The Patient Protection, Research Paper Example

Executive Summary

This paper is an analysis of the element of Medicaid expansion as prescribed in the Patient Protection and Affordable Act of 2010. This research analyzes how Medicaid expansion intends to change the status quo in terms of health care quality, access, and cost. The current state of implementation is also described, along with challenges to implementation. Finally, this paper analyzes whether the element can be successful in improving health care quality, access, and cost.

The Medicaid expansion intends to change the status quo by providing insurance coverage to millions of uninsured Americans. The current state of implementation is facing a number of challenges. These challenges that the form of legal and regulatory barriers. There are also challenges that lie in participation of the key stakeholders. This is in relation to making the uninsured people take part, and in bridging the gap between surging demand and capacity. This gap emerges from the surge in demand by newly insured patients in a situation where there are no sufficient resources available.

This element can be a success in improving health care quality, access, and cost. This is in terms of providing millions of Americans with insurance, which is their “ticket” to enter medical institutions for low cost services. This element can also be unsuccessful in improving health care quality, access, and cost. It can be unsuccessful when one asks the capacity of the federal, state, and local governments to fund all the operations needed to sustain the program.

Introduction

Background of the Study

The Patient Protection and Affordable Care Act of 2010(referred to as “The Act” from here on) are a comprehensive health reform President Obama signed on March 23, 2012. The Act sets policies on provisions to expand coverage, control health care costs, and improve health care delivery systems. Under The Act, the overall approach to expanding access to coverage mandates most US citizens and legal residents to avail health insurance. The Act also aims to develop state-based American Health Benefit Exchanges. Through this program, uninsured persons can purchase insurance, with premium and cost-sharing credits to individuals and families whose income falls somewhere between 133-400% of the federal poverty level. The program also aims to develop separate “exchange” where small businesses can purchase insurance coverage. The Act also mandates employers to pay penalties for employees who have received tax credits for health insurance through an exchange. However, small employers are exempted from this mandate. In addition, The Act imposes new policies on health plans in the exchanges. This also applies in the individual and small group markets. Lastly, The Act aims to expand Medicaid to 133% of the federal poverty level.

The Act takes a fundamental first step to improve access to health care services by expanding insurance coverage. Improving access to health care services is the ultimate goal of The Act, and its way to achieve this is to expand insurance coverage. The Act also aims to sustain federal resources in order to assist attempts to meet the increasing demand for health care services. Combined federal, state, and local strategy play a crucial role The Act’s ultimate goal.

This paper begins by stating the problem, scope and limitation, and the objective of the research. The discussion will then proceed to the framework. The framework provides an overview of the Medicaid expansion, the key stakeholders, the current implementation of the program, and the challenges to implementation. An analysis section follows that furthers some of the ideas mentioned in the framework section. Finally, a conclusion section is presented to show the broader implications of the findings of this research to America’s health care system.

Statement of the Problem

There are various socio-economic and political factors involved in the implementation of the policies prescribed in The Act. For instance, there are various parties involved in the implementation of The Act. Each of the parties has its own interests. Their interests sometimes overlap and sometime seemingly incompatible with each other. This is why there still is a need to subject The Act under critical scrutiny to reveal the forces that can drive or resist the proposed changes.

Scope and Delimitation

The Act comprises various elements. These elements are individual mandate; Medicaid expansion; state-based health insurance exchanges; Independent Payment Advisory Board; Patient-Centered Outcomes Research Institute; employer requirements; accountable care organizations (ACOs) and insurance market regulations. This paper does not intend to cover all these elements. The scope of this research only covers the element of Medicaid expansion.

Objective of Research

This paper is an analysis of The Act, with sensitivity to Medicaid expansion. This paper explains how the expansion of Medicaid intends to change the status quo. This status quo is defined in terms of health care quality, cost, and access to health care services.

