Sorry for the length, but I didn't have time to write a short blog.

Monday, November 18, 2013

Health Care Hype Part 3:Beyond the Hype and Fixing the Cracks

So we have looked at the numbers, the political hype, and now it's time to look at the law.  Before I begin, I want to point out that 1. I am only trying to list what the law does and what it fails to do. 2. I have no vested interest in the success or failure of the law.  I have insurance and will continue to.  3. I am often surprised how little reporting I've seen on the actual law.

What does the law do?

From the onset, the law was designed to try and get control of skyrocketing health care and insurance costs.  As a nation we pay more for health care than any other industrial nation on the planet.  The economics of the cost as a nation before the ACA was unsustainable.   The question is will the ACA contain this raise in cost?  The US pays nearly 18% of it Gross National Product for health care. Growth before 2006 was a little less than 5% but after that growth rate was lower at about 2%.  It is true that since the ACA the growth rate of health care is at an all-time low. There is, however, no direct correlation between the ACA and the drop in cost.

There are other reasons cost are higher.  America tends to try and buy the new technology while it is still more expensive, but also cutting edge.  We have an inordinate number of people without any insurance. About forty-four million do not have insurance and 8 of 10 those are employed or are their dependents.    This means they rely on the most expensive form of health care, the emergency room.  What is more, if they cannot afford the cost of the ER, someone has to pick up the tab.  Guess who that would be? It is those of us who do have insurance and money to cover that cost.  By forcing many to get insurance, the idea is to create large groups to negotiate the cost of insurance.  Large companies get better rates because of numbers. The other essential is that these group policies include everyone from those with pre-existing to the young and healthy.  This means everyone pays the same, but the healthy are actually covering the cost of having less healthy folks in the plan.  The exchanges have the same goal, and that is why it is important that everyone get signed up.

It is the law. Like most laws of this nature the odds of it going away are not good.  Changes that repeal, gut, or defund will not pass for at least the next two years. Like it or not, eventually the exchanges will be up and running, and there will be more and more people getting them.  The current conversation is still over a much smaller number of people who are losing plans than those 44 million that have no plan.  So really, most votes that do not truly improve the law are moot and symbolic be it a Democrat or Republican vote. The law may grow more slowly or collapse under its own weight, but little that congress does will get rid of it.

So what has health care do?

1. It closes the "doughnut hole" in the Medicare Part D program expanding medicine coverage for older Americans.

2. It prevents insurance companies from charging more or denying anyone coverage for a pre-existing condition.

3. It prevents insurance companies from charging more because the client is a woman.

4. It allows children to stay on their parent's plan until they turn 26.

5. It prevents companies from putting lifetime caps or limits on payout.

6. It requires that insurance include coverage of preventative care.  This also includes the controversial birth control option.

7. It requires that any company that has employees of more than 50 to offer insurance to their employees or to offer them help in paying for insurance on the exchanges.

8. It offers small business up to 50% tax breaks for the employer's share of the employees cost in the exchanges.

9. If all states were to be involved in the Medicaid Expansion, it would cover 15 million Americans who do not have and cannot afford assurance.

10. People entering the exchanges will in many cases qualify for some subsidy to help reduce the cost of the insurance.  The subsidies cover people making up to the 400% of the national poverty levels.  Those above the 400% threshold will not receive any tax subsidies.

11. Persons not entering into the exchanges or not having insurance will pay $95 or 1% (whichever is greater) in the first year rising to $685 or 2.5% (whichever is greater) by 2016.

12.  No person may be discriminated against by insurance companies. Factors such as pre-existing conditions, health status, claims history, duration of coverage, gender, occupation, and small employer size and industry can no longer be used by insurance companies to increase health insurance premiums.

13. Factors that can affect premiums of new insurance beginning in 2014 are income, age, tobacco use, family size, geography and the type of plan you buy. This applies to all plans including those sold in state exchanges.

14. Congress must shop on the exchanges.

15. Pharmaceutical companies will be subject to new taxes.

16. Insurance companies will be taxed on the basis of their market share.

17. Insurance companies cannot handout outrageous bonuses and then pass that cost onto consumers.

18. Establishes a reserve corps of doctors and medical personnel for emergency response during disasters.

Note there are a number of items that will continue to be implemented until 2020. I also keep stumbling across more things the ACA is supposed to do.

Until a few days ago other than the call for tort reform which would basically protect insurance companies more than they already do, I had never heard any changes, add-ons or fixes from a Republican.

Sean Spicer who is GOP National Committee Communications Director offered this.  He didn't announce we need to defund, and I don't think he mentioned tort reform. He suggested that we open the selling of insurance across state lines and allow small businesses and individuals to gather into groups so they can get the discounts enjoyed by larger employers and continue to allow those under 26 to stay on their parent's plan.  It was an odd statement for someone who was opposing Obamacare.  Why? This is exactly what the national exchange does.  It allows anyone to join the exchange making it a group and it allows anyone from any state to buy insurance across state lines.

Oddly, on paper, this looks very reasonable. So what are the fixes?

First is the "keep you policy" fix.  There is intent by both congress and the white house to try and make sure that the "You can keep your insurance" promise is fixed.  Obama admitted in a news conference that the grandfather clause in the ACA did not cover as well as he thought it did.  In an effort to correct this, he has left the determination of policies that have been cancelled up to individual state's insurance controller and the insurance companies until 2014.  There is some question though what Obama can actually do without the Congress weighing in.  As I discussed in a previous blog, that could be a reality, if it actually fixes the problem.

Second is getting the website up and running.  The website is not the law, but it is a part of implementing it.  It will continue to be a complex site to build and update.  One thing we could do to avoid the problem of how we get technology bids in the future is to simplify the process and not take the cheapest but oick the best company for the job.  We also need to encourage states to create their own.  Most states that have their own website are actually doing better.

Third we need a way to make sure the Medicaid  Expansion works.  It needs to become less of a political football and be seen as the economic add to the state that it is.

Fourth with the horrendous roll out, getting the young healthy back on the site is essential.  As more people join the insurance the better the rates and offerings.  I do not know what the solution is; only that it needs to happen. I do know that it behooves the insurance companies involved to get the so called "young indestructibles" into the plans to make money.  Insurance companies do bear some of the responsibility in this since so many failed to explain the options to their clients and continued to sell plans they knew would eventually be cancelled.

What does it all boil down to? The ACA is the law.  The press needs to inform as do insurance companies.  The constant sensational story mongering serves no purpose.  News reports and informs, but so far it hasn't done much informing.  We have problems to fix.  If congress had actually spent time trying to fix it as they eventually have on every social program ever passed from Social Security on, we would actually have something that both parties could actually run on instead of against.

I still believe that if we use our voice and our vote, we can make politicians do the hard work.  Polls show that while many do not like the Affordable Care Act, they want it fixed, not repealed or defunded.  We are all tired of the congress playing politics.  Its 9% approval rating proves it, and somehow they still don't hear us.

It is time to govern.