Tag Archives: Medicaid

The Impact of the ACA’s Medicaid Expansion on Hospitals’ Uncompensated Care Burden and the Potential Effects of Repeal

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http://www.commonwealthfund.org/publications/issue-briefs/2017/may/aca-medicaid-expansion-hospital-uncompensated-care

Abstract

Issue: By increasing health insurance coverage, the Affordable Care Act’s Medicaid eligibility expansion was also expected to lessen the uncompensated care burden on hospitals. The expansion currently faces an uncertain future.
Goal: To compare the change in hospitals’ uncompensated care burden in the 31 states (plus the District of Columbia) that chose to expand Medicaid to the changes in states that did not, and to estimate how these expenses would be affected by repeal or further expansion.
Methods: Analysis of uncompensated care data from Medicare Hospital Cost Reports from 2011 to 2015.
Findings and Conclusions: Uncompensated care burdens fell sharply in expansion states between 2013 and 2015, from 3.9 percent to 2.3 percent of operating costs. Estimated savings across all hospitals in Medicaid expansion states totaled $6.2 billion. The largest reductions in uncompensated care were found for hospitals in expansion states that care for the highest proportion of low-income and uninsured patients. Legislation that scales back or eliminates Medicaid expansion is likely to expose these safety-net hospitals to large cost increases. Conversely, if the 19 states that chose not to expand Medicaid were to adopt expansion, their uncompensated care costs also would decrease by an estimated $6.2 billion.

Background

Prior to the Affordable Care Act (ACA), childless, nondisabled adults were ineligible for Medicaid in most states. The ACA allowed states to expand eligibility to nonelderly adults with incomes up to 138 percent of the federal poverty level (roughly $16,400 for an individual and $33,600 for a family of four in 2017). As of March 2017, 31 states and the District of Columbia had expanded Medicaid, while 19 states had not.1

One intended benefit of the Medicaid expansion was to reduce uncompensated care burdens that hospitals face. Uncompensated care is any treatment or service not paid for by an insurer or patient. We define uncompensated care costs as the sum of a hospital’s losses on both charity care (when hospitals forgo or reduce the cost of care) and bad debt (when hospitals bill for services but cannot collect payment).

Our previous research, detailed in a 2016 Health Affairs article, found that hospitals in Medicaid-expansion states experienced a sizeable reduction in their uncompensated care costs between 2013 and 2014, from 4.1 percentage points to 3.1 percentage points of operating costs.2 To see if this uncompensated care decrease has continued, we extended our analysis to 2015 and explored which hospitals saw the greatest decreases in uncompensated care costs.

This issue brief is intended to guide decisions around a possible ACA repeal and further state Medicaid expansions, as well as inform policies aimed at alleviating hospitals’ uncompensated care burden. In 2015, U.S. hospitals provided a total of $35.7 billion in uncompensated care, according to the American Hospital Association.3 However, this burden is unevenly distributed. Safety-net hospitals care for a larger-than-typical share of low-income and uninsured patients. In the past, Medicare and Medicaid disproportionate share hospital (DSH) payments provided significant financial relief to safety-net hospitals. But the ACA mandates a sizeable reduction in DSH payments.

Findings

Uncompensated Care Declines in Expansion States Are Substantial Relative to Profit Margins

To identify trends in uncompensated care burdens for hospitals in expansion and nonexpansion states, we used data from Medicare Hospital Cost Reports to create a sample of 1,154 hospitals that report financial data for the calendar year. Focusing on hospitals within the 75th percentile, 50th percentile, and 25th percentile of the uncompensated care cost distribution, we found that between 2013 and 2014, these costs markedly declined in expansion states, and this downward trend continued into 2015 (Exhibit 1). The trajectories of uncompensated care costs were similar for hospitals across the three percentiles. In contrast, we found no similar break from historical trend in nonexpansion states.

 

How Medicaid Enrollees Fare Compared with Privately Insured and Uninsured Adults

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http://www.commonwealthfund.org/publications/issue-briefs/2017/apr/how-medicaid-enrollees-fare?omnicid=EALERT1201088&mid=henrykotula@yahoo.com

Abstract

Issue: The number of Americans insured by Medicaid has climbed to more than 70 million, with an estimated 12 million gaining coverage under the Affordable Care Act’s Medicaid expansion.1,2 Still, some policymakers have questioned whether Medicaid coverage actually improves access to care, quality of care, or financial protection.