This research identifies the stakeholders. The current state of implementation is also discussed, as well as the challenges of implementation. In addition, this paper analyzes whether the expansion of Medicaid will be successful in improving health care quality. This paper analyzes the Medicaid expansion considering the significant socio-economic political forces around it. In other word, this paper has the following objective:

• To analyze the expansion of Medicaid as prescribed in The Act and assess whether it can be successful or not at improving health care quality, access, and cost

Framework

Overview of the Medicaid Expansion

Medicaid expansion is a part of The Act’s aim to expand its public programs. The expansion will include all non-Medicare eligible persons under age 65 with incomes up to 133% federal poverty level (FPL) based on modified adjusted gross income. The Act will provide a benchmark benefit package to all newly eligible non-elderly adults. This package meets the essential health benefits through the “exchanges”. The states will receive a hundred percent federal funding from 2014 through 2016 in order to finance the program. The federal funding will be reduced to 95% in 2017, 94% in 2018, 93% in 2019, and 90% in 2020 and subsequent years. An increase in the federal medical assistance percentage for non-pregnant childless adults will be awarded to states that have already expanded eligibility to adults with incomes up to 100% FPL. Although the federal funding starts in 2014, states can already expand eligibility on April 1, 2010 (Kaiser Family Foundation, 2011).

The most critical objective of The Act is the plan to expand health insurance and cover Americans who are currently uninsured. The Act has two strategies to realize this objective (Sommers & Epstein, 2010). The first strategy is to mandate individuals to purchase insurance. This is coupled with the development of state-based insurance “exchange” subsidies to assist individuals whose income falls under 400% of the federal poverty level to avail insurance from private companies. The second strategy is through Medicaid expansion. The federal government underwrites the Medicaid expansion to cover adults whose family income is below 133% of the federal poverty level. According to the estimate of the Congressional Budget Office, each of these strategies will add sixteen million enrollees. This will total to thirty-two million newly insured Americans.

The Status Quo

The Medicaid expansion will take effect in January 2014. Currently, about 49.9 million American citizens still do not have health insurance (US Census Bureau, 2010). Medicaid is one of the two primary programs that aim to provide citizens that fall within certain eligibility requirements of health care services. The percentage of people covered by government insurance is 31% in 2010. That is about 95 million people (US Census Bureau, 2010). In such a situation, the system is not working well. The health care system is problematic.

Employers mostly provide insurance to their employees. Note, however, that the government does not mandate all employers to do this. The coverages of such insurance are also remarkably limited. Also, a person has the responsibility to pay for the full insurance premium in case of losing the job. All coverages will be lost at once if the person fails to do so. Insurance companies have the freedom to deny service to people who already have certain diseases. The result is an increasing medical expenditure especially among the low-income. This sometimes results to medical bankruptcy (Grunow & Nuscheler, 2010).

How the Expansion of Medicaid Intends to Change the Status Quo

The Medicaid expansion intends to change the status quo in terms of affecting the Medicaid coverage and spending. The expansion also impacts private insurance coverage. Under The Act, the Medicaid eligibility threshold for non-elderly adults will rise to 133% of the federal poverty level. There will also be substantial expansion of coverage among states with restrictive Medicaid eligibility requirements and a large number of uninsured citizens. The programs will grow less in states with higher current eligibility threshold and fewer uninsured residents (Ku, Jones, Shin, Bruen, & Hayes, 2011).

The Act directs the Center for Medicare and Medicaid Services to establish a national voluntary program for an accountable care organization (ACO) (Shortell, Casalino, & Fisher, 2012). The ACOs are provider groups whose duty is to accept responsibility for the cost and quality of care delivered to certain populations of patients who are under the care of the group’s clinicians. ACO’s, coupled with payment reform, is a strategy to reduce the rate of increase in health care costs over time. It is also a strategy to improve the coordination and quality of care for patients (Shortell, Casalino, & Fisher, 2012).

