The Affordable Care Act, part 2

So that might be a preventative wellness visit, a screening for diabetes or high cholesterol, a colonoscopy or a mammogram but the patient, when they receive those services, will not be subject to a co-pay.

Jan Paynter: Are large employers required to provide health benefits and do they cover typically a spouse?

Christopher Lillis: So the so-called business mandate for large businesses was delayed. That was delayed ‘til January 1st, 2015 but come January 1st, 2015, employers that have more than 50 employees will need to provide health coverage to their employee. There’s no requirement of an employer to provide spousal benefits and in fact that’s been something that some couples have experienced. Recently some larger companies trying to trim their healthcare costs have said, ‘Well, now thanks to the Affordable Care Act, we don’t really need to provide coverage for the spouse. The spouse can attain coverage elsewhere affordably.’ And so a lot of big businesses are trimming their healthcare benefits to protect their bottom lines. But no, there’s no requirement in the Affordable Care Act to extend health insurance to a spouse.

Jan Paynter: I was surprised by that I must say. Must new employees satisfy a waiting period before getting coverage?

Christopher Lillis: I think that’s up to the individual employer. That’s not…again, that’s not something that is a feature of the Affordable Care Act. That’s left to the discretion of the employer. And I think different employers approach that in different ways.

Jan Paynter: What if the employer’s plan is grandfathered as we discussed in the previous program and it doesn’t have preventative care?

Christopher Lillis: Well, so what’s happened is that for business plans, and I can speak to this because I’m a small business owner, businesses are now being given policies that are compliant with the Affordable Care Act. And what’s interesting is, we did not purchase our health insurance for 2014 on the Health Insurance Exchange. We stuck with the same broker that’s been writing our policy for years. But, with this new…essentially a reenrollment we have been told that the plan is Affordable Care Act compliant and our costs dropped significantly. And so it’s…as the market broadens, as the risk pools broaden, we’re going to see these policies being written for small business in large that are compliant with the minimum essential health benefits and likely get a lot cheaper because the broader the risk pool the lower the premiums.

Jan Paynter: Oh, I see. I see. Let’s think about veterans for a minute. As a retired vet collecting a pension, a lot of people want to know, are those benefits counted in determining eligibilities for subsidies in the Healthcare Marketplace?

Christopher Lillis: No. The veterans benefits you receive are not counted towards the income that would be used to calculate your tax subsidies. So it’s really much more about wages. It’s about dividends and interest you might get from investments. Those are the items that get counted towards your income when determining a tax subsidy. But things like disability benefits and veteran’s benefits are not counted in that calculation.

Jan Paynter: That’s good to know. If I’m covered by Medicare, Chris, must I change it or can I keep it?

Christopher Lillis: Well, so we’ve had for many years now an option for Medicare age patients, they can choose to stick with the traditional system or they can choose a Medicare Advantage plan which might be offered by a private health insurer like Aetna or Anthem or Humana. So all individuals over the age of 65 can choose if they want to receive their Medicare benefits directly from the federal government or administered through a private health insurance option, one of these so-called Medicare Advantage options and each and every year in the open enrollment period for Medicare those Medicare beneficiaries can change their mind. They can change from one Medicare Advantage provider to another or switch back to traditional Medicare.

Jan Paynter: How will Obamacare affect the cost of Medicare drug coverage?

Christopher Lillis: So, it’s going to affect the consumer more than it affects the system. So Congress has never granted Medicare the authority to negotiate drug prices with manufacturers and so for the longest time pharmaceutical companies have been just allowed to set the prices they wish to set. However, the Affordable Care Act for consumers is closing the so-called donut hole in the next several years. So already seniors have saved about a billion dollars on their drug costs. Excuse me, about nine billion dollars on their drug costs because once they reach that donut hole, the point in time where their Medicare Part D is no longer in effect, when they’re responsible for 100 percent of their drug costs, those prescription drugs are discounted by 50 percent and that donut hole will keep getting smaller and smaller until 2020 when the donut hole will be completely eliminated.

Jan Paynter: Oh, that’s very exciting for people. Doctor, in your judgment what are some of the most frequently acceptedness concerning healthcare?

Christopher Lillis: The question I get most often in my practice from my patients is something akin to, is it true that if I get diagnosed with cancer at 75 years old Medicare won’t pay for my treatments because I’m too old. So this goes back to the 2010 politi-fact lie of the year which is that the Affordable Care Act contains so-called death panels. There is no age when your Medicare benefits stop essentially from…you can get treated for cancer when you’re 100 years old or treated for cancer when you’re 65 years old. There’s no death panels in the Affordable Care Act.

