The Supreme Court put it back in our court. The election did not cause its rejection. We have been replete with information about the health insurance reformation, what it will deplete and the promises it should complete. And complete it is, but the Affordable Care Act is ultimately not about affordability, which we are spending considerable time and money to discover. So should we hope, change, hope to change or change our hopes? Or at least our expectations.
Like "ClintonCare" before it, the Affordable Care Act supports laudable social goals, and should really be titled the "Accessible Care Act," as it seeks to enfranchise many who could not previously obtain coverage, inject competition, streamline efficiency and allow the creation of new and more standardized formats for all of us to see and follow. This, of course, makes sense from a global viewpoint, and what other view can the federal government harbor?
The problem, of course, is not with the law itself, or its intentions, but the fact that it is national in nature, and by its very nature cannot account for the fact that we all don’t fit so well in a federal framework, but in a federalist framework. Put more simply, all politics, and markets, are local. What we need in California, or in the North Bay, will be dictated less by Washington and more by our own unique situation and what can naturally rise as a result. At the same time, what is imposed, while composed with the best of intentions, will create as much harm as good, as there is the law -- and the law of unintended consequences. Here are a few to consider:
-- Health Insurance Costs: there are taxes on the medical device, pharmacy and health insurance industry (which will all be passed on to the consumer), funding for the exchanges, the elimination of pre-existing condition limitations, expanded allowances for dependents and guaranteed individual coverage. This all falls on top of what is still an exceptional medical system that meets our many needs … at considerable and continued expense.
In addition, small group rating will change in 2014. Age categories will compress (which will cause rates to increase for younger employees) and risk factors are eliminated (which raises rates for healthy groups while it reduces them for the less healthy).
-- Supply and Demand: Roemer’s law says that as the supply (of health care) increases, so does demand, which sets cost efficiency on its head. More and better drugs and systems combine with a large influx of newly insured patients along with greater cost pressure on doctors through the expansion of Medi-Cal (with its notoriously low reimbursement levels) and Medicare cuts (which now nearly rival Medi-Cal rates and are coming closer). If you build it, they will come, but what if the structure can’t support the game with its new rules?
-- The Exchanges: In some states it is true that competition may breed cost compression. In California, with seven major viable carriers and several strong regionals, that argument does not hold. Enter the California Exchange (“Cover California”) which takes the same carriers, with a slightly expanded eligible population, and, with $190 million of federal money, attempts to justify its existence. To be sure they succeed, however, California may change the rules on self-funding medical plans in December, the exchange will have some power to direct how carriers may “play” in and outside it, and the federal government will provide subsidies to those who meet income qualification -- which may only be claimed when the subscriber enrolls in the exchange. Also, since some states have opted not to create an exchange, the federal government will create one for them, while at the same time setting up two national plans, which will also be offered under Covered California.