The Stakeholders

Today, the term “stakeholder” is broader and more inclusive than how it is used before. The stakeholder group that comprises the largest number is the American population in general. The federal government, state and local governments, insurers, health care providers, and other organizations are also stakeholders (Strayhorn, 2005). The level of participation among the stakeholders is a crucial factor in determining the success of the expansion to improve health care quality, access, and cost. This paper returns to this point in the discussion and analysis section.

Implementation and the Challenges to Implementation

Implementing the Expansion of Medicaid

According to Leighton Ku (2010), professor at George Washington University, it will take years to plan and execute the changes needed to expand coverage and transform the health care system.

The implementation of Medicaid expansion needs a streamlined and coordinated enrollment processes between Medicaid, Children’s Health Insurance Program, and the new state-based insurance exchanges. Creating this streamlined and coordinated process involves the following critical steps: designing simple application forms and procedures, and sharing data securely across programs. Designing the forms and procedures includes designing online systems. Before the Medicaid expansion takes effect in January 2014, the states will need to undergo the following processes: test and adjust the systems; train staff, begin public communication and outreach. States need enough time for planning these complex procedures. The federal government can assist in this process by providing cross-program guidance. Also, the Act sets new income definitions for Medicaid and the insurance exchanges. This is based on a modified adjusted gross income. This is expected to help in coordinating enrollment (Ku, 2010).

Challenges to Implementation

Legal and regulatory barriers are some of the obstacles that can arise during the implementation of the Medicaid expansion. There are various challenges to implementation of the Medicaid expansion such as different readiness among the states; political opposition, and additional sources of funding (Ku, 2010). The different readiness among the states is a challenge in terms of the states’ budgets. Note that the recession’s impact still resonates and cause budget difficulties in states. There are states that may not be ready to fund the major planning and systems development required. There are also political oppositions that manifest in some attempts to repeal The Act. The Congress is showing interest to repeal the mandate and other unpopular provisions and keep only the popular ones (Gorin, 2011). Another challenge is the additional sources of funding. Additional sources of funding are needed for planning on the state-level, and hiring new staff.

Note that the expansion aims to provide coverage for the uninsured. The challenge is on how to make the uninsured individuals to participate in the expansion program. Had it succeeded to provide millions of individuals with coverage, the next challenge is on how to increase the participation of health care providers. There is also the challenge of improving the capacity of each state to supply the demand due to increase in number of newly insured patients. These challenges to implementation will be further discussed in the next section of this paper.

Discussion and Analysis

The Medicaid expansion does not exist in isolation. This relies on a multitude of relationships with various groups of people or bodies. These groups of people or bodies comprise the stakeholders. This is why it is important to assess the stakeholder engagement process. This process comprises ways to stay connected to the parties that have an actual or potential interest in and effect on Medicaid expansion.

Moreover, engagement implies taking into consideration the views of each stakeholder groups. The information can then be used to determine whether the Medicaid expansion can be successful or not in improving the health care system. Furthermore, as stated earlier, there are socio-economic and political factors that come at play and determine the direction that the implementation will take. These forces are the critical factors that determine whether the expansion will be successful or not in terms of improving the health care system. In other words, the analysis is framed within the socio-economic and political forces or factors that influence the realization of the objectives of Medicaid expansion.

The level of participation of the population and the health care providers is crucial to the success of Medicaid expansion to improve the health care system. The Medicaid expansion is free for all, but this does not guarantee that all uninsured individuals who are eligible will submit an application. The expansion is expected to provide coverage for millions of individuals. This will mean increase in demand for health care services. In this case, the level of participation of health care provider is crucial in terms for supplying the increase in demand for health care services. In addition to payment delays, low reimbursement rates are a barrier that prevents participation among health care providers. Raising the primary care reimbursement rates in Medicaid to equal Medicare rates is the law’s strategy to increase the level of participation among providers. Another strategy is increasing the budget for community health centers and National Health Service Corps (Ku, 2010).

