age of 26 to be covered
under parents insurance
Prohibits insurance companies from
• Rejecting insurance to Americans with pre-existing
conditions
• Spending more than 20% on administrative costs
rather than patient care
• Differentiating for mental healthcare
• Charging women more than men
[Sommers, 2012; HHS, 2014]
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Impacts Of Affordable Care
Act
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1. Nursing
Estimated increase in primary care providers owing to
Minimum Essential Coverage (MEC) under ACA
ACA focused on providing routine check ups in outpatient
settings
$900 million granted to primary care workers for
improving access to health services for the less fortunate
all over the country
Allotment of $30 million to ‘Advanced Nursing Education
Expansion Program’ through ACA
1.2 million job openings for licensed and registered
nurses estimated by 2020
[American Nurses Association, 2014; Lathrop, et al., 2014]
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1. Nursing (Cont’d)
10% bonus payment from fiscal year 2011 to 2016 to
• Nurse Practitioners
• Clinical Nurse Specialist
• Physician Assistant
$338 million distributed among the following categories in
nursing
• Advanced education
• Practice
• Quality
• Retention grants
[American Nurses Association, 2014]
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1. Nursing (Cont’d)
Increase in health care jobs [Roles under nursing]
• 30% projected increase in the number of registered nurses
from year 2012-2022
• 432,000 registered nursing job availability over the next
decade
[HHS, 2013; Paranzino, et al., 2014]
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Summary
Owing to ACA, focus on primary care has increased
Impact on nursing significant due this reason
Increment in incentives for expansion of nursing
programs (education, retention grants etc.)
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2. Medicare
Federal law insuring people over the age of 65 and
permanently disabled individuals under 65
Prior to ACA, Medicare beneficiaries required to pay 20%
of the costs of services covered
Since implementation, entire cost of annual health
checkup funded under Medicare
No personal funds for preventive checkups
Programs regarding health awareness for beneficiaries to
prevent costs for expensive treatments
[Davis, et al., 2010; Krasner, 2012]
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2. Medicare (Cont’d)
Estimated reduction of $390 billion from fiscal year 2010
to 2019 in Medicare spending
Beneficiaries entitled for independent care at home
• Physician and Nurse practitioner provide required primary
care at home
• Intention of reducing expenditure and increasing health
outcome
Guaranteed protection of Medicare
• Medicare life estimated to extend till 2029
Narrowing of the coverage gap
• Out-of-pocket funds estimated to be dropped to 25% by
year 2020
[Davis, et al., 2010; American Nurses Association, 2014; Medicare.gov, 2014; AARP, 2014]
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2.1 Projected Savings In Medicare Under ACA
[Blahous, 2012]
In absence of ACA, Medicare Hospital Insurance Trust
Fund estimated to be depleted by 2016 resulting in
decreased Medicare spending
Expected solvency of the Medicare Hospital Insurance
Trust Fund till 2024 since implementation of ACA
 Projected savings under ACA
$(inbillions)
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2.2 Decrease In Medicare Spending Under ACA
14% fall in the projected Medicare spending for FY 2020
Medicare spending projections
Amountinbillion$
[Rudowitz, 2014]
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Summary
Over $1600 saved per person under Medicare since ACA
Increase in life of Medicare trust fund by 13 years
Increased drug coverage under Medicare
Eligible for insurance even with pre-existing conditions
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3. Medicaid
Medicaid – Health care reform for citizens with limited
resources and income
Jointly ventured by federal and state government
The PPACA upgraded primarily the following aspects of
Medicaid
• Eligibility criteria
• Increase in federal funding
• Improved accessibility to health services
Applicable since January 1st 2014
12 million enrollees predicted by 2016
Estimated reduction of uninsured individuals by 26 million
by 2024
[NCSL, 2011; Artiga, et al., 2014]
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3. Medicaid (Cont’d)
Improved eligibility
• Adults (below 65 years of age) with income increased from
100% to 138% below the Federal Poverty Line
Complete federal financing for 3 years for new enrollees
through 2014 to 2016 in states adopting Medicaid
expansion
• Decrease in funding by 10% till year 2020
25% budget increase in Children's Health Insurance
Program (CHIP)
Individual Family
Income $14,484 $29,726
[NCSL, 2011; Artiga, et al., 2014]
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3. Medicaid (Cont’d)
Increase in Medicaid and CHIP enrollment
• Data till 3 quarters for FY 2014
[Haislmaier, 2015]
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3.1 Medicaid Eligibility For Children Under ACA
(State Of New York)
Age
category
1 2 3 4 5 6 7 8 Additional
cost per
person
Children
under
1year &
Pregnant
Women
$2,169 $2,924 $3,678 $4,433 $5,187 $5,942 $6,696 $7,451 $755
1 to 18
years of
age
$1,498 $2,019 $2,540 $3,061 $3,582 $4,103 $4,624 $5,145 $522
[DOH, 2014]
Monthly income according to the size of the family
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Summary
Medicaid expanded state wise
Increased eligibility for coverage from 100% to 138%
below FPL, since implementation of ACA
Individual eligible for insurance even with pre-existing
conditions
Increase in the number of enrollees
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4. Employer Based Insurance
3 to 5 million fewer people estimated to obtain employer
based insurance
Increased schemes under individual health insurance
marketplace
• People can invest in their own start up
Young adults covered under parents insurance, hence
not mandatory to be employed for it
Increase in the number of young adults
CBOestimatesinmillion
[CBO, 2012; Furman, 2014; Blahous, 2014]
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4. Employer Based Insurance (Cont’d)
Coverage for employers with less than 25 employees
• Small business health options program (SHOP)
• Available to businesses with 50 or fewer employees
• High quality health and dental coverage
• Small business health care tax credit
• Eligible for coverage if average annual income of employees
is $50,000 or less
• Number of full time equivalent employees 25 or less
• Health contingent wellness programs
• Rewarding employees for adopting healthier habits e.g.
reduction in use of tobacco
• Rewards in form of increase in coverage
[Healthcare.gov; SBA, 2015]
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Summary
Around 3% decrease in employer based insurance since
ACA
Young adults till the age of 26 can be covered under
parents insurance
Individuals no longer dependent solely on employers for
insurance
Various coverage plans under SHOP for businesses
having
• Up to 25 employees
• Between 25 to 50 employees
• Between 50 to 100 employees
• More than 100 employees
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5. Health Insurance Marketplace
A place for the uninsured to compare and purchase
health insurance
Facilitated federally and state wise
Cost assistance for families earning 400% below FPL
Insurance plans based on
• Age
• Income
• State
• Family size
[IRS, 2015; Healthcare.gov, 2013]
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5.1 Individual Health Insurance
Self employed, freelancer, independent contractor can
get insurance through ‘Health Insurance Marketplace’
known as ‘Simple Cafeteria Plan’
According to the cost coverage offered, based on income
and property
Catastrophic only coverage also available which includes
free of cost primary care visits
Type of plan Costs covered (in %)
Bronze 60
Silver 70
Gold 80
Platinum 90
[Olafson, 2013]
37Binghamton University | March 2015
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5.1 Individual Health Insurance (Cont’d)
Coverage for the self-employed
• Individual mandate
• Additional Medicare tax
• 0.9% tax if income exceeds threshold of
• $200,000 if single
• $250,000 if married
• Net investment tax
• 3.8% tax on net investment income exceeding threshold
of
• $200,000 if single
• $250,000 if married and filing jointly
[SBA, 2015; IRS, 2014]
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5.2 Selecting Insurance In Marketplace
Search for desired plan
[nystateofhealth.ny.gov, 2015]
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5.2 Selecting Insurance In Marketplace (Cont’d)
Selecting and comparing plans
[nystateofhealth.ny.gov, 2015]
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Summary
Individual can choose from a variety of plans suitable
Individual able to examine and compare each plan
thoroughly and then choose according to budget in mind
4 plans available, each with a specific range of insurance
coverage
Availability of coverage for the self-employed
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6. Private Insurance
3 out of every 4 individuals covered by employer or
government program
ACA impacts individuals opting for private insurance in 6
major ways
• Liberty to choose from various policies
• Less out of the pocket funds
• Increased comprehensive benefits
• No discrimination with respect to income or pre-existing
conditions
• Increased enrollment
• Increased eligibility for subsidies
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6.1 Impacts On Private Insurance
Liberty to choose from various policies
• Individual can choose any plan suitable
• Plans include essential health benefits (EBH)
• 80% of the premium allotted for medical expenses (82%
for the state of NY)
• 20% of premium allotted for administrative purposes (18%
for the state of NY)
[nyhpa.org, 2013]
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6.1 Impacts On Private Insurance (Cont’d)
Significant costs covered in the insurance
• Limit on out of pocket funds
• Division of deductibles depending on type of plan
[nyhpa.org, 2013]
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6.1 Impacts On Private Insurance (Cont’d)
Increased comprehensive benefits
• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance abuse
• Prescription drugs
• Laboratory services
• Pediatric dental services and vision care
• Disease management and wellness service
• Rehabilitation services
[nyhpa.org, 2013]
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6.1 Impacts On Private Insurance (Cont’d)
No discrimination
• Under ACA, insurance to be issued to any individual who
asks for it
• Known as ‘Guaranteed Issue’
• Individuals cannot be denied coverage based on the following
conditions
• Low income
• Pre-existing conditions
• Sex
• Individuals with poor health status cannot be charged with
higher premium
[nyhpa.org, 2013]
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6.1 Impacts On Private Insurance (Cont’d)
Increased enrollment
• Mandatory enrollment for insurance
• Estimated increase in the aging population (above 65)
• Increased average age of the insured due to baby
boomers
• Increment in total private market FY-2014
[Haislmaier, 2015]
47Binghamton University | March 2015
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6.1 Impacts On Private Insurance (Cont’d)
[kff.org, 2013]
Increased eligibility for subsidies
• Premiums to decline by 84% for individuals with low
income
Annual
income
in $
% FPL Unsubsidize
d premium
in $
Potential
government
tax credit
subsidy in $
Premium
after
subsidy in $
Individual
17000 148 5400 4742 658
28000 234 5400 2565 2158
40000 348 5400 954 3800
Family of 4
35300 148 13500 12231 1269
58000 243 13500 8968 4532
83000 348 13500 5605 7895
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Summary
Compulsory enrollment for insurance
Increase in the number of covered benefits
Decrement in premiums for low income individuals
No discrimination on the basis of income, pre-existing
conditions and sex of an individual while providing
insurance
Decline in premiums for individuals
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7. Pharmacists
Pharmacy comprises of 10.1% of total healthcare
expenditure
Increase in expenditure of pharmaceutical industry by
33% in next 5 years
Projected increase in drug expenditure from $359 in 2012
to $483 in 2021
Year [CMS, 2012]
50Binghamton University | March 2015
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7. Pharmacists
Pharmacists play critical role in patient care
Growth in pharmaceutical sales since implementation of
ACA
ACA affected pharmacy in following primary areas
• Care delivery system
• 340B drug pricing program
[Forman, 2014]
51Binghamton University | March 2015
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7.1 Impacts On Pharmacists
Care delivery system
• Under ACA, pharmacists can participate in delivering care
to individuals with chronic conditions through
• Medical homes
• Medicaid patients funded through state
• Funded under U.S. Department of Health and Human
Services
• Home-based care
• Pharmacists included as integral part of the patient care team
along with physicians and nurses
• Medication therapy management (MTM)
• Grants provided to pharmacists to provide MTM services to
patients with chronic conditions
[ASHP, 2010]
52Binghamton University | March 2015
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7.1 Impacts On Pharmacists (Cont’d)
340 B drug pricing program
• Offering discounts to hospitals for reducing out patient drug
costs
• Accurately calculates the drug costs to avoid overpricing
• Extending participation to
• Children's hospital
• Cancer centers
• Rural referral centers
• Community hospitals
[Smith, et al., 2014]
53Binghamton University | March 2015
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7.1 Impacts On Pharmacists (Cont’d)
Reduced drug expenditure
• Decreased costs for medicines, both branded and generic
• Increase in Medicare drug coverage
Year Amount deductible
for brand name
drugs (%)
Amount deductible
for prescription
drugs (%)
2015 45 65
2016 45 58
2017 40 51
2018 35 44
2019 30 37
2020 25 25
[CMS, 2015]
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7.1 Impacts On Pharmacists (Cont’d)
• Increase in Medicaid prescriptions
Year
PercentIncrease
[healthcare.gov, 2014]
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7.1 Impacts On Pharmacists (Cont’d)
• Decline in out of the pocket funds for drugs
• E.g. Contraceptives
Year
Prescriptionsdispensed
[healthcare.gov, 2014]
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Summary
Growing pharmaceutical sales
Increase in pharmaceutical expenditure
Increase in the roles (involvement) of pharmacists right
from nursing homes to home based care
Decrease in out of the pocket cost for medicines specially
for Medicare
Extended participation of the 340 B drug pricing program
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8. Mental Healthcare
Present scenario of mental healthcare in U.S.
