Obamacare: My Five Predictions
While the Syria debate rolls on, let’s return to our regularly scheduled programming: the relentless march of Obamacare. While Republicans compete to see who can be the loudest in denouncing Obamacare, the law has already brought about some changes, with significant ones coming next year and for the rest of this decade. My five predictions:
*Consolidation will replace solo practitioners and many stand-alone service providers (e.g., Magnetic resonance imaging [MRI] and mammogram clinics). My home state of Delaware’s a good case in point: If you think the largest private employer here is E.I. Du Pont De Nemours And Co. (NYSE:DD), you’d be wrong. It’s the Christiana Health Care System.
Partly, it’s a result of the trend towards maintaining electronic medical records: For example, Sally’s system doctor sends her to the system’s mammogram unit for a scan, and he receives the results immediately on his computer. Billing is seamless too. Which brings me to another reason for consolidation: A bigger operation is better able to spread the financial impact of high-cost patients (with chronic conditions like diabetes) over its entire patient pool.
*More nurse-practitioners and physicians assistants will do routine work instead of higher-cost MDs.
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Dentists (who work mostly on a cash basis) figured this out 40 years ago: Have the cheaper hygienist do all the prep work, x-Rays, etc., so the dentist can just pop in to do the exam (where his/her expertise is needed). It makes the best use of the dentist’s time, and helps to control costs. Now think of a reception area filled with kids with runny noses and sore throats. Do they have to see a board-certified pediatrician? I can foresee the day when, if Mommy insists that her red-nosed child must see the doctor, she’ll be told it’s an extra charge. Ditto for middle-aged folks on maintenance meds for cholesterol, high blood pressure, etc. who need to see a medical professional on a regular basis. Ditto for those receiving annual routine exams such as pap smears and prostate checks.
*The 2015 premiums for health insurance provided through an ‘exchange’ will skyrocket in October 2014 – just in time for mid-term elections!
Right now, insurance companies are scrambling to predict what the 2014 premiums should be, but it’s tough, since 2014 will be the first year when the insurance exchanges operate. To make matters worse, no doubt there is political pressure from the Obama White House to ‘lowball’ any estimates, so they can tout the affordability of the premiums. This, of course, ignores the reality of who will be first in line to sign up: unemployed or no-insurance people aged 40 to 65 who have chronic conditions (heart disease, diabetes) who don’t qualify for Medicare or Medicaid. Just to give you an idea of how large this population might be, consider the number of adults who applied for Social Security Disability Insurance and/or Supplemental Security Income last year: a total of 4.6 million.
Each of these 4.6 million people claims to have a medical condition that makes him/her unable to work. And while they’re waiting (perhaps a year) to have their case dealt with, they need health insurance. Enter Obamacare to the rescue.
*Employers will drop ‘family’ plans and limit insurance to ‘self only.’
Many employers offer health insurance because they feel a moral obligation to their employees (healthy employees are better for the bottom line too). But the extent of this relationship will be put to the test when Obamacare comes on the scene. An employer may feel responsible for its employee, but if the spouse and kids can get coverage under Obamacare, why should the employer pick up the tab for them, too? It will save money, and some employees (the child-free singles) will feel they’re being treated as fairly as, say, the married worker with five kids. It will also end some Human Resources nightmares, such as: determining the eligibility of a worker’s common-law wife and his five step-grandkids who live in his household.
*Embarrassed parents with unemployed or underemployed adult children might not admit to liking Obamacare, but deep down inside they do – or at least they’re comfortable with it.
Obamacare’s provision that adult children can stay on their parents’ health plan until age 26 has been a relief for many families, but they might not want to admit it. Consider this: You work hard during the high school years to make sure your child goes to a ‘good’ university, and then you provide support so your undergraduate does well, and perhaps goes for a ‘good’ graduate degree too. Then your student graduates, and reality sets in. The ‘good’ university degree doesn’t fetch much in a market that’s still in recovery. The young adult ends up working at a coffee bar (no benefits), or various non-profits (ditto), or cash jobs in the neighborhood (ditto), or stays at home, hoping, like Dickens’ Mr. Micawber, that something will turn up. This situation is not an easy thing for a parent to admit, as it smacks of personal failure. I have heard parents say, reluctantly, that being able to keep their kids on their health insurance has reduced some of their worry. On a political level, if you believe in the theory of ‘in for a dime, in for a dollar’, these parents (high-earning middle class types) might fit a Republican profile – but they have positive feelings about Obamacare. The ‘dime’ that got them in was the young adult benefit. If Republicans want to repeal and replace Obamacare, they’ll have to deal with pushback from these parents.
While the inside-the-Beltway types beat each other up over who despises Obamacare more, let’s face the reality. It will take a 2016 trifecta to get Obamacare repealed and replaced: a Republican president, House, and a Senate with a filibuster-proof majority. It’s not impossible, but it is a tall order.
In the meantime, House and Senate Republicans and candidates should make the most of next year’s premium spike in their campaigns – and propose reasonable, truly affordable alternatives (e.g., purchasing insurance across state lines), while being mindful that some parts of Obamacare (such as the adult child coverage) are probably here to stay.
Joanne Butler is a graduate of the Kennedy School of Government at Harvard University and a former professional Republican staff member at the U.S. House of Representatives Ways and Means Committee.