Tag Archives: Affordable Care Act
America’s system of health care safety nets is an inadequate, balkanized, inefficient, unfair, unsustainable monstrosity. And that’s on a good day. Its two main components—Medicaid/CHIP for the poor and Medicare for the elderly and disabled—spend nearly a trillion dollars annually to cover 110 million people. And both are growing like topsy. In tandem with the equally doomed employer health insurance system, the safety net feeds an insatiable appetite for overpriced, often-inferior medical care that is bringing the entire system to the brink of insolvency. And the Affordable Care Act (ACA) promises to make it worse by adding yet another 15 million underfunded Medicaid enrollees and by creating a new subsidy entitlement for families making up to $88,000 a year—arguably creating our first-ever middle-class welfare program that, according to James Capretta, brings “middle-class Americans into permanent dependence on the federal government for their health care.”
Correcting the Basic Problem
Is there anybody who still doesn’t know that cigarettes are bad for them? You’d have to have lived under a rock—or received a public school education—to think otherwise. How about obesity, alcohol abuse, high cholesterol, elevated blood sugar, and hypertension? All have received a huge amount of publicity for decades. So why do we still have an epidemic of preventable diseases from these avoidable risks?
Lack of information? Nope. We’ve been deluged by that for years (“This is your brain on drugs…”), and while it has indeed helped, we still have a huge number of huge people eating, drinking, smoking, and sofa-spudding themselves slowly to death.
Lack of medical care? No, not that either. Awesomely cheap preventive medical services have been a hallmark of private health insurance since they were mandated by the HMO Act of 1973. If anything, there is a perverse parallel between the growth in prevention coverage and surge in diabetes since then.
I like the state health insurance exchange concept. It offers a necessary corrective to our failed employer/government-dominated group insurance system by giving American consumers the direct power to hold their insurers’ feet to the fire to deliver value. Letting exchanges operate at the state level also allows 50 different experiments to discover what works best, something we’re already beginning to learn from Utah’s promising marketplace and Massachusetts’ deeply troubled one.
The problem is that the Affordable Care Act’s version of insurance exchanges is to this consumer-market ideal what Victor Frankenstein’s creation was to humanity—a good idea gone so very wrong. But unlike the good doctor’s bad doppelganger, ACA is reparable. The fix requires major surgery to excise the Abbie Normal parts of ACA’s monster, replacing them with features that enable consumer purchasing power to transform health care into just another, normally affordable necessity of modern life.
Here are the essentials for fixing the exchanges:
Metaphorically (if Scatologically) Speaking
It has been said that Michelangelo’s task of creating his magnificent “David” was actually quite simple. Just take a huge block of marble and chip away the parts that don’t look like David. In fixing the Affordable Care Act, a similar approach is needed. Just start with the huge manure pile that is the Affordable Care Act (ACA) and hose off the parts that don’t look like a pony. As hard as it may have been to see either David or the pony imbedded in its original matrix, both are there.
In the case of ACA, the hosing off consists of four essential tasks:
- Repeal and replace the individual mandate.
- Expand and simplify the individual health insurance exchanges.
- Expand the prevention incentives.
- Fix the safety-net entitlement.
This article deals with number one, the mandate issue.
Flawed Arguments Pro and Con
There are two things the newly ascendant House Republicans need to know about fixing the new health reform law. First, their mantra of “repeal and replace” (besides being moot) ignores the fact that, buried in the manure pile of the Affordable Care Act (ACA) is a real pony in the form of individual insurance exchanges that need to be dug out, hosed off, and nurtured by a combination of empowered consumers and enlightened, lightened regulatory oversight. Second, the GOP’s oft-voiced preference for incremental health reform—tort reform, interstate insurance purchases, and tax credits—won’t do anything to fix the fundamental problems in health insurance and medical care.
So I’d like to offer a guide to both parties on what we know and what they must do to fix not just the ACA, but the entire problem of unaffordable, mediocre quality medical care.
What We Know
There are four basic problems to fix.
HOW TO DO IT
In Part 1, I wrote about why you must take the lead to drive a new health benefits strategy for your company. Now, I’d like to talk about both the short- and long-term components of that strategy.
Short-Term: Turn your employees into savvy medical purchasers.
1. Implement universal High-Deductible Health Plans (HDHPs). Your current rite of annual, bit-by-bit increases in deductibles and copayments is like cutting off a dog’s tail an inch at a time. Stop doing that. Move all your employees now to HDHPs and health savings accounts (HSAs). Ideally, implement the maximum medical-cost-sharing allowed by the new health reform law (i.e., same as current HSA maximums of $5,950 for individuals, $11,900 for families), and get rid of all fixed-dollar copayments in favor of deductibles and coinsurance to communicate actual medical prices.
2. Maintain employee premium contributions. Despite the much lower premiums for the new HDHPs, don’t reduce employee premium contributions. Keep them at current levels.