Vol. 116 December 15, 2014 Obamacare Update

December 16, 2014

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“After a year in place, the Affordable Care Act has largely succeeded
in delivering on President Obama’s main promises.”
– NY Times

“Americans would rather see it improved than repealed.”
– Boston  Globe

Today, December 15, is the deadline for new enrollees to sign up for health care insurance under Obamacare ( December 23 in Massachusetts). It seems an appropriate time to take a look at how it is going. The deadline for renewals is February 15.

The recent Jonathan Gruber “revelation” about Obamacare’s “non-transparency” alleged that “ they did not tell the public that young, healthy people must subsidize sick people to make the numbers work.” Well, hello, what about insurance don’t you understand?! Those of us whose house has not burned down are subsidizing (aka “insuring the loss of”) those whose house has burned down!

Since the ACA was passed in 2010 the number of uninsured has fallen by 25%-33% depending on the study. At least 8 million and perhaps 11 million previously uninsured are now covered. Critics of the ACA charge that number is overstated by about 700,000 who merely got dental insurance coverage. More about that later in this blog. The law “is helping the health care industry by providing new paying patients and insurance customers.” It certainly is!  Health insurance companies are looking at a “nearly $2 trillion ( yes, TRILLION) of subsidized coverage through insurance exchanges and Medicaid over the next 10 years,.” Share prices of four of the major health insurance companies – Aetna, Cigna, Humana, and United Health – have more than doubled since March 2010. (1)

ACA subsidies are helping many who could not get health care coverage previously, but deductibles and variable out-of-pocket costs can remain a burden on low- and middle-income Americans. Please note the key word “Americans” here because the law does NOT extend coverage to un-documented immigrants. Undocumented immigrants and adults in 23 states that have not extended their Medicaid coverage as subsidized by the ACA comprise the major portion of uninsured persons. Texas, Florida, and California have the highest proportions of those people.

ACA health care insurance premiums were predicted to skyrocket, but in fact they will rise an average of 5% for 2015. “One reason may be that insurers who came in high in 2014 found themselves beaten out for enrollments. 77 new insurance plans will be competing for customers in 2015.” (2)  The online application for new customers is down to 16 screens from the original 76 screens that scuttled the first website application.

A physician from Kentucky in an essay in the NEJM pointed out that the two Kentucky senators remain vehemently opposed to Obamacare despite the fact that 413,000 Kentuckians have gained health insurance coverage under the ACA law. Senate Minority Leader Mitch McConnell (R-Ky) has suggested that Kentucky could keep its health care exchange established by the ACA, Kynect, “even if the ACA is repealed”. (Does “have your cake and eat it too” come to mind here?) “It is unfathomable that they can continue to oppose the law and that geography can determine the adequacy of American’s care.” (3)

Government reports reveal that 1.4 million new enrollees have made selections of plans through December 5 through federal exchanges in 37 states. Reaching the CMS announced target of 9.1 million enrollees by 2015 appears to be imminent. The law’s “penalty” for individuals remaining underinsured started out at $95 (or 1% of income) annually in 2014 will go to $325 (or 2% of income) in 2015.

It is too early in its implementation to evaluate the ACA’s promised improvement of quality. A recent study of Massachusetts mortality rates after ACA implementation suggested that its effect has been positive, but many criticized the study’s conclusions as speculative and premature. Obamacare did create the Medicare Hospital Readmission Reduction Program aimed at reducing readmission within 30 days of hospital discharge; an expensive event supposedly associated with inadequate treatment during the first hospitalization or inadequate follow-up as an outpatient. The national readmission rate for Medicare dropped from 19% in 2007-2011 to 17.5% in 2014, “in part as a result of the ACA”.

An early sign of the success of Obamacare might be the very recent demand to expand its dental insurance benefits for children to adults via a proposed Comprehensive Dental Reform Act of 2013. (4) Look to this concept and the coverage of non-documented immigrants to become issues in the 2016 election. For those of you with a really long-term outlook, expect Hilary’s Affordable Veterinary Office Care (HAVOC) to be a hot issue in 2020.

Even during this very polarized midterm election some perceived a subtle shift on the Republican side from “Obamacare opponents” to “Obamacare critics”. They may be getting the message that a large portion of the citizenry is liking the health insurance coverage that reduces their stress and concern about the potential impact of uninsured illness on their life and pocketbook. Maybe more member of both parties will switch from Obamacare “opponents” to Obamacare “critics”, since we all agree that Obamacare, or whatever Hilary chooses to call it during her first term, can be improved.

