In the nineties, we had the wide-scale introduction of managed care and capitation. The American public and providers saw financial incentives rewarded those who limited care, and these efforts were abandoned.
Following that we had a steady issuance of mandates from Washington. These did little to improve outcomes and imposed more administrative demands on physicians (ACO’s, OSC’s, PQRS, MACRA), leaving less time for actual face-to-face patient care. The mandates increased overhead to the point that the least expensive venue for healthcare, the independent office based practice, all but disappeared. This led to consolidation in health care providers and acceleration in health care expenditures, setting the stage for the adoption of the Affordable Care Act (ACA) of 2010.
There have been a number of winners and losers in the healthcare system since the advent of the ACA. Hospitals and hospital systems have been the immediate winners, writing off less care that is not reimbursed because of the reduction in the uninsured. Insurance companies, on the other hand, have been on the losing side, and many are exiting the business of writing coverage under the ACA. This has resulted in pressures to recover costs elsewhere for insurance companies.
These complications are a direct effect of Obamacare, but they could have been avoided. Consider the following numbers:
• In September of 2015, the U.S. Department of Health and Human Services reported 16.4 million uninsured individuals gained health insurance under the ACA
• The latest projections for 2014 to 2019 by the Urban Institute and the Robert Woods Johnson Foundation states the gross costs of all ACA coverage provisions is $636 billion
• As of February 2015, the Center for Medicare and Medicaid Services reported “over 11.7 million additional individuals are enrolled in Medicaid and Children’s Health Insurance Program (CHIP)”
This means that 71.3% of the recipients of Obamacare have enrolled through Medicaid. The cost to ensure a Medicaid recipient is about $3,000 per year. From 2014 to 2019, insuring these new Medicaid recipients will cost $175.5 billion. Had the ACA been limited to the expansion of Medicaid, it could have accomplished over 70% of its expanded enrollment at 28% of its most recent projected costs, for a savings of $460 billion.
I believe any right thinking Congressional representative, Republican or Democrat, could have seen the wisdom of that approach. The 2,700-page ACA could have been condensed to about 10 pages by reducing the ACA to its Medicaid provision that states if a family of four’s income is less than 40% above the poverty level ($34,000), they qualify for Medicaid.
This has been the singular accomplishment of the ACA in my opinion. Every year since 1983 I have had more than 4,000 personal interactions with patients one-on-one. I learn about each of my patients, their lives and their families. Providing 11.7 million with affordable health care through Medicaid expansion has been so worth it.
However, it comes at a heavy price for many of the rest who now have what I call “ghost insurance”. Families who do not qualify for Medicaid can pay more than $10,000 per year for health insurance they effectively never use because of deductibles that are in excess of $3,000 per year. Their financial pain is very real.
If Congress is provided with the opportunity to change the ACA, this would be a good place to start. Keep the baby and throw out the bath water. Also please tell the American public how $460 billion was necessary for ghost insurance.
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