When Employer Behaviors Change

The House Ways and Means Committee released a new report that has received some media time over the past few days. The report, “Broken Promise: Why Obamacare Will Force Americans to Lose the Health Care Coverage They Have and Like” provides a summary of the results of a Fortune 100 survey concluding many employers will simply drop their employer sponsored insurance (ESI) because of the way the rules and fines established by the Affordable Care Act and move their employees to the Health Insurance Exchanges to purchase their coverage. Paying the fine imposed in the Affordable Care Act is cheaper than providing coverage.

The report states the Affordable Care Act “threatens the stability and sustainability of the employer-based health insurance system.” As if it is stable and sustainable today.

The report estimates employers will save nearly $29 billion in 2014 alone and over $422 billion between 2014 and 2023 using the fine-paying approach. Sounds to me like those savings could be a great boost to the economy, to the global competitiveness of employers, and in creating jobs. The report doesn’t talk about that because it is intended to deliver a different message.

The report should probably have an addition to the title to really clarify what we’re dealing with for the general public; “Broken Promise: Why Obamacare Will Force Americans to Lose the Health Care Coverage They Have and Like--- But Won’t Be Able To Afford for Much Longer.”

Anybody who might have thought “nothing will change” for the employees with any health reform model (Republican or Democrat) was simply naïve. “Nothing will change” is the politically correct way to talk in an election season- hopefully, the American people know better.

Things are already changing and they have to keep changing if we’re going to head off the real health care cost crisis before it actually happens. The sooner the politicians and the media can start to talk straight with the American people, the sooner they will get on board and help to become part of the solution.

The information and subject of this report is important. Employers are going to change their behaviors when the incentives of the game are changed. When employers change their behaviors, things are going to change for the employees. It’s not complicated. What is complicated is coming up with alternative solutions to address the changing behaviors and at least help the employees plan for what may be coming down the road. Unfortunately, this report didn’t get that far. And, probably didn’t try.

Health Care and the Supreme Court:: All Bets Are Off

Before the Supreme Court arguments began I was pretty confident they would rule as follows: The Anti-Injunction Act wouldn’t apply (they would move forward on the other items), they would narrowly determine the individual mandate to be Constitutional (requiring everyone to have some type of protection for health care costs), the Severability provisions wouldn’t apply (since the individual mandate would remain in place), and the expansion of Medicaid would move forward (since states aren’t necessarily “forced” to participate in Medicaid in the first place). After this week, I could be wrong on three out of four.

While oral arguments are seldom indicative of what the final results will be in a Supreme Court decision, the picture that emerged last week was less than optimistic for the Affordable Care Act. All Justices seemed to indicate the Anti-Injunction Act does not apply so there was little disagreement between the sides. However, the government simply could not defend its position for requiring the purchase of health insurance for everyone, why the rest of the law should remain in-force even if the mandate was repealed, and why the Medicaid expansion is not a “coercion of federal power.” At times, listening to the government blurt its incoherent responses to questions was painful.

If the Affordable Care Act is thrown out in its entirety, we will once again be starting over with health care and it’s not going to be any easier the next time around.

Republicans will continue to push to rely on the free-market which simply will not work in health care today. Democrats will move to a single-payer argument which will not be accepted by most of the population. We will once again be at a stalemate. In the meantime, individuals and families will continue to struggle with the system we have patched together and be destroyed by its rules and its costs. We have lost precious time and millions of dollars fighting this fight.

Hopefully, the Supreme Court will come to a legal and yet rational decision. If the individual mandate is ruled unconstitutional, let’s hope they keep some of the provisions in the Affordable Care Act that make sense and let Congress piece together a plan that can work- by fixing the delivery of health care first- and then worry about getting everyone in the game.

It’s what they should have done from the beginning.

Buying Health Insurance Is Going To Change

The Congressional Budget Office released an update of their thoughts on the impact the Affordable Care Act might have on the way health insurance is delivered in America. The numbers are a little different than what they thought back in 2010 when the Act was signed into law.

In their report (you can get it off the CHCI web site by clicking here); "Estimates of the Effects of the Affordable Care Act on the Number of People Obtaining Employment-Based Health Insurance," the CBO attempts to determine the impact all of the new rules of the ACA will have on the different “systems” we have (and will continue to have) to pay for health care in this country. This includes trying to estimate how many individuals will continue to obtain health insurance from their employer; how many will go to the health insurance exchanges, and how many will gravitate to an expanded Medicaid program. In 2010 the CBO thought 8-9 million individuals would lose their health insurance from their employer (primarily small employers) and either purchase health insurance through the health insurance exchange or Medicaid or remain uninsured and pay the penalty. The new number is 11 million.

