Demystifying Medicine One Month at a Time

Tag: PPACA

Forward

The Chief Justice upheld the honor of his institution. (USA Today)

The decision has been handed down from the highest court in the land.

Obamacare has been upheld. Chief Justice John Roberts skillfully parsed the individual mandate by calling it what it really is, a tax.

To make health care more widely available more affordably, it seems logical that we all have to share in the cost burden. Taxes are anathema to many of our citizens. But in life, you get what you pay for.

A few thoughts on health care reform:

1. Though no one is saying it, business leaders are not altogether unhappy with the decision. For the first time since WWII, the Affordable Care Act gives us the opportunity to uncouple employment from health insurance. To be sure, the legislation says that companies with more than 50 employees must offer insurance to their employees. But it also provides a penalty for not doing so–one that many companies are now weighing as a business cost more reasonable and less unpredictable than group health insurance. If the states and/or federal government truly can develop health insurance exchanges that offer lower-cost individual plans, then employees at such companies will be forced onto the open market. The upside of this is that no one will be locked into a job they hate simply because of its health benefits. Another potential upside is that firms will start hiring again–less scared off by benefit costs for employees.

2. There’s enough federal dollars in the legislation aimed at innovation that we will finally be able to break the stranglehold of “fee-for-service” health care. [Fee-for-service: the more medical care delivered, the higher the payment–regardless of quality. More is just more. Remember, though, more is not better.] It will take many years. But by stopping the spending orgy that is fee-for-service and allowing quality-based models of reimbursement, we may actually see the pace of health care cost inflation decelerate.

Last thought: Atul Gawande wrote an excellent reaction to the SCOTUS decision that puts health care reform in its historical context as a longstanding societal “wicked” problem. It’s worth a read. Click here.

Kids with Benefits*

The CDC issued a report last week on health insurance status in the United States.

Given the stalled economy and the era-defining unemployment rate, you might not be surprised that there’s an overall increase in the number of uninsured Americans. After all, most of the coverage benefits of the 2010 health care reform act (PPACA) don’t go into effect until 2013.

Hey kids! Welcome to the mosh pit of health care.

But for one group, kids ages 19-26, there’s been a major increase in coverage. This is due to a provision in the law that allows kids to stay on their parents’ plans through age 26 [*clarification: until their 27th birthday], regardless of their career status (still in school? entered the workforce?) or their location (they aren’t required to be living at home or even in the same city!).

There were about a million more insured young folk in the first three months of this year compared to the same period a year earlier, according to the research. This exceeds the government’s own projections. Apparently, young people (O.K., their worried but smart parents) know a good deal when they see one.

I looked around for some criticism of this aspect of the health care reform law, but wasn’t able to find any. I wonder if that’s because it’s generally acknowledged that this age group is generally healthy (err, excepting some poor personal health choices on occasion) and seldom requires expensive items like hospitalizations, long term care, or costly medicines for chronic disease.

Health insurers must comply with this provision of the reform law, but they get to look magnanimous since it doesn’t cost them very much to provide the added coverage.

Proponents of national health insurance often speak of expanding Medicare (the government health insurance program for the elderly and disabled) to the vast middle of the population, those between the ages of 19-64. Well, starting at the easy end seems to be working. It’s what to do about that older end of the spectrum that gets challenging.

Anecdote alert: Young people, e.g. recent college grads, are starting to make their way in the world. I have a sister, herself a recent college graduate, who moved to a big city to pursue a job in business. By report of her and her peers, it seems companies are interested in hiring entry level kids in only in temporary positions–the better to avoid taking them on as full time employees with benefits. Some will eventually be hired, others may not work out. But in either case, these kids (assuming their parents still have health coverage) can safely remain on their parents’ policies.

Peace of mind for them and their folks.

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*clarification added in third paragraph regarding duration of coverage.

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