Jan Paynter: Concerning specific questions about the Marketplace. Can I expect my premiums to increase? I know this is very hotly debated. I wanted your take on it.

Christopher Lillis: Right. So I think if you had an individual plan previously, which, again, this was only about two percent of Americans, you…we all have different experiences. If you had a plan that barely covered anything and you’re purchasing an exchange plan now that has all these essential health benefits, you might see a raise in your premium prices. You might also see a tax credit depending on your income that could defray that cost. What experts are predicting from 2014 to 2015 is that premiums will not likely rise very quickly unless there’s very little uptake of the Affordable Care Act. So the fewer people who sign up, the higher the likelihood premiums will rise. The more people sign up, the lower the likelihood premiums will rise for all of us.

Jan Paynter: I know one of the things people think about…the Obama administration is leaning pretty hard on the idea of signing up young people because that will defray a lot of the cost. If we do not see a massive sign up, what other possibilities in your view are out there to defray costs?

Christopher Lillis: So what’s interesting is that originally there were some pundits who were commenting that if enough young people don’t sign up that the health insurance marketplace would enter a so-called death spiral. This has been pretty well debunked to this point. There are reinsurance programs that are out there to help protect insurance companies from major losses if there aren’t enough young people to sign up. Now, if not enough young people sign up, again, most of us will experience increases in premiums year over year but the cost control mechanisms are mostly based through insurance products both for us as consumers and patients and for the insurance companies as providers of that insurance.

Jan Paynter: I know one of the things I liked in looking at these plans was with almost all of them there was a cap beyond which you couldn’t go in terms of charges.

Christopher Lillis: Yes. So those are the so-called out-of-pocket maximums and the out-of-pocket maximum for an individual is I believe $6,200 or $6,500 per year and the cap for out-of-pocket costs for a family are around $12,000 a year.

Jan Paynter: Chris, what are some of the timelines we all need to be made aware of in 2014?

Christopher Lillis: Well, the big one I think is March 31st. That’s when the first open enrollment period ends. And so the sooner you sign up the sooner you’ll get insurance but if you choose to not purchase insurance after March 31st, you will be subject to the individual mandate unless you have a financial hardship. And then I think the next dates that would come up would be the second open enrollment period which will be October of 2014. Other than that, there aren’t a lot of dates in 2014 to keep an eye on because for the most part the Affordable Care Act is now in its full effect. Our last visit we talked about a lot of dates because different benefits were rolling out at different times. But January 1st, 2014 was a significant date because the vast majority of the Affordable Care Act is now in force.

Jan Paynter: It is and it’s going to be very interesting when the elections roll around in November to see how this plays in. It’s been much reported in the news, Chris, that emergency room visits are on the increase and the Obama administration as we know expected that the reverse would be true. What explanations do you feel are in place for that? I know one economist in MIT said, ‘Well, okay, people tend to take more services on when they can afford it,’ so that might be part of one of the reasons why this is occurring. What’s your view on that?

Christopher Lillis: That’s a great question. So the news came out regarding studies that were done in Oregon. Oregon had this amazing situation where they had a lottery some years ago and some people were afforded Medicaid because they won the lottery and some were left without health insurance because they didn’t win the lottery. And so some intrepid researchers decided to study the two populations and find out what the differences are, what kind of health benefits come from Medicaid. So for the initial years, 2009 and 2010, there was an uptick in emergency room use for Medicaid patients compared to uninsured patients. However, I think the real explanation for that is because when you’re uninsured for a long period of time, you delay care. You don’t get care for the illnesses you have and so when you suddenly have insurance, there’s a rush to find a point of contact. Now sometimes it takes a while to find a regular primary care doctor and in that time period the emergency room becomes a very easy place to go. It’s a familiar place to go. But, I think what’s going to be interesting and what isn’t widely publicized yet is that in 2012 emergency room visits in Oregon have started dropping dramatically and it’s because of their coordinated care efforts. They’re instituting so-called patient centered medical homes and coordinated care organizations and they’ve reversed that trend and actually reduced emergency room visits thanks to strengthening the primary care net in Oregon.

Jan Paynter: I thought it was interesting when I looked at the stats on percentages for instance in 2010, only four percent of the costs involved emergency room visits, inpatient hospitals were at 31 percent so it’s not quite as gray I think as people believe.