CBO spent quite a bit of time in this report explaining all the reasons making any projections are so difficult. Behavioral economics plays a large role in what will happen, but, as illustrated by behavioral economist Dan Ariely, we are all “predictably irrational.” We have no idea how all of this is going to change the mix.

Regardless of what the number is, the health insurance market is about to go through a huge shake-up. While today's discussion continues to focus on purchasing “health insurance,” the real discussion should be centered on how we will individually finance the health care services we will inevitably use. An even bigger issue will ultimately be the training and educating of the 11 million (or whatever number it ends up being) individuals who will leave the world of employer-based health insurance to begin making these decisions on their own.

The CBO still has no idea of what will actually happen when/if the ACA moves forward. Suffice it to say the world of health care will continue to change in dramatic ways. The individual and their families are going to need to be engaged whether they want to or not.

Update- Women's Preventive Health -Starting At The Wrong End

The health care system in this country is a reflection of our culture. The profit-motive is there, the amazing advances in medical science and technology is there, bloated costs are certainly there, inefficiency is there, and what the system decides to pay for and not pay for is decided by trying to weigh the costs and benefits of the marketplace with the needs of the society in general. It’s no wonder the system is so messed up. The pieces aren’t aligned.

The Obama Administration changed its tune on dealing with the preventive women’s health issue that was created by the Affordable Care Act; (specifically, requiring contraception services be provided at no cost to the individual). The original position and employer mandate was ludicrous (even to those not involved with politics) as the perception of infringing upon religious rights looked very real. The Administration should have known better on this one.

From a pure public health standpoint, the logic of the original mandate made some sense. Religious institutions provide a significant portion of health care in this country. Catholic hospitals make up twenty-percent of all hospital beds and in many geographic areas are the only hospitals around. To address the desire to reduce abortions and unwanted pregnancy, the Administration felt these institutions had to be included in the original mandate- women’s health is a large cost item in health care and whatever final rules were developed needed to include all major players.

The decision created an outcry and the Administration had no choice but to change their approach.

Now, instead of requiring employers to provide these services- the Administration shifted the responsibility to the health insurers. Nobody really knows how this is supposed to work but the “religious freedoms” argument for employers was theoretically resolved.

Instead, the new decision creates another administrative layer to add to an already confusing and complicated health care structure. And, don’t think anything is “free.” Somebody is going to be paying for it somewhere.

Our health care costs reflect our society. In many respects, the costs are a scorecard on how we live. A significant portion of our costs reflect our lifestyles and using contraception could be considered a lifestyle if you really want to get into it. Don’t get me wrong, reducing unwanted pregnancies and abortions is important. However, a large part of today’s unwanted pregnancies and abortions reflect lifestyle more than anything else. That's what really needs to change. Providing access to necessary health care services is one thing. Providing free access to health care services that encourage irresponsible lifestyles is another.

We need accountability in our health care system today- not encouragement to just continue what we’re doing because it’s free. Some may argue the Administration's decision was a "step in the right direction." Unfortunately, this was only a baby step if a step at all. As usual, we’re starting from the wrong end.

"Women's Preventive Health" We've Gone Too Far

Even though I didn’t agree with the overall concept from the beginning, I’ve tried to be a supporter of the Affordable Care Act. Since its passage in March, 2010 I’ve been a passive supporter- but an avid advocate for overall change in our health care relationships. I never did understand why the primary focus of the Affordable Care Act was to first get everyone insured (see previous blogs going back to 2009). I understand the theory of it- but getting more people into a broken system without focusing on what was broken made no sense. We should have learned a lesson from Massachusetts. However, the Affordable Care Act was the law we enacted, I was ready to get on-board to help make it work.

In the beginning, I respected Obama for using so much of his political capital to finally address a crisis that is coming (and is still coming) in health care. He’s certainly paying for it now.

I followed all of the legal challenges, watched as stakeholders grumbled, tolerated the huge government bureaucracy being created, and listened to the political rhetoric both for and against the legislation. All the while, I tried to continue to see the positives associated with what we had to do to address the crisis at hand.

And then the rules for “women’s preventive health” were released. Here again, I tried to look at the "bigger picture." I certainly understood the need for prevention and the use of our health care system to address broader social issues. I agree with the focus of the Affordable Care Act to address prevention as opposed to sickness.

