VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA and Households (last updated 2.16.17)
- 1 Major Provisions Affecting Most Families
- 2 ACA and Household Budgets
- 3 ACA and Taxes
- 4 ACA and Patients with Pre-existing Conditions
- 5 ACA and Women
- 6 ACA and Children
- 7 ACA and Young Adults
- 8 ACA and Immigrants
- 9 ACA and Medicare Beneficiaries
- 10 ACA and Medicaid Beneficiaries
- 11 Resources
Major Provisions Affecting Most Families
Preventive Services Without Cost Sharing
All plans except grandfathered health plans must offer preventive health services without cost-sharing:
- Adults: Vaccinations recommended by the Centers for Disease Control and Prevention; screening for high blood pressure, cholesterol, diabetes, depression, HIV, alcohol misuse, obesity, tobacco use and colorectal cancer.
- Men: Screening for abdominal aortic aneurysm; prostate cancer (Medicare only).
- Women: Screening for breast cancer, cervical cancer, osteoporosis, urinary-tract infections, sexually transmitted diseases and domestic violence; breast-cancer prevention drugs for women at high risk; breast-feeding support and contraceptives.
- Children: Vaccinations; screening for autism, high blood pressure, cholesterol, depression, developmental delays, hearing and vision problems, lead, sickle cell, obesity.
This provision does not apply to evaluation and monitoring of ongoing medical issues or investigating, diagnosing new symptoms, follow-up tests after abnormal findings or most prescription and over-the-counter medications.
Restrictions on Health Spending Accounts
Starting in 2011, individuals will no longer be able to use tax-advantaged money from an FSA, a health savings account or a health reimbursement account for over-the-counter drugs that are not prescribed by a doctor. Starting in 2013, the health-care-reform law caps annual FSA contributions at $2,500 per year (previously, there was no maximum contribution amount for medical FSAs). Called the “Special Needs Kids Tax” because it no longer allows parents to pay for specialized treatment with pre-tax dollars, this cap will result in $14 billion in federal revenues.
- Affordable Care Act: Questions and Answers on Over-the-Counter Medicines and Drugs (IRS)
- Tax-Advantaged Accounts for Health Care Expenses: Side-by-Side Comparison (Congressional Research Service).
Subsidized Coverage on Exchanges. For those who lack access to adequate or affordable employer-provided health benefits with incomes below 400% of federal poverty level, coverage can be obtained on the state health exchange. Premium tax credits will be available to help pay for this coverage. Details of eligibility and logistics for obtaining such tax credits are explained here.
ACA and Household Budgets
Increased Out-of-Pocket Expense
- Administration Allows New Cost-Cutting Measure for Insurers. “The Obama administration has given the go-ahead for insurers and employers to use a new cost-control strategy that puts a hard dollar limit on what health plans pay for some expensive procedures, such as knee and hip replacements. Some experts worry that such a move would surprise patients who pick more expensive hospitals. The cost difference would leave them with big medical bills that they’d have to pay themselves.” (Associated Press, 5.16.14)
- Health Plan Costs are Pricing Many Americans out of Seeking Medical Care. “The Associated Press, on Monday, released a survey which found that 25 percent of privately insured Americans are ‘not confident’ that they’ll be able to afford healthcare in the event of a major medical problem. The poll found that people respond to the hit on their wallets in ways that may not help their health: Nineteen percent of all privately insured adults said they did not go to the doctor when they were sick or injured, because of costs. Among those with high-deductible plans, the figure was 29 percent. Seventeen percent skipped a recommended test or treatment; it was 23 percent among those with high-deductible plans. Eighteen percent of all adults went without a physical exam or other preventive care, 24 percent among those with high-deductible plans. Many of those who are struggling to pay for medical care are making moves to mitigate the costs, according to the Associated Press, including dipping into their savings and scaling back on retirement contributions. The survey also found that 45 percent of insured adults report paying more for coverage after switching their health plans, compared to 29 percent who say they’re paying less.” (FreedomWorks, 10.14.14)
- Dropping Coverage, Increasing Costs of Popular Drugs. “Express Scripts, which handles prescription-drug benefits for millions or people nationwide, is dropping coverage for 66 brand-name drugs next month in an effort to keep costs down. Rival CVS Health is dropping 95 drugs from its own list of covered drugs. Happy holidays.” (Los Angeles Times, 12.4.14)
