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ACA: A Step Toward Healthcare For All (Dr. John Cavacece, DO)


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Presented to the American Medical Student Association ( at Michigan State University's College of Human Medicine (MSU CHM) on Tuesday, March 20, 2012

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ACA: A Step Toward Healthcare For All (Dr. John Cavacece, DO)

  1. 1. Affordable Care Act: A Step TowardHealthcare for All.
  2. 2. We have the best healthcare in the world! Right?
  3. 3. The Problem• Most expensive health care in the world. – >$2 trillion/yr. (17% of GDP) – >$8 thousand per capita/yr.• Double any other nation.• 50 million or more have no health coverage.• >80 million are underinsured.• Health care quality in US lower than most other developed countries.
  4. 4. Administrators Physicians2500%2000%1500%1000%500% 0% 1970 1975 1980 1985 1990 1995 2000
  5. 5. U.S. Spending on Healthcare Each Year U.S. $8,000 Norway $5,000 Canada $4,000 U.K. Japan $3,000 $2,700 Spending per capita/per year on health care
  6. 6. What do we get out of our investment?
  7. 7. Problem of Access: A Moral Issue• Census data: 50.4 Million Americans without health insurance.• Estimated 50 thousand deaths per year attributable to lack of insurance!• Will diminish over next 9 years to estimated 23 million without insurance.• Therefore, only 23 thousand unnecessary deaths due to lack of insurance.
  8. 8. Is this the best we can do?1.3 million Michiganders have Michigan workers family no healthcare coverage. health care premiums rose 13 times faster than earnings. 50.7 million Americans have no health insurance and no access to a family physician.
  9. 9. Moral and Practical• WHO statistics- U.S. 54/191 in world for “fairness” in providing access to care (slightly ahead of Rwanda).• Patients with curable diseases go untreated until too late>> costs everyone more.• Lack of coverage or affordability for basic preventive health care.• Patients end up requiring more expensive life saving care.
  10. 10. Quality of Care• “Avoidable mortality”- deaths before age 75 from conditions that are treatable with effective care. – U.S. ranks dead last of 19 developed countries. – Twice as many deaths from curable disease before age 75 than France, Japan, and Spain.• “Healthy life expectancy at age 60”- last of 23 developed nations.• Infant mortality- last of 23 nations.
  11. 11. Patient Protection and Affordable Care Act• Individual Mandate – By 2014, all are required to purchase health insurance. – $695 penalty if not done, maximum $2085 per family. – Also if cost of plan exceeds 8% of income, won’t be required to buy. – Problem: Forces people to choose from group of ineffective plans.
  12. 12. “Did you Know?” Quiz• All members of Congress must buy their insurance from their state’s healthcare exchange. • How many of you knew that?• Medical Loss Ratio: 20/80 – 80 cents out of every dollar in premiums must be paid out for policyholders medical care. – If the full 80% is not paid out for medical care, the insurance company must send you a refund check every year. • How many of you knew that?
  13. 13. Health care legislation is designed to:• Reduce health care cost growth for families, employers and the government.• Provide Americans access to affordable quality health coverage.• Strengthen and protect Medicare and Medicaid.• Modernize our health care delivery system.
  14. 14. Here’s how…
  15. 15. Security and Control • Insurance companies won’t be able to turn people down because of pre-existing conditions. • This took effect in 2010 for children and in 2014 for everyone.
  16. 16. Essential Health Benefits CoveragePreventive care Habilitation services Hospitals Physicians Substance abuse Prescription drugs Dental and vision care for childrenMental healthRehabilitation Maternity care
  17. 17. Financial Protections• No annual or lifetime limits• Spending caps will limit the amount consumers pay out of pocket each year.• Insurance companies have to spend at least 80-85% of premiums on medical care.• Eligible for tax credits• Insurers must justify premium increases
  18. 18. Easier to Buy Insurance• New Insurance Exchanges allow people to compare plans, apples to apples• The ACA limits insurance company overhead costs (administrative and marketing) so more of our premiums go to our health care• Allows individuals and small businesses to get better rates because they are in a bigger pool
  19. 19. Moderate-Income Americans• Families and individuals will receive tax credits to help pay for health insurance, depending upon income.• Tax credits will be available to families earning between 133-400% of the Federal Poverty Level ($29,327-88,200 for a family of four).• Tax credits are designed to keep premium costs between 2%-8% of income, on a sliding scale.
