THE BLOG
06/20/2013 12:18 pm ET Updated Aug 20, 2013

Will Universal Health Care Be Achieved When the Exchanges Kick in Next Year?

It is no surprise that the Obama administration has done a poor job of explaining Obamacare, aka the Patient Protection and Affordable Care Act, or simply - and ironically - the Affordable Care Act ("ACA"). After all, we have been waiting for four-and-a-half years for this President to tell us exactly what his plans are for taking on a host of critical issues facing our country - with few, if any, answers to satisfy our curiosity.

Of particular concern to the millions of Americans that will be directly affected by the ACA are those marketplace Exchanges and how they will function. Even though the program has been unfolding for three years, according to the Kaiser Family Foundation, most of the public still doesn't have enough information to understand how the ACA will affect them and their families. This lack of information is most prevalent among the currently uninsured (58 percent) and low-income households (56 percent), two groups that will be significantly affected by - and potentially benefit the most from - this law.

The Exchanges will offer four insurance plan levels that will be subsidized by the government, ranging from a "Bronze" plan through Silver, Gold and Platinum plans, each offering higher costs for slightly less skimpy coverage as you travel up the ladder of valued metals. The choice of plans will be determined by age, location and income for both individuals and families, with those earning up to 133 percent above the Federal Poverty Level ("FPL") - or $15,282 a year for individuals and $31,322 annually for a family of four - eligible for Medicaid. Those with incomes up to 400 percent of the FPL will receive subsidies. The Exchanges will also offer a way to calculate how much premiums, out-of-pocket expenses and benefits will cost potential plan members, who will also be able to determine if they are eligible for subsidies in the form of tax credits, or if they will be eligible for Medicaid.

There will also be a percentage-of-income limit on how much the insurers can charge for insurance premiums. The ACA gives states the choice of running their own Exchanges or allowing the federal government to do so. The states can also expand Medicaid coverage for their citizens by lifting the income level for qualifying to 138 percent of the FPL, or about $33,000 for a family of four. Sixteen million are expected to move into Medicaid under the ACA, while 14 million more will likely seek insurance through the Exchanges, mainly individuals under 65 who do not have on-the-job health insurance or cannot afford employer coverage. The federal government will pay the full cost of the Medicaid expansion from 2014 to 2016, then will gradually reduce payments to 90 percent in 2022 and beyond. Currently, the federal government covers 57 percent of Medicaid costs, with the rest picked up by the states, even though many are now slashing their budgets for this program in the face of mounting deficits brought by the GOP's obsession with cutting tax revenues.

In February 2013, the non-partisan Congressional Budget Office ("CBO") estimated that the ACA would still leave 31 million uninsured as of 2016. Adding to the inadequacy of this law is the fact that states are able to opt out of its Medicaid expansion provision, thanks to a Supreme Court decision in June 2012. This "opt-out" provision not only weakens the ACA overall, it will also reduce funding to hospitals and other public healthcare "safety net" providers, further impacting the neediest among us. Another key shortcoming of the ACA is not allowing negotiation with Big Pharma on drug prices - a disservice to the entire country. The ACA must also focus more on delivering a safer system for all patients - something that is in conflict with the current corporate model of healthcare "consumer" and "provider" - and return us to the more humane and special personal relationship of "patient" and "doctor." That is my pie-in-the-sky wish. Healthcare as a consumer product just doesn't cut it. What we have with the ACA are too many complicated, moving parts that do not make a whole, and will not succeed in containing the ever-rising costs of healthcare that may prevent even more Americans down the road from signing up for the program and paying fines instead, at the risk of their health and their wallets.

A timely and important study on this issue was released on June 6th in Health Affairs, the leading health policy journal in the United States. This study, entitled "The Uninsured After Implementation of the Affordable Care Act: A Demographic And Geographic Analysis," also appears on the Health Affairs blog, and it analyzes the makeup of each state that might opt in or out of the ACA, detailing the demographics of each state's population. Needless to say, the states under GOP governors are resisting the ACA, and have been tireless in their efforts to repeal the bill, even though they are home to many of the people in this country who need this program the most. A piece of good news, however, is that hard-nosed Arizona Governor Jan Brewer has decided to opt in, and a few other GOP governors are also considering following suit. After all, how could they resist the federal government picking up the tab for a Medicaid expansion in their states?

The only major newspaper to report on this study - while also managing to get at least part of the story wrong - was The Washington Post. The Post suggested that the uninsured would decrease by 2016, when in fact the study found that the uninsured in 2016 would still number upwards of 31 million. The stunning reality is just how little the number of uninsured will actually drop by 2016 under the ACA. The researchers who conducted this study are a group of five distinguished doctors from Harvard Medical School and the City University of New York School of Public Health, using Census Bureau data and CBO information to support their conclusions.

Of further concern is the fact that, according the US Census Bureau in 2008, there were only 630,000 doctors in the entire United States. Meanwhile, the Association of American Medical Colleges projects that we will need 91,500 more doctors by the end of this decade. The current debate about doubling the federal loan rate to 6.8 percent for students on July 1st could also have a strong impact on those newly insured under the ACA. Seven million students in all could be affected by such a gross action. How many of those needed doctors will drop out of medical school, or decide on an alternative career if that loan rate increase occurs? And what of the Sequester cutting money from programs for young doctors to work in underserved communities? The momentum is certainly not going in the right direction on this issue. Frankly, doctors today are burned out, as are their patients. A medical appointment is often an all-day affair that leads to a five-minute visit with an actual doctor. The doctor shortage is a crisis of epic proportions, and this issue must be addressed immediately, for there is no way the current crop of doctors can take care of the coming influx of millions of newly insured patients under the ACA.

To be fair, the ACA is an accomplishment by some measures for the Obama administration, and it offers several good reforms, such as ending exclusions from coverage because of pre-existing conditions, and giving young people up to 26 years of age the ability to remain on their parents' insurance. There are also some innovations in place to deliver more cost-effective healthcare, such as the Accountable Care Organizations, which will bring doctors and hospitals together in coordinated medical "homes" to help reduce frequent re-admissions and cut costs to hospitals. Those savings can then be shared with those "providers" (a term I personally loathe), along with the medical records of their patients through the Comprehensive Primary Care Initiative. These programs also cut administrative costs of the insurers from 28 percent to 20 percent, freeing up more money for actual healthcare.

So, will we reach universal coverage any time soon? The answer is, unfortunately, no, but I see these as steps in a long process, and not the conclusion of this issue. We must build on this modest and long-overdue beginning, for the patchwork of reforms provided by the ACA will not provide the truly comprehensive, affordable and quality care that would come with an Expanded and Improved Medicare for All, which must be the ultimate goal of healthcare reform. In its first year alone, such a program would cut $600 billion dollars from healthcare costs, according to economist Gerald Friedman from the University of Massachusetts, with administration costs dropping to 4 percent by removing the insurance profiteers - aka the health insurance companies, who have seen their profits rise a whopping 250 percent in the last decade alone.

We need and deserve the kind of healthcare that other industrialized nations provide to their citizens at less than half the cost of our current system, while still providing better outcomes in longevity and overall health. Plain and simple, we need Expanded and Improved Medicare for All. Where will we find the Congressional leaders to finally finish this job that has been hanging around for 100 years? If those so-called "deficit hawks" were sincere, they would be yelling, "Go to single payer!" throughout the halls of Congress.

Co-authored with Jonathan Stone

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