- Is Obamacare Squeezing The Middle Class? “Poor, long-uninsured patients are getting Medicaid through Obamacare and finally going to the doctor’s office for care. But middle-class patients are increasingly staying away… Instead of raising premiums to fully reflect these costs, insurers are raising deductibles and copayments instead. This of course, shifts the burden to people who have health care problems. But that is by design. The insurers have decided that the healthy buy on price, while high deductibles and copayments mainly deter the sick. And even after all the various ways of risk adjustment, they apparently want to attract the healthy and avoid the sick.” Goodman, John. (Forbes, 1.6.15)
- Health Insurance Plans are Getting Crummier, and These Charts Prove It. “Among lower-income adults, who would be hit significantly harder by a large medical bill than higher-earning insured adults, underinsurance is especially prevalent. The Commonwealth Fund data shows that people with lower incomes (less than 200 percent of the poverty line, or about $22,000 a year for an individual) are underinsured at twice the rate of people with higher incomes (those earning more than 200 percent of the poverty line).When you dig into the data, you see that this is really a story about deductibles going up — way up. Insurance plans without deductibles are disappearing. And plans with big deductibles that used to be a rarity — those upward of $3,000 — are now becoming increasingly common.” (Vox, 5.20.15)
- Obamacare Advocates Seek to Fix Problem They Made Worse. “‘Democrats call it ‘underinsurance.’…About a quarter of all non-elderly Americans with private insurance coverage do not have sufficient liquid assets to pay even a mid-range deductible, which at today’s rates would be $1,200 for single coverage and $2,400 for family coverage,’ the Wall Street Journal reported in March…Obamacare provisions raised the insurers’ costs, and since then some additional cost-increasing Obamacare provisions have become law. Sure enough, deductibles began to increase significantly. The pro-Obamacare group Commonwealth Fund measured adults for whom the insurance deductible represents five percent or more of annual income. In 2003 and 2005, Commonwealth Fund found, three percent of adults were in that category. In 2010, the figure doubled, to six percent. In 2012, it rose to eight percent. In 2014, it rose to 11 percent.” (Washington Examiner, 5.22.15)
- The Problem of Underinsurance and How Rising Deductibles Will Make It Worse: Findings from the Commonwealth Fund Biennial Health Insurance Survey, 2014. “Half (51%) of underinsured adults reported problems with medical bills or debt and more than two of five (44%) reported not getting needed care because of cost. Among adults who were paying off medical bills, half of underinsured adults and 41 percent of privately insured adults with high deductibles had debt loads of $4,000 or more. (Commonwealth Foundation, May, 2015)
- ObamaCare Is Growing The Number Of Unpaid Medical Bills. “In the lexicon of hospital finance, bad debt is another word for unpaid bills. In this case, Community Health said that the charge was largely a result of lower-than-expected collections on deductibles and co-pays that consumers owed. The hospital chain was recording a higher amount of cash from these co-pays than it now expects to collect, so it needed to take a write off to account for its lowered expectations. The rising amount of uncollected co-pays and deductibles may be an early sign of consumer stress as the economy weakens. But more likely, it also reflects changes in the healthcare market that are saddling consumers with a much bigger share of their medical costs. For this, ObamaCare is playing a big role.” Gottlieb, Scott. (Forbes, 2.19.16)
- The Rising Cost of Patient Care. “When the cost of care is too high, patients are more likely to avoid visits to their doctor or skip needed testing, like blood work to check for diabetes.
- According to the American Academy of Pediatrics (AAP) Periodic Survey of Fellows #91, 20 percent of patients with HDHPs chose not to seek preventive care for their children, and roughly 50 percent either reduced or combined follow-up visits to their doctors, and used telephone consults in place of in-person visits.
- That has been Terrence McAllister’s experience. ‘We certainly have seen a decrease in the amount of use that people are making of acute care. We’ve noticed that people, especially those with [HDHPs] are more likely to put off routine care for chronic problems like asthma or Attention Deficit Hyperactivity Disorder, or not to seek care promptly for more acute problems,’ he says.
