Guide to Health Care Reform
By Mary Branham, CSG Managing Editor
The Patient Protection and Affordable Care Act, sometimes referred to as “Obamacare,” has been taking effect slowly since its passage in February 2010. Changes have been made to state Medicaid programs and requirements for insurance companies.
Imapact on Medicaid
The Centers for Medicare and Medicaid Services announced in August 2012 that Massachusetts was the first state to partner in a project to test a new model for providing dual eligibles with a more coordinated, person-centered care experience.
The Medicare-Medicaid Coordination Office is working to improve access, coordination and cost of care by focusing on three major areas—program alignment, data and analytics, and models and demonstrations. The office is creating a technical assistance center to help all states meet the needs of these dual eligibles. It also has launched an initiative to align the two programs to eliminate unnecessary and inefficient conflicts in the requirements for the two programs.
Under the Financial Alignment Demonstration, the state and the CMS contracted with integrated care organizations to coordinate the delivery of services for all covered Medicare, Medicaid and expanded services.
The CMS in 2010 selected 14 other states—California, Colorado, Connecticut, Michigan, Minnesota, New York, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, Vermont, Washington and Wisconsin—to receive contracts for up to $1 million each to design new integrated care models.
Dual eligibles are people who are eligible for medical coverage under both Medicare and Medicaid. The Affordable Care Act created the Federal Coordinated Health Care office—established in September 2010—to improve care coordination for people eligible for both programs.
The Affordable Care Act included several provisions aimed at cutting the cost of providing health care to those who qualify for Medicaid.
Jan. 1, 2012–Dec. 31, 2016: CMS created new demonstration projects in Medicaid for up to eight states to pay bundled payments for episodes of care that include hospitalizations and to allow pediatric medical providers organized as accountable care organizations to share in cost-savings.
It established the Center for Medicare and Medicaid Innovation in 2010 to test new payment and delivery system models that reduce costs while maintaining or improving quality. The center has organized Innovation Models into seven categories—accountable care; bundled payments for care improvement; primary care transformation; initiatives focused on Medicaid and the Children’s Health Insurance Program, or CHIP; initiatives focused on Medicare-Medicaid enrollees; initiatives to accelerate the development and testing of new payment and service delivery models; and initiatives to speed the adoption of best practices.
Ten states—California, Connecticut, Hawaii, Minnesota, Montana, Nevada, New Hampshire, New York, Texas and Wisconsin—are participating in an initiative to offer incentives to Medicaid beneficiaries who participate in prevention programs and demonstrate improvements in health risk and outcomes. The Centers for Medicare and Medicaid Services offered $100 million in grants to states that targeted chronic disease prevention through the program. The grants are for three years.
Points of Service
Home and Community-Based Services
Starting Oct. 1, 2010, states could offer home and community-based services to certain elderly and disabled populations through a Medicaid state plan amendment; they also could extend full Medicaid benefits to individuals receiving home and community-based services under a state plan.
The Centers for Medicare and Medicaid Services on Feb. 22, 2011 issued a proposed rule to allow states to provide home and community-based attendant services and supports through the Community First Choice Medicaid state plan option.
In its final rule issued April 26, 2012, the U.S. Department of Health and Human Services announced states choosing to participate in the Community First Choice option would receive a six percentage point increase in federal Medicaid matching funds for providing community-based attendant services and supports to enrollees who would otherwise be confined to a nursing home or other institution.
“Prior to passage of the Affordable Care Act, many families had few choices beyond nursing homes or other institutions for their loved ones,” Health and Human Services Secretary Kathleen Sebelius said in announcing the rule.
According to the Kaiser Commission on Medicaid and the Uninsured, about half of the 9 million people who qualify for Medicaid based on disability suffer from mental illness; 45 percent have three or more diagnosed chronic conditions.
The Affordable Care Act gave states the option to permit certain Medicaid enrollees to designate a provider as a health home; states taking the option received 90 percent federal matching payments for two years for health home-related services.
Health homes coordinate care for people on Medicaid who have chronic conditions. To be eligible for a health home, Medicaid enrollees must have two or more chronic conditions—defined as mental health, substance abuse, asthma, diabetes, heart disease and being overweight; have one chronic condition and be at risk for a second; or have one serious and persistent mental health condition.
Health home services include comprehensive care management; care coordination, health promotion, comprehensive transitional care/follow-up, patient and family support, and referral to community and social support services.
Health home providers can be a designated provider, such as a physician, clinic or mental health provider; a team of health professionals, including nurse care coordinators, social workers and behavioral health professionals; or a health team, which may include medical specialists, nurses, pharmacists, nutritionists, dieticians, social workers, behavioral health providers, chiropractors, and licensed complementary and alternative practitioners.
