10-Year Report Card: Patient Protection and Affordable Care Act

Anytime you impose a change, it is always good to look back and see if there was an appropriate effect. How else will you know if it was the right decision? The Patient Protection and Affordable Care Act (PPACA), otherwise colloquially known as Obamacare, was enacted 10 years ago on March 23rd. The PPACA had 3 primary goals, according to healthcare.gov, which was created as part of the ACA. Those goals are as follows:

  • “Make affordable health insurance available to more people. The law provides consumers with subsidies (“premium tax credits”) that lower costs for households with incomes between 100% and 400% of the federal poverty level.
  • Expand the Medicaid program to cover all adults with income below 138% of the federal poverty level. (Not all states have expanded their Medicaid programs.)
  • Support innovative medical care delivery methods designed to lower the costs of health care generally.”

Let’s review the progress towards each of these goals. 

Goal 1: Make affordable health insurance available to more people.

This goal can be split into two parts:

  1. Is health insurance available to more people?
  2. Is health insurance affordable?

Insurance coverage has been expanded to significantly more people than it was prior to 2010. According to the Kaiser Family Foundation, the number of uninsured dropped from 46.5 million (17.4%) in 2010 to 27.9 million (10.4%) in 2018—that’s almost half the number of uninsured. It appears that similar trends can be seen in 2020, although this doesn’t account for the loss of coverage due to unemployment during the pandemic because more than half of the US population under age 65 acquires their health insurance through an employer.[1]

However, according to a study conducted by the Commonwealth Fund, an estimated 87 million (45%) individuals were inadequately insured.[2] While more Americans received coverage, a large portion of those that gained insurance still can’t afford the out-of-pocket costs over the course of a single year, not including insurance premiums, as well as their plan deductible.

Premiums have been steadily increasing by over 20% every five years. This means that the employee contributions to their employer-sponsored plans are actually rising faster than the median income!

As the 2020 election approaches, the concept of “Medicare for All” has been brought to the forefront to help increase coverage. The concept promotes a single-payer system, which allows for increased affordability due to the government’s ability to negotiate payment rates. However, while this system may increase coverage, federal government spending would increase $1.5 trillion over 10 years[3] and bringing about questions of accessibility.

Premiums weren’t “affordable” in 2010, and they are certainly less so today in comparison, especially if you take into account stagnant wages and increases in cost of living. While more people have health insurance coverage, given the significant premium increases and out-of-pocket costs, the goal of making healthcare more affordable has not been met.

Goal 2: Expand the Medicaid program to cover all adults with income below 138% of the federal poverty level

In June 2012, the Supreme Court ruling in National Federation of Independent Business v. Sebelius effectively made the expansion of the Medicaid program optional for states. However, all but 14 states have expanded the program, which accounts for a 14.7 million increase in enrollment, or 26.1% over baseline.[4]

The expansion has streamlined eligibility, enrollment, and renewal processes. For example, there is now a single application for Medicaid, CHIP, and subsidized exchange coverage. Due to these changes, enrollment and spending in Medicaid has increased in all states.[5] These changes were also associated with negative consequences, including increased wait times for appointments.[6]

This goal has only been partially met as one-quarter of the country still hasn’t bought in. While expansion still has a long way to go towards full implementation, substantial progress has been made recently. Virginia expanded Medicaid as of January 2019, and Maine expanded coverage as of February 2019. Utah and Idaho expanded Medicaid in January 2020; Nebraska will expand Medicaid in late 2020; voters in Missouri and Oklahoma will vote on the expansion in 2020.[7]

Goal 3: Support innovative medical care delivery methods designed to lower the costs of health care generally.

Under the ACA, The Center for Medicare and Medicaid Innovation (CMMI was created to support “the development and testing of innovative health care payment and service delivery models,[8]” including accountable care organizations (ACOs), bundled payments, value-based purchasing, and other primary care initiatives.

Innovation Center outlines the following priorities:

  • Testing new payment and service delivery models, including Quality Payment Program Advanced Alternative Payment Models
  • Evaluating results and advancing best practices
  • Engaging a broad range of stakeholders to develop additional models for testing[9]

In fact, they have developed 87 new programs and models.

For the Medicare Shared Savings Program, over the course of the last 10 years, the number of accountable care organizations and beneficiaries in these models has grown tremendously.

It has also resulted in these organizations generating shared savings, which is the result of curbing projected healthcare costs. In 2018, $983 million in shared savings was generated in the MSSP Program.[11]

From 2010 to 2017, healthcare expenditures, as a percent of the gross domestic product, have increased from 16.4% to 17.1%.[12] While innovative care delivery models have sparked innovation and slowed the dramatic rise of healthcare costs, we will need to continue to develop models to reverse the healthcare expenditure instead.

The third goal has been partially met as it’s possible that over a longer time span costs may actually begin to decline. Sometimes trying to stop a massive object moving at high speed requires a greater distance, not necessarily greater resistance. When looking back at the ACA as a whole, we notice a lot of “partially met goals,” which means if I were to give this a grade, I might consider this a 70% which is a C-. While the ACA has had an impact on both healthcare access and costs within the US—there is a significant amount of work left to be done in order to truly meet the outlined goals. At best, the ACA is either a good launching pad for future healthcare changes, or a long-term work-in-progress that will need to continue to be modified as time moves on. Arguably the most difficult piece of the puzzle is “buy-in.” This is because at the core of Value-Based Care is changing human behavior both in how care is given and received. At the same time, it’s important to make sure that incentives are aligned for those who run healthcare organizations. That means that there are three levels of human behavior that have to be modified. It isn’t an easy task, but this is why many of us at Salient Healthcare signed up to be a part of this wave of change. We know what we’re getting into. We believe in our cause, and if you’re reading this, thank you for believing in it, too.

[1] https://scorecard.commonwealthfund.org/spending/#13

[2] https://www.commonwealthfund.org/publications/issue-briefs/2019/feb/health-insurance-coverage-eight-years-after-aca

[3] https://www.urban.org/research/publication/incremental-comprehensive-health-reform-how-various-reform-options-compare-coverage-and-costs


[5] https://www.macpac.gov/subtopic/overview-of-the-affordable-care-act-and-medicaid/

[6] https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2017.1491?journalCode=hlthaff

[7] https://www.healthinsurance.org/medicaid/

[8] https://innovation.cms.gov/

[9] https://innovation.cms.gov/about

[10] https://www.cms.gov/files/document/2020-shared-savings-program-fast-facts.pdf

[11] https://www.cms.gov/files/document/2020-shared-savings-program-fast-facts.pdf

[12] https://apps.who.int/nha/database/country_profile/Index/en

Maria Nikol

About the Author

Senior Business Consultant

Maria Nikol is a Senior Business Consultant with over 12 years of experience in healthcare operations and strategy. She is passionate about the application of emerging policies within the value-based care space. Within her multifaceted position at Salient, she has taken a lead in developing business partnerships. She holds a Master of Jurisprudence in Health Law from Widener University and a Bachelor of Science in Pharmaceutical Marketing and Management from the University of the Sciences in Philadelphia. Her hope is to empower providers with the proper tools and knowledge to efficiently take better care of patients in this ever-evolving industry.

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