There’s so much to like about the Affordable Care Act (ACA), and there’s so much to dislike it for.  As a type I diabetic I applaud the idea of enabling everyone to buy regular health insurance without the fear of rejection.  I eagerly await the ability to buy the same insurance plan as someone who is healthy.  But as a citizen of the USA, I worry that we’ve bitten off way more than we can chew on, and we’re hiding the true enormity of that bite under a tablecloth (a napkin seemed too small for this analogy). So here’s my take on the worse parts of Health Care Reform plan.

Here’s the Top 10 Things to Dislike About Health Care Reform

  1. Adds a “fee” on health insurance companies to pay for reform costs – this will get passed on to consumers
  2. Adds a tax on the sale of any medical device to pay for reform costs – this will raise consumer costs
  3. Adds a “fee” on pharmacuetical companies to pay for reform costs – this will increase drug prices
  4. Reduces the maximum amount that can be put into a Flexible Spending Account (FSA) to pay for medical expenses from $5000 to $2500 – effectively increasing taxes on many employees using an FSA
  5. Reduces plan choices to only 5 options, each of which requires more benefits than today’s low cost plans – thus increasing premiums consumers pay
  6. Does little to fight the root cause of health care inflation – Americans have poor health habits – but creates various committees and panels to figure out what to do in the future
  7. Greatly expands Medicaid* enrollment by 17 million people – thus increasing federal and state spending, and therefore the taxes we pay
  8. Requires pharmacuetical companies provide up to 50% discounts to seniors in the Medicare Part D donut hole – these discounts will be made up for by charging higher rates to insurance companies, which will result in higher premiums for non-Medicare consumers
  9. Requires companies with 50 or more employees to offer health insurance or pay a penalty – because the penalty is lower cost than a health insurance plan, it will encourage companies to drop coverage to save money
  10. It greatly expands government spending, regardless of what politicians say

* Medicaid is a federal and state government program that provides free health insurance to low income and disabled Americans.

Other items that did not make the top 10

These didn’t make the top 10, but definitely contribute to the difficulties we face with the implementation of the Affordable Care Act.

  • Does not address the Medicare physician reimbursement rate problems that are pushed to the next year each fall
  • Does not change the grossly inadequate Medicaid payment schedule for physicians which leaves them unable to afford to care for medicaid patients – this reduces the number of Medicaid accepting doctors during a time when enrollment will be surging
  • Does not adequately address an upcoming shortage of primary care physicians
  • Increases the unreimbursed medical expense tax threshold from 7.5% of income to 10% – thereby increasing taxes on people with the greatest medical needs
  • Impose a tax on health insurance companies that allow employers to select rich benefit health plans exceeding a specific threshold – effectively causing insurance companies to stop offering rich benefit plans
  • It reduces the premium difference between young and old consumers to 3:1 – so younger people end up paying for older people
  • Tax indoor tanning salons to pay for reform costs
  • Requiring laid off people who are unable to afford COBRA coverage to wait for 6 months without insurance before accepting them into the current Pre-Existing Condition Insurance Plans (PCIP)

As you can see, this list contains some large issues that must be corrected for Health Care Reform to have any chance of success. This does not mean that we should throw out the Affordable Care Act.  Rather we should fix the flaws in order to keep the many good things included in the bill — see the previous post “Top 10 Reasons To Like It” for more details.

The Biggest Drawback of Health Care Reform

The biggest drawback of Health Care Reform is that it will expand the US budget deficits greatly. This increase can not be sustained without cutting other programs or raising taxes (aka increased costs for us).  The various “fees” and taxes that are imposed on companies and products don’t ultimately get paid for by the companies.  They get passed to us through higher premiums and product costs.  So in the end, the politicians have crafted a plan that they can say does not raise taxes on citizens.  But the reality is that it does, and they know that.

The false hope in this reform package is that it does virtually nothing to reduce health care costs, but imposes numerous “fees,” taxes, additional benefit, and administrative costs that will simply be passed on to the consumer in increased premiums. So with no further changes in the reform bill, we will get increased government spending and increased costs for every person in the US. This was not the goal of health care reform, but is what we will get if ACA is not modified.

The expansion of Medicaid enrollment is potentially the biggest ticking bomb in the ACA.  The network of physicians that will accept Medicaid patients is getting smaller each year.  This is primarily because the reimbursement rates paid to the doctors is not keeping up with the costs of caring for these Medicaid patients.  So doctors stop taking new Medicaid patients to enable their practice to survive.  With millions of new Mediaid patients joining the system, where will they find doctors?  How much more will the Medicaid system cost if the doctors were paid the same amount as Medicare doctors?  How can we afford that extra expense, given the budget deficits the US currently has? These are the questions our elected officials need to answer.  The dilemma they face is that Medicaid enrollment is expected to increase by over 14 million people in 2014, at a cost of almost $95 billion according to the CMS 2011 Actuarial Report On The Financial Outlook For Medicaid

For a good resource about what the Affordable Care Act does, visit The Kaiser Family Foundation piece : Summary Of New Health Reform Law.

The pros and cons of health care reform will take several years to work through. Until then we have to adjust to the changes that are coming. SPF Insurance will keep you informed about these new adjustments as they occur, and before they start to affect your life.

So stay tuned for more.

If you liked this “Top 10 List,” then LIKE this post over there to the right and a little bit above here.

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