A lot of what happens in 2014 will depend on what happens in 2012. Take this item, for example:
A large majority of employers in both studies said they expect to continue offering benefits once the exchanges start. But former insurance executive Bob Laszewski said he was surprised that as many as 8 or 9 percent of companies already expect to drop coverage a couple of years before the exchanges start.
Apparently, according to this survey, some employers are considering dropping their employer-sponsored plans on the heels of reform-generated healthcare exchanges. The decision by these companies to consider foregoing the costs of their coverage if they assume that fines levied will be a “cheaper” option is somewhat problematic, perhaps in the short term. If recruitment of workers is affected by a move to shutter employer-sponsored plans, for instance, smaller companies may have to rethink this strategy — especially in the face of likely government subsidies starting in ’14, that will assist them in this endeavor of corporate coverage.
For larger companies that can resist the likely call by GOP rabble-rousers as contributing to government-run “dumping” of consumers into exchanges, the joke may be on the punditry — as the entire healthcare marketplace would likely benefit from the influx of potential consumerism and competition among private carriers within those government created exchanges. Sure, some companies may be thinking of making these “painful” decisions now, but we will have to get through ’12 first to see exactly what forms insurance purchasing in the expanded marketplace will take. This point may be a mute one by January 2013.
Court challenges to the ACA are taking a slightly different turn with another set of appeals judges this week. Turns out that one of the plaintiffs in the case in which states are challenging the insurance mandate provision of the law purchased insurance through her employer — raising the question of plaintiffs’ legal standing in the ongoing pursuit of this case. The U.S. Solicitor General is asking for the case to be dismissed.
[Sol. Gen.] Katyal then argued that the law’s insurance mandate, which takes effect in 2014, does not so much require individuals to buy coverage as it does regulate the way they pay for health care they will inevitably consume. Without the mandate, Mr. Katyal said, the law’s requirement that insurers provide coverage to all applicants, regardless of their health status, would simply encourage people to buy insurance after they got sick. [..] “Congress is not regulating the failure to buy something, but the failure to secure financing,” Mr. Katyal said.
Two judges on this panel are Repub appointees. One was appointed by a Democrat. This circuit is the second of three appeals panels scheduled to hear challenges to the ACA. | LINK
It’s that time of year again. Graduation. In the spirit of all things healthcare reform, it is a good time to take a look at one of the more popular provisions of the reform law — extension of coverage of dependents of parental plans until age twenty-six. Reports are now surfacing that the federal government was unprepared for such an onslaught of consumers taking advantage of the law. Many plans have enrolled tens of thousands of young adults to their rolls, potentially adding to plans’ earning forecasts for 2011.
They’ve been called “the invincibles”, the demographic coined by healthcare policy wonks of the early-to-mid twenty-somethings which formerly bypassed coverage for essentially none at all until they were able to obtain, at the very least, employer sponsored coverage. Of course, the rush to get coverage has brought concerns over the ability to control costs with respect to this key provision of the ACA. Corporate lobbies, usually representing the nation’s largest business collectives, are a little concerned of the requirement to cover dependents even if they are married and not enrolled as students. (Most health plans have until 2014 to forego dependent coverage if the adult child’s employer offers any type of health coverage.)
At this point HHS couldn’t be more ecstatic of the response to this provision of the reform law, as almost 600 000 young adults have jumped on board.
One of the stopgaps in federal spending on healthcare proposed by the GOP-led House this session is the ongoing discussion of entitlement spending and the effect of redefining eligibility with respect to Medicare. It seems as though the issue of raising the age of eligibility as a minimum qualifier for Medicare has always been a well-worn consideration. But a new Kaiser study sheds some light on what lawmakers, accounting bodies, and Medicare itself may be in for, assuming full implementation of reform by 2014.
Increasing the age of eligibility by two years would save the federal government over $7B, but the costs to beneficiaries would be shifted to those who would have previously been covered, employers, and state governments (as Medicaid would be left picking up the tab for those 65- and 66-year olds and those dually eligible).
The total out-of-pocket costs for 65- and 66-year-olds would increase by $5.6 billion while employer retiree health care costs would rise $4.5 billion, according to the report.
The increase in Medicare eligibility also would increase premiums by 3 percent for beneficiaries who stay on the program because younger beneficiaries would be removed from the risk pool. In addition, that shift would also raise prices 3 percent for all individuals who purchased coverage through the law’s health insurance exchanges, according to the analysis.
The report gives an alternate take on if the proposed healthcare exchanges will be cost-effective in the short term — en route to an eventual savings of over $100B with respect to fed healthcare spending by 2020 as determined by the Budget Office. | LINK
The one year anniversary of the ACA is giving many time to reflect on its passage and what it really means for the future of healthcare delivery in the foreseeable future. One thing’s for certain — the controversy surrounding it on all sides will not be going away any time soon. Whereas the public is portrayed in the media as being, at worst, “evenly divided”[1] on the issue (just like every other manufactured boilerplate lately — take your pick), many supporters are saying that the reform law’s original form and intent will eventually get the full support of the American public.
