The ACA: How Might It Change the Ethics of Health Care? 5 November 2014 Jan C. Heller, PhD System Director of Ethics

The ACA: How Might It Change the Ethics of Health Care?

5 November 2014

Jan C. Heller, PhD

System Director of Ethics

Presentation Outline

• Introduction: This is the first of three presentations

– A disclaimer: The ACA represents a major societal change, and there

are many, many details of this Act we won’t have time to discuss or

about which I can claim no special expertise

• Brief summary of the Affordable Care Act

• Overview of ethical issues emerging with the ACA

– Will explore some of these more deeply in later presentations

• Some implications for health care ethics

– In broad strokes for now…

Overview of the Affordable Care Act

• Actually titled the “Patient Protection and Affordable Care Act”

– Signed into law by President Obama on 23 March 2010

• Focuses on three broad areas…

– Provisions to expand health insurance coverage (most effort here, thus

far)

– Control of rising health care costs

– Improvements to the health care delivery system

• My principal source for this overview:

– Kaiser Family Foundation• http://kff.org/health-reform/fact-sheet/summary-of-the-affordable-care-act/, modified on 23 April 2013

ACA: Provisions to Expand Coverage

• Requires most US citizens and legal residents to have

health insurance– Creates state-based exchanges for individuals to purchase

insurance, with premium and cost-sharing credits for individuals

and families with incomes between 133-400% of federal poverty

level (FPL, $19,530 for family of three in 2013)

– Separate exchanges for small businesses

– Expands Medicaid eligibility to 133% of FPL

– Graduated (increasing) penalties for those choosing not to

purchase insurance


• Many changes to support expanded funding, e.g.,…– Taxes (fines) on individuals without coverage

– Over-the-counter drugs excluded from HSA reimbursement

– Excise tax on high-priced employer-sponsored plans

– Excise tax on medical device sales

– Increased tax on indoor tanning services

• Additional fees also imposed on…– Pharmaceutical manufacturing companies

– Health insurance sector


• Changes to health insurance– Basic “essential health benefits package” for all, with four tiers

and reduced out-of-pocket limits

– Guarantee issue and renewability

• Rating variation allowed only on age, rating area, family

composition, and tobacco use

– No lifetime limits

– Abortion coverage (more on this below)

• Not included in essential health benefits package

• States can prohibit Exchange-plans from providing coverage


• Expands Medicaid coverage

– State coverage permitted to expand to 133-200% FPL

– Increase drug rebate percentage

– Gradually increased reductions of Medicaid DHS allotments to states

with lowest percentage of uninsured (“carrot and stick”)

– Prohibit payment for health care acquired conditions

• CHIP maintained and payment increased after 2015

• FDA authorized to approve generic drugs and to grant

manufacturers 12 years of exclusive use (up from 5+3 years)

before generics can be developed

ACA: Cost Containment

• Simplifies certain health insurance administration rules and claims

management processes

• Demonstration projects for “bundled payments” preparatory to

implementing Accountable Care Organizations (ACOs)

• Extensive changes to Medicare, e.g.,…

– Incentives to providers to accept patients in Medicare Advantage (vs.

patients with higher fee for service rates)

– Reduce premium subsidies to higher income individuals and couples

– Creation of Independent Payment Advisory Board to submit plans to

achieve reductions

– Creation of Innovation Center within CMS

ACA: Improving Delivery System

• Comparative effectiveness research supported

• Demonstration grants for alternatives to current tort litigations

• Pilot programs for acute care and Medicaid “bundled payments”

models

• Better coordination of care for “dual eligibles” (Medicare and

Medicaid)

• Increased Medicaid payments for primary care

• Create Community-based Collaborative Care Networks

ACA: Improving Delivery System

• New emphasis on prevention and health promotion, with

screenings, education, and grants to reduce chronic disease rates

and address disparities

• Coverage of preventive services

• Grants to establish employer-based wellness programs

• Improved access to community health centers

• My take on changing delivery system:

– Stay tuned…mostly leaving it to us to figure this out by shifting

incentives away from acute care toward population health

– More on this in later presentations

Overview of Ethical Issues

• Does not provide “universal” coverage

– Undocumented immigrants not covered

– Individuals may choose not to be covered

– States may choose not to participate in Medicaid expansion

• With threat of reduced payment to states not participating

• Individual coverage is mandated

– Okayed by the Supreme Court, but remains an ethical question

– Turns on status of individual vs. community or common good

• But can we separate the health of individual from the community?

