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Making Sense of the Affordable Care Act

By Elizabeth Ritchie, RN

The entire conversation of health care reform starts with the consensus that in the United States the health care status quo cannot be sustained. Reining in health care costs and putting health care back in the hands of individuals rather than insurance companies has been attempted by presidents since Teddy Roosevelt’s administration. The Affordable Care Act (ACA) is the single greatest deficit-reduction package since President Clinton’s budget of 1993. It is the single biggest legislative action of President Obama and the most significant ruling by the Supreme Court in decades.

The official name for this law is the Patient Protection and Affordable Care Act and the Reconciliation Act of 2010. It is usually abbreviated Affordable Care Act (ACA), and some have called it Obamacare and/or Romneycare. The act is comprehensive, complicated, is designed to be phased in over time, and is supposed to provide accessibility, affordability, high-quality and patient-centered care. These are all areas that doctors, nurses and health care providers have wanted addressed for years, but somehow the health care delivery system developed around the money and not so much around the health of individuals, families and communities.

Since 2008, the debate over health care reform has been a bloody battle with unforeseen twists and turns along the way. After 18 months of much debate by all sides, all parties, special interests, and those organizations that will lose money and those that will gain money, the ACA was passed into law on March 23, 2010. Many of the 30 provisions of the law went into effect immediately and others are being phased in over five years. The law was challenged by 26 states and went to the Supreme Court in 2011, with a final court ruling on June 28, 2012. The split decision was one of the most significant rulings in recent times, with the court largely approving all of the major tenets of the ACA. The controversial mandate that individuals purchase health care insurance was upheld. The piece of the law that expands Medicaid, which is the government’s health insurance program for low-income and sick people, was restricted. It allows more flexibility for states to expand their Medicaid programs without paying the same financial penalties that were called for in the law. Many people were surprised that the Supreme Court upheld the major tenets of the ACA. Whether it was a happy day or an awful day for the country, it is time for all of us to get on with the massive amount of work it will take to get it fully implemented, and ultimately achieve a better health care delivery system for all Americans.

In Colorado

Colorado has been working on health care reform since 2008 and has put into place several pieces of legislation requiring more access and less cost for over 13,000 residents. We are in the forefront of reform and are one of 10 states in the nation leading the way toward instituting the provisions of the ACA.

The most controversial provision of the ACA, and the one that most Coloradans and the nation will be facing by the end of 2013, is the “individual mandate” to buy insurance. Starting Janurary 1, 2014, legal residents and small businesses (50-100 full-time employees) will be required to purchase a health care plan at the Colorado Health Benefit Exchange (COHBE).

If you currently have a private health insurance plan, an employer plan, Medicaid, Child Health Plan Plus, Medicare, VA, or any other plan, you will not be required to buy insurance at the Colorado Health Benefit Exchange (COHBE).

The Health Benefits Exchange will be a marketplace created to offer accessibility, affordability and a choice of plans that will be available for purchase, similar to programs such as Travelocity or Expedia in the travel industry. Insurance companies will go through a certification process in order to be qualified. There will be rules, regulations and standards regarding the products and the cost of each service. Any company that is not able to meet these standards will not be allowed in the Exchange. The COHBE will be up and running by October 2013. Trained navigators will be available to find the coverage needed to fit each individual budget.

In Colorado there are approximately 770,000 uninsured residents. It is estimated that most of the uninsured, approximately 500,000 Coloradoans, will be eligible to buy insurance. Low-income residents may qualify for Medicaid or be able to purchase federally subsidized coverage. Premium subsidies will be offered to a family of four with an income of less than $92,200 or for an individual earning less than $44,680 per year. There will also be an option to choose plans in tiers, i.e. a plan which covers 90% of average medical costs and the consumer pays 10%, progressing down to a 60/40 plan.

There will be another Exchange set up for small businesses. The provision for small businesses to buy insurance applies to companies with 50 to 100 full-time employees and often has tax credits available to help with affordability. There are 91,000 eligible small businesses in Colorado.

Yes, there will be penalties for not buying insurance; but, no, you will not go to jail. The total annual tax penalty will be either a percentage of taxable income or a flat dollar amount and will be phased in. The first year it will be $95 per person, or one percent of taxable income. By 2016 it will be 2.5 percent of taxable income, or $695 per person. After 2016 the tax penalty increases annually, based on the cost-of-living adjustment. There are exemptions for low income, Indian tribes and religious objections.


The second main point of confusion is whether there will be expansion of Medicaid coverage. The ACA provision to expand Medicaid was based on the tenet that increased access to care would result in better health. The ACA provides for federally subsidized Medicaid to cover individuals up to 133 percent of the Federal Poverty Level (FPL) ($29,327 annual income for a family of four; $14,400 annual income for an individual). The program would be 100 percent supported by federal dollars for the first three years, then would go to a 90/10 split with the state. The Supreme Court ruled that states were not required to expand their Medicaid program. Colorado has a history of expanding Medicaid, and in 2010 coverage was made available to an additional 100,000 residents. Each state has to decide whether to expand their program. Gretchen Hammer, ex-director of COHBE, stated that the Department of Health Care Policy and Financing in Colorado is currently assessing the costs and benefits of expanding Medicaid.

