AFFORDABLE COVERAGE ACT

The Affordable Coverage Act is rolling out but there are a few BUMPS in the road.   Here are some highlights …


1) There will be Universal Health Coverage.

REALITY

- Historically, when this has been attempted at the state level, it has failed.  Currently, there are 48 million in the US who are uninsured.  It is estimated that by 2019 the number will only drop to 31 million.

2) Young adults up to age 26 can remain on their parent’s health insurance plan.

REALITY

- Many parents won’t be able afford paying their child’s monthly premium (now that the premiums have increased for everyone because of the ACA) so will drop their coverage of the child anyway.  Currently, the percentage of 19 to 26 year olds without insurance has only fallen from 48% to 41%.

3) Companies with greater than 50 employees are required to provide health insurance for employees who work greater than 30 hours.

REALITY

- It is expected that in 2014, 44 percent of major US companies will only offer high-deductible health plans.  This shifts more of the health costs to the employee.

- Some employers will stop offering insurance and will instead provide what is called premium support, or funds that can be used for buying insurance.

- Some employers will decrease their employee's hours below the 30-hour per week threshold that relieves them from the mandate to provide insurance or pay a penalty.

4) Insurance Companies are forced to offer generous plans (cannot exclude specific patients on account of pre-existing health conditions, must cover medications).

REALITY

- Insurance companies are choosing to not offer plans on the healthcare exchange (anticipating that this is where ‘sick people’ might be enrolling) and sell plans mostly to businesses instead

- Insurance companies that do sell to the exchanges offer a ‘restricted network’.  This means they avoid hospitals that care for complicated patients and keep the number of doctors in their plans low, making it more likely that people will have to go out of network and pay more of the costs of care.

- Although insurance companies can't charge more to people with health problems as individuals, they can charge up to three times more based on age and can charge more in geographic areas where the population has more health problems or the costs of care are higher.

5) The healthcare exchange offers an easy to understand and fair alternative option for purchasing healthcare insurance.

REALITY

- On the new health insurance exchanges, plans are offered based on four tiers. The Platinum plans will pay for 90 percent of covered care, Gold (80%), Silver (70%) and Bronze plans, the lowest tier, will pay for 60 percent of covered services. It is important to distinguish that these levels are only for covered services because people don't usually understand that they will have to pay for uncovered services and out-of-network services. Unfortunately, the use of out-of-network services is often involuntary and occurs without being known at the time of care, especially in emergency situations.

- The United States is the only industrialized nation that uses a market-based health system and it has clearly failed. The US spends the most by far on health care and has average life expectancies to show for it.  As economists have shown, we will continue to pay high prices for medications and medical devices. Although there are proven methods to control health care costs such as simplified administration, global budgets and negotiating bulk prices, none of them were included in the ACA. In fact, the ACA increases our already enormous administrative costs by adding new levels of administration to our health system as outlined above. 

While I agree with the model of a National Health System, I have reservations simply expanding Medicare for all adults over age 18.  As a physician who has a small corporation and has personal experience dealing with this organization, I already understand its many weaknesses.  Any physician who has been practicing over the past 4 years while Medicare struggles unfolding other programs such as Meaningful Use (part of the ACA) and Physician Quality Reporting Initiative (PQRI) can attest to the frequent, bewildering changes that come year after year.  These changes come in response to what’s happening in the private market.  When one tries to get answers, either from the CMS support or local paid consulting services, it quickly becomes apparent that there’s a great deal of confusion and disorganization coming from DC.  Quite simply – the federal government moves far too slowly to be able to actively manage a beast like the healthcare sector.    

I would advocate expanding the Medicaid programs with greater policy oversight from CMS in Washington DC.  I think the US could provide a basic insurance health plan for adults above 18.  The federal government could set certain expectations for each state to meet or else they would not get a portion of their federal tax dollars the next year.  If the program does well then perhaps Medicare could be eliminated eventually to avoid redundancy.  Employers would no longer be required or asked to provide health insurance.  There would still be private health insurance for those individuals who wanted to be prepared for a catastrophe (cancer, heart attack).  After all, isn’t this how insurance is supposed to work?  There would be ‘boutique doctors’ who wouldn’t accept Medicaid and only see cash-paying patients.  There might even be private health insurance for those who wanted to see these ‘boutique doctors’. 

I’d love to hear any views or thoughts from readers on this matter.