Overview and Key Considerations

The Impact of the Affordable Care Act on Cancer Care and

Prevention

Katie Horton, RN, MPH, JD

Cancer: Compelling Case for Health Reform

• No more compelling case for health reform than cancer treatment and survivorship– 12 million survivors in US– 1.6 million new cases of cancer diagnosed

annually– Cancer survivors living longer

• Need comprehensive follow-up care over longer period of time

2

Cancer: Compelling Case for Health Reform

• Impact of cancer and its treatment difficult even for those with reasonable financial means and strong support network– 11 percent of all cancer patients under 65

are uninsured• Higher for members of racial and ethnic

minority groups– 1 in 4 struggle with under-insurance

3

Cost of Cancer• Cancer costs climbing• Now estimated to cost $264 billion annually

including direct medical expenditures and lost productivity

• 33% of cancer patients have health care costs that are equal to or greater than 10% of annual family income

4

Pre-ACA Health Care System

• ~ 50 million without coverage• Unstable insurance markets with

discrimination against persons needing health care

• Fragmented--care coordination often poor• Weak individual market• Challenges intensify for uneducated, poor,

uninsured and underinsured

5

ACA Goals

• Establish near-universal coverage• Improve fairness, quality and affordability of

health insurance coverage• Improve health care value and efficiency• Strengthen primary care access• Make strategic investments in public’s health

(preventive care and community investments)• Law not “perfect”—corrections needed

6

7

Where Are We Headed?Estimated Health Insurance Coverage in 2019

SOURCE: Kaiser Family Foundation analysis of Congressional Budget Office estimates, March 20, 2010

Total Nonelderly Population = 282 million

ACA Coverage Expansions

8

By 2022, ACA Coverage Expansions will Reduce Uninsured by Approximately 32 Million

Medicaid Approximately 10-16 million additional individuals enrolled in Medicaid

Health Insurance Exchanges

Coverage for approximately 20-23 million individuals

Employer Coverage

Between 4-6 million fewer people estimated to have coverage through an employer

Uninsured Approximately 30 million will remain uninsured(8% of US population)

Source: Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision. Congressional Budget Office. July 2012. http://www.cbo.gov/sites/default/files/cbofiles/attachments/43472-07-24-2012-CoverageEstimates.pdf

Promoting Health Coverage

Medicaid Coverage

(up to 133% FPL)

Employer-Sponsored Coverage

Exchanges(subsidies 133-400%

FPL)

IndividualMandate

Health Insurance Market Reforms

Universal Coverage

Return to KaiserEDU Tutorials

10

How Do We Get There?

• Individual responsibility• Employer responsibility• Insurance market reforms (individual and group

markets)• Exchanges• Medicaid

• Restructuring and expansion• Medicare

• Payment reform• Delivery system reform

• Tax reforms

11

Shared Responsibility

• 2014: All individuals required to obtain coverage or pay a penalty unless they have a religious objection or face financial hardship

• 2014: Large employers (50+ employees) will be subject to fees if they do not offer affordable coverage and any employees receive subsidized coverage through a health insurance exchange

Market Reforms

12

13

Key Insurance Market Reforms (2010)

• Health plans may not place lifetime limits on coverage, rescind coverage, or deny coverage to children with pre-existing conditions

• Dependent coverage to age 26

• Preventive services with no cost sharing (USPSTF, ACIP recommended immunizations, additional HRSA-recommended preventive care for women and children)

• Pricing transparency and medical loss ratio/rebates

• “Patient protections”

• Non network ED coverage

• Direct access to pediatric and ob-gyn services

• Internal and external appeals

14

Key Insurance Market Reforms (2014)

• Adults with pre-existing conditions cannot be denied coverage or pay more based on their health status

• Rating limitations– Premium rates for qualified health benefits

plan can vary by only a few factors and with limitations

15

“Grandfathered” Health Plans• Plans in place before passage of ACA, with no

significant changes to benefits/coverage or premiums/cost-sharing since that time

• Grandfathered plans exempt from certain market reforms (i.e. annual limits, preventive services, appeals, emergency services etc.)