The other big government health care plan is Medicare. The changes to Medicare insurance are all in the improvement categories; such as free yearly wellness visits, free preventive testing, and elimination of prescription-drug costs. Since the Medicare population is most likely to be on prescription medications, their costs have not been affordable. Starting in 2010 there is a phased approach to eliminate this disparity, with its ending by 2020. Also, there are innovation grants being awarded by the federal Department of Health and Human Services to improve the efficiency, quality and costs, and to decrease fraud and abuse in Medicare. In Colorado there are at least eight of these grant programs. Denver Health is receiving a grant to improve ambulatory care for low-income children and adults with medical, social and behavioral-health needs. The Upper San Juan Health Service District in Pagosa Springs received an award to expand acute care for cardiovascular early detection, to implement a tele-medicine acute stroke care program, and tele-medicine and remote diagnostics for cardiologist consultations for individuals complaining of chest pain.

Insurance Costs

Controlling the cost of insurance and reining in insurance companies has been a big part of the ACA. Insurance companies are barred from denying coverage or increasing premiums for the sick. It startles me to think that you buy insurance to cover expenses if you get in an accident, get a disease or become sick, and in many cases get denied when you need it most. Beginning in 2010, insurance companies cannot deny coverage for children due to pre-existing conditions. In 2014 they cannot deny coverage due to pre-existing conditions for adults. They cannot discriminate based on gender, race or health status: e.g., increase premiums for women. There will be no annual limits and no lifetime limits on coverage. Health plans will be required to cover preventive services without cost sharing. Waiting periods cannot exceed 90 days. Out-of-pocket spending will be limited. Insurance will cover clinical trials (very important for the University of Colorado Hospital’s medical research). They are required as of 2010 to spend 80 to 85 percent of their revenue on health care. Where have they been spending our money? Starting in 2011 companies returned $1.1 billion to individuals and companies because they were not able to comply with this provision.

In summary, the days of health insurance companies deciding whether you get health care or not are coming to an end. Getting the majority of the population insured and setting up competitive, controlled insurance marketplaces is a good start.

Delivery of Health Care

The last big issue is improving health care delivery to be more efficient, accessible and less costly by putting the patient at the center of the system. The current method of paying fees for service – that is, being paid according to how many patients are seen or how many tests are ordered – is not cost effective. Current models that have been tested pay for how well your doctor and/or hospital does, instead of how much your doctor and/or hospital does. These new payment methods have proven to be cost effective, with higher quality and improved outcomes. At any rate, payment reform is way overdue, and new payment structures are a critical element of new health care delivery systems.

Coordination of care is another big initiative. Managing the care for complex, chronically ill and patients with multi-diseases so that readmissions are minimized or eliminated has been proven to be successful in reducing costs and improving quality. In Colorado, work is being done with patient-centered medical homes, Regional Care Collaborative organizations, Accountable Care Collaboratives (ACC) for Medicaid and Accountable Care organizations (ACO) for Medicare.

The ACA has created new programs to deal with fraud and abuse in Medicare, which typically saves millions of dollars in unnecessary costs.

Lack of Providers

The No. 1 worry or weakness in all of this reform is not having enough primary-care providers to extend coverage to 500,000 new enrollees, as well as the increased population of the aging baby-boomer generation. The ratio recommended by a California government council is 60 to 80 primary-care doctors per 100,000 residents, and 85 to 100 specialists per region. There are several provisions in the ACA to address this issue, including federal money to train new primary-care doctors, increasing payments to primary-care doctors who see Medicaid patients, rewarding primary-care doctors who work in underserved communities and strengthening community health centers. Innovative health care organizations have solved part of this issue with the use of collaborative teams, maximizing the use of physician assistants, nurse practitioners, RNs and LPNs.

Innovative, progressive health care organizations have successfully instituted the concepts outlined in the book “Pursuing the Triple Aim.” The book is written by Maureen Bisognano, president and CEO of the Institute for Health care Improvement (IHI), and Charles Kenney, author of 12 books on health care quality improvement. The IHI has been one of the leaders in supporting improvement s in health care systems in the nation. The core principles necessary for improving care and cutting costs include:

1. Provide care that is effective, safe, and reliable to every patient, every time.

2. Improve the health of the population, focusing on prevention and wellness.

3. Decrease per-capita costs.

The authors relate stories of how individuals and health care organizations have successfully implemented the Triple Aim. In Colorado, the Center for Improving Value in Health care (CIVIC) has adopted these principles in working with health care organizations in Colorado.

This is a remarkable period in the history of health care. The challenges of health care reform are great, and the outcomes are uncertain. It is also an exciting time and holds great potential to transform our system into one that is more efficient, accessible and affordable.

Helpful websites for further information:


Colorado: (center for improving value in health care)

This article covers the most controversial and important aspects of health care reform in Colorado but these are only a small part of the 30 provisions of the ACA. Just this month services will start becoming available FREE to women who have insurance. These include essential services such as FDA-approved methods for birth control, annual “well women” checkup, counseling, support and supplies for breast feeding, paps and mammograms for women over 40, screening and counseling for domestic violence, and screening for several diseases such as gestational diabetes, HPV and HIV. For a quick overview of all the provisions of the ACA the Dept. of Health and Human Services website is helpful:

Elizabeth Ritchie has worked in health care for 40 years and retired as a Lieutenant Colonel from the Army Nurse Corps. She has lived in Chaffee County for eight years and believes that all people deserve quality, accessible and affordable health care.