Health Care Law at One Year: Little Protection, Not So Affordable

By March 23, 2011Health Care

One year ago today, President Obama signed the Patient Protection and Affordable Care Act (PPACA), the great federal restructuring of U.S. health care. The law’s value in protecting patients is suspect, and it’s doing little to make health care affordable. So, after a year of implementation what has been the real effect?

PPACA: Neither Protective, Nor Affordable

We know that the promise of being able to keep our health plan if we like it was an empty one, and even the Administration’s own actuary admits this fact. When asked during a hearing in the House Budget Committee whether the health care law really allows people to keep the plans they like, Rick Foster stated that claim was “not true in all cases.”

We also know the bulk of the funding for the new entitlement program is based on fuzzy math at best and outright deception at worst. In a stunning admission before the House Energy and Commerce Committee, the Secretary of Health and Human Services admitted the Administration is counting reductions in Medicare spending as a credit to extending the solvency of the program while also using the same funds to “pay for” a large portion of the expected costs of PPACA. This double-counting allowed the Administration to claim the legislation would save the nation more than $100 billion over the next 10 years — a statement with as much veracity as the promise our health plans wouldn’t change.

As the law enters its second year of implementation, the National Association of Manufacturers will be watching several issues sure to emerge in 2011: the essential benefits package and accountable care organizations (ACO). The essential benefits package defines for all Americans what coverage must purchase in order to avoid penalties under the law. It’s easy to predict how this will turn out: All single men will have to buy a plan that covers pre-natal and post-natal care and all single women will have to have a policy that covers prostate cancer. This is not to say these aren’t important things to cover, but the inequity is clear.

What’s also clear is how the process of determining what is an essential benefit will be manipulated by well-meaning interest groups that will gauge their importance and influence on policymakers based on whether their particular disease category is included as an essential benefit. Special-interest coverage is hardly a strategy for controlling health care costs.

While accountable care organizations (ACOs) seem to be an attractive idea in some health care policy circles, there are some (this author included) who believe the consolidation and integration of hospitals and physician practices could do irreparable harm to competition in the marketplace. ACOs may work fine in a single-payer system like Medicare, but it could wreak havoc on negotiations for payment rates and the establishment of networks in a private market which depends on competition in order to arrive at a mutually agreed upon price for services. In small to medium-sized communities, this consolidation could lead to oligopolies or monopolies in health care services. Such an outcome would raise prices and make care less affordable.

Many proponents believed, and continue to believe, Americans will warm to the law once they see all the great things and reap all the rewards of the centralized command-and-control this law will bestow upon us. The results so far leave us cold.

Provisions limiting how much money we can all set aside in flexible spending accounts (FSA) — which escaped scrutiny in the legislative maneuvering necessary to enact the bill — are increasing the out-of-pocket costs for those who use these tools. Another provision took away the ability to pay for over-the-counter medicines out of FSA or Health Savings Account without a prescription. This has led to patients seeing their physician to acquire the prescription, obviously increases costs through the simple act of having to obtain a physician order.

This patient protection and affordable care is looking less and less protective and definitely not affordable.

Joe Trauger is vice president for human resources policy at the National Association of Manufacturers.

Join the discussion 2 Comments

  • Jay Banks says:

    The US might have the most expensive, inefficient and unpopular health care system of any developed country, with poor outcomes and the major reason for this could be the system which is too complicated. In other countries there are models that really work. The government should have taken a look at those before coming up with its own system.

  • Susan says:

    I think all of the business Associations should just get together and boycott the whole thing.

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