The Patient Protection and Affordability Act: Implications for Grantmakers

The Patient Protection and Affordability Act: Implications for Grantmakers Michael R. Cousineau, Dr.PH University of Southern California 2011 USC Center for Community Health Studies

Health Reform Laws Enacted • H.R.3590 Patient Protection and Affordable Care Act • Related Bills: • H.CON.RES.254 • H.RES.1203 • H.R.3780 • H.R.4872 • S.1728 • Became Public Law No: 111-148 • http://www.thomas.gov/cgi-bin/bdquery/z?d111:HR03590:@@@D&summ2=3& USC Center for Community Health Studies

Three Components of Health Care System and Policy • Access and equity • Costs and efficiency • Quality USC Center for Community Health Studies

Health Coverage U.S. 1987 - 2008 USC Center for Community Health Studies

Costs: How much do we spend? • 2.4 Trillion, 2007 • Projected to increase to $3.6 Trillion by 2014 • Source: California HealthCare Foundation, 2010 USC Center for Community Health Studies

Health Spending – Share of GDP USC Center for Community Health Studies

Quality • Only about half of services that doctors provide are evidence-based, and represent good medical practice • Errors, 44,000 deaths per year due to medical errors USC Center for Community Health Studies

Grading the ACA • Access B • Costs C+ • Quality C+ USC Center for Community Health Studies

ImplementationTimeline Full Implementation in 2014 Initial regulations (In effect now) Most items phase in over the next two years 2010 2011 2012 2013 2014 USC Center for Community Health Studies

How does it Affect Private Insurance? • No Pre-existing conditions children now, adults 2014 • High-risk pool established • Young adults can remain on their parents’ health plan until age 26 • No lifetime caps or restrictive annual limits on coverage • Rescissions • No co payments for prevention USC Center for Community Health Studies

How does PPACA Expand Coverage? • Expands Medicaid to all up to 133% of the federal poverty threshold • Health Insurance Exchange with Approved Health Benefit plan • Subsidies 133% and 400% of the federal poverty threshold • Estimated 35 million Americans USC Center for Community Health Studies

Individual Mandate Penalties for being uninsured: $695 per adult $2,085 per family 2.5% of household income Maximum Amount - Whichever is greater Exceptions: • No prosecutions 2014-2016 • Financial hardship • Religious objections • American Indian ethnicity • Uninsured for <3 months • Income below tax filing threshold • Cost of least expensive plans >8% income • Incarcerated • Undocumented USC Center for Community Health Studies

Medicaid Expansion • Those with incomes up to 133% of poverty • Does not include undocumented immigrants • Non citizens 5 year waiting period for subsidies USC Center for Community Health Studies

Health Benefit Exchange • A new market for those in the individual market • Incorporates Medicaid • Provision for small businesses • Approved plans with an essential benefit package but different tiers • Provides subsidies in the form of tax credits for those from 134-400% FPL • Family premium limits ranging from 2.0% to 9.5% of income USC Center for Community Health Studies

California Health Benefit Exchange • A website that provides standardized comparison information on qualified health plan plans • A calculator for applicants to compare costs across plans • A web-based eligibility portal to help link individuals to health cover options available to them; • A toll-free consumer assistance hotline USC Center for Community Health Studies

How Does it Affect Employers? Employers in Los Angeles County, by Firm Size, 2006 Small businesses: (<25 employees) can obtain coverage with subsidies (tax credits) (N=289552) (more than 1 million workers) Source: Employer Firms, Establishments, Employment, [and] Annual Payroll and Receipts by Firm Size and State, 2006. U.S. Small Business Administration, Office of Advocacy. http://www.sba.gov/advo/research/st_06.pdf USC Center for Community Health Studies

How Does it Improve Quality and hold down costs? C+ USC Center for Community Health Studies

Benefits and Payments 2011 to 2013 • Medicaid physician payments increased for primary care services (2013 & 2014) • Medicare – preventive services & annuals at no cost • Elimination of the Medicare Part D “donut hole” USC Center for Community Health Studies

Health Care Delivery Reform and Practice Redesign Accountable Care Organizations Payment for Quality Outcomes USC Center for Community Health Studies

Payment Reform USC Center for Community Health Studies

What it Means for California • Extend health coverage to 3.8 million uninsured Californians • Protect and improve coverage for 21 millionCalifornians with employer-based or individual health insurance • Guarantee that 800,000 Californians with pre-existing conditions can obtain coverage • Allow 3.2 million young adults in California to obtain coverage on their parents’ insurance plans • (Sources: UCLA Center for Health Policy Research, Kaiser Family Foundation) USC Center for Community Health Studies

Estimated Number of People in Los Angeles CountyAges 0–64 Years Eligible for Health Insurance and SubsidiesUnder the Patient Protection and Affordable Care Act Source, CHIS, 2007. UCLA Center for Health Policy Research. Analysis by USC Center for Community Health Studies, 2010 USC Center for Community Health Studies

Implementation in California • Establishment of the California Health Exchange Board, AB 1602, SB 900 Peter Lee new CEO • Basic Health Plan, which is an option for the states, (SB 703), currently has not been reported out of committee • Establishment of Accountable Care Organizations (ACOs) • State Medi-Cal Budget USC Center for Community Health Studies

Problems and Limitations • People not covered • Undocumented immigrants • Those unable or unwilling to purchase coverage • Funding for DSH hospitals • State Medi-Cal Payments USC Center for Community Health Studies

ChallengesMoving Forward • Logistical Challenge • Workforce • Political Challenges • Legal Challenges • Financial • The on going state budget crisis and the federal deficit • General economy USC Center for Community Health Studies

Health Reform and the Safety Net • With more people covered, what will be its role? • Medicaid 1115 Waiver (A Bridge to Health Reform). • Low income Health Insurance Program • The conversion of Medicaid SSI to managed care • System and practice redesign for Los Angeles County and its partners • A provider of last re sort to a system of choice USC Center for Community Health Studies

Thoughts for Grant-makers • Stay informed • Continue to monitor and engage but also participate, and provide feedback about what is working • Promote learning and active community-based research • Making value-added investments, leveraging and partnering, build on what is there • Identifying, engaging and empowering new partners • Promoting and testing innovation, and encourage thinking out of the box • Educating and engaging the community USC Center for Community Health

The Patient Protection and Affordability Act: Implications for Grantmakers