Wednesday, July 5, 2017

Get healthy America! The ACA and some changes ...

Can anyone explain how we arrived at this point in history?  You know, the one where the most powerful nation in the history of the world cannot put together an effective system ensuring affordable healthcare for its citizens.  This is where the United States finds itself at the moment.

Developing technologies, medicines, training personnel about complex issues, and administering an effective oversight of the health care system presents a financial and logistical nightmare.  We should be astonished our system functions as well as it does.  However, this nation must implement changes to the existing legislation and structures or millions of families will struggle to stay healthy and financially solvent.

Unpaid healthcare bills have contributed to the increase in healthcare costs for Americans.  Many individuals lacked health insurance and required medical attention.  By law, hospitals could not deny certain services, yet the patients could not pay for these services out of pocket.  Thus, hospitals did not receive compensation.

These medical facilities made decisions to increase costs for various services to make up for lost revenue.  The gradual increase of these costs affected the individuals who paid out of pocket for their health care and those who received health insurance in some capacity.  This was a particular problem for health insurance companies, who saw their own payments to hospitals increasing.  These companies, in turn, passed on these costs by increasing health insurance premiums.  

In 2010, President Barack Obama put together legislation in an attempt to correct this problem.  His signature piece of legislation, known as the Affordable Care Act (ACA), sought to reduce healthcare costs by requiring that every American have health insurance.  Of course, the issue is more complex.

The ACA operates under the principle that if all Americans have health insurance, the number of unpaid medical bills will decrease.  Medical facilities could then lower various prices for services, thereby easing the burden on health insurance companies and those who pay for the premiums.  Hospitals would be happy because they would receive their money and people would be happy because they received necessary care.  

Prior to the ACA, Americans received health insurance through a variety of ways:  workplace providers, personally purchased insurance, Medicare for seniors, and Medicaid for low-income or disabled Americans.  Despite these various ways of finding health insurance, some citizens slipped through the cracks.  What does the country do with Americans whose jobs do not provide health insurance, yet that same person makes too much money to qualify for government assistance?

These individuals lack the financial resources to pay for insurance on their own and they are often too young to enroll in Medicare.  Their recourse was to hope they would not face a major illness or not pay their medical bills.

The ACA sought to correct these problems with some serious policy changes, which included: 

  • An individual mandate that required a person have health insurance or they must pay a fine
  • A requirement that any business employing 50 or more full-time people must provide health insurance for those employees
  • A child could stay on a parent’s health insurance until the age of 26
  • Insurance companies could not place a cap on benefits
  • A person could not be denied health insurance based on a pre-existing health condition
  • An expansion of the poverty line to include more Americans to qualify for Medicaid
  • The creation of an online ‘exchanges’ where citizens could examine various health insurance plans from companies.  The Americans who still did not have health insurance would benefit from being able to look at all the options.  Also, the hope was that having these companies post their coverage plans in the same online marketplace would create competition, driving down health insurance premiums

Conservative citizens in the nation objected to many of these major components for a variety of reasons.  No business owner likes having the government place additional restrictions on their livelihood.  Requiring them to provide health insurance would create a financial burden that cuts into profit margins.  The individual mandate also amounts to the government requiring a citizen purchase a good or service, which runs counter to the freedom to choose how we spend our money.  The expansion of Medicaid also means taxpayers will further subsidize the health insurance of people who are technically above the poverty line.  These represent valid concerns of many Americans.  

The implementation of the ACA has produced mixed results (which is typically the case with most legislation).  These policies have undoubtedly assisted low-income Americans, providing more insurance options and a greater likelihood that they will be able to pay for healthcare.  The expansion of Medicaid provided immediate relief to citizens across the nation.  Young people remained insured under their parents’ plans while at the ages where they searched for jobs that provided their own health insurance.

The ACA’s passage and implementation also positively affected the cost per person of health care spending and slowed the growth of Medicaid expenditures over the long run.

Millions of Americans received health insurance who otherwise probably would not.  This surely saved lives and improved quality of life for so many individuals.  Yet, despite some successes, there is a problem which still exists.  The ACA remedied the healthcare issues of lower-income Americans, but created a problem for middle-class Americans.

