I’ve seen several people of late, in discussing the Patient Protection and Affordable Care Act (“PPACA”, or in many circles, “Obamacare”), complaining about increases in their health insurance premiums as some of the regulations of
the PPACA have begun to become effective. It may well be that, particularly in the short run, some folks’ insurance premiums will go up. But before moaning and groaning too much about the higher premiums, perhaps they should consider the things they will get under the new law that they didn’t have before—and what they stand to lose if the Supreme Court overturns the PPACA.
The coverage for preexisting conditions alone is an enormous benefit to almost everyone, whether they realize it or not. Oh, you think you don’t have a preexisting condition and none of your loved ones has one either? You might want to rethink that. Consider this: if you or one of your family members has ever been treated for hypertension, high cholesterol, asthma, diabetes, arthritis, obesity—even, in many cases, common emotional and mental health issues such as depression or anxiety (and we haven’t even mentioned any of the really major stuff like coronary artery disease, cancer, stroke, etc.), then you (or your loved one) has a preexisting condition which, under the old underwriting rules, could be used as a basis to deny you health insurance coverage in the future. That is, should you for any reason lose your current coverage say, as a result of a job loss or change, the health insurance plan offered by your next employer (assuming it is offered at all), would be legally entitled to either deny you coverage or charge you a premium that is astronomically higher than what everyone else pays. Look at that list above again. Have you, or a loved one, ever been prescribed medication for any of those conditions? I think it’s fair to say that most of us have either been treated for one of those conditions or has a family member who has.
The PPACA also bans lifetime benefit caps—another source of worry for someone with a preexisting condition that requires ongoing medical monitoring and maintenance. Under the old system, you could find yourself having managed your condition very well for years, but then later on having another, unrelated serious health issue arise that requires expensive treatment. It is possible that treatment will be unavailable to you unless you either have the money to pay for it yourself, or you have not maxed out your lifetime benefit under your health care plan.I found this very good article at healthcare.gov that lays it all out in painful detail exactly what we will lose of the PPACA is struck down (or repealed). Consider that starting in 2014:
- Insurers can no longer use health status to determine eligibility, benefits, or premiums;
- Individuals and small businesses can choose from a range of private insurance plans through competitive marketplaces called Exchanges in their States; and
- Annual dollar limits on coverage will be banned in group and new individual market plans, critical benefits will be covered, and out-of-pocket spending will be limited.
And consider what the new law is already doing:Insurers can no longer limit lifetime coverage to a fixed dollar amount;
- Insurers can no longer take away your coverage because of a mistake on an application;
- Insurers can no longer deny coverage to a child because of a pre-existing condition;
- Thousands of uninsured people with pre-existing conditions have enrolled in the temporary high-risk pool program called the Pre-existing Condition Insurance Plan, which has literally saved people’s lives by covering services like chemotherapy.
And finally, consider what will happen immediately if the law is struck down by the high court or repealed:
- Reduce the health care and health insurance options of the 50 to 129 million Americans with pre-existing conditions;
- Take away, for the 32 to 82 million people with both a pre-existing condition and job-based insurance, the ban on lifetime limits on benefits, restrictions on annual limits on benefits, new protections in the small group market from discrimination based on health status, and the security of knowing you can change jobs without losing your health coverage and care;
- Lock older Americans into their current coverage if they have it, since up to 86 percent of people ages 55 to 64 have some type of pre-existing condition;
- Limit insurance options for the parents of the up to 2 million uninsured children with pre-existing conditions, who today can no longer be blocked from purchasing individual market insurance due to their pre-existing condition.
The entire article is worth a read (see http://www.healthcare.gov/law/
The new law is not perfect. Many of us would have preferred to see a single-payer system or even a national health care system like most of the developed world enjoys. But make no mistake: the existing law accomplishes some hugely important things that will benefit virtually everybody. Yes, premiums might be higher at the outset; but over time you will actually pay less out of pocket for healthcare than you now do. Don’t you think that’s worth it?
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Mark, you are so very right. So many people will gain a considerable measure of medical security under this act. And yes, I too would have preferred a national health care system. But this law makes sure that people who otherwise would not have been able to obtain health insurance will now be able to do so.
Thanks for a beautifully written and detailed article on this subject.
