As I stated in my last few blogs, the REAL start of the Patient Protection and Affordable Care Act is January 1, 2014. Why? Because the most important provisions of this law take effect on 1/1/14 or later. January 1, 2014 has been called the biggest change in our health care system since Medicare (1965). What’s the latest? And, what’s coming in 2013 and 2014?
Before answering these two questions, it’s important to reflect on what’s brought us to this point. First, the Obama Administration was politically astute in front-loading the enhanced benefits of Obamacare right after the law passed on March 23, 2010. However, 2013 and 2014 contain most of the provisions necessary to pay for these enhanced benefits.
As I stated in my first blog post, this law will be changing and evolving as we move forward. Years from now, we will be able to say, in the words of Jerry Garcia of the Grateful Dead, “What a long, strange trip it’s been.”
Here are a list of recent surprises, as well as predictions about some of the things that will happen by year’s end:
- A majority of states have asked the federal government to run their state-based Health Insurance Exchanges. Can the Feds do it in time?
- In the last few months, the federal government admitted that time was running short, and they would only be able to offer one plan ( in states where the feds run the Health Care Exchange) for each employer group in 2014 because they didn’t have the time to set up multiple plan options for employers by January 1, 2014. The administration has had three years to prepare for the state-based exchanges, and it appears they will not be prepared to get them all up and running by 2014. As a result, employers who live in those states will most likely have to pay more (with only one benefit option) with less flexibility in plan benefit offerings.
- California appears to be ready to go in establishing its state-based exchange, which is known as “Covered California.” The rates and benefits for the individual Health Insurance Exchange have been released, while the Small Group Health Insurance Exchange rates are still pending. Individual rates are higher for those with no subsidy, and many individuals will have access to fewer doctors due to the introduction of so-called “skinny networks” introduced into the California Health Care Exchange. Skinny networks ( just as with Managed Care HMO’s in the 1970’s and 1980’s), are better able to control costs by restricting access to a smaller network of providers. Another noteworthy development: Aetna, Cigna and United Health Care are not participating in Covered California. Conversely, it’s been reported that such relatively unknown carriers as LA Care, Western Health Advantage, Chinese Health Plan and Sharp Health Plan are participating in Covered California.
- The 2.3% Medical Device Tax, which went into effect on 1/1/13 and is based on sales (not profits), has proven to be very unpopular. As a result, Congress has discussed its repeal.
- Will the Federal government be able to attract enough young (i.e. healthy) adults, which will be critical to help pay for the older, sicker enrollees that are certain to enroll?
- Will there be doctor shortages, particularly for the Medicaid program, which is expected to see an increase in enrollment of many millions?
These are just some of the many questions that are looming as we head into 2014 and beyond. And, the success or failure of the rollout of the state-based Health Care Exchanges will have a significant impact on the 2014 mid-term elections. Because Obamacare passed with only Democratic votes, they are likely to receive any credit (and blame) for the success (or failure) of this important implementation in 2014.