The nonpartisan Congressional Budget Office has released their report on the GOP’s Affordable Care Act (ACA) replacement plan. The numbers released in this report are grim, and will only make it more difficult for Republicans to explain why their legislation will outperform the ACA.The bottom line is that 14 million will lose coverage under this plan in 2018, rising to 21 million in 2020 and 24 million in 2026. In the non group market, premiums will rise 15-20% in 2018 and 2019.
On #Trumpcare, CBO will soon weigh
We already know it will say:
Trumpcare’s name is a LIE
And will leave some to die.
Hippocrates would cry “foul play”!
The effects of the Affordable Care Act of 2010 in each state depend on various factors, such as the number of uninsured individuals in the state and the governor’s receptiveness to the law’s provisions. In this post, I focus on the benefits of the Affordable Care Act (ACA) in Colorado, primarily from the perspective of my job as an emergency department (ED) physician, in support of my argument that the ACA must not be repealed–instead, I recommend that it be strengthened. In a prior post, I summarized estimates of the impact of the GOP’s proposed ACA repeal/replace plans on coverage and consumer costs.
Effects of the ACA on Uninsurance Rate in Colorado
In Colorado, the number of uninsured individuals declined by 25.5%, from 729,000 individuals in 2013, or 14.1% of the population, to 543,000 individuals in 2014, or 10.3% of the population.
Colorado was one of 32 states (including DC) that had expanded Medicaid as of 1/1/2017. In fiscal year 2014, annual Medicaid enrollment in Colorado increased by 26.1%. Average monthly enrollment increased 59% from 783,420 to 1,244,031 pre-ACA to post-ACA.
Drivers of Healthcare Cost and Utilization from the Emergency Department Perspective
Healthcare access and coverage–so improved under the ACA–drive a lot of what happens in the emergency department (ED). We can think of this in 3 categories:
- How the ACA has impacted who comes into the ED (and the hospital).
- How the ACA has decreased the amount of services we ED physicians provide to patients while they are in the ED (and hence the cost).
- How the ACA has impacted what happens at the end of the ED visit (should I stay or should I go?)
How the ACA has impacted who comes into the ED (and the hospital)
In Colorado, the number of ED visits has declined with ACA implementation. This varies state, by state, but in Colorado, we have seen a clear decline in the rate of ED visits per insured person–a trend driven by the expansion of Medicaid insurance.
The trend is also apparent when we restrict the analysis to children only:
The decline in population rate of ED visits among Medicaid patients did not result in a net decline in the number of ED visits–in 2014, the overall number of Medicaid ED visits went up, largely because more patients were on Medicaid. But, among those on Medicaid, during the ACA rollout, population rates of ED visits went down. As expected, the number of un-insured ED visits declined in Colorado as the number of Medicaid visits rose.
Increasingly, patients are more likely to visit their medical home (primary care provider) because they are more likely to have one, thanks to the ACA. When we do see patients in the ED, patients are more likely to have had started treatment before coming in (saw or called their medical home). Diverting more ED visits to the medical home is good for many reasons, not the least of which is cost.
The decline in ED visits is also a Colorado Medicaid performance metric for Colorado’s seven Regional Care Collaborative Organizations (RCCOs)–RCCOs received payment incentives if they achieved a 3% decline in ED visits per patient in their RCCO. Although most RCCOs did not achieve this decline, all achieved some decline in 2016:
How the ACA has decreased the amount of services we ED physicians provide to patients while they are in the ED (and hence the cost)
If we know a patient in the ED has no coverage (no financial access to primary care), the ED visit costs more for many reasons, including:
- The patient is more likely to have tests done in the ED because there is no primary care provider to order tests and follow test results
- The patient is more likely to have subspecialty consultations instead of office follow-up visits with primary care providers
- The patient is more likely to get more conservative (more aggressive) treatment in the ED, rather than waiting a day or two to see if the patient really needs more aggressive testing/treatment, because there is no medical home to provide that testing/treatment in a day or two.
