Florio Healthcare Panel Discussion

The Affordable Care Act: Is it Working?

Nearly five years to the day after the Affordable Care Act was signed into law, the effects of the legislation “have yet to be determined,” according to various members of a panel of top New Jersey healthcare administrators. 

Among the panelists invited to Monmouth to discuss the policy’s effects on NJ were: two healthcare executives; Meridian Health CEO John Lloyd; Monmouth Medical Center CEO Frank Vozos; and NJ Association of Health Plans President Wardell Sanders. Former NJ Governor and Monmouth University’s current Public Servant in Residence, James Florio, who passed a similar salvo of health and welfare reforms during his tenure as governor, rounded out the panel.

The event was sponsored by the Monmouth University Polling Institute, Marjorie K. Unterberg School of Nursing and Health Studies, and the Political Science Club. Dr. Kathryn Fleming, a specialist professor of nursing administration, and Dr. Stephen Chapman assistant professor of political science, served as moderators. 

Director of the Polling Institute, Patrick Murray, opened the discussion by announcing the results of one of the institute’s latest polls: 45 percent of New Jerseyans support the law while 46 percent oppose it.

“At one point, not too long ago,” recalled Florio, “we had 50 million Americans without access to healthcare. People who were not old enough to be on Medicare and not poor enough to be on Medicaid didn’t have it through their employment and couldn’t afford the $11,000-12,000 for an individual insurance policy. I think it’s a good agenda for us as a nation to undertake,” he added. 

“We’ve always believed at Meridian,” Lloyd averred, “that as a country we should’ve been ashamed of ourselves that we didn’t have health coverage for everybody in the U.S.

Nationwide, the uninsured rate dropped 3.5 percentage points last year, from 17.3% to 13.8%, the lowest annualized rate across the seven years of Gallup’s Well-Being Index measurement. No state reported a statistically significant increase in the percentage of uninsured in 2014 compared with 2013.

“We’re starting to see some pretty good success in terms of getting more Americans covered. And I think that’s something that all of us should and can support,” said Lloyd.

Some of the policy’s greatest inadequacies, however, come in the form of higher out-of-pocket costs for individuals searching for coverage in smaller niche marketplaces. Compound this issue with the fact that some states still refuse to participate in the Marketplace at all and the contradictions begin to pile up.

“The ACA attempts to deal with the limitations that we have in our health care system,” said Florio. “Healthcare planners always talk about the ideal system being one that brings into balance cost, quality and access.”

Healthcare expenditures in the U.S. are currently about 18 percent of GDP, according to a June 2009 whitehouse.gov report titled, “The Economic Case for Health Care Reform.” If health care costs were to continue to grow at historical rates, the reports says, the share of GDP devoted to health care would reach 34 percent by 2040. 

“Think about that,” implored Florio. “That’s one out of every five dollars that goes to health care.”

The soaring costs of pharmaceuticals and specialized treatments in America have provoked the sweeping reforms that are just starting to produce the expected tangible results. 

In N.J. alone, 254,316 consumers selected or were automatically re-enrolled in quality, affordable health insurance coverage through the Marketplace as of February 22, according to the Department of Health and Human Services’ website. 83 percent of N.J. consumers who were signed up qualified for an average tax credit of $306 per month through the Marketplace. 

“We have a great quality of health care in this country – if you can afford it,” remarked Florio. “Access is a really hard one and that’s the one that the ACA is primarily trying to deal with.” 

For those individuals who choose to opt out of the Marketplace altogether, a tax penalty based on your Modified Adjusted Gross Income (MAGI) will be assessed to you by the Internal Revenue Service. The penalty for not having coverage will be paid on your Federal Income Tax Returns for each full month you or a family member doesn’t have health insurance or an exemption. 

“The greatest continuing challenge is cost,” said Sanders. “Even after the Affordable Care Act, there are still some folks who can’t afford coverage. The last great barrier is the one that we keep banging our heads against – affordability, which is not completely addressed in the ACA.”

As reported by Health and Human Services, 38 percent of N.J. Marketplace enrollees obtained coverage for $100 or less after any applicable tax credits in 2015, and 71 percent had the option of doing so.

“In a way we do have universal health care,” said Sanders “it’s just poorly organized.”

N.J. was one of only four states to opt out of administering their own state-based exchange or federal partnership in addition to expanding the Medicaid program to include individuals or families whose salaries are 133 percent of the poverty line. 

Because N.J. decided not to participate in setting up its own state exchange, the way in which hospitals are reimbursed for treating patients provided for under Medicaid has changed drastically. Under the ACA, patients who were once forced to seek remedial treatment only under the direst circumstances will now have access to a primary care physician. 

“The notion that the emergency room is the first place that people will go is not the right care at the right time at the right place,” Sanders said.

The most appropriate setting, dictated by the new mandate, is the patient’s primary care doctor. 

The reimbursement for Medicaid patients however, is only about $0.70 of every dollar used for treatment. This in turn has “changed the way we play the game a lot,” said Vozos. 

One way in which the game has already changed, is the marginalizing of smaller healthcare practices that can’t eat the costs of treating patients covered by Medicaid. Over $150 billion in expenses has already been shouldered by the healthcare community to make the ACA efficacious.

“(Health care) is changing pretty rapidly from an inpatient enterprise to an outpatient enterprise,” said Vozos. Statewide I think we’re seeing close to at least a four percent drop in inpatient admissions and in some cases we’re seeing even a slight drop in outpatient services too. Many of the patients that used to be admissions are observations,” (meaning they are never officially admitted to the hospital).

“Five years from now, healthcare will look nothing like the healthcare of today,” predicted Vozos. 

As healthcare emphasis shifts from remediation to prevention, costs are predicted to decline.  

“Preventive medicine is a very, very good way of accelerating quality while also containing costs,” said Florio. “Chronic diseases, such as asthma, diabetes, represent $0.70 of every dollar. All of those things are preventable or at least manageable if people know what they are doing.”

All of this debate will be for naught, pending the review of the Supreme Court in the case of King v. Burwell. Federal subsidies that are now available to all Americans who qualify may be ruled to only apply to those who purchase insurance through exchanges established by the state.

About a third of the states have created exchanges, and the challengers say the subsidies should be available only in those places. As the law authorizes, federal authorities have stepped in to establish exchanges where the states have refused.

The decision to hear the case, which will be decided by the end of the court’s term in June, comes as the act’s second enrollment period begins Nov. 15. 

The impending decision could have “devastating” effects on the ACA said Vozos and could potentially be “catastrophic” to the reforms still operating in their infancy, according to Sanders. 

PHOTO COURTESY of Monmouth University