Goals: To compare the experiences of working-age adults who were either: covered all year by private employer or individual insurance; covered by Medicaid for the full year; or uninsured for some time during the year.

Method: Analysis of the Commonwealth Fund Biennial Health Insurance Survey, 2016.

Findings and Conclusions: The level of access to health care that Medicaid coverage provides is comparable to that afforded by private insurance. Adults with Medicaid coverage reported better care experiences than those who had been uninsured during the year. Medicaid enrollees have fewer problems paying medical bills than either the privately insured or the uninsured.

First, Do No Harm to Patients With Pre-Existing Conditions

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http://www.realclearhealth.com/articles/2017/04/26/first_do_no_harm_to_patients_with_pre-existing_conditions__110567.html?utm_source=RC+Health+Morning+Scan&utm_campaign=5d3df6bbc3-EMAIL_CAMPAIGN_2017_04_26&utm_medium=email&utm_term=0_b4baf6b587-5d3df6bbc3-84752421

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The recent U.S. House decision to pull the first iteration of the American Health Care Act (AHCA) off the floor doesn’t necessarily mean efforts to reform health care are at an end. As members of Congress work to develop legislation that will change the current health care system, they must develop policy that ensures people with pre-existing conditions will receive coverage without additional costs in premiums, deductibles or coinsurance for their pre-existing condition.

As it stands, the Affordable Care Act (ACA) prohibits insurers from denying coverage to Americans with pre-existing conditions – no matter how severe or costly their medical care might be. Had the AHCA passed, a new provision would have required that patients with pre-existing conditions maintain continuous coverage without a lapse of more than 63 days.

Theoretically, this provision should ensure all Americans have constant coverage. In reality, however, it’s possible many patients with pre-existing conditions would have difficulty meeting this requirement. For starters, many individuals with chronic conditions, such as spina bifida or sickle cell disease, often earn lower incomes precisely because of their medical needs – which in turn makes it difficult for them to afford meaningful insurance that covers their care. Further, millions of sick patients with chronic diseases rely on Medicaid for coverage. Any health reform legislation must ensure that these patients don’t lose coverage altogether by 2020.

These changes could inflict grave harm on Americans. A recent report from the Department of Health and Human Services estimates that anywhere from 61 million to 133 million non-elderly Americans have pre-existing conditions. All of these Americans could have been denied coverage, or offered coverage at extraordinarily steep prices, had they needed to shop for individual health insurance before 2014, when the ACA’s coverage provisions went into effect. In fact, between 2010 and 2014, the number of uninsured Americans with pre-existing conditions fell by 22 percent – a clear sign of the impact of the ACA’s market reforms.

The ACA is not perfect. Changes such as reducing prescription costs, addressing cost barriers created by high deductible plans and reducing unnecessary administrative burdens on physicians and patients would improve the law.

However, the current law’s provisions like the ban on discriminating against Americans with pre-existing conditions have led to an historically low number of uninsured Americans – estimated at 8.9 percent last November. In turn, that coverage, combined with access to primary physicians, leads to more timely prevention and treatment of disease and, ultimately, improved public health for all Americans.

Family physicians serve on the front lines of our health care system, and we know how important it is that chronically ill patients receive the care the need to get healthy. We have witnessed firsthand the positive effects of the ACA’s prohibition on discriminating against Americans with pre-existing conditions, and we urge our leaders in Washington – both in Congress and in the administration – to continue to protect them.

The Future Of Delivery System Reform

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http://healthaffairs.org/blog/2017/04/20/the-future-of-delivery-system-reform/

Over the past several years, the federal government has put billions of dollars into a variety of programs aimed at improving the way health care is delivered. The Affordable Care Act (ACA) authorized a broad agenda of reform projects, including accountable care organizations (ACOs), bundled payments, value-based purchasing, primary care initiatives, and other payment and service delivery models. The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 established new ways of paying physicians intended to promote high-quality patient care.

What will happen to these initiatives under a Congress where Republicans are still seeking to enact major new health reforms and a president who could aggressively use authority granted by the ACA to make sweeping changes in Medicare and other health programs? Does this spell the end of delivery system reform, or could this be a new start with a greater potential to promote efficient and effective health care?

