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The Affordable Care Act. Part II. October 17, 2014 Ross K. Airington, MPA VCU Office of Health Innovation. Background. Why Is Health Reform Needed?. In 2012, there were nearly 48 million uninsured Americans

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The affordable care act

The Affordable Care Act

Part II

October 17, 2014

Ross K. Airington, MPA

VCU Office of Health Innovation

Why is health reform needed
Why Is Health Reform Needed?

  • In 2012, there were nearly 48 million uninsuredAmericans

  • Since 2003, average health insurance premiums for family coverage have risen 80%

  • Average annual cost of employer‐sponsored family coverage in 2013 = $16,351

    • Average employee contribution: $4,741

  • In 2013, only 57% of firms offered employer-sponsored coverage

Source: The Kaiser Family Foundation and Health Research & Educational Trust, “Employer Health Benefits: 2013 - Summary of Findings.”

Uninsured in dc md va
Uninsured in DC/MD/VA

  • DC: 62,900 (12%)

  • MD: 758,500 (15%)

  • VA: 1,073,200 (16%)

  • Approximately 71.1% of uninsured Virginians live in families with a gross income at or below 200% FPL

    • 200% FPL in 2013 = $47,100 for family of 4

Work Status of the Nonelderly Uninsured

Source: Macri, J. Lynch, V., Kenney, G., Profile of Virginia’s Uninsured, 2010, The Urban Institute, Prepared for the Virginia Health Care Foundation, March 2012.

Health insurance matters
Health Insurance Matters!


less likely to have an unpaid medical bill


decrease in average health care costs per year


relative reduction in mortality rates


less likely to borrow money or fail to pay other bills because of medical debt

Sources: Health Affairs, The New England Journal of Medicine, National Bureau of Economic Research

Overview of the affordable care act
Overview of the Affordable Care ACT

Patient protection and affordable care act ppaca
Patient Protection and Affordable Care Act (PPACA)

Enacted in March, 2010 with the goals of:

Ensuring access to quality health care

Providing affordable health insurance to the uninsured

By 2024 will expand coverage to ≈ 26 million currently uninsured Americans

Net cost of coverage expansion is $1.383 trillion over 10 years (2015-2024)

Source: Congressional Budget Office, Updated Estimates of the Effects of the Insurance Coverage Provisions of the Affordable Care Act, April, 2014

How is the law paid for
How is the law paid for?

  • Individual & Business (> 50 employees) Tax Penalties for failure to purchase insurance

  • Increased Taxes for High-Income Workers

  • Annual Fee for Insurance Companies

  • Tax on “Cadillac” Insurance Plans

  • Tax on Medical Device & Drug Industries

  • Provider Cuts

    • Yearly payment updates to hospitals (“market basket updates”) are reduced

    • Payment reductions if fail to meet certain quality criteria

    • Medicaid and Medicare Disproportionate Share Hospital (DSH) payments

      • Reduced by $14 billion and $22 billion respectively (2014-2019)

Consumer protections1
Consumer Protections

  • No one can be denied coverage

    due to a pre-existing condition

  • No cancellation of coverage or

    lifetime benefit limits

  • Free preventive care services

  • Allows dependent children age 26 and under to stay on parent’s plan

  • Limited age/family rating and no gender rating

Coverage expansion1
Coverage Expansion

  • Enacts an Individual Mandate (Jan 1, 2014)

  • Enacts an Employer Mandate(Jan 1, 2015 and Jan 1, 2016)

  • Expands Medicaid to non-elderly population with incomes at or below 133% FPL (Jan 1, 2014)

  • Creates a Health Insurance Marketplace(Jan 1, 2014)

Individual and employer mandates
Individual and Employer Mandates

  • Starting in 2014, everyone must either:

    • Have health insurance coverage

    • Have a coverage exemption

    • Pay a penalty

  • Beginning January 1, 2015, employers with 100 or more full-time or full-time equivalent employees must offer affordable coverage

    • …to full-time employees and their dependent children

Individual mandate penalties
Individual Mandate: Penalties

  • Collected through tax returns

  • Exempted: undocumented immigrants, Native Americans, and those who earn too little to file a tax return

Source: The Kaiser Family Foundation

Health insurance marketplace1
Health Insurance Marketplace

  • The ACA requires the establishment of state-based or federally facilitated “Health Insurance Exchanges” (2014)

  • Virginia defaults to a Federally Facilitated Marketplace (FFM)

  • Health plans in the Exchange must provide coverage for 10 Categories of “Essential Health Benefits”

Essential health benefits
Essential Health Benefits

  • Ambulatory patient services

  • Emergency services

  • Hospitalization

  • Maternity and newborn care

  • Mental health and substance use disorder services, including behavioral health treatment