• Number of plans meeting definition of “grandfathered” decreasing over time:

– 48% of covered workers enrolled in grandfathered plans in 2012, down from 56% in 2011

Source: Kaiser Employer Health Benefits Survey. 2012.

New Coverage Expansions

16

17

Health Insurance Exchanges

• New market for individuals and small businesses/groups

• One stop shopping for insurance products that meet certain federal and state standards– Called “qualified health plans”

• Exchanges expected to assure quality of coverage, provide information and enrollment assistance, coordinate with Medicaid and calculate subsidy eligibility, among others

Health Insurance Exchanges

• Subsidies only in Exchanges• State administered/federal default• Critical issues for states include:

– Whether to operate at all– Adverse selection– Active purchaser vs. passive “shopping center”– Geographic size (state vs. regional)– Medicaid relationship– Governance

18

Subsidies• Premium subsidies available for

individuals and families with incomes between 100% and 400% of the poverty level; subsidies on a sliding scale

19

2012 Federal Poverty Level

Individual Family of Four

100% FPL: $11,170 $23,050

400% FPL: $43,320 $88,200

20

Subsidies-Timeline

• 2010: Tax credits for small employers

• 2010: Temporary high risk pools (pre-existing condition coverage) for people with pre-existing conditions

• 2014: Premium and cost-sharing subsidies for low and moderate income individuals and families; premium assistance for small employers purchasing Exchange products

Essential Health Benefit Coverage

• All new qualified health plans (including health plans offered through the Exchange) must include the essential health benefit package– Will reflect standard employer-sponsored plan

—”typical employer coverage”• Coverage under the Medicaid Expansion will

also include the essential health benefit package

21

Essential Health Benefit Coverage• 10 broad categories of coverage in ACA

– Ambulatory patient services– Emergency services– Hospitalization– Maternity & newborn care– Mental health and substance use disorder services including

behavioral health treatment– Prescription drugs– Rehabilitative and habilitative services and devices– Laboratory services– Prevention and wellness services and chronic disease

management– Pediatric services including oral and vision care

• Rules out for comment in December

22

23

Source: Kaiser Family Foundation, December 10, 2012

• 18 States Declared State-based Exchange

• 6 States Planning for Partnership Exchange

• 6 States Undecided• 21 States Default to

Federal Exchange

24

Medicaid

• Fundamentally restructures Medicaid to allow states to cover all non-elderly, non-disabled citizens and legal US residents with family incomes below 133% (approx. $30,000 for family of four)– Primarily assists adults who have never had

children or whose children are grown

• Benchmark coverage and preventive care for newly eligible persons– Benchmark coverage will resemble essential

benefits package (approximation of employer coverage)

Prevention

25

Coverage of Preventive Services

• ACA requires new health plans to cover without cost-sharing:

(1) Evidence-based items or services rated A or B by the USPSTF

(2) ACIP-recommended immunizations

(3) Preventive care for infants, children, and adolescents recommended by HRSA, and additional preventive care and screenings for women recommended by HRSA

26

Prevention in Medicare

• Sixty percent of cancer diagnoses occur among individuals age 65 or older

• Provides for annual wellness visit, health risk assessment and personal prevention plan

• Requires Medicare-covered services that are classified as A or B by USPSTF to be covered without cost-sharing (doesn't require Medicare to cover them all); also applies to colorectal cancer screening

27

Prevention in Traditional Medicaid

• ACA expands the scope of “optional” preventive services under “traditional” Medicaid to include all USPSTF-, ACIP- and HRSA-recommended clinical preventive services required under Section 2713 (Effective January 1, 2013)– Additional 1% increase in FMAP percentage

for any recommended preventive service provided, so long as the state does not impose any beneficiary cost-sharing

