Economics, Health Care

9 big roadblocks to the full implementation of the Affordable Care Act

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In a new article for National Review Online, AEI health care scholar Thomas Miller outlines nine “pressure points” that could delay or significantly impact the implementation of the Affordable Care Act, which is scheduled to take full effect on January 1, 2014.

1)      Health exchanges. Nearly two-thirds of the states are not fully on board with running their own exchanges as mandated by the ACA. The federal government needs the states to provide infrastructure and local-market experience.

2)      Medicaid expansion. Less than half the states officially support the ACA’s Medicaid expansion, and since the Supreme Court ruled that the expansion must be optional rather than mandatory, it’s likely that many of the remaining states will not implement it.

3)      Individual-mandate enforcement. The mandate remains unpopular and the tax penalty to enforce it is small compared to the premium costs of required coverage. Many healthy and young individuals will have a strong incentive to remain uninsured, wreaking havoc on the risk pool.

4)      “Minimum” health-benefits coverage. The long list of ACA “essential” benefits requirements affecting most forms of fully insured coverage will mean a spike in premiums, particularly for young adults in good health.

5)      Who picks up the check? Higher health-benefit costs will suppress private-sector wage and job growth as well as prevent public investment in other areas.

6)      Health-care provider capacity. The ACA will stimulate a great deal of demand for health care services, but it does little to incentivize an increase in supply. There is already a shortage of physicians in America.

7)      “Pilot” error. A variety of projects in the ACA were meant to demonstrate innovations in health care delivery systems, but most of these have failed to show positive results. It’s far more likely that spending will be controlled through across-the-board reimbursement cuts for doctors, hospitals, and producers of medical products.

8)      Transparency without real prices. The ACA attempts to make health care information more transparent and accountable to the consumer, but it also empowers bureaucrats to decide exactly how plans are structured and operated.

9)      Standardization vs. customization. The ACA treats health care as a process with uniform standards, turning patients into identical cogs in an assembly line. A competitive market would allow dynamic, bottom-up innovation.

These “pressure points” indicate that the ACA’s implementation will be politically and economically difficult. But they also present a final opportunity to choose a better path in health care.

3 thoughts on “9 big roadblocks to the full implementation of the Affordable Care Act

  1. I can scarcely believe that point #7 came out of AEI. First, manufacturers of durable medical products have been subjected to a massive tax on gross income (not profits) in the Obamacare/Abysmalcare bill. Some companies are even cutting employees or going out of business. Further, much of this increase must be passed on to consumers…but all of can’t be. So how is a further cutting of reimbursement supposed to do anything but work to further cripple and even close these companies?
    But the most astounding thing of this post #7 is the seeming ignorance shown here of the already low, even pathetically low, reimbursement to doctors. Medicare is so low that already 30% of doctors (including my former family p. of 25 years) will not see even one Medicare patient, as reimbursement is below or at overhead in most cases. And many other doctors limit the number of Medicare patients they see. Medicaid is worse…and that is the rate at which those uninsureds, now to be on Medicaid, will pay doctors. Two examples: Neurosurgeon, does preoperative history and physical, meets family 0715, patient is pushed down to operative suite, catheters, lines, etc., are installed, surgery goes from 0900 to 1400, surgeon takes care of the patient for another 90 days, including several days in the hospital ICU, more days on the hospital floor. Medicare allows the brain surgeon $1.760.00…fully less than overhead, where just to keep the office open costs $150.00 per hour (whether the surgeon is in the office, in the OR, at a meeting, etc.). Second, a comparative income proposition: It’s like paying a gas station owner 80 cents a gallon for gas.
    And to look at an earlier item (#6, above): Can’t you see that the already low reimbursement to physicians, which you argue should be even lower, is one reason we have a shortage of physicians?

  2. I own a “Big Business” with 60 employees. The Affordable Care Act defines “Big Business” as 50 or more employees. IRS defines a big business as 500 or more employees. Did they forget a zero?

    I have 10 employees who work as needed because demand for my product substantially fluctuates. I do not cover them on our generous medical plan. Because they work more than 30 hours a week when they are working, under Affordable Care I must provide them with medical coverage, or I must drop all employees from coverage.

    I provide my Sales Manager with substantially better family medical coverage than I provide for my own family or any other employees. I agreed to this because I need him bringing in sales and such coverage was a requirement he set for working for me. His daughter has cancer and has a specific provider which they wish to keep. Now I will get fined under Affordable Care at the rate of (60-30) times $3,000 or $90,000 a year.

    • As your leaders have told you, you should be so lucky as to be able to employ 60+ people. Your comrades in the Kremli….I mean White House expect you to pay your fair share. If you’re not willing to give up your own prosperity for the betterment of the less fortunate, they maybe you just need to be re-educated.

      Criket, I hope you know I’m being terribly sarcastic. I’m just as frustrated.

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