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by Don Azarias
October 15, 2010
According to those independent and neutral experts, President Barack Obama’s health care overhaul law is getting panned by Republicans (who else?), pundits and critics and, of course, by Democrats who are afraid of losing in the midterm elections. In their first comprehensive look, they are in accord that more Americans will be covered, but costs are also going up. Except for Obama and Democrats, almost everyone agrees that costs, indeed, will be going up.
Economic experts, at the Health and Human Services Department (HHS), concluded in a recently-issued report that the health care overhaul will achieve Obama’s aim of expanding health insurance by adding 34 million to the coverage rolls. But the analysis also found that the law falls short of the president’s twin goal of controlling runaway costs, raising projected spending by about 1 percent over 10 years. That increase could get bigger, since Medicare cuts in the law may be unrealistic and unsustainable, the report warned.
This could become a major political liability in the midterm elections. The report projected that Medicare cuts could drive about 15 percent of hospitals and other institutional providers into the red and, possibly, jeopardizing access to care for seniors.
The report from Medicare’s Office of the Actuary carried a disclaimer saying it does not represent the official position of the Obama administration. But White House officials have repeatedly complained that such analyses have been too pessimistic that it undermines the law’s potential to realize savings in the long run. Come on, you White House occupants, didn’t it ever occur to you that those actuarials from Medicare are more conversant than you are and can speak with authority when it comes to Medicare’s viability?
Starting in 2014, most Americans would be required to carry health insurance except in cases of financial hardship. Also in 2014, government tax credits will help uninsured workers and their families pay premiums, and Medicaid will take in many more low-income people. Eventually, more than 30 million will gain coverage, sharply reducing the number of uninsured and putting the nation on a path to coverage for all citizens and legal immigrants.
After battling for a year to pass the legislation, Democrats desperately wanted to have tangible accomplishments in order to prevail in high-stakes congressional elections this fall. But they also have to deflect lingering questions and doubts about the effectiveness of the health care reform and its costs that go with it.
Beth Umland, research director for Mercer, said employers were expecting health cost increases averaging about 6 percent a year before the law. “Now they are looking at an additional 2 or 3 points, so that 6 percent can become a 9 percent, and that seems to be above their comfort level,” she said.
Dave Osterndorf, chief health actuary for the Towers Watson consulting firm, said large employers will respond by passing on costs to their workers. “These first few changes, in and of themselves, will not dramatically change the way employers look at the provision of health benefits. Employers and employees will feel part of the impact,” he said.
The report acknowledged that some of the cost-control measures in the health care reform program———Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings———could help reduce the rate of cost increases beyond 2020. But it held out little hope for progress in the first decade.
Republicans said the findings validate their concerns about Obama’s 10-year, nearly $1 trillion plan to remake the nation’s health care system. “A trillion dollars gets spent, and it’s no surprise———health care costs are going to go up,” said Rep. Dave Camp (R-Michigan), leading Republican on health care issues. Camp added that he’s concerned the Medicare cuts will adversely affect the quality of care for seniors.
In a statement, HHS Secretary Kathleen Sebelius argued that the law will be beneficial for seniors. It concluded that Medicare monthly premiums would be lower due to the spending reductions. “The Affordable Care Act will improve the health care system for all Americans, and we will continue our work to quickly and carefully implement the new law,” the statement said.
Passed by a divided Congress voting along party lines, after a year of bitter partisan debate, the law would create new health insurance markets for individuals and small businesses. Tax credits would help many middle-class households pay their premiums, while Medicaid would pick up more low-income people. Insurers would be required to accept all applicants, regardless of their health.
Emergency Rooms (ERs), the only choice for patients who can’t find care elsewhere, may grow even more crowded with longer wait times under the nation’s new health law. That might come as a surprise to those who thought getting 32 million more people covered by health insurance would ease ER crowding. It would seem these patients would be able to get routine health care by visiting a doctor’s office, as most of the insured do. But it’s not that simple considering that:
*There’s already a shortage of front-line family physicians in some places and experts think that will get worse.
*People without insurance aren’t the ones filling up the nation’s emergency rooms. Far from it. The uninsured are no more likely to use ERs than people with private insurance, perhaps because they’re wary of huge bills.
The biggest users of ERs, by far, are Medicaid recipients. And the new health insurance law will increase their ranks by about 16 million. Medicaid is the state and federal program for low-income families and the disabled. And many family doctors limit the number of Medicaid patients they take because of low government reimbursements. ERs are already crowded and hospitals are just now finding solutions.
“Just because we’ve insured people doesn’t mean they now have access,” said Dr. Elijah Berg, a Boston area ER doctor. “They’re coming to the emergency department because they don’t have access to alternatives.” And with a large number of people coming to the ER, many hospitals will experience overcrowding problem.
The health care reform law would have an adverse effect on Medicare. The report projected that reductions in payments to private Medicare Advantage plans would trigger an exodus of enrollees from the popular alternative. Enrollment would plummet by about 50 percent. Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs.
In a worrisome scenario for Obama and Democrats, the report warned that a new voluntary long-term care insurance program created under the law faces “a very serious risk” of insolvency.
If that’s the best Obama and Democrats can do, then I don’t know if they realize that this ambitious health care reform program could become a political albatross that would hang around their neck for a long, long time.