That date is one week from today and sadly to say I don’t
believe there is one state or federal Exchange or one health plan prepared to
meet that goal. Let me explain what
happened and what is likely to happen in the near and not-so-near future.
If you look at the diagram of what is an Exchange (attributes
to Jeff Album of Delta Dental) you’ll see that the focus of the Exchange was on
Small Group (businesses with more than 50 and less than 100 employees). There was a reason for this. The U.S. Health Care System kicked off with
Kaiser in the late 1940’s as an incentive to provide tax-free income to
prospective workers.
And, when you looked at the 56 million uninsured employed,
persons in the United States, most of them were employed in Small
Businesses. So, if we want to expand the
pool, and by the way, expand the risk pool to avoid healthy people choosing to
be uninsured, we would need to put some teeth into requiring Small Business to
insure their members. That was the
original intent of the ACA.
Then it got screwed up.
A larger number of uninsured were the Medicaid
population. These are individuals and
more commonly family living below that “poverty level”. In an earlier Post I covered how the “poverty
line” was established but suffice it to say that there are two important components:
first, the cost of common items included in a normal life style vary
dramatically from region to region and particularly are greater in urban areas,
resulting in a greater need for subsidies in our cities. Second, most subsidies, such as food stamps
and even cell phones, are not included as “income” in determining whether a
family earns enough to advance beyond the poverty level.
The result is that the Medicaid eligible population in many
states was financially untenable to support.
So, when the federal government, through the ACA, demanded that the
states expand the health care offered through Medicaid, many states said, “No.”,
even though the first few years would be paid for by federal dollars.
State options also came into play with the establishment of
Exchanges. Only about a dozen states,
including my California, chose to set up their own Exchanges. The rest fought the edit, demanding that the
federal government set them up (or saying they would fight to the death the establishment
of them). And the feds have been slow in
meeting that demand.
What can we expect?
A new occupation is the Navigator, a term used to define
methods to steer members through the Exchange choice process. Much money has been allocated for this
function and none of it is going to actual health care. One is reminded of how many are now employed by
the TSA and how that has resulted in higher air fares with greater delays and
poorer service.
One can also expect an early increase in premiums as the
insurance companies cope with the new tax levied on the to support ACA
subsidies. We will definitely see huge
variances in premium and coverage from state to state, since the definition of
essential health benefits is all over the place.
And unintended consequences are already occurring: large
employers (more than 100employees) are casting out expensive programs, such as
Retired health, providing set amounts to place these people in the
Exchange. This population, by the way is
exactly counter to the healthy population needed to make the Exchanges work.
And major health plans, such as Aetna, are choosing to stand
on the sidelines to see how this plays out, lessening the competition among the
big players that was expected to curtail costs.
My old company, WellPoint/Anthem, id a player in 12 states and in all 19
regions of California, but they are almost the exception, rather than the rule.
Regardless of how Congress settles the Fiscal Cliff and
defunding of the ACA this week, rollout of the ACA will be delayed from the
January 1, 2014 deadline, and the animal that we will eventually see is going
to be exceptionally different from that expected in 2010.
Later today I am going under the knife for a hip
replacement. Sounds like a topic for my
next Post. Join me to see how it all
turns out.