Significant disorders
• Schizophrenia
• Bipolar disorder
• Depression
• Post-traumatic stress
45.6 million adults suffer from either mental health or
substance use conditions in the United States
24% of adults suffering from mental illness uninsured
Nearly 1/3rd insured under marketplace have no
coverage for substance use disorder
[Collins, 2015; DHHS, 2013]
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8. Mental Healthcare (Cont’d)
ACA along with the Mental Health Parity and Addiction
Equity Act (MHPAEA) extends protection to nearly 62
million individuals
Ensures that, coverage for mental health and substance
use, should be comparable with coverage for medical
and surgical care
Three primary ways for expanding coverage
• Including Essential Health Benefit (EHB)
• Parity in individual and small market
• Access to quality healthcare
[DHHS, 2013]
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8. Mental Healthcare (Cont’d)
Essential health benefits
• Starting 01/01/14, treatment for mental health and
substance use to be covered under EBH
• 3.9 million insured under individual marketplace will gain
access to stated services
• 1.2 million insured under small group market to gain
access to the same
Equality in individual marketplace and small group
market
[DHHS, 2013]
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8. Mental Healthcare (Cont’d)
Improved access to health services
[DHHS, 2013]
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Summary
Before ACA, individuals though insured, lacked coverage
for mental disorders and substance abuse
Improved access to mental health services
Mental health and recovery service for substance abuse
covered under essential health benefits included under
coverage
Equality of benefits offered in both market place and
small group market
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9. Dental And Vision Benefits
Pediatric dental care included under the Essential Health
Benefits (EHB) since January 1,2014
 Adult dental care not covered in all health plans
Dental benefits classified primarily as follows
• Based on health plans
• Embedded dental plan (included in health plan)
• Stand alone dental plans
• Based on age groups
• Dental plans for adults (above 19 years of age)
• Pediatric dental plans
• Based on coverage
• High coverage, low deductibles
• Low coverage, high deductibles [healthcare.gov, 2014]
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9.1 Dental Plans
Stand alone dental plan
• Not included in any medical policy
• Can be coupled with health insurance plan
• Maximum out of the pocket funds of $350
• $65 deductible
• Actuarial value of 70 to 85%
[deltadental, 2014]
Year
Amountin$
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9.1 Dental Plans (Cont’d)
Embedded dental plan
• Medical and dental benefits combined in a health plan
• Deductible of around $2000
• Maximum out of the pocket limit of $6600
• Actuarial value of 50%
[deltadental, 2014]
Year
Amountin$
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9.2 Pediatric Dental Benefits
Pediatric dental coverage more of a preventive nature
Oral assessments, cleanings, fluoride treatment etc.
included
Regular dental coverage through age 19
Owing to implementation of ACA, around 8.7 million
children to gain dental insurance by 2018
• 3.2 million via Medicaid
• 3.0 million via health exchanges
• 2.5 million via employer sponsored insurance
Increase in the number of children covered by 15% since
2010
Reduction in the number of uninsured by 55%
[American Dental Association, 2013]
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9.3 Adult Dental Benefits
Since implementation of ACA, around 17.7 million adults
expected to gain dental benefits
Most benefits covered under Medicaid hence differ from
state to state
4.5 million adults to gain dental coverage through
Medicaid
800,000 adults to gain dental coverage through health
exchanges
Overall decrease in number of adults not having dental
coverage by 5%
Generation of 7.5 million adult dental visits
[American Dental Association, 2013]
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9.4 Overall Effect
Effect on economy
Increase in dental expenditures by $4 billion
4% of national expenditure
$2.4 billion growth in Medicaid dental expenditure
[American Dental Association, 2013]
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9.5 Vision Benefits
Vision benefits included in EHB
Mandatory to be included in any health plan unlike dental
Preventive service
Timely vision screening for early problem detection
Expansion in every state compulsory
Benefits provided by state include
• Vision screenings and primary examinations in the medical
facilities
• Extensive annual eye check up along with necessary
treatments
• Corrective remedies like contact lenses and spectacles in
case of refractive error
[AAPOS, 2013]
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9.6 Vision Benefits For Pediatrics
Benefits for pediatrics according to age limits
[AAPOS, 2013]
Age limit Preventive tests
Newborn – 3 years Red reflex test
Corneal light reflection
Ocular motility
Pupil examination
Vision assessment
3 years – 5 years Vision screening
Visual acuity test
5 years and above Regular vision
screening
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Summary
Dental and vision benefits included in essential health
benefits
Dental not mandatory to be included in the health
insurance plans as opposed to vision benefits
Stand alone dental plans more economic than embedded
dental plans
Excessive focus on preventive dental and vision benefits
for pediatrics
Increment in number of individuals getting coverage for
dental benefits
• 8.7 million children
• 17.7 million adults
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10. Free Clinics
Health care organizations providing variety of medical
services to the economically challenged
• Dental
• Vision
• Pharmacy
Services limited to individuals who are
• Uninsured
• Underinsured
• Insured but lack access to necessary medical services
Employees are usually volunteers
Free clinics are usually charitable hospitals
[NAFC, 2015]
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10. Free Clinics (Cont’d)
Even though number of insured is increasing, focus on
free clinics persistent due to increased importance of
primary care
However, small free clinics anticipated to go out of
business or estimated to turn towards advocacy
Free clinics willing to transform to adapt to the ACA
regulations
Willingness to start accepting Medicare and Medicaid
insurance patients
Need for the free clinics and charitable trusts to expand
their policies according to ACA
[Cohen, 2013]
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10. Free Clinics (Cont’d)
Process flow of a free clinic in Michigan after
implementation of ACA
[FCOM, n.d.]
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10.1 Impact Of King v. Burwell On Free Clinics
Free clinics and charitable organizations to be majorly
impacted if ruling in favor of King v. Burwell litigation
King V. Burwell claim in the opposition of expansion of
tax credits to federal marketplaces
As a result, significant portion of individuals to become
uninsured
Thus opportunity for the free clinics to flourish
With no insurance and increased premiums, preference
of individuals towards free clinics
[NPR.org, 2013 ; NAFC, 2015]
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10.1 Impact Of King v. Burwell On Free
Clinics (Cont’d)
Free clinics are suggested to implement the following if
court favors the King v. Burwell claim
• Reconciling with former patients who are covered under
FFM
• Promote the clinic with the help of media and other social
means of communication
• Creating awareness and imparting knowledge regarding
effect of loss of subsidies
[NAFC, 2015]
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Summary
Free clinics facing the need to change under ACA
Threat to small free clinics in view of decreasing number
of uninsured
Free clinics to expand services to Medicare and Medicaid
If results in favor of King v. Burwell, free clinics to have
booming business
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11. EMS Billing
Billing for emergency medical services basically includes
costs for emergency transportation (ambulance)
[Plaintownship, 2013]
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12. Uncompensated Care (UCC)
Uncompensated care
• Providing health services to the uninsured, publicly insured
and underinsured
• Patients treated free of charge
• Service costs incurred by the health care organization
• Comprises of ‘bad debt’ and ‘charity care’
Introduction of ACA led to
• Significant decrease in the number of uninsured
• Decrease of 10.3 million in the number of uninsured
• Increase in number of Medicaid patients
Projected decrease of $5.7 billion (16% decrease from
the spending baseline of UCC)
[DeLeire, et al., 2014]
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13. Economy
Reduction in deficit
• Probable decrease in the deficit by $109 billion through
fiscal years 2013-2022
• Projected reduction in 0.5% of GDP over the decade 2023-
2032 totaling to a reduction of $1.6 trillion
• Change in deficit
[Furman, 2014]
$(inbillion)
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13. Economy (Cont’d)
Reduction in job lock
[Finegold, 2013]
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13. Economy (Cont’d)
• Significant proportion of population employer-insured
• Fear of increase in premiums or cancellation of
insurance resulted in continuation of existing jobs
• Led to condition known as ‘job lock’, an obstacle to
labor mobility
• Employees eligible for insurance even with pre-existing
conditions through ACA
• Reduction in job locks resulting in entrepreneurship
ultimately contributing to economic growth of the
country
[Furman, 2014]
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13. Economy (Cont’d)
Improvement in the health of employees
• Implementation of ACA resulted in increased access to
primary health care
• Preventive health services accessible easily
• Resulting in increased productivity of employees
• Healthy employees able to contribute more, hence
incrementing the economy
Enhanced financial security
• Ban on insurance companies to sell policies with lifetime or
annual limits
• Reduction in out of the pocket catastrophic costs
Decrease in catastrophic costs
[Furman, 2014; Hoffman, 2014]
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Summary
Increased access to primary care
Reduction in growth rate of healthcare expenditure by
0.5%
Reduction in job locks because of health insurance
marketplaces
No lifetime constraints on insurances
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Challenges To Affordable
Care Act
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1. King v. Burwell
Issue raised
• IRS (internal revenue service) willing to permissibly expand
tax credit subsidies to health insurances purchased under
federally funded health exchanges (‘Marketplace’)
Challenge (claim under King v. Burwell litigation)
• ACA allows expansion of tax subsidies to individuals
enrolled in health plans only funded through states i.e.
Qualified Health Plans and not through Federally
Facilitated Marketplace (FFM)
As a result, IRS facing opposition regarding the extension
of subsidies
Decision of IRS termed to be ‘unlawful’ by opposition
[Teitelbaum, 2015]
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1.1 Background
ACA allows formation of health exchange under every
state
Every State at the liberty to whether or not adopt this
policy
As a result, two types of health exchanges created
• State funded (for states setting up their own exchanges)
known as Qualified Health Plans (QHP) – adopted by 17
states
• Federally funded (for states opting out of setting own
exchanges) know as Federally Felicitated Marketplace
(FFM) – adopted by 34 states
[Teitelbaum, 2015]
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1.2 IRS Regulation And Opposition
As stated under ACA, individuals covered under QHP’s
that is State exchanges, eligible for financial assistance
(tax credits)
Regulation stating the expansion of tax credit benefits to
individuals covered under either exchanges (State or
Federal) issued by IRS
Under this regulation, around 90% individuals among the
5 million insured under FFM received the benefit of credit
This regulation of IRS contradictory to claim under ACA,
termed inappropriate
[Teitelbaum, 2015]
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1.3 Effects
Appeals by
• Fourth Circuit Court of Appeals – subsidy applicable for
both
• D.C. Circuit Court of Appeals – subsidy limited to FFM
If ruling in favor of King v. Burwell claim,
• 8 to 10 million people will lose insurance
• Imbalance in the insurance markets due to removal of such
high percentage of population from insurance pool
• Federally funded states will have to make a decision
whether to implement marketplace or not
• States may implement 1332 waiver which gives privileges
to waive certain conditions under ACA
[NACC, 2015; Teitelbaum, 2015]
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Summary
IRS to extend tax credit benefits to individuals covered
under federally funded exchanges
King v. Burwell law suit filed against this regulation
stating that expansion of subsidies applicable only for
state funded or Qualified Health Plans
If decision in favor of litigation filed, and subsidies for
FFM suspended, approximately 8-10 million individuals to
lose insurance
This may result in rise in premium costs all over the
country
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2. Triple Aim
Benefits of the ACA combined together to create the
‘triple aim’
2 major aspects of the ACA
• Change in the delivery of care
• Expansion of insurance coverage
Improvements made till date
• Increased number of accountable care organizations (more
than 600)
• Increase in hospitals implementing bundled payments
contracts
• Increase in number of certified medical practices (more
than 5700)
[Berwick, et al., 2015]
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2. Triple Aim (Cont’d)
Better care for
individuals
Better health for
population
Decrease in
health care costs
[Berwick, et al., 2015]
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2. Triple Aim (Cont’d)
4 major steps required to be taken to successfully realize
the triple aim
• Incorporating technical adaptations like telemedicine for
improved access to care
• Innovations in delivery of care like community paramedics
and community health workers
• Building strong relationship between patient and health
care provider
• Alliance of healthcare providers and social leaders
(Leadership Alliance)
[Berwick, et al., 2015]
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2.1 Care Design Principles For Triple Aim
In order for the triple aim to make progress following
design principles for care should be followed
• Investing in care systems showing potential for continuous
improvement
• Reducing waste and non-value added activities in
healthcare settings
• Increasing communication and co-operation between
workforce
• Complete utilization of resources