- Another result of the high cost of care is the intentional ‘rationing of care’ by physicians who strive to order fewer tests or prescribe lower cost medications to help patients manage their healthcare costs. A survey published in the Journal of General Internal Medicine asked 1,348 physicians about their prescribing patterns for 10 interventions, focusing on the frequency of self-reported rationing. The survey found that primary-care physicians were more likely to ration care than surgical or procedural specialists.
- Overall, 53 percent reported that they had changed their clinical practice and refrained from ordering certain procedures or medications in order to reduce cost.” (Physicians Practice, 9.14.16)
- Even with In-Network Hospital, Insurance May Not Cover ER Physicians. “Patients routinely go to in-network hospitals for a procedure or a test only to learn later that treating physicians — often an anesthesiologist or radiologist — were not in their network’s plans. Though it isn’t always easy, checking ahead to discover the insurance status of everyone involved in scheduled care is at least possible in theory. That’s not at all true in the case of an emergency.” (Tampa Bay Times, 9.19.14)
- This is How American Health Care Kills People. “All that added up to a total bill of almost $63,000 and counting — he hasn’t been billed yet for the final varices surgery… But wait, you might be thinking. Doesn’t ObamaCare have out-of-pocket limits that would prevent this sort of thing? It does indeed. But there are numerous loopholes that medical providers can and do take advantage of. The biggest is that spending on out-of-network services do not have to apply to out-of-pocket limits. Affordable Care Act regulations stipulate insurers are supposed to cover quite a bit of spending on emergency procedures (depending on a complex formula), and Texas law says that Stewart’s insurance should pay the ‘usual and customary rate’ (which probably accounts for the $9,695.87 payment) and count whatever he spends on his emergency care towards his out-of-pocket limit. ‘However, this still doesn’t obligate the insurance carrier to pay for the remainder of the out-of-network care,’ Maxine Harrington, professor of law at Texas A&M University, told The Week. Only in-network care has to be covered once the out-of-pocket limit is reached, even if it is an emergency. (In an emailed statement, a representative from the Department of Health and Human Services noted that new regulations are set to be implemented in 2018 that will provide somewhat more protection against surprise balance billing.)“ (The Week, 1.19.17)
ACA Exchange Enrollees
- Proposal To Add 2016 Skimpier ‘Copper’ Plans To Help with Affordability. “The proposals put forward by America’s Health Insurance Plans, a trade organization, and a group of senators led by Mark Begich (D-Alaska) would add a new level of coverage on the marketplaces. The copper plan proposed by Begich and AHIP’s ‘lower premium catastrophic plan’ would pay 50 percent of covered expenses, on average, and be eligible for premium tax credits. The proposals aim to attract people who haven’t yet bought coverage on the state marketplaces, and young or healthy people who may want a less expensive option. ‘Plans do considerable outreach, and they’re hearing that affordability is a top priority for consumers,’ says Karen Ignagni, president and chief executive of AHIP.” (Kaiser Health News, 7.1.14)
- Poll: Many Insured Struggle with Medical Bills. “A new poll from The Associated Press-NORC Center for Public Affairs Research may help explain why President Barack Obama faces such strong headwinds in trying to persuade the public that his health care law is holding down costs. The survey found the biggest financial worries among people with so-called high-deductible plans that require patients to pay a big chunk of their medical bills each year before insurance kicks in. Such plans already represented a growing share of employer-sponsored coverage. Now, they’re also the mainstay of the new health insurance exchanges created by Obama’s law.” (Associated Press, 10.13.14)
- Obamacare: Low Quality, High Cost. “The Heritage Foundation found that Medicaid is responsible for 71 percent of the net growth in insurance coverage during the first half of 2014… But exchange patients are dealing with shortcomings too, from high out of pocket costs to limited access to primary care doctors. Both the New York Times and USA Today have documented serious affordability and access issues with exchange plans. In Indiana, one woman spent almost half a year trying to find a doctor that would accept her exchange plan: ‘I definitely feel like a bad person who is leeching off the system when I call the doctors’ offices,’ she says. Shawn Smith of Seymour, Ind., spent about five months trying to find a primary care doctor on the network who would take her with a new, subsidized silver-level ACA insurance plan.” (Commonwealth Foundation, 10.30.14)
