Monday, October 31, 2011

What if eliminating the mandate doesn’t drive a stake in “ObamaCare”?

A new study upends the argument that the Affordable Care Act (ACA) can’t work without an individual insurance mandate—which, strangely enough, could end up being the ACA’s salvation.

The study examined the potential impact on the affordability of health insurance premiums should the Supreme Court declare that the insurance mandate is unconstitutional without overturning the rest of the ACA. The study didn’t address the constitutional issues, only the pragmatic argument that without a requirement that people buy coverage, the young and healthy will choose to go without health insurance until they are sick, knowing that the ACA prohibits insurers from turning them down or charging them more for pre-existing conditions. This could drive up premiums for everyone else—forcing more people to drop coverage until the whole insurance market collapses.

But this study found that removing the mandate will have a far more modest impact, assuming that “all other features of the act—including the Medicaid expansion, premium subsidies, employer tax credits, and employer penalty provisions—were unchanged”:

“Neither our simulations nor the available research demonstrates that the mandate is necessarily a ‘linchpin’ of the Affordable Care Act, as one federal judge concluded. Our study suggests that although the mandate has important effects on premiums and coverage, it might not be essential to the act’s successful implementation. The premium increase and the loss of coverage might be judged acceptable if that meant preserving the remainder of the act. We believe that there is good reason to expect that the act would still cover 21–24 million of those who would have been uninsured otherwise, even if the mandate is removed.”

The “primary reason” why removing the mandate would have less of an impact than others have predicted is that the ACA’s tax credit subsidies would insulate most people from the costs associated with premium increases, making it unlikely that people would drop coverage in droves. Other features of the law, like open enrollment periods, would also mitigate the impact on premiums and loss of coverage associated with removing the mandate, the authors concluded.

Now, I have to say that there is a lot of uncertainty here, because the Congressional Budget Office and many other independent analysts predict that removing the mandate would have a much bigger impact on premium increases, dramatically reducing the number of people who would get coverage. Even this study found that some 8 million fewer people would have health insurance if the mandate is eliminated.

But consider this oh-so-sweet irony: if the Obama administration loses the argument in the Supreme Court that the individual insurance mandate is constitutional, and it is removed by the justices without overturning the rest of the law, it could end up being the ACA’s political salvation. Polls have consistently shown that the mandate is the least popular part of the ACA, dragging down support for the overall law. But most of the rest of it—including the subsidies and the prohibition against turning people down or charging them more because they are sick—is supported by an overwhelming majority of Americans. It will be much, much harder to repeal the ACA if the unpopular mandate goes and the popular stuff remains, in which case conservative critics may lose by winning, and the ACA’s supporters may win by losing. Instead of driving a stake in the heart of “ObamaCare,” as the critics had hoped, it could help keep the law alive. How is that for a neat trick or treat on this Halloween night?

Today’s question: Do you think the Affordable Care Act will be more or less likely to work and survive if the individual insurance mandate is eliminated?


ryanjo said...

I oppose the individual mandate for a different reason; I don't want to give our already wastrel government more money to burn through. I actually look forward to the time when the Medicare trust fund runs out of money -- what's the latest pundit prediction -- 2024? Then maybe patients can go back to paying doctors directly, doctors will answer to patients instead of insurance companies and HCFA, and compete on value instead of what HMO they belong to.

Oh yes, go ahead, "that could never work" (although it seems to be the way the rest of the economy does). As if the present system and the latest patch (ACA) is any better!

The real reason to get rid of the PPACA isn't affected by the fluff that Bob says the public likes, like no pre-existing conditions and so on. After all, most in Congress would vote for that anyway, since it wouldn't cost the taxpayers a cent. The real target of repeal for doctors should be the Independent Payment Advisory Board. Answering only to the President in power, containing no practicing physicians, cutting the health care budget with elected officials required to overturn by 2/3rds vote -- this is one scary agency. Even Pete Stark (D-Calif.), said that the IPAB "sets [Medicare] up for unsustainable cuts" that will endanger the health of patients, and that he would "work tirelessly to mitigate the damage" the panel would cause.

Of course our ACP President, Dr. Fred Ralston, likes the IPAB. Go figure...

BDoherty said...

First, I have to respectfully correct the record on ACP’s position on IPAB.

