Posts Tagged ‘High-deductible healthcare plans’

Is Medicare in Peril if the Supreme Court Rules Against the ACA

Monday, April 30th, 2012

Could there be collateral damage if the Supreme Court rules to overturn the Patient Protection and Affordable Care Act (ACA)? Some healthcare experts are warning of potential collateral damage if the Supreme Court strikes down the entire ACA: potential chaos for Medicare.  “The Affordable Care Act has become part and parcel of the Medicare system, encouraging providers to deliver better, more integrated, better coordinated care, at lower cost,” said Judy Feder, a public policy professor at Georgetown University and former Clinton administration health official.  “To all of a sudden eliminate that would be highly disruptive.”

Sara Rosenbaum, a professor of health law and policy at George Washington University, is more blunt: “We could find ourselves at kind of a grand stopping point for the entire healthcare system.”  It’s not only Democrats warning of potential problems.  Gail Wilensky, who ran Medicare and Medicaid during President George H.W. Bush’s administration, doesn’t think it’s likely that the court will strike down the entire health law.  But if it does, she warns, “it seems like it takes everything with it, including those aspects that are only very peripherally related to the expansion of coverage.”

One reason that so many experts are concerned is that the ACA altered the payment rates for nearly every type of healthcare professional who treats Medicare patients.  Every time Medicare sets a payment rate, it must cite a legal authority.  Since 2010, according to Rosenbaum, that legal authority has been the ACA.  If the law is ruled unconstitutional, she said, every one of those changes “doesn’t exist anymore because the law doesn’t exist.”  The result?  “You have agencies sitting on two years of policies that are up in smoke,” she said.  “Hospitals might not get paid.  Nursing homes might not get paid.  Doctors might not get paid.  Changes in coverage that have begun to take effect for the elderly, closing the donut hole might not happen.  We don’t know.”

Writing for the Huffington Post, Ethan Rome, Executive Director, Health Care for America Now, says that “The Supreme Court will uphold the ACA not only because it’s constitutional, but because to do otherwise would impose a massive judicial intervention in one of the economy’s most complex sectors and derail a train with millions of individuals and businesses on board.  If the conservative justices disregard decades of legal precedents and strike all or part of Obamacare, they would not merely be tearing down the most sweeping piece of social legislation since Medicare and Medicaid, they would be taking away substantial consumer protections and benefits from millions of America’s seniors, families and small businesses.  The court would have to take responsibility for dismantling the law piece by piece, a task as difficult as it is unconscionable.  The law is two years old.  Implementation is moving forward, and hundreds of complicated provisions are in effect, helping millions of Americans.  States, businesses, doctors, hospitals and insurance companies have undertaken major, costly changes in anticipation of the improved insurance marketplace developing right now.  The fact is that serious wreckage would result from a bad decision.  Attempting to unscramble this omelet would be a national nightmare.”

Politico’s J. Lester Feder offers this perspective. “If America is hoping a Supreme Court ruling will end the legal uncertainty hanging over the healthcare system once and for all, there’s a chance it could be sorely disappointed.  Most legal experts are hoping the Supreme Court will give a clear thumbs up or down to the healthcare law.  But they’re worried about the possibility that, if the court strikes down just part of the health law, it could outsource the job of figuring out precisely which provisions of the gargantuan law stay or go.  That could mean at least another year of legal proceedings before the country — and the states that have to build the health exchanges — really know the rules its health system will operate under.  And that doesn’t even include the wild card of the election.  The parties challenging the law attempted to head off this scenario by specifically asking the court to consider whether the individual mandate could be severed from the rest of the law.  But if the Supreme Court decided it lacked the capacity — or the desire — to settle questions of how dependent the various parts of the law are on the individual mandate, it could remand the case to the lower courts to work through the details, legal experts say.  Another outside possibility is that the Supreme Court could appoint a ‘special master’ to sift through it under the high court’s supervision, though special masters usually oversee complex settlements or disputes among states, not dismantling politically charged legislation.”