• Lowering the rate of healthcare expenditures to 15% of
GDP
• Equal power to patients, families and communities for co-
producing health and well being
[Berwick, et al., 2015]
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Summary
Combination of benefits from ACA combined to form the
‘Triple Aim’
The triple aim intends to
• Reduce healthcare costs
• Improve quality of healthcare for individuals
• Improve healthcare for population
Measures taken to successfully implement triple aim
Designing of care principles for the same
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3. Challenges To Insurers
Since implementation of ACA, insurers face certain
restrictions
Under ACA, the insurers are required to
• Propose plans covering all the essential health benefits
• Removal of prohibitions on annual and lifetime limits
• No discrimination on the basis of preexisting condition or
on basis of health status
• Guarantee the issuance of insurance
• Maintain the insurers’ medical loss ratio to 80% or above
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3. Challenges To Insurers (Cont’d)
Owing to this situation, insurers unaware of the medical
conditions of applicants and thus uncertain about setting
premiums
In order to prevent insurers from facing this situation, 3
premium stabilization programs issued under ACA
• Reinsurance
• Risk Corridors
• Risk Adjustment
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3.1 Reinsurance
Implemented though the ACA to help individuals with
unexpected high medical costs that is, ‘high risk’ patients
Effective for FY 2014 to 2016
Reinsurance payments include the following plans
• All ACA compliant plans
• Non-grandfathered plans (both outside and inside of the
health exchanges)
Program funded through fees charged on all available
insurance plans
Reinsurance fee limit totals amounts for, fixed limit for
reinsurance payment and U.S. treasury and varying limit
for administrative costs
[Boothe, et al., 2015]
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3.1 Eligibility For Reinsurance
In order for the enrollee to be eligible for the reinsurance
payment plan, following financial limits are set
Reinsurance fee limit in $
Year Annual medical cost limit
reached by enrollee in $
2014 45000
2015 70000
2014 2015 2016
Reinsurance
payment
10 billion 6 billion 4 billion
U.S. Treasury 2 billion 2 billion 1 billion
Per person
cost
63 44 27
[Boothe, et al., 2015]
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Summary
Reinsurance necessary for stabilizing the insurance
marketplace during 1st year of its operation
States at the liberty of expanding reinsurance even in the
absence of health exchanges
In absence of State participation, Department of Health
and Human Services (HHS) runs the reinsurance
program in that State
Prevents the high risk individuals from incurring high
medical costs
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3.2 Risk Corridor
Intends to promote accurate premium values
Plan to be implemented on a trail basis from fiscal years
2014 through 2016
Encourages the insurers to eliminate uncertainty about
premium costs in health insurance exchanges
Administered by federal government
Expects the insurers participating through exchanges to
allocate 80% of premiums to developing health care and
improving its quality
This plan compares the allowable premium costs with a
particular target amount (target amount = premium cost –
administrative costs)
[healthaffairs.org, 2015; kff.org, 2014]
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3.2 Risk Corridor (Cont’d)
Plan deemed to be eliminated by the federal government
in the case if insurers remain underpriced
This might be possible as a major amount of losses
suffered by insurers are not reimbursed by the program
In FY 2014, 80% insurers made payments to Medicare
whereas only 20% received money back
This resulted in contradiction of the aim of risk corridor of
equality among insurers regarding making and receiving
equal payments to and from the government, in order to
avoid net budgetary effect
[healthaffairs.org, 2015]
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3.2 Risk Corridor Law Under ACA
Law states different responsibilities for insurers having
the range of, ratio of allowable costs to target costs,
within 3% points in both directions
Actual cost limit Responsibility of the insurer
Insurers with actual spending
below 92%
To refund 80% of the profit
earned to the federal government
Insurers with actual spending
between 92 and 97%
To pay department of health and
human services (HHS), an
amount half of their gains
Insurers with actual spending
between 97 and 103%
To keep the profits to themselves
and bear their own losses
Insurers with actual spending
between 103 and 108%
Half of the losses reimbursed
Insurers with actual spending
above 108%
80% of losses reimbursed by the
federal government
[healthaffairs.org, 2015]
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3.2 Risk Corridor Example
Example of risk corridor for a target amount of $500
[kff.org, 2014]
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Summary
Plan originally introduced to bring stability to premiums
for insurers introducing plans in marketplaces
Risk corridor plan to be run on a trial basis for years 2014
to 2016
Plan intends to have equal quantity of money going out
and coming in into the federal government via insurers
Primary intention to nullify net budgetary effect
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3.3 Risk Adjustment
Under risk adjustment under ACA, payment received by
the insurer based on the predicted medical cost of the
enrollee
Medical costs estimated on the basis of risk factors
All the non-grandfathered plans whether individual or
small group market, whether included in the marketplace,
benefitted by the risk adjustment plan
Payments made to the insurers depend upon the
actuarial risk
Plans with higher than average actuarial risk to receive
payments from plans having lower than average actuarial
risk
[acadeathspiral.org, 2014; Pope, et. al., 2014]
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3.3 Risk Adjustment (Cont’d)
In absence of risk adjustment, plans having high risk
enrollees, will have to charge higher average premiums
to the enrollees
States have an option to participate and if not, allow
federally exercised plan (by HHS) to run in the State
States not wanting to run the federally governed plan can
run their own risk adjustment plan, after getting a federal
approval
In the plan, insurers compared on the basis of financial
risk of their applicants
[acadeathspiral.org, 2014; kff.org, 2014]
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3.3 Risk Adjustment Calculation
Each applicant (enrollee) assigned an individual risk
score based on gender, age and diagnosis
The diagnosis are assigned a numerical value and listed
under ‘Hierarchical Condition Category’, which determine
the price the plan is likely to cost for that particular
diagnoses
Risk score values vary depending upon the diagnoses of
a person
• An individual having multiple unrelated diagnoses, all the
corresponding HCC values are used while calculating risk
score
• An interaction factor is added to an individuals risk score,
suffering from multiple illnesses
[kff.org, 2014]
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3.3 Risk Adjustment Calculation (Cont’d)
The risk score values are then averaged (weighted
average)
This weighted average value represents the predicted
expense of the plan
A scope for adjustment is kept for
• Actuarial value
• Geographic cost variation
• Rating variation
From these values, enrollees having higher and lower
risk values are calculated
[kff.org, 2014]
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3.3 Risk Adjustment Calculation (Cont’d)
The risk adjustment costs calculated have the following
benefits for the enrollee and the plan
• Predicts the risk of healthcare cost (high or low) for an
enrollee
• Calculates the actuarial risk for every plan for all of its
enrollees
• Calculation determines the cost owed by each plan along
with the costs due to the same
[kff.org, 2014]
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Summary
Risk adjustment plan aims to distribute funds from plans
covering low-risk enrollees to those covering high-risk
enrollees
[kff.org, 2014]
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4. Maintenance Of Marketplaces
Marketplaces under ACA funded by two sources
• Federally funded marketplaces (federally facilitated
exchanges)
• State funded exchanges
Federally funded marketplaces are functional in the
States who have chosen not to establish their own health
exchanges
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4.1 Issues Being Faced
Health exchanges even though provide a variety of
health plans to choose from, are facing certain
challenges themselves
Following are the challenges faced by health insurance
exchanges
• Availability of subsidies
• Assistance of consumer
• Funding of exchanges
• Threat of adverse selection
• Challenges due to States not expanding Medicaid
• Federal and State rules
[Health Policy Brief, 2014; NCSL 2015]
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Readiness Of Grants (Subsidies)
Debate over availability of subsidies under Federally
Facilitated Exchanges for individuals with low income and
small businesses
Benefit of tax credits only to people insured through state
exchanges
However regulation stated by IRS suggests availability of
credits regardless of the type of exchange
Funding of exchanges
• State based exchanges to be financial sustainable till FY
2015
• In order for the FFE (federally facilitated exchanges) to
sustain, a user fee of 3.5 percent on the premium of all
plans sold only through exchanges is applicable
[Health Policy Brief, 2014; NCSL 2015]
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Assistance to customers
Conflicts between customers regarding policies of
exchanges
Guidelines for help known as ‘navigators’ to assist low
income individuals and small businesses
The navigators expected to have thorough knowledge
regarding the policies about local markets
Navigators expected to have experience of working with
small firms and companies and also undergo training
However, number of navigators working depend on the
funds available for training in the federal budget
[Health Policy Brief, 2014]
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Threat of Adverse Selection
States have option of regulating health plans, either
purchased through exchange or outside of exchanges,
equally
However FFE can regulate health plans only through
exchanges
This inequality may affect the stability of health
insurance market
If health plans outside FFE offer cheaper coverage which
is less comprehensive, there is a high possibility of
healthy people opting for that coverage, while sick people
will have to opt for broader coverage
This is adverse selection, leading to sick individuals
incurring more claims
[Health Policy Brief, 2014, NCSL, 2015]
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Challenges For Non-Medicaid States
Under the ACA, States have option of not expanding
Medicaid
Along with Medicaid, many states (25) are reluctant for
setting up State exchanges
As a result, individuals in such States are ensured
through FFE
However the cost of private coverage is more than the
coverage under Medicaid
Also if decision is made in favor of King v. Burwell,
majority people insured under FFE will lose insurance
and in these States individuals would suffer because of
lack of Medicaid expansion
[Health Policy Brief, 2014]
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Federal And State Rules
Under ACA, both Federal and State exchanges and their
regulations exist.
[Health Policy Brief, 2014]
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Summary
Even though health exchanges, either Federal or State,
offer a variety of health plans to choose from, they face
numerous challenges
The major challenges are faced by Federally Facilitated
Exchanges mostly regarding their tax credits and
subsidies
Challenges faced by State exchanges are related to
Medicaid expansion
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Operational Level Impacts
Of Affordable Care Act
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1. Workforce
Destabilization among the workforce and of the system
due to increase number of the insured
Overload on the healthcare system
Catastrophic workforce shortages mainly in primary care
facilities
Healthcare workforce has following effects on its
operations due to ACA
• Improper distribution of workforce and unbalanced ratio
• Aging workforce
• Increased workload
• Increasing dissatisfaction among physicians
• Bottleneck in education pipeline
[Anderson, 2014]
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1.1 Improper Distribution Of Workforce And
Ratio
Urban locations have increased access to health services
than rural areas
According to current distribution
• 10% of primary care physicians
• 18% of nurse practitioners available in rural areas
Rural areas have high potential of Medicaid patients
Projected need of 7987 primary care physicians for the
newly insured due to ACA
Shortage of 20000 to 45000 nurse practitioners and
physicians predicted
Disastrous outcomes of shortage resulting in increased
mortality and morbidity
[Anderson, 2014]
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1.2 Aging Workforce
Currently 2.8 million registered nurses and 985,375
physicians estimated to be serving in healthcare industry
Of the estimated workforce, about 33% expected to retire
in the next 10 years
As a result, shortage of workforce is anticipated as
follows
Shortage due to more number of insured individuals
Type of workforce Expected shortage
Physicians 95,000 to 130,000
Registered Nurses 300,000 to 1.2 million
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1.3 Increased Workload
Due to increased regulations owing to ACA, increase in
paperwork
As a result, time a physician or registered nurse spends
with patient is compromised
Estimated increase of 190 million hours of paperwork due
to mandatory regulations introduced under ACA
As a result, compromise in the quality of care provided
Difficult to maintain the quality of care provided due to
increasing insured population
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Summary
Healthcare workforce (nurses, physicians etc.) impacted
severely by ACA
Increased workload for the existing workforce due to
tremendous increase in the number of insured individuals
Owing to the same, projected shortage of the workforce
for the coming decade
Ultimately, formation of a gloomy outlook of the
workforce towards the industry because of ACA resulting
in deteriorating quality of the care provided
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2. Healthcare Delivery
Owing to the increased regulations, changes being
brought about in the healthcare delivery system
Merger of hospitals, healthcare businesses, independent
physicians in order to maintain position in marketplace
Merging results in
• Acquiring higher market share
• Increased negotiation power with insurers, government
agencies etc.