Christopher Lillis: Sure. Hospitals are going to be the largest cost center because that’s where we treat our sickest patients. Emergency rooms deliver outstanding care but when we think about chronic disease management, when we think about minor illnesses, it’s not the most efficient place to deliver care. Emergency room visits are more expensive than primary care visits and emergency rooms are really not designed to help people like diabetics and high blood pressure patients who need monitoring over time in a good forward thinking, long term plan. The emergency room is a great place to go if you have chest pain. Probably not the right place to go if you have a cold. And so that’s why we need to strengthen the primary care network through some of the elements of the Affordable Care Act like an expansion of community health centers, the Centers for Medicare and Medicaid Innovation, working on accountable care organizations, patient-centered medical homes, coordinated care organizations. This is really what’s going to help bend the cost curve in the future and keep people out of the emergency room and keep them well.

Jan Paynter: I see. That’s a great answer. What do you foresee might be some of the greatest challenges to the implementation of the law coming up this year? Some people are concerned that there might be a physician shortage as more people are being seen. This is something the Huffington Post postulated. Fair?

Christopher Lillis: Well, I think what we see is that…in Massachusetts where it’s easiest to try to figure out what’s going to happen with the rest of the country is that primary care waiting times did not really increase after Gov. Romney instituted basically universal health insurance for Massachusetts in 2006. There is a tremendous slack in our system right now and what do I mean by that? About 30 percent of all care that’s delivered in the United States is deemed unnecessary or wasteful and so if we could work on making care more efficient, more coordinated, that slack, that 30 percent of care that’s delivered that’s unnecessary could easily be reallocated to individuals who need it, individuals who are newly getting insurance. But, again, the Affordable Care Act expands community health centers, it’s putting more money into primary care training programs and I think what we’re going to see is a ramp up of physicians and nurses to meet this rise in demand.

Jan Paynter: I wanted to segue a little bit to something else that I saw that I thought was very interesting in The New York Times in January. It’s a piece called “The Information We Still Need to Manage Our Healthcare” by a businessman named Paul Downs and he cites…and many people have seen this…persistent difficulties experienced by himself and employees in getting precise insurance cost information. And he poses a simple but salient question, why don’t insurance companies…and I think a lot of us wonder this…why don’t the companies have to issue simple, monthly or yearly statements just as banks and credit card companies do. And he notes that they have an ability to communicate with us in whatever manner they choose and yet they fail to do so. Chris, what do you see as some possible and reasonable solutions for this persistent and all too common consumer dilemma?

Christopher Lillis: Right. I think the healthcare sector, worse than any other, has a transparency problem. So whether that’s prices at the doctor’s office or hospital, how your premium dollars are spent on the health insurance side, why your drugs cost so much, we have a transparency problem and what we’re seeing is a push, more of an organic push, to get healthcare prices and healthcare reimbursements more transparent so consumers can make more educated choices about where they seek their care.

Jan Paynter: According to the Kaiser Family Foundation, which as we discussed before the program, is a marvelous, marvelous resource and as we had talked earlier, regrettably I think better actually than healthcare.gov at imparting good, clear information. When states don’t expand Medicaid, who is most often left behind?

Christopher Lillis: It’s essentially low income Americans, Americans who might be working 30 hours a week at a minimum wage job. They’re going to find that their income is not sufficient enough to actually reach the poverty limit, 100 percent of the federal poverty limit and in that case they cannot qualify for the subsidies on the exchange and even the most inexpensive plan is going to be out of reach for them in terms of what they can afford. And so the working…the folks who are working and making minimum wage are the ones who are left out. So it’s the folks who unfortunately cut our hair, serve us food in restaurants, it’s the folks who clean behind us in our office buildings. These are the folks who are not going to have an option to get healthcare coverage that was intended for them.

Jan Paynter: One of the things I thought was interesting that the Kaiser cites is that often it’s the indigent minority single adults, the so-called majority minority, 53 percent of them African-America, Hispanic or other non-White ethnicity, these are 22.6 million people who are either working full time or part time who do not have coverage and this is really unacceptable I think in this country.

Christopher Lillis: Well and I think to further that end, what happens when folks go uninsured and they have to seek their care in an emergency room where they cannot be turned away, it inflates the cost for the whole rest of the system. The hospital will raise its prices, the insurance company will see these raised prices and raise their premiums and so right now we’re paying for the care of the uninsured in a remarkably inefficient way. A more efficient way to help people stay healthy, a more humane way would be to expand the Medicaid program so people can develop a relationship with a primary care doctor, be seen in a more efficient way for minor needs and chronic disease management and we can keep people out of the hospitals where the care is most expensive.

