Monday, December 16, 2013

The Affordable Care Act: What to Look for in 2014

Here is what to look for during 2014 under the Affordable Care Act.

1. Cost of premiums. If health insurance premiums continue to rise at the rate of 1.3% annually as they have since 2010, the ACA will have achieved its principal purpose – making health care affordable. Enrollments will follow.
2. Rural and inner-city community hospitals. Without Disproportionate Share funding under Medicare, hospitals serving low-income populations will be under enormous financial pressure in the states that have not expanded Medicaid. These states will either have to expand Medicaid, raise state taxes, or let those hospitals close. Watch what Texas and Florida do. If either one of those states expands Medicaid, all the rest of the states will follow.
3. Federal budget. Lower-than-expected premiums and the fact that half the states opted out of Medicaid expansion have resulted in enormous savings in the federal budget. Will those savings be preserved for health care or spent on something else?
4. Employer mandate. The President delayed implementation of the penalties on employers who fail to offer health insurance. Will this part of the law go into effect in 2015?
5. Towards Single Payer. Would it be less expensive for the government to simply pay for all health care? OK, this won’t happen during 2014, but we will begin to learn whether single-payer health care (“Medicare For All”) makes sense. The first step towards a single-payer system will be if employers stop offering health insurance to their employees and instead subsidize the purchase of their health insurance on the Exchange. Employers would like to shed the responsibility of paying for health care. This would level the playing field in the global economy and improve the competitive position of American business. Once health care is disentangled from employment, the road to single-payer becomes simply a matter of what is most efficient – direct government payment to providers or the use of insurance companies as “middlemen” between patients and providers.

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