There studies suggesting that the effects of Medicaid expansion are harder to predict than how it initially appears to be (Sommers & Epstein, 2010). Note that the expanded coverage will be free to the states and to uninsured individuals whose income qualifies them for the program. For such reason, it is easy to assume that almost all persons eligible for the program will enroll. Upon closer analysis, this may not be the case. This is because correlation does not imply causation. In the case of the expansion, eligibility doesn’t always turn to actual enrollment.

There are empirical evidences that support this claim. For instance, currently, there are still millions of Americans who are uninsured despite the fact that they are eligible for the program. Moreover, Sommers and Epstein (2010) maintain, “the apparent simplicity of expanding Medicaid uniformly to include people in a given income category belies the tremendous heterogeneity among the 50 state Medicaid programs, which vary in terms of enrollment procedures, demographic of the target population, and the state politics. These differences are socio-economic and political factors that can complicate any attempts to implement the kind of broad spreading out that the Medicaid expansion aims to accomplish.

The political forces that can make the implementation of the expansion challenging are the administrative obstacles. Administrative obstacles discourage uninsured individuals to purchase insurance. These people are discouraged by the tremendous effort required to complete the multipage application and provide documentation of income and residency. Another obstacle is the process of maintaining enrollment. Remember that under the federal law, states are required to verify an enrollee’s eligibility annually. Note that there are states that practice this process more frequently than the others.

There is a need to increase the participation of the population who are uninsured and are eligible for the program. As mentioned earlier, there are still millions of Americans who remain uninsured despite the fact that they are eligible for the program. Based on data from 2007-2009 Current Population Survey (CPS), Sommers and Epstein (2010) predicts that a substantial increase of participation among the uninsured is needed to reach CPS’ target: enrolling sixteen million people by 2019. The implementation of the expansion needs fundamental shifts if increasing participation would be taken into account.

There are social institutions that can assist this aim of increasing participation among the uninsured. The mass media are the most powerful institution that can disseminate information. The mass media can increase participation through simplifying the eligibility rules to encourage the eligible uninsured to sign up for the program. According to Sommers and Epstein (2010), the details of enrollment outreach, application processes, and renewal procedures are the key to success for the Medicaid expansion to achieve its ultimate objectives.

The changes that the Medicaid expansion makes in the status quo can pose challenges. These challenges arise from the impending gaps between demand and capacity. As mentioned earlier, there will be an increase in the program for states with limiting eligibility threshold and high rate of uninsured citizens; and there will be a decrease in programs for states with high eligibility threshold and low rate of uninsured citizens. Note that states that less primary care capacity is also the ones with biggest estimated Medicaid expansions. These states that lack sufficient resources will then meet surging demand from people who are newly insured. The potential gaps between the demand and capacity do not only affect the newly eligible Medicaid beneficiaries; the gap also affects the individuals who depend on a state’s existing supply of clinicians.

There are studies that provide empirical evidences to support the claim above. Leighton Ku and colleagues (Ku, Jones, Shin, Bruen, & Hayes, 2011) examined the potential gaps between the demand in capacity in an experiment that involves each state and the District of Columbia. The researchers calculated measures of potential Medicaid expansion and current primary care capacity in those areas. The researchers also determined the quantity of nonelderly adults who are uninsured and eligible as prescribed by the 2014 Medicaid criteria; this is to determine the size of Medicaid expansion for each state. The researchers also utilized data from the Urban Institute to determine the rate of participation among the uninsured population. Moreover, the researchers calculated the number of primary care providers and the number of patients who were cared for in federally qualified health centers in 2009.

The research findings show that eight states experience the greatest challenges (Ku, Jones, Shin, Bruen, & Hayes, 2011). The research pointed out that these eight states are anticipated to have huge Medicaid expansion despite the fact that these states lack the capacity to provide primary care services. The significant increase of demand for the care that will come from newly insured patients can overtake or exceed the supply of primary care providers. The government should exert additional efforts to avoid this scenario. The research findings of Ku and colleagues have broader implications to the various effects of the expansion to state’s primary health care systems. Note access to care is determined, not at the state level, but in local service areas. Access to health care services differs among different areas within states.