• Creation of a united healthcare system
Done in order to ensure solvency in light of policies of
ACA
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2. Healthcare Delivery (Cont’d)
Following reasons are prompting healthcare institutions
to make changes to their delivery models
• Shortage in workforce
• Increased regulations
• Reduced interaction with patient (owing to increased
paperwork)
Providers taking up the approach of ‘cash-only’ practices
As a result elimination of third party insurers resulting in
less number of regulations
Hence physicians able to practice medicine as deemed fit
by them, keeping it patient centered
Such models claimed to be ‘direct’ models
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Summary
Delivery in healthcare is affected to the health reforms
Hospitals, physicians practicing independently are
merging in order to survive in the healthcare marketplace
Healthcare institutions adopting ‘pay for performance’
and ‘cash only’ policies
Effort to keep third party insurers out of the delivery
scenario in order to provide quality health services
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Conclusion
Reduction in the healthcare spending by 0.6% ($22
billion 800 million) in the year 2013
Historic decrease in the number of uninsured
Percentage
Year
[Furman, et al., 2014]
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Conclusion (Cont’d)
Increase in public and private insurance FY-2014
[Haislmaier, 2015]
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Future Work
Operational level impacts of ACA on hospital
operations
Effect of ACA
• Trauma and Emergency care
• Safety net providers
Timeline for ACA
132Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References
 American Nurses Association, “Advanced Practice Nursing: A New Age In
Health Care”,
http://www.nursingworld.org/FunctionalMenuCategories/MediaResources/Me
diaBackgrounders/APRN-A-New-Age-in-Health-Care.pdf, 2011, Accessed
February 2015
 American Nurses Association, “Health Care Reform”,
http://www.nursingworld.org/MainMenuCategories/Policy-
Advocacy/HealthSystemReform/AffordableCareAct.pdf, 2014, Accessed
January 2015
 American Public Health Association, “Why do we need the Affordable Care
Act”,
http://www.apha.org/~/media/files/pdf/topics/aca/why_we_need_the_aca_au
g2012.ashx, 2012, Accessed February 2015
 American Society of Health-System Pharmacists, “Summary of key health
systems pharmacy related provisions”,
http://www.ashp.org/DocLibrary/SM2010/Health-Care-Reform-
Reportsm2010.aspx, 2010, Accessed March 2015
133Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References (Cont’d)
 Artiga, S. and Rudowitz, R., “Medicaid Enrollment Under the Affordable Care
Act: Understanding the Numbers”, http://kff.org/health-reform/issue-
brief/medicaid-enrollment-under-the-affordable-care-act-understanding-the-
numbers/, 2014, Accessed January 2015
 Blahous, C., “The Fiscal Consequences of the Affordable Care Act”,
http://www.economics21.org/commentary/fiscal-consequences-affordable-
care-act, 2012, Accessed January 2015
 Blahous, C., “Losing Employer-Provided Coverage: Another ACA Prediction
Comes True”, http://www.economics21.org/commentary/losing-employer-
provided-coverage-another-aca-prediction-comes-true, 2014, Accessed
February 2015
 Blahous, C., “No grounds claim Obamacare lowers healthcare costs”,
http://www.economics21.org/commentary/no-grounds-claim-obamacare-
lowers-healthcare-costs, 2013, Accessed February 2015
 Centers for Medicare and Medicaid Services, “National Health Expenditure
Projections”, http://www.cms.gov/Research-Statistics-Data-and-
Systems/Statistics-Trends-and-
Reports/NationalHealthExpendData/downloads/proj2012.pdf , 2013,
Accessed February 2015
134Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References (Cont’d)
 Closing the Coverage Gap - Medicare Prescription Drugs Are Becoming
More Affordable, http://www.medicare.gov/Pubs/pdf/11493.pdf, 2015,
Accessed March 2015
 CNA Classes, “Obamacare and CNA Salary Impact”,
http://www.cnaclasses.org/cna-salary/obamacare-impacts-cna-salary/, 2013,
Accessed January 2015
 Collins, S. P., “President Obama has elevated the conversation about mental
health to the national stage”, Think Progress,
http://thinkprogress.org/health/2015/03/13/3633203/obama-mental-health-
care-legacy/, 2015, Accessed March 2015
 Congressional Budget Office, “The Effects of the Affordable Care Act on
Employment-Based Health Insurance”,
https://www.cbo.gov/publication/43090, 2012, Accessed February 2015
 Davis, P.A., Hahn, J., Morgan, P.C., Stone, J. and Tilson, S., “Medicare
Provisions in the Patient Protection and Affordable Care Act (PPAA)”, CRS
Report for Congress, 2010
135Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References (Cont’d)
 DeLeire, T., Joynt, K., and McDonald, R., “Impact Of Insurance Expansion
On Hospital Uncompensated Care Costs In 2014”, Department Of Health
And Human Services,
http://aspe.hhs.gov/health/reports/2014/uncompensatedcare/ib_uncompensa
tedcare.pdf, 2014, Accessed January 2015
 Furman, J., “Six Economic Benefits of the Affordable Care Act”, Council of
Economic Advisors, http://www.whitehouse.gov/blog/2014/02/06/six-
economic-benefits-affordable-care-act, 2014, Accessed January 2015
 Furman, J., Fiedler, M., “2014 Has Seen Largest Coverage Gains in Four
Decades, Putting the Uninsured Rate at or Near Historic Lows”,
http://www.whitehouse.gov/blog/2014/12/18/2014-has-seen-largest-
coverage-gains-four-decades-putting-uninsured-rate-or-near-his, 2014,
Accessed February 2015
 Gruber, J., “The Impacts Of The Affordable Care Act: How Reasonable Are
The Projections?”, National Bureau Of Economic Research Working Paper
No. 17168, 2011
136Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References (Cont’d)
 Haislmaier, E. F., Gonshorowski, D., “Q3 2014 Health Insurance Enrollment:
Employer Coverage Continues to Decline, Medicaid Keeps Growing”, The
Heritage Foundation, http://www.heritage.org/research/reports/2015/01/q3-
2014-health-insurance-enrollment-employer-coverage-continues-to-decline-
medicaid-keeps-growing, 2015, Accessed March 2015
 Hoffman, A., “Health Care Spending And Financial Security After The
Affordable Care Act”, North Carolina Law Review, 2014
 Internal Revenue Service [IRS], “The Health Insurance Marketplace”,
http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/The-Health-
Insurance-Marketplace, 2015, Accessed February 2015
 Lathrop, B., Hodnicki, D., "The Affordable Care Act: Primary Care and the
Doctor of Nursing Practice Nurse“, OJIN: The Online Journal of Issues in
Nursing Vol. 19 No. 2., 2014
 Matheson, V.A. and Congdon-Hohman, J. “Potential Effects of the Affordable
Care Act on the Award of Life Care Expenses”,
http://college.holycross.edu/RePEc/hcx/Matheson-
Congdon_ACATortAwards.pdf, 2012, Accessed January 2015
137Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References (Cont’d)
 Medical and Prescription Drug Deductibles for Plans Offered in Federally
Facilitated and Partnership Marketplaces for 2015, http://kff.org/health-
reform/fact-sheet/medical-and-prescription-drug-deductibles-for-plans-
offered-in-federally-facilitated-and-partnership-marketplaces-for-2015/, 2015,
Accessed March 2015
 National Conference of State Legislatures [NCSL], “Medicaid and the
Affordable Care Act”, http://www.ncsl.org/documents/health/HRMedicaid.pdf,
2011, Accessed January 2015
 New York State Department of Health,
https://www.health.ny.gov/health_care/child_health_plus/eligibility_and_cost.
htm, 2014, Accessed February 2015
 NY State of Health,
https://nystateofhealth.ny.gov/individual/searchAnonymousPlan/search,
2015, Accessed March 2015
 Office of Disease Prevention and Health Promotion (DPHP), “Access to
Health Services”, http://www.healthypeople.gov/2020/topics-
objectives/topic/Access-to-Health-Services, 2014, Accessed February 2015
138Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References (Cont’d)
 Paranzino, G., Burnette, P., “ How nontraditional roles are reshaping nursing
careers”, Kelly Health Resources,
http://www.slideshare.net/thetalentproject/a-new-era-for-nursing-how-
nontraditional-roles-are-reshaping-nursing-careers, 2014, Accessed
February 2015
 Shi, L., Singh, D., “Delivering Healthcare in America: A Systems Approach”,
Chapter 6, 6th Edition, Jones and Bartlett Learning, 2014
 Six ways the affordable care act will affect individual insurance,
http://www.nyhpa.org/PDFs/6-Ways-ACA-6.11-(4%20pages).pdf, 2013,
Accessed March 2015
 Small Business Health Care Tax Credits, https://www.healthcare.gov/small-
businesses/provide-shop-coverage/small-business-tax-credits/, n.d.,
Accessed February 2015
 Smith, S. M., Kay, D. H., “The Affordable Care Act: Key Points For
Pharmacists”,
http://www.une.edu/sites/default/files/SSmith_ACA_2014_DHK.pdf, 2014,
Accessed March 2015
139Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References (Cont’d)
 Sommers, B., U.S. Department of Health and Human Services,
http://aspe.hhs.gov/aspe/gaininginsurance/rb.cfm, 2012, Accessed January
2015
 Sonfield, A., “Affordable Care Act Survives Supreme Court Test, But
Medicaid Expansion Placed in Peril”, Guttmacher Institute,
http://www.guttmacher.org/pubs/gpr/15/3/gpr150302.html, 2012, Accessed
January 2015
 Symphony Health Solutions (healthcare.gov), “New Data Reveals Influence
of ACA on Pharma Sales”, http://symphonyhealth.com/2014/04/aca-
influence-on-pharma-sales/, 2014, Accessed March 2015
 The Henry J. Kaiser Family Foundation, “Key Facts About The Uninsured
Population”, http://kff.org/uninsured/fact-sheet/key-facts-about-the-
uninsured-population/, 2014, Accessed February 2015
 The Henry J. Kaiser Family Foundation Subsidy Calculator;
http://kff.org/interactive/subsidy-calculator/, Accessed March 2015
 U.S. Department of Health and Human Services, “Key Features of the
Affordable Care Act”, http://www.hhs.gov/healthcare/facts/timeline/, 2014,
Accessed January 2015
140Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References (Cont’d)
 U.S. Small Business Administration, “Healthcare”, Managing a business,
https://www.sba.gov/healthcare, 2015, Accessed February 2015
 U.S. Department of Health and Human Services,
http://aspe.hhs.gov/health/reports/2013/mental/rb_mental.cfm, 2013,
Accessed March 2015
 Healthcare.gov, “Dental coverage in Marketplace”,
https://www.healthcare.gov/coverage/dental-coverage/#question=do-i-have-
to-provide-dental-coverage-for-my-children, 2014, April 2015
 Delta Dental, www.slideshare.net/deltadentalins/dental-benefits-and-the-
affordable-care-act, 2013, Accessed March 2015
 Nasseh, K., Vujicic, M., O’Dell, A., “Affordable Care Act Expands Dental
Benefits for Children But Does Not Address Critical Access to Dental Care
Issues”
http://www.ada.org/~/media/ADA/Science%20and%20Research/Files/HPRC
Brief_0413_3.ashx
 American Association for Pediatric Ophthalmology and Strabismus,
“Children’s Vision Services Under the ACA”,
http://www.aapos.org/news/show/139--, 2013, Accessed March 2015
141Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References (Cont’d)
 Free Clinics of Michigan, “Resources for Free Clinics”,
http://www.fcomi.org/other-resources-for-free-clinics.html, n.d., Accessed
April 2015
 Gordon, E., “Healthcare Law Puts Free Clinics at a Cross Roads”,
http://www.npr.org/2012/03/25/149350040/health-care-law-puts-free-clinics-
at-a-crossroads, National Public Radio, 2013, Accessed April 2015
 Cohen, R., “Future of Free Clinics under Obamacare”,
https://nonprofitquarterly.org/policysocial-context/22721-the-future-of-free-
health-clinics-under-obamacare.html, 2013, Accessed April 2015
 The National Association of Free and Charitable Clinics [NAFC],
https://nonprofitquarterly.org/policysocial-context/22721-the-future-of-free-
health-clinics-under-obamacare.html, 2015, Accessed April 2015
 Teitelbaum, J., King v. Burwell: A policy expert’s view (Part 1), Jones and
Bartlett Learning, 2015
 http://www.nafcclinics.org/about-us/what-is-free-charitable-clinic
142Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References (Cont’d)
 Boothe, A., Couture, B., “The ACA’s Risk Spreading Mechanisms: A Primer
on Reinsurance, Risk Corridors and Risk Adjustment”,
http://americanactionforum.org/research/the-acas-risk-spreading-
mechanisms-a-primer-on-reinsurance-risk-corridors-a, 2015, Accessed April
2015
 Anderson, A., “The Impact of the Affordable Care Act on the Health Care
Workforce”, http://www.heritage.org/research/reports/2014/03/the-impact-of-
the-affordable-care-act-on-the-health-care-workforce, 2014, Accessed April
2015
 Berwick, D., M., Feeley, D., Loehrer, S., “Change from the inside out”, The
Journal of American Medical Association (JAMA), 2015
 Centers for Medicare and Medicaid services, “Reinsurance, Risk Corridors,
and Risk Adjustment Final Rule”,
http://www.cms.gov/cciio/resources/files/downloads/3rs-final-rule.pdf, n.d.,
Accessed April 2015
143Binghamton University | March 2015
wise.binghamton.eduwise.binghamton.edu
References (Cont’d)
 ACA death spiral, “Continuing resolution jeopardizes risk corridors”,
http://acadeathspiral.org/category/risk-adjustment/, 2014, Accessed April
2015
 Health policy briefs, “Risk Corridors”,
http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=118, 2015,
Accessed April 2015
 The Henry J. Kaiser Family Foundation, “Explaining Health Care Reform:
Risk Adjustment, Reinsurance, and Risk Corridors”, http://kff.org/health-
reform/issue-brief/explaining-health-care-reform-risk-adjustment-
reinsurance-and-risk-corridors/, 2014, Accessed April 2015
 Pope, G. C., Kautter, J., Keenan, P., “Affordable Care Act Risk Adjustment:
Overview, Context, and Challenges”, Medicare and Medicaid Research
Review, 2014
 http://healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_84.pdf
 http://www.ncsl.org/research/health/state-laws-and-actions-challenging-
ppaca.aspx

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The Affordable Care Act And Its Effect On American Healthcare (3)

  • 1. Excellence Through Innovative Research The Affordable Care Act And Its Effect On American Healthcare Apurva A Mande Graduate Student Systems Science and Industrial Engineering State University of New York at Binghamton April 10, 2015
  • 2. 2Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Agenda  Background of US Healthcare  The Affordable Care Act • Aims • Aspects  Impact of ACA on • Nursing • Medicare and Medicaid • Employer based insurance • Health insurance marketplace and private insurance • Pharmacy • Mental health services • Dental and vision benefits • Economy  Conclusion  Future work
  • 3. 3Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu US Healthcare Background Healthcare industry comprises of 18% of Gross Domestic Product (GDP) of the country and expected to rise up to 18.4% till 2016 Till 2022, healthcare expected to comprise of 19.9% of GDP Fiscal Year Expected healthcare growth rate (%) 2013 4.1 2014 6.1 2015 6.2 [Blahous, 2013; CMS, 2013]
  • 4. 4Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu US Healthcare Background (Cont’d) Fragmented in nature Lack of universal access to quality and affordable health services High spending on healthcare Percent of spending population Amount spent per person on healthcare 30 12000 10 27000 1 90000 [Shi, 2014; Hoffman, 2014]
  • 5. 5Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Implications Of Absence Of Coverage Providers have a right to deny health services to the uninsured (except ER) Missed diagnosis and preventable hospitalization in case of critical health conditions Low chances of receiving follow-up treatments resulting in further deterioration of health Forgoing and postponing of essential care due to high costs High medical bills leading to financial insecurity, medical debts and bankruptcy [KFF, 2014]
  • 6. 6Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Need For ACA Significant number of uninsured individuals (41 million) Healthcare spending very high 20% projected share of healthcare in GDP by 2020 Increased rate of loss of insurance under 2008-2010 recession Emphasis on curative treatment instead of preventive [APHA, 2012]
  • 7. 7Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu The Affordable Care Act
  • 8. 8Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1. The Affordable Care Act (ACA) Popularly known as the Affordable Care Act, the Patient Protection and Affordable Care Act (PPACA) (Public Law 111-148) is a federal decree, signed by the President of the United States on 23rd March 2010 Primarily consists of 2 pieces of legislation • Patient Care and Affordable Care Act • Health Care and Education Reconciliation Act Serves with the aim to • Provide health insurance to every American citizen • Easy access to affordable and quality heath services [Gruber, 2011]
  • 9. 9Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2. Aims Of Affordable Care Act Significant expansion of health insurance coverage Mandatory health insurance to residents Expanding eligibility criteria under insurance schemes Ease of access [Ease Of Access] • Coverage • Services • Timeliness • Clinical staff [Shi, 2014; DPHP, 2014; CMS, 2012]
  • 10. 11Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2. Aims Of Affordable Care Act (Cont’d) Equality in insurance coverage • No discrimination on the basis of pre existing conditions • Insurance coverage to all individuals regardless of • Healthcare costs • Severity of injuries • Access to employer • Limit on out of the pocket expenditure Individual Family Out-of-pocket expenditure limit per year $6350 $12,700 [Matheson, et al., 2012; Hoffman, 2014]
  • 11. 12Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Subsidies for people with low income • Low costs for insurance premium • Particularly for individuals uninsured by government or employer Mandating individual insurance • Any individual must be insured either by • Employer • Public health insurance • Individual market • Fee payable in absence of insurance Individual Family Amount charged 2% of annual income or $325 $975 2. Aims Of Affordable Care Act (Cont’d) [Matheson, et al., 2012; Healthcare.gov, 2015]
  • 12. 13Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3. Aspects Of ACA Allows young adults up to the age of 26 to be covered under parents insurance Prohibits insurance companies from • Rejecting insurance to Americans with pre-existing conditions • Spending more than 20% on administrative costs rather than patient care • Differentiating for mental healthcare • Charging women more than men [Sommers, 2012; HHS, 2014]
  • 13. 14Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Impacts Of Affordable Care Act
  • 14. 15Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1. Nursing Estimated increase in primary care providers owing to Minimum Essential Coverage (MEC) under ACA ACA focused on providing routine check ups in outpatient settings $900 million granted to primary care workers for improving access to health services for the less fortunate all over the country Allotment of $30 million to ‘Advanced Nursing Education Expansion Program’ through ACA 1.2 million job openings for licensed and registered nurses estimated by 2020 [American Nurses Association, 2014; Lathrop, et al., 2014]
  • 15. 16Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1. Nursing (Cont’d) 10% bonus payment from fiscal year 2011 to 2016 to • Nurse Practitioners • Clinical Nurse Specialist • Physician Assistant $338 million distributed among the following categories in nursing • Advanced education • Practice • Quality • Retention grants [American Nurses Association, 2014]
  • 16. 17Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1. Nursing (Cont’d) Increase in health care jobs [Roles under nursing] • 30% projected increase in the number of registered nurses from year 2012-2022 • 432,000 registered nursing job availability over the next decade [HHS, 2013; Paranzino, et al., 2014]
  • 17. 21Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Owing to ACA, focus on primary care has increased Impact on nursing significant due this reason Increment in incentives for expansion of nursing programs (education, retention grants etc.)