The prospect of ACA repeal has raised concerns among advocates, who argue that the enactment of Medicare-led efforts to promote higher-value care represents a real turning point in the battle to reduce waste and inefficiency. They fear that any reversal of the ACA framework would be a setback to the cause of lower costs and higher quality.

Those fears are overblown. There is bipartisan agreement on the goal of promoting more efficient and effective health care. MACRA, which is aimed at improving the value of physician services through payment changes, was enacted on a bipartisan basis. The debate is over the best way to accomplish the goal, not the goal itself.

We agree that it would be unwise to jettison entirely the delivery system reform provisions of the ACA, but their demise would not be the end of efforts to improve US health care. Rather, we see those provisions as far less consequential than their advocates claim, yet they can serve as departure points for putting in place more effective changes that provide room for private initiative and consumer preferences alongside changes in Medicare’s payment systems.

Summing Up

The cost of health care in the United States has grown rapidly for many years, typically well above growth in the overall economy. Those high costs have not guaranteed high-quality care or good patient outcomes, and our delivery system remains inefficient. What is needed is a process of continuous improvement in the efficiency and quality of the care delivered to patients. That is the core belief motivating the delivery system reform effort, which should be continued even as important features of the ACA come under review.

The key question is how best to pursue more cost-effective care delivery in the United States. At the moment, the federal government is trying to use its leverage to bring about greater efficiency, employing its regulatory powers under the Medicare program. That approach, while understandable, should be amended to make room for more private initiative and consumer incentives. Those are the driving forces for productivity improvement in other sectors of the national economy, and they should be harnessed to produce better outcomes in health care as well.

 

What Trump Can Do Without Congress to Dismantle Obamacare

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House Republicans left for spring break last week, without reaching a deal to repeal and replace the Affordable Care Act. Their bill to overhaul the health care system collapsed on the House floor last month, amid divisions in the caucus.

Even without Congress, however, President Trump has the authority to modify important provisions of the health law, including many that House Republicans sought to change or repeal. Here are some examples of actions he could take (or has already taken):

Don’t expect Medicaid work requirements to make a big difference

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https://www.axios.com/dont-expect-medicaid-work-requirements-to-make-a-big-difference-2338186318.htm

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Liberals and conservatives have irreconcilable differences of policy and principle over the issue of Medicaid “work requirements.” But their impact depends on how they are implemented and is likely to be very small — because most people on Medicaid who can work already are.

With Trumpcare dead for now, expect Republican governors to begin submitting waiver proposals to the Department of Health and Human Services to move their Medicaid programs in a more conservative direction. Medicaid “work requirements” are likely to be an element of many of those waiver requests, possibly from Republican-led states now looking to expand Medicaid under the Affordable Care Act.

During the Obama administration, HHS rejected mandatory work requirements as inconsistent with the purposes of the Medicaid statute, spurning requests from Arizona, Indiana, and Pennsylvania under a previous governor. Under the Trump presidency, HHS is expected to approve them.

Medicaid “work requirements” are not requirements to work in a literal sense. Generally, this is how states would define them:

  • Able-bodied beneficiaries — people who can work — would have to look for a job, participate in a job training program or go to school, or work full time or part time.
  • People who would be exempt: anyone who can document that they are too sick or disabled to work, have to take care of a sick child or family member, or do not have adequate child care.

Liberals find Medicaid work requirements repugnant because they believe that Medicaid beneficiaries want to work if they can, and that providing health coverage to people who cannot afford it is an obligation of any moral nation. Conservatives who favor work requirements see Medicaid coverage as another form of government welfare benefit, like cash assistance, requiring reciprocal obligations from beneficiaries, and a disincentive to work.

The reality, though, is that most Medicaid beneficiaries are working already, and the vast majority of those who are not working are likely to be exempted from all but the most draconian Medicaid work requirements when front-line caseworkers apply state rules.

As the chart shows:

  • 59% of all Medicaid beneficiaries who were not on Supplemental Security Income — the program for low-income people with disabilities — were working full time (41%) or part time (18%) in 2015.
  • That leaves 41% who were not working. Of those, the vast majority (89%) had reasons for not working, including that they were sick or had a disability (35%), were taking care of a family member (28%), or were in school (18%).
  • Another 8% said they could not find a job which, when documented, usually satisfies work requirements.
  • All told, just a tiny subset of Medicaid beneficiaries are-able bodied adults who do not have a reason for not working that would fail to pass muster with a state case worker.

