New CBO Report Lowers Its Projection For ACA Implementation Cost

Once again, the Congressional Budget Office (CBO) has lowered its projection for the cost of implementing the Affordable Care Act (ACA). In a new report, the CBO estimates the cost of health insurance subsidies, Medicaid and Children’s Health Insurance Program (CHIP) outlays and small-employer tax credits at $648 billion for 2015 to 2019. However, once the number is subtracted from the $142 billion in payments to the government due to the individual mandate, employer mandate, and Cadillac tax, the cost of ACA implementation over the same time period comes to $506 billion – a 30 percent drop from the CBO’s initial projection of $710 billion.

The report cites three key factors for the lower estimate:

  • Private insurers selling policies in the state and federal insurance exchanges that are charging lower premiums than expected.
  • A projected decrease of 2 million in the expected number of Medicaid and CHIP enrollees by 2025.
  • The historic low rate of healthcare spending growth.

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Senior Housing Prices Soared In 2014

In 2014, average per-unit prices in the assisted living market increased by 25 percent. Assisted living average unit prices hit a record $188,700 per unit and average per bed prices for nursing homes jumped 4 percent to $75,500, setting records in the industry for the second straight year. The average price for independent living communities also set a new record of $246,800 per unit, 28 percent higher than in 2013. The new prices came in a year that also saw record levels of mergers and acquisitions. In 2014, close to 300 mergers and acquisitions, representing approximately $26 billion, were announced in the senior housing market. As prices increased, cap rates, or the ratio of net operating income to property asset value, plunged last year, providing more cash flow for investments. Rates for assisted living and nursing homes also decreased.

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Study: Increase Patient Activation To Cut Costs & Improve Outcomes

Increased levels of patient engagement through patient activation may improve outcomes and lower healthcare costs, according to a new study published in Health Affairs. Researchers analyzed patient activation levels for more than 32,000 adult patients at Minnesota’s Fairview Health Services under the Patient Activation Measure, a “metric used to quantify a person’s knowledge, skills, and confidence in managing one’s own health and healthcare” on a scale of one to four. Researchers found patients with higher levels of activation demonstrated nine out of 13 improved healthcare outcomes. Lower activation levels were associated with significantly reduced chances of positive outcomes for seven of 13 measures compared to patients who remained at level four. The research team also found activation had similar effects on billed costs. Patients with the highest levels of activation had projected costs 31 percent lower than those at the lowest activation levels. Additionally, costs increased or decreased as patients’ activation levels changed.

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