Friday, June 29, 2012

Time to get to work

Now that ObamaCare is here to stay, for now, the real work begins. How do we make the best of the situation and minimize the damage?

Tens of Thousands if not hundreds of thousands of mostly small employers self fund under a high deductible that will be going away in 2 years or less. This model has been extremely effective, save 15% on your auto insurance in 15 minutes comes to mind. Employers can offer the same benefits just 10-20% cheaper. It also has brought the expertise of true professionals onto the issues of excessive provider reimbursement, inefficient care, and cost control. Ten thousand engaged brokers and TPAs will deliver far better results then 500 politicians and 100 Academic quacks any day. This model is counter to the principals of ACA which is looking for high premiums and top down cost control. It is going to take some major efforts and lots of luck for these plans to survive. Small employers need to be prepared for not only a 10-20% increase when high deductible plans go away but a 30-50% increase when their new low deductible plan is community rated. If your in Ohio and rated 1-36 in small group everyone under 20 better be prepared. If your under 10 I don't think a 3 digit rate increase is out of the realm of possibility.

The people that think professionally are strong believers that a $100 tax, penalty, tax is going to prevent adverse selection. 30+ years of reality says it will just make the issue worse. Employers are going to have to find an affordable plan they can pay 100% of the employee cost for to maintain participation. Prepaid plans sponsored by a local health system might be back in vogue pretty quickly. Choice will be the first casualty of ACA.

Tax rates will be the second, when this doesn't work, reform always fails to do what reform says it will, the logical thing to do would be to scrap it, just like Medicare they will borrow to cover it instead. Eventually we will hit our credit limit and when we do taxes will skyrocket. If you can't stomach health insurance as a career any longer accounting and financial planning are going to be very busy.

Finally the practice of medicine is about to get considerably more altruistic. You would think providers learned their lesson after getting suckered on Medicare. This time they are not getting flowers and dinner first. 80-85% of spending goes to providers, when the budget is busted that is going to stick out like a cancer for the scalpel.

The one positive I see is every time government has tried to fix healthcare they have made a complete mess of things and created entire new industries to address it. There is going to be a whole lot of fixing to be done and thus a whole lot of work for those that identify it.
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