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States Exploring Deviations from ACA Standards

A number of states are considering pursuing waivers from selected requirements of the Affordable Care Act in the name of health care innovation.

Section 1332 of the 2010 health care reform law permits states, with federal approval, to implement different approaches to providing their residents with quality, affordable health care that fall outside the restrictions of Affordable Care Act requirements so long as those different approaches provide comparable coverage and do not increase federal costs.

iStock_000005564268XSmallThese state innovation waivers, also commonly referred to as section 1332 waivers, are available to take effect as of January 1, 2017 and a number of states – Alaska, California, Hawaii, Minnesota, and Oklahoma – either have applied for waivers or appear to be on a path for doing so.

Learn more about efforts in those states in this Health Affairs Blog article and learn more about section 1332 waivers from this description on the web site of the Centers for Medicare & Medicaid Services.

Medicaid Expansion Improved Hospital Finances

jama1Hospitals in states that expanded their Medicaid programs as provided for in the Affordable Care Act experienced increased Medicaid revenue, reduced uncompensated care costs, and higher profit margins compared to hospitals in states that did not expand their Medicaid programs.

These findings for 2014 come from the new study “Association Between the 2014 Medicaid Expansion and US Hospital Finances” published by the Journal of the American Medical Association. Find that study here.

Post-Reform “Churn” Less Than Expected

When the Affordable Care Act passed, observers were worried about health insurance “churn”: people moving from one health insurer to another at frequent intervals.

But early indications are that this churn, while real and a challenge, is not nearly as great as anticipated.

According to a 2015 survey of low-income adults in three states, churning is taking place less often than expected as people move from uninsured to privately insured to Medicaid-insured and then back again.

The leading causes of churn so far have been people obtaining insurance, changing jobs, losing Medicaid eligibility or marketplace subsidies, and inability to continue paying insurance premiums.

More than half of those who changed insurers reported gaps in coverage and care during their transitions.

The three states that were surveyed all responded to the Affordable Care Act’s passage differently:   Kentucky expanded its traditional Medicaid program, Arkansas enrolled new beneficiaries in private market plans, and Texas did not expand its Medicaid program at all.
Interestingly, there were no significant differences in churning rates between the states.

commonwealth fundChurn is especially a challenge for low-income people, which especially makes it a challenge for private safety-net hospitals because they serve so many more low-income patients than most hospitals.

For a closer look at health insurance churn and what has happened since the Affordable Care Act’s passage, see the article “Insurance Churning Rates for Low-Income Adults Under Health Reform: Lower Than Expected” here, on the web site of the Commonwealth Fund.

Who’s Still Uninsured?

Hispanics.

Young people between the ages of 19 and 34.

Men.

Low-income people, especially those living in states that have not expanded their Medicaid programs.

People in the South – again, especially those living in states that have not expanded their Medicaid programs.

Those who work for small companies.

commonwealth fundThe uninsured rate in the U.S., 20 percent before the Affordable Care Act took effect, is now 13 percent.

Learn more about how the Affordable Care Act has changed the rate at which different groups of Americans are insured in this Commonwealth Fund survey.

ACA Slowly, Surely Improving Health Status

A new survey has found that the combination of Affordable Care Act-driven enhanced access to health insurance and improved performance by health care providers is producing better health status in communities across the U.S.

The survey looked at health status in 306 regional health care markets based on factors such as access to care, quality, avoidable hospital use, health care costs, and health outcomes found modest improvements in these areas and attributed those improvements to expanded access to health insurance and government quality programs introduced through the Affordable Care Act. The gains the survey documented occurred from 2011 through 2014.

commonwealth fundTo learn more about how the survey was administered and what it found and to see and compare health status in individual communities, go here to read the Commonwealth Fund report Scorecard on Local Health System Performance.

Fewer People Skipping Care for Financial Reasons

Fewer Americans are choosing not to pursue medical care for financial reasons, according to new information from the Centers for Disease Control and Prevention.

According to the CDC’s National Health Interview Survey, 4.5 percent of the people surveyed reported not getting medical attention they needed for financial reasons in 2015, down from 6.9 percent in 2009 and 2010.

This suggests that the Affordable Care Act’s changes in providing access to health insurance are making a different in the ability of people to get the care they believe they need.

Happy medical team of doctors togetherPrior to the reform law’s passage, the proportion of people reporting that they chose not to seek care for financial reasons had been rising steadily since 1998.

This is good news for the nation’s private safety-net hospitals, which often must deal with the medical and financial implications of serving especially large numbers of patients who, for financial reasons, have had limited and sporadic contact with the health care system over the years.

To learn more about the survey’s findings see this CQ HealthBeat report presented by the Commonwealth Fund and go here to see the CDC report Early Release of Selected Estimates Based on Data From the 2015 National Health Interview Survey.

A Look at Alternative Medicaid Expansion

While most states expanding their Medicaid programs in response to the opportunity presented by the Affordable Care Act simply expand their existing Medicaid programs, six states have taken a different approach, obtaining Medicaid demonstration waivers so they could tailor their programs in different ways.