ACP does not support IPAB as currently constituted. (And our current President is Dr. Virginia Hood, FACP. Dr. Ralston is ACP’s immediate Past President.) We submitted a statement for a congressional hearing on IPAB that called for major changes—including allowing Congress to reject its recommendations by a simple majority vote, and requiring practicing physician representation on the board. At the same time, ACP believes there is value in providing Congress with independent recommendations on reducing costs in a responsible manner—something politicians themselves are not good at doing, as we all know. Like many issues, ACP doesn’t see IPAB in a polarized yes-or-no, black-or-white, repeal-or-retain way; rather, our approach is to offer constructive alternatives to fix what is wrong with it while preserving what is good about it.

Second, I am troubled by the nostalgia for the days before Medicare was enacted. Do some internists really want to go back to a time when the elderly often had poor access to health care because they could not find affordable health insurance? For all of its longer-term financing woes—which can be readily fixed—Medicare has been an enormous success story for seniors. A paper published in the Health Care Financing Review put it this way:

“About one-half of America’s seniors did not have hospital insurance prior to Medicare. By contrast, 75 percent of adults under age 65 had hospital insurance, primarily through their employer. For the uninsured, needing hospital services could mean going without health care or turning to family, friends, and/or charity to cover medical bills. More than one in four elderly were estimated to go without medical care due to cost concerns (Harris, 1966). Medicare, along with other programs, notably Social Security . . . have greatly improved the ability of the elderly and the disabled to live without these worries. Medicare covers nearly all of the elderly (about 97 percent), making them the population group most likely to have health insurance coverage.”

A peer-reviewed study in Health Affairs reported that “Our findings are consistent with the idea that Medicare-funded services have improved the health of the elderly,” noting evidence supporting Medicare’s contributions to extending life span and improving seniors’ functional status.

Medicare has short- and long-term financing problems that need to be addressed, but going back to a time when many of the elderly did not have access to affordable health care because they couldn’t find insurance is not the answer. Medicare has improved access, equity and outcomes, and saved lives. The evidence suggests that expanding health insurance coverage to other, non-elderly Americans, as the ACA would do, also will improve access, equity and outcomes, and save lives.

Finally, I can say, with absolute certainty, that Congress will never allow the Medicare trust fund to run out of money and the program to go broke. Medicare is enormously popular among voters, and Congress will find a way to keep it going, no matter which party controls Congress or the White House.

Steve Lucas said...

Funny this question should come up at this time. Last night I saw a TV story on the exchanges. The numbers worked out that the average insurance policy is costing about $12,000. The proposed fine for not covering employees is going to be about $2,000, leaving $10,000.

A person making $30,000 per year would qualify for basically free medical insurance through the exchanges. So an employer could give the employee a $5,000 raise, save $5,000 and get out of the insurance business.

Then a very young, earnest young man was talking about how this would not happen and that business would be more responsible and want to offer insurance as an incentive for employment. I have some very bad news for this young man.

He thinks much too highly of business since they will do what is best for the bottom line in a New York minute. We all have our current long list of misdeeds where business has stuck the government with the cost of failed investments or technology.

Bob D. makes an important point: We are all looking, in our own way, for a fiscally responsible solution to our growing medical cost dilemma. I believe, like ryanjo, that part of the solution is returning to a patient/doctor relationship where financial incentives do not drive testing and care.

Like most socially responsible people I do not like the screening for pre-existing conditions, or any of the other hurdles placed in the way of people getting the care they need, at a reasonable cost. We do have the issue that we now equate care with insurance. This is not the case as these are two separate issues, with many receiving outstanding care with no insurance through clinics, the VA, and other avenues.

The numbers are clear; most of our medical costs are focused on a very small number of people. We need to collectively share in these cost to maintain our social structure.

The unfortunate reality is that financial incentives drive the testing and unnecessary treatment of the bulk of the population. Political incentives drive the continuation of this system to the detriment of both those who need care and those paying for care.

Steve Lucas

ryanjo said...

Thanks for the clarification of the ACPs position on the IPAB. I just remember the same logic applied when ACP supported the ACA. It was a step toward rectifying physician payment inequities, specifically the SGR, we were told. We are about to find out how much constructive engagement has earned physicians when the Congressional Joint Select Committee on Deficit Reduction finishes its deliberations this month. Care to wager?