But the legislation crossed the line for me with these new rules as it now infringes upon the fundamental religious beliefs and practices of others.

The idea of providing contraceptive resources to prevent unplanned or unwanted pregnancy certainly makes sense given the world we live in today. This is a huge cost to our society in many areas. However, to require religious organizations to now compromise their beliefs to comply with a government-mandated law is simply not who we are as a country.

The intent of the Affordable Care Act is to fix a major economic problem our country is facing. I had hoped, despite all of the complaints and criticisms, the Act could provide the framework from which to work. I tolerated all of the government rules and regulations as a necessary evil to incent stakeholders to finally begin work in different ways. I supported the cause because I know that change is necessary.

However, when the Act now is requiring individual citizens to compromise their religious beliefs for rules established by the government, it’s time for me to get off the bandwagon. The government has simply gone too far. I hope our legislative process is able to correct what I believe is a fundamental infringement on our personal rights. Until it does, the Affordable Care Act has one less supporter than it did before- and from the sounds of it, it can't afford to lose many more.

Atul Gawande- Remembering What We're Fighting About

When you are in the middle of a fight, very seldom to you ever stop, assess, and confirm that you remember why you are fighting in the first place. Most of the time we just keep on fighting.

That’s what we’re doing with health care. Even though legislation has been passed to change the way things work, we’re just continuing to fight because many adamantly disagree with the approach that is being used to make the changes and most don’t really understand what is going on. If you didn’t understand the health care system before- you really don’t understand it now. If we don’t change, it is very likely the end-result will cost a lot more and create more damage before we are through. The health care debate has become a part of a much deeper discussion our country is having with itself and still hasn’t quite figured out the right answer.

Atul Gawande’s June 1, 2009 New Yorker article had quite an influence on getting us where we are today. (It’s a good article- You can link to it Here) Sometimes it’s important to step back and reflect on why this fight started in the first place.

The health care system Gawande describes is influenced by many different incentives both internally created and externally driven. The influence of the incentives and the personal make-up of the health care stakeholders determine the type of health care system that is developed in a local community. The health care system then determines the economics (how much it costs and how it is delivered). Gawande believed the health and age of a population have little to do with significant variations in the cost of health care we are experiencing today; it’s the system used to deliver health care that really matters.

Yes, critics have challenged some of the facts but the challenges don’t erase the picture of health care the article constructs. The challenges don't negate the reality.

Even as we continue to fight about it, we should also take some time to step back and reflect on the health care system described by Gawande almost 3 years ago. We need to take a moment and remember what we’re fighting for- and hope we are making some progress to come to a solution as we fight.

At this point, the progress seems questionable.

Iowa Caucuses- Health Care IS an Economic and Debt Issue

The Iowa caucuses are over and it’s on to New Hampshire. To nobody’s surprise, it was a close contest, a lot of money was spent, and a lot of negative advertising was used in the strategies. Republicans still aren’t united behind any single contestant- but the field will narrow over the next few weeks.

Iowa gave us the first look at the results of the Citizens United decision made by the Supreme Court last year. There is going to be even more money spent, with candidates hiding behind the covers of the “super PACs” created on their behalf. Free speech? We’ll see.

Iowan’s are a rational bunch. They look at things from a different perspective than those in Washington D.C., New York, California or the other highly populated areas. They care about community, about agriculture, and about things that are relevant to themselves. They don’t usually like the negativity associated with politics- but the Iowa caucuses proved the negative ads work. We’ll see a lot more of them.

Interestingly, Iowa Republican’s participating in the caucuses listed the economy and the debt as their primary issues of concern. Health care and abortion listed in the distance.

The Iowa caucuses proved that we continue to keep health care as a separate and distinct political issue even though fixing our health care mess is directly related to both the economy and the debt. A Pew Research Foundation study in April, 2011 determined the unfunded liabilities associated with pensions and health care for state governments increased 26% (to $1.6 trillion) in one year alone. Health care IS an economic and debt issue.

Iowa has always been the starting point of the presidential election process and used to either gather momentum or begin the elimination of candidates. Iowa also provides lessons as to what works and what doesn’t work in the campaign process.

The Iowa caucuses taught us: The Republicans are still not sure who to get behind to run against Obama in 2012, Super PAC negativity works (unfortunately)- and we’ll see a lot more, "retail/door-to-door" politics is still effective, and we still don’t believe reforming health care has much to do with jobs, the economy, or our debt.

We’ll see what we learn in New Hamphshire.