The Affordable Care Act: A User's Guide

RoadToReform

California has embraced the Affordable Care Act like no other state. Health professionals started enrolling patients who qualify for the Medi-Cal expansion three years ago. The state also built an online health insurance marketplace called Covered California, which will debut this October. The marketplaces are a signature aspect of Obamacare meant to reduce costs, subsidize plan premiums for lower-income individuals and set a consistent standard of coverage.

Obamacare will affect every Californian starting January 1, 2014—some more than others. But most people say they still don’t understand the reforms. According to the Kasier Family Foundation 57 percent of Americans say they don’t have enough information to understand the reforms. But that percentage is even higher among those who stand to benefit the most, with 67 percent of the uninsured and 68 percent of people with incomes below $40,000, unclear about what the reforms will mean for them.

Confused about the health care reform law and how it will affect you? Keep reading.

ACAandYou

People who have health insurance through their employer – well over seven million Californians — already benefit from Obamacare. For instance, insurers can’t spend more than 20 percent of premiums on administration or they have to refund the money. In California more than 1.8 million consumers got a rebate averaging $65 a family in 2012.

The legislation also allowed young adults to stay on their parents insurance, a rule that added more than three million young people to the ranks of the insured.

The reforms also specified coverage of preventative services for women. Mammograms, pap smears and birth control are now covered without any out-of-pocket expenses. Currently, insurers are also permitted to charge women 150 percent of what they charge men, a rate difference that reform prohibits.

Starting Jan 1. 2014, businesses that employ more than 50 are required to offer coverage to their employees or pay a penalty. The Obama administration, however, recently announced that they will suspend enforcement of penalties until Jan. 1 2015.

MedCalExpands

Obamacare requires the majority of Americans to have health insurance by 2014. But the law will also provide assistance to low-income adults. For the first time, childless, low-income adults (with incomes of $15,856 a year or less) qualify for Medi-Cal, the government insurance policy for the poor.

California has already enrolled eligible people through the Low Income Health Programs. That early enrollment was made possible by a grant from the federal government in 2010 to test out how the expansion of Medicaid would work in practice before it began nationally. California counties used the early expansion to develop creative enrollment methods, plug gaps in care, improve communication and treat patient populations as a whole.

BuyingAPlan

Beginning in October an individual making up to $45,960 a year could qualify for health insurance subsidies through the California health benefits exchange known as Covered California. Any legal permanent resident who can’t get insurance through an employer can purchase an individual or family plan through the exchange. California is one of the 16 states running their own exchange; the rest of the states will participate in the federal exchange. Premiums, announced in May, were lower than expected.

BigSystemsBigChanges

CommunityClinics

Nearly one and a half million additional Californians are expected to qualify for Medi-Cal after reforms. Many of those clients will go to community and public health clinics for primary care. Many clinics are adopting the model of a “medical home,” where an integrated team of physicians and administrators ensures continuity of care. That means patients develop an ongoing relationship with their doctors and staff at the clinic, who make sure that patients are, for instance, getting ordered tests completed and necessary follow-up care.

Community clinics around the state, including San Francisco’s St. Anthony’s clinic and Santa Clara County have already changed the way they operate. Clinics such as those in Contra Costa County and Oakland’s Asian Health Services have started to prepare to enroll more poor people, including hiring more staff and expanding their facilities.

Community clinics are also preparing to help people navigate and enroll in either Medi-Cal or Covered California, depending on their incomes. Clinics in San Francisco, Los Angeles and elsewhere are trying to reach the many people who do not know that they are eligible for Medi-Cal or subsidized insurance on the exchange.

Despite such adjustments, community clinics in urban and rural areas also face an increased demand that can’t be met in areas with a physician shortage. Several programs are attempting to recruit more doctors to cities and underserved rural areas.

Some critics worry that even with insurance and increased access to primary care, low-income patients still won’t get needed health care. Health care institutions and specialists may still be reluctant to take patients with public insurance, because private insurance pays more.

Innovation

Obamacare is creating some of the biggest changes in the health-care industry in decades. Some aren’t working exactly as expected in these early days of reform.

Our current system pays providers for specific services, for instance, but the industry is moving towards a system where providers are paid per patient instead. Under this system, doctors or practices receive bonuses when their patients do well, including going to follow-up appointments, avoiding the emergency room, and seeking appropriate care for chronic conditions. So far there have been mixed results for these pay for performance initiatives — sometimes they improve care but often they don’t. Accountable Care Organizations, which rely on a network of health professionals coordinating care to improve the health of their patients and reduce costs, aren’t working as expected either. Adjusting to new systems takes time, as long as five to six years, ACO organizations suggest, but that also means that reducing costs will take time too.

The switch from paper charts to electronic health records is perhaps the biggest change for doctors and nurses. The federal HITECH ACT, passed in 2009 as part of the stimulus package, provided money for Medicare and Medicaid providers to develop electronic systems. Community clinics that have already made the switch found that they’re improving quality but not reducing costs as promised.

Pitfalls

LeftBehind

Obamacare excludes a large number of people based on citizenship status. Undocumented immigrants do not qualify for the Medi-Cal expansion or subsidies through Covered California. The only exclusion is for undocumented immigrants who entered the country when they were 16 or younger, an exception that applies only in California. Advocates point out that this is contrary to the goals of the reforms, which work better with a bigger pool of insured people. Politicians say it would have been impossible to win the support to include them. State legislators are considering how to pay for health care for undocumented immigrants.

Native Americans are also excluded from the individual mandate because the federal government is already required to cover them through Native American Health Clinics. But the legislation does provide new funding opportunities for Native American health centers.

Young adults have been allowed to stay on their parents insurance policies until age 26 since 2010, one of the first of the reforms enacted, and the most popular. But how many eligible young people will sign up for their own insurance on the exchange?

Young people remain the largest block of the uninsured. Critics say their rates will increase to offset the decreases that older people can expect when insurers go from charging their older clients five times what they charge the younger to charge three times as much. Advocacy groups, including the Young Invincibles, say that’s a price they’re willing to pay for coverage, but whether or not the young and healthy will think insurance is worth the price is yet to be seen. Administrators of the program also point out that young people will be the largest group to qualify for financial assistance.

Most small business owners don’t understand what Obamacare means for them, either. The most common misconception is that they will be forced to provide coverage to their employees. In fact, most small businesses—any with fewer than 50 employees—will not be required to provide health insurance to their employees, but they will be able to provide coverage through the state business exchange.

Insurers and states also decide how to interpret the new law. For instance, Obamacare requires insurers to provide breast pumps to nursing mothers, but some companies are interpreting the legislation narrowly, leaving some mothers struggling to get pumps. And while states are required to select plans for the exchange that cover ten essential benefits set by federal rules, that leaves them with much latitude in deciding which particular benefits will be covered. The same latitude is in place when it comes to deciding what Medicaid will cover under reform.

Aside from demonstration programs like the rollout of the Low Income Health Plan in California, Obamacare is largely untested. No one knows exactly how much new demand there will be for health care once more Californians are insured. Much of the success of the legislation depends on people signing up for insurance through Covered California. The more people, the more affordable insurance will become. But will enough people understand their benefits and enroll to make the exchange work as an affordable market for individual insurance? Will the Medi-Cal expansion keep poor people healthier and out of the emergency room? Only time will tell.

Complied by Callie Shanafelt and Heather Tirado Gilligan with graphic design by Shana Rigelhaupt.

Note: An earlier version of this article stated incorrectly that legal immigrants in the country for less than five years would not qualify for Medi-Cal or subsidies through Covered California.

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