Damaging Disclosures About Healthcare Reform?

 

ObamaCare: A Dozen (more) Damaging Disclosures by Grace Marie Turner, for Forbes, highlights the maturation of a complex piece of legislation into tangible healthcare reform.  It is impossible to think that a comprehensive bill such as the PPACA wouldn’t need additional attention from either regulators or legislators.

Since its passage we have already seen the 1099 provision repealed and the Community Living Assistance Services and Supports (CLASS) program dropped. The disclosures that Grace Marie Turner writes about are not damaging at all. In my opinion, it is a sign that our government is working in a manner to address unforeseen consequences of any legislation.

As a response to the points listed in her opinion piece; here is my rebuttal to Grace Marie Turner’s 12 enumerated challenges surrounding healthcare reform.

1.The Obama administration got slapped by the Government Accountability Office for using an $8.3 billion slush fund to temporarily cushion the blow from cuts that ObamaCare requires to a program called Medicare Advantage. 

Just like many other private industries, such as agricultural, oil and gas, Medicare Advantage plans have been subsidized the Federal government. The industries like the free money and American consumers like the reduce cost. The ACA is trying to cut the fat and reduce the subsidies.

Is the moving of $8.3 billion into another HHS account a slush fund? No. Is there recognition that the money will be used to forestall spikes in Medicare Advantage plans for 2013 when subsidies are removed? Probably.  I have no doubt that a Republican administration would do the same thing in an election year.  I am waiting for the GOP to stand up and demand that the $8.3 billion not be used to keep MA rates low.

2. IRS Agents: The Obama administration is diverting roughly $500 million to hire additional IRS agents and other employees to help implement the health overhaul law.  This is expressly against the will of the House leadership that has tried to cut off funding to implement the law until the Supreme Court reaches its decision.

Since when does the “House leadership that has tried to cut off funding” set executive branch orders? One of the clear acknowledgments in the ACA is that there is vibrant underground economy that evades participation in programs that benefit the public at large. The foundation of lower health insurance rates is based on near 100% participation. If the enforcing agency is going to be the IRS they will need additional staff. Ms. Turner alludes to the fact that the House leadership is trying to sabotage the law by denying certain elements of its implementation. In this manner, they can point a finger and say, “I told you so, it was never going to work.” Of course, we all understand that you don’t blame the horse for not plowing the field when you intentionally starve it.

3. Public support collapses

It is unfair to characterize the public support for the ACA based upon intense media exposure to a few elements within the law. Often times when I discuss the variety of benefits from the ACA (no charge preventive office visits, removing lifetime insurance claim caps and pre-existing condition denials) the perception almost always changes. This is not to say that there are some elements such as the individual mandate that are not anathema to many people. However, just because you don’t like the interior color of the car doesn’t mean it won’t drive well and save you money.

4. Hospitals hit: By a nearly five-to-one margin, hospital executives expect that the health law will hurt their bottom line.

There is no doubt that unless hospitals, physician groups and insurance companies change the way they manage operations there is the chance they will see reduced profits. We are already seeing providers and insurance companies engage the new law by getting involved in Accountable Care Organizations and actively promoting ACA benefits to attract new plan members. I am sure most of the hospital executives would agree that the system before the ACA was not sustainable. With change comes opportunity and the better executives will certainly leverage the new opportunities to their benefit.

5. Holder slapped: Attorney General Eric Holder was forced by a Circuit Court judge to acknowledge that the judicial branch indisputably has the power to determine the constitutionality of laws passed by Congress.

While this is a nice “Atta boy” for folks opposed to the ACA, it really isn’t a damaging disclosure of any sort.

6. Bishops stand firm

It is probably safe to say that the U.S. Conference of Catholic Bishops would like to see the United State run as a theocracy, but we aren’t. The bigger story is how President Obama worked to accommodate the Catholic Church. This is how America works; finding compromise to accommodate everyone’s sacred beliefs when permissible.

