ACA pt 1

Question 1

ACA 3 leg stool

Answer 1

ACA 3 leg stool

• CR: no use of pre existing conditions for premiums in private insurance
• Individual mandate
• Low-income subsidies in indv marketplace

Question 2

ACA’s 3 primary goals

• Cover _
• Increase _
• Reduce _

Answer 2

ACA’s 3 primary goals

• Cover the uninsured by subsidizing coverage
  
  • 2 mechanisms
    
    • Medicaid expansion
    • subsidized private coverage for people in exchanges
• Increase regulation of private health insurers
  
  • CR + GI
• Reduce healthcare spending “bending the curve”
  
  • healthcare spending as a percentage of GDP

Question 3

heterogeneity of the uninsured

• The Relationship Between the Uninsured and Income
  
  • high vs low-income insurance type
    *

Answer 3

heterogeneity of the uninsured

• The Relationship Between the Uninsured and Income
  
  • Higher income= more likely to have private insurance
  • Lower income= more likely to have public insurance
  • There are uninsured people at all levels of income
  • most uninsured= working families

Question 4

heterogeneity of the uninsured

• The Relationship Between the Uninsured and Employment Setting
  
  • big vs small employer

Answer 4

heterogeneity of the uninsured

• The Relationship Between the Uninsured and Employment Setting
  
  • strong relationship: uninsured and where one works, specifically focusing on the size of the employer
  • Big employer= more likely to be insured
    
    • (spread out admin cost/less underwriting/ bargaining)
• • Small firms and self employed had the most uninsured

Question 5

ACA main insurance provisions (2014)

• medicaid _
• state _
• Mandates

Answer 5

ACA main insurance provisions (2014)

• medicaid expansion
• state health insurance exchanges
• individual mandate
• employer mandate “play or pay”

Question 6

Medicaid expansion

(as initially written) to all nonelderly under _ FPL

Coverage before ACA

Who lacked Medicaid coverage?

Who administers Medicaid?

Answer 6

Medicaid expansion

(as initially written) to all nonelderly under 133% FPL

Coverage before ACA

Who lacked Medicaid coverage?

• childless adults, and to a lesser extent parents, lacked Medicaid coverage

Medicaid is administered by the states (have discretion)

Question 7

State Health Insurance Exchanges/Marketplaces

What does it provide?

How do they help people get insurance?

Goal?

Answer 7

State Health Insurance Exchanges/Marketplaces

What does it provide?

• Private insurance options for individuals and small businesses (SHOP)

How do they help people get insurance?

• Tax credit varying by income for individuals between 100% and 400% FPL to offset premium

Goal?

• transform the individual/small group health insurance markets to operate more like the large group market (more insurance options, cheaper premiums)

Question 8

State Health Insurance Exchanges/Marketplaces

• How does it prohibit the use of pre-existing conditions by insurers for premiums?
• what can the adjust community rating on?
• potential problem with ACR +GI?
• solution for adverse selection?

Answer 8

State Health Insurance Exchanges/Marketplaces

How does it prohibit the use of pre-existing conditions by insurers for premiums?

• Adjusted community rating
• guaranteed issue

What can they adjust community rating on?

• smoking
• geographic area
• age

The potential problem with ACR +GI?

• adverse selection
  
  • older and sicker people getting coverage
  • younger/ healthier people passing

Solution for adverse selection?

• individual mandate
  
  • requires people to purchase coverage or pay a penalty on their taxes

Question 9

employer play or pay

Answer 9

employer play or pay

play by offering coverage or pay a penalty if a firm doesn’t offer coverage

Question 10

What caused the CBO to increase their projected # of uninsured due to ACA?

Answer 10

2012 supreme court case that made Medicaid expansion optional= less people insured

Question 11

2010 ACA’s Secondary Provisions in Effect Earlier than 2014 (read 5 times)

Answer 11

2010 ACA’s Secondary Provisions in Effect Earlier than 2014 (read 5 times)

• National high-risk pool
• Dependent children’s coverage up to age 26
• No use of pre-existing conditions for children’s premiums
• No copayments for USPSTF’s A/B-rated services (preventative services)
• Restrictions on using lifetime and annual limits
• Tax credits for small businesses with low-wage workers
• Drug discounts for Part D’s “doughnut hole”
• CLASS: voluntary living assistance coverage (abandoned)

Question 12

2010 ACA’s Secondary Provisions in Effect Earlier than 2014

• describe national high risk pool
• why was it temporary?