  • Prescription drugs

  • Rehabilitative and habilitative services and devices

  • Laboratory services

  • Preventive and wellness services and chronic disease management

  • Pediatric services, including oral and vision care

Insurance affordability programs
Insurance Affordability Programs

  • Premium Tax Credits for individuals 100% to 400% FPL

    • Individual: $11,490 to $45,960

    • Family of 4: $23,550 to $94,200

  • Cost-Sharing Reductions (CSR) for individuals between 100% and 250% FPL ($28,725 individual; $58,875 family of 4)

    • Silver plans only

    • 3 CSR tiers based on income:

      • 100%-150% FPL: 94% AV

      • 150%-200% FPL: 87% AV

      • 200%-250% FPL: 73% AV

Marketplace plans in virginia 2014
Marketplace Plans in Virginia (2014)

  • Virginia – Federally Facilitated Marketplace

    • 9 insurers offering 105 individual and family plans

      Monthly Premiums

    • Lowest Bronze: $139

    • Lowest Silver: $188

  • Richmond

  • Aetna

  • CoventryOne

  • Anthem HealthKeepers

  • Optima Health

    • Outside Richmond

  • Anthem BlueCross BlueShield

  • Kaiser Permanente

  • Innovation Health Insurance Co.

  • CareFirst Bluechoice

  • CareFirst BlueCross BlueShield

So how did it go1
So how did it go?

  • Over 8 million people signed up for private insurance on the Marketplace

    • 2.2 million (28 percent) were young adults (18-34)

    • 85 percent were eligible for financial assistance

  • 3 million more people enrolled in Medicaid and CHIP

  • 5 million people enrolled in plans that meet ACA standards outside the Marketplace


The White House. FACT SHEET: Affordable Care Act by the Numbers. April 17, 2014.

HHS. Health Insurance Marketplace: Summary Enrollment Report for the Initial Annual Open Enrollment Period. May 1, 2014

Restrictive medicaid eligibility in virginia
Restrictive Medicaid Eligibility in Virginia

  • Spending

    • 11thlargest state in terms of population

    • 7thin per capita personal income

    • 22ndin Total Medicaid Spending

    • 25thin Spending per Enrollee

  • Access

    • 44thin access to benefits for working parents (30% FPL)

    • 38th in access to benefits for jobless parents (25% FPL)

    • Tied for last in benefits for childless adults (no benefits)

Source: Kaiser Family Foundation, State Health Facts: Medicaid & CHIP

The affordable care act

Medicaid Expansion


Federal Poverty Level




  • *Covers up to 200% FPL with FAMIS


Projected medicaid growth in virginia
Projected Medicaid Growth in Virginia

  • Number is lower than previous estimates, due to the application of expected uptake rate of 69%

  • The expanded Medicaid enrollment is estimated to result in a savings of $604 million through 2022*

    • Under the ACA, the increase in Medicaid enrollment could grow by more than 250,000

    *Medicaid DSH and Indigent Care, Presentation to the Senate Finance Committee, Health and Human Resources Subcommittee, Scott Crawford, Department of Medical Assistance Services, January 27, 2014,

    Impact of supreme court s decision
    Impact of Supreme Court’s Decision

    • Decision rendered June 28, 2012

    • Major components of decision:

      • Individual Mandate is constitutional as a tax

      • Medicaid Expansion itself is constitutional; but the “all-or-nothing” approach is not

        • Unconstitutionally coercive to tell states they must expand or risk losing all of their Medicaid funding

        • Medicaid Expansion (from current levels up to 133% FPL) becomes optional for states

    Will the feds reduce the match
    Will the Feds reduce the match?

    • The FMAP formula has remained basically unchanged since the enactment of Medicaid in 1965, and temporary adjustments to the formula have resulted in FMAP increases, not decreases.

    • 2001 Recession

      • April 2003 through June 2004: Every state’s FMAP was increased by 2.95 percentage points

    • Great Recession of 2007-2009

      • Across the board increase of 6.2%.

      • Increase in FMAP ranging from 1.88 to 5.39 %, based on the increase in a state’s unemployment rate.

