By Ruth Carol, contributing writer
On its 10th anniversary of being signed into law, the Patient Protection and Affordable Care Act, also known as the Affordable Care Act (ACA), faces the country’s worst pandemic since the Spanish Flu in 1918. Will the ACA be able to provide coverage for millions more or will it break under the financial strain? What are the ramifications for the country’s health care system, of which the ACA is only one piece?
More popular than ever
What is certain is that the ACA has grown in popularity during the last decade. This past March, 42% of voters supported the ACA while 35% opposed it, according to a Wall Street Journal/NBC News poll. This represents the largest margin by which supporters outnumbered opponents since the law was passed.
All social programs of this nature gain in popularity over the course of time, said Michael Marchand, chief marketing officer for the Washington Health Benefit Exchange. When Medicare and Medicaid were established in 1965, people thought it was a terrible idea, he said, adding, “Imagine trying to go after Medicare or Medicaid today.” Marchand was involved in the rollout of Medicare Part D prescription benefits, which went into effect in 2006. “People hated it when it first came out. Fast forward 15 years, it has a 90% approval rating,” he noted.
People were concerned what the ACA would do to the insurance market, he continued, but health insurers didn’t flee the market as predicted and pricing has stabilized. “I fully expect the ACA will continue to grow in popularity,” Marchand added.
Any major social change has push back, especially when it comes with politically charged discourse like the ACA did, noted Avery LaChance, MD, MPH, director of both the Connective Tissue Diseases Clinic and Health Policy and Advocacy at Brigham and Women’s Hospital Department of Dermatology. When the ACA was first passed, there was a lot of uncertainty about what it would mean for individuals and their insurance coverage, and the health care system, in general. The ACA has gained support in the wake of its successes.
Those successes include the key provisions that weren’t actually rolled out until 2014, Bruce Brod, MD, MHCI, chair of the Academy’s Council on Government Affairs and Health Policy, pointed out. The exclusion of pre-existing conditions and dependent family coverage up until the age of 26 are the ACA’s most widely known provisions that catapulted its popularity as millions of people have come to depend on them. They translated into 20 million Americans getting insurance coverage.
As the Trump administration started to challenge the ACA, more people rallied behind it because they were afraid of losing it, Dr. LaChance said. Members of Congress have attempted to repeal the law more than 70 times since its enactment. Currently, the ACA is awaiting review by the Supreme Court, which could declare it unconstitutional affirming a lower court ruling. The lawsuit was brought by Texas and 17 other states challenging the constitutionality of the ACA.
Given the COVID-19 and the increased risk of people losing employer-sponsored insurance (ESI) due to job loss, the safety net function of the ACA has become more salient, added Christine Eibner, PhD, senior economist at the RAND Corporation.
Is it enough?
The ACA may be more salient, but is it solvent enough to absorb the more than 40 million people who sought unemployment benefits between March 14 — when President Trump declared a national state of emergency due to COVID-19 — to May 23? What about the approximately 20 million individuals who are expected to need hospitalization and the four million-plus people who will likely require critical care, according to a recent study published in Health Affairs? What about the countless number of people who will be treated in the emergency department and discharged as they are not deemed critically ill?
The ACA will not likely have to absorb all the newly unemployed people, Marchand said. Some individuals who lost their ESI will continue their existing plan under the Consolidated Omnibus Budget Reconciliation Act (COBRA) for a while, while others will switch to their spouse’s plan. Individuals under 26 years of age could switch to their parent’s coverage, assuming they still have it. Some people may continue their existing plan or look for a similar, less expensive one on the exchange, said Marchand, whose state was one of 12 states that re-opened their ACA exchange enrollment because of COVID-19. Between March 10 and May 8, 22,000 individuals signed up for coverage, including 7,000 uninsured residents. That is double the number of people who signed up during the same timeframe last year, he noted.
The wild card is how many people will end up on Medicaid. While some people will join the exchanges, others will exit them as they now qualify for Medicaid, Dr. Brod speculated. Another trend will be people swapping out their traditional Medicare plans for Medicare Advantage plans, the latter of which offers lower co-pays and deductibles on prescription coverage. “This is the first significant economic downturn to occur after the ACA started,” he added. “There is a lot of uncertainty about what choices individuals will make when they are financially strained after they lose their job.”
The ACA will enable many people who have lost their ESI to gain subsidized insurance coverage, Eibner said. Specifically, people with incomes below 138% of the federal poverty level (FPL) who live in Medicaid expansion states will be eligible for free coverage through Medicaid. People with incomes between 138% and 400% of the FPL (or 100-400% FPL in non-expansion states) could become eligible for subsidized coverage through the health insurance marketplaces. Those with incomes above 400% of the FPL will not be eligible for subsidies, but they may still benefit from the ACA’s rules that prohibit insurers from denying health insurance coverage based on pre-existing conditions, she said.
However, people with incomes below 100% of the FPL in states that did not expand Medicaid under the ACA may not qualify for subsidized programs, Eibner added. Also, undocumented immigrants who lose private coverage are not eligible for the ACA’s programs.
These options bear out in a recent Kaiser Family Foundation (KFF) analysis, which estimates that the pandemic will leave nearly 27 million people without ESI. Of those, 12.7 million are expected to be eligible for Medicaid, and 8.4 million are estimated to be eligible for marketplace subsidies. Some could qualify for a 60-day special enrollment period for the ACA regardless of which state they live in because job loss is a qualifying event to enroll outside the normal open enrollment period.
It’s not just about the ACA absorbing the newly unemployed, which it probably could at least for the short term, but whether the country’s health coverage infrastructure can absorb them, Marchand said. How can a state pay for an influx of hundreds of thousands of people on Medicaid that was not in the budget? He believes the impact on the health care system at the state and federal level could be substantial and the financial implications will be felt for the next three to five years.
