Patient Protection and Affordable Care Act (Obamacare)

Luther D. Quarles IV, OMS-IVPCOM

Political Advocacy Liaison, SNMA Region VIII

Disclosures

• None

Quick Timeline

• March 2010– US Congress passed HR

3590, the Patient Protection and Affordable Care Act (PPACA), and HR 4872, the Health Care and Education Reconciliation Act of 2010

– President Barack Obama signed them into law

• Thursday June 28, 2012 the US Supreme Court upheld the constitutionality of the PPACA in a 5-4 ruling

Provisions of PPACA

• Aims to increase the quality and affordability of healthcare:– Lower the rate of uninsured, to include 32 million

previously uninsured Americans– Requires insurances to cover everyone regardless of

sex or pre-existing conditions (Exclusion: Tobacco Use)

– Individual Mandate– Medicaid– Health Insurance Exchanges

Individual Mandate

• Requires all individuals not covered by an employer sponsored plan, Medicaid, Medicare, or other public programs to secure an approved private-insurance policy or pay a penalty, unless the applicable individual is a member of a recognized religious sect

Guaranteed Mandate

• Insurers are prohibited from establishing annual spending caps of dollar amounts on essential health benefits

• Requires insurance companies to cover all applicants within new minimum standards and offer same rates regardless of pre-existing conditions or sex

• Expanded covering of children on their parents insurance until age 26

• No Cost for preventative health care services, i.e. Immunizations, screening exams, etc

Medicaid Expansion

• Medicaid eligibility is expanded to include all individuals and families with incomes up to 133% of the Poverty Line

• Children's Health Insurance Program (CHIP) enrollment process has been simplified.

• States have the right to refuse the Medicaid Expansion

Health Insurance Exchanges

• set of government-regulated and standardized health care plans, from which individuals may purchase insurance which is eligible for federal subsidies

• commence operation in each state, offering a marketplace where individuals and small businesses can compare policies and premiums, and buy insurance

Cost

• Congressional Budget Office: – produce a net reduction in federal deficits of $143

billion over the 2010–2019 (site CBO)– That figure comprises $124 billion in net

reductions deriving from the health care and revenue provisions and $19 billion in net reductions deriving from the education provisions. Approximately $114 billion of the total reduction would be on budget

Top 10 Debates on PPACA

Can I keep my current coverage?

Pro• "No matter how we reform health

care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what. My view is that health care reform should be guided by a simple principle: fix what’s broken and build on what works.”

• Barack H. Obama, JD 44th President of the United StatesAddress to the annual meeting of the American Medical Association,June 15, 2009

Con• "According to experts, more than 87

million American could lose access to their current health care plan under the new law. Workers at a majority of the nation’s employers – including as many as four out of every five small businesses – would lose their current coverage, thus providing further evidence that ObamaCare is doing exactly the opposite of what Democrats promised it would do."

• John Boehner Minority Leader of the United States House of Representatives (R-OH)"Obamacare, Three Months of Broken Promises," www.gopleader.gov,June 23, 2010

Will the quality of care from Medicare and Medicaid improve?

Pro• "Patient care under Medicare will

improve as pilot programs to improve efficiencies are implemented. Doctors and hospitals are encouraged to coordinate care through payment incentives. For the first time, Medicare will reward quality, not quantity; thus, bonus payments will be given to those doctors and hospitals that provide good quality care."

• Alliance for Retired Americans (ARA) "Medicare Benefits and Changes," www.retiredamericans.org,Apr. 2010

Con• ”…Our care will suffer. If the Democrats'

plans become law, fewer than 700,000 physicians would be available to treat a patient population growing in size, aging in years, shunning medical education and receiving 'free' health care or insurance coverage from the government in increasing numbers.

• The result will be longer wait times to see a doctor and a decline in the high quality of care Americans are accustomed to as overworked physicians try to keep up."

• Investor's Business Daily "The Doctor Shortage," www.investors.com,Mar. 4, 2010

Are the health care reform laws socialist?

Pro • "Opponents of health insurance reform

continue to spread myths, including peddling the bogus notion that the health reform bill is 'socialism' and a 'government takeover of health care.' The fact is the reform legislation builds on our existing private health insurance system...

