The Affordable Care Act (ObamaCare):Where Are We?

Department of Family & Community Medicine Grand Rounds 4/25/12Dan Derksen MD, ProfessorDepartment of Family & Community Medicinedderksen@salud.unm.edu

March 2010

March 2012

The Impact of Health Care Reform in New Mexico

Dan Derksen MD, ProfessorDepartment of Family & Community Medicinedderksen@salud.unm.edu

I. Affordable Care Act 2010 to 2014II. Supreme Court of the United StatesIII. Coverage – U.S. vs N.M.IV. Medicaid & the ExchangeV. Forecasting Health System Change

I. Affordable Care Act

Since 2010 in New Mexico:• 900,000 with private insurance – no lifetime limits • 120,000 kids w/ pre-existing conditions not denied coverage• 10,000 < age 26 are covered on parents’ plan• NM Division of Insurance - rate review process

I. Affordable Care Act in 2014

•Mandates coverage (individual, employer)•Expands Medicaid <133% Federal Poverty Level

•Subsidizes premiums 133 - 400% FPL on state or federal exchange•FPL family of 3 = $18,310

Donald VerilliUS Solicitor General

Paul ClementFormer US Solicitor General

RobertsThomas Scalia Ginsburg

Sotomayor

Kennedy

Breyer KaganAlito

Supreme Court of theUnited States

Supreme Court Hammer Time on Obamacare?

Supreme Court of the United States

Threshold – Is It Premature to Act before 2015?

Anti-Injunction Act (PL 72-65):• Disallows legal challenges to taxes until they are collected• Penalty for not having health insurance to be levied in 2014

Prediction: 9-0 SCOTUS Vote that Anti-Injunction Act does not apply

Mandate – Minimum Coverage Provision, Severability

• Mandates that every American have health insurance• Challenged by 26 states with Republican Attorneys General• Questions mandate constitutionality and if the insurance

requirement can be severed from the rest of the law• Affects guaranteed issue, community ratings for insurers • Mandate spreads risk, mitigates insurer adverse selection

PL 111-148, PL 111-152

Is Medicaid Expansion Unconstitutionally Coercive for States?

• Covers all American adults under age 65 <138% FPL• 100% paid for by federal government 2014, 2015, 2016• States eventually pay 10% of expansion costs• Requires states to expand or lose Medicaid funding entirely• Striking down Medicaid expansion endangers other federal

programs – education, transportation, national security

Are Past Politically Charged SCOTUS Votes Predictive?

48% cases were decided unanimously (9-0) in 201020% were along liberal/conservative divide (5-4) Scalia & Thomas voted most often to invalidate legislation

Example: 5-4 Citizens United (2010) – extends 1st amendment free speech rights to corporations, unions• For: Roberts, Kennedy, Scalia, Alito, Thomas• Against: Stevens, Ginsberg, Breyer, Sotomayor

http://sblog.s3.amazonaws.com/wp-content/uploads/2012/04/SB_votesplit_040512.pd

Will the Supreme Court Run the ACA off the Road?

If you don’t know where you are going, you might end up someplace else Yogi Berra

Supreme Court of the United States - Prediction

 Medicaid Expansion Mandate Severability

Alito No No NoBreyer Yes Yes Yes

Ginsburg Yes Yes YesKagan Yes Yes Yes

Kennedy Yes No YesRoberts Yes No YesScalia Yes No No

Sotomayor Yes Yes YesThomas No No No

Total Y/N 7-2 4-5* 6-3*Mandate struck down, along with guaranteed issue, community rating

042512 Dan Derksen MD

Can the U.S. Afford the Status Quo?

Status Quo: 60 million uninsured by 2020

OECD Health Data 2011 at http://www.oecd.org/dataoecd/6/28/49105858.pdfAccessed 4/2/12

OECD - Organisation for Economic Co-operation & Development

U.S. Per Capita Cost Is Higher

OECD Canada Switzerland U.S.$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

Life Expectancy76

77

78

79

80

81

82

USA

OECD

Canada

Switzerland

OECD Health Data 2011 at http://www.oecd.org/dataoecd/6/28/49105858.pdfAccessed 4/2/12

U.S. Life Expectancy Is Lower

Is There a Way Forward from Here?HELP US!

What Are the Republican Alternatives?

Patients’Choice ActRedirect $300b ESI tax subsidyCreate advanceable Tax Credits

Families $5,700/yrIndividuals $2,300/yr

Health Savings AccountsLow-income: $5k debit card

ESI = Employer Sponsored Insurance AFDC = Aid to Families with Dependent Children

http://online.wsj.com/article/SB124277551107536875.htmlhttp://online.wsj.com/article/SB10001424052748704529204576257132397198332.html

Other ReformsCreate Medicaid Block GrantsLike 1996 AFDC Block GrantsApply to All Means Tested Programs

Will States Have the Opportunity to Innovate?