How the ACA has impacted what happens at the end of the ED visit
If we, as ED physicians, know a patient has financial access to primary care, we are more likely to discharge them home rather than admit them to the hospital. This is reflected in the decrease in hospital admissions relative to the rate of ED visits among all ages:
The same trend is seen among children only:
As an example of how this works, one of the most common reasons young children are admitted to the hospital in Colorado (and nationwide) is for a common lower respiratory viral syndrome called bronchiolitis. Several of my colleagues at Children’s Hospital of Colorado have performed the research (here and here) to show the circumstances under which a child is safely discharged home on home-oxygen therapy. This is cost-saving in that hospitalizations are expensive, and also result in many missed days of work for parents. The criteria for discharge to home (rather than hospital admission) in our hospital’s evidence based guideline include access (within 24 hours) to a medical home for a follow up check:
Before the ACA permitted so many more access to a medical home, patients with common conditions like bronchiolitis were more likely to be admitted. Discharging more to home means fewer inpatient stays:
Thus, for Colorado consumers, the ACA has helped improve coverage, thereby reducing the per-insured rate of ED visits, the per-ED-visit rate of inpatient admissions and the overall rate of inpatient admissions, both for adults and children. It has primarily done this by allowing more Coloradans to access care where they should be able to: in a medical home. By reducing these costly forms of healthcare utilization, EDs are less crowded for those who truly need ED care. By reducing the proportion of uninsured visitors to the ED and hospital, the ACA has also decreased the amount of uncompensated care, permitting more hospitals to remain in business.
Jeffrey Beall is an academic librarian at the Auraria Library at University of Colorado Denver located in Denver, Colorado. He got tenure in 2012 and became an associate professor. For a number of …
In honor of bronchiolitis season, I am posting here a limerick I wrote summarizing the AAP’s 2015 guidelines for treatment of bronchiolitis:
When treating bronchiolitis,
Refraining from films would delight us!
Please also avoid
The neb and the ‘roid…
After all it is only a virus!
For other medical verse, please see my blog.
Source: Bronchiolitis guideline limerick
At 1:30 AM, January 12, 2017, the Senate passed a budget resolution to repeal the Affordable Care Act (ACA), with a party-line vote (51-48). A budget resolution needs only a simple majority to pass and thus represented the Republican Party’s quickest avenue to repeal the ACA. Congressional Republicans are pursuing a plan that would repeal parts of the law in early 2017 via budget reconciliation (see below for which parts), but may delay enacting a new system for up to three years (i.e. they plan to defund the ACA’s key coverage provisions, but delay a replacement).
On January 17, 2017, the nonpartisan Congressional Budget Office (CBO) released a report on how ACA repeal would affect health insurance coverage and premiums. The CBO assumed the repeal plan would be similar to that adopted by Congress in 2015 (sponsored by Congressman Tom Price, Donald Trump’s nominee for secretary of Health and Human Services, and vetoed by President Obama). The bill Congress passed did not contain policies intended to replace the ACA, presumably because a consensus did not exist on what form such an alternative should take. It is unlikely that supporters of ACA repeal will have agreed on an alternative before voting on repeal. Based on the 2015 legislation, the CBO report assumes that the forthcoming reconciliation legislation will do the following:
- the individual mandate penalties
- after a delay of two years, the premium tax credits and Medicaid expansions
- leave intact the ACA’s insurance reforms (cannot be amended through reconciliation under the Senate’s reconciliation rules)–including
- essential health benefit
- actuarial value requirements
- limitations on health status underwriting
- limitations on pre-existing condition exclusions
- rating requirements that allow premiums to vary only based on age, geographic locations, and tobacco use (and not on sex).
CBO Projections of Impact on Health Insurance Coverage:
If Congress does not repeal the ACA’s insurance reforms (listed above):
- 2017: No immediate dramatic effect because premium increases would already be established and enrollment set
- 2018: 18 million people would become uninsured, including 10 million fewer enrollees in the nongroup (or individual) insurance market, 5 million fewer with Medicaid coverage, and 3 million fewer with employment coverage.
- 2020: (following repeal of the Medicaid expansions and premium tax credits): 27 million will have become uninsured
- 2026: 32 million will have become uninsured (23 million fewer nongroup market enrollees, 19 million fewer covered by Medicaid, and 11 million more enrolled in employer coverage)
- These increases would be due to a combination of people dropping coverage because it was no longer mandated and to insurers abandoning the nongroup market and increasing premiums because of adverse selection concerns.
If Congress does repeal the ACA’s insurance reforms (listed above):
- 2026: 59 million would be uninsured; 21 percent of the population.
CBO Projections of Impact on Health Insurance Coverage:
- 2018: insurers would increase premiums by 20 to 25 percent
- 2018: insurers in some areas would leave the nongroup market in anticipation of further reductions in enrollment and higher average health care costs among enrollees who remained after the subsidies for insurance purchased through the marketplaces were eliminated. As a consequence, roughly 10 percent of the population would be living in an area that had no insurer participating in the nongroup market.