  20. 20. Medicare • Closes the “donut hole” in drug coverage and lowers cost of brand name drugs • Provides incentives for better coordinated care and use of evidence based medicine
  21. 21. Medicare• No co-pays for preventive services in 2011• Medicare Advantage plans cannot charge higher co-pays than traditional Medicare.• Enhanced payments for primary care physicians and general surgeons• Medicare Trust Fund solvency is extended by 9 years
  22. 22. Caretakers and Young Adults People in the sandwich generation and caretakers will have guaranteed coverage and affordable choices. Young adults can stay on their parents plans until age 26.
  23. 23. Nursing HomesElder Justice Act: – Authorizes new criminal background checks on long-term care workers – Requires better information about the quality of nursing care and improves complaint process.
  24. 24. Home and Community-Based ServicesThe Community First Choice option that allows states to make community-based servicesmandatory. There are no cost caps or waiting list restrictions.
  25. 25. Small Businesses• Premium subsidies to employers Employers with up to 25 employees and annual wages that average less than $50,000 who purchase health care for their employees get a tax credit• Affordable choices Employees of small businesses may purchase insurance through the Exchange
  26. 26. Health Care Workforce• The ACA will provide loan repayments and scholarships for students who work in underserved areas.• The ACA gives grants to health programs at colleges and universities to increase the racial diversity of the health-care workforce.
  27. 27. Womennsurance companies will no longer be able to denycoverage due to a pre-existing condition such as: – Breast or cervical cancer – Pregnancy or C-section – Domestic abusen insurer will no longer beble to charge women morehan men for the same coverage.
  28. 28. Expand State Health Insurance Programs• State health insurance programs under Medicaid will cover all families and individuals with incomes up to 133% of the Federal Poverty Level – $24,348 for a family of three.• For the first time ever, childless adults without a disability can qualify for Medicaid.
  29. 29. Expansion of Public Programs• 133% of federal poverty level (14K for individual, 29K for family of four).• Eliminates limitation of Medicaid for adults w/o dependent children.• If income above 133%, can obtain coverage thru health insurance Exchanges.• Medicaid payments to primary care doctors will be increased to 100% of Medicare payment.• Problem: program will still miss millions.
  30. 30. Prevention and Wellness• No deductibles or copayments for preventive services.• Grants for community wellness programs• National standards for restaurant nutrition labeling• Incentives for doctors to improve patients’ health
  31. 31. Children• Insurance companies can’t deny children insurance because of a pre-existing condition (will also apply to adults in 2014)• No yearly or lifetime limits on coverage• No co-pays for preventive care• All insurance plans will cover kids’ dental and vision care• Young adults can stay on their parents’ plan until age 26
  32. 32. People with Medical Conditions• People with a disability or mental illness can work part-time and still qualify for Medicaid.• Mental health parity – mental health care must be covered just like physical health care.• Insurance companies won’t be able to refuse or charge more to cover people with pre-existing conditions.• A new, temporary high-risk pool will help people with pre-existing conditions gain immediate access to insurance, HIP MICHIGAN.
  33. 33. Delivery System Doctor incentives for better coordinated care Pilot projects in evidence-based medicineEnhanced payments for primary care physicians and general surgeons
  34. 34. Patients and Doctors Have Control• Insurance plans will have to cover essential services: preventive care, hospitals, physicians, prescription drugs, mental health, substance abuse, dental and vision care for children, maternity care, and other services.• Clear appeals process if your claim is denied
  35. 35. Sounds great – but how do we pay for it?