- Big Changes in Fine Print of Some 2015 Exchange Plans: Tucked Within the Plans’ Jargon are Changes that Could Markedly Affect How Much Consumers Pay. “Much attention has focused on changes to plans’ monthly premiums, but changes to other kinds of benefits — affecting the cost of things like doctors’ visits and prescriptions — can be trickier to understand and make a huge difference in annual health care costs. A ProPublica analysis of the 2014 and 2015 plans in 34 states being offered on the exchange shows the adjustments taking place. ProPublica has created a tool that allows users to see, quickly and easily, some significant ways the plans have changed from one year to the next.” Changes include deductibles, out-of-pocket limits, and services applied to deductibles. (New York Times, 12.4.14)
- You’ll Pay a Lot More to See the Doctor with Obamacare. “Obamacare enrollees have to shell out a lot more to see the doctor or get medications than their peers with job-based health insurance. Deductibles, co-payments, and drug payments are higher under the average Obamacare silver-level plans — the most popular — than employer policies, according to a CNNMoney comparison of reports by Kaiser Family Foundation and Health Research & Education Trust. The reports looked at policies offered on the exchanges for 2015 and those enrolled in employer plans in 2014.” (CNN Money, 2.12.15)
- ObamaCare Is Getting Less Affordable By The Minute. “So much for the ‘affordable’ part of the Affordable Care Act. Looks like ObamaCare premiums will rocket next year while sky-high deductibles make it too costly for many to see the doctor. Last Monday, IBD’s Jed Graham broke the news that big insurers in six states ‘are seeking to raise rates an average 18.6% next year.’ BlueCross BlueShield of Tennessee — which currently accounts for 70% of the ObamaCare enrollees in that state — is looking to increase premiums a whopping 36.3%. CareFirst — which has 80% of the ObamaCare enrollees in Maryland — is pushing for a 30% increase. Oregon’s Moda Health wants a 25.6% increase, on average, for the roughly half of ObamaCare enrollees it covers in the state. The Wall Street Journal followed up on Graham’s reporting later in the week, noting that New Mexico’s market leader, Health Care Service, wants an average 51.6% boost in premiums…Things aren’t looking much better for ObamaCare enrollees at the other end of the spectrum, where even high-cost plans can come with substantial deductibles.” (Investors, 5.22.15)
- Insurance Dropouts Present a Challenge for Health Law. “The plan she chose from the federal insurance exchange sounded affordable — $58.17 a month after the subsidy she received under the Affordable Care Act. But Ms. Douglas, 50, who was working about 30 hours a week as a dollar store cashier and a services coordinator at an apartment complex for older adults, soon realized that her insurance did not fit in her tight monthly budget. She stopped paying her premiums in April and lost her coverage a few months later…Though there is no comprehensive data on why people drop or lose their marketplace coverage, enrollment counselors, health care providers and consumers say cost is a factor.” (New York Times, 10.11.15)
- The Decline of ObamaCare: Fewer Enrollees and Rising Loss Ratios will Force a Rewrite in 2017. “ObamaCare’s image of invincibility is increasingly being exposed as a political illusion, at least for those with permission to be honest about the evidence.…The researchers found that in 2014—the first full year of claims experience in ObamaCare—average MLRs across all health plans sold on 16 state exchanges roamed from 90% to 99%. Average MLRs in 11 states climbed to 100% or more, reaching as high as 121% in Massachusetts. A business can’t stay solvent for long spending $1.21 for every $1 that comes in. The 2014 MLRs are used to set rates for 2016 premiums, which are still under regulatory review. But the researchers estimate that to rebound to an MLR of 85%, premiums in the 11 money-losing states need to rise by 10% to 36% in the best estimate and 23% to 52% in the worst scenario. The familiar danger is that as rates rise, more people drop out, and thus rates must rise still higher, as the states that attempted ObamaCare-like regulatory schemes in the 1980s and 1990s discovered.” (Wall Street Journal, 10.25.15).
