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It has been three years since the landmark Affordable Care Act (ACA) was signed into law on March 23, 2010.[1]   As the law approaches full implementation, ACA has already increased access to needed health services, reduced costs and improved care for millions.  Yet, as this progress continues and the law's most impactful provisions near implementation, threats to the law remain, through repeal efforts and budget cuts. Further, last year's Supreme Court ruling on the law left states with the option, not requirement, to expand Medicaid coverage to more Americans. While some states have moved forward with expanding Medicaid, others have wavered or chosen not to expand, leaving millions uninsured who would otherwise have gained coverage.

To celebrate ACA's anniversary, we review significant improvements the law has already made in expanding consumer access to health care and in promoting policies that improve the health care system in general. We then consider specific ways in which the law strengthens and improves Medicare.  These improvements would all be lost by the repeal of the law or enactment of various deficit reduction proposals currently under discussion.

I. ACA and Medicare: Improving the Lifeline Millions Depend On

As the Center has said since it was signed into law, ACA is good for Medicare and good for families that depend on it. It is saving older and disabled Americans thousands of dollars a year and strengthening the solvency of Medicare.

  • Closing the Medicare Drug Coverage Gap.  People with Medicare are already seeing a phase-out of the "Donut Dole" coverage gap. ACA is on track to fully eliminate the Donut Hole by 2020, ensuring that people enrolled in Medicare Part D have better access to the drugs they need. So far, this ACA provision has already saved Medicare beneficiaries over $5.7 billion on their prescription drug costs, with the average beneficiary saving over $600.[2]
  • Free Preventive Services for People with Medicare: ACA makes many preventive screenings and services free for people with Medicare as well as those with private insurance.  Last year alone, over 34 million Medicare beneficiaries used at least one free preventive service, including mammograms and other critical screenings.[3]
  • Medicare Advantage (MA) Payment Changes.  Medicare Advantage payments are restructured at an increasingly smaller percentage of original Medicare rates.  Prior to the restructuring, MA payments were, on average, 13% higher than those for traditional Medicare.[4]  Also, MA plans are prohibited from charging higher cost-sharing than original Medicare for skilled nursing facility care, chemotherapy and kidney dialysis.

ACA is good for Medicare and Medicare beneficiaries. The biggest threats to Medicare today are the many attempts to privatize Medicare, turn it into a voucher program, and undermine the community of persons who rely on Medicare.  These proposals are often made by the same policymakers who opposed ACA and maintain that it harms Medicare and Medicare beneficiaries.  Three years after enactment of ACA, these are the proposals that would cause the sweeping changes to Medicare that are so often falsely attributed to Health Care Reform.

II. Access to Care and Consumer Protections

ACA improves access to affordable coverage and care for American families. It ends harmful and discriminating practices that left many uninsured, especially when they needed care most. Among the many policies that are already helping, or are soon to be in effect are:

  • Increasing the Age for Dependent Coverage of Adult Children.  Among the most touted, and earliest-implemented, ACA provisions was the required increase to age 26 for private insurance coverage of adult children.  This provision, effective in 2010, allows parents who have family coverage to continue to insure their adult children several years after the previously common cut-off date. Thanks to ACA, today the uninsured rate for young adults has dropped over 27 percent and 2.5 million more young adults are insured.[5]
  • Covering Preventive Benefits.  The law requires new health plans to provide coverage without cost-sharing for preventive services rated as A or B by the U.S. Preventive Services Task Force. Patients can now receive certain services, including mammograms, colonoscopy screenings for colon cancer, and some vaccinations, at no cost. To date, over 70 million Americans with private insurance have been provided at least one free preventive service thanks to ACA.  These services not only prioritize health and wellness, they reduce overall costs for families, and state and federal budgets.[6]
  • Ensuring that Consumers' Money Gets Spent on Health Care, not Profits. ACA includes policies that establish a Medical Loss Ratio (MLR) to ensure that consumers' premium money is spent on care, not administrative costs or profits. If insurance companies fail to spend at least 80% of consumers' dollars on medical care and improving quality of care and services provided, they will be required under ACA to issue rebate checks to consumers. [7] Thus far, insurers that did not meet the 80/20 rule have provided $1.1 billion in rebates that benefited about 13 million Americans, at an average of $151 per family.[8]
  • Making Plans Easier to Understand for Consumers. ACA requires all health plans to provide consumers with concise, easy to understand summaries of coverage and glossaries of terms. This change will allow consumers to more confidently navigate the confusing process of comparing and choosing plans. Health plans will also have to provide examples of coverage and estimates of out-of-pocket costs for common medical situations such as maternity or diabetes management.
  • Eliminating Lifetime Limits. ACA outlaws the practice of placing lifetime limits on the dollar value of coverage or rescinding consumers' coverage (except in cases of fraud). 

