Wednesday, February 2, 2011

Confusion rules the day!

A Florida’s judge’s ruling that the Affordable Care Act (ACA) is unconstitutional doesn’t resolve the underlying constitutional issue (which will ultimately have to be decided by the U.S. Supreme Court) but it has introduced new uncertainty for the $2.3 trillion health care industry, and emboldened the law’s critics to push even harder for repeal (not that they weren’t trying already).

The Wall Street Journal’s health blog reports that “states and companies that are supposed to be implementing the law trying to figure out what to do next. The WSJ reports that the 26 states that are parties to the suit are considering whether to ask the Supreme Court to take up the case now, before it has fully wended its way through the legal system. The New York Times quotes the governor of Florida as saying that until the fate of the law is clear, ‘we’re not going to spend a lot of time and money’ to implement it. Other states, even if part of the suit, will move ahead, the NYT says.” The WSJ also reports that most health care companies plan to “stay the course” and continue to plan for the law’s implementation. Meanwhile, the Obama administration says that the judge’s ruling will have no effect on the implementation of the law or the requirement that states (including those who brought the suit) comply with its mandates and claims that most constitutional experts agree with the administration.

Now, I am not a lawyer, so I don’t have any expertise on the legal arguments over the ACA’s constitutionality. For those of you who want to hear more about the constitutional questions from people who might actually know what they are talking about, I recommend this Health Care Blog post from attorney Mark Hall, a critic of the Florida judge’s ruling. He notes that “At least half of the relevant part of the opinion is devoted to discussing what Hamilton, Madison, Jefferson and other Founding Fathers would have thought about the individual mandate” (Judge Vinson concluded that they would not have approved of it) but “the same Founders wrote a Constitution that allowed the federal government to take property from unwilling sellers and passive owners, when needed to construct highways, bridges and canals.” The Washington Post’s Ezra Klein – a supporter of the Affordable Care Act – has posted an excellent overview of what legal experts are saying about the ruling, pro and con, including a link to a posting that argues Judge Vinson ruled correctly.

What I am qualified to talk about is the potential impact of the ruling, especially in states that decide that they no longer need to take the steps needed to set up the health exchanges. If the Affordable Care Act, in whole or in part, is later upheld by the Supreme Court, say a year from now, the states that made the decision to forgo taking steps to comply with the law’s requirements, in the hope that it would all go away, will be at a serious disadvantage. The ACA requires that states have established the framework for the health exchanges by January 1, 2013, or the federal government can step in and run them. States that have been planning all along for the implementation will be in a much better position than those that did not. The irony, then, is that the states that stop their efforts now to set up the exchanges, based on Judge Vinson’s ruling may be inviting a federal “government-run” take-over of their exchanges! Sure, their gamble could pay off (at least in a political sense) if the Supreme Court decides the ACA—or perhaps more likely, just the individual insurance requirement—is unconstitutional, but that is a pretty big gamble to take for their residents. Meanwhile, states that moved forward, despite the legal uncertainty, will be in a much stronger position to provide affordable coverage to their residents without opening the door for the federal government to run things.

But the greatest risk is to most of the 32 million people who will get health insurance under the Affordable Care Act but now could find it slip away if the Supreme Court finds the ACA to be unconstitutional, or if the court invalidates the principal mechanism to get people covered (the requirement that everyone participate in the insurance pool, or pay a small fine). I have yet to see a proposal from critics of the ACA that would get everyone covered without some mechanism to bring everyone into the system.

Instead of an individual mandate, you could automatically enroll everyone in a public program like Medicare or Medicaid, which will almost certainly pass constitutional muster because it is established law and precedent that people are required to participate in Medicare Part A and Social Security. It is precisely to avoid such an outcome that the individual mandate was originally proposed by conservative theorists like the Heritage Foundation!

But if the critics of the ACA now don’t want to automatically enroll people in a public program, or require that they participate in private insurance as proposed in the ACA, how then would they ensure that everyone has affordable health insurance coverage? Sorry, folks, selling insurance across state lines and offering more health savings accounts isn’t going to do it—such approaches would cover at most three million people who now lack health insurance, according to the CBO.

