HEALTH CARE CONSUMER’S CONCERNS ABOUT THE AFFORDABLE CARE ACT — THE LAW OF THE LAND (Part A)

(THE GOOD, THE BAD, AND THE UGLY)

One area of health care related concerns where a good majority of voters are focused is the AFFORDABLE CARE ACT or ACA.  This blog is about three components of that major driver of consumer concern. In this blog we will set the stage by describing what it is and what it isn’t.

affordable care act - law of land

Setting the Stage-The Affordable Care Act

Then came the Affordable Care Act. whose purpose was to improve affordability and accessibility, oversee, coordinate and govern the many pieces in play.  It did, and it didn’t.  What it did do was stretch across both the private and public payor structure and add more Americans to the roles of the insured. It also brought controversy. And the immediate call for repeal and replacement.[1]

Signed in March of 2010 by President Barack Obama, the original bill had added many, many (about 400 sections in all) reforms. These reforms impacted all phases of healthcare and had far-reaching impact on how health care insurance and the industry providing it would be governed.  I had the pleasure of listening to Tommy Thompson discuss the ACA shortly after it was passed. [2]   Mr. Tommy George Thompson (Republican) went from state legislator in Wisconsin to 42nd Governor of Wisconsin (1987 to 2001). The United States Senate confirmed him as the 19th Secretary of Health and Human Services where he served until January 26, 2005. [3]

He also was pretty astute in his comments, questions and predictions about the ACA which he called “The Good, The Bad, and The Ugly.” [4] In my notes from that discussion, the “GOOD” was summarized as an “action versus insurance companies.” It extended dependent young adult care

with no limit on “damages” (insurance coverage). There were provisions for wellness and prevention. The act included Quality of Care-Pay for performance (P4P) based on outcomes which would move from process to accountability for quality. It created the Centers for Medicare and Medicaid (CMS) “innovations” which included the IPAB or Independent Payment Advisory Board which would be able to restrict the cost for Medicare as well as Bundled Payments-or changing the way providers of healthcare would be paid.

As for the “BAD?” The law was passed as a “shell” which did not fit the statutes or law.  Congress did not put the law together-the rules still were being written at the time of passage (Sound familiar as we fast forward to 2017 and beyond?). To quote Mr. Thompson. “We really don’t know what is going on.” He steadfastly maintained that “We the people” (subject matter experts or SMEs) should let Washington know what is going on.”

Mr. Thompson went on to say that constitutionality, the bill was being tested because at the time of this discussion three States had indicated “yes” while two States had indicated “no.” Ultimately, he predicted that the Court system (Court of Appeals or the Supreme Court) would decide but the current Administration would not want that to happen in an election year (remember Thompson was a Republican, the Administration was Democrat). In summary he stated: “52% of Americans confused.”

And now for the “UGLY.”  Nancy Pelosi (By that I mean her leadership in Congress) drove the process upon which Mr. Thompson had some observations. The Democrats were in power in 2008 and had replaced the heads of three powerful Congressional committees (including the Commerce Committee) and “dictated” the same healthcare bill being reported out by all three.

In spite of criticism from Republicans, there was pressure to pass the bill before Thanksgiving as the Governors’ races in 2009 were leaning heavily toward the Republicans. Why was this important? The States would be asked to expand Medicaid and Republican State Houses would be less likely too. As a result, Congress stayed in session over Christmas to pass health care with the White House telling the Senate to “Pass it!” (Author’s note-there are many similarities between this process and the one which occurred in Congress in 2016.)

Deals were struck to pick up Senate support (including Medicaid deals). On the day before Christmas in 2009, the bill was passed by the Senate. However, the House and Senate were not ready for “prime time” and did not add the details. The result was that they passed a “shell” which was signed by the President. The Secretary of HHS was to write the rules (Author’s note- United States Department of Health and Human Services or HHS is a cabinet-level department of the U.S. Federal Government. Their mission?  “Protecting the health of all Americans and providing essential human services”).

This blog will talk about the basic issues. The PROS and CONS and go through the various elements and suggest some of the consequences of appeal. A later blog will talk about the TECTONIC PLATES which have occurred since the time that Congress failed to do that deed (appeal/replace).

HERE IS A SUMMARY OF THE PROS AND CONS [5]

PROS

Did more Americans obtain health insurance? The answer is YES as most estimates indicated that more than 16 million Americans obtained health insurance coverage within the first five years.  It is of interest to note that the coveted age group of ‘young adults’ appeared to be included amongst those newly insured.

Was health insurance MORE AFFORDABLE?  Again, it would appear that that answer was mostly YES but not for the obvious reasons.  Insurance companies must spend > 80 % of insurance premiums on medical care/improvements. Even so, it is still not totally obvious if the ACA failed at the very least to prevented insurers from making unreasonable rate increases or whether there were other causes. AND people had a wider range of coverage options. But also, NO-see the CONS below.