FL Gov Rick Scott certainly has it wrong!
http://www.politifact.com/florida/statements/2012/apr/02/rick-scott/rick-scott-calls-health-care-law-job-killer/
Why did Obama campaign against mandates?
Stupid or uninformed or…lying?
Do you think the framing of your question could be just a wee bit more loaded, Jenny?
President Obama campaigned on health care reform. In the campaign, he stated certain ideas and preferences about what a final plan would look like. But any campaign promise concerning a details of a plan that had yet to be hammered out in congressional committees, negotiations with the opposition party, bicameral conferences, etc., must be understood to be subject to change as that forging process takes place. To suggest that the only explanations for candidate Obama’s stated opposition to individual mandates and President Obama’s signing into law a plan that contained such mandates, are stupidity, misinformation or laying, is to willfully ignore the realities of how legislation gets passed.
I think the President came to office honestly believing that if he demonstrated a genuine willingness to work with the GOP, then at least a few Republicans in the House and Senate would recognize a sincere effort and would respond in kind. The individual mandate, of course, was originally a Republican idea, floated during the Clinton administration in response to President Clinton’s attempt to reform health care. Many of the same Republican legislators who screamed at the top of their lungs about the “unconstitutionality” of the individual mandate, had in fact been enthusiastic supporters of it when it had been proposed by their own party. I suspect part of President Obama’s political calculus (which, unfortunately, proved to have been naively optimistic), was that if he served an opening volley in which he conceded a major point he had articulated in the campaign, that it would open the door to some genuine give and take between the parties as they put a deal together. Many felt — myself included — that he was giving away too much too soon in the negotiations. In the end, those of us who are more cynical in our assessments of the GOP than the President was initially prepared to be, were vindicated. So, there was some political naivete at work.
The other thing that surely factored into the eventual inclusion of the individual mandate was that the President’s team eventually came to the realization that if they were going to accomplish some of the primary goals of reforming health care (i.e., enabling access to healthcare even if people have preexisting conditions, and that people would no longer have to worry about maxing out their lifetime benefits, and if they didn’t have the option of going with a single payer system and instead had to work within the framework of private, for-profit insurers, then the only way to make the economics of it all to work would be to require everyone to participate in some fashion.
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Only rich people want RomneyObamacares cancelled. All those congressmen should let us have the same health plans they are on! Obama 2012!!!!!!
Among the issues that the Supreme Court is being asked to declare unconstitutional is the individual mandate, i.e., the requirement that everyone must have health insurance or pay a penalty. Anyone who cannot afford the premium will get help through the health insurance exchanges that must be set up in each state by 2014. The idea is that we need to create an insurance risk pool that includes everyone–young and old, healthy and sick. Part of what makes health care expensive in the USA is that younger and generally healthier people often don’t have coverage. Insurance companies would prefer to deny people with “pre-existing” conditions for exactly the reason that it costs money to provide health care, but they have been cherry-picking the healthiest people and dropping those who get sick to save the company money. If we require that insurance companies cover everyone, then we have to bring healthy people who don’t need health care right now into the pool. If everyone responsibly pays their fair share in premium costs (with help for those who can’t afford it), then the costs will start to come down.
There are many ways to bend the cost curve down under the Affordable Care Act; the individual mandate is one of them. We need to set up robust health exchanges in every state, i.e., exchanges governed by a pro-consumer board independent from the insurance industry to make sure that quality and affordability are maintained. I’m helping to do that in New Jersey. The insurance industry is much stronger on the state-level than on the national stage, so we have our work cut out for us. I wish we had a national health insurance exchange–something that we fought for but did not get.
“Bending the cost curve” is an economic function. The insurance mandate increases access to and therefore demand for healthcare without changing the available supply. This moves the cost curve higher not lower. Therefore the insurance mandate raises healthcare costs, It does not reduce, flatten or even lower the rate of cost growth. It does however, force individuals and businesses to pay out additional funds for something that they have not previously chosen as a priority, reducing their freedom, something that we Americans take very seriously. The savings from this provision are depending on Americans in the gap (where penalty costs less than insurance) and rebels. In other words the govenment depends on collecting penalty revenues to offset costs of the act.