  • 18. 22Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2. Medicare Federal law insuring people over the age of 65 and permanently disabled individuals under 65 Prior to ACA, Medicare beneficiaries required to pay 20% of the costs of services covered Since implementation, entire cost of annual health checkup funded under Medicare No personal funds for preventive checkups Programs regarding health awareness for beneficiaries to prevent costs for expensive treatments [Davis, et al., 2010; Krasner, 2012]
  • 19. 23Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2. Medicare (Cont’d) Estimated reduction of $390 billion from fiscal year 2010 to 2019 in Medicare spending Beneficiaries entitled for independent care at home • Physician and Nurse practitioner provide required primary care at home • Intention of reducing expenditure and increasing health outcome Guaranteed protection of Medicare • Medicare life estimated to extend till 2029 Narrowing of the coverage gap • Out-of-pocket funds estimated to be dropped to 25% by year 2020 [Davis, et al., 2010; American Nurses Association, 2014; Medicare.gov, 2014; AARP, 2014]
  • 20. 24Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2.1 Projected Savings In Medicare Under ACA [Blahous, 2012] In absence of ACA, Medicare Hospital Insurance Trust Fund estimated to be depleted by 2016 resulting in decreased Medicare spending Expected solvency of the Medicare Hospital Insurance Trust Fund till 2024 since implementation of ACA  Projected savings under ACA $(inbillions)
  • 21. 25Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2.2 Decrease In Medicare Spending Under ACA 14% fall in the projected Medicare spending for FY 2020 Medicare spending projections Amountinbillion$ [Rudowitz, 2014]
  • 22. 26Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Over $1600 saved per person under Medicare since ACA Increase in life of Medicare trust fund by 13 years Increased drug coverage under Medicare Eligible for insurance even with pre-existing conditions
  • 23. 27Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3. Medicaid Medicaid – Health care reform for citizens with limited resources and income Jointly ventured by federal and state government The PPACA upgraded primarily the following aspects of Medicaid • Eligibility criteria • Increase in federal funding • Improved accessibility to health services Applicable since January 1st 2014 12 million enrollees predicted by 2016 Estimated reduction of uninsured individuals by 26 million by 2024 [NCSL, 2011; Artiga, et al., 2014]
  • 24. 28Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3. Medicaid (Cont’d) Improved eligibility • Adults (below 65 years of age) with income increased from 100% to 138% below the Federal Poverty Line Complete federal financing for 3 years for new enrollees through 2014 to 2016 in states adopting Medicaid expansion • Decrease in funding by 10% till year 2020 25% budget increase in Children's Health Insurance Program (CHIP) Individual Family Income $14,484 $29,726 [NCSL, 2011; Artiga, et al., 2014]
  • 25. 29Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3. Medicaid (Cont’d) Increase in Medicaid and CHIP enrollment • Data till 3 quarters for FY 2014 [Haislmaier, 2015]
  • 26. 30Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.1 Medicaid Eligibility For Children Under ACA (State Of New York) Age category 1 2 3 4 5 6 7 8 Additional cost per person Children under 1year & Pregnant Women $2,169 $2,924 $3,678 $4,433 $5,187 $5,942 $6,696 $7,451 $755 1 to 18 years of age $1,498 $2,019 $2,540 $3,061 $3,582 $4,103 $4,624 $5,145 $522 [DOH, 2014] Monthly income according to the size of the family
  • 27. 31Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Medicaid expanded state wise Increased eligibility for coverage from 100% to 138% below FPL, since implementation of ACA Individual eligible for insurance even with pre-existing conditions Increase in the number of enrollees
  • 28. 32Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 4. Employer Based Insurance 3 to 5 million fewer people estimated to obtain employer based insurance Increased schemes under individual health insurance marketplace • People can invest in their own start up Young adults covered under parents insurance, hence not mandatory to be employed for it Increase in the number of young adults CBOestimatesinmillion [CBO, 2012; Furman, 2014; Blahous, 2014]
  • 29. 33Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 4. Employer Based Insurance (Cont’d) Coverage for employers with less than 25 employees • Small business health options program (SHOP) • Available to businesses with 50 or fewer employees • High quality health and dental coverage • Small business health care tax credit • Eligible for coverage if average annual income of employees is $50,000 or less • Number of full time equivalent employees 25 or less • Health contingent wellness programs • Rewarding employees for adopting healthier habits e.g. reduction in use of tobacco • Rewards in form of increase in coverage [Healthcare.gov; SBA, 2015]
  • 30. 34Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Around 3% decrease in employer based insurance since ACA Young adults till the age of 26 can be covered under parents insurance Individuals no longer dependent solely on employers for insurance Various coverage plans under SHOP for businesses having • Up to 25 employees • Between 25 to 50 employees • Between 50 to 100 employees • More than 100 employees
  • 31. 35Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 5. Health Insurance Marketplace A place for the uninsured to compare and purchase health insurance Facilitated federally and state wise Cost assistance for families earning 400% below FPL Insurance plans based on • Age • Income • State • Family size [IRS, 2015; Healthcare.gov, 2013]
  • 32. 36Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 5.1 Individual Health Insurance Self employed, freelancer, independent contractor can get insurance through ‘Health Insurance Marketplace’ known as ‘Simple Cafeteria Plan’ According to the cost coverage offered, based on income and property Catastrophic only coverage also available which includes free of cost primary care visits Type of plan Costs covered (in %) Bronze 60 Silver 70 Gold 80 Platinum 90 [Olafson, 2013]
  • 33. 37Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 5.1 Individual Health Insurance (Cont’d) Coverage for the self-employed • Individual mandate • Additional Medicare tax • 0.9% tax if income exceeds threshold of • $200,000 if single • $250,000 if married • Net investment tax • 3.8% tax on net investment income exceeding threshold of • $200,000 if single • $250,000 if married and filing jointly [SBA, 2015; IRS, 2014]
  • 34. 38Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 5.2 Selecting Insurance In Marketplace Search for desired plan [nystateofhealth.ny.gov, 2015]
  • 35. 39Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 5.2 Selecting Insurance In Marketplace (Cont’d) Selecting and comparing plans [nystateofhealth.ny.gov, 2015]
  • 36. 40Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Individual can choose from a variety of plans suitable Individual able to examine and compare each plan thoroughly and then choose according to budget in mind 4 plans available, each with a specific range of insurance coverage Availability of coverage for the self-employed
  • 37. 41Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 6. Private Insurance 3 out of every 4 individuals covered by employer or government program ACA impacts individuals opting for private insurance in 6 major ways • Liberty to choose from various policies • Less out of the pocket funds • Increased comprehensive benefits • No discrimination with respect to income or pre-existing conditions • Increased enrollment • Increased eligibility for subsidies
  • 38. 42Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 6.1 Impacts On Private Insurance Liberty to choose from various policies • Individual can choose any plan suitable • Plans include essential health benefits (EBH) • 80% of the premium allotted for medical expenses (82% for the state of NY) • 20% of premium allotted for administrative purposes (18% for the state of NY) [nyhpa.org, 2013]
  • 39. 43Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 6.1 Impacts On Private Insurance (Cont’d) Significant costs covered in the insurance • Limit on out of pocket funds • Division of deductibles depending on type of plan [nyhpa.org, 2013]
  • 40. 44Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 6.1 Impacts On Private Insurance (Cont’d) Increased comprehensive benefits • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental health and substance abuse • Prescription drugs • Laboratory services • Pediatric dental services and vision care • Disease management and wellness service • Rehabilitation services [nyhpa.org, 2013]
  • 41. 45Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 6.1 Impacts On Private Insurance (Cont’d) No discrimination • Under ACA, insurance to be issued to any individual who asks for it • Known as ‘Guaranteed Issue’ • Individuals cannot be denied coverage based on the following conditions • Low income • Pre-existing conditions • Sex • Individuals with poor health status cannot be charged with higher premium [nyhpa.org, 2013]
  • 42. 46Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 6.1 Impacts On Private Insurance (Cont’d) Increased enrollment • Mandatory enrollment for insurance • Estimated increase in the aging population (above 65) • Increased average age of the insured due to baby boomers • Increment in total private market FY-2014 [Haislmaier, 2015]
  • 43. 47Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 6.1 Impacts On Private Insurance (Cont’d) [kff.org, 2013] Increased eligibility for subsidies • Premiums to decline by 84% for individuals with low income Annual income in $ % FPL Unsubsidize d premium in $ Potential government tax credit subsidy in $ Premium after subsidy in $ Individual 17000 148 5400 4742 658 28000 234 5400 2565 2158 40000 348 5400 954 3800 Family of 4 35300 148 13500 12231 1269 58000 243 13500 8968 4532 83000 348 13500 5605 7895
  • 44. 48Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Compulsory enrollment for insurance Increase in the number of covered benefits Decrement in premiums for low income individuals No discrimination on the basis of income, pre-existing conditions and sex of an individual while providing insurance Decline in premiums for individuals
  • 45. 49Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 7. Pharmacists Pharmacy comprises of 10.1% of total healthcare expenditure Increase in expenditure of pharmaceutical industry by 33% in next 5 years Projected increase in drug expenditure from $359 in 2012 to $483 in 2021 Year [CMS, 2012]
  • 46. 50Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 7. Pharmacists Pharmacists play critical role in patient care Growth in pharmaceutical sales since implementation of ACA ACA affected pharmacy in following primary areas • Care delivery system • 340B drug pricing program [Forman, 2014]
  • 47. 51Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 7.1 Impacts On Pharmacists Care delivery system • Under ACA, pharmacists can participate in delivering care to individuals with chronic conditions through • Medical homes • Medicaid patients funded through state • Funded under U.S. Department of Health and Human Services • Home-based care • Pharmacists included as integral part of the patient care team along with physicians and nurses • Medication therapy management (MTM) • Grants provided to pharmacists to provide MTM services to patients with chronic conditions [ASHP, 2010]
  • 48. 52Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 7.1 Impacts On Pharmacists (Cont’d) 340 B drug pricing program • Offering discounts to hospitals for reducing out patient drug costs • Accurately calculates the drug costs to avoid overpricing • Extending participation to • Children's hospital • Cancer centers • Rural referral centers • Community hospitals [Smith, et al., 2014]
  • 49. 53Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 7.1 Impacts On Pharmacists (Cont’d) Reduced drug expenditure • Decreased costs for medicines, both branded and generic • Increase in Medicare drug coverage Year Amount deductible for brand name drugs (%) Amount deductible for prescription drugs (%) 2015 45 65 2016 45 58 2017 40 51 2018 35 44 2019 30 37 2020 25 25 [CMS, 2015]
  • 50. 54Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 7.1 Impacts On Pharmacists (Cont’d) • Increase in Medicaid prescriptions Year PercentIncrease [healthcare.gov, 2014]
  • 51. 55Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 7.1 Impacts On Pharmacists (Cont’d) • Decline in out of the pocket funds for drugs • E.g. Contraceptives Year Prescriptionsdispensed [healthcare.gov, 2014]
  • 52. 56Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Growing pharmaceutical sales Increase in pharmaceutical expenditure Increase in the roles (involvement) of pharmacists right from nursing homes to home based care Decrease in out of the pocket cost for medicines specially for Medicare Extended participation of the 340 B drug pricing program
  • 53. 57Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 8. Mental Healthcare Present scenario of mental healthcare in U.S. Significant disorders • Schizophrenia • Bipolar disorder • Depression • Post-traumatic stress 45.6 million adults suffer from either mental health or substance use conditions in the United States 24% of adults suffering from mental illness uninsured Nearly 1/3rd insured under marketplace have no coverage for substance use disorder [Collins, 2015; DHHS, 2013]
  • 54. 58Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 8. Mental Healthcare (Cont’d) ACA along with the Mental Health Parity and Addiction Equity Act (MHPAEA) extends protection to nearly 62 million individuals Ensures that, coverage for mental health and substance use, should be comparable with coverage for medical and surgical care Three primary ways for expanding coverage • Including Essential Health Benefit (EHB) • Parity in individual and small market • Access to quality healthcare [DHHS, 2013]
  • 55. 59Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 8. Mental Healthcare (Cont’d) Essential health benefits • Starting 01/01/14, treatment for mental health and substance use to be covered under EBH • 3.9 million insured under individual marketplace will gain access to stated services • 1.2 million insured under small group market to gain access to the same Equality in individual marketplace and small group market [DHHS, 2013]