THE MAJOR POSITIVE was for people with PRE-EXISTING MEDICAL CONDITIONS. This segment of the population was no longer left out in cold due to denial of coverage. No longer did pre-existing medical conditions incumber coverage. Until recently. You did NOT RUN OUT OF INSURANCE COVERAGE until recently. Insurance companies previously “set limits on the amount of money they would spend on an individual patient called the PRE-SET DOLLAR amounts.”  After the ACA, Insurance companies could no longer maintain that pre-set limit on the coverage. Until recently. This is an important issue to you the healthcare consumer. I will expand on this subject a little later on.

PREVENTIVE CARE received a boost as more health care screenings were covered.  A long list of evidence-based screenings became available at little or no cost. Again, until recently. LOWER PRESCRIPTION DRUG COSTS (another one of your current concerns) became a reality as the number of prescription and generic drugs covered by the ACA grew every year. “Savings on prescription drugs exceeded $15 billion within the first five years of the ACA.” Yet, as we discussed earlier, pharmacy costs remain a major issue.

CONS

Many people did indeed PAY HIGHER PREMIUMS. Cost went up as insurance companies provided a wider range of benefits and covered people with pre-existing conditions. Premiums rose for a segment of the population who already had health insurance. If you didn’t have insurance, your wallet became lighter due to the Mandate. This was the downside risk to the understandable and basic important ACA GOAL of everyone carrying uninterrupted insurance because not having insurance passes healthcare costs on to everyone else. Yet, the requirement that the uninsured without an exemption must pay a modest fine was viewed in some circles as “Government intrusion.”

TAXES WENT UP for a segment of the American population. “New taxes on medical devices, pharmaceutical sales, people with high incomes were applied to help pay for the ACA.” But, new taxes alone were not the only funding created-additional funding from Medicare payments was added. The American WEALTHY SUBSIDIZED PAYMENTS TO COVER THE POOR

Author’s note-something to consider here. Insurance cost strategy is based on getting a number of people who are healthy to pay premiums. This way there are enough premium dollars to pay for those who are sick. What we may not be discussing in this debate is that by allowing children to remain covered by their parent’s insurance up to age 26, it removes the premium dollars from the risk pool. Someone has to subsidize this premium loss.[6]

There was a COMPLICATED ENROLLMENT PROCESS. Not surprisingly, the newly launched ACA website had “technical problems” which created barriers to enrolling which led to delays and enrollment falling below the levels predicted. Confusion permeated the choice process resulting in consumer complaints. The correct choice of family and business coverage plans were described as “complicated and not always clear.”

Businesses were perceived to be manipulating payrolls (job cuts and cutting employee hours) to AVOID COVERING EMPLOYEES. The actual data indicated that there were no job cuts.  There may have been some cutting of hours below the mandatory minimum to be considered a full-time employee and thus eligible for employer sponsored health care coverage. [7]

affordable care act - impact on jobs

THE BUMPY RIDE- The ACA – How the repeal might impact you

affordable care act - health care concerns

  1. COVERAGE FOR PEOPLE WITH PREEXISTING CONDITIONS

PROVISION

  1. WHO: Health Insurers cannot deny coverage or alter a plan offered to people with pre-existing medical conditions[8]
  2. WHAT: Preexisting medical condition is any medical situation that is excluded from coverage by an insurance company because the health issue was believed “to exist prior to the individual obtaining a policy” [9]

IF REMOVED

  1. “Twenty-seven percent of adult Americans under 65 years of age who have preexisting medical conditions might lose health care coverage”
  2. Could affect health as well as the “number of patients ‘enrolled’ to a Physician or Health Care Prover’s panel”

THERE IS ONE EXCEPTION:

One Exception: Grandfathered Plans-“individual health insurance policy purchased bought for the individual or family on or before March 23, 2010 that has not been changed to reduce benefits or increase costs to consumers.”

TEACHING POINT

PRE-EXISTING CONDITIONS

The subject of ‘Pre-existing conditions’ has become an important sounding board and the primary tenant of the Affordable Care Act.  I will not go into detail now about the current healthcare law of the land as I will do so down the road in a section devoted to it.  I will take a few minutes here to address this concern ahead of the detailed discussion down the pike.

People with Pre-Existing Health Conditions Can No Longer Be Denied Coverage: A pre-existing condition, such as cancer, made it difficult for many people to get health insurance before the ACA. Most insurance companies wouldn’t cover treatment for these conditions. They said this was because

the illness or injury occurred before you were covered by their plans. Under the ACA, you cannot be denied coverage because of a pre-existing health problem.[10]

PROVISION: Health insurers cannot deny coverage, charge more, or make coverage exclusions for people with preexisting health conditions, such as asthma, diabetes, or cancer.