- Many Need to Shop Around on HealthCare.gov as Prices Jump, U.S. Says.”’It really shocks me to see these plans with $5,000 deductibles, Belinda Greb, 56, of Vida, Ore., said in an interview. ‘It becomes an area of stress as opposed to making me feel secure.’ …only one insurer is offering coverage in the marketplace in Wyoming, and consumers have a choice of just two insurers in Alaska, Hawaii, Oklahoma, South Dakota and West Virginia. And that data, current as of Oct. 19, did not reflect the recent collapse of nonprofit insurance cooperatives in South Carolina and Utah.In Minnesota, officials approved increases averaging 49 percent for Blue Cross and Blue Shield of Minnesota, the largest insurer in the market. Even with the increases, the company said, ‘Blue Cross is likely to experience continued significant financial losses through 2016.’…The Iowa insurance commissioner, Nick Gerhart, approved rate increases averaging 29 percent for Wellmark Blue Cross and Blue Shield, the state’s dominant health insurer, and 20 percent for Coventry Health Care. The higher rates, he said, were justified based on the plans’ experience…in Hawaii, the insurance commissioner this month approved rate increases averaging 27 percent for the Hawaii Medical Service Association and 34 percent for Kaiser Permanente health plans.” (The New York Times, 10.30.15)
- Many Say High Deductibles Make Their Health Law Insurance All but Useless. “For many consumers, the sticker shock is coming not on the front end, when they purchase the plans, but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage. ‘The deductible, $3,000 a year, makes it impossible to actually go to the doctor,’ said David R. Reines, 60, of Jefferson Township, N.J., a former hardware salesman with chronic knee pain. ‘We have insurance, but can’t afford to use it.’ In many states, more than half the plans offered for sale through HealthCare.gov, the federal online marketplace, have a deductible of $3,000 or more, a New York Times review has found. Those deductibles are causing concern among Democrats — and some Republican detractors of the health law, who once pushed high-deductible health plans in the belief that consumers would be more cost-conscious if they had more of a financial stake or skin in the game. ‘We could not afford the deductible,’ said Kevin Fanning, 59, who lives in North Texas, near Wichita Falls. ‘Basically I was paying for insurance I could not afford to use.’ He dropped his policy…’When they said affordable, I thought they really meant affordable,’ she said.” (New York Times, 11.14.15)
- Obamacare Architect: High-deductible Plans Overdone. “With the open enrollment deadline for Obamacare looming next month, one of the chief architects of the president’s health law said Friday the plans offered on government-run exchanges need to be more affordable in order to boost participation rates. High-deductible plans are part of the problem, Dr. Ezekiel Emanuel added…He did acknowledge: ‘We’ve overplayed the high-deductible plans. People are feeling this is less and less insurance. And just more and more, ‘I’m paying out of my pocket.’” (CNBC, 11.20.15)
- Many See I.R.S. Penalties as More Affordable Than Insurance. “Clint Murphy let the deadline for getting health insurance by the new year pass without a second thought. Mr. Murphy, an engineer in Sulphur Springs, Tex., estimates that under the Affordable Care Act, he will face a penalty of $1,800 for going uninsured in 2016. But in his view, paying that penalty is worth it if he can avoid buying an insurance policy that costs $2,900 or more. All he has to do is stay healthy. ‘I don’t see the logic behind that, and I’m just not going to do it,’ said Mr. Murphy, 45, who became uninsured in April after leaving a job with health benefits to pursue contract work. ‘The fine is still going to be cheaper.’” (New York Times, 1.4.16)
- Millions Excluded from Obamacare Aid, Pass on Coverage. “Success stories about President Barack Obama’s health care law frequently rely on the personal anecdotes of Americans who say that if it weren’t for Obamacare they would be broke or dead. But critics counter that the narrative dismisses the concerns of those who haven’t realized the law’s promises. Many middle-class Americans who get no help from the government to pay for coverage – and who rarely use medical care – say the law has caused them financial harm and diminished their quality of life. Finding costs insurmountable, some say they are passing on coverage or using loopholes that offer them access to medical care without crippling their finances.” (US News, 2.15.17)
Also see Excise Tax on Comprehensive Health Insurance Plans (Cadillac Tax) for impact of the tax on employer-sponsored insurance plans.
