During his State of the Union address last night, President Obama described the Affordable Care Act “as part of the fabric of middle-class economic recovery.” Obama defended the Patient Protection and Affordable Care Act by pointing out its role in helping approximately 10 million Americans gain health coverage, significantly decreasing the level of uninsured Americans. For the first time in his presidency, Obama faces a Congress completely controlled by Republicans – a majority not too enthralled by his healthcare policy. Republican leaders are expected to find a way to “knock out” key pieces of the ACA, including the medical device tax and the mandate for employers to offer health insurance.
However, the most pressing issue will be King v. Burwell, a case before the U.S. Supreme Court that that challenges insurance subsidies in states that haven’t created their own exchanges. If the court rules in favor of the plaintiffs, 9.3 million low-and-middle-income Americans could lose access to subsidies worth $28.8 billion in 2016. Obama also praised the efforts of U.S. healthcare workers in helping control the spread of the Ebola virus in West Africa and proposed a new program called the Precision Medicine Initiative which aims to fight diseases such as cancer and diabetes. Furthermore, Obama promised to fix problems with healthcare delivery at the Veterans Health Administration.
Open enrollment in the Health Insurance Marketplace ends on February 15, 2015. Directions for signing up, including details on fees, exemptions, enrollment periods, and information on what to do if you miss the ACA deadline can be found here.
The Affordable Care Act is once again at the top of the agenda for the new Republican Congressional majority. Yesterday, the House debated a bill that would redefine full-time work from 30 hours to 40 hours a week, reducing the number of workers who would be offered health insurance by their employers. Republicans have argued that by requiring companies to offer health insurance to employees working 30 or more hours, the health law creates an incentive for employers to reduce workers’ hours to below 30 per week. Therefore, creating a way for employers to avoid providing coverage or paying a fine. The bill is expected to pass the House and go to the Senate. However, the White House says that if the bill reaches President Obama’s desk, he will veto it.
Between November 15 and December 18, HealthCare.gov enrolled 1.9 million new customers for health insurance. During the same time, 4.5 million existing policyholders re-enrolled or were automatically renewed into their existing policy or similar one beginning January 1, 2015. Health and Human Services Secretary Sylvia Burwell believes the numbers indicate “an encouraging start.”
For those who were re-enrolled, percentages around the mid-to high-30s logged into the system and either renewed their old plans or changed it to a different one. The rest were re-enrolled automatically. Anyone who was auto-renewed can change plans until February 15, 2015. Increased competition among plans, variations in premiums or benefits, and changes in financial circumstances have caused many people to switch plans.
Burwell remained tight-lipped about whether her department is making contingency plans in the event the Supreme Court rules that subsidies are not available in the 37 states where HealthCare.gov is operating the exchange.
In order to increase transparency, CMS has released new data giving consumers and researchers the tools and information they need to review 2015 health insurance plan information. New choices and more competition means that consumers will have even more affordable options during Open Enrollment this year. With 25 percent more issuers participating in the Marketplace this year, more than 90 percent of consumers will be able to choose from three or more issuers, up from 74 percent in 2014.
The Affordable Care Act, One Year Later Series: The Winners Part II will continue exploring the ways in which the ACA is working.
Premiums in the marketplaces aren’t rising quickly and more insurers are joining the marketplaces to compete. Many opponents of the ACA have argued that only older and sicker people are signing up for coverage, and that carriers would increase premiums or abandon marketplaces. However, multiple studies have shown that premiums inside marketplaces are barely rising. In fact, even within states, there is a lot variation. The HHS announced that participation in the marketplaces will actually increase next year.
Employer premiums aren’t rising. Most working-age Americans are insured through their employers. And although critics said employer premiums would skyrocket, this hasn’t been the case. A Kaiser/HRET Survey of Employer-Sponsored Health Benefits found that employer premiums rose by just 3 percent. However, because coverage can still be expensive, employers have asked employees to pay more in out-of-pocket costs.
Overall health costs are rising at historically low rates. When measuring the cost of healthcare, economists mostly care about national health expenditures-what the U.S. spends on medical care through both private and public insurance, as well as through individual out-of-pocket costs. According to the latest projections from CMS, it’s been rising very slowly.
The net effect on the budget has been to reduce the deficit. The ACA calls for new spending since the government now has to underwrite the costs of both the expanded Medicaid program and subsidies for people buying health insurance. With every dollar in new spending, there is also one dollar in either new revenue or new spending cuts. According to the Congressional Budget Office (CBO), the net effect is to reduce the deficit. Additionally, according to the Committee for a Responsible Federal Budget, the total bill for federal healthcare programs is likely to be lower than predicted when the ACA first became law.
Stay tuned to the HMS Affordable Care Act, One Year Later Series to find out who the ACA losers are.
On January 1, 2015, the employer mandate responsibilities in the ACA are scheduled to take effect. Employers with 100 or more full-time equivalent employees (FTEs) will be required to offer a qualified health plan to all of their full-time employees or face a potential financial penalty. The law defines a “full-time employee” as an individual who works 30 hours or more per week. The IRS has determined that the requirement will be applied on a monthly basis using 130 hours per month as the standard for full-time. For employers of 50-99 FTEs, the mandate takes effect the following year on January 1, 2016.