Preexisting Condition Coverage

Insurers are unable to deny coverage to people who have preexisting medical conditions

NEWLY INSURED ADULTS WITH PREEXISTING CONDITIONS[11]

affordable care act - newly insured

Health Status Premium Underwriting     

Insurers are barred from considering health status as a factor in setting a household’s premium

Relief for High Risk Individuals

Establishes two transitional programs:

  • Reinsurance and Risk Corridors that run from 2014-2016 to provide funding to mitigate insurer losses that come from serving a high number of high risk individuals
  • Establishes a permanent Risk Adjustment program that transfers money between insurers based on the risk levels of their enrollees.[12]

IMPACT: About 27% of adult Americans younger than 65 years have health conditions that might lose them coverage in the individual market. [13][14]

MANDATES TO BUY INSURANCE

PROVISION

  1. WHO: individual Americans as well as employers with fifty or more full-time employees (usually working 30 or more hours a week) “must buy health care insurance or face monetary penalties” [15]
  2. DATA[16]

(a)  Mandates unpopular

(b) 2015- 7.5 million people paid a fine (through income tax review) for not purchasing the required insurance (calendar year 2014) at a cost of $210/person

(c) 2016- 6.5 million people paid a fine (through income tax review) for not purchasing the required insurance (calendar year 2015) at a cost of $470/person (20% fewer than the year before)

IF REMOVED

  1. Disrupt the Individual Marketplace
  2. The risk pool would decrease and narrow to contain more ill individuals as healthy individuals delay purchasing insurance
  3. Cost for health care insurance would go up

TEACHING POINT

HERE IS THE CRUX OF THE AFFORDABILITY ISSUE:

In order to lessen the exposure of risk pools for pricing insurance, younger, less ill people need to be in those pools.  Absent a penalty for not having insurance, costs for those sicker individuals in the pool will be increasing.

  1. Major innovation in U.S. public policy
  2. Central pillar of health reform

(a) The CBO has projected potential loses in Americans covered by health care insurance

(b) Over two-thirds of the ACA coverage increase over the last eight years (through the beginning of 2018) would be lost (CBO estimates)

(c) The resultant increased risk pools of covered beneficiaries would be magnified by a predicted employer-sponsored insurance loss (due to healthy people opting out) which is estimated to be four times the current rate of employed people eligible for that coverage who choose not to carry it

(d) This would be accompanied by an estimated potential maximum increase in premiums for ACA Individual Market Exchange Plans by 40 percent

See below for a more detailed discussion of this and other ACA provisions versus the current tectonic plates.

I will continue this blog next week.

FOOTNOTES:

[1] http://obamacarefacts. com/affordable-healthcare

[2] TriWest HealthCare Alliance and Elsevier/MEDai 3/24/2011

[3] https://georgewbush-whitehouse.archives.gov/government/thompson-bio.html

[4] The Good, the Bad and the Ugly was a Western film directed by Sergio Leone and starring Clint Eastwood, Lee Van Cleef, and Eli Wallach as the namesake heroes and villains.

[5] http://www.healthline.com/health/consumer-healthcare-guide/pros-and-cons-obamacare#Overview1

[6] used with permission from Joel Brill MD, Chief Medical Officer Predictive Health

[7]  https://fivethirtyeight.com/features/yes-some-companies-are-cutting-hours-in-response-to-obamacare/

[8] https://www.hhs.gov/healthcare/about-the-aca/pre-existing-conditions/index.html

[9] https://www.healthinsurance.org/glossary/pre-existing-condition/

[10] http://www.healthline.com/health/consumer-healthcare-guide/pros-and-cons-obamacare#Overview1

[11] https://www.commonwealthfund.org/publications/issue-briefs/2017/jun/coverage-care-preexisting-conditions-aca

[12] Adapted from: The American Health Care Act vs. The Better Care Reconciliation Act vs. The Affordable Care Act: A Side-by-Side Comparison 21-March-2017 by Michael S. Adelberg, Tricia A. Beckmann, and Shane McCarthy

[13] Medscape: What’s At Risk in Repealing the ACA? How Will It Affect You? Leigh Page, February 23, 2017

[14] Graph source: www.commonwealthfund.org/publications/issue-briefs/2017/jun/coverage-care-preexisting-conditions-aca

[15] https://www.forbes.com/sites/beltway/2017/04/10/whats-happened-to-the-aca-penalty-tax/#c4ec71898e45

[16] https://www.dailysignal.com/2017/01/11/how-many-americans-paid-the-obamacare-tax-penalty-in-2016/

By | 2018-10-15T11:53:58+00:00 October 17th, 2018|Categories: Healthcare|Tags: |0 Comments

Leave A Comment