Why should you care?

Everywhere you look, the healthcare repeal bill is there and if you are like most people, you are concerned and fed up with hearing about it. The question you might be asking yourself is why is it such a big deal and why should you care?

 

health reform 320I’m sure the one thing that we can all agree on is that healthcare is important to everyone and it is expensive. When your hurt or sick, you want to be able to get treatment immediately. In emergent situations, you will receive care need regardless of ability to pay. However, after you are feeling better, you will receive a bill for the care you received. If you have insurance, this bill will definitely be less than if you don’t have insurance. Unfortunately, most people who don’t have insurance usually don’t have extra money to pay for unexpected medical expenses. Another area of concern is for people who have chronic medical conditions, medical bills are an ongoing, permanent part of their lives. They need to visit their doctor on a regularly basis in order to stay on top of their condition to prevent an exacerbation that would cause them to have to go the hospital for emergency treatment and, therefore, causing an increased monthly bill. While there is no doubt that the current healthcare plan currently in place is by far from perfect, the idea of repealing it to replace it with something else is not only time consuming but irresponsible of our government officials. Instead, they should be acknowledging what we currently have was a good first step and then find a way to improve it. So, how does the new healthcare bills that is being proposed by the House and the Senate measure up in terms of the benefits they will provide versus the disadvantages that they most likely will cause to you or someone you care about?

There are several major points in the Affordable Care Act (ACA or Obamacare) that would be changed under the American Health Care Act (AHCA–House plan) and the Health Care Freedom Act (HCFA–Senate plan as of 7/27/17, which is a revised version of the Better Care Reconciliation Act, or BCRA, that they proposed on 7/20/17). The Congressional Budget Office (CBO) has examined the current plan with the proposed versions from the House and Senate and noted some significant differences in coverage and several other areas of concern.

Let’s look at the number of people who were uninsured before ACA, currently and projected under the new plans. The National Center for Health Statistics shows that before 2010, when the ACA became law, that 15% of Americans were uninsured and the number was projected to continue to rise. After the ACA was put in place until 2016, it shows that number decreased to about 10% of Americans who are without insurance. According to the CBO, if no changes were made to ACA the number of uninsured would remain at 10% or even decrease by the year 2026. By implementing the House plan (AHCA) the number of uninsured is estimated to be 19% by 2026 and it is estimated to be 18% if the Senate plan (HCFA) is put into effect. This may not seem like a big difference, but it would be 22-23 million more Americans uninsured by 2026 than are currently are uninsured.

The way the new plans are being structured would affected people who have low- to moderate-income, the elderly and those with pre-existing conditions. The reason for this is the new plans get rid of the subsidies that currently help people pay for health insurance. Instead, people would be offered tax credits, but these are based on age alone and not income. So, this means that if you are younger, you are going to get less help to pay for health insurance regardless of your income. Also, both the AHCA and HCFA would allow insurers to be able to charge older consumers five times more than younger consumers. According to the CBO, a person who is 64-years-old making $26,500 a year and is currently paying $1,700 a year out-of-pocket for health insurance would see that cost rise to $14,600 a year out-of-pocket expense for the same plan under the proposed healthcare plans. At the same time, a 40-year-old making the same $26,500 a year and is also paying $1,700 a year for health insurance would see their out-of-pocket expense rise to only $2,400 under the proposed plans. As we age, individual costs for healthcare rise because we use it more. As you can see, the proposed changes will cause elderly people (especially those with low-income) to have a significant financial burden that most likely they will be unable to meet. In order to have some health insurance, they will probably have to pick less expense plans that don’t provide an adequate amount of coverage and have to pay for healthcare services out-of-pocket directly. In cases where they don’t have the means to be able to pay, they will forgo getting necessary treatment and end up being sicker and requiring hospitalizations that are more expensive than preventative care. At any point in this process, they are having to spending a significant amount of money on healthcare that they don’t have. Since most people who are elderly have some form of pre-existing conditions, they could be denied coverage altogether by insurance companies under the proposed healthcare plans. The plans also reinstate annual and lifetime health insurance caps. Essentially, people who are sick would run out of coverage or be denied coverage.

Besides cutting subsidies, the proposed AHCA would reduce funding to Medicaid by providing a fixed amount to each state every year with an increase that is tied to inflation, but ultimately, it would remove the expansion that was created under the ACA by 2020. Currently under the ACA, the expansion in Medicaid is covered by the federal and state governments and the amount that each state receives depends on usage of medical care in each state by Medicaid patients. The HCFA retains the expansion but also has fixed amounts that states would receive each year and the rate of increase for inflation is less than that was proposed in AHCA. This would cause deeper cuts to be made. The thought is by reducing federal spending, the individual states would be responsible for making up the difference in the amount of money that is needed by Medicaid patients in their respective states. The states who are using the expansion have said that they don’t currently have the capability to do this and by cutting the funding for the expansion as proposed, it would leave millions of people uninsured.

