Following the Obama administration’s announcement about the suspension of enrollment in a high-risk health insurance program known as the Pre-Existing Condition Insurance Plan, a flurry of commentary began on what the move means for the Affordable Care Act.
Some observers said that the program’s underwhelming enrollment numbers and high costs foreshadow inevitable problems with the ACA’s health insurance exchanges, while others drew a clear division between a program intended to insure only those with pre-existing health conditions and state marketplaces designed to spread risk by insuring both those who are sick and those in good health.
Two months after the halted enrollment, the debate continues.
Closing the Pools
The high-risk pools were designed to help sick U.S. residents gain coverage ahead of January 2014, when the ACA’s ban on denying individuals coverage because of pre-existing conditions will take effect.
In early February, the administration announced several cost-saving reforms intended to prevent the $5 billion program from running out of money. However, on Feb. 15, HHS officials announced that enrollment in the high-risk pools would end because of rising costs and limited funding.
China is in the midst of a comprehensive $178.3 billion health care reform that is arguably the most ambitious among a series of stalled, largely counterproductive post-1978 efforts to improve access and reduce inequalities between rural and urban areas within China’s regionalized health care system. Unless the health care reforms are accompanied by a reform of fiscal policies, however, the absence of good governance brought on by financial constraints and perverse cadre payment incentives at the sub-national level is likely to undermine efforts to create a robust primary care infrastructure, and will consequently result in reform failure.
The wide-ranging economic reforms of the 1980’s transferred the responsibility for funding health care onto China’s local governments. In areas of China where economic reform resulted in an economic boom – i.e. major coastal cities like Shanghai and the first of the Special Economic Zones in Guangdong and Fujian province – local governments were able to raise enough money from increased tax revenue to greatly counterbalance the withdrawal of Central Government funding. In most of the country, however, Central Government funding decreased while the tax base stayed unchanged or shrunk owing to outward migration to the urban centers and the just mentioned Special Economic Zones.
Every day, over 7,600 baby boomers turn 65. By 2029, this number will rise to over 11,000. As more and more Americans approach senior citizenship, health care for seniors through Medicare becomes increasingly relevant. The question is, how will this affect you?
We all have questions about how the current budget battle and resulting spending cuts are going to impact Medicare. It seems unavoidable that Medicare costs will have to be reduced in some manner. Both Democrats and Republicans have proposed fixes to counteract these budget cuts. President Obama, in his State of the Union address, recommended adjustments to Medicare Part D that would enforce mandatory rebates–in other words, price controls–on drug companies.
But we need to ask ourselves: why would we make changes to the most successful part of Medicare by far? Polls indicate that 90 percent of seniors are happy with their current Part D coverage. Not only is Part D popular; it is also cost effective. It has cost 30 percent less than originally estimated. Premiums are an average of half the price originally estimated. Meanwhile, price controls are estimated to increase drug costs by 40 percent. Clearly, they are not the answer to cutting Medicare costs.
It was one of the most notorious quotes that emerged from the battle over the Affordable Care Act.
We have to pass the bill so you can find out what is in it. – House Speaker Nancy Pelosi, March 9, 2010.
The line was taken out-of-context, as Pelosi’s office has continued to protest. But more than three years after her quote — and nearly three years after the ACA passed Congress — Pelosi’s accidental gaffe seems pretty apropos.
The law continues to delight supporters with what they see as positive surprises; for example, some backers say Obamacare deserves credit for the unexpected slowdown in national health spending. But critics warn that the law’s perverse effects on premiums are just beginning to be felt.
And there still are “vast parts of the bill you never hear about,” notes Timothy Jost, a law professor at Washington & Lee. “I wonder if they’re [even] being implemented.”
Jost and a half-dozen other health policy experts spoke with me, ahead of Obamacare’s third birthday on Saturday, to discuss how the law’s been implemented and what lawmakers could have done better.
Wang Li is a 48-year-old farmer from Dalian, China. After a two-day trip to the major provincial hospital, he’s heading home to his village to die. Wang has lung cancer, and even with insurance, his surgery will cost him 20,000 RMB — $3,000, which is twice his annual salary. The surgery would be curative, but it doesn’t matter. “I cannot burden my family,” he said.
I am a Chinese-born, American physician who just returned from a two-month research trip spanning twelve cities and nine provinces in China, where many of the health care reforms in contention in the U.S. have already been tried. As Americans contemplate the decisions ahead, consider China’s cautionary tale.
Today’s China is one of great disparity. The wealthy minority receives top-notch care, while the poor majority suffers from little access to care and no way to pay for it. Stories abound of patients like Wang Li who sign out of hospitals when they run out of savings, knowing they will die without treatment.
In 2006, Governor Mitt Romney signed Chapter 58 of the Acts of 2006 entitled “An Act Providing Access to Affordable, Quality, Accountable Health Care.” It has been described by many names, including Massachusetts Healthcare Reform (MHR), Romneycare, or simply, as the template for the Affordable Care Act. The goal of the act was straightforward: to ensure near-universal access to health insurance for citizens of the Commonwealth of Massachusetts. The bill quickly led to insurance expansion: by 2010, 94.2% of adults under 65 had health insurance, an 8 percent increase over the 86.6% in 2006. By all accounts, the goals of insurance expansion were met.
But the bill has not been without controversy. There have been two main concerns: first, that the bill did too little to control rising healthcare costs. The cost crisis led to the 2012 bill that many refer to as “Mass Health Reform 2.0” – formally called Chapter 224 of the Acts of 2012. Its focus is to curtail healthcare spending, and while reasonable people have reasons for skepticism about the likelihood of success, that’s a topic for another day.