- 2020: nongroup market premiums would increase by 50 percent relative to current law projections and about half of the population would live in states with no insurer participation in the nongroup market
- 2026: nongroup market premiums would double and three-quarters of the population would live in states with no insurers in the nongroup market. Fewer than 2 million people would have nongroup market coverage.
The Urban Institute has released a similar Report on the Implications of Partial Repeal of the ACA through Reconciliatio, in December 2016, using the same 2015 bill as the model for the 2017 reconciliation bill repeal.
The key effects of the passage of the anticipated reconciliation bill are as follows, quoted verbatim from the report’s Abstract:
- The number of uninsured people would rise from 28.9 million to 58.7 million in 2019, an increase of 29.8 million people (103 percent). The share of non-elderly people without insurance would increase from 11 percent to 21 percent, a higher rate of uninsurance than before the ACA because of the disruption to the non-group insurance market.
- Of the 29.8 million newly uninsured, 22.5 million people become uninsured as a result of eliminating the premium tax credits, the Medicaid expansion, and the individual mandate. The additional 7.3 million people become uninsured because of the near collapse of the non-group insurance market.
- Eighty-two percent of the people becoming uninsured would be in working families, 38 percent would be aged 18 to 34, and 56 percent would be non-Hispanic whites. Eighty percent of adults becoming uninsured would not have college degrees.
- There would be 12.9 million fewer people with Medicaid or CHIP coverage in 2019.
- Approximately 9.3 million people who would have received tax credits for private non-group health coverage in 2019 would no longer receive assistance.
- Federal government spending on health care for the non-elderly would be reduced by $109 billion in 2019 and by $1.3 trillion from 2019 to 2028 because the Medicaid expansion, premium tax credits, and cost-sharing assistance would be eliminated.
- State spending on Medicaid and CHIP would fall by $76 billion between 2019 and 2028. Also, because of the larger number of uninsured, financial pressures on state and local governments and health care providers (hospitals, physicians, pharmaceutical manufacturers, etc.) would increase dramatically. This financial pressure would result from the newly uninsured seeking an additional $1.1 trillion in uncompensated care between 2019 and 2028.
- The 2016 reconciliation bill did not increase funding for uncompensated care beyond current levels. Unless different action is taken, the approach will place very large increases in demand for uncompensated care on state and local governments and providers. The increase in services sought by the uninsured is unlikely to be fully financed, leading to even greater financial burdens on the uninsured and higher levels of unmet need for health care services.
- If Congress partially repeals the ACA with a reconciliation bill like that vetoed in January 2016 and eliminates the individual and employer mandates immediately, in the midst of an already established plan year, a significant market disruption would occur. Some people would stop paying premiums, and insurers would suffer substantial financial losses (about $3 billion); the number of uninsured would increase right away (by 4.3 million people); at least some insurers would leave the non-group market midyear harming consumers financially.
- Many, if not most, insurers are unlikely to participate in Marketplaces in 2018—even with tax credits and cost-sharing reductions still in place—if the individual mandate is not enforced starting in 2017. A precipitous drop in insurer participation is even more likely if the cost-sharing assistance is discontinued (as related to the House v. Burwell case) or if some additional financial support to the insurers to offset their increased risk is not provided.
The Urban Institute’s report concludes:
This scenario does not just move the country back to the situation before the ACA. It moves the country to a situation with higher uninsurance rates than was the case before the ACA’s reforms. To replace the ACA after reconciliation with new policies designed to increase insurance coverage, the federal government would have to raise new taxes, substantially cut spending, or increase the deficit.
With the Republicans on the verge of dismantling the Affordable Care Act and Medicaid, much of their focus has been on how much healthcare insurance “costs”. I thought it would be timely to revisit a 2015 analysis in the American Journal of Public Health, “Considering Whether Medicaid is Worth the Cost: Revisiting the Oregon Health Study.” (full text) The investigators performed a cost-effectiveness analysis using data from the Oregon Health Study (OHS), the experiment that began in 2008 when the state randomly selected uninsured participants to apply for Medicaid coverage creating a randomized controlled trial of a social policy. They concluded that Medicaid is in fact a cost-effective program.
The authors’ cost-effectiveness analysis found that the observed benefit of providing Medicaid was $62,000 per quality-adjusted life-year (QALY) gained. As a reference point, placing smoke detectors in homes provides a benefit of $210,000 per QALY.
The study reminds us that health benefits are best understood broadly and over the long term, rather than through a narrow focus on one year’s “cost” in the cost-effectiveness balance.