Health Care Access and Payment–November 2012

A good question posed: What really happens to healthcare when the election dust settles? The continued implementation or the repeal of Obamacare, the Affordable Care Act, is proposed as a difference that turns on the tally of the votes for president for 2013 to 2017. I think the answer is yes, but for reasons not included in the rhetoric of party platforms.

The chances of outright repeal are slim to none, because the math doesn’t work. The votes for repeal have split along party lines. The House with its Republican majority has voted repeatedly for repeal but can’t effect it. The votes needed must be found in the Senate. A supermajority of 60 out of 100 senators is needed to repeal a law. There are 47 Republican senators, and 51 Democrats plus two independents with Democratic-leaning views. Thirty-three seats are at issue in the election and a Republican majority is possible, but a change of views by voters will not produce sixty Republican-leaning senators.

A procedural option theoretically can reduce the votes needed for repeal to 51, an ordinary majority.  

That repeal could be included in a budget reconciliation bill, an “omnibus” of the type that has carried many changes over the years that are deemed unsuited for debate on the Senate floor. However, the 1985 Byrd Rule (after Robert Byrd, the long-time senator from West Virginia) requires that an “amendment” to current law must be budget neutral, i.e., it can neither increase nor decrease total expenditures. To create that amendment, there is a cumbersome process intended to assure input from Senate interests and views, by which each committee charged with some aspect of law affected by the change must provide its recommendations to the Budget Committee, which then must craft a “reconciliation” that meets the budget neutrality and other requirements of the Rule. Given the substantial cost of repeal, this appears to be an option invoked by those who enjoy the speculation for its own sake.

The ideological divide of influences is characterized in the election platforms as business versus government, an exercise in “who do you trust?” The business interest is represented by preferences of the insurance industry to maximize profits by offering an array of policies for different consumers at the most attractive prices. The government interest in the reforms is broader coverage offered by means of informed consumer choice, including affordable costs. These are appropriate interests for each entity. Health care provider interests fall in both camps. The elephant in the room is whether health care is really a consumer good, or a necessity that requires access to work for our country.

Many Americans don’t have health care access; that is widely acknowledged. The need to insure in order to receive health care, at least hospital care, is an unavoidable fact of our delivery system. The days of paying the bill off as you can exists only for a few patients in a few health care markets that are essentially (perhaps regrettably) off the grid. A patient without an insurer to negotiate lower rates pays top dollar for care.

The hot button issue is that a significant and highly vocal segment of voters don’t want to be compelled to have coverage. The individual mandate compels one who is not governed by employment or expanded government coverage to buy a health insurance policy with a minimum package of benefits, or pay a tax. A Republican administration and legislators might negotiate repeal of this provision for trade-offs with advocates favoring broad access to coverage, but the impact on federal expenditures will still be uncomfortable for its anti-deficit proponents.

Beyond that, implementation of the ACA or “reform of the reforms” describes a process to take place on a piecemeal basis. Important matters will take place at administrative and technical levels. The workhorse for implementation is the state health information exchange (HIE). HIEs have many functions that must go from zero to sixty mph in a very short time, and each state must design an entity as a government agency or a nonprofit corporation with participants capable of fulfilling their roles. In the very unlikely event that the requirement for an HIE could be repealed, the concept keeps its vitality and momentum. States have invested in creating them and expect to rely on their functions. States that have not done that work will have even more difficulty meeting the 2013 deadline.

A critical task for an HIE is certifying the comparable value of policies that can be listed for purchase by employers and individuals. In order to compare, policies need common benefits and stable beneficiary pools.

Comparability will be possible whatever can be done to existing law. However, insurer interests favor more lean-benefit policies with risk pools including only younger, healthy people and cheaper policies for those who want to take more risk of high out-of-pocket costs. The more room for variation, the harder it will be to compare policies. In addition, small risk pools are more likely to become unstable when a few beneficiaries have very high costs, and high out-of-pocket coverage puts the beneficiary at risk of medical bankruptcy. This is an earmark of the current system of insurance marketing which appears to be favored by the business friendly platform. Administrative and technical changes will surely support or withdraw support for comparability.

The same polarity invites changes that limit the effectiveness of insurance reforms like exclusions for preexisting conditions, requirements to include more categories of people on family plans, and the lifting of lifetime caps on benefits. The required 80% return of premiums in the form of benefits is a complex and prospective calculation. Repeal of those ACA provisions is politically impossible because too many voters would be deprived of benefits they have and want. But administrative and technical changes will affect them.

States don’t have the clout of the federal government so they are more vulnerable to powerful insurance industry lobbying for HIE- level changes that can add to profits. The business oriented platform seems to encourage consumer choice and competition while taking strength from a most important consumer tool. The mechanisms to enable consumer choice will be empowered or disabled state by state at a decision making level that the public will barely note and is unlikely to understand.

Access to health care will depend on the existence and function of state health information exchanges. Who is president is not the sledgehammer it is depicted to be, but it is an important influence in a very complicated evolution, and both platforms agree that reform is necessary.


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