Healthcare Gets Real
Feb 17, 2017
As partisans fight over Obamacare, the stare-down between health care consumers and health insurance costs gets nasty. Needless to say, American health care consumers remain on edge. Some have seen their health care premiums rise in double digits over the past few years – so high, that health insurance is no longer affordable. And others are quick to champion the Affordable Care Act (ACA or Obamacare) because they have gained health insurance for the first time. This is more than monumental for those who can now receive health care treatments that make the difference between life and death.
With President Barack Obama out of office, moves to repeal and replace Obamacare have started, sputtered, stalled and rebooted. The newly elected President, Mr. Trump, is realizing that the incessant campaign rhetoric to repeal and replace Obamacare made for an awesome rallying cry to energize his base, but much harder to implement once seated in the Oval Office. When that’s coupled with a recent report from the nonpartisan Congressional Budget Office (CBO) that analyzed the effects of repealing Obamacare, the realities of health care get even more real for Mr. Trump, the Republican-led House and Senate, and the American health care consumer.
Counting the costs
According to the CBO report, even a partial repeal, as proposed by Republicans, would lead to huge increases in the number of uninsured Americans and even higher skyrocketing premiums for those in the individual insurance market. As for the Republican-proposed partial repeal, it specifically includes removing the individual mandate, Medicaid expansion, and subsidies for people purchasing insurance on the individual marketplace. (The majority of people who are eligible to purchase insurance on the Marketplace receive subsidies according to CoverMissouri.org). However, the Republicans have promised to leave certain provisions intact like children’s ability to stay on their parents’ insurance until age 26, and insurers’ inability to deny coverage based on preexisting conditions.
Last year, the CBO and staff from the Joint Committee on Taxation (JCT) estimated that the number of people who are uninsured would increase by 18 million in the first new plan year following the enactment of the bill. Later, after the elimination of ACA’s expansion of Medicaid eligibility and of subsidies for insurance purchased on the ACA marketplaces, the number would increase to 27 million, and then to 32 million in 2026.
Premiums in the non-group market (individual polices purchased through the marketplaces or directly from insurers) would increase by 20 percent to 25 percent—relative to projections under current law—in the first new plan year following the enactment. The increase would reach about 50 percent in the year following the elimination of Medicaid expansion and marketplace subsidies – and premiums would double by 2026. These numbers are reported directly from the CBO report.
The CBO report also states: “The majority of that increase would stem from repealing the penalties associated with the individual mandate. Doing so would both reduce the number of people purchasing health insurance and change the mix of people with insurance – tending to cause smaller reductions in coverage among older and less healthy people with high health care costs and larger reductions among younger and healthier people with low health care costs. Thus, the average health care costs among the people retaining coverage would be higher, and insurers would have to raise premiums in the non-group market to cover the higher costs.”
“The Affordable Care Act put health insurance coverage within reach of millions of Americans, many of them working parents in jobs that didn’t provide affordable health coverage plans,” said Brenda Sharpe, president and CEO of REACH Healthcare Foundation. “In Lafayette County, the percent of uninsured residents decreased from 16 percent in 2013 to 11 percent last year.”
Toniann Richard, CEO of the Lexington, Mo.-based Health Care Collaborative (HCC) of Rural Missouri is looking at this from both the patient and provider side. HCC owns and operates the Live Well Community Health Centers in Buckner, Carrollton, Concordia and Waverly – all federally qualified health centers (FQHCs). The Trump Administration is hinting at the possibility of funding these centers using a block grant model. Basically, these community health centers would receive money from state and federal government (independent allocations) to run the FQHC. However, when the money runs out, these facilities are pretty much on their own.
“I think from a provider perspective, we are prepared for that,” Richard said. “We’ve always agreed at the board, executive and staff level that we must be mindful of resources that are available to us. As for patients, we’ll have to look at ways to beef up some of our resources so that patients continue to get the care that they need [in] their community. We really want to make sure that people aren’t leaving their community to receive care. As CEO, I am also wearing my administration hat to make sure we save jobs within our organization. We employ over 75 individuals. We are making decisions with our staff in mind. Richard added that the Live Well Centers have a solid infrastructure from human and financial capital to operations.
The ironic walk back
Many Americans would agree that ACA has some deficits. However, Mr. Trump and Republican lawmakers have no definitive plan on how to make it work better. The deadline to introduce legislation to end the health law has come and gone (as of January 27, 2017). According to recent national headlines, Mr. Trump now says it may be next year before legislation is introduced.
This walk back may be music to the ears of many who voted for Mr. Trump. Ironic, but true. Many of the record number people who signed up for health insurance under ACA for 2017 were in states the Mr. Trump won, according to ABC News. Roughly 6.4 million people signed up by the mid-December deadline—400,000 more enrolless than the same period last year, according to the Department of Health and Human Services (HHS).
Here’s the twister: The states with the most people enrolling in ACA voted for Mr. Trump. This includes Florida, with just under 1.3 million ACA enrollees; Texas with about 776,000; North Carolina with 369,077; Georgia with 352,000; and Pennsylvania with 290,950, according to figures provided by HHS. The enrollment numbers include new subscribers (2.05 million) and returning consumers who had to renew their coverage.
Outgoing HHS Secretary Sylvia Mathews Burwell noted that more than 30,000 people called HHS operators “worrying about the future of coverage in the wake of the election,” she said speaking to reporters on a conference call. She said officials have been assuring consumers that “Obamacare” remains the law of the land through the 2017 calendar year and that people will be guaranteed coverage at least until then under the existing law.
