Obamacare at the Crossroads: Health care reforms continue until 2020
Editor's Note: It's been three years since the Affordable Care Act was signed into law by President Obama. In a three-part series that began Sunday, the New Hampshire Union Leader takes stock of Obamacare in New Hampshire by looking at provisions of the law already in place, what lies ahead in 2014 and implications for the Granite State as the law takes full effect in the last five years of the decade, assuming efforts to have it repealed or defunded do not succeed.
While 2014 is the year when the most significant provisions of the Affordable Care Act take effect, the rollout of Obamacare will continue for at least four years after the Obama presidency is over in 2016, assuming the law remains in force and fully funded.
By the start of 2015, New Hampshire will have a full year of experience in cooperating with the federal government in the operation of an online marketplace or exchange for health insurance comparison shopping. Hopefully by then, Anthem won't be alone on the exchange, says Lisa Kaplan Howe, policy director at New Hampshire Voices for Health.
In an attempt to standardize the coverage offered in various plans throughout the country, the ACA defines plans as bronze, silver, gold, platinum or catastrophic, based on levels of coverage, deductibles, co-pays and other policy features.
"Anthem is likely to have plans in most of the tiers," Howe said. "I think a lot of carriers are watching to see what happens. So once the marketplaces are up and running, and they see how they are working, they may have their own incentives to come in. I think of 2014 as a learning year. There will be more carriers in the future."
Bob Nash, president of the New Hampshire Association of Insurance Agents, is not so sure.
"It's very difficult for health carriers to make any kind of profit in this state," he said. "It's a pure product of population. We are a small state, population-wise. Insurance is based on spreading the risk across a broad spectrum, and the smaller the spectrum, the more the risk and the lack of choice."
Multi-state plans coming
One provision of Obamacare that could have a significant impact on that lack of choice is a requirement that any insurer who wants to offer a multi-state plan in 2014 has to offer the plan in all 50 states by 2017. It's the first step toward allowing the purchase of health insurance across state lines, something the left and right have agreed on for years.
By 2017, at least two federally regulated multi-state plans should become available in every state.
"A number of companies have already submitted applications to be one of those multi-state plans," said Howe. Multi-state plans will debut in 31 states next year. "It will be interesting to see how that changes the dynamic in New Hampshire, and whether having a national plan with a bigger pool of people will help to keep costs down," she said. "We don't know if we will be one of the lucky 31 states or the last state in the pool."
Multi-state plans will be phased in nationally, with 60 percent of all states in 2014, 70 percent in 2015, 85 percent in 2016, and 100 percent in 2017.
Other key provisions of Obamacare taking effect in the last five years of the decade, include:
• A requirement as of Jan. 1, 2015, that the Centers for Medicare and Medicaid Services use a fee schedule that gives larger payments to physicians who provide high-quality care compared with cost.
• A provision as of Jan. 1, 2016, that allows states to form health care choice compacts and allows insurers to sell policies in any state participating in the compact.
• A 40-percent excise tax that takes effect on Jan. 1, 2018, on so-called "Cadillac" insurance plans. The tax will be levied on insurance premiums greater than $27,500 per year for family plans and $10,200 a year for individual plans.
• Medicaid on Jan. 1, 2019, extends coverage to former foster care youths who were in foster care for at least six months and are under 25 years old.
• The Medicare prescription drug coverage gap (commonly called the "doughnut hole") will be completely closed by Jan. 1, 2020.
Some of the most important aspects of the law are those designed to control the cost of health care services, in other words the fees charged by health care providers, particularly hospitals and doctors. The Medicare and Medicaid reimbursement programs will shift from payment based on services provided, to payment based on outcomes achieved.
"Everyone knows where the problem lies," Nash said, "the cost of medical service itself. People much more knowledgeable than I say until you concentrate on hospital costs, you're not going to be able to decrease the cost of health insurance."
Hospitals say those charges reflect the large amount of uncompensated care they have to provide for the uninsured.
By attempting to bring the number of uninsured as close as possible to zero, while creating incentives for cost-containment, Obamacare supporters say the law tries to address both dynamics.
Expansion of Medicaid is a big part of expanding the pool of insured, and by 2015 the matter should be settled in New Hampshire. If Medicaid is not expanded, more low-income families will apply for subsidies on the exchange. At least that's the theory.
Nash points out that when Maine expanded Medicaid on its own, the uninsured population remained constant at 12 percent. When mandatory health insurance took effect in Massachusetts, it reduced the number of uninsured to about 5 percent, but did not affect premium increases.
"The premiums in Massachusetts have continued to go up, not decrease, but there has been a decrease in the uninsured," Nash said. "Some would say that's benefit enough. It depends on your outlook."
By 2020, after five years of employer and individual mandates, multi-state insurance plans, expanded Medicaid, and aggressive outreach to the uninsured, Obamacare advocates hope the pool of insured will become large enough to significantly reduce uncompensated care at hospitals, and gain greater control over costs.
Even a supporter like Rowe thinks that may be too optimistic.
"It would be a wonderful day," she said, "but a very long-off day, when we get everybody into the system."