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Christine Sterns
“ACA – It’s Here to Stay”
Summary 11/19/15
Ms. Sterns’ presentation laid the Affordable Care Act (ACA) out in the context of the ongoing
changes occurring on the healthcare scene.
The ACA was driven by the “Triple Aim” pillars of healthcare which include: 1. improving the
health of the population by increasing access to healthcare, 2. lowering the cost of healthcare and 3.
Improving the quality/efficiency of the healthcare delivered. Concern from employers about the health
of their employees and the cost of poor health also contributed to the adoption of the ACA.
Those who like the ACA like it because it expands healthcare coverage to those who otherwise
would not have it, thereby addressing pillar number one. Those who don’t like it, don’t like it because it
does not reign in the cost of healthcare thereby not addressing the second pillar to reduce cost.
Ms. Sterns suggested that there will not be a repeal of the ACA legislation because the divide in
Washington in terms of opposition and support for the act is consistent. Those who supported it still
support it and those who didn’t still don’t; those who side with it are greater than those who don’t.
Despite the support, the ACA presents some problems. One problem is that even though more
people are insured to date, the cost of insurance is still a problem for employees , especially since there
are not coinciding wage increases to cover the cost of the newly insured who are not eligible for
government support.
Also, the types of coverage are changing. Not long ago, Health Maintenance Organizations were
the most largely used insurance options. Then the Preferred Provider option began to increase in
popularity. Now, due to the high premiums, people are gambling on high deductible plans, which
means a more significant out of pocket cost if something happens. Added to that, the cost of insurance
exceeds inflation rates and the penalty for not having insurance has increased significantly since its
passing.
Small employers are feeling the pinch of having to provide health insurance; however, they are
eligible for a tax credit to ease that burden. Unfortunately, due to the daunting amount of paperwork,
many do not take advantage of this credit available to them.
Medicare expansion was another component of the ACA. Childless adults are now covered,
whereas they were not covered before. This is good for those receiving Medicare but presents a
problem for those providers who accept Medicare because the reimbursement rate for Medicaid
patients is low compared to health insurance payments.
The ACA is paid for by certain excise taxes, certain new taxes, reinsurance fees, employers,
insurers and the Cadillac tax, which is a tax on more expensive plans.
The ACA did away with the idea of not insuring someone because of a pre-existing condition.
While in New Jersey, this law already existed so nothing changed in New Jersey with regard to preexisting conditions.
Since cost is the major issue not addressed by ACA, how do we address it? For one, employers
can consider using a primary vendor to get bulk rates. Or they can consider the balance between cost
and quality and find the best price for the service as much as possible; the ensured can pay the
difference. Employers are also considering workplace wellness programs that have yet to show large
impacts on employee health, yet are felt to be worth the investment. Finally, to address this cost issue,
the employer may take on more risk. That is, they buy a lower premium plan for their employees with
less benefits and if the employee needs more coverage, the employee will pay out of pocket.
Depending on one’s perspective, the ACA may be considered a good thing for the nation or bad.
Either way, the speaker argues that it is here to stay.