The Affordable Care Act and Cancer Patients – Winners and Losers in an Unsteady Paradigm Shift
Kip Piper, MA, FACHE, is a health policy and business advisor and former federal and state health official. He is president of Health Results Group and CEO of Medonomics.
The implementation of the Affordable Care Act (ACA) brings with it new rules of engagement for patients and their oncologists. Challenges posed to oncologists by the ACA will be addressed in next month’s The Last Word column. Herein, I will address the “good news” surrounding the ACA. To start, there are coverage expansions under the ACA, beginning with the positive effects for patients. Coverage expansion is taking 2 forms. The first is expanded Medicaid coverage in about half the states in the country for low-income adults who were previously ineligible for Medicaid. The second is the health insurance exchanges: the federal healthcare insurance exchanges at healthcare.gov and the state-run insurance exchanges. There, if their income was below 400% of the poverty level, they were able to apply for substantial federal subsidies in the form of subsidized premiums. On a sliding scale, patients between 100% and 200% of the poverty level are receiving the most federal subsidies. In addition, individuals and families with incomes between 100% and 250% would also receive subsidized cost sharing: ie, lower deductibles, copayments, and coinsurance as a result of additional federal subsidies. Medicaid for the most part has no premium, no deductible, no coinsurance, and only nominal copayments for prescription drugs.
Consequently, the goal here is that many individuals with a history of cancer who were uninsured or underinsured would be able to be insured and receive coverage. The big question is, how many people ultimately will enroll? And of those who do enroll in either the Medicaid or the federal exchange market, how many were actually formerly uninsured, versus those who were previously insured but were moving from various forms of private insurance: individual coverage or employer-sponsored coverage? At this point, there is no way of knowing how many of those signing up for the new insurance plans are making a lateral move and how many are newly insured as a result of the ACA. Put another, and important, way, how many people are moving from the private insurance market to the government-insured market? What is important to note is that even with the most optimistic projections about the ACA, at the end of this decade we will still have more than half the number of uninsured that we currently have – leaving us with approximately 30 million uninsured people.
Another positive side of the ACA with respect to oncology is what is termed adjusted community rating. This is the idea that requires health insurers to price, to set their premiums, in a certain way and limits how a health insurer can calculate its premiums, starting in 2014 and beyond. Specifically, health insurers are no longer able to vary premiums based on the health status of the individual or group of individuals being insured. In the past, health insurers could charge individuals who were sick, or a group of sicker-than-average employees, higher premiums. Conversely, they would charge lower premiums for healthy people. In short, insurers could vary premiums based on the health status of the individuals being insured. Starting in 2014, they are no longer able to do that: insurance premiums are now an entirely egalitarian matter – a radical shift from the basic premise of insurance, which is to base a premium on risk.
Secondly, historically, in many states, insurers were able to charge women more than men and older adults more than younger adults. State regulations on insurance rates vary, but in most cases an insurer could charge an employer with a disproportionately female population more than a disproportionately male population. The reason is simple: during their working years, women tend to use more healthcare services than men, and insurers would charge women higher premiums to reflect that reality. Premiums also varied by the age of the individual or group of individuals being insured. Consequently, someone in their early 60s, pre-Medicare, would see their premiums escalate to 5 or 6 times that of a 20-year-old. But the overriding factor determining one’s premium was health status.
Everything changes under the ACA, with the rare exceptions of some grandfathered plans. In most cases, insurers may no longer vary premiums based on health status, age, or sex. This has the effect of causing healthy young men to subsidize those who account for greater healthcare utilization than they do, ie, the older people, the infirm, and women. This is in addition to the subsidies built into the ACA, wherein the taxpayers and employers are subsidizing the uninsured. In addition to the effects of this adjusted community rating mechanism, childless adults will be cross-subsidizing healthcare for children, particularly their vision and dental services, while men will be cross-subsidizing the cost of maternity and prenatal care. This is part of a massive redistribution of hundreds of billions of dollars over the coming years from some groups of people to other groups of people.
What this means for people with or at risk for cancer is that they will not have to pay more. Prior to these provisions of the ACA going into effect starting in 2014, if a member of a group developed cancer, the premium for the group would increase. This can no longer happen, and in many cases those who had been paying very high premiums due to current or past illnesses could even see their premiums go down.
Another advantage of the ACA affecting access is the coverage of preventive services. Most health plans are now required to cover a range of federally endorsed preventive services – specifically, services that have been endorsed by the United States Preventive Services Task Force. Anything that the task force recommends, such as cancer screenings, health plans must cover automatically and do so without applying any deductible and without imposing any cost sharing – no copayment. So the hope is that this will improve access to critically important cancer screenings and catch cancer early on, when treatment can be optimized.
Another advantage of the ACA is guaranteed issue and the prohibition of excluding coverage on the basis of preexisting conditions. If the individual has the money to sign up, the health plan must cover them, and related to that, once someone is insured, the insurer cannot exclude any other preexisting conditions. That again is a boon for access to cancer care. The ACA has also prohibited any annual or lifetime caps on how much insurers will pay for a patient’s treatment – historically a major fear of cancer patients receiving biologics that succeeded so well that once-terminal, acute conditions had been transformed into long-term conditions. Now patients will no longer have the fear of running out the clock with an end to coverage of life-preserving treatment.
But Will It Fly?
The foregoing description of the ACA and its desired impact on cancer patients and the oncologists who treat them took considerable space even to summarize. But this is only the first half of the story. In the next issue, I will provide a feasibility analysis of the ACA, providing special focus on its feasibility in oncology. For while the ACA was written with the intent of reforming all fields of medicine, oncologists know the special nature of cancer care, and so an in-depth reality check is in order. Certainly the complex infrastructure of personalized medicine in the treatment of cancer, requiring a unique provider team and reimbursement process, is not handily dispensed with as if it were a matter of no depth. The concluding portion of this story will examine the factors involved in delivering on the promises made in the ACA. We will examine the basic problems to medicine posed by this insurance paradigm, and those especially challenging to cancer care and research supporting the massive, growing infrastructure required to “make it fly.” Can it? Is the ACA the visionary step forward it claims to be or just a politician’s dream with no medical or economic substance? Is the answer to this question “Yes,” “No,” or “Only if you fix this”? The needs of cancer patients are so extraordinarily profound, the research discoveries concerning personalized cancer care so complex, that it would do the question a disservice to attempt answering it in a few sentences here, where space does not permit even a brief feasibility assessment/gap analysis. Consequently, I will attempt to provide useful perspective in part 2 of this article, laying out the specific challenges to carrying out the mission of the ACA as described above and seeking an answer to the question, “But will it fly?” This astonishing legislative foray into the demanding field of personalized medicine in oncology requires its own space, and it will receive it in the next issue. Until then, I hope that the foregoing description of the provisions of the ACA has provided clarity not only on the viability of the act in cancer care but simply on the intent of those who drafted it.
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