• [H]ealth insurance reform legislation expands private health insurance in America, and is based on increasing choice and competition... among a variety of private insurance plans."

• Nancy Pelosi Speaker of the US House of Representatives (D-CA) www.speaker.gov

• March 19, 2010

Con• "Obama is a socialist. If you take

over banks, if you take over car companies, if you take over financial institutions, the way that he has - now the health care system. If you're going to use every crooked deal that you can come up with to get a bill like that passed - most recently the health care bill - that is by definition, if you look up the dictionary definition of socialism, this is it.”

• Sean Hannity Host of Fox News Channel’s Hannity showInterview with CNSnews.com,Mar. 25, 2010

Is Obamacare constitutional?

Pro• "The Constitution gives Congress the power to tax and

spend money for the general welfare. This tax [PPACA] promotes the general welfare because it makes health care more widely available and affordable. Under existing law, therefore, the tax is clearly constitutional...

• Many important and popular government programs are based [on] Congress's ability to give incentives through taxation and redistribute tax revenues for public purposes. To strike down the individual mandate the Supreme Court would have to undermine many years of precedents justifying these programs that stretch back to the New Deal (and in the case of the rules for direct taxes, to the very founding of the country).

• Opponents of the individual mandate insist that they are only defending individual freedom, but they are actually taking a far more radical position. They are really claiming that it is unconstitutional to make Americans pay taxes."

• Jack M. Balkin, JD, PhD Knight Professor of Constitutional Law and the First Amendment at Yale Law School"Is the Health Care Law Unconstitutional?," New York Times,Mar. 28, 2010

Con• Can Congress really require that every person purchase

health insurance from a private company or face a penalty? The answer lies in the commerce clause of the Constitution, which grants Congress the power 'to regulate commerce... among the several states.'

• ...[T]he individual mandate extends the commerce clause's power beyond economic activity, to economic inactivity. That is unprecedented. While Congress has used its taxing power to fund Social Security and Medicare, never before has it used its commerce power to mandate that an individual person engage in an economic transaction with a private company. Regulating the auto industry or paying 'cash for clunkers' is one thing; making everyone buy a Chevy is quite another. Even during World War II, the federal government did not mandate that individual citizens purchase war bonds."

• Randy E. Barnett, JD Carmack Waterhouse Professor of Legal Theory at the Georgetown University Law Center"Is Health-Care Reform Constitutional?," Washington Post,Mar. 21, 2010

Healthcare Insurance Premiums

Pro• We estimate that, on net, the

combination of provisions in the new law will... lower premiums by nearly $2,000 per family...

• Without reform, premiums are expected to increase from $13,305 in 2010 to $21,458 in 2019. Relative to this increase, premiums under reform increase only three-quarters as much. By 2019, family premiums are nearly $2,000 lower. Adding reductions in out-of-pocket costs and lower taxes for Medicare and Medicaid will result in estimated savings for the typical family of over $2,500 that year."

• Center for American Progress (CAP) "The Impact of Health Reform on Health System Spending," www.americanprogress.org,May 2010

Con• "Throughout the year-long debate over health care reform,

President Obama promised that the legislation would reduce the spiraling cost of health care... But a couple of new government reports confirm what many of us who opposed a federal takeover of the health care system feared all along - higher costs...

• CMS [Centers for Medicare and Medicaid Services] says that the health care law will impose billions of dollars in annual fees on manufacturers and importers of brand-name prescription drugs and on health insurance plans, and new taxes on medical device sales. CMS said it anticipates that these new fees and taxes will be passed down to consumers in the form of higher drug and device prices and higher insurance premiums, raising health care costs from $2.1 billion in 2011 to $18.2 billion in 2018.

• Throughout the health care debate, Americans were told the Democrats' health care reform measure would make premiums more affordable; instead, as the President's own actuary at CMS confirms, Americans will face higher premiums..."

• Lisa Murkowski, JD US Senator (R-AK),New Health Care Law Will Increase Costs, Reduce Benefits," murkowski.senate.gov,May 18, 2010

Will people no longer be at risk of medical bankruptcy?