III. Quality of Care and Delivery System Reform

ACA works to improve and explore new delivery systems and policies that will improve quality and reduce costs. Among these efforts are:

  • Comparative Effectiveness Research.  The law authorized a Patient-Centered Outcomes Research Institute to conduct research into the comparative effectiveness of various medical interventions.
  • The Office for Dual Eligibles.  This office, now called the Medicare and Medicaid Coordinating Office, was established to improve care for those Medicare beneficiaries who also have Medicaid and to promote more efficient and cost-effective methods for the provision of care.  In its two years of operation, the MMCO has launched an alignment initiative to identify and address those areas where differences in Medicare and Medicaid law create problems for beneficiaries.  It has also promoted the development of integrated care initiatives by states, to more effectively coordinate and manage care for those who are eligible for both programs (dual eligibles). 
  • Center for Medicare and Medicaid Innovation.  The law gives the Innovation Center  authority to test innovative payment and delivery systems that improve outcomes and decrease costs, or that improve outcomes without increasing costs, or that decrease costs without worsening outcomes.  The Innovation Center has collaborated closely with the Medicare and Medicaid Coordinating Office to test models for improving care for dual eligibles.
  • Accountable Care Organizations (ACOs) in Medicare.  This provision, applicable to the traditional Medicare program, allows physicians, hospitals and other health care professionals to group together.  These voluntary organizations share with Medicare in savings generated from caring for certain Medicare beneficiaries if the ACOs meet designated quality standards. 
  • Data Collection to Reduce Health Care Disparities.  ACA requires the collection and reporting of certain data on race, ethnicity, sex, primary language, and disability status. The data collection and disaggregation will help address and reduce disparities faced by communities including lesbian, gay, bisexual and transgender (LGBT) Americans.

Conclusion

ACA has improved the lives of the millions of Americans and their families who count on Medicare for their health insurance coverage. The law ensures that future generations will have access to benefits by strengthening the Medicare trust fund and by supporting delivery system reforms that will help reduce the growth in health care costs.  ACA promotes health and wellness for beneficiaries by emphasizing prevention, quality, and care coordination. It also benefits the families of Medicare beneficiaries by extending access to health insurance coverage to millions of uninsured individuals, and by protecting everyone against insurance company practices that deny health insurance coverage to people when they need it.

Efforts to eliminate ACA and to privatize and dismantle Medicare endanger the health of millions of Americans.  In today's environment of fragmented health care delivery, rising health care costs, and increased job insecurities, shifting more costs to Medicare beneficiaries through privatization is not the solution.

ACA is good for Medicare, good for consumers, good for families, and good for taxpayers.  Medicare beneficiaries, consumers, and their families should celebrate the third anniversary of the Affordable Care Act, and should work to ensure that its provisions are fully implemented at the federal and state levels.

 


[1]  Health Care Reform consists of two separate laws, the Patient Protection and Affordability Care Act of 2010 (PPACA), Pub.L. 111-148  (March 23, 2010),  and the Health Care and Education Reconciliation Act of 2010 (HCERA), Pub. L. 111-152 (March 30, 2010).  The laws often are collectively referred to as the Affordable Care Act (ACA).
[2] Centers for Medicare and Medicaid Services, available at http://www.cms.gov/apps/files/MedicareReport2012.pdf.
[3] Department of Health and Human Services, available at http://www.healthcare.gov/blog/2013/03/anniversary-consumer-protections.html.
[4] See, e.g., MedPAC Report to Congress: Medicare Payment Policy (March 2010) noting that in 2010, overall payments to plans average an estimated 113 percent of original Medicare fee-for-service (
FFS) spending; available at:  http://www.medpac.gov/documents/Mar10_EntireReport.pdf.
[5] Department of Health and Human Services report, available at http://aspe.hhs.gov/health/reports/2011/YoungAdultsACA/ib.pdf.
[6] Department of Health and Human services, News Release, available at http://www.hhs.gov/news/press/2013pres/03/20130318a.html.
[7] Healthcare.gov, http://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html.
[8] Department of Health and Human Services, available at http://www.healthcare.gov/blog/2013/03/anniversary-insurance-accountability.html.

 

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