Puzzlement as the Game Changes
Given what I do for a living, I have been asked been many times, “Are you for or against Obamacare?” My answer has been consistent … I firmly believe that one cannot be “for it” and one cannot be “against it.” With a 2,000 plus page law and over 10,000 pages of rules, there are many elements of the law that appear to make a lot of sense, there are many aspects of the law that are problematic, and there are many aspects of the law which are in the gray area, their impact still to be determined. Indeed, those who have been major advocates of the law have now been confronted with the shortcomings, and those advocating for the demise of the law are now indicating that they want to retain a number of significant elements of the law. And so, both sides of the argument are realizing and ironically coming to consensus that one cannot be “for it” and one cannot be “against it.”
There is a game called “Jenga”, a game where players see a tower of wood blocks and take turns removing a block at a time, attempting to safeguard the tower of blocks from collapse.
Perhaps this is the perfect metaphor for the policies being examined relating to the Affordable Care Act. Removing elements of the Affordable Care Act, or the entire set of building blocks, i.e. the entire Affordable Care Act, can have significant unintended consequences. Let’s examine a few of the blocks:
There has been much discussion by the incoming administration of removing the individual mandate. At the same time, an important element of the original act, the provision of insurance for those individuals with preexisting conditions, is to be retained. There is an unintended consequence. The impact on private insurance premiums would be significant as those unfortunate enough to have medical issues will also be those who purchase health insurance. As high risk individuals indeed utilize medical services to a greater extent, costs will increase to insurance companies. Insurance companies will be forced to increase insurance premiums to employers and individual purchasers. With no individual mandate strongly incentivizing healthy people to purchase health insurance, risk cannot be distributed and relatively healthy people wishing to purchase health insurance will be priced out of the market.
With all the problems associated with the Patient Protection and Affordable Care Act, and there are many, one of the clear outcomes has been that 20 million plus people who did not have private insurance or Medicaid in the last decade now have health insurance. Underlying reasons are many, nearly all attributable to the Affordable Care Act. Drivers include the requirement that employers with over 50 employees provide health insurance, tax incentives for smaller employers to provide health insurance, the individual mandate, the Federal Exchange with federal subsidies established to offset premium costs for families with more modest means and the federal subsidy for state Medicaid expansion. It should be noted that 31 states have expanded their Medicaid programs. If, as strongly indicated, nearly all aspects of these policies are to be rescinded, the unintended consequences can be significant.
With a large Medicaid population potentially losing their benefits and those in the federally subsidized exchanges dropping their insurance, people will lose access to primary care providers. Access to free preventative services including blood pressure monitoring, age appropriate mammograms, and colonoscopies, diabetic monitoring, etc., will be compromised. We may anticipate acute and chronic disease processes to worsen with a reduction in the provision and access to preventative services. Pharmaceutical compliance will drop as well due to diminished coverage and access.
We may anticipate that unintended consequences will include an increase in utilization of the hospitals’ emergency rooms by the uninsured. This is, of course, the form of health care with greatest associated expense and lowest associated quality as there is no continuity of care. Further, given that hospitals are required by law to provide emergency care, we may anticipate seeing a significant rise in bad debt. The unintended consequence … cost increases to the hospital, with hospitals attempting to pass the costs on to the insured population. Insurance premiums will increase, again pricing people out of the insurance market. It is interesting to note that whereas the stock market values have increased to record levels since the election, hospital stock values have dropped and it can be anticipated that hospital bond ratings will drop as well. Investors understand.
There are many blocks in the game of Jenga. And there are many parts to our health care system. Piecemeal block removal will have the unintended potential consequence of the collapse of the Jenga tower. Similarly, piecemeal removal or total removal of the blocks of the Affordable Care Act, may have the potential unintended consequence of a significant collapse of aspects of our health care system. Now is the time for policy makers to come together as a team to bolster or rebuild appropriately this complicated puzzle we call our health care system.
Dr. Steven Ullmann is Professor and Chair, Department of Health Sector Management and Policy, at the University of Miami.