I don’t know how the Supreme Court will answer the constitutional question. But I do know that if it is found to be unconstitutional, the United States will have to find another way to bring everyone into the pool (Medicare for all?). Or accept that the United States, still the richest country in the world, has decided instead to allow tens of millions of its legal residents to go without health insurance, knowing that many will live sicker and die younger as a result.

Today’s questions: If you don’t support the individual insurance requirement and/or believe it is unconstitutional, how would you propose that the U.S. ensure that all legal residents have access to affordable health insurance? Or do you think it would be okay to leave tens of millions without health insurance?


Harrison said...

An opinion piece in the Washington Post today envisions a future where the Supreme Court, in controversial 5-4 ruling, finds the ACA to be unconstitutional. And the timing of their decision strikes a blow to the 2012 campaign of President Obama who loses to Pres Mitch Daniels. He keeps campaign promises by cutting the federal budget and the economy struggles. The number of uninsured soars to over 70 million. Private corporations find it nearly impossible to continue insuring workers and remaining competitive.
And in 2017 the newly elected President, Hillary Clinton, signs into law the Medicare for All Act.

I think that the vision of the future is correct.
I doubt the timeline.
It will be much longer and drawn out. And much more painful for our economy.

But if the ACA is not enacted and then improved upon the result we can count on is an emergency transition in the future to Medicare for All.

And a large number of the people who are in the polls as opposing the ACA are there because they feel that Medicare for All should happen now instead of the ACA.


doc777 said...

I’m not a constitutional scholar either but I do remember a few things from college. We have three branches of government in this country, and despite Charles Schumer thinking those are the House, the Senate, and the President, the constitution defines things a bit differently. The President apparently flunked U.S. history. The judicial branch has ruled on the ACA. Judge Vinson declared the ACA void and stated in his decision that a declaratory judgment is the functional equivalent of an injunction. Let me try to explain this in terms that even the ACP leadership can understand. As of this moment, the ACA is dead, and it will remain dead unless and until it is revived by an appellate court or the Supreme Court. The ACA is effectively off of the books and Florida is not the only state that is putting implementation on hold. The government argued in its defense of the individual mandate, that it was the keystone of the legislation and was necessary in order for the ACA to work. Judge Vinson after determining that the individual mandate was unconstitutional, therefore had no choice but to void the entire law, and since the Democrats in their haste to ram this legislation down our throats did not have time to add a severability clause, Judge Vinson had every right to do so.

I believe that most people support the concept of finding a way to allow our citizens access to high quality affordable health care. The fundamental difference is in how we frame the problem. The ACP leadership and others have looked at the issue as a coverage issue. (People lack coverage so we need to devise a system to provide them with coverage.) The contrary view is that we have primarily a cost issue. (People who want health insurance would buy it or employers would be more likely to offer health insurance if it did not cost so much.) Instead of addressing the cost issue, we continue to focus only on the coverage issue. The safety net programs, mainly the Medicaid program, have been expanded way beyond their means in order to address the coverage issue. Now they are stretched to the point that states are facing huge deficits. Since the states cannot print more money, they are being forced to ration care or greatly increase taxes in order to balance their budgets. In addition, a form of rationing is occurring due to inadequate access to many services since providers do not want to see patients they will lose money on. Physicians thought that getting prior authorization from insurance companies for certain procedures was a pain. Just wait till they have to deal with the blunt force measures our state legislators will use to bring their state budgets back into line.

The ACA is already making the situation worse. The additional mandated coverages are dramatically increasing costs. Over 700 entities covering more than 2 million people have already gotten temporary waivers to avoid providing coverage that eliminates annual caps. It is expected that large numbers of employers will eliminate coverage completely once the exchanges go into effect. It will simply be less expensive for them to pay the per employee fee, than to provide coverage.