    Dsh reductions
    DSH Reductions

    • Federal requirement that states provide “Disproportionate Share Hospital” (DSH) payments to hospitals that serve a “disproportionate” number of Medicaid patients

      • Assumption that these facilities also serve large percentages of uninsured

    • Each state receives an “allotment” of federal DSH funds

    • States develop guidelines for distribution of DSH funds to hospitals

    • Between 2017 – 2024 Medicaid DSH allotments to states will be reduced

      • Up to 50% in the latter years

    Source: “Medicaid DSH and Indigent Care”, Presentation to the Senate Finance Committee, Health and Human Resources Subcommittee, Scott Crawford, Department of Medical Assistance Services, January 27, 2014,

    Disproportionate share hospital programs
    Disproportionate Share Hospital Programs

    • How Virginia uses its DSH allotment:

      • Partial financial relief to 33 private hospitals that have a high proportion of Medicaid patients

      • Maximize use of federal funds to support indigent care at state teaching hospitals (UVA and VCU)

    • VCUHS and UVA Medical Center receive the majority of the state’s DSH allocation to support their Indigent Care programs

    Medicaid DSH and Indigent Care, Presentation to the Senate Finance Committee, Health and Human Resources Subcommittee, Scott Crawford, Department of Medical Assistance Services, January 27, 2014,

    The affordable care act

    “The growth in Medicaid expansion states starkly contrasts the experience in the 24 states that did not expand the joint federal-state health program. In those states, hospitals continued to see flat or sagging admission rates and little reduction in the number of uninsured, largely non-paying patients.”

    “While these trends were expected, the gap in Medicaid enrollment between expansion and non-expansion states is greater than most industry analysts predicted.After a strong start to the year, health systems have recalculated their previous estimates to adjust for higher than expected enrollment and revenues. Many have projected a strong finish to the year.”

    In Medicaid expansion states, the shifts between Medicaid and self-pay admissions were dramatic through the first half of 2014

    Source: PwC Health Research Institute. Medicaid 2.0: Health systems have and have notsof ACA expansion. September 2014.

    The affordable care act

    Key Facts about the Uninsured Population, The Henry J. Kaiser Foundation,

    What s at stake in virginia if there is no expansion
    What’s at stake in Virginia if there is no expansion? Kaiser Foundation,

    The Coverage Gap

    190,000 Adults in VA

    5.2 Million Nationwide

    Source: Kaiser Family Foundation, The Coverage Gap: Uninsured Poor Adults in States that Do No Expand Medicaid, October 2013

    On the flip side
    On the flip side… Kaiser Foundation,

    • Federal deficit cannot be ignored

      • Many doubt the feds’ ability to continue funding at the levels outlined in the ACA

      • Fear that state may get “stuck” with the bill

    • Medicaid already consumes a large portion of the state budget

    • Goals of expansion may not be fully achieved if there isn’t sufficient access

    The path to expansion in virginia
    The Path to Expansion in Virginia Kaiser Foundation,

    Path to medicaid expansion in virginia
    Path to Medicaid Expansion in Virginia Kaiser Foundation,

    Budget adopted by the 2013 VA General Assembly included language allowing for Medicaid expansion up to 138% FPL, if and only if certain reforms are made to the existing Medicaid program

    Oversight of medicaid expansion in virginia
    Oversight of Medicaid Expansion in Virginia Kaiser Foundation,

    • Budget language created the Medicaid Innovation and Reform Commission (MIRC)

      • Must determine if the appropriate phases of reform have been met

      • If conditions have been met, then the Commission shall approve Medicaid coverage expansion up to 133% FPL

        • “…by July 1, 2014, or as soon as feasible thereafter”

  • Sunset Clause:

    • If federal commitment drops below levels stated in ACA, then DMAS will dis-enroll the newly covered individuals

  • Marketplace virginia
    Marketplace Virginia Kaiser Foundation,

    • Senate budget included language that called for a “Private Option” in lieu of traditional Medicaid Expansion

      • Based on similar proposals in Arkansas, Iowa, Michigan, and Pennsylvania

      • Provides premium assistance to the expansion population who buy private plans on the Marketplace

      • Requires “skin in the game” contributions up to 5% of household income

      • Requires incentives for job search and work activities

      • Significantly reduces the authority of the MIRC

    2014 virginia general assembly session
    2014 Virginia General Assembly Session Kaiser Foundation,

    • January 8, 2014 to March 8, 2014

    • March 8: Unable to agree on Medicaid Expansion, the General Assembly adjourns without passing a budget

    • March 7: Governor McAuliffe announces that he will call a special session – to begin March 24 –to complete the budget and appoint judges

    2014 virginia general assembly session1
    2014 Virginia General Assembly Session Kaiser Foundation,

    • June 9: GOP retakes the majority in the Senate when Sen. Phillip P. Puckett (D-Russell) unexpectedly announced his immediate resignation

      • Within four days the House and Senate passed a budget without Medicaid expansion

      • Also included new language (the “Stanley Amendment”) meant to prevent the Governor from expanding via executive action

    2014 virginia general assembly session2
    2014 Virginia General Assembly Session Kaiser Foundation,

    • Sept. 8: Governor McAuliffe announces a comparatively modest plan to help close the coverage gap in Virginia

      • Includes:

        • Expanded coverage for those with severe mental illnesses

        • Increased outreach and enrollment efforts for the Marketplace

        • FAMIS eligibility for the children of state employees

        • Dental benefits for pregnant women in Medicaid

        • Pursuing federal innovation grants

    2014 virginia general assembly session3
    2014 Virginia General Assembly Session Kaiser Foundation,

    • September 18: General Assembly goes BACK into session to debate…

      …wait for it…

      …that’s right…

      Medicaid Expansion!

