update on the health reform law (the patient protection and affordable care act of 2010) alice chen,...

Update on the Health Reform Law

(The Patient Protection and Affordable Care Act of 2010)

Alice Chen, MDUCLA Department of Medicine Grand Rounds

June 9, 2010

Learning Objectives

• This is history: context of health reform.• What’s in the law? – Major elements of health reform– What changes are happening now– Help Sarah

• What’s next?– Role of physicians– Resources

1910’s – Teddy Roosevelt is the first in a long line to campaign on national health insurance

1930’s – FDR proposes national health insurance as part of the New Deal, but it is removed due to opposition by the AMA.

1940’s – Harry Truman calls for nationalized health coverage. AMA again stalls the deal.

1960’s – JFK calls for health benefits for Social Security recipients. AMA calls plan a hoax.

1965 – Medicare and Medicaid are created under LBJ. 1970’s

– Nixon and Edward Kennedy debate on health care – Carter campaigns on national health insurance with mandatory universal coverage.

1990’s – Clinton proposes universal coverage through a tightly regulated private insurance market.

1997 – State Children’s Health Insurance Program enacted 2003 – Medicare Part D is enacted with a donut hole. 2008 – Presidential candidates campaign on health care issue. February, 2009 – President Obama announces that health care is a goal for

2009. A year-long health reform debate ensues . . . .

This is history.A century of health reform.

This is history.Why health reform?

Meet Sarah

This is history.Meet Sarah

Sarah is a UCLA grad student who spends a night in the obs unit for gastroenteritis. You give her your card and tell her she can establish primary care with you.

She calls you a few months later.“I have this growing lump on my neck. I’m afraid I

have cancer.”You tell her to come to clinic, and she pauses.

“I graduated and I finally found a great job with a small business. I have no insurance. What do I do?”

This is history.Meet Sarah

One option» Go buy insurance! Lie on the intake form that asks whether

there’s anything wrong right now and risk getting the policy rescinded. Pay more for being a woman. Learn through the fine print later on that the insurance covers nothing even though it costs a lot.

Oh wait. She saw a cardiologist last year for mitral valve prolapse. Every insurance company in California denies her coverage.

What’s in the law? Meet Sarah

So you suggest some other ideas:» Come to UCLA as a self-pay patient, and I’ll waive my

professional fees.» Go to Simms-Mann Clinic and get a referral to Harbor or

Olive View if needed and wait for a few months.» If you get really sick, go to the ER. Other people will pay

for your emergency care (through taxes or increased premiums), but it might ruin your credit.

» Quit your job and get any job that has insurance. Starbucks is an option.

» Take 2 aspirin and hope it will go away.» Get pregnant and have a child and spend all your money

so you’ll qualify for MediCal and hope there will be doctors who are willing to see you.

» Move to a country with universal health care.» Marry someone for health insurance.

What’s in the law? Meet Sarah

“Are you serious?”

This is history.

Why health reform?

• #1 worldwide rank in health care spending• Worst health indices of 19 developed countries• 1 in 5 people in the U.S. has inadequate insurance – 92,000,000 people

• 1 in 7 people in the U.S. has no insurance– 49,000,000 people– >18,000 die annually due to lack of health insurance

http://www.familiesusa.org/assets/pdfs/americans-at-risk.pdf WHO (May 2009). "World Health Statistics 2009". World Health Organization. http://www.who.int/whosis/whostat/2009/en/index.htmlRoehr, Bob (2008). "Health care in US ranks lowest among developed countries". BMJ 337 (jul21 1): a889. "Income, Poverty, and Health Insurance Coverage in the United States: 2007." U.S. Census Bureau. Issued August 2008., Thomas M. Selden and Merrile Sing, "The Distribution Of Public Spending For Health Care In The United States, 2002," Health Affairs 27, no. 5 (2008): w349-w359 (published online 29 July 2008) http://www.hr.umich.edu/humancapital/retirement/HCR%20Section%201.%20Retirement%20Outlook%20Note%20pages.pdf

This is history.

Why health reform?

This is history.

Why health reform?

California projections (2009 2019)• Uninsured: 2,000,000 more people.• Insured: Individuals and families spend 50%

more on health care.• Employers: Premiums double.• Providers: Uncompensated care doubles.

Garrett B, Hoalan J, Doan L et al. The Cost of Failure to Enact Health Reform: Implications for States. September 2009.

This is history.

Why health reform?

