The Health Reform Ruling: A Mixed Bag

I know I've been absent from posting for a while now and you may have thought I was dead. Actually it was much worse, I was studying for Step 1, but that's behind me now and what good timing that my first post back is about health reform. This is a complex issue, so this post may be a bit long and a bit rambling, but I'll do my best to remain coherent.

As anyone who isn't living totally off the grid knows, the Supreme Court upheld the individual mandate of the PPACA (or as the media calls it, Obamacare) yesterday. Before I dive into what that really means, it's worth considering there were only three ways this ruling could have really gone. They could have: 1) Thrown out the entire PPACA after determining that it could not stand alone without the individual mandate and was too flawed to remain as law. 2) Thrown out the individual mandate but allowed the rest of the PPACA to stand independently. 3) Upheld the whole thing.

Most people with strong knowledge on the subject and the court I talked to were expecting option 2, but instead we got option 3 (for the most part). To be honest, I'm a little surprised. I never expected them to throw out the whole thing, but considering the piss-poor job the defense did of explaining how the mandate and the penalty for violating it was constitutional (hint: they never explained how it was constitutional, argued it wasn't a tax but later called it a tax, etc.) and the pointed questions and dissatisfaction with the answers coming from the bench... Well, I was in the group expecting them to throw out the mandate due to its potential infringement on the constitution and lack of good explanations as to why it wouldn't be an infringement. For whatever reasons, the court saw things in a different way than they appeared to during the arguments and yesterday's decision could have some pretty serious implications for the future when it comes to allowing the government to force its citizens to buy a commercial product for some broader purpose. I won't even touch any of that now because honestly, what's done is done and it's silly to even try and predict what kind of effects this could have so early in the game. What I will do is try to mention what today's ruling really means to you.

Since the bill is being upheld almost completely intact, the time table for implementation will remain. So the good things, the things the administration actually likes to talk about, are still on track. The pre-existing consideration exclusion, the expansion of medicaid, the ability to stay on family insurance until 26, and the individual mandate are all still here. The problems are all still here too, namely that a huge chunk (possibly the majority) of cost savings from the law that were supposed to lower our deficit and reduce healthcare costs is all smoke and mirrors and won't be allowed to happen. Make no mistake, the Medicare savings that the President said would cover half the cost of this legislation will not, and should not, occur, and as a result this will not be the quick fix to healthcare costs or Medicare spending that they have tried to lead you to believe it is. One problem has changed though, and that is the expansion of Medicaid. For those unaware of the issue, the law required a massive expansion of Medicaid, which means a massive increase in Medicaid costs. Half of that money comes from the federal government (I'll say it again, this is an expensive law) and the other portion is the responsibility of individual states. This is a large part of why states were suing to overturn the law. The federal government was forcing the states to spend billions more, billions they clearly do not have, on an expansion of a program they didn't agree to expand and can't really afford at its current size, let alone larger. The Supreme Court apparently agreed that this was a bit off, and they stripped that requirement of its punishment power. As it stands now, the requirement is still there but the states would not be punished for disobeying it, which is a problem for the current administration as well as Medicaid itself, and I won't be surprised if a lot of states running on shoestring budgets tell the feds they simply can't afford the expansion.

On the individual level, there isn't a lot that is going to change... yet. If you have insurance, great, but expect wait times at doctors' offices to increase gradually over the next several years. With increased coverage comes increased utilization, and millions more people will likely be seeing the doctor that weren't before. This is great for the health of the people, but potentially bad for healthcare costs and bad for how long it may take to get in to see your doctor considering the existing physician shortage. If you don't have insurance, the government is going to require you to get some. The promises of affordable insurance for all are completely hollow; health insurance is an expensive product and this one law did very little to fix the intrinsic problems in health spending, so don't expect insurance prices to plummet. There may be a temporary slide as the risk pool on private plans grows a bit, but if you couldn't afford it before, you're still going to have trouble affording it now. Hospitals love the ruling because it means they should have less uncompensated care, and really no other reason. Their passionate support for this mandate was due to their finances, not altruism or politics. For doctors it's a mixed bag. More insured patients could be a good thing and reduce the cost and stress of dealing with uninsured patients, and for primary care doctors it could even mean a small salary bump since people are more willing to see the doctor if they have insurance. However, the potential downsides are currently pretty big. If President Obama gets his way and the huge Medicare payment cuts to doctors are allowed to hit, many of them will be faced with a grave choice: Continue accepting elderly patients and risk your livelihood and business, or opt out of Medicare and hope the insurance companies don't try to follow Medicare's example and aim your business towards bankruptcy too. It really can come down to that, and recent CNN articles have cited specific examples of private practice docs that couldn't afford to keep their doors open anymore. If the cuts hit, it will be much worse, and the patients will ultimately pay the price. If the cuts that the president promised to help pay for this law happen, make no mistake, Medicare patients will be in serious trouble and many doctors will stand up and tell people what is really going on. I don't know what the outcome of that showdown would be, but given the current political climate and the ease with which our voting public gives up rights and blames others for our bad choices, I have to think it would be a negative one for doctors and as a result a negative one for their patients (AKA everyone).

The bottom line of all of this is quite simple: You have to have health insurance. The government can make you pay a penalty if you don't. Beyond those two statements, it's very difficult to predict where this all is headed. There are very valid reasons to be concerned, and there are some reasons to be optimistic, but it is all going to come down to how this mandate and this law are implemented and which ridiculously bad ideas proposed to pay for this law will be allowed to occur. We can't afford the law right now, regardless of what the administration has promised. We can't afford a lot of what we were doing before adding this to the stack, so there is going to be a breaking point, probably soon, where we have to figure out how to really pay for things we need and cut things we don't. I tend to be cynical so I have grave concerns over what faces our elderly, our healthcare providers, and our spending in the next few years. I hope I'm wrong, but if I'm not the idealistic notion of a United States with appropriately compensated professionals, cheap insurance, and good quality healthcare for all won't last long and the "I told you so"s won't even want to say it.

As always, your thoughts, comments, rants, and questions are welcome.

-M