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Monday, July 2, 2012

Health Care Re-Visited

In light of the positive ruling by the Supreme Court legitimizing the universal mandate contained in the Affordable Care Act under the taxation power of the Congress, it makes some sense to re-visit some earlier points made on this Blog.

Right-wing radical Republicans in Congress (as well as co-opted candidate Mitt Romney) are trying hard to characterize the Affordable Care Act as a failure, and as “government controlled”, and even as “socialism.”  As a matter of fact, it is less of a government-controlled system then is their own health care insurance, which is organized, managed, and overseen by the Office of Personnel Management (OPM).  To go a step further, the extra health care benefits available to members of Congress include clinical care on-site operated by naval personnel, and access to taxpayer-subsidized surgical/hospital care at Walter Reed Army Medical Center in Washington DC, and the National Naval Medical Center in Bethesda, Maryland. (Senate Minority Leader Mitch McConnell had heart surgery there in 2003). So, while they take full advantage of their own government-organized and taxpayer-subsidized health plans, they rail against anyone else having a similar opportunity.  Hypocrites all.

Under the Affordable Care Act provisions, the government does not provide medical services, nor does it control from where you get your health insurance.  You are free under this Act to continue choosing from a number of private insurance companies for your coverage.  The Act does have a provision for state-based Health Exchanges through which individuals and small businesses with up to 100 employees, could purchase qualified coverage, but these Exchanges can be administered by either a state agency or a non-profit organization; presumably, the states can make that choice.  States can also opt in 2017 to set up Regional Exchanges or allow other state Exchanges to operate within a given state.  In addition, the OPM will contract with private insurers to offer at least two multi-state plans in each Exchange.  Going a step further, the Act allows for the creation of non-profit, member-run health insurance companies in all 50 states and DC to offer qualified health plans.  So, while some aspects of the PPACA may be government-assisted, it is far from being government-run, or a takeover of health care by the government.

Are there some requirements in the Act that would involve government implementation and management?  Of course; but that doesn’t make it “socialism” or “government-run.”  There is a federal requirement that everyone be covered, backed up by certain penalties for those who fail to comply.  That  provision has now been addressed by the Supreme Court and found to be constitutional under the taxation power given to the Congress.  Some restrictions are placed on what can be offered by insurers and what cannot be included.  But, in my opinion, this is no different than many pieces of  legislation that require certain actions, programs, restrictions and innovations that result in changes in administration or management in the public and/or private sector.  One example:  the ADA - the Americans with Disabilities Act.

But congressional Republicans and Mitt Romney continue to claim that Obamacare is a government takeover of health care.  Just what has been taken over, since private corporations still provide health care insurance and health care delivery?   They never tell you what has been taken over, because they don’t want you to know that they actually support government control when it is in their own interest as federal employees. The truth is that private companies, that have long controlled our health care, are being reigned-in by the government and the Republican shills for those companies, from whom they get a lot of monetary support, are not happy about it.

For many decades, private health care insurance conglomerates have been the ones standing between a patient and his/her doctor  by excluding pre-existing conditions from coverage, by placing lifetime caps on those with acute illnesses, by lack of support for preventive care and by dropping coverage when a serious illness shows up.  Now none of these is allowed.  That is not government takeover; it is government protection for consumers.  Obamacare actually builds on and improves the nation’s private health care system.

So, let’s take another look at the PPACA, and see what it has actually done for consumers, or will be doing for them, in a positive way:

- allows adult children up to age 26 to be on their parents’ healthcare insurance; has already extended insurance coverage to perhaps 3 million young adults under age 26, some of whom had other plans before they switched, so this figure does not represent just new sign-ups

- prohibits insurers from citing pre-existing conditions for denial of coverage; from placing lifetime caps on coverage, or dropping persons with newly acquired illnesses or conditions;

- provides portability between employers;

- expands Medicaid to all non-Medicare eligible individuals under age 65 (children, pregnant women, parents and adults without dependent children) with incomes up to 133% of the federal poverty level; all newly eligible adults will be guaranteed a benchmark benefit package that meets the essential health benefits available through the Exchanges; (will perhaps cover up to 17 million of the 31 million that are currently uncovered, but this may change based on the part of the SCOTUS ruling that struck down a penalty on states that disallows all Medicaid funding if a state opts out of this provision);

- extends funding for the Children’s Health Insurance Program through 2015 and keeps current income eligibility levels through 2019; beginning in 2015, states will receive a 23 percentage point increase in the CHIP match rate up to a cap of 100%; CHIP-eligible children who are unable to enroll in the program due to enrollment caps will be eligible for tax credits in the State Exchanges;

Very briefly and quickly, let us look at some more positives that will occur in the near future:

- will provide refundable and advance premium credits to eligible individuals and families to purchase insurance plans through the State Exchanges with savings of up to $2,300 for those families
- will require Exchanges to maintain a call center for customer service, and to use a single form for application that can be filed in person, by mail or online;
- will create a temporary insurance program for employers providing health insurance coverage to retirees over age 55 but not eligible for Medicare
- will create an essential health benefits package which is the minimum that must be offered by all health care plans;
- will establish a temporary national high-risk pool to provide coverage to individuals with pre-existing conditions along with subsidized premiums.