    2014 virginia general assembly session4
    2014 Virginia General Assembly Session Kaiser Foundation,

    • How did that go?

      • House of Delegates voted 64 to 33 (largely along party lines) to kill a modified expansion proposal

    • Cost for one-day special session:

      • $40,000 in per diems and mileage reimbursement

    Source: House of Delegates Clerk’s Office

    Access Kaiser Foundation,

    Health care workforce in virginia
    Health Care Workforce in Virginia Kaiser Foundation,

    • Current Workforce

      • Physicians: 17,168

        • 40% Primary Care

    • Registered Nurses: 78,711

  • By 2028 there will be a shortage of:

    • 1,500 physicians

    • 22,600 full-time RNs

    • Source:

    • Virginia Department of Health Professions, Forecasting Nurse Supply and Demand in Virginia 2000-2028, January 2010

    • Governor’s Health Reform Commission, Roadmap for Virginia’s Health, September 2007

    • Joint Commission on Health Care, Update: Virginia Physician Workforce Shortage, September 17, 2013

    The problem
    The Problem Kaiser Foundation,

    • The population is getting:




    New patients will have complex medical needs
    New Patients will have Complex Medical Needs Kaiser Foundation,

    • Of the 26 million Americans who will likely gain health insurance through the Health Insurance Marketplace by 2019:

      • 37% will have gone more than two years without a check-up

      • 29% will have had no interaction with the healthcare system in the year prior to obtaining coverage

      • 13% report their health as poor or fair

        • (compared with only six percent of those currently privately insured)

    Source: Trish, E, Damico, A., Claxton, G., Levitt, L., & Garfield, R. (2011). A profile of health insurance exchange enrollees. Retrieved from

    Rising demand is for services
    Rising Demand is for Kaiser Foundation,

    • While some services can only be provided by physicians, some can be provided as effectively – or more effectively – by other clinicians and health professionals

    Rising demand is for primary care services
    Rising Demand is for (Primary Care) Kaiser Foundation,

    • 30% of U.S. physicians practice in primary care1

    • 25% of current medical school graduates plan careers in primary care2

    • 52% of all NPs were providing primary care in 20103

    1. Goodson, J.D. (2010). Patient protection and affordable care act: Promise and peril for primary care. Annals of Internal Medicine, 152(11), 742-744.

    2. Schwartz, M.D. (2012). The US primary care workforce and graduate medical education policy. Journal of American Medical Association, 308, 2252-3.

    3. Inglehart, J.K. (2012). Expanding the role of advanced nurse practitioners-risks and rewards. New England Journal of Medicine, 368 (20), 1935-1941.

    Scope of practice laws
    Scope of Practice Laws Kaiser Foundation,

    • Only 17 states and DC provide full scope of practice for APRNs

    • The remaining 33 states have a reduced or restricted scope of practice

      • With the mandate of some degree of physician involvement

    Source: American Association of Nurse Practioners. Retrieved at

    Scope of practice in virginia
    Scope of Practice in Virginia Kaiser Foundation,

    • The 2012 Virginia General Assembly session brought with it landmark legislation broadening the scope of practice for nurse practitioners

      • The law also expands from four to six the number of nurse practitioners that can partner with a physician

      • Collaborating physicians no longer have to be on site

    Conclusion Kaiser Foundation,

    Conclusion Kaiser Foundation,

    • ACA attempts to extend health care coverage to the majority of the uninsured in the US

      • Medicaid expansion

      • Health Insurance Marketplace plans

      • Individual Mandate

      • Employer Mandate

    • Virginia remains “undecided” on Medicaid expansion

    • A great deal is at stake for Virginia’s poorest residents and the health care safety net

      • DSH funding reductions

      • Coverage Gap

    QUESTIONS? Kaiser Foundation,

    The affordable care act

    Additional Questions? Kaiser Foundation,

    Ross K. Airington

    Health Policy Analyst

    VCU Office of Health Innovation

    resources Kaiser Foundation,

    Need more information
    Need More Information? Kaiser Foundation,

    • VCU Office of Health Innovation




    • ENROLL Virginia!


    • Health Reform GPS


    • Kaiser Family Foundation


    • Kaiser Health News


    • America’s Essential Hospitals


    • American Hospital Association (AHA)