Less attention has been paid to the cost-sharing reduction provisions of the ACA for those covered through exchanges that earn less than 250 percent of the Federal Poverty Level. In California, that is 58 percent of all those covered through exchanges (it is similar nationally). The cost-sharing provisions substantially increase the actuarial value of the plan and, therefore, reduce the total financial burden for low-income folk, and the provisions have significantly reduced the barriers to accessing care.
Awareness of these provisions remains relatively low in the general population and in the populations who would benefit. Yet, in surveys of newly covered populations who now understand their coverage, satisfaction with covered benefits and out-of-pocket costs is as high if not higher than those with employer-sponsored coverage.
Coverage expansion has undeniably helped hospitals and health systems by substantially reducing the uncompensated care burden. But the rise of high deductibility has dampened demand for some ambulatory services and has potentially increased bad debt for physicians who are seeing more patients with high deductibles. In addition, Medicaid expansion and exchange-related discounts to insurers have weakened margins as payer mix for hospitals and physicians skews more toward public coverage. Overall, coverage expansion has been a financial positive as evidenced by various metrics such as the overall reduction in uncompensated care and the robust economic performance of for-profit hospital providers attributed to the positive effects of coverage expansion.
Access to Care
Getting an insurance card should improve access to health care services and, apparently, it has. A March 2015 tracking survey by the Commonwealth Fund, reviewing progress from ACA expansion, found that 68 percent of the newly covered had used the card to access care, and 62 percent of that group said that “prior to getting this coverage, they would not have been able to access and/or afford this care.”
A similar story comes from Kaiser Family Foundation surveys conducted on the California experience and released in May 2015. The report found that among the newly covered, significant majorities had a usual source of care and a regular doctor compared with a minority of the uninsured. In particular, 43 percent of uninsured adults reported a usual source of care, with 22 percent having a regular doctor; among the newly insured, the percentages were 61 percent and 43 percent, respectively, compared with 80 percent and 70 percent for the previously insured.
Looking at all Covered California members and all Medicaid members compared with the privately insured, both Medicaid (71 percent) and Covered California members (69 percent) have a usual source of care, which is getting close to the 81 percent rate enjoyed by the privately insured. As these newly insured are gradually absorbed into the delivery system and they “learn” to use their new coverage, these numbers are likely to rise.
As Lee told me succinctly: “We have not been flooded with complaints from people who can’t access doctors.”
The Kaiser Family Foundation study found that only 7 percent of the newly covered Californians had providers say they did not accept their coverage, compared with 4 percent of the previously covered.
But, the access to care issue is complicated. Which providers? What settings? What quality? What about specialists? Do we have enough primary care providers? What happens in 2016 when payment rates for primary care under Medicaid revert back to previous levels (not the Medicare levels providers have enjoyed for the last two years)?
These are all good and difficult questions to answer easily. Here are some clues:
Where was the massive primary care surge? Despite claims of massive surges in primary care demand that we heard from some physicians and health systems, a study conducted by Athena Health based on data from its 16,000 providers found a surprisingly low increase in visits to primary care practices. This makes intuitive sense to me: As one of my old physician colleagues taught me, “There is only so much doctoring you can do in a day,” and absent a massive increase in supply of primary care physicians, why would we expect capacity and volume to increase massively? Indeed, when Canada finally got universal physician insurance coverage in the 1960s, overall demand for primary care did not increase much. (Higher-income folk got fewer visits and lower-income folk got relatively more.)
Did all the new demand end up in the ED? Another survey released in 2015 of a large sample of more than 2,000 emergency department physicians found a substantial increase in ED visits that could be attributed to the newly covered, due principally to Medicaid expansion. In particular, 28 percent said that volumes to their ED had increased greatly since the ACA was implemented, and a further 47 percent saw slight increases. Historically, ED utilization research has shown that as much as a third of visits are for conditions that could and should be seen in routine primary care settings, but because of convenience, primary care physician preference or perceived sophistication of services, patients end up in the ED. Emerging benefit designs for employer-sponsored coverage and for exchanges are intended to encourage beneficiaries to seek routine care in less-expensive settings than the ED, but it is harder to craft such incentives in the Medicaid population.
What about network adequacy and affordability? “Narrow networks are a necessary building block of affordable coverage,” Covered California’s Lee told me. And while exchange recipients in surveys report less of a preference for broad networks than those in employer-sponsored coverage, the issue becomes significant for new members when they have a serious illness and may find that certain providers (particularly high-profile ones) are simply excluded because of the providers’ high costs.
For me, this has gotten personal. In California, products, networks and plans in the individual market are identical inside and outside the exchange. As I have written in these pages before (see “My Journey through Obamacare”), I am in the individual market, and all I need is a low-cost narrow network that includes the Palo Alto Clinic (part of Sutter Health) and Stanford Health. The reason I like both of these systems is partly because they have national and international reputations for quality, but mostly because I live within walking distance, and I am a geography major. As we geographers say, nothing compares with propinquity.
Unfortunately for me, my insurer, Blue Shield, severed its contract with Sutter and, more recently with Stanford, because both are deemed to be excessively expensive. In a spirited letter to Stanford leaders that was widely leaked, Blue Shield’s CEO pointed to Stanford’s prices, margins and profits in comparison with Shields’ self-imposed pledge to return any profits in excess of 2 percent to customers. All noble … but now I have to drive to UC San Francisco if I get really sick.
As far as I can determine, I cannot buy any Blue Shield plan that includes these local providers. I am not sure if any plan marketed to individuals includes them, but finding that out would involve hiring Homeland’s operatives to do the necessary espionage on who is actually in what network.
This little drama is playing out everywhere. Who to blame? Obama, Covered California, Blue Shield, Stanford and Sutter, me, all of the above, no one?
The Last Mile: The Connection to Health
Coverage does seem to help access to care, but does it improve health? We have some answers from the Oregon Medicaid studies.
Oregon presented health services researchers with a rare gift in social science: a randomized trial. In 2008, Oregon wanted to expand Medicaid but had limited resources, so it had to limit expansion to 35,000 of the 85,000 on the proposed eligibility list. The solution: a lottery. Assign them at random. This is as good as it gets for research economists.