Answer 12

2010 ACA’s Secondary Provisions in Effect Earlier than 2014

describe the national high-risk pool

• Government administered source of health insurance coverage for people who are deemed uninsurable due to Pre existing conditions (chronic health conditions)
• Money to bolster HRP already in states
• Money to create HRP in new states

why was it temporary?

• ACR+GI in 2014

Question 13

2010 ACA’s Secondary Provisions in Effect Earlier than 2014

CLASS Act

Goal

Why abandoned

Answer 13

2010 ACA’s Secondary Provisions in Effect Earlier than 2014

CLASS Act

Goal?

• keep the disabled out of nursing homes
• Have insurance plan pay for certain home health services

Why abandoned?

• Concerns about adverse selection leading to excessively high premiums

Question 14

SHOP EXCHANGES

Who does it help and how?

how pick insurance?

Growth in exchanges?

Answer 14

SHOP EXCHANGES

Who does it help and how?

• tax credit against corporate income tax for small businesses

how pick insurance?

• firm picks a metal tier
• workers to choose among the plans in that metal tier

Growth in exchanges?

• States can add bigger firms as the exchanges grow
• but, poor roll out of indv exchange

Question 15

Why did CBO project low ACA spending year 2010-2013?

Why do spending estimates increase after 2014?

Answer 15

Why did CBO project low ACA spending year 2010-2013?

• delays in people enrolling in Medicaid/ buying subsidize coverage on exchanges (unawareness/ procrastination)

Why do spending estimates increase after 2014?

• individual mandate penalty growing in size over time

Question 16

ACA’s Main Financing Provisions goals?

Total cost of ACA _ Financing of ACA = _ deficit

Answer 16

ACA’s Main Financing Provisions goals?

Goals

• raise taxes
• to reduce spending

Total cost of ACA < Financing of ACA = decrease deficit

Question 17

ACA’s Main Financing Provisions (5)

Medicare _

Reductions in _

Reductions in _

New fees on _

new tax

Answer 17

ACA’s Main Financing Provisions

• Medicare HI payroll tax increase (HIGH INCOME PEOPLE)
• Reductions in FFS Medicare payments’ annual updates (mostly hospitals)
• Reductions in Medicare Advantage payments*
• New fees on drugs, devices, and insurers
• “Cadillac Tax” on high-cost private insurance plans 2018*

Question 18

Which 2 ACA financing provisions will pass costs onto consumers?

Answer 18

Which 2 ACA financing provisions will pass costs onto consumers?

• New fees on drugs, devices, and insurers (HIGHER PRICES)
• “Cadillac Tax” on high-cost private insurance plans

Question 19

Cadillac tax

• Describe Cadillac tax
• goal of excise tax?
• Impact on consumers?
• tax passed on as a higher premium
• What is the tax combating? Why inefficient?
• Result of generous plans?

Answer 19

Describe Cadillac tax

• excise tax on insurers for high-cost private insurance plans above a threshold

goal of excise tax?

• reduce HC spending by discourage people from getting generous health plans

Impact on consumers?

• tax passed on as a higher premium

What is the tax combating? Why inefficient?

• the inefficient employment-based tax exclusion (magnitude of tax subsidy indv receive tied to plan generosity)
• causes people to obtain health insurance plans that are too generous

Result of generous plans?

• Moral hazard- overutilization/ low value care

Question 20

Why will the Cadillac tax make more money in the future?

Answer 20

Why will the Cadillac tax make more money in the future?

• plan thresholds indexed to general inflation
• inflation rate of insurance plans > general inflation
• over time, more plans will be taxed

Question 21

ACA: Reducing in Spending- Private (2)

REDUCE PRIVATE SPENDING

Answer 21

ACA: Reducing in Spending- Private

• Cadillac tax
  
  • combat moral hazard from generous health plan due to the employment-based tax exclusion
• State health exchange flat subsidy
  
  • NOT tied to generosity of plan
  • Flat subsidy based on 2nd cheapest silver plan

Question 22

ACA: Reducing admin overhead- Private (3)

increased competition and transparency

Answer 22

ACA: Reducing admin overhead- Private (3)

• State Health Insurance Exchanges fostering competition and transparency​
• New state CO-OP plans and (as initially written) multi-state OPM plans
• Minimum Medical Loss Ratio (MLR) requirements for insurers​
  
  • benefits paid/ premiums collect
  • minimum MLR requirement to insure lower administrative costs if the competition alone doesn’t work

Question 23

ACA reductions in PUBLIC SPENDING (3)

Answer 23

ACA reductions in PUBLIC SPENDING (3)

1. FFS Medicare payments: Decrease annual updates to provider payments
   
   • Productivity adjustments to market basket (HOSPITALS better use of inputs)
2. reduction in prices paid for drugs for seniors in the donut hole of Medicare Part D
3. Reduction in prices for drugs form the _Medicaid*_ program (increased rebate)
   
   • Price based on average market price (AMP)

Question 24

Efforts to decrease inefficient Medicare utilization (5)

UTILIZATION!!!!