In addition, a number of states currently considering Medicaid expansion appear to be considering pursuing demonstration waivers, often referred to as section 1115 waivers, as well.

commonwealth fundOne area in which these demonstration programs differ from traditional Medicaid expansion is in the degree of financial responsibility new Medicaid beneficiaries assume. Typically, new Medicaid participants must pay more for the benefits they receive under their states’ Medicaid expansion through greater cost-sharing responsibilities.

In the new issue brief “How Will Section 1115 Medicaid Expansion Demonstrations Inform Federal Policy?” the Commonwealth Fund looks at the alternative approaches different states have taken and considers the implications of those different approaches for both beneficiaries and the states. Find that issue brief here.

Affordability a Challenge for Many Newly Insured

Many Americans who have obtained private health insurance through the Affordable Care Act continue to have problems affording health care.

According to a Kaiser Family Foundation report based on focus groups six states, low-income individuals with new private insurance report continued problems with:

  • kaisermedical debt
  • affording care that is not covered by their insurance plans
  • handling out-of-pocket expenses, including deductibles
  • unexpected bills for treatment they thought was covered

Such patients pose a challenge for many private safety-net hospitals because of their inability to afford their co-pays and deductibles, leaving these hospitals with unexpected uncompensated care and bad debt. Because they care for more low-income patients than the average hospital, this is a bigger problem for private safety-net hospitals.

For a closer look at how the study and focus groups were conducted and what they found, go here for the Kaiser Family Foundation report Is ACA Coverage Affordable for Low-Income People? Perspectives from Individuals in Six Cities.

Safety Net Still Needed, Study Finds

Despite Affordable Care Act policies that have enabled millions of Americans to obtain health insurance, the health care safety net is still needed.

Or so concludes a new report from the Georgetown University Health Policy Institute’s Center on Health Insurance Reforms.

For the report A Tale of Three Cities: How the Affordable Care Act is Changing the Consumer Coverage Experience in 3 Diverse Communities, researchers visited and examined conditions in Tampa, Columbus, and Richmond (Virginia), and among their conclusions was:

We still need a safety net. Safety net programs in existence before the ACA were expected to become less necessary once the ACA coverage expansions took effect. And to some extent that has indeed been the case. But what was deemed affordable under the ACA for those with income too high for Medicaid eligibility is not necessarily perceived to be affordable to the individuals enrolling in the marketplace plans, particularly when health care spending must compete with other pressing household expenses. As a result, safety net providers report that many patients who start the year with coverage return to them later in the year uninsured.

Happy medical team of doctors togetherThe report also found that

Safety net providers are adapting to the new coverage and health system landscape ushered in by the ACA. However, there’s not yet enough data to know whether coverage has translated to better, more affordable access to health care services.

To learn more about the report and its findings, go here to read a Center on Health Insurance Reforms blog entry on the research and go here to see the report itself.

MACPAC Unhappy With How DSH is Dished

Medicaid disproportionate share hospital payments (Medicaid DSH) are not getting to the hospitals that need them most, according to the independent agency that advises Congress and the administration on Medicaid access, payment, and care delivery issues.

In its March 2016 Report to Congress on Medicaid and CHIP, the Medicaid and CHIP Payment and Access Commission found

…little meaningful relationship between DSH allotments and three aspects of DSH payments that Congress asked us to study: 1) the relationship of state DSH allotments to data relating to changes in the number of uninsured individuals, 2) data relating to the amount and sources of hospitals’ uncompensated care costs, and 3) data identifying hospitals with high levels of uncompensated care that also provide access to essential community services for low-income, uninsured, and vulnerable populations.

macpacMACPAC also observed that

Although early reports suggest that the coverage expansions are improving hospital finances in general, it is not yet clear how hospitals that are particularly reliant on Medicaid DSH payments are being affected.

MACPAC further maintains that

…DSH allotments and payments should be better targeted, consistent with their original statutory intent.

Noting an obstacle to such an undertaking, MACPAC

…recommends that the Secretary [of Health and Human Services] collect and report hospital-specific data on all types of Medicaid payments for all hospitals that receive them. In addition, the Secretary should collect and report data on the sources of non-federal share necessary to determine net Medicaid payment at the provider level.

Finally, MACPAC promises to continue looking into this challenge and exploring possible solutions.

In future reports on DSH payment policy, which MACPAC will include in its annual March reports to Congress, the Commission will continue to monitor the ACA’s effect on hospitals receiving DSH payments. We also plan to explore potential approaches to improving targeting of federal Medicaid DSH funding, including modifying the criteria for DSH payment eligibility, redefining uncompensated care for Medicaid DSH purposes, and rebasing states DSH allotments.

To learn more about what MACPAC had to say about Medicaid DSH and other Medicaid- and CHIP-related issues, go here to see the MACPAC report March 2016 Report to Congress on Medicaid and CHIP.