Professionals in the trenches like Sharpe and Richard agree that the American health care system is complicated, and that’s an understatement. “The complexity of our health care system is not for the weak at heart,” Richard said. And explaining these complexities often takes her to the nation’s capitol, a trip she recently returned from, to chat with politicians. “Health care is complex, overwhelming and stressful and so it’s important for federal and state legislators to sit down with people like myself, or hospital administrators, to answer questions and crosswalk them through the challenges that a patient may confront when trying to receive care,” she said.
“It’s also important for them to learn as much as they can about the reimbursement process. For example, we try to always be mindful of what it costs to provide a service and what we are paid to provide that service,” Richard said. “And if what I’m hearing is true that on the federal and state levels they want to provide a set amount of money to do the same level care that we do today, it is important for them to see what a cost report looks like.” Richard also said legislators need to be keenly knowledgeable of how much oversight health care organizations experience that receive federal and state dollars. This includes audits, compliance checks, numerous regulatory obligations, and costs to hire physicians and nurses. “Before decisions are made, I’d like to sit down with folks to talk about what all of that looks like.” Richard will be meeting soon with state legislators.
“So that people can continue to take care of their own health and their family members’, we encourage our elected leaders to outline improvements to the health law before taking action to repeal the Affordable Care Act, and to step back from any strategy of “repeal and delay” that would create instability in the health services serving Missourians today,” Sharpe said.
Poor, sick and rural
(accessHealth News was asked to redact the name of the CEO that we interviewed because the responses to our questions were mostly based on opinion and were not connected to this CEO’s employer or other professional affiliations.)
Rural America has had a long, hard bout with health care. With more community health centers emerging in many rural cities (a byproduct of ACA), most communities have not experienced a TKO, but the bruises are telling. Critical Access Hospitals (CAHs) are feeling the blows. A CEO of a rural CAH in Missouri said that in the state about 15 percent of CAHs have negative operating margins and over half are negative to break even. “The confluence of the uninsured and sequester cuts have created significant economic challenges,” he said. “Since the passage of ACA, there have been about 60 hospitals that have closed in the U.S.” He points out that Sac-Osage in Missouri and Mercy Hospital in Kansas are a couple close to home, adding that according to Becker’s Hospital Review, 670 hospitals nationwide are at risk. “I am an optimist and I believe they can rebound but they may not look like they did 10 years ago,” he said. “They may have to reduce impatient capacity and look more like a free-standing ER and surgi-center with a few overnight recovery beds. We ultimately must deal with the reimbursement system to provide long-term stability.
When asked to explain ACA’s positive or negative impact on CAHs, in a nutshell, he said “there are too many moving parts to unequivocally say that it has been either. From where I sit, it has not been great but I see the worst-case scenarios. Patients present at ERs thinking they have insurance but the deductibles are so high – $5,000 plus – that they essentially do not have insurance. I don’t fault the patient because the law mandates they buy coverage, and the higher deductible, the lower the premium, so they did what looked like the best deal for them. All is well until you need care.”
From this CAH CEO’s standpoint, ACA’s impact on patient care specifically as it relates to access and delivery has been slightly negative. He said with a higher demand for health care among those who have been excluded, or among those who avoided the system, now receiving coverage, usage has soared. “They started consuming resources at a prodigious rate,” he said. “The complexity of care is higher than normal because of years of neglect. This was seen more in urban areas than in rural communities.”
The demand for health care also impacted the demand for health providers, which drew human capital away from rural areas, he explained. In certain rural communities with a decent proximity to the city, nurses and other practitioners can easily drive to bigger, neighboring cities to work at a tertiary care facility and demand higher pay. “We have to rely on providing a great working environment and personal relationships that create a work-life balance that offsets some of the economic limitations in rural,” he said.
In terms of staring the elephant in the face and making changes, accessHealth News asked this CEO what he’d propose. “To me the most basic element would be to put buyer and seller together. Right now, the person receiving care, and the person paying for it are not the same – the insurance component has them working both sides of the street.” He also recommends funding health savings accounts for low to moderate earners and allow those funds to be rolled into IRA’s or education funds.
It’s no secret that the American health care system is complex, to say the least. When one considers the complexities like ACA – and all of its moving parts – the move to repeal and replace, and other components like health information technology, electronic health records, Medicare solvency and talks to reduce moneys for entitlements like Medicaid, or Medicare and Medicaid investment shifts toward value and preventive care, the ongoing challenges for rural CAHs, opped off by the inherently fragile state of rural health care, mind-boggling doesn’t cover it. accessHealth asked the CEO to help readers make sense of all of this. “As a rule, rural communities tend to be older, less educated and have a higher rate of poverty which translates to sicker patients,” he said. “It would be wonderful to see more preventative care but that is for the generations that have not already developed problems. If we allow the CAHs and other rural facilities to fail, it will displace more patients and put more pressure on an already stressed urban system.
“The ultimate question is: ‘Is there a place to seek care in your community?’ When the local hospital closes, you see a drain on overall economic activity in the community as those better paying jobs leave the area. Once you lose that intellectual capital, it’s hard to get it back. Nobody wants to hear it but the number one driver of cost can be found when you look in the mirror. What high-risk behaviors are you engaging in, from the obvious, like smoking, not using your seatbelt, or alcohol use, to the more subtle like too much screen time and failure to exercise? [We] can all play a part by actively engaging in healthy habits which not only saves you money but improves the quality of your life,” he said.