The Affordable Care Act: What to Expect in 2016
Since being signed into law in 2010, the Patient Protection and Affordable Care Act (ACA) has been slowly phased in towards full implementation. While full implementation of the law is still a few years away, this calendar year, 2016, is critical regarding the financial impacts of the sweeping healthcare law. Let’s review what to expect from the ACA in 2016.
Higher Premiums: Unfortunately, a recent report from the National Center for Policy Analysis indicates that out-of-pocket costs for healthcare are slated to rise somewhere between 7.5% and 20.3%. It appears that these rate hikes will have a greater impact on lower income individuals because the tax credits designed to alleviate some of the costs will not keep pace with premium hikes.
Penalties for Non-enrollment: In 2016, penalties for individuals who fail to purchase health insurance will increase significantly. This year, the penalty for non-enrollment is a minimum of $695. These penalties are designed to make sure that younger; healthier individuals are included in the insurance pool to help lower costs. It remains to be seen if younger Americans will be swayed by the higher penalty versus the overall cost of purchasing a policy.
Reimbursements based on Quality: The Department of Health and Human Services (HHS) will aggressively implement the quality and value components of the ACA. By the end of 2016, up to 85% of Medicare payments for services will be tied to quality and value with 90% by the end of 2018. To date, the impact on hospital performance has not been substantial, however with new measurement implementation and more data available to study; changes in quality performance are likely to emerge.
Preferred Networks: With performance and quality of care being the standard hospitals are measured by, many are developing strategies to help address the care received after a patient leaves the hospital. These strategies are trending and often include the development of networks of Home Health Agencies and Skilled Nursing Facilities. A preferred network of post-acute care allows the hospital to have a say in the quality of care their patients are receiving and are designed to decrease re-admittance rates.
The Growth of ACO’s: One of the key benefits of the ACA was in the emphasis on coordinated care to improve quality and control costs. The rapid growth of Accountable Care Organizations (ACOs) is further proof of the impact our healthcare law has on care delivery. ACOs are formed when doctors and hospitals work together in the coordination of patient care. This design puts the emphasis on the patient and not the number tests being performed by various providers. The sharing of diagnostic information helps control costs and the ACOs receive payment for successful treatments. Today, there are ACOs representing 49 states and the District of Columbia. In 2014, ACOs had a reported net savings of $411 million and demonstrated improvements in 82% of the reported quality metrics.
Since 2016 is a presidential election year, major changes in the healthcare law are not anticipated. In the interim, providers, patients, employers, and families will continue adjusting to the current landscape. Regardless of which political party wins the election, full-blown repeal of the ACA is unlikely. It is more realistic to think that the positives of the law will be expanded upon while negatives are dealt with through legislative amendments. Give us your thoughts and experiences with the ACA, and even your prediction for its future in the comments section below. We will revisit this topic later in the year and see what the ACA landscape looks like heading into 2017.
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