A recent item in the AMA MorningRounds caught my eye. I’m a roll-up-your-sleeves Consult-Liaison psychiatrist and I don’t pretend to understand the Affordable Care Act (ACA), either the law itself or the Supreme Court decision about its constitutionality. But I did try to educate myself a little about it, as any physician ought to try to do. But first the news item; Iowa Governor Terry Branstad declined to expand Iowa’s Medicaid program under the ACA. He’ll forgo the federal funding that would allow about 150, 000 low-income Iowans to enroll in the state Medicaid program. Branstad joins several other Republican governors in this regard, including those in Wisconsin, Louisiana, Florida, and South Carolina.
So of course, because I wasn’t sure what that meant, I looked for a basic primer on the ACA on-line and found the Henry J. Kaiser Family Foundation Health Reform Source (no connection with Kaiser Permanente) where I found the link to “A Guide to the Supreme Court Affordable Care Act Decision”. The link is A Guide to the Supreme Court’s Affordable Care Act Decision – Kaiser Family Foundation. There I found the pdf file (http://www.kff.org/healthreform/upload/8332.pdf) with a few pages worth of admittedly dense text, but an overall non-partisan, fairly clear summary of the background on the ACA itself, the Individual Mandate, the Medicaid Expansion and more. It helped me put the implications of Governor Branstad’s action into context.
The section in the pdf entitled “The Medicaid Expansion” explains one of the ways the ACA increases access to affordable health care insurance is by expanding eligibility for Medicaid benefits. Even President Obama says this is politically ugly. Medicaid is funded jointly by the Federal and state governments and it’s voluntary for states. All states participating in the Medicaid program have to follow certain federal rules. Funding the expansion will cost money and the federal government would cover 100% of the states’ costs of the coverage expansion in 2014-2016, tapering to 905 in 2020 and thereafter. The Congressional Budget Office estimates this would cover about 17 million uninsured, low-income Americans.
If I understand it correctly, the Supreme Court decision identifies the ACA as a tax, and it probably is one of the biggest in American history. And the ACA’s Individual Mandate is constitutional (though there was dissent among the justices). However, the court ruled the Medicaid expansion “is unconstitutionally coercive of states because states did not have adequate notice to voluntarily consent, and the Secretary could withhold all existing Medicaid funds for state non-compliance.” States could stand to lose over 10% of their overall budget which can be an economic disaster. So what the Court did to remedy that was to limit the Secretary’s enforcement authority, leading to the acceptable “opt-out” choice for states.
However, the Medicaid expansion of the ACA is otherwise intact and other changes to the Medicaid program contained in the ACA are preserved, including:
- Increases in primary care provider payments
- New options to expand home and community-based services
- Gradual reductions in disproportionate share hospital payments
- The requirement that states maintain the eligibility standards in place as of March 23, 2010
So now that I have this context, I can better understand how the ACA gets politicized and the Medicaid expansion would be vulnerable to that. However, Iowa has another response to the ACA and I’m pretty sure Governor Branstad would applaud it. That would be the newly created University of Iowa Health Alliance (UIHA), a regional alliance of four large health systems including over 50 hospitals and over 160 clinics. According to Jean Robillard, MD, Vice President for Medical Affairs, who announced the UIHA on the same day as the Supreme Court’s ruling on the ACA, the alliance will add value by enhancing care to patients while improving the health of Iowans, and at the same time reducing costs. “UIHA will create a platform for sharing expertise, selected support services, and information technologies needed to succeed in the emerging ‘accountable care’ environment.” You can read more about Iowa’s innovation at link, Four Health Systems Launch Regional Alliance.
And another issue regarding ACA pertinent for patients with mental illness as far as gaining access to insurance coverage are the state insurance exchanges. Many patients with chronic mental illness don’t have insurance. A recently published paper examined a couple of mechanisms in the ACA, namely risk adjustment and reinsurance, which might help ensure financial solvency of health plans that have a disproportionate share of enrollees with mental illness. Risk adjustment involves a federal or state exchange moving funds from insurance plans with healthier patients to plans with sicker patients–often those with complex, comorbid medical and mental illness. Reinsurance involves all plans in a state contributing to a pot of money used to reimburse costs to individual market plans for costs of patients who exceed a high predetermined level . I’m hoping Iowa takes advantage of these mechanisms within ACA.
1. Barry, C. L., J. P. Weiner, et al. (2012). “Risk Adjustment in Health Insurance Exchanges for Individuals With Mental Illness.” Am J Psychiatry.
OBJECTIVE: In 2014, an estimated 15 million individuals who currently do not have health insurance, including many with chronic mental illness, are expected to obtain coverage through state insurance exchanges. The authors examined how two mechanisms in the Affordable Care Act (ACA), namely, risk adjustment and reinsurance, might perform to ensure the financial solvency of health plans that have a disproportionate share of enrollees with mental health conditions. Risk adjustment is an ACA provision requiring that a federal or state exchange move funds from insurance plans with healthier enrollees to plans with sicker enrollees. Reinsurance is a provision in which all plans in the state contribute to an overall pool of money that is used to reimburse costs to individual market plans for expenditures of any individual enrollee that exceed a high predetermined level. METHOD: Using 2006-2007 claims data from a sample of private and public health plans, the authors compared expected health plan compensation under diagnosis-based risk adjustment with actual health care expenditures, under different assumptions for chronic mental health and medical conditions. Analyses were conducted with and without the addition of $100,000 reinsurance. RESULTS: Risk adjustment performed well for most plans. For some plans with a high share of enrollees with mental health conditions, underpayment was substantial enough to raise concern. Reinsurance appeared to be helpful in addressing the most serious underpayment problems remaining after risk adjustment. Risk adjustment performed similarly for health plan cohorts that had a disproportionate share of enrollees with chronic mental health and medical conditions. CONCLUSIONS: Cost models indicate that the regulatory provisions in the ACA requiring risk adjustment and reinsurance can help protect health plans covering treatment for mentally ill individuals against risk selection. This model analysis may be useful for advocates for individuals with mental illness in considering their own state’s insurance exchange.