States and the federal government created online health insurance exchanges where individuals who still did not have coverage could shop, but the competition between companies has yet to see a reduction in those premiums.  Unfortunately, these premiums have increased since the implementation of the ACA.

One of the reasons for increases in health insurance stemmed from changes in the minimum coverage that insurance companies were required to offer by law.  Many Americans had no choice but to choose a new healthcare plan because insurance companies could no longer offer those old plans.  These individuals experienced a level of frustration after President Obama had touted, “If you like your healthcare plan, you can keep it.”

These Americans faced the prospect of paying far more in premiums for a plan they did not want.  They also did not qualify for Medicaid or Medicare, and their job did not provide insurance.  That puts millions of people in a difficult position.

Insurance companies also contributed to the increases in premiums.  When the ACA became legislation, companies could no longer deny individuals a policy based on pre-existing conditions.  Americans who once could not access health insurance now had policies, which dramatically increased the money paid out to medical facilities by insurance companies.  

The decrease in profit margin, or outright losses, forced insurance providers to increase premiums.  In other instances, the companies singled out the specific insurance policies that lost money and eliminated them as options.  The loss of lower-tiered options put individual consumers in a difficult position because the remaining policies offered by insurance providers are typically too expensive.  Generally, this leaves families with two discomforting choices:

  1. Pay the higher premiums and reduce their expenses elsewhere
  2. Pay the fine and forego health insurance with the hope of not suffering a major illness

Americans who fall into this category do not have the financial assets necessary to access medical care, nor can they afford to pay a fine for not having health insurance.  Also, these same working Americans contribute tax dollars to a Medicaid program that pays for the health insurance of others.  This represents a problem that must be solved.  Shifting the problem of health insurance from one socioeconomic group to another is unacceptable.

Since the ACA became law, Republicans have campaigned that they would ‘repeal and replace’ this legislation.  After the 2016 elections, they have been given the opportunity to do that.  The GOP maintains a majority in the House, Senate, and they control the White House.  Republicans have proposed the American Health Care Act of 2017, dubbed 'Trumpcare' as a response, which would:

  • Roll back the Medicaid expansion introduced by the ACA
  • Repeal the individual mandate that requires a purchase of health insurance
  • Reduces the penalty to zero on businesses who do not provide insurance to employees 
  • Repeal numerous taxes implemented by the ACA
  • Keeping private market rules from the ACA (no denial of pre-existing conditions, no cap on benefits, etc.)
  • Retaining the health care exchanges established by states and the federal government
  • Retaining the 5:1 ratio on what insurance providers could charge the oldest customers compared to the youngest (seniors tend to incur more medical costs, thus have higher premiums)
  • Encourage the use of Health Savings Accounts by increasing the amount that can be contributed to these accounts with paying taxes
  • Add an option that allows individual states to mandate employment as a requirement to receive Medicaid funds for non-disabled, non-elderly, and non-pregnant adults.
  • Prevents federal Medicaid funds from being used on any services from Planned Parenthood
  • States that insurance policies offered by providers do not have to include abortion services 

The provisions in this GOP plan have not been well received by the public or on Capitol Hill.  According to the latest estimates from the Congressional Budget Office (CBO), the American Health Care Act would cause more than 23 millions Americans to lose insurance coverage.  Additionally, the repeal of the taxes from the ACA would benefit wealthier Americans and this would negate most of the savings from rolling back the Medicaid expansion.  Within 10 years, the rate of uninsured Americans would move from 10.4% to 18.6%.

The ACA has corrected problems for millions of Americans, particularly those with fewer financial resources.  Despite successes, health insurance premiums still continue to increase.  The problem shifted from one group to another, and the GOP response to the ACA is deficient, to say the least.  

Where does this leave us?  What realistic solutions exist for providing affordable and effective health insurance to all citizens?  

Open insurance competition across state lines. One issue neither the ACA or its replacement option have addressed is permitting insurance companies to operate nationwide.  Currently, insurance companies must actually be in a state to offer policies to those citizens.  A person living in Florida could not buy a health insurance policy from a company that is based only in California.  The prohibition of interstate activity means each state has fewer providers and thus, less competition for the best prices and policies.  