- Companies Desperate to Avoid ObamaCare ‘Cadillac Tax’ Shifting Costs to Workers. “‘The excise tax, when it hits in 2018, will affect both employers and employees,’ said Brian Marcotte, president of the National Business Group on Health… Employers are shifting workers into plans with higher deductibles, just as ObamaCare does in the health care exchanges, and using health savings accounts to help defray the costs. Another cost saver, Marcotte added, is to increase premiums for spouses who have access to other plans.” (FOX News, 8.14.14)
- A Growing Risk: High-deductible Health Plans Can Ruin Finances. “The 30,000-plus people who work for Carolinas HealthCare System will have only one option for insurance next year, and it requires them to pay up to $5,600 a year out of pocket. For family coverage that risk rises to $11,200. The move by the Charlotte area’s largest employer spotlights a trend that’s sweeping the country: As more people get health insurance, more people with insurance face potentially devastating medical bills. The cost-sharing shift has been building for years. Now it’s snowballing to include some of the region’s biggest employers, from hospitals to banks to public schools. Proponents say greater cost-sharing promotes healthy behavior and drives down medical spending. Some employers contribute to savings accounts for medical expenses and pay workers for such actions as avoiding tobacco and getting health screenings. (Charlotte Observer, 4.5.15)
- Workers Paying More for Health Insurance, but Getting Fewer Benefits. “Workers continue to be squeezed by rising insurance costs, eroding benefits and stagnant wages, the report from the nonprofit Commonwealth Fund found. Nationwide, the average contribution an employee made to an insurance premium in 2013 and the average deductible together represented 9.6% of the median income of American households with members under age 65. That is up from 8.4% in 2010 and nearly double the 5.3% that households were paying for employer-provided health coverage in 2003. ‘Workers are paying more but getting less protective benefits,’ the report’s authors noted.” (Los Angeles Times, 1.8.15
- Many Low-Income Workers Say ‘No’ to Health Insurance. “The employer mandate has not yet had any noticeable effect on the number of workers enrolled in employer-sponsored health plans, according to a survey by Mercer, a human resources consulting firm. Most of the newly eligible appear to be obtaining coverage elsewhere, such as through the plan of a parent or spouse, or are continuing to go without, said Tracy Watts, a Mercer consultant. A study by ADP, the payroll processing giant, found an income tipping point at which most employees who are eligible for health insurance will buy it: $45,000 a year…Until this year, most insurers would not cover groups that fell short of their minimum participation requirements. The Affordable Care Act struck down that policy — a sea change for the industry — by prohibiting minimum participation rules from being used to deny coverage to any employer with 100 or more workers. But there is a big loophole: Insurers are required to issue the policies, but they are not required to renew them.” (New York Times, 10.19.15)
- In Latest Obamacare Fiasco, Most Low-Income Workers Can’t Afford “Affordable Care Act.” “And while many had anticipated from the beginning that the Obamacare tax was merely a subsidy for the large insurance companies (or rather, their public shareholders), few had expected a far more sinister consequence of the ‘Affordable’ care plan: that the employer mandate would turn out to be unaffordable for a vast majority of low-income workers – the very people who were supposed to benefit from it.” (ZeroHedge, 10.26.15).
ACA and Patients with Pre-existing Conditions
ACA Provisions Related to Persons with Pre-existing Conditions
People with illnesses or disabilities may be unable to obtain private health insurance or may find that the coverage offered them is so costly that they cannot afford it. In the Affordable Care Act, Congress provided relief for these people that will roll out in two phases. First, as of 2010, insurers can no longer deny or restrict coverage for children who have been diagnosed with an illness (that is, a preexisting condition). Also, from 2010 to 2014, a new, temporary Pre-Existing Condition Insurance Plan program will offer uninsured adults with preexisting conditions coverage in special state-based “pools.” In a second phase, from 2014 on, all health plans will be prohibited from restricting coverage of preexisting conditions or charging higher premiums to individuals with health problems.
- Pre-Existing Condition Insurance Plan. Health Affairs Policy Brief, 11.30.10.
- Pre-Existing Condition Insurance Plan Program. USDOL: Regulation • Program Information • Program Map • FAQs
- See Access to Care: Medically Uninsurables.
- Collins, Sara. Testimony—The Affordable Care Act’s Pre-Existing Condition Insurance Plan Program: A Critical Bridge to 2014, But Not a Long-Term Solution for Universal Coverage (4.3.13).
