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Posts by Jules Clark, Research Analyst

A year with ACA exchanges, some progress, more opportunity

Health careNearly a year after the health insurance exchanges opened for the first time, there are many uninsured people who are still unaware of how and when to get health insurance coverage. A recent Kaiser Family Foundation survey found that almost 90 percent of the nearly 41 million remaining uninsured Americans are unaware that open enrollment for the exchanges begins in November. Only 53 percent know that the Affordable Care Act (ACA) provides financial assistance, such as Medicaid and premium subsidies, to low and moderate income Americans. Almost 60 percent of the survey respondents, however, said they expected to get coverage within the next few months.

The open enrollment period in 2015 lasts just three months, from November 15th, 2014 to February 15th, 2015, three months shorter than last year’s open enrollment period. If the uninsured miss the open enrollment period, only a qualifying life event (such as marriage, divorce, birth, certain types of relocation) will allow the purchase of health insurance after the three-month enrollment period ends. Otherwise, one would be uninsured and shut out from the exchanges for another year. Given that one important goal of the health care legislation was to cover the neediest uninsured Americans, this news reinforces the need for a reliable and effective information stream to people with limited knowledge about their health insurance options.

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Medicaid Gap Leaves 6 Million Without Affordable Coverage

Free ClinicA significant piece of the Affordable Care Act (ACA) legislation is the Medicaid expansion, a provision that was originally meant to expand eligibility for the public program to include all people in the United States up to 133 percent of the Federal Poverty Level (FPL). This means that all individuals with annual incomes below $15,521 would be eligible for Medicaid, which is essentially free health coverage, minus nominal costs on out-of-pocket expenses.

Historically, Medicaid administration, including rules on eligibility requirements, was drastically different for each state. Therefore the expansion presented a major shift in policy and practice for many states. When the constitutionality of the law was taken to the Supreme Court, the court decided to allow states the decision to expand or opt out of the expansion, while the law itself was upheld. The result was a dead split; 25 states expanded Medicaid and 25 refused.

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Where is the Money Going?

Last week, the Center for Medicare and Medicaid Services (CMS) released an extensive database of Medicare providers who receive payments from the federal government. The database contains a complete list of federal Medicare providers, including full name, address, and professional specialty. The data include payment amounts, number of beneficiaries’ services, and the number of services conducted by each provider.

Much has been made about the enormous payments made to the highest paid Medicare providers. Critics claim there is waste and fraud in the system. Some of the highest paid doctors have also been linked to large contributions made to politicians connected to the budgeting of the Medicare program. Before we assume too much, let’s break it down by the numbers:

In 2012, spending on Medicare benefits totaled $536 billion, accounting for 16% of all federal spending.  It accounted for about 21% of all national health care spending, 28% of spending on hospital care, and 24% of all spending on physician services (Kaiser).

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ACA Update: Why Seven Million is Just a Number

As a tidal wave of “Obamacare meets deadline” columns pour into our cyber universe, “Seven million” becomes the temporary flash flood. Seven million represents the number of sign-ups the Congressional Budget Office (CBO) originally predicted in their estimates of the Effects of the Affordable Care Act on Health Insurance Coverage in May 2013. The projected signups are only for Qualified Health Plans (QHP’s) on the public health insurance exchanges, and they don’t include renewed grandfathered health plans or other private insurance signups.

The process of signing up for health coverage through public exchanges is a three-stage process. First, potential enrollees select a plan based on desired level of coverage and relative cost. An application is sent to the insurance provider. Second, the insurance provider reviews the application and determines the final premium. Finally, the potential enrollee is notified of acceptance and required to pay the first month’s premium. Only after this first payment, is the enrollee officially covered by health insurance.

As of March 31st over 7 million people have signed up for health insurance on the exchanges, the first stage of the process. Health and Human Services Secretary Kathleen Sibelius told reporters that insurers claim 80 to 90% of exchange consumers have paid their health insurance premium. But, we can’t know specifically how many people have paid the premium because data are not yet available to the public. Sibelius’ comments, among others, contain an element of speculation.

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Cutting Through the Noise to Clarify the Affordable Care Act

AIER ACA CoverSince starting my research on health care and the Affordable Care Act, also know as the ACA, I have been inundated with countless opinions from the media, literature, and personal interaction, mostly weighing in on whether the ACA is simply good or bad for the United States and its citizens. Because the ACA is a complicated law and a polarizing political topic, many misconceptions have arisen and persisted in the public sphere. A student at AIER’s career development seminar asked me “After researching the ACA, would you sign up for Obamacare?” Instead of breaking it down and explaining exactly what the ACA entails, I simply acknowledged that it is a loaded topic, and if I did not have health insurance I would buy it in 2014.

Here is what I should have said–

The ACA is a law, not a health insurance plan. It is a law that regulates the insurance industry, which affects everyone who purchases health insurance to different degrees. It mandates that Americans have health insurance and that certain businesses offer it. One does not sign up for “Obamacare” or the Affordable Care Act. One purchases a health insurance plan that will be regulated within the framework of the ACA legislation.

The extent to which I am affected by the ACA depends on my current source of coverage, or lack thereof. If I get health insurance through my employer, in most cases, there will not be a discernible change to my health policy and my world will carry on uninterrupted in 2014 and beyond. If I get health insurance through a public program such as Medicaid or Medicare, almost nothing changes for me. If, however, I buy insurance in the individual market or I don’t have health insurance, I will see important changes.

There are many special cases, exemptions, and specific mandates/provisions that the ACA has created, making the law obscure and, more importantly, hard to predict. It’s impossible to accurately estimate how aggregate health care costs in America will change. It is also impossible to predict how many people will sign up for coverage through the exchanges and how different states will handle the implementation process.

Until implementation is complete and premiums are clearly identified for all insurance providers and enrollees and their plans, we cannot make a precise prediction of how the ACA will affect the healthcare landscape or the American consumer.

What we can do is provide our readers with data and information that will help identify where Americans are, and where they will likely end up as a result of the legislation. Based on ACA provisions and mandates, we can also give consumers a sense of how premiums may change. The numbers below are taken directly from AIER’s study, How the Affordable Care Act Affects Your Health Insurance Costs.

 Pre-ACA Health Care Coverage

Using 2012 Census data and the HHS Medical Expenditure Panel Survey we were able to estimate where Americans access health care coverage. Eighty-five percent of the U.S., 267 million people, had health insurance in 2012, while 47 million were uninsured. Of this total, we estimated that that about 230 million people will see “little to no noticeable change in premiums” and about 50 million will see a significant increase in premiums. Conversely, about 30 million people will see reduced or low premiums.

We cannot estimate what uninsured people paid for health care before the ACA, because they did not pay premiums and only incurred out-of-pocket expenses. Therefore we are judging the relative cost of premiums across the uninsured population. For example, previously uninsured Americans now eligible for Medicaid (13 million) will not pay premiums, but they may incur nominal out-of-pocket expenses; therefore we categorize them in the 30 million with reduced or low premiums. Of the uninsured with incomes too high for Medicaid or federal subsidies, we put them into the group of 50 million with significant increases in premiums.

In addition to our estimates, our report presents a detailed guide on how the ACA will affect each type of insurance plan. It also offers analysis on health care distribution in the United States, eligibility for subsidies, Medicaid, and the impact of the ACA on premiums for the total population.