By 2020 in U.S. with ACA:•Reduce uninsured by 30 to 33 million•Residual uninsured 26 to 27 million•Cover 20 to 23 million thru exchange•Cover 16 to 17 m in Medicaid expansion (100 million will be on Medicaid in 2020)•Reduce employer sponsored by 3 to 5 m

http://www.cbo.gov/sites/default/files/cbofiles/attachments/03-13-Coverage%20Estimates.pdf

NM Health Status: Critical1) Last in access to health care &

prevention2) 49th of 50 States in % Pop. Uninsured3) Will experience 2nd highest decrease in

uninsured of states starting in 2014 (16%, 300,000 individuals) if ACA upheld

4) 260 NM deaths/yr due to being uninsuredState Scorecard on Health System Performance. The Commonwealth Fund 2009. http://www.commonwealthfund.org/Publications/Fund-Reports/2009/Oct/2009-State-Scorecard.aspx

KFF State Health Facts. http://www.statehealthfacts.org/comparetable.jsp?ind=126&cat=3

Buettgens: Health Reform Across the States. March 2011. http://www.urban.org/uploadedpdf/412310-Health-Reform-Across-the-States.pdf

Dying for Coverage in New Mexico. 2006 http://familiesusa2.org/assets/pdfs/dying-for-coverage/new-mexico.pdf

Payer Source – Health Insurance in NM

Payer Source # New Mexicans

Medicaid 550,000

Uninsured 450,000

Medicare 300,000

Other Public 150,000

CHAMPUS Tricare 50,000

Subtotal Public 1,500,000

Total Pop. NM 2,000,000

Daniel Derksen MD 4/25/12

New Mexico Health Care Reform

In 2014, about 135,000 uninsured New Mexicans will be covered:

• 80,000 through expansion of Medicaid • 55,000 in the Health Insurance Exchange

By 2020 in New Mexico up to:• 750,000 will be covered via Medicaid• 250,000 will be eligible for HIX coverage• 100k to 150,000 will still be uninsured•Will increase health system demand 25%• Pent up demand highest in first 24 months

Health care official resigns over perceived lag in progressTrip Jennings | The New MexicanPosted: Friday, March 23, 2012 - 3/24/12

 An Albuquerque doctor tasked by Gov. Susana Martinez's administration to help administer a cornerstone of the nation's federal health care law in New Mexico resigned this week, citing resistance from top officials to move forward.  Dr. Dan Derksen resigned Monday as director of the New Mexico Office of Health Care Reform. In an interview Friday, Derksen, a lifelong Republican, said there had been a shift in policy and that he had lost the battle over "policy approach and implementation" within the administration about the timeline for building a New Mexico health insurance exchange, which is meant to help more people obtain health insurance.

State Slow Planning Insurance ExchangesBy Winthrop Quigley / Journal Staff Writer on Tue, Apr 17, 2012

Gov. Susana Martinez’s people insist they will implement a health insurance exchange, as required by the federal Affordable Care Act, despite the resignation late last month of Dan Derksen.

He was just about the only senior official in the administration who seemed to take the exchange seriously.

The state’s commitment to the exchange is a tad difficult to trust. Leaving aside the lack of any discernible political taste the administration has for the federal health care act, the state has decided to delay work on a highly complicated project that is supposed to be ready to enroll thousands of people into insurance plans starting in October of next year. If the governor really wants a working insurance exchange in place before the federal law imposes one on New Mexico, state government is going to have to work with far more speed than it ever has.

No Help from NM Budget FY’13• $5.61 B (3.6% increase) General Fund Spending• FY’12 budget balanced (from $450 million deficit)

without increasing taxes• Increase in Medicaid funding by $45m, insufficient

to pay for anticipated baseline growth in program

http://www.nmsu.edu/~legislat/documents/1-5-12-fy13-exec-budget.pdf

Daniel Derksen MD 4/25/12

Exchange Timelines Required of StatesJuly 2011 Proposed HIX rule released9/29/11 Level 1 NMHIX establishment grant submitted11/29/11 CMS Notice of Award $34.3 million to NMMarch 2011 Final HIX rule published3/30/12 Level 2 proposal due (or 6/30/12)June 2012 Supreme Court ACA RulingsFall 2012 Complete, submit CMS HIX certification forms1/1/13 CMS Certifies NMHIX “ability to operate”10/1/13 Begin enrolling for NMHIX (or federal HIX)1/1/14 Medicaid Expansion (175,000 eligible)1/1/14 NMHIX Full operations1/1/15 NMHIX Fiscally self-sustaining

Integrate Screening, Eligibility, Enrollment

Small Business Health Options Program Exchange

Individual Health Insurance Exchange

Medicaid/CHIP

Subsidized Unsubsidized

Income below 133%*

State Basic Health Plan (optional)

**Income 133-200 %

** Income >133%

Participating small employers/employees

Income 133-400%

Income >400%

*5% Income Set AsideThus <138%

Daniel Derksen MD 4/25/12

Physicians, Providers Community

Family Medicine Foundation

Office StaffPatients

Health IT

Improved OutcomesVision 2020

Practice OrganizationCoordinatedCare (ACO)

Performance Measurement

Public ReportingRWJ AF4Q

Patient ExperiencePress Ganey

Meaningful Use of EHRMedicare, Medicaid

Primary Care

Reforming the delivery, payment & education systems

Daniel Derksen MD 4/25/12

As any change must begin somewhere, it is the single individual who will experience it and carry it forward.

The change must indeed begin with an individual; it might be any one of us.

Carl Jung