References:
1. Bos Globe Nov. 18, 2014; pg A8
2. Cape Cod Times Nov. 1, 2014
3. The Affordable Care Act, 1 Year Later, NEJM 371;21, pg. 1960, Nov. 20 2014
4. Integrating Oral and General Health Care, NEJM 371:24, pg. 2247, Dec. 11, 2014

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Vol. 98 October 1, 2013 “Today’s The Day” for Obamacare*

September 30, 2013

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Today is the day that Obamacare really begins.

Thirty million uninsured and underinsured Americans can start signing up today for affordable health care insurance through healthcare insurance exchanges. A key factor for the success of the Affordable Care Act (ACA – the real name for Obamacare) is the addition of these new insurance premiums to the national health insurance pool from Americans assumed to be younger and healthier than people already insured by Medicare or Medicaid.

Though government “defunding” is hanging in the balance today, this day is pretty tame compared to that day in 1965 when Medicare was implemented. Several states actually mobilized their National Guard then in fear of the predicted “hordes of people descending on hospitals seeking medical care”. It never happened, of course, and Medicare benefits, as political candidates found out this past year, have become a “political sacred cow”, resistant to most attacks.

Obamacare elements that have already been implemented include requirements that insurance companies cover “essential benefits”and can not reject coverage of pre-existing conditions. As we muddle through this next stage of Obamacare implementation, here are a few things to keep in mind:

1. If you are on Medicare, Medicaid, an employer’s health insurance plan, you don’t have to do a thing. Just sit tight and let the dust settle.

2. You have until March 31, 2014 to buy insurance (“enroll”) through an exchange. The only other deadline is December 15, 2013 if you want your coverage to begin on January 1, 2014.

3. Don’t try to enroll in the first month. Let the glitches in websites get ironed out and wait for “navigators” to appear to help you understand your eligibility for and coverage of the various plans offered. Navigator training funding has been delayed by Congress. Navigators, by regulation, can NOT give you a specific recommendation, but will clarify your choices via internet and even “live chats”.

4. In those thirty-six states which have opted not to set up state exchanges the federal government has taken on the responsibility for providing this service. Unfortunately, the feds have a different name for these exchanges, “marketplace”, but they will offer the same help in finding the right health care insurance for you. Establishment of federal “marketplaces’ has been delayed in some states by “subpeona harrassment” from Congressional Committees trying to distract, or even cripple, the fledgling efforts of healthcare insurance marketplaces.

5 . If you are not eligible for Medicaid or Medicare and have no insurance now you may be eligible for a federal subsidy of your premium. To find out just plug in your own figures at the Kaiser Family Foundation website at http://www.kff.org and see what you could get. The short list of your information the website requests is : 1. income, 2. family size, 3. age, and 4. tobacco use (That last one is really interesting)

6. Verification of income for eligibility (by the IRS) will not be operational until 2015. In 2014 it will be based on the “honor system, so you can count on some tabloid bombshells about individual insurance frauds under the headline of “We Told You So!”.

7. The tax penalty for the individual who can afford health insurance, but opts out this first year is a paltry $95, so don’t sweat it.

8. The state exchanges and the federal marketplaces will be offering comparisons of four levels of insurance (Bronze, Silver, Gold, and Platinum) with increasing premiums and decreasing predicted out-of-pocket costs from different insurance companies. The plans offered in these exchanges will be better than 98% of current policies available to individuals according to www.healthpocket. com, a free website that collects no personal information.

The hoped-for long-range result is less of a tax burden on taxpayers who are currently paying for medical care for the uninsured via state and federal taxes.

During dinner the other night the conversation drifted to Obamacare, gradually became more intense, and with a soupçon of agitation one Obamacare opponent ** blurtd out, “How can anyone vote for a bill that is 3000 pages long?! Who the hell would read the whole thing?” The rejoinder, “How many pages does the Bible have?” was a non-sequitur conversation-stopper, but it got me to thinking.

Like the Bible, Obamacare is open to interpretation, and your view of it may depend on your political party rather than your religion. Both are vulnerable to quoting out of context in support of opposing viewpoints. Both have overall, encompassing goals which can often be lost, or at least obscured, by the minute details of excess verbiage.. Both have, and will continue to have, “unintended consequences” (like the Inquisition or the Crusades) that we mere mortals have to deal with.

Everyone certainly agrees that Obamacare is NOT divinely inspired. Congress has clearly rejected the idea of a central authority (the Pope, or Donald Berwick, MD as “Czar” of CMS). The Bible is no longer chained in the dark in the back of the church, and Obamacare is now out in public, out in the market place. We shall see eventually how well it meets the needs of our citizens for affordable health care.