Impact on patients
“Medicaid varies significantly state by state, however, many individuals who newly qualify for Medicaid will see a decrease in their overall out-of-pocket expenses,” Dr. LaChance said. For patients on private plans, she believes that people may shift to high deductible plans with lower premiums. More people may be looking at health savings accounts and health reimbursement arrangements, Marchand added. His concern is that even if prices remain flat for insurance products, it may feel like a 3% increase to people who are trying to recoup the money they lost during their time off work. Another concern is whether small businesses that are trying to get on solid financial footing will be able to even offer health insurance in the future, he said.
During the pandemic, many people have stopped seeking treatment, Dr. LaChance stated. There has been a nearly 60% decline in ambulatory care visits in the wake of the pandemic, according to a recent Commonwealth Fund report. Although the numbers have rebounded somewhat, there are still about one-third fewer visits than before the pandemic. In addition to having followed stay-at-home orders and social distancing, people are fearful of any kind of health care setting right now and are struggling financially, she added. As a result, people may avoid treatment for a while.
Numerous studies show that uninsured adults are less likely to seek care for chronic conditions and preventive screenings, Dr. Brod noted. Their health problems tend to smolder, and patients end up in higher cost settings, such as the emergency department, when their conditions become too difficult to manage.
Patients who do go to the dermatologist will have more concerns about insurance coverage and out-of-pocket expenses, Dr. LaChance said. “We will see more cost-conscious patients coming in to discuss what the cost of care will be,” she added. Making those estimates can be especially difficult in dermatology. There is no way to determine ahead of time that a patient coming in for a full body scan will require a biopsy of a suspicious mole, Dr. LaChance said. Plus, a patient’s out-of-pocket expense depends on the type of insurance product they have.
Impact on dermatologists
Patients will return, but it may not be immediately following the relaxation of stay-at-home rules. People may push off appointments a month or two until their finances are better, Marchand said.
“Dermatologists may be seeing fewer patients on a daily basis because they will have to limit the number of office visits to comply with appropriate social distancing and state-specific re-opening guidelines,” Dr. LaChance said. Decreased patient volume will impact reimbursement. “Overall, the thought and hope are that it will even out over time,” she said.
In the meantime, many dermatologists have moved to teledermatology. Within one week, Dr. LaChance switched from doing almost no teledermatology visits to almost exclusively teledermatology visits. It has improved access to care for all patients, but especially elderly and immunosuppressed patients, she said. The hospital is getting reimbursed for telemedicine at least through the pandemic.
Teledermatology does pose a challenge for how best to collect co-pays and deductibles when the patient is not in the office at the time of service, Dr. Brod pointed out. Practices will need to determine what model works best for them to ensure that they are fairly reimbursed even when the patient does not step foot in the office.
Other reimbursement challenges will come from an increase in patient populations moving from private plans to public ones, Dr. LaChance noted. Both Medicare and Medicaid offer a significantly lower rate than private payers. “Most dermatologists who run a small business can’t afford to run it on Medicaid rates,” Dr. Brod said. The move to Medicare Advantage plans could also raise issues with network coverage and lower payment rates, he added. These challenges are exacerbated by the financial hit that practices took during the pandemic. “The Academy is advocating for dermatologists on a number of levels to preserve reimbursement at CMS and ensure reporting flexibilities in the Merit-based Incentive Payment System, as well as advocating for fair payment in the private sector and reducing administrative burdens,” Dr. Brod stated.
Bigger implications
“COVID-19 is an expensive illness that is quickly spreading throughout the country,” Eibner said. A recent KFF analysis estimates that the average cost of COVID-19 treatment for individuals with ESI — and without complications — would be nearly $9,800. The cost of treatment for people who have complications could top $20,000. “Some actuaries have predicted that insurers may raise rates substantially next year to address the costs,” she added.
Dr. LaChance is concerned about the growing financial burden of large medical centers that served as a patient safety net prior to the pandemic. The change in payer mix with more patients on publicly backed insurance plans will cause a greater financial strain on these institutions, she said.
One silver lining of the pandemic is the widespread success of telemedicine, allowing physicians to provide care safely for their patients without an in-person visit. Telemedicine has the potential to change how physicians in private practice will provide care moving forward, Marchand said. Some patients will want to have more telemedicine visits, which could work for check-ins or prescription renewals, in between in-person visits. He believes new health insurance products that rely more heavily on telemedicine with different cost/benefit structures may emerge following the pandemic. But that will depend on whether insurers continue to reimburse for telemedicine, Marchand said.
Dr. LaChance is hopeful that reimbursement for teledermatology will continue once the pandemic has slowed. “CMS has taken the lead to rapidly expand telemedicine and we are seeing greater adoption by private plans,” she said.
Will the ACA survive the pandemic?
“It’s unlikely that the pandemic will destroy the ACA,” Eibner said. “If anything, the coverage that it provides to individuals who have lost their jobs will make the law more popular.” However, the Supreme Court case (Texas v. Azar) wending its way through the system could overturn the ACA. “We likely won’t know the outcome of that case until next summer,” she said.
“The ACA has to survive,” Dr. LaChance said. “It is woven into the fabric of the U.S. health care system, and we’ve never had a greater need for it than now.” The ACA is not a perfect plan, but if it were repealed, it would be devastating for the country, she added.
“The pandemic has exposed the inherent weaknesses in our health care system,” Dr. Brod added. Whether the ACA is deemed unconstitutional or not, dermatologists need a seat at the table to help shape health policy and advocacy efforts in the wake of the pandemic just like they did when the ACA was being created, he said.