About The Affordable Care Act (ACA) or “Obamacare”

I am writing you today to explain the new healthcare options that I believe are best to provide to your employees. The Affordable Care Act (ACA) or “Obamacare” has introduced new laws that serve as comprehensive health care reform. This reform was introduced to make quality health insurance more widely available for a broad range of people. Obamacare is intended to protect the patient and provide more universal coverage by implementing new ideas and policies. The policies that will affect your organization the most include pay for performance, coverage for young adults, pre-existing illness provisions and the use of medical homes. As a company that offers insurance to employees, you are heavily affected by these changes, so it is imperative to look at the pros and cons of each aspect of this new policy.

One new change is how the providers are paid; traditionally we have paid providers fee-for-service, but the ACA has begun the push what is called pay for performance. In the old system, fee for service is defined as “physicians or tier employing entities generally receive more reimbursement for each incremental clinical encounter or service rendered” (Caveney 2016). Within this system, physicians are incentivized to order more procedures because that’s how they earn their living. The reason why you should care about this is because these procedures translate into money spent. With the implementation of pay for performance you instead reward providers for implementing cost effective savings and providing good outcomes. If we were to transition to pay for performance, we would be rewarding providers for doing cost effective procedures while also obtaining desirable results. In certain test regions in North Carolina, Blue Cross and Blue Shield have implemented several types of pay for performance.

One type known as the Blue Quality Physician Program (BQPP) aims to meet the ever-changing needs of the work place by creating a better experience for the patient in a clinical setting that. In certified BQPP regions, it has been shown that patients experience better chronic disease management, reduced emergency room utilization, and fewer readmissions to the hospital (Caveney 2016). A difficulty in implementing pay for performance is that it is often hard to measure. It can be challenging to figure out which areas to target for growth, and with patient satisfaction becoming an increasingly popular new measure, it has become a concern whether patients have the knowledge to measure quality care. Pay for performance can also get a bit tricky with hospital visits. Patients can visit any number of doctors and it may be difficult to discern who deserves the extra reward. It also can be hard to see if certain health outcomes are due to physician error or patient error. Some patients will not adhere to plans and their noncompliance could result in skewed data. Similarly, pay for performance has traditionally only been used in primary care, it may be hard to develop guidelines for more specialized acute diseases.

Coverage for young adults is another new health strategy. This allows any employer health plan that currently gives dependent coverage to continue covering the child until they reach the age of 26. This plan extends to any plan that the child is in, unless the child has another offer of an insurance from their employer (“Coverage for Young Adults”). As an employer this would affect you financially in both positive and negative ways. On the plus side, it would give a tax benefit, but it would mean you must extend coverage for many years. These young adults do not directly benefit Cummins because they are not actually working for us. This means you would be paying for their insurance and receiving nothing from them in return. The insurance company would benefit from this part of the plan because they can offset the costs of care. Young people are generally healthier, so they do not need many costly procedures.

This plan would directly benefit the children and young adults receiving coverage because traditionally they are an underinsured population. This history of being a disproportionately uninsured is due to a number of reasons such as young adults (false) sense of invincibility, reduced access and financial difficulties. Young adults also don’t have access to employer-based insurance, as most of them start out at entry-level jobs. Similarly, many young adults do not have the financial means to support themselves, much less pay high marketplace premiums (“Young Adults and the Affordable Care Act: Protecting Young Adults and Eliminating Burden on Families and Businesses”). This plan also gives them affordable premiums at the same benefits they grew up with. Moreover, it may incentivize the young adults to begin a career at Cummins and continue to receive the same high quality of care they have grown up with.

More provisions have been put in place with the pre-existing conditions. Pre-existing conditions are defined as “medical conditions or other health problems that existed before the date of an individual’s enrollment in a health insurance plan” (Claxton et al.). Traditionally, health care insurers have been able to deny those with chronic conditions or have them into a wait period of up to 12 months; with the passing of the ACA Cummins and other companies will no longer be able to do this. Certain exclusions do apply: for example, if someone received a new diagnosis within 6 months before enrolling in a new plan, they can be excluded for up to 12 or 18 months. This provision directly affects you because as an employer, this could lead to higher payments over a long period of time.

It does not allow health insurers to deny anyone coverage or screen them, and as a private insurer, you must issue medical insurance to anyone who applied regardless of any health condition(s) they may have. This provision not only applies to your current workforce, but also applies to any dependents listed on their health insurance. This could lead to more coverage for chronic diseases, which translates to more money spent to provide the counseling and medications needed to treat these diseases. This is great for employees and may draw in perspective hires. The Kaiser Family Foundation estimates that before that ACA was put into place, 52 million American under the age of 65 would be uninsurable (Claxton et al.). That number doesn’t account for the medications, or other health care needs that could be declined.