Medicaid work requirements send signals conservatives like and liberals reject. As I learned a long time ago designing and implementing a leading welfare reform program as Commissioner of Human Services in New Jersey, the fight about policy and principle can get hot when it comes to work requirements, but their impact depends on how they are implemented.

With most beneficiaries working or with good reasons not to be, that impact will be small.

Reversal: Some Republicans now defending parts of ObamaCare

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Reversal: Some Republicans now defending parts of ObamaCare

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The House’s debate over repealing ObamaCare has had an unintended effect: Republicans are now defending key elements of President Obama’s health law.

Many House Republicans are now defending ObamaCare’s protections for people with pre-existing conditions, in the face of an effort by the conservative House Freedom Caucus to repeal them.

Some Republican lawmakers are also speaking out in favor of ObamaCare’s expansion of Medicaid and its mandates that insurance plans cover services such as mental health and prescription drugs.

Rep. Patrick McHenry (R-N.C.), the GOP’s chief deputy whip, said Wednesday that the Freedom Caucus’s calls for states to be able to apply for waivers to repeal pre-existing condition protections are “a bridge too far for our members.”

Those ObamaCare protections include what is known as community rating, which prevents insurers from charging higher premiums to people with pre-existing conditions, and guaranteed issue, which prevents insurers from outright denying coverage to them.

McHenry spoke in personal terms about the importance of keeping in place those Affordable Care Act (ACA) provisions, contained in Title I of the law.

“If you look at the key provisions of Title I, it affects a cross section of our conference based off of their experience and the stories they know from their constituents and their understanding of policy,” McHenry said.

“My family history is really bad, and so my understanding of the impact of insurance regs are real, and I believe I’m a conservative, so I look at this, understand the impact of regulation, but also the impact of really bad practices in the insurance marketplace prior to the ACA passing,” he continued. “There are a lot of provisions that I’ve campaigned on for four election cycles that are part of the law now that I want to preserve.”

McHenry’s defense of those ObamaCare pre-existing condition protections is striking because just last year, House Republicans touted a healthcare plan, called A Better Way, that would have repealed the protections and replaced them with a different system.

Rather than ObamaCare’s protections, the Better Way plan would have protected people with pre-existing conditions only if they maintained “continuous coverage,” meaning they had no gaps in coverage. Unlike under ObamaCare, the plan would not extend the protections to people who were uninsured and trying to enroll in coverage. For those people, Republicans proposed subsidizing coverage through separate high-risk pools.

During a town hall at Georgetown University last year, Speaker Paul Ryan(R-Wis.) called for repealing ObamaCare’s community rating protection and allowing insurers to return to the days of “underwriting,” when they could charge people with pre-existing conditions more. Instead, sick people could get coverage subsidized through high-risk pools, he said.

“Open up underwriting, have more insurance companies, have more competition, and just pay for the person with the pre-existing condition to make sure that they can get affordable coverage when that moment happens and make it much more competitive for everybody else,” Ryan said then. “I think it’s a smarter way to do it economically and it gives people more freedom, more choices.”

Now, though, many House Republicans are defending the ObamaCare protections.

Block grant funding of public health insurance: the Canadian example

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Block grant funding of public health insurance: the Canadian example

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Speaker Paul Ryan wants to reform Medicaid by “block granting” the program, that is,

by capping federal funding and turning control of the program over to states. The aim of such reforms is to reduce federal funding over the long term, while preserving a safety net for needy, low-income Americans. An additional valuable aim of this effort has been to advance federalism by reducing the federal government’s role and giving states and governors more freedom and flexibility in managing their Medicaid programs and helping people in their states.

What are the likely consequences of block granting? Benjamin Sommers and David Naylor write in JAMA about how Canada’s joint federal/provincial funding of health care provides lessons about the likely consequences of block granting.

Canada is a single payer health care system. However, there isn’t a Canadian single payer. Rather, there is a single payer for each province: I am covered by the Ontario Health Insurance Plan (OHIP). These plans are primarily funded by provincial taxes. However, provinces also receive a health transfer from the Canadian federal government, i. e., a block grant. The provincial health insurance plans are run by provincial health ministers, not the federal minister in Ottawa.

