The 4 "Hanging Chads" of the Patient Protection and Affordable Care Act

The United States is more than three years into the implementation of the Patient Protection and Affordable Care Act, but there are still a great deal of questions left unanswered.

Next year, 2014, is where many of the unanswered answers reside, especially in regard to health insurance exchanges, bundled payment demonstrations, accountable care organization results and consolidation aftereffects.

Paul Keckley, PhD, executive director for the Deloitte Center for Health Solutions, believes there are particular elements and uncertainties of the healthcare reform law that are of utmost concern for providers and consumers. Here, he outlines four major "hanging chads" of the PPACA that will affect every hospital and every patient that walks through a hospital's doors.

1. Can states do everything they are required to do? So far, the PPACA has required states make a number of important decisions, most notably whether they want to expand the Medicaid program to millions of newly eligible people, gaining federal matching funds along the way. States have also notified the federal government how they plan to approach the health insurance marketplaces — i.e., will the states create the exchange, will states partner with the federal government to make the exchange or will the federal government completely design the state's exchange?

However, Dr. Keckley says there are still other provisions that require the attention of states, such as Section V of the PPACA, which requires state and local governments to make decisions about how they plan to develop and revamp their healthcare workforce, which will be tasked with taking care of millions of more patients. The PPACA is one of the largest overhauls of the healthcare system since Medicare was introduced, and it gives a fair amount of leeway to states — but can the states handle it?

"This leads to the big question," Dr. Keckley says. "Can states do everything they are required to do given their fiscal priorities and the politics of running state legislations that aren't often on the same page with the [federal] government, like Florida?"

2. Will the health insurance marketplaces attract enough young people? The individual mandate and health insurance marketplaces within the law very much go hand in hand. By next year, individuals who do not enroll in a health plan are subject to either a fixed amount tax or a percentage of income tax, and it's considered to be a progressive approach to spur younger, healthier people to enroll in health plans, since many will not feel compelled to do so. Next year, the penalty will be a $95 flat tax per person, and in 2015, it will be $325. By 2016 the tax will be almost $700.

For people looking for coverage, they will head to the insurance exchanges, where health insurers and other groups will sell varying health plans. However, Dr. Keckley is unsure if the individual mandate and exchanges will lure in younger, healthier, uninsured people — which will help lower costs by compensating for those with more costly, chronic conditions.

"Does that penalty impose enough of a pause that folks will get insured?" Dr. Keckley says. "Or instead of 16 million young 'invincibles,' do we end up with a smaller group that has medical problems and slams the system with conditions that need to be fixed?"

3. How will employers respond to the health insurance marketplaces? People that have employer-sponsored health coverage, a majority of Americans, really do not have to worry about the PPACA's mandate or health insurance exchanges. But some fear the PPACA's exchanges could encourage employers to stop offering health insurance altogether, leaving employees at the hands of the exchanges, or could encourage employers to "dump" its more costly employees onto the exchanges.

Dr. Keckley says this consideration is hard to peg because for some employers, it may be worthwhile to lose their tax exemption for supplying health insurance that it is to pay for employee health benefits. However, for the past three straight years, national healthcare expenditures have slowed near historic lows, making life a little easier for employers and causing some to wonder if the PPACA is already curbing the unsustainable trajectory of healthcare cost growth.

4. Does consolidation in the delivery system result in a lower or higher cost structure? The previous three "hanging chads" centered on major policies within the PPACA, but Dr. Keckley says there is one chad that is the offspring off the law: consolidation in the industry.

ACOs, integrated delivery networks and merged hospitals have been sprouting up at a rapid pace since the law's inception in 2010. Dr. Keckley says it's worth asking if this rush to consolidation, both directly and indirectly encouraged by the PPACA, is a recipe for success or failure.

"Historically, consolidation in the delivery system has not resulted in reduced costs when two hospitals merge," Dr. Keckley says. "With this shift from fee-for-service to value-based care and a bigger delivery system, does that add or reduce costs?"

More Articles on Healthcare Reform:

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Health Reform in 2013: What's Happened, What's Left & What it Means for Providers

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