The research findings have also broader implications in assessing the effects of the expansion and private insurance coverage through the new health insurance exchanges (Ku, Jones, Shin, Bruen, & Hayes, 2011). Increased waiting times and access barriers can result from the surging increase in demand for primary care by newly insured patients. This will happen once the rate of demand exceeds the supply of care. In this scenario, Medicaid patients, privately insured patients and Medicare patients are all affected. A possible situation that can arise from such a scenario is that patients who need urgent medical attention will end up in expensive emergency rooms. Another situation is delays in getting medical attention that can result to worse conditions that could have been avoided had the patient undergo examination early and without delay.

Conclusion

In sum, the element of Medicaid expansion in The Patient Protection and Affordable Care Act of 2010 is a complex matter. It is a complex matter in terms of how it intends to change the status quo; the roles of the stakeholders; how it will be implemented; and the challenges to implementation of the expansion. It intends to change the status quo by providing millions of Americans with insurance coverage. The stakeholders include all that is involved in demanding and providing health care services. The challenges to its implementation include different readiness among states, political opposition, and additional sources of funding.

In the final analysis, it is a difficult task to determine whether the Medicaid expansion will succeed or not in improving health care quality, access, and cost. The implementation of the plan is itself a challenging stage. The expansion aims to cover a large number of uninsured individuals. As the studies described in this paper attest, it does not mean that uninsured individuals will participate just because the expansion is free and that they are eligible for the program. In addition to this, the differences between the states in terms of their capacity to provide primary health care services can be a challenge. As shown, the increase of newly insured patients will result to a surge in demand for primary care. This can create a gap between demand and capacity for some states. This gap emerges from a high demand but low capacity to supply that demand.

The expansion of Medicaid can open the doors of medical institutions to millions of individuals who are currently uninsured. However, does this mean improvement for health care quality, access, and cost? To some extent, the answer is yes. In some ways, it can also be a no. The expansion of Medicaid can mean success to improve health care quality if, by improved health care quality, one means coverage for a large number of people. No one can deny that the expansion can provide millions of Americans with insurance coverage. The Medicaid expansion can also be an improvement in terms of access to health care services. It is an improvement because a large number of citizens have the “ticket” to seek professional medical attention when they need it. In terms of cost, it is also an improvement because newly insured patients do not have to suffer from medical bankruptcy as the public program covers their medical needs.

The answer can be a no if the roles of the other stakeholders are taken into account. The expansion is not an improvement to health care quality, access, and cost in the face of a gap between the demand and capability. Yes, millions of people have the “ticket” to medical institutions, but the question is can they be accommodated? In other words, the government may not have enough funds to provide the shortage of supply and improve the capability.

This discussion brings one back to the quest for an effective formula for cost-sharing. Policy makers in general agree that health care system should be able to provide universal insurance. However, no one can also deny that this might drain the national resources. In addition, it is difficult to sustain. At the same time, governments are thoroughly aware that the health care system is not a concern to be left entirely to the business sector. Hence, most countries adopt a private-public mix to fund their health care system.

People traditionally ask who pays for their health insurance. Today, the question shifts to determining an effective formula for cost sharing. Seeking such formula takes into consideration the need to balance efficiency goal with equity concerns (Lim). There are those who advocate for increased private spending on health insurance. There are also those who are for increased public spending. On the one hand, advocates of increased private spending on healthcare within a mixed system highlight its role as a safety valve. This safety valve relieves pressure on the public purse. On the other hand, advocates of increased publics pending claim that it best meets social objectives such as equity of access (Shiell and Seymour).

In this light, this paper recommends other interested individuals to research on the lessons the US health care systems can derive from health care systems of other nations.

References

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