28

29

Public Health

• Sustained funding for prevention and public health (Prevention and Public Health Fund)

- $15 billion over 10 years

- Mandatory appropriation

- To invest in community prevention, core capacity and building the evidence

• National Prevention and Health Promotion Strategy (and Council)

Prevention and Public Health Fund

• $15 billion mandatory appropriation over 10 years ($2 billion a year beginning in FY 2015)

• Can fund any program authorized by the Public Health Service Act

• So far, the PPHF has been used to strengthen the health and public health workforce; expand existing Public Health Service Act programs; bolster public health infrastructure through grants to states; and create and maintain new health promotion programs

30

Community Transformation Grants• New grant program for community prevention: supports

communities in creating comprehensive change in the factors that affect people’s health across multiple environments.

• 2011: $103 million to 61 state and local government agencies and nonprofit organizations in 36 states to improve the health of their communities– Focus is on obesity, nutrition, tobacco; but some may include

increasing access to broader set of clinical services

• 2012: $70 million awarded to 40 small communities (fewer than 500,000 residents) to implement broad, sustainable strategies that will reduce health disparities and expand clinical and community preventive services

31

Other Payment, Coverage and Delivery System Reforms

32

Clinical Trials• Beginning 2014, routine medical costs must

be covered for all individuals who are participating in clinical trials (excluding traditional Medicaid)– Routine costs include all costs typically

covered for an individual not enrolled in clinical trial

– Costs for specific investigational item or service excluded

33

Clinical Trials

• Insurers are prohibited from dropping or limiting coverage for participants in cancer clinical trials

• Plan may compel patient to use a network participating provider for the trial– Trial costs must be covered even if

approved clinical trial is conducted outside the state of the patient’s residence

34

Closes Medicare Doughnut Hole

• Provides immediate $250 rebate to seniors who hit the prescription drug coverage gap

• Coverage gap will be closed completely by 2020

35

Payment and Delivery Reforms• Accountable Care Organizations (effective 1/1/12):

– New model of care in which groups of primary care providers work together to coordinate patient care and reduce costs while offering high-quality care to Medicare beneficiaries

• Medicaid Health Homes (effective 1/1/12):

– ACA gives states the option to create “health home” models in which a designated provider or team of health professionals will provide coordinated care to individuals with one or more chronic conditions; Oregon is including cancer

36

37

Delivery System and Quality

• Multi-payer, national quality improvement strategy

• Continued movement toward provider reimbursement tied to quality outcomes

• Demonstration projects on medical homes, gain sharing, medical liability, bundling, geographic payment variation, accountable care organizations

Delivery System and Quality

• Patient-Centered Outcomes Research Institute

– Assists patient, clinicians and others with making informed decisions by identifying and analyzing national research priorities

– FY 2012, direct appropriations of $150 million

– FY 2013-2019, funding source sustained (trust fund plus per capita charges per enrollee from insurance plans)

– Restricts use of CER by public or private payers in coverage or reimbursement decisions

38

Controlling Costs

• New Independent Payment Advisory board with expanded powers (IPAB)

• $15 million funded for FY2012

• In 2015, will make recommendations about Medicare spending if targets not met

39

40

Controlling Costs

• Center for Medicare and Medicaid Innovation

• $5 million dollars for the design and implementation of models in FY 2010

• $10 billion funding for FY2011 through FY2019

• Numerous initiatives underway: bundled payments, value-based purchasing

• Medicare payments for diagnostic imaging reduced

Ten-Year Medicare Savings = $533.1 Billion

Source: Kaiser Family Foundation analysis of Congressional Budget Office (CBO) cost estimates as provided on March 20, 2010.Notes: *Savings include interactions with Medicare Advantage and TRICARE; spending includes implementation of Medicare changes, Part D interactions with Medicare Advantage

provisions, Part B interactions with Part D provisions, and Medicaid interactions with Medicare Part D provisions.