If the unthinkable happens and the Supreme Court does strike down President Barack Obama’s signature piece of legislation, employers and insurance companies — not the government — will be the primary drivers of change over the next decade.  They’ll borrow some ideas from Obamacare, and push harder to slash costs.  Business can’t and won’t take care of America’s 50 million uninsured.  Workers will pay more of their own medical costs as job coverage changes to plans with higher deductibles.  Another part of the equation will be tax-free accounts for routine medical expenses, to which employers can contribute.  Employees and their families will be steered to hospitals and doctors that can prove to insurers and employers that they deliver quality care.  These networks of medical providers would earn part of their fees for keeping patients healthy, similar to the accountable care organizations in the ACA.

High-Deductible Health Plans Equal Less Healthcare

Tuesday, May 3rd, 2011

Americans who have high-deductible health plans tend to not get necessary medical treatments whether they are low-income people with chronic health problems or healthier or higher-income people, according to a study by RAND, a non-profit research group, and Towers Watson, a consulting firm.  The researchers analyzed healthcare claims data from 59 large companies, examining first-year experiences with high-deductible plans comprised of more than 800,000 families nationally between 2003 and 2007.

Medical spending declined among all families with high-deductible and consumer-driven health plans, compared with those in traditional plans, according to the study published by the journal Forum for Health Economics & Policy. Families who live where the median income is 200 percent less than the federal poverty level, and those with one of the five most costly chronic conditions — cancer, diabetes and heart disease — spent approximately the same on healthcare than families with high-deductible plans.  The families all had at least one member working full time in a job that included health benefits, the researchers noted.

“One important issue is whether high-deductible health plans will leave low-income and chronically ill patients with inadequate access to healthcare,” Amelia Haviland, the study’s lead author and a RAND statistician, said.  “The evidence suggests that non-vulnerable families, low-income families and high-risk families are equally affected under high-deductible plans.  We discovered that costs go down dramatically during the first year people are enrolled in high-deductible health plans, as long as the deductible is at least $1,000 per person.  “But we also found concerning reductions in use of preventive care. This suggests people are cutting both necessary and unnecessary care.”

The researchers determined that deductibles of at least $1,000 per person led to an average of a 14 percent decrease in spending when compared with families who had lower deductibles.  The RAND study notes that “The drop in preventive care happened even though the high-deductible plans in the study waived a need to pay a deductible when receiving such care.  This suggests that enrollees in high-deductible plans either did not understand this part of their policy or some other factor discouraged them from getting preventive care.”

According to the RAND study, “High-deductible and consumer-directed health plans have been gaining favor as one way to help control health care costs.  By 2009, about 20 percent of Americans with employer-sponsored health coverage were enrolled in such plans.  A 2010 survey found that more than 54 percent of large employers offered at least one high-deductible health plan to their employees.  Healthcare reform is expected to further encourage enrollment in high-deductible health plans as such plans are expected to be a key offering in the insurance exchanges being set up in many states to help the uninsured find health coverage.”

As families cut their medical spending, they eliminated some forms beneficial care, the researchers found.  Although childhood vaccination rates rose in families who had traditional health plans, they fell among families in high-deductible health plans.  Mammograms, cervical cancer screening and colorectal cancer screening also declined among those with high-deductible health plans.

Writing on Kaiser Health News, Jonathan Cohn, Senior Editor of The New Republic, says “Conservatives think traditional health insurance provides too much financial protection from medical expenses.  They also think that the Affordable Care Act will make this situation worse.  That’s one reason they want to repeal it.  The problem, according to the conservatives, is that insurance dulls the average person’s consumer instincts.  When medical care is cheap or free, people don’t bother to shop around for the best prices — and they don’t think twice before seeing the doctor.  In other words, they end up with too much care at too high a price.  Insurance and government programs spread that cost around, so that eventually all of us end up paying more in the form of higher premiums or taxes over which we have little individual control.  The solution, as this argument goes, is to redesign insurance so that it forces people to pay more out-of-pocket expenses.  And, within reason, it’s not a bad idea.  Most economists, even those on the left, would agree that excessive coverage leads to higher health care spending.”