  36. 36. How is it paid for?• Multiple funding mechanisms are built into the Legislation. ACA does NOT add to the deficit! – Congressional Budget Office: $143 Billion in Savings this decade.• Examples of funding mechanisms: – $2,000 per employee fines for large businesses (50+ employees) who do not provide insurance for workers – Higher taxes will be imposed on those earning more than $200,000 individual/$250,000 couple – Medicare Advantage plans will be reimbursed at the regular Medicare rate
  37. 37. Shared Responsibility Costs and responsibilities are shared among state and federal government, businesses and individuals
  38. 38. Shared ResponsibilityFederal Government• Pays for 100 percent of Medicaid expansion from 2014-2016• Pays for 90-95 percent of Medicaid expansion in 2017 and beyond• Shares in cost of tax credits and premium subsidies
  39. 39. Shared ResponsibilityIndividuals• U.S. citizens and legal residents must purchase health insurance or pay a penalty• Penalties are phased in for those who do not• Exemptions granted for financial hardship, religious objections, those without coverage for less than 3 months, undocumented workers, incarcerated individuals, or if the lowest cost plan exceeds 8% of income• Tax changes for some high-income individuals
  40. 40. Shared ResponsibilityBusinesses• Large employers (50+ employees) may have to pay a penalty if they do not provide coverage and one or more of their employees receives an insurance premium subsidy.• Taxes on insurance companies that offer very high cost plans• Fees or taxes on producers of some medical equipment and pharmaceuticals
  41. 41. NOW WHAT???
  42. 42. Answer-Medicare for All• Simple and efficient.• The most fiscally responsible option.• Releases employers from worry of health insurance.• All are covered.
  43. 43. Medicare for All• Patients have free choice of doctor and hospital.• Publicly funded, privately distributed.• We already fund 60% of total costs with tax dollars.
  44. 44. Myths• Single payer means “Socialized Medicine” – FALSE!! – Social insurance like Medicare.• Canadians dislike their system. 88% of Canadians would choose to keep their present system.• Insured pay more to cover uninsured. Opposite is true, besides we already pay more
  45. 45. Myths about Single payer• “Market” is the solution. Private better than public. – Not in health care!• We can’t afford it! Actually, would be much less costly.• Innovation would suffer, longer waits for procedures. – Equal number patents per capita in other nations.• Government can’t do anything right! Gross generalization.
  46. 46. Who Wants It• Public (>2/3)• Business- makes much more sense. No need to cover employees, therefore, more competitive in market.• Labor- would be free to negotiate for wage increases.• Physicians, nurses, etc. (59% of physicians)
  47. 47. Who Doesn’t Want It• Health Insurance Companies- would lose obscene profits and would have to restructure (auto industry?).• Pharmaceutical companies- become unable to charge outrageous prices for meds (one customer).• AMA- not on board yet.
  48. 48. Health Care Bill: A Fair Process?• Health Care Industry spent $1.4 million per day lobbying. (6 lobbyists per member of Congress)• 50 are former employees of the Senate Finance Committee and Chairman, Max Baucus (D-MT)• Baucus received $1,434,625 from health care and insurance companies for barely contested race.• $13 million of contributions from health care sector to 23 members of finance committee.
  49. 49. What You Can DoJoin MCH’s email list, find us on Twitter @MIChealthcare or Use the Legislative Action Center at Visit
  51. 51. So how do I Apply for the Pre-existing Condition Program (PCIP). .• You must have a pre-existing condition.• You must have been uninsured for 6 months.• You must provide: – Proof of US citizenship and Michigan residency – Letter from a physician (issued in the last 6 months) that you have a qualifying condition, OR – Denial letter stating that, for health reasons, you were denied coverage in the last six months• Qualifying conditions are listed at• To apply, contact PHP of Mid-Michigan at 877-459-3113 or• 51
  52. 52. How do I apply for...MEDICAID:• Contact “Michigan Enrolls” at 1-888-367-6557• Fill out form and print online from:• Contact your local DHS officeMiChild, Healthy Kids, Plan First and MOMS:• Online at• Call 1-888-988-6300• Health Departments• Some Federally Qualified Health Centers (FQHCs)• Contact your local DHS office 52
  53. 53. How do I apply for Medicare?Contact the Michigan Medicare/Medicaid Assistance Program at, or 1-800-803-7174 53
  54. 54. How do I apply for MiRx?• Online at or 1-866-755-6479• The MiRx (My Prescription) Card is a prescription drug discount program for Michigan residents who do not have any prescription drug coverage.• The MiRx Card program is free. Card holders take their prescription and their MiRx card to a local participating pharmacy. Card holders are charged the MiRx discounted price for any medicine the pharmacist stocks and your doctor prescribes.• Over-the-counter drugs are not covered even if they are prescribed by your doctor. 54
  55. 55. Small Business Tax Credit• Employers with fewer than 25 full-time employees and pay wages averaging less than $50,000 per employee per year may qualify.• Employers with more than 25 employees may also qualify if some of their workers are part-time.• Small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011.• To find out more, visit 55
  56. 56. How do I use the health insurance exchange? Exchanges will not be active until 2014. Visit for more information.How do I check the quality of my hospital? 56
  57. 57. Health Care Reform:Understanding the Affordable Care Act What’s really in the new law? Presented by: Michigan Consumers for Healthcare
  58. 58. Michigan Consumers for Healthcare• Working collaboratively with a diverse alliance of consumers, partners and policymakers to attain affordable, accessible, quality healthcare for all Michiganders• Foundation funded and non-partisan.