It is exceedingly clear that we need to focus on the cost issue before our entire health care system collapses. However, addressing the cost issue by implementing rationing of services at the legislative level is not the solution. Instead, mechanisms to drive true free-market competition need to be put into place. Patients need to be more involved in the decision making process and providers need to be reimbursed in a way that places more value on outcomes and efficiency. Systems clearly have the capability to reduce costs while maintaining (or even increasing) quality. One large system in our state participated in a Medicare demonstration project and saved Medicare more than $80 million over the past four years while increasing quality, qualifying it for millions of dollars in bonus payments. If the incentives are properly aligned, efficiency and quality can be improved dramatically.

Steve Lucas said...

Adding to doc777 comments there is a belief that people want, or will purchase, health insurance. This is a false assumption. People want free medical care. People will not do the right thing when it cost them money.

One very real issue is cost. Often people find it cheaper to pay out of pocket in other countries for care than to bother with insurance. Simply put “The rent is too damn high.” This is not just the scans, or the excessive test, or the insurance, it is the whole system.

The result of these two concepts is that you have a large group of people who will not buy insurance at any cost and companies unable to afford to offer coverage to their employees. Mandates and everything else is just noise surrounding this economic question.

Insurance has become a surrogate end point for medical care. With the looming shortage of front line doctors people will continue to go to the ER, and we will continue to see escalating cost.

There is no silver bullet. We need to attack a number of economic issues all at the same time in order to bring about the changes necessary to allow us to pursue universal coverage.

This is not WW I where wave after wave attacking soldiers tried to take a hill only to be pushed back and the commanders then blamed the troops. This is a very complex issue.

Steve Lucas

WarmSocks said...

If you don’t support the individual insurance requirement... how would you propose that the U.S. ensure that all legal residents have access to affordable health insurance? Or do you think it would be okay to leave tens of millions without health insurance?

I don't support requiring people to carry insurance. Neither do I propose ensuring that people have access to health insurance. Insurance isn't the answer.

Why the insistence that we need a third-party payer? Why not require people to take responsibility for themselves?

If doctors didn't have to spend so much time getting pre-approval from insurance companies, they would have more time to spend with patients. If doctors didn't hire coders and billers and insurance liasons and scribes, they could lower their fees. That would make things much more affordable for patients (and, I suspect, more enjoyable for doctors). People could afford to see a doctor once or twice a year for significantly less money than is currently paid as an insurance premium.

What I'd really like to see is 100% self-pay, and change the tax code to let people deduct 100% of medical expenses on their income taxes (no waiting until out-of-pocket costs exceed a certain percentage of income). Give people the option of a HSA and insurance to cover catastrophic illnesses. If someone chooses not to carry insurance, then no crying over the consequences - they'd still get to take the tax deduction.

Retired FP said...

If you are going to discuss a law at least get the name correct! The ACA is NOT the Accountable Care Act. It is the Affordable Care Act (actually Patient Protection and Affordable Care Act). The Affordable part is no small measure a cause of the disagreement either. But whichever way you lean on this law, it would serve you much better to at the least use the correct name

Unknown said...

The concept of mandatory insurance in order to establish a viable pool which is funded sufficiently to cover claims is hardly novel. Auto insurance is just that. And like auto insurance, depending on voluntary participation will fail, due to the hesitation of many to pay if they didn't have to by law. This seems totally consistant with the health care situation.
The idea that self insurance will work simply doesn't hold water--many will assume, as they always have, that illness or accidents will "happen to someone else." Then when they are in the ER with a severe head injury from an MVA what is there to do except provide necessary care and have the hospital and MDs eat the charges (and pass them on in higher costs to others. The ACA is far from perfect but I go along with Doherty's question--what is the VIABLE alternative to the present law? Can we function well as a less healthy, partially insured society in the 21st century? I think not.

WarmSocks said...

Norman, one distinction between auto insurance and health insurance is that people are not compelled to purchase auto insurance; drivers are. Don't want to buy auto insurance? Walk, bike, take the bus, ride a horse...

The scenario you provide by way of example is confusing. If somebody is in an MVA, the ER & hospital bills would be paid by the auto insurance. While that illustrates the prudence of carrying a good auto insurance policy, it doesn't show the necessity of mandatory health insurance.