Pro• "The Senate plan limits how much even the

wealthiest family buying insurance in the Exchange can be expected to pay, out-of-pocket, in a given year to a total of $11,900 for a family, and $5,950 for an individual. Again, lower-income households are expected to pay less…

• These caps should virtually eliminate medical bankruptcy. The total amount that a family can possibly owe is low enough that providers will be willing to give them time to pay it off, and in many cases, to negotiate discounts.

• When providers know that there is no way that you can ever pay a $50,000 bill, you wind up in bankruptcy court. When the amounts are smaller, and doable over time, negotiations are possible."

• Maggie Mahar, PhD Fellow at the Century FoundationResponse to Paul Starr's article "What Is in the Health Care Bill," www.talkingpointsmemo.com,Dec. 17, 2009

Con• "Most people with medical bankruptcies already

have insurance, and out-of-pocket expenses will continue to be a burden on the middle class.

• In 2009, 1.5 million Americans declared bankruptcy

• Of those, 62% were medically related• Three-quarters of those had health insurance• The Obama bill leaves 24 million without

insurance• The maximum yearly out-of-pocket limit for a

family will be $11,900 on top of premiums• A family with serious medical problems that last

for a few years could easily be financially crushed by medical cost

• Real health care reform is needed. But this bill falls short of that on many levels."

• Jane Hamsher, MFA Founder and Publisher of Firedoglake"Fact Sheet: The Truth About the Health Care Bill," www.huffingtonpost.com,Mar. 19, 2010

Will the health care reform laws decrease the federal deficit?

Pro• "CBO [Congressional Budget Office] and

JCT [Joint Committee on Taxation] estimate that enacting both pieces of legislation—H.R. 3590 and the reconciliation proposal—would produce a net reduction in federal deficits of $143 billion over the 2010–2019 period as result of changes in direct spending and revenues. That figure comprises $124 billion in net reductions deriving from the health care and revenue provisions and $19 billion in net reductions deriving from the education provisions."

• Congressional Budget Office (CBO) Report (untitled) on the estimated budgetary effects of the March 2010 health care reform laws, www.cbo.gov,Mar. 20, 2010

Con• "In reality, if you strip out all

the gimmicks and budgetary games and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion..."

• Douglas Holtz-Eakin, PhD President of the American Action Forum and former Director of the Congressional Budget Office"The Real Arithmetic of Health Care Reform," New York Times,Mar. 20, 2010

Will Obamacare lower taxes?

Pro• "The health reform legislation

signed into law by President Obama includes the largest health care tax cut in history for middle class families, helping to make insurance much more affordable for millions of families...

• The Small Business Health Care Tax Credit can cover up to 35 percent of the premiums a small business pays to cover its workers. In 2014, the rate will increase to 50 percent..."

• Dan Pfeiffer White House Communications Director"Health Reform and the Recovery Act: Unprecedented Tax Cuts for the Middle Class," www.whitehouse.gov,Apr. 13, 2010

Con• "The Senate bill would: impose job-killing mandates

and penalties on businesses, [and] increase taxes and burdens on small businesses... H.R. 4872 is no 'fix' for the Senate-passed bill. It includes a long term hidden tax by deferring the 'Cadillac tax' on certain high cost health plans until 2018. The number of Americans that will ultimately suffer from this hidden tax will mushroom each year because the tax is indexed to inflation...

• This bill would also impose a new 3.8 percent 'Medicare tax' on non-wage income that would target high income earners, income from interest, dividends, capital gains, and some profits from investments in partnerships and S-corporations. If this tax and other tax increases included in the President's FY 2011 budget become law, certain taxpayers could expect a marginal tax rate on capital gains and qualified dividends of 23.8 percent, and a marginal tax rate on nonqualified dividends of 43.4 percent."

• US Chamber of Commerce "H.R. 3590, the 'Patient Protection and Affordable Care Act,' and the Related Budget Reconciliation Legislation, H.R. 4872, the 'Student Aid and Fiscal Responsibility Act of 2009,'" www.library.uschamber.com,Mar. 19, 2010

Physician Shortage

Pro• "The recently enacted PPACA (H.R. 3590) includes

numerous policies to train more primary care physicians and increase the supply of primary care physicians. These policies include: mandatory and increased discretionary funding for the National Health Service Corp (NHSC), reauthorization of Section 747 of Title VII, Training in Family Medicine, General Internal Medicine, General Pediatrics, and Physician Assistantship; creation of a Primary Care Training Extension Program and increased faculty scholarship loans, redistribution of 65% of the current unused Graduate Medical Education slots to primary care and general surgery and allowing residents to count their time spent in ambulatory settings to count towards their residency requirements, such as physician offices and community health centers; and the establishment of Teaching Health Centers, creating primary care residency programs in non-hospital settings."