It’s success or failure will be clear only after Obama is out of office .
What will we call it then?
ACA won’t stick because we have learned to distrust most three letter acronyms like FBI, CIA, and NSA.
“Christicare” might do, but it sounds awfully religious.
“Cruzcare” sounds like an automobile speed controller.
If Hilary becomes President, she’ll probably put up with the name Obamacare as it is successfully implemented during her first term. Then, during her second term, she’ll dust-off her previous plan for universal health care and call it, what else but, “Clintoncare”.

By the time the Republicans win the presidency the Affordable Care Act will have so many beneficiaries (voters) that they won’t dare to kill it, and they will have to rename it.

I wonder WWJD? ***

* This was Mel Fisher’s  rallying cry every day for 16 years when he and his crew set out in boats searching for sunken Spanish treasure in Florida waters. He found the treasure of the Atocha  with the help of an archeologist named R. Duncan Mathewson.

** I call them “opponents” not “critics” because they really do desire Obamacare to die. In my mind “critics” suggest ways to improve plays, films, books, or programs and rarely ask for their abolishment. We should all act as “critics” of Obamacare in the coming years.

*** “What Would Jesus Do?”


Vol. 52 October 1, 2011 Medical Costs of Prisons, Medicare Cost Projections

October 1, 2011

Please excuse the September 15th hiatus. The cyber-devils made my website go down and it took a
while for my consultant to diagnose the problem between the website host and the domain registry.
It was more like “Who’s On First” then “Tinker to Evers to Chance”.

.

.
25% of all Americans with HIV, 33% of Americans with hepatitis C, and 33% of all heroin users spend some time in prison. (1)

U.S. has 5% of the world’s population and 25% of the world’s prisoners. That was 2.8 million prisoners in January 2008.

40% of federal inmates have mental disorders which is 4X the rate in the general population. If you count all types of jails, the number peaks at 60%. The largest facilities housing psychiatric patients in the U.S. are jails. 7% of inmates receive mental health treatment while incarcerated.

Released prisoners are 129 times more likely to die of a drug overdose within 2 weeks of release then the general population. Most are uninsured. They are terminated by Medicaid upon incarceration and are ineligible to re-enroll upon release in most states. The Affordable Care Act permits former prisoners to receive health care coverage.

State correctional spending is the fastest-growing sector of government spending other than Medicare.

Rhode Island spends an average of $41,346 per year per inmate. That jumps to $109,026 per year per inmate for maximum security inmates. Massachusett’s average annual cost per inmate is closer to $46,000.

The $5.6 TRILLION surplus projection in 1995 that turned into a $6.2 TRILLION deficit projection was spurred in part by the $272 BILLION prescription drug coverage (Part D) and the $1.9 TRILLION tax cuts passed during George Bush’s administration (plus a couple of wars, of course). (2)

The savings in Medicare costs projected by “health care system redesign” and changes in coverage and/or benefits will have their first real effect in 2022. “People say you can’t solve the deficit problem without dealing with health care, but you can’t solve the near-term deficit problem by dealing with health care either.” (3)

Under Rep. Ryan’s proposal, if you are under 55 years old you will pay $12,500 out-of-pocket for your health care  while the government will spend $8,000  in 2022 . Under current policy that cost to you would be $6,250 with the government paying $8,500.

$500 BILLION has already been cut from Medicare costs by reducing payments to Medicare Advantage plans (HMO-like plans that studies showed did not reduce medical costs for enrollees) and to acute care hospitals (Helps explain all the recent public scrambling for “policy reviews” and pleas for help coming from many urban acute care hospitals in most states.)

Medicare is projected to consume 6% of the GDP (Gross Domestic Product) in 2035. Raising the eligibility age for Medicare from 65 to 67 in 2014 would reduce Medicare costs only about 0.4% of that 2035 GDP. (5)

If you are 65 years old today you paid an average of $150,000 in Medicare and Social Security taxes over your lifetime and will receive about $350,000 in retirement benefits. A 46-year-old under current policy will pay over $200,000 in Medicare and Social Security taxes and will receive over $500,000 in retirement benefits. (6) Hence, all the discussion about higher premiums for the affluent, restrictions on gold-plated Medigap plans, and increases in co-insurance and deductible amounts.

My Conclusions:
1. It seems to cost more to consider drug addiction a crime than to treat it as a medical disorder.
2. Medical technology will continue to improve and cost more, so be prepared to pay more taxes and/or higher premiums for your health care insurance at any age.

References:
1. Medicine and the Epidemic of Incarceration in the United States, NEJM 362;22 June 2, 2011, Rich et al
2. Money, Pat Regnier and Amanda Gengler, October 2011, p.107-115
3. Henry Aaron, economist, Brookings Institute, ibid
4. Kaiser Family Foundation, Congressional Budget Office, ibid
5. Congressional Budget Office, ibid
6. Urban Institute, ibid


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