You ask what a healthy society should do. A little comparison: parents do a disservice to their children when they pander to every selfish demand. The kids are much better off when parents instill healthy character traits. My kids have obligations to the family, and if they shirk their responsibilities, there are consequenses. A healthy society would be the same way. We need to quit pandering to people and indulging those who won't contribute to society; people need to realize that there are consequences for their actions.

From what I read across the internet, it sounds like what some people really need the ER staff to tell them, "If you believe that your condition will lead to death if not treated promptly, we are here to help. We are not here to babysit people who can't deal with the common cold. We are not here as a backup plan because you couldn't take the responsibility of refilling your medications in a timely manner. Go home. Come back if you're dying. Otherwise, see your PCP." PCPs need to quit telling people,"You have an upper respiratory infection." People need to hear, "This is just a cold. There's nothing I can do about it. Just let it run its course. If you're not better in two weeks, it means it might have progressed into something else; that's unlikely to happen, but if it does, come back. It's not necessary to see the doctor for the common cold."

A VIABLE alternative to mandatory coverage is to hold people more accountable for their choices. If people run up medical bills that they can't/won't pay (whether it's because they chose not to buy insurance, or because they buy toys before necessities), then there should be a way to garnish their pay and decline providing future services. Natural consequences.

Unknown said...

Warm, people may have a choice of not driving...does anyone have a choice of never getting severely ill or injured?
And OK, cancel the MVA and put the person in the ER (uninsured) because he fell off his horse (this happens in Arizona!)-- now what?
And as far as choices go, you seem to have missed the fact that there are many millions of people who didn't make a "bad decision," but who simply can't afford or get health insurance. This smells like the old rhubarb about the poor (and middle class?) getting what they deserve. Not everyone has the luxuries and good fortume that we have. Don't tell me about all the lazy people out there who won't pull their weight...many of them work harder and longer hours than I do, and for a lot less money.

WarmSocks said...

Norman, you are right; I did not make mention of hardworking individuals who can afford neither insurance nor doctors. This is a problem, but I don't think the mandate provides a solution. More of my thoughts on this here. Read & comment if you're so inclined.

As for people not having a choice on illness, that's a subject with which I am all too familiar. I have RA; my daughter has just been diagnosed with JIA. Neither of us would have chosen this, but we don't get to pick, so we play the cards we're dealt.

ryanjo said...

Medicare for All -- nirvana for the limousine liberals, as long as they don't have enroll themselves. One of the best quotes of the entire health reform debate: "The American people want the best healthcare system other people's money can buy."

Well hold it now, Norman, what makes you so sure that making everyone pay for health insurance will make it available & affordable for all? For those of us who already pay for our insurance, and that of our employees, the premiums are estimated to increase. In addition, the ACA allows me as a small business to reduce my % contribution to my employees' coverage, or pay a fee (much smaller than the insurance cost) and provide them no coverage. And millions of uninsured Americans will choose to remain uninsured under ACA, and pay an assessment much smaller than an insurance premium (estimates range up to 2 million people).

Instead of mandating insurance, why not incentivize people to carry insurance? Allow tax free Health Savings Accounts, with some matching of funds for persons who pursue health lifestyles. If I am spending my own money, I'm going to ask questions about costs. Revive tax deductions for institutions and providers who provide low cost or free care. There are many other sensible options, none of which were considered in ACA because it doesn't fit the ideology of the ruling party (if free healthcare is our right, what about free food, shelter, indoor plumbing, etc?)

Above all, let's not merely follow our ACP leadership's acquiescence that ACA is the best we can do for now. ACA just throws more money into a sick system; insurers getting fat with admin costs (they've already figured out the cap), Pharma eating patients alive with rip off meds and eternal patents (the 40% higher prices already took care of their promised discounts), physicians rewarded for procedures and harassed by third-party paperwork. Yes, I agree that the ACA is the first step toward Medicare for All -- it's that bad.