If the Affordable Care Act stays as is, costs are going to continue to escalate. If the Affordable Care Act is struck down, costs are going to continue to escalate. We are faced with not too appealing choices. In the event that the mandate is struck and the balance of the law upheld, we face even higher costs for those who pay for insurance.
Many years ago New Jersey enacted a requirement to accept anyone who wanted coverage. The result was premiums escalating about 30% shortly thereafter. Check healthcare.gov and you will find a plan offered in NJ with a premium an absurd $100,000 a year … talk about self-insurance.
Given those most likely to forego coverage are also least likely to need coverage because they are currently young and healthy, the short-term negative impact may be somewhat overstated, but it is real nevertheless. Congress may have made a serious mistake in creating the national mandate. Rather, it should have left the manner in which adverse selection was dealt with to the states. A two year waiting period to obtain coverage, if initially waived, a surcharge for late enrollment such as used by Medicare, limited benefits for an extended period upon late enrollment are all possibilities.
Regardless of your point of view, it’s very clear that this law was passed without a clear understanding of all the consequences and interrelationships within the health care system. That is too bad, because if the law is struck in total, we are back to square one and billions of dollars in the pubic and private sector will have been wasted and many of the positive initiatives will cease. The likelihood of this or the next Congress starting over is remote.
The good news is that regardless of any law, private insurers are taking the initiative to tackle the real issues of cost and quality. Insurers are focused on new payment models such as Patient Centered Medical Homes, Bundled Payments and Accountable Care Organizations where they attempt to shift reimbursement from fee for service to fee for quality and outcomes. These models also promote care coordination and ultimately improved quality of health care.
This article also appears in the Health Insurance Illuminated blog.
Are you concerned that the Affordable Care Act will be voided in whole or in part?
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