Answer 24

Efforts to decrease inefficient Medicare utilization (5)

1. Medicare reduced payments to hospitals with high readmission rates
   
   • Price adjustment: IPPS/DRG payments
2. bundled payments over a longer episode of care
3. Created ACOs (“Shared Savings Program”)
   
   • Savings/ penalty based on utilization
4. Created CMMI
   
   • create new payment models
5. Created Independent Payment Advisory Board (IPAB)
   
   • b4 MedPac (Senate vote)
   • Alter Medicare payments (no senate)
   • Payment models: disincentivize the utilization of low value services

Question 25

The ACA’s Provisions for Healthcare Prevention (5 times) Private Medicare Medicaid Primary care physicians Increased funding for _ \_ _ \_ to (2)

Answer 25

**_The ACA’s Provisions for Healthcare Prevention (5 times)_** **Private**: No copayments for A/B preventative services **Medicare**: annual physicals and reimbursement for personal prevention plan **Medicaid**: smoking cessation for prego women **Primary care physicians**: temporary increase in reimbursements/grants for training **increased funding for FQHCs**: serve Medicaid/ immigrants. now teach centers

Question 26

**_The ACA’s Provisions for Public Health Prevention_** * Prevention and public health fund * Employment-based wellness programs * Large chain restaurants: calorie info on menus * 10% excise tax on tanning services

Answer 26

**_The ACA’s Provisions for Public Health Prevention_** * Prevention and **public health fund** * **Employment-based wellness programs** * Large **chain restaurants**: calorie info on menus * 10% excise tax on **tanning** services

Question 27

**_Argument_** **_to strike down entire ACA?_**

Answer 27

**_Argument to strike down entire ACA?_** * individual mandate = unconstitutional, * Individual mandate essential to ACA * so, whole ACA had to go

Question 28

4 main Supreme court questions

Answer 28

**_4 main Supreme court questions_** 1. Could the Supreme Court **rule on a tax that hasn’t yet been imposed?** 2. Was the **individual mandate constitutional?** 3. Was the **Medicaid expansion coercive to the states?** 4. **individual mandate** be **“severable” from** the **ACA ?** 1. ACA didn't have that severability clause

Question 29

Supreme Court’s 2012 Decision on the Individual Mandate What upheld it? What 2 clauses was it not valid under?

Answer 29

**_Supreme Court’s 2012 Decision on the Individual Mandate_** **What upheld it?** * Ruled to uphold the mandate under the **Taxing Clause**.\* I**t's a tax** -\> **Congress** **can pass taxes** What 2 clauses was it not valid under? * **Necessary and Proper clause** * **Commerce clause**

Question 30

Describe ACA Medicaid expansion Expansion Funds to states why initially mandatory

Answer 30

**_Describe ACA Medicaid expansion_** **Expansion** * all non-elderly 133% FPL **Funds to states:** * FMAP Matching funds * Decrease over time to 90% **why initially mandatory** * States **not complying** with the ACA’s Medicaid **expansion** will **lose all of their federal Medicaid funds**

Question 31

What clause made Medicaid expansion optional? Issue? Why some states want optional?

Answer 31

What clause made Medicaid expansion optional? * **Spending Clause** * Cant penalize states when they have a choice whether or not to accept the federal conditions in exchange for federal funds Issue? * a state not expanding Medicaid would have many adults under the poverty line ineligible for coverage. While all adults just over the poverty line would still be eligible for generous tax credit subsidies Why some states want optional? * more flexibility in devising their Medicaid plans through a negotiation with CMS (Cost sharing/ benefits)

Question 32

**_Data for the Reduction in Uninsured Resulting from the ACA_** * proportion of uninsured adults has _ as a result of the ACA * Expansion states vs non-expansion uninsured %? * uninsured % has _ in the states that didn't expand their Medicaid programs, primarily due to _ \_ * Who set up exhanges/ expanded Medicaid immediatley? *

Answer 32

**_Data for the Reduction in Uninsured Resulting from the ACA_** * proportion of uninsured adults has **fallen** as a result of the ACA * **Expansion** states and **non-expansion** states saw the **same decrease** in the **uninsured** * **uninsured % has still fallen** in the non-expansion states, primarily due to the new **exchange marketplaces** *