To actually lower total health care costs, economically speaking, you must increase the available supply. There are two ways to do that. 1. increase the health care resources available to provide care. This creates a commodity situation, where competition arises and causes prices to fall. 2. Remove Insurance – lowering the number of insured. Since health care is not affordable otherwise, this would decrease demand significantly, again causing competition, this time by removing enough demand to create a surplus in supply, which again lowers prices. Obviously these are the two extremes. There is a continuum between them which will have similar effect. So, if increasing insurance access doesn’t make Health care affordable, what does?
The key element of the Affordable Care Act that dealt with lowering costs is section 3002, the Medicare Shared Savings Plan section. This section applies only to Medicare Parts A and B, not Medicaid, not commercial insurance and not Medicare Advantage. This section’s original goal was to move from a fee-for-service type system that most of us have today, to an outcomes based system, where a fixed fee is paid for a disease state for a fixed period of time. We need to examine what that means.
There are care quality rules in place to attempt to keep the obvious “just minimally treat” from happening. The intent is to capitalize on early intervention and preventive action to keep people out of hospital beds (decrease hospital revenues significantly) This is to be done by physician groups, hospitals and home care groups all teaming up (Pres. Bush’s homeland security applied to healthcare?) sharing information and the patient being better for it. In other words, reduce demand through preventive care.
While there is no question that getting patients to actually do what they are told would greatly diminish care requirements, we patients don’t listen – we’ve proven that over and over again. Telling the Dr to try harder is unlikely to meaningfully change our will. In fact, they’ve already proven that this road is unlikely to get to where they want to go. There is data from prior experiments (search Physician Group Practice pilot 2005-2010) that demonstrate little or no benefit with this specific course of action.
In this case congress seems to have taken a high road that has some short-term semblance of savings at a longer-term cost, rather than attempting to solve the core problem of low supply, high demand. Speaking of politics…
Notice that the majority of the act comes into effect in 2014. That would be half-way through Pres. Obama’s second term (assuming re-election) and an election year where the initial financial tally will come at year end, after the elections are over and giving 2 years for the wounds to scab over before the Dems have to field a new candidate for President. That means that the 2016 elections will be interesting if ACA sticks.
You speak of health care as if it were, or could be, some kind of textbook example of a free market where price is determined merely by the “law of supply and demand,” and not by other, extrinsic forces. The entire notion of a “free market” is itself a myth, and nowhere is it more mythical than in the realm of health care.
So long as we are stuck with a middleman — namely, the private, for-profit insurance industry — which adds nothing of value to the quality of health care delivered and merely drives up the price, then any explanations of health care delivery costs which rest on “supply and demand” are simply laughable. And such an explanation fails to explain why the rest of the developed world seems to be able to deliver health care to its citizens both more cheaply and with better outcomes than the U.S.
I agree we need to remove the middle man.
I don’t believe health care is a text book example of anything.
My sole tenet with supply and demand was to show that the law does not provide the relief sought by the prior responses. However, if you believe that we have plenty of supply to go around, go to any of our rural areas and seek any type of advanced treatment locally.
While neither the original article nor my post had anything to do with why the U.S. healthcare system is sub-par, I do have an opinion to offer since you asked.
The U.S. healthcare delivery system is failing its citizens precisely because healthcare has been treated as a free-market good. In all of the roughly 30 nations ranked higher in healthcare quality than the U.S., health care is a public good like education and therefore paid for not through private insurance but through taxes. This assures everyone a basic level of care, which can then be supplemented or replaced if one can afford it by private insurance.
That healthcare is actually a public good rather than a free-market good is evidenced in our prioritization of a single human life even when it is ruinous socially and financially to multiple lives and in direct conflict/contention with the insurance industry -something the ACA did address (another cost increasing component – making something moderately more affordable for the few at a higher cost to the many)
However, the free-market system and exorbitant costs have funded research and development that would not have been otherwise funded resulting in an aggregate improvement in global health on the U.S. tab.
Also to gut the system we have and replace it with a social system would be extremely disruptive. Possibly to the point of civil unrest. It will need to be done in steps, something that president Obama moved forward, whether appreciated or not, and whether the supreme court strikes down the ACA in part or full ( I didn’t see a severability clause so in my mind its all or nothing, but I’m not the judge).