Come Jan. 1, many Americans will receive health insurance — some for the first time — under the provisions of the Patient Protection and Affordable Care Act, also known as Obamacare. However, as the Dec. 23 enrollment deadline for health coverage in 2014 approaches, questions and uncertainty abound, both at the University and around the nation.

Of particular concern for healthcare providers are reimbursement rates — the amount of money a hospital receives from insurance companies for providing care — which will likely change as individuals enroll in or switch insurance plans.

In preparation for these impending financial adjustments, the University of Michigan Health System has been performing extensive sensitivity analyses, which allow administrators to estimate potential shifts in coverage within the population it serves and better plan for income changes.

Paul Castillo, chief financial officer for UMHS, noted that the analyses are only mathematical equations used to make predictions based on the current landscape. The majority of financial adjustments will occur in the coming year, once the system has been observed and analyzed.

“It’s too early to tell what exactly is going to happen in the exchange marketplace today,” Castillo said. “This next 12 months is a very important time period for us to really observe what’s happening in the marketplace and incorporate those observations into our financial modeling.”

As some individuals begin enrolling in health insurance for the first time, others may have the option to switch plans. These migrations between systems perhaps provide the most uncertainty for healthcare providers, since it will be difficult to accurately estimate the new demographics until the system has been in place for several months.

The reimbursement that UMHS receives will strongly depend on what portion of their patients decide to take advantage of Medicaid or Medicare, which typically have lower reimbursement rates than private insurers. In any case, it will likely require the health system to find ways to be more efficient with the resources available.

“If we were paid at Medicare reimbursement rates, we would actually see a lower overall payment level for the portion that migrates,” Castillo said. “Under either scenario, there is a prediction of lower reimbursement in total, but the reality is we don’t know if that’s going to be the case or not.”

Regardless of the uncertainty, Castillo said the process of reform was necessary given the state of health coverage in the United States In 2012, the U.S. Census Bureau estimated that 15.4 percent of Americans lacked health insurance, or 48 million people.

“The elements of the Affordable Care Act that are attempting to provide access at a reasonable cost to a portion of the population that has historically had difficulty getting access to insurance — I think those are good tenants,” Castillo said.

Enrollment will be complicated for Michiganders

In the state of Michigan, more than one million individuals — about 14 percent of the population — are currently uninsured. Given the confusion and issues with enrollment, many of these Michiganders may remain uninsured into 2014.

“I would guess that less than half of the uninsured in Michigan will gain coverage by the deadline — probably substantially less than half,” said Public Health Prof. Richard Hirth, an expert on healthcare policy.

Recently, however, healthcare coverage has not been the focus of criticism. Rather, the federal enrollment system — — has been facing the brunt of condemnation, primarily from conservative opponents, given its myriad technical issues and delays.

Although recent reports have indicated improvement in the federal exchange system, it has yet to be seen whether modifications to the system will translate into higher enrollment rates.

In contrast to the federal exchange, many states have been successfully operating independent enrollment programs. Fourteen states took this option when the law was introduced, granting them federal funding to establish their own healthcare enrollment websites. While preliminary results appear varied, several states, including Kentucky and California, are currently operating systems that largely outperform the federal exchange.

Michigan had the option to establish a state-based exchange, but decided to utilize the federal system instead, a move Hirth said was motivated more by politics than other factors.

“Not having a state-based exchange was largely political,” Hirth said. “You could make your political statement against the ACA, but ultimately, since you would have the federal exchange available, you wouldn’t have thought there would be that much of a consequence.”

Hirth does not place blame, however, entirely on the federal government, which likely expected a larger portion of states to take control of their own enrollment sites.

“I don’t think the federal government ever anticipated that they’d be doing the exchange for 36 states,” Hirth said. “That really contributed to a lot of the problems with the rollout.”

Each state added to the system must be linked into numerous databases and calculations must be calibrated based on the state laws and regulations. This process is not only time consuming but also highly prone to error.

“Health insurance is a complicated product,” Hirth said. “It’s more complicated than simply setting up a website to sell it.”

Confounding the enrollment problems, Michigan Medicaid expansions, which will extend coverage to a large portion of the uninsured population, won’t take effect until March because of delays in approval by the U.S. Department of Health and Human Services and Michigan’s state legislature. Once in effect, Hirth estimates just over half of the previously uninsured individuals will be covered under an insurance policy.

Under the expanded Medicaid qualifications, individuals whose incomes are less than 133 percent of the federal poverty level will receive coverage at little or no expense.

Young adults are a driving force for cost

While the long-term goal of the ACA is to reduce costs for patients and healthcare providers, this may not be the case in the coming year. Uncertainty regarding the demographics of the newly insured suggests the annual premiums for some plans may see an increase in 2014 as insurers equilibrate their expenses.

“In the first year of the exchanges, the plans were guessing,” Hirth said. “They had to make their best projection as to who is likely to enroll in a plan and those projections are certainly at risk right now given the slow pace of enrollment.”

More than 470,000 of the uninsured Michiganders, about 42 percent, are between the ages of 19 and 34, according to HHS. Although Hirth estimates the percentage of uninsured students at the University is in the single digits, these younger — generally healthier — populations have proven resistant to mandated coverage requirements. Many students with no income are essentially exempt from penalties for failing to enroll, which are assessed through income tax.

Without these younger demographics enrolling, there are fewer individuals to cover the cost of care for many plans, thus driving up prices for those who choose to participate.

When Massachusetts passed a statewide healthcare reform law in 2006, which required citizens to obtain insurance or pay a penalty, the people in the greatest need of insurance — those with costly diseases and disabilities — were the first to enroll. With several weeks of enrollment remaining, Hirth said many legislators have been presuming that national enrollment would follow this pattern.

“It remains to be seen whether the younger, healthier folks are discouraged from enrolling altogether as opposed to just waiting until the last minute to make a decision,” Hirth said. “We don’t know yet whether that Massachusetts experience will be followed given that we’ve had a lot more problems than they did.”

Regardless of how they’ll be affected, some just don’t get it

Helen Morgan, assistant professor of obstetrics and gynecology, teaches the undergraduate course, “Perspectives on Health Care.” In her experience, she has found that very few people are properly educated on healthcare options and policies.

“The reality is that people don’t understand it,” Morgan said. “There’s so much rhetoric and there’s so much dogma and everyone’s just trying to figure out what is the actual reality.”

Given the polarized opinions on healthcare reform, many individuals who see Morgan have received false information from biased sources. Moving forward, she said the University holds some responsibility, along with the administration, for educating the public on these issues.

But even in these early stages of implementation, Morgan said some effects are already being seen in the health system. Most notable in her practice, she has been reminding patients that certain forms of birth control are covered under the new law.

“Prior to the Affordable Care Act, I had a lot of patients whose insurance plans wouldn’t cover any contraception, so we had to make up these bogus reasons for why they needed something just so we could have the insurance company pay for it,” Morgan said.

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