The U.S. Supreme Court is expected to vote next month on the legality of the Affordable Care Act—the legislation passed by Congress in 2010 that reformed health care insurance coverage in this country. Although certain aspects of health care reform have yet to be resolved, the Affordable Care Act, if deemed constitutional by the court next month, has the potential to address many concerns of individuals with kidney disease, including transplant recipients, and living donors.
The impact of the individual mandate
A key component of the reform law––and at the center of the Court’s review––is whether the government can require U.S. citizens to buy health insurance. Assuming that insurance is affordable, it would provide coverage for individuals with pre-existing conditions, such as kidney disease. Provisions in the ACA eliminate annual and lifetime caps on the amount of expenses that health insurance covers. Among other things, these provisions have been seen as an opportunity to address discrimination against living organ donors seeking health insurance and as providing an option for kidney transplant recipients who lose Medicare coverage for anti-rejection medications.
At the heart of the Affordable Care Act is the concept of a new state-based marketplace for health insurance, known as the health care exchange. Starting in 2014, this new marketplace would give individuals and small employers some of the advantages that large companies enjoy because of their purchasing power. In addition, a program of premium and cost-sharing subsidies would advance the goal of making exchange-based insurance affordable. A dozen states have already created the health insurance exchanges envisioned by ACA, either by legislation or executive order. Will those states be able to operate those exchanges independent of federal law?
Medicaid expansion could hurt states struggling to balance budgets
In addition to the individual mandate, health care reform advances the goal of universal coverage by increasing the number of individuals who are eligible for coverage under Medicaid. The court is also considering the constitutionality of Medicaid expansion since such an expansion would ultimately impose additional financial burdens on the states that share in the cost of the Medicaid program. It is important to note for the kidney community that the Medicaid expansion criteria only apply to those who have Medicaid as their primary insurance and not those who are dually eligible for Medicare and Medicaid.
Can some provisions be saved?
If the Supreme Court does not uphold the constitutionality of the individual mandate, it may also decide whether other provisions of the Affordable Care Act will remain in force, or leave that decision up to Congress. This could be problematic for provisions that are already in effect, such as the ban on lifetime limits on health coverage, and reductions in out-of-pocket spending for Medicare beneficiaries who reach the coverage gap (“donut hole”) in prescription drug coverage. (Since 2011, name-brand drugs have been available at half-price through the donut hole.) In the first four months of 2012, CMS claimed that more than 416,000 people with Medicare saved an average of $724 on prescription drugs and 12.1 million used a free preventive service. That has amounted to $3.5 billion savings on prescription drugs in the Medicare drug benefit coverage gap from the enactment of the law in March 2010 through April of 2012, CMS said. If the ACA is struck down, those savings to seniors could go away.
Provisions affecting renal care
In the two years since the passage of the Affordable Care Act, the kidney community has identified a number of health care reform implementation issues that would have to be resolved through advocacy.
These include the following:
- Would treatment of end-stage renal disease be included as “essential health benefits” in the insurance that is to be made available through the exchanges and will there be any restrictions on these benefits?
- Would individuals with ESRD be able to keep exchange-based small employer group health coverage even though they are eligible for Medicare?
- Would individuals with ESRD be eligible for premium and cost-sharing subsidies for exchange-based insurance despite eligibility for Medicare?
Some, but not all, of these questions have been answered during the last three months. In an “Essential Health Benefits Bulletin,” issued by the Center for Consumer Information and Insurance Oversight on December 16, 2011, it was stated that organ transplants are consistently covered across the existing markets and plans examined, and, presumably, should be considered an essential health benefit.
The Interim Final Rule on health insurance exchanges published in the Federal Register on March 27, 2012, provided additional clarification. “We note that neither the proposed nor the final rule state that individuals will automatically be terminated from Exchange coverage should they be found eligible for Medicare.” And, on June 1, the Department of Health and Human Services issued a proposed rule entitled, “Data collection to support standards related to essential health benefits; Recognition of entities for accreditation of qualified health plans.” This proposed rule would establish data collection standards necessary to implement aspects of the ACA, outlining the data on applicable plans to be collected from issuers to support the definition of essential health benefits. The proposed rule would also establish a process for the recognition of accrediting entities for purposes of certification of qualified health plans.
In addition, employees with kidney failure will not have to give up their exchange-based small employer group health insurance during the first 30 months of ESRD. Specifically: “We clarify that QHPs (Qualified Health Plans) offered in the small group market fall under the definition of a group health plan subject to MSP (Medicare Secondary Payer) provisions codified in section 1862(b)(1) of Social Security Act. This would result in parity between the SHOP (Small Business Health Options Program) and non-Exchange small group market regarding the applicability of MSP rules that pertain to ESRD coverage.”
On the other hand, the U. S. Department of Health and Human Services declined to require that exchanges enforce specific standards for access to health care providers reimbursed by exchange-based insurance. “With respect to the other specific suggestions offered by commenters, (reasonable proximity of providers to enrollees’ homes or workplaces, ongoing monitoring process, and out- of-network care at no additional cost when in-network care is unavailable), we are concerned that the proposed standards may not be compatible with existing State regulation and oversight in this area.”
Moreover, the Internal Revenue Service has ruled that individuals, who are eligible for other qualifying coverage, including Medicare ESRD beneficiaries, are not eligible for the premium tax credit that enables individuals to purchase health insurance through the exchanges.
Although the End-Stage Renal Disease Program has a 30-year history as a federally-funded entitlement, it remains to be seen whether the treatment of end-stage renal disease is recognized as an Essential Health Benefit.
What does the future hold?
Despite these rulings, and because gridlock in Congress would make it difficult to pass some of the beneficial ACA provisions, kidney patients, and living kidney donors, would probably benefit the most, at least in the short term, if the Supreme Court were to uphold the Affordable Care Act.
If the Supreme Court rules only that the individual mandate is unconstitutional but leaves it up to Congress and the Administration to decide the fate of the other provisions of the Affordable Care Act, it may be possible to extend the life of the Pre-existing Condition Insurance Program (PCIP) that was slated to terminate in 2014. On the other hand, Congress would have to provide support to make PCIP premiums affordable, and that may not be a realistic expectation.
Alternatives to the individual mandate that have been discussed as ways to spread risks of health costs more broadly may not be helpful to individuals who are considered to already have a pre-existing condition. These alternatives would be designed to discourage individuals from waiting until they are sick to purchase health insurance, such as penalties for late enrollment, and/or limited open-enrollment periods.
If the Supreme Court invalidates the Affordable Care Act in its entirety, a number of scenarios are possible. States could elect to operate their own health insurance exchanges. (For example, health insurance exchanges already exist in Massachusetts and Utah.) However, the cost of running these exchanges may make it impossible for many states to consider this option. Furthermore, the exchanges would no doubt vary from state to state with respect to the kind of protections they afford for individuals with kidney disease. Certainly, the kidney community will have to redouble its efforts to make sure that more kidney transplant recipients have Medicare coverage for the drugs that prevent rejections.
Mr. Chianchiano, JD, MBA, most recently served as the National Kidney Foundation’s Senior Vice President of Health Policy and Research and continues to work for NKF as a consultant on health policy. He originally joined the NKF staff in 1979, having previously worked for the American Heart Association.