I think that your concern about the elderly may have some relevance as far as Medicare A, since hospital expenses can be truly catastrophic, even for the insured. But what I said refers to patients paying their doctors. Look at it this way, after both Medicare B & I pay the admin costs (up to 30% of health costs), plus the waste of my time not seeing patients (up to several hours a week with their precerts & formulary harassment), plus what the patients already pay for Medicare deductibles & copays, I estimate I could charge about 50-60% of what Medicare and the patient already pay me. Which makes an office visit just as affordable as dinner in a good restaurant or a tank of gas.

But as any practicing physician knows, the Medicare program will not allow doctors & patients to opt out. Not without punitive financial measures. So patients and doctors alike continue to dance to the music, as the puppeteers in Washington fumble with the strings.

doc777 said...

I have to laugh at the desperation the ACP leadership is exhibiting. The ACA cannot work whether the mandates are included or not. It's financing is based on smoke and mirrors and the wheels are already falling off. The Class Act has already been deemed undoable. The IOM recently stated the exchanges will fail unless there are serious cost cutting measures put into place (that statement despite assuming the mandates are in place). The cost overruns are going to be incredible and will cripple the country like is already occurring in Massachusetts.

Yet the ACP continues to embrace it's sacred cow. So much so that they arrogantly ram it down our throats when we are naive enough to renew our membership (there is actually an in-your-face statement on the online receipt). Adding 15 million people to the already dysfunctional Medicaid program is not the solution. Oh that's right, we will just give more money to expand the community health centers so all of us can continue to limit our access to the Medicaid population. What a bunch of hypocrites. I get almost daily emails from the ACP begging me to call Washington to give input for the special committee. Despite those emails, it appears a few hundred people responded out of well over 100,000 members. A large portion of our membership is just fed up. The ACP is quickly becoming irrelevant. And, since they have put all their eggs in one basket, after the 2012 election, the ACP will only be useful for entertainment value.

The Unseen Patient said...

Removing the mandate will have several negative effects. First it will leave several fewer people with coverage. It also will negate the idea that all Americans share in the solution of improving our health system. It will allow a group of citizens to remove themselves from the solution and make it even more difficult to take the next step to a single payer. The nation shares the responsibility of the failings of our current system and they share the responsibility to repair it. The task cannot be delegated to some while other sit and watch.

Arvind said...

Ryanjo and Steve, you should join Docs4PatientCare, which better represents your ideas and priorities.

Its funny how, the ACP keeps trying to defend the ACA despite more facts being obvious that it was a mistake to support it. Time to wake up to reality, Bob.

doc777 said...

Well, maybe the Ohio Issue 3 vote will knock ACP leadership upside the head. Despite a very contentious collective bargaining measure likely drawing many more liberals to the polls, Issue 3 PASSED (66% for, 34% against). The measure calls for exempting residents of Ohio from national health care mandates, which would stop any state law from forcing persons, employers or health care providers to participate in a health care system.

As I stated, the wheels are falling off. They know the mandate is going down, so now they are trying desperately to save the sinking ship by coming out with this garbage that the ACA can work without the mandate. It cannot work with the mandate. It sure as heck cannot work without it.

(Also, just as a clarification, Bob works for the ACP. He does not set policy for the organization. He does not lead the organization. The physician leadership sets the policy. Bob defends that policy. That is his job. It is not Bob I am angry at. Instead, my anger is directed at my colleagues in leadership who continue to ignore at least half the membership. I don't want to leave this organization. It does a lot of good things. However, if things continue as they are, the organization may leave me no choice.)

Anonymous said...

For the record the prestigious District of Columbia United States Court of Appeals ruling on the mandate of the ACA written by Judge Silberman upholds the mandate. The precedent is the enforcement of crop allocations. Even the wheat farmer who used his wheat crop for his personal farm consumption and did not sell it was held subject to the crop allocations. His sequestered production affects the national market by not buying in or selling to the market. This allocation is for the apportioned good of all.
There is nothing new nor unconstitutional about the mandate. The Supreme court will not find a contradictory precedent.

Harrison said...

I think that the Supreme Court's decision on this issue is truly uncertain.
There was a time in the Court's history when this case would have been a slam dunk decision against the mandate.
The court for 70 or more years ruled pretty consistently against the notion of the federal government or even the state governments "taking property from A to give to B"
This changed under FDR -- in about 1937.
But the current composition of the court is different than the 1937 court.
I think Justices Roberts, Alito, Scalia and Thomas have more opinions in common with the likes of Justice Sutherland or perhaps Chief Justice Taft than they do with Justices Brandeis or Holmes.

We may see a re-emergence of the antiquated traditions.

Who knows?