- Conover, Christopher J. and Jerry Ellig. Beware the Rush to Presumption, Part A: Material Omissions in Regulatory Analyses for the Affordable Care Act’s Interim Final Rules. Mercatus Center (1.9.12). This assessment of the PCIP interim regulations concludes:
- Benefits Overstated. “The analysis excludes the beneficial impact of a high-risk pool in reducing premiums in the individual market (by roughly 14 percent), thereby potentially resulting in greater numbers of individuals with insurance. The RIA also greatly overstates the magnitude of implied health benefits by citing two observational studies indicating mortality risk is 25 percent higher among the uninsured while ignoring a comprehensive literature synthesis suggesting there are no or very modest health benefits associated with being insured. The RIA also overstates projected reductions in bankruptcy risk by as much as a factor of eight. Finally, the analysis incorrectly counts reductions in uncompensated care as a benefit rather than a transfer. It compounds this error by implicitly assuming all uncompensated-care costs are borne by private patients when the best evidence suggests that three-quarters are publicly financed.
- Costs Understated: “The analysis fails to consider administrative costs borne by states ($600–$700 million), deadweight losses associated with the federal tax exclusion ($2.2 billion), and moral-hazard losses of up to $3.5 billion over three and one-half years.”
- Net Benefits Overstated. “When the net effect of overestimated benefits ($1.5–$3.0 billion) and underestimated costs ($6.3 billion) over three and one-half years is taken into account, the benefits of a federally subsidized high-risk pool no longer appear to exceed its costs. For benefits to have exceeded costs, net benefits per enrollee would have had to exceed $15,750 in the original analysis; this is implausibly high given that the RIA estimates total spending per enrollee will be only $15,000.”
ACA and Women
ACA Provisions Related to Women
While many provisions also benefit women, such as elimination of restrictions on pre-existing conditions, the following provisions disproportionately will benefit women:
- Elimination of Gender Rating. Under the old non-group market, in most states insurers were permitted to gender-rate their policies, typically charging women a higher premium reflecting their higher utilization/costs at most ages (most of this differential is related to reproductive health). The ACA prohibits the use of gender rating in the non-group and small group markets.
- Maternity Care as an Essential Health Benefit. EHBs are defined to include maternity benefits which often were not provided in health plans in the non-group market. All Exchange plans must cover EHBs including maternity benefits.
- Free Contraceptive Benefits. ACA requires new plans to cover prevention and wellness benefits, including contraception, at no charge by exempting these benefits from deductibles and other cost-sharing requirements. This provision applies to all prescriptions for any type of birth control approved by the FDA. This includes the ones usually sold over the counter like spermicides and sponges.
- Women Aged 55 to 64 Bear the Brunt of Insurance Costs. “People who buy the bronze or silver plans on the federal exchanges will spend a moderate amount more — from $694 to $1,165 a year, or 14 to 24 percent — on premiums and out of pocket expenses than they did before the health reform took effect. However, that average figure masks a huge redistribution of the costs to older women from nearly everyone else. Total expected premiums and out of pocket expenses rose by 50 percent for women age 55 to 64 — a much larger increase than for any other group — for policies on the federal exchanges relative to prices that individuals who bought individual insurance before health care reform went into effect.” “Women age 55 to 64 will pay from $2,185 to $2,738 more in premiums and out of pocket expenses under the new health insurance environment than they did pre-ACA.” (Washington Post, 6.24.14)
- Navigating The Rise Of High-Deductible Health Insurance. “Childbirth is the most frequent reason for hospitalization in the United States, and high-deductible health plans (HDHPs)—combined with their high out-of-pocket cost “bronze” counterparts in state health exchanges—will soon become the most common insurance arrangements for expectant mothers. Although the Affordable Care Act (ACA) mandates that health insurers cover birth hospitalizations, it does not limit cost sharing except through relatively high annual out-of-pocket maximums. Thus, childbirth-related cost sharing may increase markedly for US families in the coming years.” (JAMA, 1.20,15)
ACA and Children
- The ACA’s Pediatric Essential Health Benefit Has Resulted In A State-By-State Patchwork Of Coverage With Exclusions. The approach used to establish the Affordable Care Act’s pediatric essential health benefit has resulted in a state-by-state patchwork of coverage with inconsistent exclusions, particularly with regard to services for children with mental or developmental disabilities. (Health Affairs, December, 2014)
ACA and Immigrants
- Eligibility for ACA Coverage. The statutory language in the Affordable Care Act says that only “lawful residents” are eligible for subsidized coverage through the Exchanges.
- Impact of Obama Executive Order. The president’s immigration executive order, which would defer deportations for up to five million undocumented immigrants.
