The Affordable Care Act ( ObamaCare ): Where Are We?

1. The Affordable Care Act (ObamaCare): Where Are We? March 2010 March 2012 Department of Family & Community Medicine Grand Rounds 4/25/12 Dan Derksen MD, Professor Department of Family & Community Medicine dderksen@salud.unm.edu

2. The Impact of Health Care Reform in New Mexico Affordable Care Act 2010 to 2014 Supreme Court of the United States Coverage – U.S. vs N.M. Medicaid & the Exchange Forecasting Health System Change Dan Derksen MD, Professor Department of Family & Community Medicine dderksen@salud.unm.edu

3. I. Affordable Care Act • Since 2010 in New Mexico: • 900,000 with private insurance – no lifetime limits • 120,000 kids w/ pre-existing conditions not denied coverage • 10,000 < age 26 are covered on parents’ plan • NM Division of Insurance - rate review process

4. I. Affordable Care Act in 2014 • Mandates coverage (individual, employer) • Expands Medicaid <133% Federal Poverty Level • Subsidizes premiums 133 - 400% FPL on state or federal exchange • FPL family of 3 = $18,310

5. Kagan Sotomayor Breyer Alito Thomas Scalia Roberts Kennedy Ginsburg Supreme Court of the United States Paul Clement Former US Solicitor General Donald Verilli US Solicitor General

6. Supreme Court Hammer Time on Obamacare?

7. Supreme Court of the United States

8. Threshold – Is It Premature to Act before 2015? • Anti-Injunction Act (PL 72-65): • Disallows legal challenges to taxes until they are collected • Penalty for not having health insurance to be levied in 2014 Prediction: 9-0 SCOTUS Vote that Anti-Injunction Act does not apply

9. Mandate – Minimum Coverage Provision, Severability • Mandates that every American have health insurance • Challenged by 26 states with Republican Attorneys General • Questions mandate constitutionality and if the insurance requirement can be severed from the rest of the law • Affects guaranteed issue, community ratings for insurers • Mandate spreads risk, mitigates insurer adverse selection • PL 111-148, PL 111-152

10. Is Medicaid Expansion Unconstitutionally Coercive for States? • Covers all American adults under age 65 <138% FPL • 100% paid for by federal government 2014, 2015, 2016 • States eventually pay 10% of expansion costs • Requires states to expand or lose Medicaid funding entirely • Striking down Medicaid expansion endangers other federal programs – education, transportation, national security

11. Are Past Politically Charged SCOTUS Votes Predictive? • 48% cases were decided unanimously (9-0) in 2010 • 20% were along liberal/conservative divide (5-4) • Scalia & Thomas voted most often to invalidate legislation • Example: 5-4 Citizens United (2010) – extends 1st amendment free speech rights to corporations, unions • For: Roberts, Kennedy, Scalia, Alito, Thomas • Against: Stevens, Ginsberg, Breyer, Sotomayor http://sblog.s3.amazonaws.com/wp-content/uploads/2012/04/SB_votesplit_040512.pd

12. Will the Supreme Court Run the ACA off the Road? If you don’t know where you are going, you might end up someplace else Yogi Berra

13. Supreme Court of the United States - Prediction *Mandate struck down, along with guaranteed issue, community rating 042512 Dan Derksen MD

14. Can the U.S. Afford the Status Quo?

15. Status Quo: 60 million uninsured by 2020

16. U.S. Per Capita Cost Is Higher OECD Health Data 2011 at http://www.oecd.org/dataoecd/6/28/49105858.pdf Accessed 4/2/12 OECD - Organisation for Economic Co-operation & Development

17. U.S. Life Expectancy Is Lower OECD Health Data 2011 at http://www.oecd.org/dataoecd/6/28/49105858.pdf Accessed 4/2/12

18. Is There a Way Forward from Here? HELP US!

19. What Are the Republican Alternatives? Patients’Choice Act Redirect $300b ESI tax subsidy Create advanceable Tax Credits Families $5,700/yr Individuals $2,300/yr Health Savings Accounts Low-income: $5k debit card Other Reforms Create Medicaid Block Grants Like 1996 AFDC Block Grants Apply to All Means Tested Programs ESI = Employer Sponsored Insurance AFDC = Aid to Families with Dependent Children http://online.wsj.com/article/SB124277551107536875.html http://online.wsj.com/article/SB10001424052748704529204576257132397198332.html

20. Will States Have the Opportunity to Innovate?

21. By 2020 in U.S. with ACA: • Reduce uninsured by 30 to 33 million • Residual uninsured 26 to 27 million • Cover 20 to 23 million thru exchange • Cover 16 to 17 m in Medicaid expansion (100 million will be on Medicaid in 2020) • Reduce employer sponsored by 3 to 5 m http://www.cbo.gov/sites/default/files/cbofiles/attachments/03-13-Coverage%20Estimates.pdf

