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Happy 3rd Anniversary ACA – and an Unnoticed Star

Posted by John McDonough  March 24, 2013 02:24 PM

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This weekend marks the third anniversary of the signing of the Patient Protection and Affordable Care Act (PPACA) by President Obama on March 23 2010. One week later, the President signed a companion act, the Healthcare Education and Reconciliation Act of 2010 (HCERA), consisting mostly of changes to the PPACA necessary to secure that Act's passage in the House of Representatives. The combined two laws are collectively referred to as the Affordable Care Act, or ACA, or Obamacare.

It was a wild legislative ride to passage and it's been a wild implementation ride for the three obamacare-approved-300x300.jpgyears since then. By my count, the ACA has survived three near-death experiences. The first occurred in utero with the January 19 2010 election of Republican Scott Brown to the US Senate seat from Massachusetts, depriving Democrats of a vital 60-seat majority, and convincing many that health reform was dead; the second was the US Supreme Court decision on June 28 2012 when complete repeal of the entire law was averted by a late change of mind/heart by Chief Justice John Roberts; the third was on November 6 2012 when a Republican victory for White House and Senate control would have led to certain repeal.

While the brushes with death are over, huge challenges remain -- especially leading up to those coming on January 1 2014 when these enormous reforms all take place on the same day:

  • The launch of health insurance exchanges/marketplaces and new private health insurance coverage options for millions of Americans, estimated to reach 27 million by the Congressional Budget Office, and with subsidies expected to reach 19 million of them;
  • Health insurance market reforms banning medical underwriting and pre-existing condition exclusions in all 50 states, replaced with guaranteed issue of insurance policies;
  • Eligibility for all Americans with incomes below 138% of the federal poverty line (about $15K household income for a single adult) to enroll in Medicaid in those states that adopt the expansion.

This is the biggest set of health reforms ever launched in U.S. history -- bar none.

And there is so much more in the ACA that has been accomplished over the past three years. Click here for a list of some of them. The U.S. medical care system, because of the ACA, is now engaged in its most robust reform ever, on multiple fronts, as the ACA's vision of a system that rewards hospitals and physicians for the quality and value of the care they deliver begins taking precedence over rewards for the volume of services provided.

One of the bigger surprises in the past three years has been the unexpected slowing of the rate of growth of Medicare spending, which has decelerated beyond anyone's prediction. Over a decade, more than one half trillion in lower spending -- beyond the $716 billion in savings created by the ACA. How far it will go and how long it will last is unknown, though the reductions have already improved the nation's debt and deficit positions.

On this anniversary, I want to draw attention to one of many small yet  consequential ACA sections hardly anyone knows about, which is sparking a positive revolution in U.S. health care -- it's Section 9007 in ACA Title IX, called "Additional Requirements for Charitable Hospitals." It amends the IRS code, for the first time, to provide meaningful standards and accountability for the tax-exempt status enjoyed by non-profit hospitals. Under the ACA, already underway, U.S. non-profit hospitals are now legally required to invest dollars back into their communities in return for their tax exempt status in at least one of the following ways:

  • Improve access to health care services
  • Enhance the health of the community
  • Advance medical or health care knowledge
  • Relieve or reduce a government burden

For many hospitals, the lion's share of their community benefit obligation prior to the ACA Community_Benefit.jpginvolved providing free or below-cost services to uninsured persons. With the anticipated drop in the number of uninsured by as much as two thirds by 2019, U.S. hospitals are now re-engineering their community benefit operations to address the tougher ACA standards. Many are re-examining relationships with their communities and looking for new partnership models and activities.

New guidance from IRS Form 990 Schedule H specifically encourages hospitals to engage in "community building" activities such as physical improvements and housing, economic development, community support, environmental improvements, leadership development for community members, coalition building, community health improvement advocacy, workforce development, and more.

Almost completely unnoticed in the hurricane of ACA changes and activities, these new standards for hospital community benefits are considered a revolution in many parts of the nation (not so much in Massachusetts, where accountability for hospital community benefits became an issue in the mid-1990s thanks to then Attorney General Scott Harshbarger).  And by the way, who in Congress gets the most credit or blame for these changes?  It was Iowa Republican Senator Charles Grassley, the cantankerous one, who made this happen. 

Tougher standards, better accountability, improved community health -- Section 9007 is just one of a galaxy of shining stars in the ACA, disguised from our sight by the polluted political environment surrounding the ACA. Here's hoping the skies are starting to clear.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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About the author

John E. McDonough is a professor of practice at the Harvard School of Public Health. He is the author of the book “Inside National Health Reform”, published in 2011 by More »


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