  • 56. 60Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 8. Mental Healthcare (Cont’d) Improved access to health services [DHHS, 2013]
  • 57. 61Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Before ACA, individuals though insured, lacked coverage for mental disorders and substance abuse Improved access to mental health services Mental health and recovery service for substance abuse covered under essential health benefits included under coverage Equality of benefits offered in both market place and small group market
  • 58. 62Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 9. Dental And Vision Benefits Pediatric dental care included under the Essential Health Benefits (EHB) since January 1,2014  Adult dental care not covered in all health plans Dental benefits classified primarily as follows • Based on health plans • Embedded dental plan (included in health plan) • Stand alone dental plans • Based on age groups • Dental plans for adults (above 19 years of age) • Pediatric dental plans • Based on coverage • High coverage, low deductibles • Low coverage, high deductibles [healthcare.gov, 2014]
  • 59. 63Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 9.1 Dental Plans Stand alone dental plan • Not included in any medical policy • Can be coupled with health insurance plan • Maximum out of the pocket funds of $350 • $65 deductible • Actuarial value of 70 to 85% [deltadental, 2014] Year Amountin$
  • 60. 64Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 9.1 Dental Plans (Cont’d) Embedded dental plan • Medical and dental benefits combined in a health plan • Deductible of around $2000 • Maximum out of the pocket limit of $6600 • Actuarial value of 50% [deltadental, 2014] Year Amountin$
  • 61. 65Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 9.2 Pediatric Dental Benefits Pediatric dental coverage more of a preventive nature Oral assessments, cleanings, fluoride treatment etc. included Regular dental coverage through age 19 Owing to implementation of ACA, around 8.7 million children to gain dental insurance by 2018 • 3.2 million via Medicaid • 3.0 million via health exchanges • 2.5 million via employer sponsored insurance Increase in the number of children covered by 15% since 2010 Reduction in the number of uninsured by 55% [American Dental Association, 2013]
  • 62. 66Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 9.3 Adult Dental Benefits Since implementation of ACA, around 17.7 million adults expected to gain dental benefits Most benefits covered under Medicaid hence differ from state to state 4.5 million adults to gain dental coverage through Medicaid 800,000 adults to gain dental coverage through health exchanges Overall decrease in number of adults not having dental coverage by 5% Generation of 7.5 million adult dental visits [American Dental Association, 2013]
  • 63. 67Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 9.4 Overall Effect Effect on economy Increase in dental expenditures by $4 billion 4% of national expenditure $2.4 billion growth in Medicaid dental expenditure [American Dental Association, 2013]
  • 64. 68Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 9.5 Vision Benefits Vision benefits included in EHB Mandatory to be included in any health plan unlike dental Preventive service Timely vision screening for early problem detection Expansion in every state compulsory Benefits provided by state include • Vision screenings and primary examinations in the medical facilities • Extensive annual eye check up along with necessary treatments • Corrective remedies like contact lenses and spectacles in case of refractive error [AAPOS, 2013]
  • 65. 69Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 9.6 Vision Benefits For Pediatrics Benefits for pediatrics according to age limits [AAPOS, 2013] Age limit Preventive tests Newborn – 3 years Red reflex test Corneal light reflection Ocular motility Pupil examination Vision assessment 3 years – 5 years Vision screening Visual acuity test 5 years and above Regular vision screening
  • 66. 70Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Dental and vision benefits included in essential health benefits Dental not mandatory to be included in the health insurance plans as opposed to vision benefits Stand alone dental plans more economic than embedded dental plans Excessive focus on preventive dental and vision benefits for pediatrics Increment in number of individuals getting coverage for dental benefits • 8.7 million children • 17.7 million adults
  • 67. 71Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 10. Free Clinics Health care organizations providing variety of medical services to the economically challenged • Dental • Vision • Pharmacy Services limited to individuals who are • Uninsured • Underinsured • Insured but lack access to necessary medical services Employees are usually volunteers Free clinics are usually charitable hospitals [NAFC, 2015]
  • 68. 72Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 10. Free Clinics (Cont’d) Even though number of insured is increasing, focus on free clinics persistent due to increased importance of primary care However, small free clinics anticipated to go out of business or estimated to turn towards advocacy Free clinics willing to transform to adapt to the ACA regulations Willingness to start accepting Medicare and Medicaid insurance patients Need for the free clinics and charitable trusts to expand their policies according to ACA [Cohen, 2013]
  • 69. 73Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 10. Free Clinics (Cont’d) Process flow of a free clinic in Michigan after implementation of ACA [FCOM, n.d.]
  • 70. 74Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 10.1 Impact Of King v. Burwell On Free Clinics Free clinics and charitable organizations to be majorly impacted if ruling in favor of King v. Burwell litigation King V. Burwell claim in the opposition of expansion of tax credits to federal marketplaces As a result, significant portion of individuals to become uninsured Thus opportunity for the free clinics to flourish With no insurance and increased premiums, preference of individuals towards free clinics [NPR.org, 2013 ; NAFC, 2015]
  • 71. 75Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 10.1 Impact Of King v. Burwell On Free Clinics (Cont’d) Free clinics are suggested to implement the following if court favors the King v. Burwell claim • Reconciling with former patients who are covered under FFM • Promote the clinic with the help of media and other social means of communication • Creating awareness and imparting knowledge regarding effect of loss of subsidies [NAFC, 2015]
  • 72. 76Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Free clinics facing the need to change under ACA Threat to small free clinics in view of decreasing number of uninsured Free clinics to expand services to Medicare and Medicaid If results in favor of King v. Burwell, free clinics to have booming business
  • 73. 77Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 11. EMS Billing Billing for emergency medical services basically includes costs for emergency transportation (ambulance) [Plaintownship, 2013]
  • 74. 78Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 12. Uncompensated Care (UCC) Uncompensated care • Providing health services to the uninsured, publicly insured and underinsured • Patients treated free of charge • Service costs incurred by the health care organization • Comprises of ‘bad debt’ and ‘charity care’ Introduction of ACA led to • Significant decrease in the number of uninsured • Decrease of 10.3 million in the number of uninsured • Increase in number of Medicaid patients Projected decrease of $5.7 billion (16% decrease from the spending baseline of UCC) [DeLeire, et al., 2014]
  • 75. 79Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 13. Economy Reduction in deficit • Probable decrease in the deficit by $109 billion through fiscal years 2013-2022 • Projected reduction in 0.5% of GDP over the decade 2023- 2032 totaling to a reduction of $1.6 trillion • Change in deficit [Furman, 2014] $(inbillion)
  • 76. 80Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 13. Economy (Cont’d) Reduction in job lock [Finegold, 2013]
  • 77. 81Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 13. Economy (Cont’d) • Significant proportion of population employer-insured • Fear of increase in premiums or cancellation of insurance resulted in continuation of existing jobs • Led to condition known as ‘job lock’, an obstacle to labor mobility • Employees eligible for insurance even with pre-existing conditions through ACA • Reduction in job locks resulting in entrepreneurship ultimately contributing to economic growth of the country [Furman, 2014]
  • 78. 82Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 13. Economy (Cont’d) Improvement in the health of employees • Implementation of ACA resulted in increased access to primary health care • Preventive health services accessible easily • Resulting in increased productivity of employees • Healthy employees able to contribute more, hence incrementing the economy Enhanced financial security • Ban on insurance companies to sell policies with lifetime or annual limits • Reduction in out of the pocket catastrophic costs Decrease in catastrophic costs [Furman, 2014; Hoffman, 2014]
  • 79. 83Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Increased access to primary care Reduction in growth rate of healthcare expenditure by 0.5% Reduction in job locks because of health insurance marketplaces No lifetime constraints on insurances
  • 80. 84Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Challenges To Affordable Care Act
  • 81. 85Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1. King v. Burwell Issue raised • IRS (internal revenue service) willing to permissibly expand tax credit subsidies to health insurances purchased under federally funded health exchanges (‘Marketplace’) Challenge (claim under King v. Burwell litigation) • ACA allows expansion of tax subsidies to individuals enrolled in health plans only funded through states i.e. Qualified Health Plans and not through Federally Facilitated Marketplace (FFM) As a result, IRS facing opposition regarding the extension of subsidies Decision of IRS termed to be ‘unlawful’ by opposition [Teitelbaum, 2015]
  • 82. 86Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1.1 Background ACA allows formation of health exchange under every state Every State at the liberty to whether or not adopt this policy As a result, two types of health exchanges created • State funded (for states setting up their own exchanges) known as Qualified Health Plans (QHP) – adopted by 17 states • Federally funded (for states opting out of setting own exchanges) know as Federally Felicitated Marketplace (FFM) – adopted by 34 states [Teitelbaum, 2015]
  • 83. 87Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1.2 IRS Regulation And Opposition As stated under ACA, individuals covered under QHP’s that is State exchanges, eligible for financial assistance (tax credits) Regulation stating the expansion of tax credit benefits to individuals covered under either exchanges (State or Federal) issued by IRS Under this regulation, around 90% individuals among the 5 million insured under FFM received the benefit of credit This regulation of IRS contradictory to claim under ACA, termed inappropriate [Teitelbaum, 2015]
  • 84. 88Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1.3 Effects Appeals by • Fourth Circuit Court of Appeals – subsidy applicable for both • D.C. Circuit Court of Appeals – subsidy limited to FFM If ruling in favor of King v. Burwell claim, • 8 to 10 million people will lose insurance • Imbalance in the insurance markets due to removal of such high percentage of population from insurance pool • Federally funded states will have to make a decision whether to implement marketplace or not • States may implement 1332 waiver which gives privileges to waive certain conditions under ACA [NACC, 2015; Teitelbaum, 2015]
  • 85. 89Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary IRS to extend tax credit benefits to individuals covered under federally funded exchanges King v. Burwell law suit filed against this regulation stating that expansion of subsidies applicable only for state funded or Qualified Health Plans If decision in favor of litigation filed, and subsidies for FFM suspended, approximately 8-10 million individuals to lose insurance This may result in rise in premium costs all over the country
  • 86. 90Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2. Triple Aim Benefits of the ACA combined together to create the ‘triple aim’ 2 major aspects of the ACA • Change in the delivery of care • Expansion of insurance coverage Improvements made till date • Increased number of accountable care organizations (more than 600) • Increase in hospitals implementing bundled payments contracts • Increase in number of certified medical practices (more than 5700) [Berwick, et al., 2015]
  • 87. 91Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2. Triple Aim (Cont’d) Better care for individuals Better health for population Decrease in health care costs [Berwick, et al., 2015]
  • 88. 92Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2. Triple Aim (Cont’d) 4 major steps required to be taken to successfully realize the triple aim • Incorporating technical adaptations like telemedicine for improved access to care • Innovations in delivery of care like community paramedics and community health workers • Building strong relationship between patient and health care provider • Alliance of healthcare providers and social leaders (Leadership Alliance) [Berwick, et al., 2015]
  • 89. 93Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2.1 Care Design Principles For Triple Aim In order for the triple aim to make progress following design principles for care should be followed • Investing in care systems showing potential for continuous improvement • Reducing waste and non-value added activities in healthcare settings • Increasing communication and co-operation between workforce • Complete utilization of resources • Lowering the rate of healthcare expenditures to 15% of GDP • Equal power to patients, families and communities for co- producing health and well being [Berwick, et al., 2015]
