The Affordable Care Act for Dummies by @Rock_Health

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The Affordable Care Act for Dummies slides were used to teach a class at Rock Health held on May 1, 2013. The class provided an overview of the Affordable Care Act, key provisions, and how digital health companies are taking advantage of healthcare reform. Topics covered include coverage expansion, retail health insurance (Exchanges), and accountable care organizations.

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The Affordable Care Act for Dummies by @Rock_Health

  1. 1. AFFORDABLE CARE ACT D UMM IES the for @rock_health @mgxtro
  2. 2. Presentation Ⓒ 2013 Rock Health August 25, 2009
  3. 3. Presentation Ⓒ 2013 Rock Health A TENSE MOMENT January 19, 2010 9:13pm EST Massachusetts Special Election, United States Senate following the death of Ted Kennedy, a leading proponent of healthcare reform MARTHA COAKLEY SCOTT BROWN 47.1% 51.9% “41st vote” U.S. SENATE SEATS
  4. 4. Presentation Ⓒ 2013 Rock Health SKILLSHARE SCOPE AFFORDABLE CARE ACT WE WILL NOT COVER • Patient Protection and Affordable Care Act (2010) • Health Care and Education Reconciliation Act (2010) • American Recovery and Reinvestment Act (2009) - Health Information Technology for Economic and Clinical Health Act (HITECH) • Children’s Health Insurance Program Reauthorization Act (2009)
  5. 5. Presentation Ⓒ 2013 Rock Health SKILLSHARE SCOPE AFFORDABLE CARE ACT WE WILL NOT COVER • Patient Protection and Affordable Care Act (2010) • Health Care and Education Reconciliation Act (2010) • American Recovery and Reinvestment Act (2009) - Health Information Technology for Economic and Clinical Health Act (HITECH) • Children’s Health Insurance Program Reauthorization Act (2009)
  6. 6. Presentation Ⓒ 2013 Rock Health ANOTHER TENSE MOMENT June 28, 2012 10:00am EDT GINSBURG SOTOMAYOR KAGAN BREYER KENNEDY ROBERTS ALITO SCALIA THOMAS INDIVIDUAL MANDATE ✓ ✓ ✓ ✓ ✕ ✓ ✕ ✕ ✕ MEDICAID EXPANSION ✓ ✓ ✓ ✓ ✕ ✓ ✕ ✕ ✕ United States Supreme Court Decision National Federation of Independent Business, et al. v. Kathleen Sebelius
  7. 7. Presentation Ⓒ 2013 Rock Health A CENTURY OF ATTEMPTS FAILED FAILED FAILED FAILED FAILED ? Children’s Health Insurance Program (1997) PASSED PASSED PASSED Medicare & Medicaid (1965) Medicare Part D (2003) Affordable Care Act (2010) 1910s 20s 30s 40s 50s 60s 70s 80s 90s 00s 2010
  8. 8. Presentation Ⓒ 2013 Rock Health WHY REFORM? $8,953 $2.8T total spending per capita $ C O S T 49% of adults do not receive recommended screening and preventive care Q U A L I T Y lack health insurance49M A C C E S S 300M AMERICANS
  9. 9. Presentation Ⓒ 2013 Rock Health OVERVIEW ~91provisions to be implemented from 2010-2018+ BIG PICTURE OBJECTIVES • Expand insurance coverage to all Americans • Further regulate health insurance and increase regulatory oversight • Pilot new payment models for healthcare services • Figure out how to make Medicare sustainable • Increase focus on preventive care
  10. 10. Presentation Ⓒ 2013 Rock Health TIMELINE 2011 2013 2018 2010 2012 2014 • Small business tax credits • Dependent coverage to age 26 • No recission • No lifetime benefit maximums • Premium reviews • Patient-Centered Outcomes Research Institute (PCORI) • MLR floors • Free preventive care • CMS Innovation Center • Independent Payment Advisory Board (IPAB) • Medicaid Health Homes and chronic disease prevention • Accountable Care Organizations • Hospital readmissions penalties • Hospital value-based purchasing program • Medicaid bundled payments • Pharmaceutical company fees • Administrative simplification • Medicare bundled payments • Medical devices excise tax • Health insurance exchanges • Medicaid expansion • Individual mandate • Premium subsidies • Employer penalties • Guaranteed issue • No annual benefit maximums • Essential health benefits • Medicare Advantage bonuses • Insurance industry fees • Cadillac Tax for high-priced plans
  11. 11. Presentation Ⓒ 2013 Rock Health COST-BENEFIT U.S. Government Washington, DC 2013-2022 PPACA Costs $1,620B Offsets ($455B) Net Costs $1,165B 2013 15 17 19 21 No ACA ACA $ C O S T Q U A L I T Y A C C E S S ? -27M uninsured NATIONAL HEALTH EXPENDITURES
  12. 12. Presentation Ⓒ 2013 Rock Health • ACOs • MLR floors • IPAB • CMS Innovation Center • Premium reviews • Administrative simplification • Value-based purchasing • Hospital readmission penalties • PCORI • Health insurance exchanges • Medicaid expansion • Subsidies • Individual mandate PROVISION FOCUS $ C O S T Q U A L I T Y A C C E S S
