If Health Reform is Overturned

                             By Joe Paduda

We know that much of the opposition to the Accountable Care Act is feeling pretty good right now, as they should after the Florida judge’s rejection of the Act.

What we don’t know is what will happen if they are successful in overturning health reform.

What will our country’s health system look like in five years if there isn’t reform?

Impact on insurers
Without reform of the insurance underwriting and rating laws, insurers will seek to be even more selective about the policies they write – their right, and I’d argue an obligation on the part of the for-profit health plans. As stock companies, their first obligation is to their owners – and that obligation requires them to generate profits and growth. That is not a value judgment – it is a statement of fact.

Health plans just don’t want the ‘risk’ that someone will have a claim. I’d expect healthplans will also continue to ‘churn’ their books – to try to dump policies that have been in place for more than three years, as that is about when claims start to pile up.

The number of viable healthplans will continue to shrink. As a mature industry, the healthplan business has been steadily consolidating – if anything that will accelerate. And no, the free market will not increase ‘choice’; we already have a free market for commercial plans (and Medicare Advantage and Part D) and in most areas there are at most two plans to choose from.

Smaller healthplans will find it increasingly hard to compete, as the big plans get ever-better discounts from providers, who have to make up the lost revenue by cost-shifting to the smaller plans with less clout. As their costs go up, so will their rates, until they either wither away or get bought out by the big plans.

PPO plans will get ‘nichier and nichier’. Their higher medical costs will push members towards HMO-type plans, making it harder for employers with widely-spread workers to get affordable coverage unless they buy insurance from one of the big plans that operates in all the areas the employer has bodies. Inevitably, some workers will be left with poor coverage…

Impact on individuals and families
Bureaucrats at insurance companies
will still be making decisions about what doctors you can see and how much they’ll pay and what they’ll cover and what they won’t. You’ll have to ask permission for services, and hope and pray they get paid. Those same bureaucrats will tell you they’re interested in keeping you healthy, but that’s only till they can churn you out of their book.

There will continue to be a hodgepodge of state-specific insurance mandates, rules, regulations, and enforcement mechanisms, as well as benefit designs and limitations

But the big problem is this – it will get harder and harder for individuals and employers to get insurance coverage.

Here’s one all-too-common scenario. The breadwinner loses her/his job, and with it health insurance coverage. They find a new job, but that company doesn’t offer benefits as they are too expensive. So, Ms/Mr Breadwinner, responsible person that s/he is, tries to buy an individual policy. There are several insurers that write those policies, so the applications go in – followed by requests for medical records, documents, and attestations signed by their physicians. Oops, one of the family has a mild case of asthma, and dad takes cholesterol medication, and mom saw a counselor a few years ago after her dad died.

Three insurers decline to offer a proposal, and the one that does will exclude any cardiovascular coverage for dad, any pulmonary issues for junior, and mom won’t be covered for any psychiatric or anxiety or related issues. And, oh, the policy is 50% more expensive than the original quote. Leaving Mr/Ms Breadwinner to decide if they want to come up with $22,000 a year for less-than-full coverage and their HSA deductible (in 2009 dollars)…

Unfortunately there isn’t any governmental assistance, so the Breadwinners, who make $75k a year, are looking at spending almost a third of their gross income on health insurance – insurance that doesn’t cover their most likely health problems.

Think this is hyperbole? You’re wrong. This is happening every day in every community, and if health reform is overturned, it is going to happen more and more often.

What does this mean for you?

Here’s hoping those seeking to overturn reform have a solution in mind that will actually work. And when you consider their ‘solutions’, remember that no insurer will cover your pre-existing condition unless they are forced to. Or your parents’ or your kids’ or your friends’.

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