  • 90. 94Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Combination of benefits from ACA combined to form the ‘Triple Aim’ The triple aim intends to • Reduce healthcare costs • Improve quality of healthcare for individuals • Improve healthcare for population Measures taken to successfully implement triple aim Designing of care principles for the same
  • 91. 95Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3. Challenges To Insurers Since implementation of ACA, insurers face certain restrictions Under ACA, the insurers are required to • Propose plans covering all the essential health benefits • Removal of prohibitions on annual and lifetime limits • No discrimination on the basis of preexisting condition or on basis of health status • Guarantee the issuance of insurance • Maintain the insurers’ medical loss ratio to 80% or above
  • 92. 96Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3. Challenges To Insurers (Cont’d) Owing to this situation, insurers unaware of the medical conditions of applicants and thus uncertain about setting premiums In order to prevent insurers from facing this situation, 3 premium stabilization programs issued under ACA • Reinsurance • Risk Corridors • Risk Adjustment
  • 93. 97Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.1 Reinsurance Implemented though the ACA to help individuals with unexpected high medical costs that is, ‘high risk’ patients Effective for FY 2014 to 2016 Reinsurance payments include the following plans • All ACA compliant plans • Non-grandfathered plans (both outside and inside of the health exchanges) Program funded through fees charged on all available insurance plans Reinsurance fee limit totals amounts for, fixed limit for reinsurance payment and U.S. treasury and varying limit for administrative costs [Boothe, et al., 2015]
  • 94. 98Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.1 Eligibility For Reinsurance In order for the enrollee to be eligible for the reinsurance payment plan, following financial limits are set Reinsurance fee limit in $ Year Annual medical cost limit reached by enrollee in $ 2014 45000 2015 70000 2014 2015 2016 Reinsurance payment 10 billion 6 billion 4 billion U.S. Treasury 2 billion 2 billion 1 billion Per person cost 63 44 27 [Boothe, et al., 2015]
  • 95. 99Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Reinsurance necessary for stabilizing the insurance marketplace during 1st year of its operation States at the liberty of expanding reinsurance even in the absence of health exchanges In absence of State participation, Department of Health and Human Services (HHS) runs the reinsurance program in that State Prevents the high risk individuals from incurring high medical costs
  • 96. 100Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.2 Risk Corridor Intends to promote accurate premium values Plan to be implemented on a trail basis from fiscal years 2014 through 2016 Encourages the insurers to eliminate uncertainty about premium costs in health insurance exchanges Administered by federal government Expects the insurers participating through exchanges to allocate 80% of premiums to developing health care and improving its quality This plan compares the allowable premium costs with a particular target amount (target amount = premium cost – administrative costs) [healthaffairs.org, 2015; kff.org, 2014]
  • 97. 101Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.2 Risk Corridor (Cont’d) Plan deemed to be eliminated by the federal government in the case if insurers remain underpriced This might be possible as a major amount of losses suffered by insurers are not reimbursed by the program In FY 2014, 80% insurers made payments to Medicare whereas only 20% received money back This resulted in contradiction of the aim of risk corridor of equality among insurers regarding making and receiving equal payments to and from the government, in order to avoid net budgetary effect [healthaffairs.org, 2015]
  • 98. 102Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.2 Risk Corridor Law Under ACA Law states different responsibilities for insurers having the range of, ratio of allowable costs to target costs, within 3% points in both directions Actual cost limit Responsibility of the insurer Insurers with actual spending below 92% To refund 80% of the profit earned to the federal government Insurers with actual spending between 92 and 97% To pay department of health and human services (HHS), an amount half of their gains Insurers with actual spending between 97 and 103% To keep the profits to themselves and bear their own losses Insurers with actual spending between 103 and 108% Half of the losses reimbursed Insurers with actual spending above 108% 80% of losses reimbursed by the federal government [healthaffairs.org, 2015]
  • 99. 103Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.2 Risk Corridor Example Example of risk corridor for a target amount of $500 [kff.org, 2014]
  • 100. 104Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Plan originally introduced to bring stability to premiums for insurers introducing plans in marketplaces Risk corridor plan to be run on a trial basis for years 2014 to 2016 Plan intends to have equal quantity of money going out and coming in into the federal government via insurers Primary intention to nullify net budgetary effect
  • 101. 105Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.3 Risk Adjustment Under risk adjustment under ACA, payment received by the insurer based on the predicted medical cost of the enrollee Medical costs estimated on the basis of risk factors All the non-grandfathered plans whether individual or small group market, whether included in the marketplace, benefitted by the risk adjustment plan Payments made to the insurers depend upon the actuarial risk Plans with higher than average actuarial risk to receive payments from plans having lower than average actuarial risk [acadeathspiral.org, 2014; Pope, et. al., 2014]
  • 102. 106Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.3 Risk Adjustment (Cont’d) In absence of risk adjustment, plans having high risk enrollees, will have to charge higher average premiums to the enrollees States have an option to participate and if not, allow federally exercised plan (by HHS) to run in the State States not wanting to run the federally governed plan can run their own risk adjustment plan, after getting a federal approval In the plan, insurers compared on the basis of financial risk of their applicants [acadeathspiral.org, 2014; kff.org, 2014]
  • 103. 107Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.3 Risk Adjustment Calculation Each applicant (enrollee) assigned an individual risk score based on gender, age and diagnosis The diagnosis are assigned a numerical value and listed under ‘Hierarchical Condition Category’, which determine the price the plan is likely to cost for that particular diagnoses Risk score values vary depending upon the diagnoses of a person • An individual having multiple unrelated diagnoses, all the corresponding HCC values are used while calculating risk score • An interaction factor is added to an individuals risk score, suffering from multiple illnesses [kff.org, 2014]
  • 104. 108Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.3 Risk Adjustment Calculation (Cont’d) The risk score values are then averaged (weighted average) This weighted average value represents the predicted expense of the plan A scope for adjustment is kept for • Actuarial value • Geographic cost variation • Rating variation From these values, enrollees having higher and lower risk values are calculated [kff.org, 2014]
  • 105. 109Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 3.3 Risk Adjustment Calculation (Cont’d) The risk adjustment costs calculated have the following benefits for the enrollee and the plan • Predicts the risk of healthcare cost (high or low) for an enrollee • Calculates the actuarial risk for every plan for all of its enrollees • Calculation determines the cost owed by each plan along with the costs due to the same [kff.org, 2014]
  • 106. 110Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Risk adjustment plan aims to distribute funds from plans covering low-risk enrollees to those covering high-risk enrollees [kff.org, 2014]
  • 107. 111Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 4. Maintenance Of Marketplaces Marketplaces under ACA funded by two sources • Federally funded marketplaces (federally facilitated exchanges) • State funded exchanges Federally funded marketplaces are functional in the States who have chosen not to establish their own health exchanges
  • 108. 112Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 4.1 Issues Being Faced Health exchanges even though provide a variety of health plans to choose from, are facing certain challenges themselves Following are the challenges faced by health insurance exchanges • Availability of subsidies • Assistance of consumer • Funding of exchanges • Threat of adverse selection • Challenges due to States not expanding Medicaid • Federal and State rules [Health Policy Brief, 2014; NCSL 2015]
  • 109. 113Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Readiness Of Grants (Subsidies) Debate over availability of subsidies under Federally Facilitated Exchanges for individuals with low income and small businesses Benefit of tax credits only to people insured through state exchanges However regulation stated by IRS suggests availability of credits regardless of the type of exchange Funding of exchanges • State based exchanges to be financial sustainable till FY 2015 • In order for the FFE (federally facilitated exchanges) to sustain, a user fee of 3.5 percent on the premium of all plans sold only through exchanges is applicable [Health Policy Brief, 2014; NCSL 2015]
  • 110. 114Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Assistance to customers Conflicts between customers regarding policies of exchanges Guidelines for help known as ‘navigators’ to assist low income individuals and small businesses The navigators expected to have thorough knowledge regarding the policies about local markets Navigators expected to have experience of working with small firms and companies and also undergo training However, number of navigators working depend on the funds available for training in the federal budget [Health Policy Brief, 2014]
  • 111. 115Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Threat of Adverse Selection States have option of regulating health plans, either purchased through exchange or outside of exchanges, equally However FFE can regulate health plans only through exchanges This inequality may affect the stability of health insurance market If health plans outside FFE offer cheaper coverage which is less comprehensive, there is a high possibility of healthy people opting for that coverage, while sick people will have to opt for broader coverage This is adverse selection, leading to sick individuals incurring more claims [Health Policy Brief, 2014, NCSL, 2015]
  • 112. 116Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Challenges For Non-Medicaid States Under the ACA, States have option of not expanding Medicaid Along with Medicaid, many states (25) are reluctant for setting up State exchanges As a result, individuals in such States are ensured through FFE However the cost of private coverage is more than the coverage under Medicaid Also if decision is made in favor of King v. Burwell, majority people insured under FFE will lose insurance and in these States individuals would suffer because of lack of Medicaid expansion [Health Policy Brief, 2014]
  • 113. 117Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Federal And State Rules Under ACA, both Federal and State exchanges and their regulations exist. [Health Policy Brief, 2014]
  • 114. 118Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Even though health exchanges, either Federal or State, offer a variety of health plans to choose from, they face numerous challenges The major challenges are faced by Federally Facilitated Exchanges mostly regarding their tax credits and subsidies Challenges faced by State exchanges are related to Medicaid expansion
  • 115. 119Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Operational Level Impacts Of Affordable Care Act
  • 116. 120Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1. Workforce Destabilization among the workforce and of the system due to increase number of the insured Overload on the healthcare system Catastrophic workforce shortages mainly in primary care facilities Healthcare workforce has following effects on its operations due to ACA • Improper distribution of workforce and unbalanced ratio • Aging workforce • Increased workload • Increasing dissatisfaction among physicians • Bottleneck in education pipeline [Anderson, 2014]
  • 117. 121Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1.1 Improper Distribution Of Workforce And Ratio Urban locations have increased access to health services than rural areas According to current distribution • 10% of primary care physicians • 18% of nurse practitioners available in rural areas Rural areas have high potential of Medicaid patients Projected need of 7987 primary care physicians for the newly insured due to ACA Shortage of 20000 to 45000 nurse practitioners and physicians predicted Disastrous outcomes of shortage resulting in increased mortality and morbidity [Anderson, 2014]
  • 118. 122Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1.2 Aging Workforce Currently 2.8 million registered nurses and 985,375 physicians estimated to be serving in healthcare industry Of the estimated workforce, about 33% expected to retire in the next 10 years As a result, shortage of workforce is anticipated as follows Shortage due to more number of insured individuals Type of workforce Expected shortage Physicians 95,000 to 130,000 Registered Nurses 300,000 to 1.2 million
  • 119. 123Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 1.3 Increased Workload Due to increased regulations owing to ACA, increase in paperwork As a result, time a physician or registered nurse spends with patient is compromised Estimated increase of 190 million hours of paperwork due to mandatory regulations introduced under ACA As a result, compromise in the quality of care provided Difficult to maintain the quality of care provided due to increasing insured population
  • 120. 124Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Healthcare workforce (nurses, physicians etc.) impacted severely by ACA Increased workload for the existing workforce due to tremendous increase in the number of insured individuals Owing to the same, projected shortage of the workforce for the coming decade Ultimately, formation of a gloomy outlook of the workforce towards the industry because of ACA resulting in deteriorating quality of the care provided