Allow for more customization of insurance plans.  The federal government now creates most of the regulations involving what insurance policies must include, they could scale back some of these regulations to allow an individual customer to decide which features they want in their insurance policy.  For instance, does a single man need a policy that covers fertility treatments and birth control?  

In this instance, scaling back some of these regulations would be beneficial to individual consumers.  If insurance companies were permitted to make a menu of options for coverage, it would allow individuals to create a plan they can afford which allows them to receive health insurance.  Additionally, these companies can tailor their plans to customers and compete nationwide for the best prices.  

The ACA provides minimum standards for every health insurance policy, and we value this particular facet of the law.  Plans must cover hospitalization, prescription drugs, emergency services, and laboratory services.  Most individuals will need this for themselves or for their family at some point.  Yet, some of these services are not necessary for all individuals.  Do couples who do not want children need maternity and newborn care, or pediatric services?  What about singles who neither need nor want this option?  If an individual's life circumstances change, they can alter their policy to meet those needs.

Create more incentives for preventative care.  Prevention is the key to good health, and good health translates to lower costs for insurance companies.  Providers already give consumers some incentives for good health, such as rate reductions for individuals who do not use tobacco.  Insurance providers could offer further discounts for preventive care or the federal government could create available tax credits for certain preventive care.

Reduce fraud and improper payments in Medicare and Medicaid.  A considerable amount of fraud occurs annually where theses two government programs are overcharged and scammed out of millions of taxpayers’ dollars.  In 2012, the FBI arrested more than 100 medical personnel, including doctors, who billed the federal government for more than $452 million in Medicare services that were not given.  Three years later, a group of 243 individuals were arrested by authorities for racking up more than $712 million in fraudulent charges to Medicare.  

Of course, these dollar amounts represent a pittance of the fraud occurring annually.  The Department of Health and Human Services estimates that potential fraud and improper payments make up as much as 10% of Medicare and Medicaid expenditures.  This translates to billions of dollars that could be funneled to any number of other programs or returned to taxpayers in some capacity.

Examine healthcare systems from other industrialized nations who offer the same services at significantly lower costs.  There is no shame in asking others for assistance in solving problems.  Specifically, European models might provide answers as to how to reduce prices for certain medical services.  Why does the same MRI cost three to five times more in the United States than it does in France or Great Britain?  Why does a hospital stay in the United States cost nearly three times as much as the same stay in a Japanese facility?  

Individuals in other nations visit the hospital far more frequently, receive comparable care, and use the same pharmaceuticals.  It would be wise to examine these systems and implement changes to alleviate some of the pricing problems.

Create nationalized standards for forms, computer software, and other administrative aspects of the health care industry to streamline the process and provide easier sharing of key information.

Keep most aspects of the ACA, particularly the expansion of Medicaid.  The current rules and regulations about health insurance corrected problems that hurt lower-income Americans, but premiums increased for a large number of Americans.  Changing legislation to shift the problem back to what it was does not represent a viable solution. 

An element of compromise can provide a solution that might have a positive effect.  With any public policy, the government should evaluate its effectiveness.  Specific legislation can then be crafted to refine that policy and correct problems.  In this case, scrapping the system is not the appropriate response.  

Yet, the health insurance issue has become a political pawn whereby Democrats do not want to give up any part of President Obama’s signature piece of legislation and Republicans refuse to publicly admit that the ACA has any good elements.  This policy area represents the current incarnation of the inability of our two major parties to do what is right and beneficial for American citizens.  When our two major political parties stop using policies as tools to gain power, perhaps they can become more cognizant of the fact that they are not the only group who has good ideas.

Require all sitting members of Congress to purchase health insurance on the market exchanges.  The men and women in our lawmaking body might have the ability to sympathize with Americans who face difficult choices, but unless it directly affects them, they will hesitate to change the status quo.  

Most members of Congress and the president will not face the prospect of not having adequate medical care because their net worth far exceeds the typical citizen.  If members of Congress were required to purchase health insurance on the individual market, at least they would have a small semblance of the impact of their votes.

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