Insurance decides people’s fate.• Pre-existing conditions: 45 states allow insurance

companies to deny patients coverage• Rescissions of coverage: Drop patients when they

get sick.• Scant competition: Companies have monopolies in

some states (e.g. Alabama/North Dakota)• Gender discrimination: Women are charged more

by many insurers

This is history. Doctors see the problems in the system.

UCLA DOM Survey Results

Can patients get care?Can the system be sustainable?

Can doctors survive?

Data collected from UCLA Department of Medicine faculty and residents, June 1-4, 2010.


This is history. Most have followed the debate a bit.


15%

Average Rating: 2.695% CI (2.31-2.93)


35% 33%

8%10%


This is history. A lot of us got involved personally.


1 person

18 people

3 people

2 people

8 people

Signed a petition

Wrote a letter to the editor

Gave a talk

Called Congress

Other

Went to a rally or town hall

None

5 people

28 people

This is history. Doctors across the country got involved.

This is history.

A century of health reform.

March 23, 2010

President Obama signs the Patient Protection and Affordable Care Act

Learning Objectives

• This is history: context of health reform.• What’s in the law? – Major elements of health reform– What changes are happening now– Sarah


UCLA DOM Survey Results:People are asking us about the law.


8 in 9 asked by family and friends1 in 2 asked by patients1 in 2 asked by colleagues

UCLA DOM Survey Results:We understand the specifics a little.




What’s in the law?

32,000,000The number of uninsured individuals

who will become insured.


January 1, 2014The day that the

biggest pieces of reform start.


Expanding insurance coverage

Insurance Regulation (rolled out 2010 to 2014)• Guarantee issue• No preexisting conditions• Limited premium variation (geography, age (up to 3x

difference), smoking, family composition)• No lifetime caps or annual caps• Limited rescissions• Regulation of premium hikes• Required minimum spending on health care (80-85% of

premiums)• Administrative simplification

What’s in the law?Can patients get care? Expanding coverage.

State Health Insurance Exchanges (starts 1/1/2014)• For uninsured individuals and small businesses• Required for Members of Congress• New regulated insurance marketplace• Pooled risk of small businesses and uninsured individuals• Minimum benefit package for all plans

Tax credits and subsidies (starts 1/1/2014)• Sliding-scale tax credit for <400% of poverty level.• Small business tax credit for premiums (50%).



Medicaid Expansion (1/1/2014)• Eligibility increased to 133% of poverty level

($29,000 for a family of 4)• Federally funded (100% for 2 years, then 90%)



Individual Mandate (1/1/2014)• Individuals are required to have insurance, or pay a

fine.

Employer Responsibility (1/1/2014)• Large employers pay a fine if one of their

employees needs a tax credit or Medicaid.

What’s really in the law?Compensating Physicians

• More compensated care– California providers currently give $5.2 billion in

uncompensated care. – With 7.3 million uninsured patients getting

insurance, much of this will now be compensated.

• Administrative simplification– Federal standards for uniform forms, standards,

and transparency for submitting for payment.

http://www.healthreform.gov/reports/statehealthreform/california.html&article=43791449

What’s really in the law?Compensating Physicians

• Primary care*– 10% Medicare payment bonus– Expanded loan forgiveness, National Health Service Corps,

scholarships

• Rural general surgeons– 10% Medicare payment bonus

• Community Health Centers– Increased funding to reach 2x as many patients

*Additional primary care money: $350 million for training programs; incentives for NP’s and PA’s.

• 10-year cost = $938 billion

• 1st 10-year net deficit reduction = $140 billion• 2nd 10-year net deficit reduction = $1.2 trillion

What’s in the law?Controlling Cost


Improving quality to control cost.• National Strategy to Improve Health Care Quality• Major Comparative Effectiveness Research effort• Independent Payment Advisory Board• Medicare payment reforms• Focus on care coordination– Accountable Care Organizations– Patient-Centered Medical Home– Bundled payments

• Grants for states to explore tort reform


Decreases in federal spending• Medicare Advantage overpayment elimination• Savings in Medicaid and Medicare prescription drug costs

($80 billion)• Reduction in Medicare prescription coverage tax-

exemption• Enhancement of fraud abuse checks• Reduces Disproportionate Share Hospital (DSH) payments

because of newly insured (saving ~$20-40 billion)


New Taxes• On industry (insurance, pharmaceutical, medical device)• On individuals

– Payroll: additional 0.9% Medicare payroll take on wages >$250,000 (couple), >$200,000 (individual)

– Capital gains: 3.8% tax on unearned income (interest, dividends) >$250,000

– “Cadillac Tax”: insurance plans >$27,500 (family) and >$10,200 (individual) taxed starting in 2018

– Tanning tax 10%.

