CHARLESTON, W.Va. -- I think I witnessed a tangible "winner" under the Affordable Care Act. A young woman, standing behind President Obama during his "photo-op" accompanying the rollout of the ACA health exchanges, subsequently summarized her situation in a TV interview. I am perplexed as to the "why" and "how" of her win.
For months, depending upon the ideology of the media source, pundit or politician, I have heard endless "alleged," "hypothetical" and "testimonial" accounts of the nature and magnitude of the ACA related joy or misery individual winners and losers will face. I knew young folks would be required to pay more than their risk justified and poor folks would receive subsidies to afford basic care coverage. I also knew that the great majority of American families were assured they would be able to keep their doctor and would experience about a $2,000 decrease in insurance premiums. I ignored the "spin" but did wonder "why" and "how".
For example, if the federal government took over the home fire insurance market, subsidized coverage for poor folks and readjusted rates for certain types of homes, would premiums drop substantially for most Americans? Would the takeover spur competition or include "cost-effective" federal inspection, educational and regulatory requirements that greatly reduced the number of homes that burned, thus, producing premium savings for most families?
The woman mentioned above was elated that she was able to enroll in an exchange program that would require a $200 premium, rather than $1,200 each month. Thus, she would be able to save about $12,000 per year, which she planned to use to hire additional employees to build her District of Columbia business. She did not mention how much she usually pays yearly out of pocket for deductibles, co-insurance, etc. but did note that her medications cost over $5,000 annually.
Rather than spin and speculation, we now have a real case (I am sure there are many more) of a communicative patient that the media, pundits and politicians should track and analyze to answer my questions.
First, what is the actual amount this woman has spent on medical care over the last several years, including premiums and out of pocket? Did she have any "out of pocket" caps under her old plan that will not be operative under the ACA in its initial year? How much will her ACA premiums increase in subsequent years when the "out of pocket" cap kicks in? Considering both the premium and her out of pocket, e.g., deductibles, liabilities, how much more or less will she pay in 2014 compared to a similar past year?
Assume this woman will realize a true overall out-of-pocket "subsidy" savings of $12,000 and not just a cost shift as described. Given the nature of her medical condition, i.e., MS, and the fact that she notes a $5,000 medication cost, it is not unreasonable to assume her actual medical cost could well exceed the cost of her previous premiums. Will a well-paid, young fellow working in the high technology industry -- or a struggling "middle class" hair salon operator or family farmer expecting a $2,000 savings -- make up the difference? Who will end up the losers? Will they end up being worse off than the businesswoman receiving the $12,000 subsidy?
An Oct. 2 New York Times front page article contends that 66 percent of blacks and single mothers and 50 percent of low-income workers will not be covered under the ACA. A recent National Journal article suggests that high deductible plans discourage male emergency room usage and end up increasing health-care costs in the long run. Would our attention and resources be more effectively focused on solving these issues rather than providing such a large subsidy?
Will the woman be able to continue to get care from her current medical team if she desires or will she be directed elsewhere? Will the quality and acceptability of care be better or worse?
Finally, will the cost of the care decrease because of new ACA requirements and regulations such that the savings will assure there are no losers? Or, was the $12,000 not a subsidy, but a savings, because of the reduced premiums emanating from the "competition" spurred by the ACA exchanges? Past trends and other factors make these explanations highly doubtful but also worth checking.
Felsen, of Great Cacapon, is a retired public health physician.