The Affordable Care Act: Impact and Opportunities for Case Managers

Lisa Kraus, RN,BSN, CCMVice President Care ManagementCareFirst

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The Affordable Care Act

What’s in a name?

When passed on March 23, 2010, the primary goals of the Patient Protection and Affordable Care Act (PPACA) – also referred to as the Affordable Care Act (ACA) or sometimes referred to as “Obamacare” were to:

1) Extend access to affordable health insurance coverage to the uninsured and underinsured

2) Reduce health care costs

3) Establish nationwide consumer protections that apply to all insurance policies

Through ACA, the Federal Government:

• Determined benefit coverage requirements

• Standardized and simplified product offerings

• Changed rating rules-no medical underwriting

• Established online multi-carrier competitive marketplaces (Exchanges) for purchasing “affordable” insurance – either at the federal level or giving states the option to establish their own – to which participating carriers build connections

• Subsidized costs of coverage for low to moderate income individuals and smaller companies

• Established implementation timelines

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Insurance Coverage Rules Under the Affordable Care Act

The primary intent of the Affordable Care Act (ACA) is to provide health insurance coverage to currently uninsured and underinsured individuals.

It seeks to do so through:

1. Expansion of Medicaid eligibility:

• Up to 133% of the Federal Poverty Limit (FPL) for parents

• Coverage for childless adults

• Supreme Court decision allowed states to opt out of this expansion

2. Allowing adult children under age 26 to stay on parent policies

3. Individual mandate to require insurance purchase or pay a penalty

4. Premium and cost sharing subsidies for incomes between 133% and 400% of FPL to enable affordability.

• Subsidies begin at 100% FPL for states that did not expand Medicaid (e.g., Virginia)

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Industry Reforms

Early reforms went into effect in 2010 and 2011.

• Minimum medical loss ratio (MLR)

• Benefit enrichments – first dollar coverage for preventive services, guaranteed right to appeal, emergency care outside of health plan network

• Standardization in how plans are described (Summary of Benefits and Coverage)

“Game changing” reforms became effective January 1, 2014.

• Exchange marketplaces – opened October 1, 2013

• Essential health benefits

• Metal level (actuarial value) standardization

• Rating rule changes – guaranteed issue; no pre-existing condition exclusions; 3:1 age bands for rating; elimination of benefit caps and limits, etc.

• 3Rs – risk corridors, risk pools, reinsurance

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What Happens to Today’s Uninsured?National Perspective

Uninsured2 55M20%

Medicaid36M13%

Nongroup/Other3

25M9%

Employer 158M58%

National Enrollment Projections1

Exchanges:24M or 34%

Medicaid:16 or 23%

Uninsured:31M or 44%

2025 Coverage Status(Change due to ACA)

2013 Coverage Status

Under 65 Population: 272M Under 65 Population: 286M

Numbers may not add up to totals due to rounding.1 Individuals reporting multiple sources of coverage were assigned a primary source. 2 “Uninsured” includes unauthorized immigrants and people who are eligible for, but not enrolled in, Medicaid.3 “Other” includes Medicare.

Source: Congressional Budget Office. Effects of the Affordable Care Act on Health Insurance Coverage (May 2013); Congressional Budget Office. Updated Estimates of the Insurance Coverage Provisions of the Affordable Care Act, January 2015.

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Individual Mandate

Penalty is the greater of the dollar amount minimum (first two rows of table below) or the applicable percentage of income (third row).The income percentage increases from 1% in 2014 to 2.5% in 2016.

Penalty Schedule for Individuals without Health Insurance

* Income based on 2014 poverty guidelines

Year 2014 2015 2016 & beyond

Adult Penalty Minimum $95.00 $325.00 $695.00

Child Penalty Minimum(50% of Adult Penalty) $47.50 $162.50 $347.50

% of Income 1.0% 2.0% 2.5%

Example: Penalty at 250% FPL ($29,175/ year*) $292 $584 $729

Example: Penalty at 400% FPL($46,680/year*) $467 $934 $1,167

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Essential Health Benefits

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Impact: What Does This Mean for Case Managers?

More people are covered by health insurance plans

BUT…

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Many people who now have health insurance never had health insurance before.

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Impact for Case Managers

Patient/ Member Knowledge• Lack of understanding of benefits• Not familiar with insurance process

Pent up demand• Many members haven’t seen a provider in a long time• Providers may not be able to focus on preventive care as they must address urgent care needs• Initially may create higher costs and out of pocket expenses

Other factors• Various levels of support in the home and ability to manage care• Need to consider mental health and substance abuse needs

Unique ACA issues• Mandated grace periods

-If member qualifies for subsidy-must wait 90 days to disenroll for lack of payment

-If no subsidy-must wait 60 days to disenroll for lack of payment• Fluctuation (ability to move in and out of policies)

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Creates a downstream impact to physician offices, case managers, pharmacies…All health care providers.

Difficult to develop and manage treatment plans

Challenging to ensure compliance with medications and other treatments

Doesn’t fit well with population health measures and metrics

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Opportunities for Case Managers

If Opportunity doesn’t knock, build a door

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Where to go for Information

• Healthcare.gov• Marylandhealthconnection.gov

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Key Opportunities

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We are able to help more people than ever before through:• Advocacy • Guidance• Care Coordination• Empowerment

What you can do:• Learn about the Affordable Care Act• Learn about the exchanges and how they work • Identify vulnerable members and reach out to them

Understand:• Patients/members may need more of your time-many don’t understand health

care.• Some may be frightened or even suspicious- “why do you want to know what

meds I am on?”• We may need to focus on the immediate or urgent needs first.• The system is improving-it is far better today than it was when the exchanges

first went live-it will continue to improve over time.

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Do not go where the path may lead, go instead where there is no path and leave a trail.

Ralph Waldo Emerson

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Questions