22. NM Health Status: Critical • Last in access to health care & prevention • 49th of 50 States in % Pop. Uninsured • Will experience 2nd highest decrease in uninsured of states starting in 2014 (16%, 300,000 individuals) if ACA upheld • 260 NM deaths/yr due to being uninsured State Scorecard on Health System Performance. The Commonwealth Fund 2009. http://www.commonwealthfund.org/Publications/Fund-Reports/2009/Oct/2009-State-Scorecard.aspx KFF State Health Facts. http://www.statehealthfacts.org/comparetable.jsp?ind=126&cat=3 Buettgens: Health Reform Across the States. March 2011. http://www.urban.org/uploadedpdf/412310-Health-Reform-Across-the-States.pdf Dying for Coverage in New Mexico. 2006 http://familiesusa2.org/assets/pdfs/dying-for-coverage/new-mexico.pdf

23. Payer Source – Health Insurance in NM Daniel Derksen MD 4/25/12

24. New Mexico Health Care Reform • In 2014, about 135,000 uninsured New Mexicans will be covered: • 80,000 through expansion of Medicaid • 55,000 in the Health Insurance Exchange

25. By 2020 in New Mexico up to: • 750,000 will be covered via Medicaid • 250,000 will be eligible for HIX coverage • 100k to 150,000 will still be uninsured • Will increase health system demand 25% • Pent up demand highest in first 24 months

26. State Slow Planning Insurance Exchanges By Winthrop Quigley / Journal Staff Writer on Tue, Apr 17, 2012 Gov. Susana Martinez’s people insist they will implement a health insurance exchange, as required by the federal Affordable Care Act, despite the resignation late last month of Dan Derksen. He was just about the only senior official in the administration who seemed to take the exchange seriously. The state’s commitment to the exchange is a tad difficult to trust. Leaving aside the lack of any discernible political taste the administration has for the federal health care act, the state has decided to delay work on a highly complicated project that is supposed to be ready to enroll thousands of people into insurance plans starting in October of next year. If the governor really wants a working insurance exchange in place before the federal law imposes one on New Mexico, state government is going to have to work with far more speed than it ever has. Health care official resigns over perceived lag in progress Trip Jennings | The New Mexican Posted: Friday, March 23, 2012 - 3/24/12 An Albuquerque doctor tasked by Gov. Susana Martinez's administration to help administer a cornerstone of the nation's federal health care law in New Mexico resigned this week, citing resistance from top officials to move forward. Dr. Dan Derksen resigned Monday as director of the New Mexico Office of Health Care Reform. In an interview Friday, Derksen, a lifelong Republican, said there had been a shift in policy and that he had lost the battle over "policy approach and implementation" within the administration about the timeline for building a New Mexico health insurance exchange, which is meant to help more people obtain health insurance.

27. No Help from NM Budget FY’13 • $5.61 B (3.6% increase) General Fund Spending • FY’12 budget balanced (from $450 million deficit) without increasing taxes • Increase in Medicaid funding by $45m, insufficient to pay for anticipated baseline growth in program http://www.nmsu.edu/~legislat/documents/1-5-12-fy13-exec-budget.pdf

28. Daniel Derksen MD 4/25/12

29. Exchange Timelines Required of States July 2011 Proposed HIX rule released 9/29/11 Level 1 NMHIX establishment grant submitted 11/29/11 CMS Notice of Award $34.3 million to NM March 2011 Final HIX rule published 3/30/12 Level 2 proposal due (or 6/30/12) June 2012 Supreme Court ACA Rulings Fall 2012 Complete, submit CMS HIX certification forms 1/1/13 CMS Certifies NMHIX “ability to operate” 10/1/13 Begin enrolling for NMHIX (or federal HIX) 1/1/14 Medicaid Expansion (175,000 eligible) 1/1/14 NMHIX Full operations 1/1/15 NMHIX Fiscally self-sustaining

30. Integrate Screening, Eligibility, Enrollment ** Income >133% Income below 133%* **Income 133-200 % Participating small employers/employees Medicaid/CHIP State Basic Health Plan (optional) Small Business Health Options Program Exchange Individual Health Insurance Exchange *5% Income Set Aside Thus <138% Income 133-400% Income >400% Subsidized Unsubsidized Daniel Derksen MD 4/25/12

31. Patients Office Staff Physicians, Providers Community Reforming the delivery, payment & education systems Improved Outcomes Vision 2020 Meaningful Use of EHR Medicare, Medicaid Health IT Practice Organization Coordinated Care (ACO) Patient Experience Press Ganey Performance Measurement Public Reporting RWJ AF4Q Family Medicine Foundation Primary Care Daniel Derksen MD 4/25/12

32. As any change must begin somewhere, it is the single individual who will experience it and carry it forward. The change must indeed begin with an individual; it might be any one of us. Carl Jung