On Oct. 17, the BDN published Dr. Philip Caper’s commentary “ACA’s bungled rollout aside, government health insurance works.” Caper was curiously selective in his presentation of the facts regarding the Affordable Care Act: the bungled rollout of the online exchanges is but the most recent symptom of poorly conceived and poorly crafted legislation.
The first major component of the ACA was the CLASS Act, the Community Living Assistance Services and Supports program. This initiative was intended to establish a long-term care program for our elderly and disabled populations. The first seven years’ premiums were projected to produce an $86 billion positive cash flow by 2020 that would subsidize the implementation of the ACA. Two years ago this week, U.S. Health and Human Services Secretary Kathleen Sebelius canceled the CLASS Act, citing its fiscal unsustainability. Congress later repealed it.
Likewise the second part of the ACA was the Pre-Existing Condition Insurance Plan. In effect since 2012, this plan was meant to insure the 400,000 plus Americans who are the very highest-cost consumers of health care. Frequently these individuals have cancer, heart disease and other serious illnesses. This plan was funded by $5 billion in federal funds and was designed to be the bridge until the health insurance exchanges commence in 2014, at which time those individuals could access the exchanges. This high-risk pool has been used effectively in a variety of states and is often termed a reinsurance pool. Unfortunately in February of this year, Sebelius announced that reimbursements to providers were being slashed and enrollment has been capped at 135,000 individuals, as the program is out of funds.
The third major component of the ACA was the mandatory expansion of Medicaid eligibility for individuals earning up to 138 percent of the federal poverty level. Last year, the Supreme Court ruled that an unconstitutional violation of states’ rights, and the expansion is now elective. Currently, 26 states, including Maine, have chosen not to expand, as the 1965-designed Medicaid system is inflexible, dysfunctional and has perverse incentives for both consumers and providers.
Which brings us to the current debacle: The federal government’s inability to create a functioning, online exchange is somewhat astounding. The government has had three years to design the system, and it is not as if they are doing something new or innovative. The private market has been doing this for 15 years. Sites such as ehealthinsurance.com have been offering an online health insurance marketplace effectively since 1999, and it functions very well in those states whose laws encourage competition. (That precludes Maine.)
Caper, in his BDN commentary, then states that the real problem with enacting comprehensive systemic health care reform is the need to accommodate the special interests of the medical industrial complex. Is Caper referring to the fact that Congress has granted to the American Medical Association the exclusive right to determine hospitals’ chargemaster pricing through the creation of the Relative Value Unit system?
The commentary goes on to say that we need Medicare-for-All.
It is worth noting that Medicare was 100 percent over budget by the fifth year of its implementation, and it is a further annual multibillion-dollar drain on our budget. Medicare reimbursement nationally averages 89 percent of costs. In Maine, that number is 79 percent. It seems to me that, for such a program to be sustainable, it should at the minimum pay the costs that it incurs.
Equally important, Caper states that Medicare has much less overhead than private insurance companies: 6 percent for Medicare versus 15-20 percent for private insurance companies. These numbers do not include the cost of the Social Security Administration, which does all of the collections for Medicare (FICA on your paycheck), nor does it include the costs of the IRS, which does the enforcement for Medicare, nor does it include the free marketing Medicare receives in the form of public service announcements.
I do not disagree with the intent of the ACA. I would like to see better access, lower costs, and better health care outcomes. But I know that much of the impetus for the ACA has been the medical inflation we have witnessed over the last 30 years.
We need to first reduce the cost of health care for all, and I am not certain that the ACA will do that.
Rep. Richard Malaby, R-Hancock, represents District 34 in the Maine House. He serves on the Legislature’s Health and Human Services Committee.