Affordable Care: Six Years Later

January 2017 View more

obamacare survives headline collage horzArguably one of the most politically charged pieces of legislation in our lifetime, the Affordable Care Act (ACA) is entering its seventh year of existence. And while there is much speculation as to what will become of it, opponents and proponents alike can agree that significant lessons have been learned about health care and its costs.

ACA Primer

The Affordable Care Act refers to the combination of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. These two pieces of legislation were intended to accomplish five goals, including expanding access to care, lowering health care costs and improving quality.

These goals were to be reached through thirteen “provisions,” which cover everything from identifying who is eligible for coverage to technology improvements. Implementation of ACA provisions began in 2010, with completion in 2014. Since then, the results have been mixed.

More People Do Have Access to Care

ACA has given more people access to health care. The Centers for Disease Control reported that the percentage of Americans without health insurance dropped by nearly 50 percent (from 16.0 percent to 8.9 percent) between 2010 and June 2016. And as of March 2016, the Congressional Budget Office has reported that approximately 23 million people have insurance. Of those people, 12 million were covered by a plan in the health insurance marketplace, known as “the exchange,” and 10 million of them received subsidies to help pay for their insurance.

Those previous numbers are important because they highlight one area where ACA seems to have missed the mark: the exchange. The exchange was supposed to be a risk pool of both sick and healthy people who would select from a range of plans at varying premiums and deductibles to stabilize rates. Specifically, the exchange needed a significant percentage of subscribers in the “invincibles” category, those aged 18–34 with little to no ailments.

Instead, the exchange is mostly used by people with pre-existing conditions who are more expensive to treat and those who are choosing higher rate plans to gain access to better coverage. The coveted “invincibles” population has been comprised of only 28 percent of subscribers consistently since 2014 and shows no sign of improving. Young people are either doing the math and opting out—paying a relatively low penalty—or they are opting for lower premiums on the exchange because they rarely tap into their health care benefits.

nmag0117_feature_healthcare_healthfeat_secondary_cmyk_800pxHealth Care Costs Are Still Increasing, But at a Lower Rate

A promising statistic is that  health care costs are increasing at a slower rate. Price Waterhouse Coopers recently tracked health care cost growth at 6.5 percent in 2016, compared to 9 percent in 2010. Definitely an improvement, but an increase is an increase. When you combine that with the millions and billions of dollars insurers are losing through their exchange plans, something has had to give. That has translated to higher premiums, higher deductibles and some insurers pulling out of the marketplace altogether.

A New Paradigm in Choosing Health Care Coverage

Selecting health care coverage has become a new process with the implementation of ACA, says Naperville-area insurance broker Bill Mitchell of Benefits Insurance Group. People are having to evaluate their risk exposure and be more forward thinking with their health care decisions. The introduction of the metallic plans (Gold, Silver, Bronze) has helped categorize plans in higher- and lower-risk exposure categories, but it can come down to an even more micro-level evaluation.

“Subscribers are truly crunching numbers for each individual or family situation, especially when they know that a major surgery is imminent,” says Jennifer Jones Sinnott of St. Charles–based Brian Feltes Insurance. They also are having to be upfront in making payment arrangements with providers if they have a large out-of-pocket minimum and a high deductible.

Both agree that subscribers are becoming more acutely aware of how important prevention and taking care of their health is in this new paradigm.

Provider Lesson Learned: Adapt and Educate

Health care providers have also had to change how they deliver care. Before ACA, hospitals were paid based on procedure volumes and episodes of care. Today, those payments are tied to quality of care and cost of services.

Health care systems like Edward-Elmhurst Health have implemented programs that improve quality, lower costs and help patients choose the best place to go for their care, says Edward Hospital CEO Bill Kottmann. “If it’s not life-threatening, we have a series of walk-in clinics where patients will receive excellent care. If the situation is more serious, our highly trained medical staff can make the call and send patients to immediate care or the emergency room.”

This means cost savings overall. It is far less expensive for the subscriber, the provider and the insurer when non-emergency care is delivered in a clinic, versus the emergency room.

Edward-Elmhurst is also working to get people into the right programs to reduce their risk of readmission and other conditions related to their acute or chronic ailment. Take, for example, the Edward-Elmhurst Diabetes Education Centers, focused clinics that are dedicated to treating the symptoms and side effects of diabetes. This type of targeted care has been especially effective with patients whose diabetes has been hard to manage, notes Kottmann.

Another example from Edward-Elmhurst—and a trend in the industry—is a more comprehensive home health care program. In the past, patients were sent home from the hospital with instructions and a prescription. Today, Edward-Elmhurst case managers check in on patients over the phone to identify any sign of organ failure and can send a care provider to the patient’s home to help prevent readmission.

Looking to the Future

It is unclear what will happen with the Affordable Care Act in the coming months and years, but the silver lining may be more targeted care and a public that is more informed as to how health care works and the importance of maintaining their health.