Medical homes are a new reform used to help prioritize primary care and hold primary care providers accountable for the coordination of patient. In this system, instead of trying to coordinate with multiple health care providers, all of the patient’s care is coordinated by one provider. Medical homes will either directly provider care or reach out to other providers for deliverance of care. This access to clinicians is sometimes extended past what is considered normal working hours. It has shown some promise in saving money; specifically, when monthly care provider fees are dropped. Provider care fees are paid by insurers to medical homes, they are intended to help offset the costs of teamwork not directly associated with patient care. As a company we can choose our type of medical home.

Traditionally there are four models already implemented with three types: Multi-Payer Advanced Primary Care Practice (MAPCP), Comprehensive Primary Care (CPC), Federally-Qualified Health Center (FQHC) Advanced Primary Care Practice (APCP) and Independence at Home (IAH). The first three of these models give financial incentives to providers to keep the costs down. These costs are called monthly care management fees. Furthermore, medical homes have been shown to meet the most quality measures such as lower readmission rate and continued contact with their providers (Baseman). Some challenges with the implementation of medical homes include expanding access to patient’s clinicians and more comprehensive data sharing. After the first initial tests of this, it had been noted that transforming primary care required consistent change. It includes more coordination, changes in management, and redesigning technology. This can lead to change burnout and overall pushback from clinicians (Nutting et al.).

For my personal recommendation, I think we should try and implement all aspects of the ACA discussed here but focus specifically on our coverage for young adults. First off, this is beneficial because it supplies preventative care to a group of people who traditionally have trouble finding a plan that is affordable and comprehensive. This group of young adults is the group Cummins is likely to hire, and keeping them healthy is in your best interest, as it insures a healthy workforce. Second, most 26-year olds don’t have chronic diseases or need costly procedures. The majority of care they need is preventative, which is far less expensive than covering acute diseases or chronic conditions. Third, they also pool risk for insurance companies, so it brings a larger pool and more people to cover expensive procedures. Fourth, with more people covered at this age, they will be more likely to go for annual checkups and get preventative services done, leading to fewer problems with chronic conditions and the high costs associated with them.

I think medical homes do show certain promise, but there have not been sufficient examples of them to be thoroughly proven. I am hopeful, and maybe after looking at more results and outcomes from medical homes it would be good for Cummins to adapt one of these plans, as it could lead to more coordinated care for your employees. Similarly, pre-existing conditions may lead to more money being spent, but if you are spending it on the right pool of people, the talent you get back can be very rewarding. Many pre-existing conditions like diabetes, hepatitis, and asthma are well researched and have defined plans of care to readily manage the diseases. This new ACA provision is meant to help keep those under control and nearly guarantees you are hiring the right people to work for your company. In summary, I believe the ACA is doing a lot of good for your company by coming up with ways to control spending like pay for performance and medical homes, and also ensuring the most Americans are covered by adding coverage for young adults and those with preexisting conditions.

Works Cited

Baseman, Susan, et al. “Payment and Delivery System Reform in Medicare.” Kaiser Family Foundation, Payment and Delivery System Reform in Medicare https://www.kff.org/medicare/report/payment-and-delivery-system-reform-in-medicare/
Caveney, Brian J. “Pay-for-Performance Incentives.” North Carolina Medical Journal, 2016, www.ncmedicaljournal.com/content/77/4/265.full.
Claxton, Gary, et al. “Pre-Existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA.” The Henry J. Kaiser Family Foundation, 12 Oct. 2018, www.kff.org/health-reform/issue-brief/pre-existing-conditions-and-medical-underwriting-in-the-individual-insurance-market-prior-to-the-aca/.
“Coverage for Young Adults.” CMS.gov Centers for Medicare & Medicaid Services, 7 Nov. 2016, www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/Coverage-for-Young-Adults.html.
Nutting, Paul A., et al. “Initial Lessons From the First National Demonstration Project on Practice Transformation to a Patient-Centered Medical Home.” The Annals of Family Medicine, 1 May 2009, www.annfammed.org/content/7/3/254.full.
“Young Adults and the Affordable Care Act: Protecting Young Adults and Eliminating Burdens on Families and Businesses.” CMS.gov Centers for Medicare & Medicaid Services, 7 May 2013, www.cms.gov/CCIIO/Resources/Files/adult_child_fact_sheet.html.