Medicaid and Health Exchanges
Did You Know?
The ACA required the Department of Health and Human Services to set up a website—healthcare.gov—to help consumers identify health coverage options.
Help for Coverage
Everyone has to buy health insurance or face a penalty. Medicaid expansion in some states will help to cover those up to 138 percent of the federal poverty level.
U.S. citizens and legal immigrants who buy coverage in the exchange and who have incomes up to 400 percent of the federal poverty level are eligible for tax credits. They can’t get the credits if they are eligible for public coverage or have access to health insurance through an employer.
Federal Poverty Level
The federal poverty level—approximately $14,000 for an individual and $29,000 for a family of four—is used to determine who is eligible for Medicaid and subsidies to buy health insurance.
Costs and Savings
The Congressional Budget Office says implementing the health care law will cost $938 billion over the next 10 years. But it also says the law will cut the federal deficit about $124 billion over that same time period.
The health reform law allows parents to keep their children on their insurance policies until the age of 26.
The law does not allow insurers to deny coverage to people with pre-existing conditions starting Jan. 1, 2014, and eliminates the lifetime limits on health care coverage.
An Ounce of Prevention
The law requires private health insurers to cover recommended preventive services without any copays or deductibles for the patient. This includes screenings for such things as diabetes, obesity, cholesterol and various types of cancers.
The law requires private insurance companies to cover a range of preventive service, including Pap tests, cancer screenings, diabetes screening and prenatal care without copays. It also requires coverage of some brands and methods of birth control.
Changes for Employers
Jan. 1, 2014: Employers with more than 50 employees can be charged a $2,000 fee per full-time employee if they don’t offer coverage and have at least one full-time employee who receives a premium tax credit. The first 30 employees are excluded from the fee.
Jan. 1, 2014: Employers can offer employees rewards of up to 30 percent, potentially increasing to 50 percent, of the cost of coverage for participating in a wellness program and meeting certain health-related standards; the law established 10 state pilot programs that permit participating states to apply similar rewards for participating in wellness programs in the individual market.
The federal government will oversee the health care law in Missouri, Oklahoma, Texas and Wyoming after those states told the U.S. Department of Health and Human Services they couldn’t or wouldn’t implement the new rules. Source: Politico
If you can afford to buy health insurance—that is, if it wouldn’t cost more than 8 percent of your monthly income and if you earn above the federal poverty line—the Affordable Care Act requires you to do so. If you don’t, you could owe a tax, administered by the IRS. The penalty wouldn’t be enforced until 2016.
Key Dates in History
Dec. 24, 2009: The U.S. Senate passes a sweeping health care bill.
Feb. 22, 2010: President Obama lays out his legislative proposal for health care reform, similar to the Senate bill.
March 21, 2010: The U.S. House of Representatives passes the Senate health care bill.
March 23, 2010: President Obama signs the Patient Protection and Affordable Care Act
March 23, 2010: Florida files a lawsuit in federal district court challenging the constitutionality of the individual mandate. Florida is joined by 25 other states in the lawsuit.
June 28, 2012: Supreme Court upholds constitutionality of the act.
Source: New York Times
Key Dates for Implementation
Starting Jan. 1, 2013: The federal government increased by one percentage point federal matching payments for preventive services in Medicaid for states that offer Medicaid coverage with no patient cost sharing for services recommended (rated A or B) by the U.S. Preventive Services Task Force and recommended immunizations.
Jan. 13, 2013–Dec. 31, 2014: Medicaid payments for primary care services provided by primary care doctors will be increased to 100 percent of the Medicare payment rate for 2013 and 2014—with the federal government paying 100 percent of this increase. States are expected to receive more than $11 billion in new funds for their Medicaid primary care systems because of an increase in rates paid for primary care services, according to the Centers for Medicare and Medicaid Services.
Fiscal Year 2013: Authorization and funding for CHIP was extended through 2015. Previous authorization was through 2013.
Oct. 1, 2013: States’ Medicaid Disproportionate Share Hospital allotments will be reduced. The secretary of the Health and Human Services cabinet will be charged with developing a methodology for distributing the reductions.
Jan. 1, 2014: States have the option to expand Medicaid to individuals not eligible for Medicare under age 65—children, pregnant women, parents and adults without dependent children—with incomes up to 138 percent of the federal poverty level. The federal government will fully cover those who are newly eligible for Medicaid through 2016; after that, federal funding will cover 90 percent of the costs. States had the option to expand coverage to childless adults beginning April 1, 2010.
Jan. 1, 2014: All hospitals participating in Medicaid can make presumptive eligibility determinations for Medicaid-eligible populations.
Oct. 1, 2015: The federal match rate in CHIP will increase 23 percentage points, up to a cap of 100 percent.