If the devil is in the details, we got the motherlode this past week as to how the most incendiary part of President Obama’s health reform will actually work when it launches next January.
The Department of Health and Human Services issued lengthy rules on the controversial individual mandate requiring uninsured Americans to purchase a health plan. The IRS followed with nearly as lengthy a set of rules specifying who is eligible for subsidies for those purchases and who pays penalties when they refuse. In what critics will consider an Orwellian flourish, both federal agencies refer to these penalties as “shared responsibility payments” — even though the Supreme Court, in its upholding of the mandate, plainly referred to them as what they are: a tax.
The two sets of rulings represent a sort of good cop, bad cop routine from the Obama administration. The bulk of the HHS rules defines individual outs for the mandate, identifying 11 different types of uninsured Americans who will be exempt from the de facto tax, ranging from sudden financial impairment to genuine religious objection to medical care. The IRS rules are all bright hard lines about who has to pay, when, and how.
The major media, echoing criticism by Obamacare’s agitators from the Left, seized on the stinginess of the IRS rules regarding subsidies and penalties for family members of people covered by their employers, or what they call the “family glitch.” The glitch is technically real, but statistically remote, and will affect almost no one in the real world, but it does make for good inflammatory headlines.
Alice: Cheshire-Puss, would you tell me, please, which way I ought to go from here?
Cheshire Cat: That depends a good deal on where you want to get to.
Alice: I don’t much care where.
Cheshire Cat: Then it doesn’t matter which way you go.
Alice: —So long as I get somewhere.
Cheshire Cat: Oh you’re sure to do that if you only walk long enough.
Lewis Carroll, The Adventures of Alice in Wonderland
2013 has arrived and employers now find themselves on the other side of a looking glass facing the surreal world of healthcare reform and a confusion of regulations promulgated by The Accountable Care Act (ACA) and its Queen of Hearts, HHS Secretary Sebelius. Many HR professionals delayed strategic planning for reform until there was absolute certainty arising out of the SCOTUS constitutionality ruling and the subsequent 2012 Presidential election. They are now waking up in ACA Wonderland with little time remaining to digest and react to the changes being imposed. A handful of proactive employers have begun, in earnest, to conduct reform risk assessments and financial modeling to understand the impacts and opportunities presented by reform. Others remain confused on which direction to take – uncertain how coverage and affordability guidelines might impact their costs.
If reform is indeed a thousand mile journey, many remain at the bottom of the rabbit hole – wondering whether 2013 will mark the beginning of the end for employer sponsored healthcare or the dawning of an era of meaningful market based reform in the US. HR and benefit professionals face a confusion of questions from their companions — CFO’s, CEOs, shareholders and analysts.
The history of president Obama’s health reform bears an uncanny and disturbing similarity to the life cycle of a hurricane. With Sandy fresh in our memory, the similarity is not comforting.
Hurricanes have three phases. The front wall of the storm brings high winds, lightening, and rain. Next, at the hurricane’s center, or eye, the wind drops and the air warms. If one is at sea, the water may turn calm and warm, bringing the illusion that the storm has ended. As the storm moves on, wind and rain return, often with increased force. Those fooled by the calm who leave safe havens may be destroyed by what follows.
The life cycle of a hurricane will bear an eerie similarity to that of health reform. Nearly four years elapsed between president Obama’s initial call for national health reform until the bill became law and the Supreme Court ruled on its constitutionality. The political and legal turmoil was intense and continuous. The process was rancorous and the outcome in doubt from start to finish. It took a bitterly fought presidential election to put an end to this phase of the struggle.
Now, we are in a period of relative calm. The 2012 election settled the immediate fate of the Affordable Care Act (ACA). The candidate who swore to repeal it lost. The ACA was the major domestic legislative achievement of the victorious incumbent president who won reelection. Now, eighteen states are in process of designing rules for health insurance exchanges — the administrative entities that will manage implementation of the new law, the most important provisions of which will take effect one year hence. The other states will either leave implementation entirely to the federal government or share administrative responsibilities with federal agencies.
A huge amount of work remains to be done by October 1, 2013 when people can begin enrolling for insurance coverage in the new exchanges.
By Anubhav Kaul, MD, Peter Bhandari, and Thom Walsh, PhD
Healthcare reform was a frontline topic during the recent presidential elections. The political warfare and misleading information around the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, has prevented the public from understanding its intended purpose, and has left many skeptical about its benefits. It is safe to say the general public has little to no idea about the quality of healthcare delivery in their respective regions.
In fact, it is not a far cry to claim that even healthcare professionals might not truly understand the issues facing American healthcare. Thus, most of the public is generally uninformed or misinformed about the population level problems facing the healthcare system. Therefore, it is quite simple for political parties to misguide the public and capitalize on their uninformed perceptions. If the public knew more about the flaws present in the healthcare system, perhaps they would better realize the PPACA is a reasonable start at addressing the failings of our system.
The Dartmouth Atlas Project is an online database which collects Medicare spending and utilization data from around the country. Information gathered from the database has shown immense variation in the way medical resources are utilized by even similar regions, communities, and health care organization. Evidence has repeatedly shown that, from a population perspective, areas that spend more on medical care do not consistently benefit from increased quality of care or patient wellbeing. Variation in the type of care delivered can be attributed to diverse incidence and prevalence of disease severity or the type of care a well- informed patient chooses. Variation in health care delivery is thus omnipresent and expected, because every patient is unique and medical innovation presents a growing number of care options to choose from.