So, does provincial autonomy facilitate experimentation and tailoring by the provinces? Sommers and Naylor think not.

there is little evidence that the alleged advantages of block grants have materialized in Canada. Advocates argue that with greater flexibility and proper incentives, states can reduce costs by improving the efficiency of care. In Canada, however, the provinces’ primary means of coping with budget pressures under block grants has been to reduce funding to hospitals and bargain harder with provincial medical associations. Ironically, then, if this scenario plays out in the United States, it would exacerbate one of the chief Republican criticisms of Medicaid — that it pays clinicians such low rates that they have reduced incentives to care for low-income patients.

Indeed, physician refusal to take Medicaid patients is one of Speaker Ryan’s central criticisms of Medicaid.

What about the effects of a block grant system on federal funding of health care?

Once block funding was initiated in 1977, health care funding became a line item in the federal budget that could be arbitrarily cut or capped for fiscal or political reasons, as opposed to a level of spending pegged to the needs and health care use of the population. Importantly, these cuts occurred under both conservative and liberal federal governments.

When the Canadian health transfer began, the federal government paid 50% of provincial costs. However, the transfer has steadily declined, until it is now about 20%. Sommers and Naylor predict that US federal block grants would also decline, and this is clearly one of Speaker Ryan’s goals.

However, Canadian health care spending per capita has not declined.

As the cost of providing care has risen, but the federal health transfer has stayed fixed or declined, the provinces have taxed more and the federal government has taxed less. The provincial governments hate this, because they would rather have the federal government make the unpopular choice to raise taxes. But it’s not clear whether block granting has made a big difference in the health care received by Canadians.

American states could similarly increase taxes in response to a declining federal Medicaid block grant, but would they? The key difference between Canadian public health insurance and Medicaid is that the former is universal, while the latter is means-tested. Ontarians prefer lower taxes, but if Ontario decreases funding for OHIP, every Ontarian will experience longer waits for care. But American states can cut Medicaid — and reduce taxes — without affecting the health care of better off and able-bodied citizens.

The affluent and able-bodied are also the citizens most likely to vote. American states determine their own voting procedures. Block granting gives states an incentive to manage voting so as to reduce the participation of the marginalized communities who are most in need of public health insurance. Block granting is likely to undermine the health care for the poor and disabled, and it could reinforce the post-Shelby County v. Holder efforts to restrict voting.

 

How Republicans Can Escape Their Health Care Dilemma, Part 3: Responsible Federalism

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https://www.forbes.com/sites/theapothecary/2017/03/31/how-republicans-can-escape-their-health-care-dilemma-part-3-responsible-federalism/#46636dd45063

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This is the last in a series of three posts. I’ve proposed three approaches that Republicans might use to get out of  the dilemma they are in over health care:

  • Universal catastrophic coverage (Part 1)
  • Universal safety net (Part 2)
  • Responsible federalism (Part 3)

The Case for a Responsible Federalism

We have had federalism in health care for many decades. The grandaddy of them all is the open-ended Medicaid program which obligates Uncle Sam to pony up federal matching dollars in lock-stop with state willingness to put up their dollars. As AEI health policy expert Joe Antos recently pointed out, Medicaid has needed fixing for 50 years. But even before that we have had federal grant-in-aid programs dating back to the 1930’s that channeled federal dollars into health care. In my view, responsible federalism in health care would entail reforming the perverse fiscal incentives embedded in Medicaid while also offering states much greater flexibility to solve their health problems without the heavy hand of Uncle Sam.

 

What a Bipartisan Approach to U.S. Health Care Could Look Like

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https://hbr.org/2017/03/what-a-bipartisan-approach-to-u-s-health-care-could-look-like?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29

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As a friend once told me, “Government is about compromise.” That friend was Tommy Thompson, a four-term governor of Wisconsin who went on to serve in George W. Bush’s cabinet as secretary of health and human services.

With the failure of the American Health Care Act, recently proposed by Republicans in the U.S. House of Representatives, it is clear that the Affordable Care Act (ACA) will continue to serve millions of Americans for the foreseeable future. Of course, the ACA (or Obamacare) remains a flawed law. But rather than allow it to “implode” or “collapse,” as some suggest it will (e.g., President Trump), a group of Republican and Democratic leaders in Washington should take action and fix the broken elements of the ACA for the good of the millions of Americans who depend on it. It is time for a compromise.

What might such a bipartisan agreement look like? Here are some ideas.