  • 121. 125Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2. Healthcare Delivery Owing to the increased regulations, changes being brought about in the healthcare delivery system Merger of hospitals, healthcare businesses, independent physicians in order to maintain position in marketplace Merging results in • Acquiring higher market share • Increased negotiation power with insurers, government agencies etc. • Creation of a united healthcare system Done in order to ensure solvency in light of policies of ACA
  • 122. 126Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu 2. Healthcare Delivery (Cont’d) Following reasons are prompting healthcare institutions to make changes to their delivery models • Shortage in workforce • Increased regulations • Reduced interaction with patient (owing to increased paperwork) Providers taking up the approach of ‘cash-only’ practices As a result elimination of third party insurers resulting in less number of regulations Hence physicians able to practice medicine as deemed fit by them, keeping it patient centered Such models claimed to be ‘direct’ models
  • 123. 127Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Summary Delivery in healthcare is affected to the health reforms Hospitals, physicians practicing independently are merging in order to survive in the healthcare marketplace Healthcare institutions adopting ‘pay for performance’ and ‘cash only’ policies Effort to keep third party insurers out of the delivery scenario in order to provide quality health services
  • 124. 129Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Conclusion Reduction in the healthcare spending by 0.6% ($22 billion 800 million) in the year 2013 Historic decrease in the number of uninsured Percentage Year [Furman, et al., 2014]
  • 125. 130Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Conclusion (Cont’d) Increase in public and private insurance FY-2014 [Haislmaier, 2015]
  • 126. 131Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu Future Work Operational level impacts of ACA on hospital operations Effect of ACA • Trauma and Emergency care • Safety net providers Timeline for ACA
  • 127. 132Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References  American Nurses Association, “Advanced Practice Nursing: A New Age In Health Care”, http://www.nursingworld.org/FunctionalMenuCategories/MediaResources/Me diaBackgrounders/APRN-A-New-Age-in-Health-Care.pdf, 2011, Accessed February 2015  American Nurses Association, “Health Care Reform”, http://www.nursingworld.org/MainMenuCategories/Policy- Advocacy/HealthSystemReform/AffordableCareAct.pdf, 2014, Accessed January 2015  American Public Health Association, “Why do we need the Affordable Care Act”, http://www.apha.org/~/media/files/pdf/topics/aca/why_we_need_the_aca_au g2012.ashx, 2012, Accessed February 2015  American Society of Health-System Pharmacists, “Summary of key health systems pharmacy related provisions”, http://www.ashp.org/DocLibrary/SM2010/Health-Care-Reform- Reportsm2010.aspx, 2010, Accessed March 2015
  • 128. 133Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References (Cont’d)  Artiga, S. and Rudowitz, R., “Medicaid Enrollment Under the Affordable Care Act: Understanding the Numbers”, http://kff.org/health-reform/issue- brief/medicaid-enrollment-under-the-affordable-care-act-understanding-the- numbers/, 2014, Accessed January 2015  Blahous, C., “The Fiscal Consequences of the Affordable Care Act”, http://www.economics21.org/commentary/fiscal-consequences-affordable- care-act, 2012, Accessed January 2015  Blahous, C., “Losing Employer-Provided Coverage: Another ACA Prediction Comes True”, http://www.economics21.org/commentary/losing-employer- provided-coverage-another-aca-prediction-comes-true, 2014, Accessed February 2015  Blahous, C., “No grounds claim Obamacare lowers healthcare costs”, http://www.economics21.org/commentary/no-grounds-claim-obamacare- lowers-healthcare-costs, 2013, Accessed February 2015  Centers for Medicare and Medicaid Services, “National Health Expenditure Projections”, http://www.cms.gov/Research-Statistics-Data-and- Systems/Statistics-Trends-and- Reports/NationalHealthExpendData/downloads/proj2012.pdf , 2013, Accessed February 2015
  • 129. 134Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References (Cont’d)  Closing the Coverage Gap - Medicare Prescription Drugs Are Becoming More Affordable, http://www.medicare.gov/Pubs/pdf/11493.pdf, 2015, Accessed March 2015  CNA Classes, “Obamacare and CNA Salary Impact”, http://www.cnaclasses.org/cna-salary/obamacare-impacts-cna-salary/, 2013, Accessed January 2015  Collins, S. P., “President Obama has elevated the conversation about mental health to the national stage”, Think Progress, http://thinkprogress.org/health/2015/03/13/3633203/obama-mental-health- care-legacy/, 2015, Accessed March 2015  Congressional Budget Office, “The Effects of the Affordable Care Act on Employment-Based Health Insurance”, https://www.cbo.gov/publication/43090, 2012, Accessed February 2015  Davis, P.A., Hahn, J., Morgan, P.C., Stone, J. and Tilson, S., “Medicare Provisions in the Patient Protection and Affordable Care Act (PPAA)”, CRS Report for Congress, 2010
  • 130. 135Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References (Cont’d)  DeLeire, T., Joynt, K., and McDonald, R., “Impact Of Insurance Expansion On Hospital Uncompensated Care Costs In 2014”, Department Of Health And Human Services, http://aspe.hhs.gov/health/reports/2014/uncompensatedcare/ib_uncompensa tedcare.pdf, 2014, Accessed January 2015  Furman, J., “Six Economic Benefits of the Affordable Care Act”, Council of Economic Advisors, http://www.whitehouse.gov/blog/2014/02/06/six- economic-benefits-affordable-care-act, 2014, Accessed January 2015  Furman, J., Fiedler, M., “2014 Has Seen Largest Coverage Gains in Four Decades, Putting the Uninsured Rate at or Near Historic Lows”, http://www.whitehouse.gov/blog/2014/12/18/2014-has-seen-largest- coverage-gains-four-decades-putting-uninsured-rate-or-near-his, 2014, Accessed February 2015  Gruber, J., “The Impacts Of The Affordable Care Act: How Reasonable Are The Projections?”, National Bureau Of Economic Research Working Paper No. 17168, 2011
  • 131. 136Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References (Cont’d)  Haislmaier, E. F., Gonshorowski, D., “Q3 2014 Health Insurance Enrollment: Employer Coverage Continues to Decline, Medicaid Keeps Growing”, The Heritage Foundation, http://www.heritage.org/research/reports/2015/01/q3- 2014-health-insurance-enrollment-employer-coverage-continues-to-decline- medicaid-keeps-growing, 2015, Accessed March 2015  Hoffman, A., “Health Care Spending And Financial Security After The Affordable Care Act”, North Carolina Law Review, 2014  Internal Revenue Service [IRS], “The Health Insurance Marketplace”, http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/The-Health- Insurance-Marketplace, 2015, Accessed February 2015  Lathrop, B., Hodnicki, D., "The Affordable Care Act: Primary Care and the Doctor of Nursing Practice Nurse“, OJIN: The Online Journal of Issues in Nursing Vol. 19 No. 2., 2014  Matheson, V.A. and Congdon-Hohman, J. “Potential Effects of the Affordable Care Act on the Award of Life Care Expenses”, http://college.holycross.edu/RePEc/hcx/Matheson- Congdon_ACATortAwards.pdf, 2012, Accessed January 2015
  • 132. 137Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References (Cont’d)  Medical and Prescription Drug Deductibles for Plans Offered in Federally Facilitated and Partnership Marketplaces for 2015, http://kff.org/health- reform/fact-sheet/medical-and-prescription-drug-deductibles-for-plans- offered-in-federally-facilitated-and-partnership-marketplaces-for-2015/, 2015, Accessed March 2015  National Conference of State Legislatures [NCSL], “Medicaid and the Affordable Care Act”, http://www.ncsl.org/documents/health/HRMedicaid.pdf, 2011, Accessed January 2015  New York State Department of Health, https://www.health.ny.gov/health_care/child_health_plus/eligibility_and_cost. htm, 2014, Accessed February 2015  NY State of Health, https://nystateofhealth.ny.gov/individual/searchAnonymousPlan/search, 2015, Accessed March 2015  Office of Disease Prevention and Health Promotion (DPHP), “Access to Health Services”, http://www.healthypeople.gov/2020/topics- objectives/topic/Access-to-Health-Services, 2014, Accessed February 2015
  • 133. 138Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References (Cont’d)  Paranzino, G., Burnette, P., “ How nontraditional roles are reshaping nursing careers”, Kelly Health Resources, http://www.slideshare.net/thetalentproject/a-new-era-for-nursing-how- nontraditional-roles-are-reshaping-nursing-careers, 2014, Accessed February 2015  Shi, L., Singh, D., “Delivering Healthcare in America: A Systems Approach”, Chapter 6, 6th Edition, Jones and Bartlett Learning, 2014  Six ways the affordable care act will affect individual insurance, http://www.nyhpa.org/PDFs/6-Ways-ACA-6.11-(4%20pages).pdf, 2013, Accessed March 2015  Small Business Health Care Tax Credits, https://www.healthcare.gov/small- businesses/provide-shop-coverage/small-business-tax-credits/, n.d., Accessed February 2015  Smith, S. M., Kay, D. H., “The Affordable Care Act: Key Points For Pharmacists”, http://www.une.edu/sites/default/files/SSmith_ACA_2014_DHK.pdf, 2014, Accessed March 2015
  • 134. 139Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References (Cont’d)  Sommers, B., U.S. Department of Health and Human Services, http://aspe.hhs.gov/aspe/gaininginsurance/rb.cfm, 2012, Accessed January 2015  Sonfield, A., “Affordable Care Act Survives Supreme Court Test, But Medicaid Expansion Placed in Peril”, Guttmacher Institute, http://www.guttmacher.org/pubs/gpr/15/3/gpr150302.html, 2012, Accessed January 2015  Symphony Health Solutions (healthcare.gov), “New Data Reveals Influence of ACA on Pharma Sales”, http://symphonyhealth.com/2014/04/aca- influence-on-pharma-sales/, 2014, Accessed March 2015  The Henry J. Kaiser Family Foundation, “Key Facts About The Uninsured Population”, http://kff.org/uninsured/fact-sheet/key-facts-about-the- uninsured-population/, 2014, Accessed February 2015  The Henry J. Kaiser Family Foundation Subsidy Calculator; http://kff.org/interactive/subsidy-calculator/, Accessed March 2015  U.S. Department of Health and Human Services, “Key Features of the Affordable Care Act”, http://www.hhs.gov/healthcare/facts/timeline/, 2014, Accessed January 2015
  • 135. 140Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References (Cont’d)  U.S. Small Business Administration, “Healthcare”, Managing a business, https://www.sba.gov/healthcare, 2015, Accessed February 2015  U.S. Department of Health and Human Services, http://aspe.hhs.gov/health/reports/2013/mental/rb_mental.cfm, 2013, Accessed March 2015  Healthcare.gov, “Dental coverage in Marketplace”, https://www.healthcare.gov/coverage/dental-coverage/#question=do-i-have- to-provide-dental-coverage-for-my-children, 2014, April 2015  Delta Dental, www.slideshare.net/deltadentalins/dental-benefits-and-the- affordable-care-act, 2013, Accessed March 2015  Nasseh, K., Vujicic, M., O’Dell, A., “Affordable Care Act Expands Dental Benefits for Children But Does Not Address Critical Access to Dental Care Issues” http://www.ada.org/~/media/ADA/Science%20and%20Research/Files/HPRC Brief_0413_3.ashx  American Association for Pediatric Ophthalmology and Strabismus, “Children’s Vision Services Under the ACA”, http://www.aapos.org/news/show/139--, 2013, Accessed March 2015
  • 136. 141Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References (Cont’d)  Free Clinics of Michigan, “Resources for Free Clinics”, http://www.fcomi.org/other-resources-for-free-clinics.html, n.d., Accessed April 2015  Gordon, E., “Healthcare Law Puts Free Clinics at a Cross Roads”, http://www.npr.org/2012/03/25/149350040/health-care-law-puts-free-clinics- at-a-crossroads, National Public Radio, 2013, Accessed April 2015  Cohen, R., “Future of Free Clinics under Obamacare”, https://nonprofitquarterly.org/policysocial-context/22721-the-future-of-free- health-clinics-under-obamacare.html, 2013, Accessed April 2015  The National Association of Free and Charitable Clinics [NAFC], https://nonprofitquarterly.org/policysocial-context/22721-the-future-of-free- health-clinics-under-obamacare.html, 2015, Accessed April 2015  Teitelbaum, J., King v. Burwell: A policy expert’s view (Part 1), Jones and Bartlett Learning, 2015  http://www.nafcclinics.org/about-us/what-is-free-charitable-clinic
  • 137. 142Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References (Cont’d)  Boothe, A., Couture, B., “The ACA’s Risk Spreading Mechanisms: A Primer on Reinsurance, Risk Corridors and Risk Adjustment”, http://americanactionforum.org/research/the-acas-risk-spreading- mechanisms-a-primer-on-reinsurance-risk-corridors-a, 2015, Accessed April 2015  Anderson, A., “The Impact of the Affordable Care Act on the Health Care Workforce”, http://www.heritage.org/research/reports/2014/03/the-impact-of- the-affordable-care-act-on-the-health-care-workforce, 2014, Accessed April 2015  Berwick, D., M., Feeley, D., Loehrer, S., “Change from the inside out”, The Journal of American Medical Association (JAMA), 2015  Centers for Medicare and Medicaid services, “Reinsurance, Risk Corridors, and Risk Adjustment Final Rule”, http://www.cms.gov/cciio/resources/files/downloads/3rs-final-rule.pdf, n.d., Accessed April 2015
  • 138. 143Binghamton University | March 2015 wise.binghamton.eduwise.binghamton.edu References (Cont’d)  ACA death spiral, “Continuing resolution jeopardizes risk corridors”, http://acadeathspiral.org/category/risk-adjustment/, 2014, Accessed April 2015  Health policy briefs, “Risk Corridors”, http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=118, 2015, Accessed April 2015  The Henry J. Kaiser Family Foundation, “Explaining Health Care Reform: Risk Adjustment, Reinsurance, and Risk Corridors”, http://kff.org/health- reform/issue-brief/explaining-health-care-reform-risk-adjustment- reinsurance-and-risk-corridors/, 2014, Accessed April 2015  Pope, G. C., Kautter, J., Keenan, P., “Affordable Care Act Risk Adjustment: Overview, Context, and Challenges”, Medicare and Medicaid Research Review, 2014  http://healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_84.pdf  http://www.ncsl.org/research/health/state-laws-and-actions-challenging- ppaca.aspx