Sources of Savings

•Provider payments, including DSH and home health - $219 billion

•Medicare Advantage – $136 billion

•Income-related premiums – $36 billion

•New Independent Payment Advisory Panel – $16 billion

•Delivery system reforms and hospital readmissions – $12 billion

Health Reform: Medicare Savings

Medicare Advantage

Payment Reforms25%

Annual Provider Payment Updates

29%

Part D Enrollment/ Consumer

Protections 1%

Delivery System

Pilots 1%

Reducing Hospital Readmissions 1%

Fraud, Waste, Abuse 1%

Part D Premiums 2%

Part B Premiums 5%Independent

Payment Advisory Board

3%

Disproportionate Share Hospital (DSH) Payments

4%

Annual Provider Payment Updates 29%

Home Health Payments 7%

Medicare Advantage Payment Reforms 25%

Exhibit 8

41

Other Provisions

• Understanding Health Disparities– All Federally-funded health programs must

collect and report data on race, ethnicity, sex, primary language and disability status• Oct. 2011: ASPE issued implementation

guidance

42

Other Provisions

• National Center for Health Workforce Analysis– HRSA

• $7.5 million through FY2014, Additional $4.5 million per year through FY2014

43

Other Provisions

• Hospital Readmissions Reduction Program– Reduces Medicare payment to hospitals

with high readmissions for certain conditions

– Final rule for FY 2012 released on Aug. 18, 2011

• Quality reporting and pay for performance pilots for PPS exempt cancer hospitals

44

Health Reform Implementation TimelineFigure 16

Return to KaiserEDU Tutorials

Paying for Health Reform

• ACA estimated to cost $938 billion over a decade – Because of higher taxes and fees and

billions of dollars in Medicare payment cuts to providers, the package will narrow the federal budget deficit by $143 billion over 10 years, according to the Congressional Budget Office

46

Paying for Health Reform

• Starting in 2013, individuals with earnings over $200,000 and married couples earning more than $250,000 will pay a Medicare payroll tax of 2.35 percent (up from 1.45 percent)

• High income taxpayers will pay a 3.8 percent tax on unearned income (dividends)

47

Paying for Health Reform

• Starting in 2018, imposes a 40 percent excise tax on the portion of most employer-sponsored health coverage (excluding dental and vision) that exceeds $10,200 a year for individuals and $27,500 for families

• Law raise the threshold for deducting unreimbursed medical expenses from 7.5 percent of adjusted gross income to 10 percent

• Limits to FSA applied

48

Future Directions

• Continued consolidation likely to result from delivery system reforms and other provisions

• Current model of oncology care will change– Further focus on quality benchmarks,

outcomes, efficiency and reduction of duplicative services

49

Future Direction• Increased bundling of payments• Disease pathways, assessments of episodes

of care and clinical decision supports applied more by payers

• Greater focus on shared decision-making with patient, value in care and use of evidence based care

50

Outstanding Considerations

• Over 25 million likely to remain uninsured• What impact of fiscal cliff, sequestration and

debt discussions on ACA and other discretionary funding?

• Will states expand Medicaid (optional post supreme court ruling)?

• What impact to cancer care of $500 billion Medicare cuts in ACA?

51

Outstanding Considerations

• What impact on employer-based insurance?• Will essential health benefits package provide

for adequate cancer prevention, treatment and other services?

• End of life care not addressed in ACA• ACA doesn’t require insurers to cover follow

up diagnostic exams/biopsies if abnormality found during preventive service

52

Outstanding Considerations

• Who will care for the newly covered individuals?

• Workforce challenges remain

53

Resources

• HHS Key provisions by date:

http://www.healthcare.gov/law/timeline/full.html• Kaiser Family Foundation Implementation

Timeline

http://healthreform.kff.org/timeline.aspx

54

Katie Horton

KHorton@gwu.edu

202-994-4129

55