  59. 59. Consumer Input Key to Meeting Consumer Needs • Bringing the consumer voice to health care reform in Michigan. • Partnering with policymakers and a diverse coalition. • Education, outreach and advocacy.
  60. 60. “We did it because we were concerned about the specter ofsingle payer insurance, which isn’t market-oriented, and we didn’t think was a good idea.” ― Mark Pauly, Policy Advisor to President George H. W. Bush
  61. 61. The Heritage Foundation was one of the strongest earlybackers of an individual mandate The “central element in the Heritage proposal is a two-way commitment between government and citizens. Under this ‘social contract’ the federal government would agree to make it financially possible… for every American family to purchase at least a back package of medical care including catastrophic insurance. In return, government would require, by law, every head of household acquire at least a basic health plan for his or her family.”
  62. 62. About the Massachusetts Model… • There has been a lot said about the Massachusetts model- some true, much false. • Finding a reliable source for data can be a challenge • We use
  63. 63. The Facts According to• 98.1 percent of the citizens of Massachusetts now have healthcare coverage (contrasted with a national uninsured rate of 15.4%)• “Any way you want to look at it, premium costs went down.”• 60% of those individuals buying insurance on the exchange had no previous insurance
  64. 64. Native AmericansThe ACA permanently authorizes the Indian Health Care Improvement Act and:• Improves access to health care for the 1.9 million Native Americans served by the Indian Health Services.• Updates the Indian Health Service scholarship program.• Authorizes the transfer of funds and equipment for use in the construction or operation of Indian Health Service (IHS) funded facilities. 66
  65. 65. Legal Immigrants Legal immigrants are eligible for: • Purchasing health insurance from the state Exchanges (2014) with no waiting periods. • Premium tax credits, cost-sharing reductions, temporary high-risk pools and “basic health plans” offered by a state. 67
  66. 66. Private Insurance Company Restrictions• Prohibits denial of coverage for health status, gender, etc.• Must have minimum set of services, caps on oop spending, no cost sharing for preventive care, no lifetime limits.• Cannot rescind coverage except in cases of fraud.• Young adults stay on parents coverage till age 26.• Existing plans remain the same except for above exceptions.• Problems: Allows for insurance industry creativity to find ways to deny coverage (fraud investigations will increase, ways to maintain profit margin, etc.)
  67. 67. Employer Requirements• Employers with >50 employees assessed a fee of $2000/employee if they do not offer coverage.• Must supply voucher to employees < 400% poverty income to enable them to enroll in an Exchange.• Employers offering free choice vouchers, will not be subject to above penalty.• Must automatically enroll employees in lowest premium plan in employee doesn’t sign up.• Problem: May incentivize employers to pay penalties and not offer coverage if less expensive.
  68. 68. Health Benefit Exchanges• U.S. citizens, legal immigrants, small businesses with <100 employees eligible.• Have to offer multi-state plans and at least one non-profit entity.• Premium subsidies provided for families 133%-400% of the poverty level (will have limits to cost of premiums).• Problems: No public option, adds more complexity to an overly complex system.
  69. 69. Reasons for High costs• Management of health insurance – “medical loss”,marketing, administration, profit. – 20-30% of health care expenditures.• Complexity of system- hundreds of different plans (no one else like this).• Unnecessary care- xrays, lab, procedures.• Malpractice• Medical education.
  70. 70. Individual MandateThe healthcare reform bill mandates that mostUS citizens and legal residents purchase“minimal essential coverage” for themselvesand their dependents if they can afford it.
  71. 71. Early Retirees Federal funds are currently available to helpbusinesses afford the cost of health insurance for early retirees (ages 55-64).