7. Employers dropping coverage

It remains to be seen how many businesses will actually drop coverage. The counter point to this is the establishment of state health insurance exchanges. Employees that lose their coverage may just find more options and better pricing with individual plans. Group health insurance is almost always more expensive than individual and family plans. Plus, I thought one of the issues with the current system of health insurance was that it was too employer centric. The additional competition to employer group plans should be touted as a benefit of the ACA.

8. Young people hit hardest: Support among the young for the president is waning.  According to a recent Harvard University survey, only half of 18 – 24 year old’s support the president, and only one in five young people think the country is heading in the right direction.

This is irrelevant to the topic of healthcare reform. Unless you inform the 18-24 year old group that their parents can pick up their health insurance on a family plan until they are 26. Don’t forget to tell them that the ACA will have special under 30 year old health insurance plans that focus on catastrophic coverage to keep premiums low.

9. Student loan confusion: The law ended the ability of private firms to participate in the student loan program and used $8.7 billion of “savings” generated by the government takeover of the program to help fund ObamaCare’s new entitlements.

The current student loan interest rate crisis is partly attributable to ACA. Private firms handling the student loan program were nothing more than private industry collecting tax payer cash. With the Federal government doing most of the work and guaranteeing the debt, the savings to government was obvious. It is always interesting that private industry advocates for the responsible reduction in government spending except when the government spending feeds their business.

10. Double-counting Deception:  The Holy Grail of ObamaCare was that it could offer massive new subsidies to provide health coverage to 30 million more people and at the same time reduce the federal budget deficit.

It is hardly a damaging disclosure that the government is crafting legislation under the “business as usual” banner.  You will not get any argument from me that these legal accounting tricks are good or necessary. Let’s be honest with the accounting. But also acknowledge that there will be increased productivity based on increased availability to affordable health insurance for millions of Americans.

11. Deep payment cuts to docs: Chief Medicare actuary Rick Foster says that current law – i.e., ObamaCare – will require physician fees to be cut by 31 percent on January 1, “an implausible expectation.”

From amednews.com, “In their annual report on the state of the program’s finances, Medicare’s trustees project that outpatient care spending under Part B will increase by an average of 4.9% annually during the next five years, a full percentage point lower than the 5.9% average seen during the past five years. But the estimate assumes that Medicare pay to physicians will be cut by 30.9% in January 2013 under the sustainable growth rate formula. If Congress overrides the SGR cut, the trustees say average annual Part B spending growth going forward will jump to 7.6%.”

In the reactive environment that is Washington D.C., problems only get addressed when there is a crisis. Unfortunately, the crisis is either manufactured or allowed to happen because of previous inaction. With the impending cut to physician fees for Medicare we can only hope that the elected officials and department executives will seek appropriate remedies.

The rate of Medicare spending has to be clipped to make it sustainable. From www.healthcare.gov, “New models of patient-centered, coordinated care will give you and your patients more control over how care is delivered.  Investments in medical homes and other advanced care coordination and disease management models will help you ensure that your patients receive seamless, efficient care.  Providers who provide high-quality services will be rewarded based on standards that they help develop, based on solid medical evidence.  And Medicare will pay bonuses to qualified primary care doctors and general surgeons, particularly those who practice in under served areas.”

Now is the time to implement solutions that will allow Medicare to avoid cuts to physician reimbursement rates. To scrap the ACA is to green light the impending train wreck involving the financial health of Medicare.

12. Dems bolt:  Rep. Barney Frank (D-MA) led a parade of Democrats renouncing ObamaCare.

This is somewhat of a mischaracterization used to mislead readers to think that Democrats feel the ACA is a failure. The true context is that the passage of the ACA has taken a heavy toll in the favorability ratings for Democrats. Just as Republicans distanced themselves from President Bush in the 2008 elections, Democrats don’t want to be seen as too cozy with the ACA because of its negative perception in the electorate. Politicians, by their nature, are self-centered survivalists.

The marketing of the benefits of the ACA takes work. Those of us who believe in it will continue to educate the public on the benefits. The ACA is not perfect. There have been good revisions and changes that have weakened the overall bill. But it is a necessary re-landscaping of the American healthcare environment that will ultimately make America healthier, stronger and more productive.