The Affordable Care Act (ACA)

Universal coverage

goal is to ensure that all people obtain the health services they need without suffering financial hardship when paying for them

-consists of three main components: Physical accessibility, financial affordability, and accessibility

-USA is the only developed country without universal coverage

Physical Accessibility

patients can access care within a reasonable distance and reasonable amount of time

Financial affordability

patients can obtain care where the payment does not cause undue financial hardship

Acceptability

patients are willing to seek services because of sufficient quality and trust in the system

why are people uninsured?

-insurance is not affordable

main focus of ACA

to increase insurance coverage of the US population through two main mechanisms:

1) expansion of Medicaid eligibility to 138% FPL

2)creation of insurance marketplaces, with those people falling between 100-400% FPL qualifying for subsides

Individual Mandate

the ACA added a requirement that Americans bad to obtain health insurance or pay a tax penalty

Medicaid expansion

An expansion of the Medicaid program under the ACA gives states the ability to expand Medicaid to cover all adults living up to 138 percent of the federal poverty level. The ACA allocated funds to expand state Medicaid programs

Insurance Marketplace

ACA created a website (www.healthcare.gov) for patients to shop for insurance, compare plans, and identify if they qualify for tax credits to help lower costs

Premium costs can only consider five different variables

-age

-geography

-tobacco use

-individual vs. family

-plan category

Tax credits

The ACA created tax credits for individuals between 100-400% FPL

-designed to close coverage gap

Dependents on Insurance

The ACA mandated that insurance must allow dependents to remain on their parents coverage until age 26

-this helps control costs (reduce adverse selection)

Pre-existing conditions

The ACA made it illegal to deny an individual insurance coverage or to determine premium costs based on pre-existing conditions

-well known and popular aspect of ACA

Preventative services

The ACA mandated that insurance policies must cover preventive health services with no copay or coinsurance

Contraceptive benefits

The ACA mandated that insurance policies must cover contraceptives/counseling with no copay or coinsurance

-fully covered: diaphragms, bc, iud, plan b, tubal ligations, instruction fertility awareness, patient education and cousneling

-no coverage: drugs to induce abortion, vasectomies, condoms

Annual and lifetime limits

The ACA eliminated placing annual/lifetime limits on insurance policies for 'essential health benefits'

annual

total amount spent in one year

lifetime

total amount spent during plan enrollment

Part D donut hold

The ACA incrementally closed the Medicare Part D donut hole (which finished in 2020 and eliminated in 2025)

-no donut hole now, patients are capped at $2000 out of pocket costs for their drugs spend

Hospital performance

The ACA created programs to make hospitals more accountable for quality of care by leveraging Medicare payments

Readmissions Reduction Program

aims to reduce readmissions for specific conditions(AMI,HF, CABG, COPD, pneumonia, hip.knee replacements)

Hospital-Acquired Condition Reduction Program

aims to reduce preventable conditions form occuring (infections, falls, pressure ulcers, hematomas)

Accountable care organizations

The ACA incentivized opportunities for insurers and providers to use ACO payment models

-"pay for performance" payment model

Legal challenges to the ACA

3 cases

Can the law require citizens to purchase health insurance?

▪ National Federation of Independent Business vs. Sebelius (2012)

▪ State attorney generals from Republican states argued under the "necessary and proper clause" in the Constitution that the ACA violated state sovereignty and that the federal government can't compel states to do certain things

▪ Decision upheld (5-4) the individual mandate as a taxation power of the federal government

Can the law require all employers to cover contraceptives?

-Burwell vs. Hobby Lobby (2014)

-Closely held for-profit corporations with religious owners challenged the conceptive mandate asking for exemptions like religious institutions, who can opt out of this requirement in their insurance plans

▪ Decision (5-4) to recognize a corporations claim of religious belief, allowing private corporations the option to not include contraceptive benefits in their group plans

Are states and federal insurance exchanges the same?

-King vs. Burwell (2015)

▪ Original language in the ACA mandated the creation of 'state-based insurance exchanges,'but many states opted to use a coordinated federal exchange instead

▪ Decision upheld (6-3) subsidies regardless of federal vs. state exchange

Summary of major changes in ACA

▪ Created the health insurance marketplace

▪ Provided tax credits (subsidies) for people between 100-400% FPL

▪ Expanded Medicaid coverage for people <138% FPL

▪ Prohibit coverage denial for pre-existing conditions

▪ Eliminate annual and lifetime limits on coverage for essential coverage

▪ Provide full coverage of contraceptive methods and counseling

▪ Closed the Medicare Part D doughnut hole

▪ Mandate insurance covering free preventative health care

▪ Tied hospital performance to reimbursement

▪ Provided incentives for accountable care organizations