Finally, let us deal with the latest charge from Republicans, especially Mitt Romney, that this Act will raise taxes for everyone.  Wrong.

It will impose a penalty/tax on those who opt to stay uncovered by a qualifying  insurance plan, beginning in 2014.  But, that group of people will be relatively small compared to the numbers who are now uncovered and who will opt for coverage, or the numbers of people who have their own plans and will continue to do so.  In reality, that penalty would affect only 1 percent of Americans and keep their medical costs from shifting to the rest of us; and, it’s the same policy Mitt Romney put in place in Massachusetts.  Trying to make this penalty on free riders into a general tax increase is ludicrous.  Obamacare is actually the largest-ever middle-class health care tax cut.

There are other taxes involved, but they too are targeted and not general in nature:
--increasing the tax on distributions from health savings accounts that are not used for qualified medical expenses;
--increasing the threshold for an itemized deduction for un-reimbursed medical expenses from 7.5%  to 10% of adjusted gross income but with a waiver for those over age 65 during tax years 2013 through 2016
--imposing an excise tax on insurers of employer-sponsored health plans that exceed certain higher thresholds;
--eliminating the tax deduction for employers who receive Medicare Part D retiree drug subsidy payments (effective Jan. 1, 2013).
--an excise tax of 2.3% on the sale of any taxable medical device;
--imposing a tax of 10% on the amount paid for indoor tanning services

None of these taxes are general taxes on the population.  They are limited in scope. It is important to understand that, on the contrary, Obamacare includes the largest middle-class tax cut for health care in history. According to the independent Congressional Budget Office, 19 million people will receive tax credits worth an average of about $4,800 each to help them afford health care, putting health insurance within reach for millions of American families.  Analysts predict that premium growth should slow after 2014 because of the law, predicting $2,000 in family savings by 2019, and the Congressional Budget Office projected savings of 14 to 20 percent through exchanges and new rules in the market.
 
So, let us concentrate now on what would be lost if Republicans were to rescind this legislation.  The CBO has weighed in on this in a letter, dated  May 26, 2011, written to Congressman Henry Waxman, ranking member of the Committee on Energy and Commerce, in which there is some discussion of the consequences of repealing this legislation.  Here are some of the CBO points for your consideration:

1)  would result in a significant loss of revenues, particularly from certain fees and taxes that would be collected by the IRS: e.g. 40% excise tax on insurance plans above certain thresholds for persons with incomes above 250k, and certain insurance industry and pharmaceutical industry fees
2)  would significantly alter the effects of many provisions of the ACT, including changes to Medicare and Medicaid; tax credits, and cost-sharing subsidies designed to increase the number of Americans with health insurance
3)  could prevent CMS from modifying Medicare payment rates on an annual basis and signing contracts with private insurers that offer Medicare Advantage and Part D (prescription drug) plans; the possible result - no Medicare Advantage plans and no more Part D plans for Medicare beneficiaries!
4)  preclude the Secretary of HHS from implementing recommendations of the Independent Payment Advisory Board aimed at limiting Medicare costs
5)  prevent federal government from setting up insurance exchanges if states chose not to; and grants to states for setting up exchanges and subsidies for cost sharing would not be available, putting states in a further bind as to health care support
6)  prevent CMS from assessing and collecting its share of higher rebates from pharmaceutical companies for drugs dispensed to Medicaid beneficiaries
7)  payment to doctors would be affected because the calculation of annual rates by CMS would be affected and rates would remain at current levels, and Medicare spending would increase in 2012 and 2013
8) mandated demonstrations and pilot projects designed to improve efficiency and quality of care would increase spending in some cases
9) in the absence of mandates for insurance coverage, the number of families and individuals covered would be lower than under current law
10) CMS would probably be prevented from providing assistance and guidance to states as to their Medicaid and CHIP programs
11) provisions to reduce waste fraud and abuse would be undercut, as would provisions to improve quality of care to enrollees

The Patient Protection and Affordable Care Act of 2010 is not the failure that many conservative Republicans would have you believe.  There are many, many provisions that will not only reform our health insurance provisions, but that will go a long way toward reforming our health care delivery system into one in which quality is primary and preventive care and wellness are of the utmost  importance.  Those who want to destroy the most important health care legislation since establishment of Medicare under Lyndon Johnson, are simply deluded.  It is time to praise this major accomplishment of the Obama administration, and to seek to implement those positive aspects that are pending between now and 2019.  “Obamacares” is indeed an apt title for this major piece of important legislation.