Detractors, not to be outdone, are more emboldened than ever to make this issue a Campaign ’12 one — and a very potent issue, at that. Although the road to the ACA’s passage was characterized by cogent and passionate debate on most levels, the labels applied by opponents — both Republican and Democratic — seemed to take center stage, almost screaming out to any fence-sitters to give up on lobbying for it. In the end, however, the bill survived threats of “death panels”, Tea Party protests, and GOP-stoked fears that ironically warned of the insolvency of Medicare should the measure become law.
The controversy surrounding the reform law is not over by a long shot. Even as healthcare consumers, states, insurance companies, pharma companies, and the federal government hunker down to to accept their roles in the wake of the law, its current incarnation will only be preserved if sound implementation by 2014 overcomes the political rhetoric on the left and right. If the most salient effects of the law — increasing access via exchanges, eradication of pre-existing condition denials, closure of the Medicare Part D doughnut hole, and eliminating coverage and payment inequities in Medicare Advantage plans — remain intact by mid-decade, perhaps the most beneficial result will be that healthcare consumer will receive high-quality, cost effective healthcare delivery without giving the means to this end even a fleeting second thought.
You can bet that a GOP takeover in the House in November will result in the re-examination of reform as it pertains to taxpayer subsidy of employer-based coverage. Boeing is the latest large employer to portend a shift in coverage cost that will probably involve some employee burden. It’s a common refrain of not only insurers but also an increasing number of corporate giants — rising healthcare costs triggered by the cost of President Obama’s biggest domestic achievement.
Boeing employees can expect to see higher employee costs for deductibles, co-payments and co-insurance next year. In 2012 employees under one particular plan will see their coinsurance payments go from 10% to 20% up to the out-of-pocket maximum. Although the tech and defense giant has stated that it would have considered and made cost shifting regardless of reform bill’s passage, the immediacy of changes within the nest three years calls for efforts at short term strategies to stay solvent as coverage pools begin to include the ranks of the uninsured in the healthcare marketplace. | LINK
About one month to go before a possible referendum on President Obama, and the recently passed PPACA, the major meme looks to be the so-called mini-med[1] plans McDonalds Corp. offers its employees. The fast food behemoth is making headlines because it is calling upon Congress to create an exemption from provisions in the reform law that require insurers to utilize at least 80 percent of its revenue toward true healthcare coverage. Its carrier, inherent in the basic plans it offers its policyholders, claims fiscal hardship if forced to do so.
Enter the U.S. Senate. Jay Rockefeller (D-WV) wants to investigate whether individuals who purchase these employer offerings are actually getting their money’s worth in the event of the need for major medical coverage. In a letter to the insurer’s CEO, Rockefeller seeks information on just how those plans are sold to employees, how they are utilized by them, and the plan’s saturation rate. It will be interesting to find out exactly whom these plans benefit the most — the insurer, the patient, or the employer. | LINK
Just when you thought that the only controversy to emerge surrounding reform this news cycle dealt with the initial forays into extended government-mandated coverage of children, think again. Now, a well-known corporate giant is warning the federal government that it may drop its employer-sponsored coverage of some 30,000 employees unless a key provision in the reform law is waived in its behalf.
McDonald’s Corp., which carries coverage with an insurer to provide capped plans to its low-wage workers, claims that its ability to do so will be threatened under reform; they cite tougher rules on a certain percentage of insurers’ premium hikes to cover massive administrative costs, known as the medical loss ratio (MLR). The Obama administration and the Democratic architects of the reform bill included provisions to limit insurers’ overreliance on MLRs as a basis for denying coverage by passing on those higher premiums to policyholders. McDonalds contends that its carrier cannot possibly meet the threshold of utilizing 80% – 85% of revenue on direct patient medical costs. Under reform, it says, its workers would immediately suffer — jettisoning coverage and raising the specter of workers either trying to qualify for government subsidy (Medicaid) or going it alone on the open market.
There’s another battle here for the soul of the reform law: a slippery slope of corporate exemptions that could weaken the intent of the law’s core mission — to curb healthcare delivery costs by forcing insurers to take a hard look at how they utilize profits versus federal government acknowledgment of a potential problem it has to squelch in favor of less desirable alternatives in the spirit of reform. | LINK
Originating from Saint Paul, Minnesota, [doctorpundit.com] is a weblog about the policy of healthcare and where it intersects with politics and public opinion; it is edited by Michael Douglas, MD, MBA. Welcome, and please consider my take on what is Healthcare 2.0, complemented by a few of my thoughts on my personal avocations and guilty pleasures: music, prose, and writing. Follow Doctor Pundit via RSS above.
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DOCTOR PUNDIT @ ONE YEAR | An occasional DP series from 2010 highlighting healthcare policy trends over the period from 2009-2010 in a compare/contrast format.