What’s really in the law?Immediate Changes

Now Early retiree: reinsurance program for employers (started

June 1) Seniors: Medicare Part D $250 Rebate (starts now) Young adults: some can get on their parents’ insurance up

to age 26, even if they are married. Small business: tax credits (35% for insurance premiums)

July 1, 2010 Adults with pre-existing conditions: Temporary subsidized

high-risk pool* Web Portal for private and public insurance choices

*Note: California already has a high-risk pool.


September 23, 2010 No discrimination against children with pre-existing

conditions. No rescissions. No lifetime limits on coverage. Tighter restrictions of annual limits on coverage. New private plans must have free preventive care. New private plans have a new, independent appeals process

for insurance company decisions. No eligibility discrimination based on salary Most 26-year-olds can stay on their parents’ insurance.


October 1, 2010 Increased funding for Community Health Centers to double

patient capacity. New primary care investments.

January 1, 2011 Free preventive care under Medicare Insurance companies must spend 80% of premiums (small-group

and individual plans) or 85% (large-group plans) on health care.

2011 State get grants to create programs to evaluate all premium

hikes.

What’s in the law?Help Sarah (New Law!)

Hey! There’s a new law!If Sarah is <26yo, she can» rejoin her parents’ insurance on September 23

(possibly before).If she is >26yo, she can»Wait until July 1 and buy into the new high-risk

pool.» Encourage her company to take advantage of

the 35% tax subsidy on premiums . . . but it’s still tough for small businesses to get good insurance.

It’s now 2014! Depending on her fortunes,» If her company is large enough to negotiate a good

insurance plan, she’s set.» If her company is still small (<25 employees), it will

get a 50% subsidy to cover premiums in the new CA state health insurance exchange.

» She can buy a plan on the new CA health insurance exchange on her own.

» If she makes <400% FPL (~$44,000), she’ll get a sliding scale of subsidies to help cover her premiums.

» If she makes ≤ 133% FPL (~$14,000 per year), she will qualify for Medicaid.


*California’s 2 senators and 53 representatives will be required to use the insurance exchange, too.

Regardless of what option she uses, she will be required to have health insurance. If not,» in 2014, she will pay a tax of $95 or 1% of her

income.» in 2016 and beyond, she will have to pay a tax

of $695 or 2.5% of her income.*

*exceptions for undocumented immigrants, legal immigrants in the country for <5 years, religious objections, those who make too little money to pay income tax.


Learning Objectives

• This is history: context of health reform.• What’s in the law? – Major elements of health reform– What changes are happening now– A case


UCLA DOM Survey Results: We think doctors should be involved.


10%

65%

8%

81%

52%

Educate people about reform

ID and advocate for changes

None – Focus on patients

None – Reform is done.

Other

Work on implementation

UCLA DOM Survey Results: Some want to be involved personally.


5

9

1512

6



This is history.

Learn More

Learn More

• Healthreform.gov: www.Healthreform.gov• Government Fact Sheets

– High-risk Pools: http://www.hhs.gov/ociio/initiative/hi_risk_pool_facts.html– Medicare Part D $250 Rebate:

http://www.medicare.gov/Publications/Pubs/pdf/11464.pdf– Medicare Changes Brochure:

http://www.medicare.gov/Publications/Pubs/pdf/11467.pdf– Insurance for people up to age 26:

http://www.hhs.gov/ociio/regulations/adult_child_fact_sheet.html– Early Retiree Program: http://www.whitehouse.gov/the-press-office/fact-sheet-early-

retiree-reinsurance-program• Kaiser Family Foundation: http://healthreform.kff.org/• Robert Wood Johnson Foundation: http://www.rwjf.org/healthreform/ • Commonwealth Fund: http://www.commonwealthfund.org/Health-Reform.aspx• New England Journal of Medicine Health Reform Center: http://healthcarereform.nejm.org/

• Email me: [email protected]

http://www.healthreform.gov/

http://www.hhs.gov/ociio/initiative/hi_risk_pool_facts.html

Thank You

• UCLA Department of Medicine – Drs. Fogelman and Tillisch• UCLA Hospitalist Group and Dr. Michael Lazarus• UCLA Medicine Chief Residents• Doctors for America – particularly Drs. Mandy Cohen, Vivek

Murthy, Arun Patel, Alex Blum, Milan de Vries, Rab Razzak, Evan Saulino.

update on the health reform law (the patient protection and affordable care act of 2010) alice chen,...

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