• What is our moral obligation to those who can afford but choose not

to purchase coverage? Hold that thought…


• Coverage/non-coverage of abortion remains controversial

– Abortion, by law, cannot be paid for by Federal funds (except for saving

life of mother or in cases of rape or incest) and thus are excluded from

federal premium or cost-sharing subsidies

– States are permitted to prohibit plans participating in their Exchanges

from providing coverage for abortions

– Plans must estimate the actuarial value of the cost of their abortion

benefit and cannot take into account the savings that might realized as

a result of abortions

• However, note that WA State has been trying to require plans

(except Federal) to cover abortion


• Coverage of contraception has also been controversial for Catholic

bishops and certain other employers

– ACA’s challenge is to be sure individuals who want coverage and work

for organizations that object to providing it have coverage without

forcing those organizations to become morally complicit (i.e.,

inappropriately cooperate) in providing it

– CHA concerned about definition of “religious employer” and Catholic

bishops (and other religious groups) concerned more broadly with

maintenance of “religious liberty”

– Supreme Court recently permitted certain smaller, family owned

businesses (Hobby Lobby) to opt out as well


• Going a bit deeper…A structural or systemic ethical issue

• What do we owe the sick, injured, and vulnerable as a society; i.e.,

what type of health insurance do we want as a nation?

– Pure market (stratifies pools based on expected health status)

– Solidarity (does away with health status stratification)

• The healthy will always subsidize the unpredictably sick, but market

insurance does not ask the healthy to subsidize the predictably and

chronically sick

– Solidarity insurance (community rated) does

– And, 75% of all medical expenditures devoted to chronic illness• Michael Lee, Jr., “Trends in the Law: The Patient Protection and Affordable Care Act,” Yale Journal of Health

Policy, Law, and Ethics, Vol. 11, No. 1, pp. 1-8, 2011.


• ACA’s economic foundation “revolves” around or grounded in the

ban on preexisting conditions

– All other features are designed to protect this commitment to social

solidarity

• Such a commitment requires an “extraordinary amount of coercion”

that market insurance can’t provide

– Lowest-spending 49% incurs only 3% of medical expenses

– Highest-spending 5% incurs 50% of the expenses

• And, this commitment leads to a “host of problems” and adds

substantially to the ACA’s complexity


• Ban on exempting preexisting conditions requires the mandate

– Otherwise, healthy would simply drop coverage

• Mandate, in turn, requires subsidies

– Can’t legitimately mandate what can’t be afforded

• And, subsidies require funding support

– New taxes, changes to Medicare and Medicaid, move away from acute

care

• And thus, the “elephant in the room” is cost-control

– If costs not controlled, more and more will people drop coverage and

an “adverse selection death spiral” results


• Because of the above, cost-control is now driving radical changes

in our health systems (no surprise here!)

– Resources flowing away from acute care into primary care,

community/population health, and prevention

– Within acute care, efficiency, without neglecting quality, more important

than ever

– We’re living through not only the transformation of health care, but the

transformation of our work and clinical worlds

• If current cost-control efforts fail, expect Congress to reenter the

process

Some Implications for Health Care Ethics

• Possible movement toward Public Health ethics

– An implication of taking risk for populations with ACOs

– Tempted to return to paternalistic or even coercive approaches

• Need for new delivery models

– Current model dominated by need to serve acute care settings

– As care becomes distributed (more out-patient, more home care, more

sub-acute settings), how will traditional ethical issues be identified and

addressed?

– What new issues might arise?

• More on these in later presentations

Questions and Discussion

Documents

The ACA: How Might It Change the Ethics of Health Care? 5 November 2014 Jan C. Heller, PhD System Director of Ethics