Another area of concern is women’s health. Currently under ACA, insurers are required to provide a basic set of benefits to women that include maternity care, pediatric care and contraception. Under the proposed AHCA and HCFA plans, not only can states seek waivers to allow insurers to drop some of this coverage, but Medicaid would no longer have to offer these benefits. This would greatly impact low-income women’s ability to obtain appropriate care. Planned Parenthood funding also falls into this area. It is important to note that according to their most recent annual report, only a small portion (3%) of the services they provide yearly are abortion procedures. The majority of their services that are used are STD testing/treatment (45%), contraception (31%), pregnancy/prenatal care (13%) and cancer screening/prevention (7%). Over half the women who use their services have incomes at or below the federal poverty line and would not have access to these services otherwise. As it currently stands under ACA, the federal funding that goes to Planned Parenthood is for family planning and other medical services (none of the funding is allowed to be used for abortions). Almost half of the funding for Planned Parenthood comes from government grants/reimbursements. Without this support, they would not be able to offer vital services to women who need them.

What is the purpose of trying to change ACA? The main reason is to reduce the federal deficit and give more control over healthcare back to the states to offer what services that are needed in each state. According to the CBO, the ACHA cuts the deficit by $118.7 billion dollars and the HCFA cuts it by $321 billion by 2026. Another consideration is that under ACA, insurance companies and medical device makers that benefit from new customers under the law pay more in taxes. Also, people with incomes over $250,000 pay more in taxes. Under the new proposed plans, these taxes are eliminated. There is no mention of any new taxes to help offset the loss of revenue.

Without a doubt, the current plan (ACA) needs tweaking in order to provide better services at a reduced cost. There has to be a way to do so with disadvantaging millions of people. One way is to provide a better screening process for admittance into Medicaid and to monitor those on it to ensure that there is a continuing need. Another component is to monitor those billing Medicaid for services rendered and checking to make sure that they are compliant. This will help to cut down on cost tied to fraudulent claims and decrease the number of unnecessary services being provided. Insurers need to do a better job of explaining to consumers coverage levels and how by having lower monthly premiums, you’ll pay more out-of-pocket for co-pays and have a higher deductible. Basic insurance coverage usually falls into this category. Basic coverage should provide access to at least preventive screenings and coverage for catastrophic events. By preventing and/or treating illnesses earlier rather than later, this will help decrease cost of doing more expensive testing/procedures/hospital stays the can occur if illnesses are left unchecked. In addition, we need to look at the overall cost of healthcare. It is far more expensive to get treatment here in the United States when compared to other similarly develop countries. If we standardize the cost of tests/procedures than that helps to reduce the amount insurers have to pay and will help to drive down the costs of the tests/procedures. If hospitals or doctors charge more than is covered by insurance for a procedure, than it is up to the patient if they want to pay the difference out-of-pocket to go to that hospital/doctor. If the government negotiated with drug companies, medical supply companies and for costs of services in a bulk they would get better rates overall. Medicaid does this with drug companies for its prescription plans and they get the best prices on pharmaceuticals compared to everyone else. Another area where this streamlining of procedure/test/service costs is in the administrative costs of hospitals and medical facilities. Often, they employ a significant number of people to figure out how to bill different insurers for the same things. By having a standardized approach to billing, it would the eliminate the need for all of the administrative personnel. An additional consideration is not imposing annual and lifetime limits and making sure to cover people with pre-existing conditions. By not doing this, it would save insurers money but the financial burden would be placed with the consumer. Most likely they would choose to delay getting care because of concerns over cost. This means that they would be sicker when they finally get care and be in need more expensive care in order to get well again. Part of eliminating cost from healthcare should include looking at rewarding doctors for providing quality care that costs less. Many doctors practice “defensive medicine” because they are afraid of being sued by their patients so then tend to over order tests even if they know the answer. We need to better educate consumers about the appropriateness of testing and encourage doctors to provide the quality care that they have been trained to without doing unnecessary testing. An area we should look at is to make the subsides that are being granted based off of income, age and usage. By allocating the funding where it is truly needed, it will help reduce overall cost. An added step in this process is to continue the taxes that are currently in place for medical supply/service companies since they are directly benefiting from the purchasing/use of their products by consumers. A final point to consider is the gradually shifting of power to the states to help fund their own versions of Medicaid. By helping each state to find a way to increase funding for their own programs. It will help to keep insurance coverage to those who need it and allow the financial burden of healthcare to be spread more evenly.

While there are some definite improvements to ACA that should be made, it can be done while limiting the amount of disruption of health insurance to a significant portion of Americans. We need to look at a variety of solutions and be creative in how we approach the issue. The outcome will be worth it because more Americans will have health insurance and it will help to improve the delivery of healthcare for many years to come.