- None of 5 Million Will Become ACA Eligible. According to NY Times (11.19.14), “none of the five million immigrants over all who will be given new legal protections will get government subsidies for health care under the Affordable Care Act.” In responding to a suit blocking the order, “the government’s petition specifically notes that the immigration action does not ‘confer any form of legal status in this country.‘”
- Undocumented Immigrants Will Obtain Work Advantage. According to Andy Pudzer, “The government’s petition says that the executive action intended to provide “work authorizations” so that undocumented immigrants could find jobs in the U.S. without working illegally for less than market wages, which might harm American workers.” However, “employers aren’t required to offer ObamaCare coverage or subsidies to these immigrants. ObamaCare requires employers to offer all full-time employees health insurance that meets the law’s standards. For businesses that offer health-insurance coverage, the government enforces this rule by imposing a penalty of up to $3,000 a year for each full-time employee who receives a federal subsidy, a proxy for each full-time employee who doesn’t receive compliant coverage. The penalty is triggered if a single full-time employee purchases coverage on the marketplace and receives a subsidy. Companies could save $3,000 in penalties or the cost of insurance—about $3,300—for every one of these immigrants they employ over a U.S. citizen or lawful resident.”
ACA and Medicare Beneficiaries
- Medicare Part D Coverage Gap “Donut Hole” Rebate. The Affordable Care Act provides a one-time $250 rebate in 2010 to assist Medicare Part D recipients who have reached their Medicare drug plan’s coverage gap. This payment is not taxable. This payment is not made by the IRS. More information can be found at www.medicare.gov.
- Medicare Part C Advantage Plans. The ACA cuts $136 billion from Medicare Advantage Plans over its first 10 years. The Medicare actuary estimates this will reduce the projected number of seniors enrolled in such plans in 2017 from 14.8 million to only 7.4 million.
- Latest Obamacare Cuts Mean More Bad News for Seniors. “Seniors could now see their health care slashed by $3,700 a year due to Medicare cuts brought on by Obamacare, according to a press release from the House Ways and Means Committee. ‘In testimony before the Health Subcommittee of the House Ways and Means Committee, Dr. Robert Book of the Health Systems Innovation Network unveiled a new analysis by the American Action Network that shows seniors enrolled in popular Medicare Advantage plans will see a loss of benefits equaling of $1,530 in 2015 alone – and growing to $3,700 when the cuts are fully phased-in in 2017.'” (Rare, 7.26.14)
- See Impact on Medicare Advantage (Part C) Coverage.
- See Impact on Medicare Prescription Drug (Part D) Coverage.
ACA and Medicaid Beneficiaries
- The Foundation for Health Care Coverage, Health Care Options Matrix™ is the only hand-held guide available that outlines all of each state’s public and private health coverage choices for individuals and groups in almost every demographic profile, as well as offering a reference list of program contact information. A separate profile is available for each state.
- AmericasFairHealthCare.org, America’s Health Care provides general information on health reform focused on consumers.
- Endowment for Health Pilot | Health Reform Resources by Age Group (child, young adult (18-26), adult, mature adult (50-64), senior (65+)
- Endowment for Health Pilot | Health Reform Resources by Source of Coverage
- Endowment for Health Pilot | Health Reform Resources by Health Status (chronic health condition, preventive care, mental health, prescriptions, oral health)
- Health Care and You is a place where individuals, families, small business owners and health care professionals can turn for help in understanding the law and how it impacts them.
- Kaiser Family Foundation, Health Reform Subsidy Calculator estimates the size of the premium subsidy for individuals obtaining coverage through the exchange.
Research and Analysis
- How Will Consumers be Affected? (Urban Institute)
- The Effect of Health Reform on Drug Prices (Congressional Budget Office)
- Winners and Losers Under Obamacare. “When all is said and done, were Obamacare fully in place right now, 166 million of today’s population could reasonably count themselves as losers in various ways, while only 34.6 million would be lucky enough to count as winners. That’s a ratio of 4.8 losers for every winner.” Conover, Christopher (1.28.14).
- Obamacare Routes to Rationing: How the Obama Health Care Law Will Ration Your Family’s Medical Treatment – A Factsheet. Robert Powell Center for Medical Ethics (Revised January, 2014).