The implementation of the Affordable Care Act (ACA) stands to alter the U.S. healthcare system and the role of private insurance.
The healthcare industry has experienced momentous change in the past year, and recent developments indicate no let-up in the coming months. The implementation of the Affordable Care Act (ACA), with its expanded benefits, curb on underwriting, greater transparency in costs and coverage, and shift to outcomes-related reimbursement, stands to alter the U.S. healthcare system and the role of private insurance.
The difficulties and opportunities with these developments will be even more evident in 2015, as Republican control of Congress opens the door to ACA revision. An early total repeal measure will be largely for show, but more select measures will follow. Top reform priorities are to repeal the medical device tax, eliminate the never-formed Independent Payment Advisory Board, and revise the employer mandate: Republicans want a 40-hour work week floor (up from 30 hours), if not a total repeal.
Looming over all is the renewed threat that a Supreme Court decision limiting subsidies for low-income individuals will deal a mortal blow to Obamacare. The ACA specifies that tax credits are available through exchanges operated by states, and program critics have filed suits to block subsidies to those obtaining coverage through the federally facilitated exchange.
These troubling developments may have encouraged Health and Human Services (HHS) Secretary Sylvia Mathews Burwell to reduce predictions for total enrollment next year through state and federal exchanges--down to about 9 million from earlier estimates of 13 million. The good-news piece is that fewer individuals are expected to lose employer coverage. But the numbers indicate that only 4 million new customers may sign up, while re-enrollment snafus may prompt some beneficiaries to drop out.
Medicaid programs also may see limited growth, as Republican victories in many gubernatorial races limit prospects for further adoption of expanded Medicaid coverage. Some states may continue seeking HHS approval of more limited Medicaid expansion, which the feds are under pressure to authorize. Meanwhile, the state Children’s Health Insurance Program is up for renewal by Congress next year, and reauthorization legislation may provide a vehicle for added changes in Medicaid and other health programs.
Insurers will be looking for future legislation to again extend the Medicare formula for reimbursing physicians, and to restore healthier rates for the Medicare Advantage (MA) program. Analysts predicted a notable decline in MA plans due to ACA rate cuts, but enrollment continues to grow as insurers have worked to keep premiums down and benefits attractive.
Slower growth in healthcare spending deserves credit for helping plans hold the line on rates while also reducing federal outlays for Medicare and Medicaid. Insurers also seek to control costs by limiting provider networks, for both Medicare and commercial plans, a strategy that has generated loud protests. Other approaches are to shift costs to beneficiaries through higher copayments and deductibles; to offer barebones policies where still permitted; to protest rising prices on specialty medicines; and to oppose consolidation among hospitals and health systems.
In lowering enrollment expectations for 2015, HHS indicated that it may take up to five years to fully implement the ACA. Insurers will be looking hard at whether they can continue to offer adequate benefits and care options at affordable rates during that time.
Finally, after more than 10 years covering these issues for Managed Healthcare Executive, I am signing off, and will leave it to our other editors to continue examining health policy and political developments for you in the coming months.