• American College of Physicians (ACP) "Ensuring an Adequate Supply of Primary Care Internists and Other Specialties Facing Shortages," www.acponline.org,Apr. 7, 2010

Con• "Questions have been raised as to whether

there will be a sufficient supply of physicians and other health professionals to serve the nation, especially in light of concerns that the nation was facing potentially significant shortages even before health care reform...

• [W]e project an overall shortage of 91,500 and 130,600 active patient care physicians in 2020 and 2025 respectively, and a primary care shortage of 45,400 and 65,800 physicians in 2020 and 2025...

• These revised estimates are consistent with earlier estimates: they indicate the health care system is likely to be facing severe pressure as demand rises more rapidly than the supply."

• Association of American Medical Colleges (AAMC) "The Impact of Health Care Reform on the Future Supply and Demand for Physicians Updated Projections Through 2025," www.aamc.org,June 2010

Medical Malpractice Lawsuits

Pro"As part of a 'grand bargain' to create a bipartisan health care bill, some have said tort reform should be included. Look at what the actual data says: 98,000 people dead every year from preventable medical errors, at a cost of $29 billion. Countless more are seriously injured with astronomical costs. The Congressional Budget Office and Government Accountability Office have looked at tort reform multiple times, and said it will save practically no money. They also found no evidence of so-called 'defensive medicine,' finding that doctors run more tests because of the fee-for-service structure, or because of the benefits extra tests have on patient care. Additionally, a 2006 study from Harvard found that 97% of cases were meritorious, totally debunking the idea that frivolous lawsuits plague our courts. And while 46 states have enacted some kind of tort reform, health care costs have continued to skyrocket, while injured patients or their families often can't seek justice…Forty-six states have tort reform, and American families still shoulder exorbitant health care costs. All the facts and data say it doesn't work. There's still 98,000 people dead every year from medical errors. But when political gamesmanship and backroom deals take over, the facts fly out the window. This health care bill has a long way to go. But let's be perfectly clear: patients' rights aren't negotiable. Tort law changes won't fix health care, but only make it more difficult for injured patients to seek justice. Instead of bargaining away patients' rights, Congress should [put] their safety first."Anthony Tarricone, JD Former President of the American Association of Justice"Tort Reform: A Bad Bargain That Won't Fix Health Care," www.huffingtonpost.com,Sep. 22, 2009

Con• "You would think that any effort to reform our health care

system would include tort reform, especially if the stated purpose for Obama’s plan to nationalize our health care industry is the current high costs...

• Many states, including my own state of Alaska, have enacted caps on lawsuit awards against health care providers. Texas enacted caps and found that one county’s medical malpractice claims dropped 41 percent, and another study found a '55 percent decline' after reform measures were passed.

• Texas Gov. Rick Perry noted that, after his state enacted tort reform measures, the number of doctors applying to practice medicine in Texas 'skyrocketed by 57 percent' and that the tort reforms 'brought critical specialties to underserved areas.' These are real reforms that actually improve access to health care.

• ...[R]esearch shows that around $200 billion per year could be saved with legal reform. That’s real savings.

• If you want to save health care, let’s listen to our doctors. There should be no health care reform without legal reform. There can be no true health care reform without legal reform."

• Sarah Palin Former Governor of Alaska"No Health Care Reform Without Legal Reform," www.realclearpolitics.com,Aug. 21, 2009

References

• Patient Protection and Affordable Care Act HR 3590 http://www.gpo.gov/fdsys/pkg/BILLS-111hr3590enr/pdf/BILLS-111hr3590enr.pdf

• Procon.org http://healthcarereform.procon.org/obamacare.pdf

• Congressional Budget Office.http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/113xx/doc11379/amendreconprop.pdf