Jan Paynter: Chris, you and I are very interested in what Ezra Klein has to say, he’s tremendously articulate whenever he speaks and he notes in January that more than two million Americans signed up for the Affordable Care Act insurance marketplaces while in October and November of ’13 more than four million signed up for Medicare coverage and this could go higher yet. And here is where politics indeed matters. Klein goes on to cite Drew Altman, President of the Kaiser Family Foundation who states that, “Republicans don’t like entitlement programs and Democrats want to portray the Affordable Care Act as mostly a marketplace solution based on private insurance and not another expansion of a government program.” So in effect, neither side wants to tell the success of Medicare enrollment. So Democrats stay focused on private insurance marketplace in spite of the inevitable increased complexities of implementation. Yet again he notes that “Medicare and Medicare prices fall significantly below what is charged by private insurance.” So I wanted to end and ask you what are your thoughts about this, Chris?

Christopher Lillis: Well, I think the Affordable Care Act, if it reaches its fullest potential, will extend insurance to 40 million Americans who didn’t have it previously. It will be a mix of private insurance through health marketplaces and the Medicaid program which is largely for those who make an income below 138 percent of the federal poverty limit. We know that Medicare and Medicaid pay doctors less, pay hospitals less and therefore keep healthcare costs lower. But there’s a tremendous stigma against Medicaid recipients because of this idea that it’s an entitlement program. The truth is there are some states that are doing things that are pretty creative. Like Arkansas decided they were going to use the Medicaid dollars in the Affordable Care Act to actually allow the eligible citizens to purchase their own health insurance, private health insurance and they’re not the only state to receive that sort of waiver. I know Pennsylvania is looking at that option and Virginia is looking at that option. So if some of these states choose to administer the Medicaid dollars through private insurance companies, essentially it’s going to be a private solution. However, the private health insurance companies really have very different salaries to pay so your average government citizen is not going to be making $10 million a year like the CEO of a private health insurance company is going to make. Nor is the federal government going to be submitting quarterly profit reports to Wall Street to try to justify why their medical losses are so high. So I think it’s an interesting conundrum, a conundrum that hasn’t been solved in this country. What’s the best way to administer health benefits? Is it through a government program, is it through a private health insurance program? We see other countries that have done a lot better in determining which way they want to go.

Jan Paynter: A lot of countries do a little of each.

Christopher Lillis: Right.

Jan Paynter: Which is a good solution and I think would satisfy people. I want to find a very positive place to land as we conclude so I wondered if you would discuss the accountable care organizations, what they are and how they can benefit the public.

Christopher Lillis: Sure. An accountable care organization refers to essentially a system that’s decided to work more closely together so physicians, specialists, primary care doctors, the hospital. What they try to do is provide care across the spectrum of all the different health services one needs to have to stay healthy. Really before we operated in silos. So the primary care doctors probably didn’t know what the specialists were doing and certainly it was hard to figure out what the hospital was doing. But the accountable care organization really tries to make a more patient centered approach, one that allows for better communication between doctors, one that provides for better support when one is discharged from the hospital or moves through a transition of care maybe from the primary care office to the specialist’s office. And by coordinating the care, by engaging in better chronic disease management models, we keep people healthier and lower their costs.

Jan Paynter: Dr. Lillis, one of the things that I found very exciting I ran across on the website fiercehealthcare.com, and I love that title, which notes that in January of ’13 the Obama administration announced $150 million in new grants through the Affordable Care Act for community based healthcare and this was reported in The Hill. It’s also part of an $11 billion for community health centers which will then allow 236 facilities to staff up and extend care to approximately one and a quarter million patients. I thought that was just a remarkably exciting development.

Christopher Lillis: It is and I think when folks get concerned about there not being a doctor to see them, the points you just brought up are very encouraging to know that we’re getting prepared for the new patients that will be in the system.

Jan Paynter: We eluded to this in the first half of our program but I wonder for those of us who didn’t see it if you would tell us again what some of your best recommendations are for healthcare informational resources, be they online or elsewhere.

Christopher Lillis: Sure. Well, we’ve talked a little bit about Ezra Klein and I think he and his cohorts at The Washington Post, his blog called the “Wonkbook” [Wonkblog] do a wonderful job explaining health policy. The Kaiser Family Foundation is another wonderful resource. The Commonwealth Fund is a great resource. If you’re looking for practical advice about what insurance to choose, I think Consumer Reports does a fantastic job. And I’m very proud of the resources we have at Doctors for America because the resources we produce are predominantly for physicians and medical students but they’re also tailored to give information to patients. And so I think all of these resources are wonderful, nonpartisan sources to get educated about the Affordable Care Act and find out what benefits are available to you.

Jan Paynter: They’re wonderful and it’s very easy to navigate the site, your site and Kaiser both and this is what people need so they can be informed. Chris, thank you very much for being our guest today and for donating so much of your valuable time to talk about this very important issue.

Christopher Lillis: It’s been my pleasure.

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