  13. 13. Presentation Ⓒ 2013 Rock Health THREE THEMES 1 EXPANSION Increased coverage State Medicaid expansion The price paid by insurers 2 RETAIL Marketplaces for insurance Consumer-driven market Federal and State Exchanges 3 VALUE Shift away from volume Accountable Care Organizations Defining and paying for value
  14. 14. Presentation Ⓒ 2013 Rock Health COVERAGE FOR EVERYONE Employer -8M Medicaid +11M Individual -3M Exchanges +27M Uninsured -27M HEALTH INSURANCE COVERAGE (2018 RELATIVE TO 2013) • Temporary tax credits for companies <25 employees • No requirements for companies <50 employees • $2,000 per employee penalty for companies that don’t offer coverage (2014) • $3,000 per employee penalty for companies that don’t offer “affordable” coverage (2014) • Expand coverage to all non-elderly individuals with incomes up to 133% of FPL • Refundable and advanceable premium tax credits for those between 133-400% of FPL • Cost sharing subsidies for those up to 250% of FPL • $695 ($2,085 for a family) or 2.5% of family income penalty for those who do not elect coverage 1 2 3 E X P A N S I O N
  15. 15. Presentation Ⓒ 2013 Rock Health WHO WANTS MONEY? Announced or Governor in support of expansion Not participating or highly unlikely to participate Undecided or undeclared STATE MEDICAID EXPANSION PLANS AS OF APRIL 30, 2013 1 2 3 E X P A N S I O N
  16. 16. Presentation Ⓒ 2013 Rock Health NO FREE LUNCH FOR INSURERS 20-30M new customers in a market that has grown by only 4% in the last 20 years, while the population grew by 20% THE PRICE • Guaranteed issue • Essential health benefits • No caps on liability • Limited ability to “tax” unhealthy • Price (premium) reviews by the state • Medical loss ratio floors (profit caps) • New fees for the industry 1 2 3 E X P A N S I O N
  17. 17. Presentation Ⓒ 2013 Rock Health RETAIL HEALTHCARE HEALTH INSURANCE EXCHANGES • Online marketplaces for individuals and small businesses to buy health insurance • Managed by Feds and States (and private sector) • Enrollment begins October 2013 1 2 3 R E T A I L
  18. 18. Presentation Ⓒ 2013 Rock Health THIS CHANGES EVERYTHING $ PAYERS CONSUMERS • Massive shift from B2B to B2C • Fully transparent marketplace • Limited product variation • Basis of competition moves quickly to price • Significantly increased choice and freedom of movement • Responsibility for healthcare and health decisions • Most plans likely to be high deductible or include cost sharing component POWER 1 2 3 R E T A I L
  19. 19. Presentation Ⓒ 2013 Rock Health STATES’ RIGHTS State- or state-partnership based Exchange Federally-facilitated Exchange STATE HEALTH INSURANCE EXCHANGE PLANS AS OF APRIL 30, 2013 1 2 3 R E T A I L
  20. 20. Presentation Ⓒ 2013 Rock Health SHIFT FROM VOLUME TO VALUE $ $ $ $ Fee-for-service PAYMENT Bundled, Shared Savings, Capitated Patient FOCUS Population Treat INCENTIVE Prevent $ 1 2 3 V A L U E
  21. 21. Presentation Ⓒ 2013 Rock Health ACCOUNTABLE CARE ORGANIZATIONS 4M Medicare beneficiaries covered encompassing 222 Shared Savings ACOs and 32 Pioneer ACOs PAYMENT TERMINOLOGY • Benchmark • One-sided versus two-sided • Share of savings and losses • Minimum savings rate (MSR) • Quality threshold • First dollar savings • Sharing and loss caps • Population-based 1 2 3 V A L U E
  22. 22. Presentation Ⓒ 2013 Rock Health WHAT ACTUALLY WORKS? PCORI • Non-governmental institute • Funds comparative effectiveness research (CER) • Will receive funding totaling $3.5B through 2019 • Already disseminated hundreds of millions in funding CMSIC • Part of the Centers for Medicare and Medicaid Services • Focus is on testing new payment and service models • Currently oversee ACOs, bundled payments, primary care transformation IPAB • U.S. Government Agency • Tasked with developing proposals to slow spending growth without affecting coverage or quality • Requires Congress to enact the proposal, come up with an equivalent alternative or have a 2/3 majority in the Senate to modify • Currently non-functional 1 2 3 V A L U E + + =NICE?
  23. 23. Presentation Ⓒ 2013 Rock Health TAKING ADVANTAGE Helps employers confidently navigate health care reform Unlocks the potential of health data to maximize outcomes and minimize costs Streamlines insurance eligibility checks for doctors and patients Improves access to care for the newly insured and underserved Extends the provision of care from the hospital to the home
  24. 24. Presentation Ⓒ 2013 Rock Health FURTHER STUDIES BACKGROUND UPDATES
  25. 25. Presentation Ⓒ 2013 Rock Health @rock_health malay@rockhealth.orgGET IN TOUCH

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