Many of us breathed a sigh of relief with last week’s Supreme Court decision. The consensus opinion was the challenges were over and we can now smooth out the edges of the ACA and enjoy the benefits of health care for all. In a word….Hardly!
The universal plan was needed, but designed by committee in order to get it passed. And yes, we need Congress to clean up the rough edges, but there are more extraordinary issues that will be apparent soon enough that will call for more dramatic action. For example:
- The individual deductibles are at draconian levels. Often $2500, $5000 or even $10,000 per year. The good news ..you have health insurance and it will be affordable. The bad news is in the absence of a serious illness or hospitalization; it won’t be of much use. We need to get the deductibles down and that will cost money, lots of money;
- The outrage of employers has not yet been felt. It will be and it will be loud. An employers requirement to provide coverage will undoubtedly be paid for by deferring employee raises, or new hiring and probably both;
- The hidden federal cost covering insurance company losses will come home to roost. This first payment is $7.9 billion that Uncle Sam will reimburse insurance companies for their losses when underwriting the ACA. There is much more to come;
- Finally, insurers are already announcing some enormous rate increases that recognize their losses and the fact that government back reimbursements are not forever.
So what needs to happen? First Congress must act to smooth out the inconsistencies and make structural changes so implementation can work smoother, better, cheaper. Secondly, government must understand that cost savings or cost containment, whatever they want to call it does not mean simple ratcheting down the providers reimbursement rate. They are already embarrassingly low and more and more providers are refusing to accept Medicare and the networks for the ACA are tiny and difficult to access. And finally, allow the free market to react and innovate some workable affordable solutions for high deductibles, affordable plan changes, etc.
Our conclusion is there will be more pain before we have a viable and affordable structure for all of America.