This week it was announced that the number of people signing up for the the ACA program was now 7.1 million people.
What does that mean for the future of the program?
First, by analyzing the numbers we find that only 30% have paid their first premiums.
We are still not sure how many of these 7.1 million are new no-medicaid or medical assistance patients.
We don’t know how many are in the healthy young 26-46 year old group, which are the patients that are going to help sustain the program financially.
Why are these numbers important?
An article in Medical Healthcare, March 29, 2014, stated that due to the first group of ACA enrollees, including a higher rate of older, more expensive members, major insurers are anticipating that they will have to raise premiums by double digit numbers.
Joseph Swedish, CEO of WellPoint, stated that “there will undoubtedly be remarkable price increases.” He added that the prospect of double-digit hikes “appears as if it’s likely,” but he was uncertain about specific numbers. His company, one of the biggest commercial insurer in the ACA exchanges, with about 500,000 members as of the end of January, is going to study the demographics and the medical utilization of its new members to figure out what the future premiums will be. Swedish’s uncertainty seems to shared by many observers of the insurance exchanges.
Another consideration discussed was that of the 3 year phase out of reinsurance and risk-corridor protections established under the ACA. The phase out of re-insurance would alone contribute to about 6%-12& in rate increases of premiums, spared out over the next few years.
Also, the administration’s regulatory twists and turns, combined with political pressures regarding funding, could reduce insurer’s support for protection- the disappearance of the”safety nets.”
Unfortunately, the cost of healthcare in the US has risen far faster than the Gross Domestic Product, or total economic output of the US.
We need to look carefully at the other parts of the equation of healthcare delivery if we are going to have a sustainable healthcare delivery system for all people.
Last week we discussed one part of the equation, which was the number of uninsured children with immigrant parents. If we had solved this part of the equation the “powers-that-be”probably would have had to reconsider a whole new health care plan.
But if we are going to try to duplicate the health care delivery systems of the Europeans and the Canadians, we have to analyze the other parts of the equation- the education of the doctors and the malpractice burden.
On average the medical student graduates with a debt of about $325,000. How then do these graduates pay back their debts if they are paid medicaid reimbursement rates, which are very low. Many of the countries pay for their education. Also, the education system is entirely different. The US medical student has to complete 4 years of undergraduate education and then 4 years of medical school.
The European system completes the total education process in 6 years only. Why the difference? Why does the potential medical student have to complete all the rigid prerequisites, languages,etc? I know that we like to have medical students which are well rounded. But is this necessary and does it make a difference in the total equation?
It was interesting and predictive that the positions available for the medical students to match for their internships/residencies, a few weeks ago were not filled this year. What does this mean? That the students applying to medical school and graduating were down and not enough to filled all of the post-graduate positions. Not a good sign! These are our potential/future doctors who will care for the increased numbers of healthcare insured enrollees. Who then will care for the increased numbers of potential patients? Will will tackle this question in future blog posts.
Also, consider the cost of malpractice insurance to the physician’s overhead expenses as well as the cost of malpractice to the total cost of healthcare delivery. We will also tackle this question in future blog posts. I was enlightened about the malpractice inequality when I was in England assessing their system of health care delivery. There basically no malpractice in European countries. Imagine, for those of you who have you own business, to add anyway from $25,000-$125,000 to your yearly business overhead before you can even enter your office and deliver whatever business activities you deliver.
In addition with the treat of malpractice can we change the behavior of physicians who many times order many more test necessary for the patient? Analysis shows that physicians still want to protect themselves from lawsuits by over testing and often over treating. For example, why do physicians order antibiotics when research has proven the lack of evidence for prophylactic or antibiotics prescribed for viral syndromes?
As the number of enrollees increase and demographic spectrum of sick, older, and more important the healthy young enrollees become apparent the sustainability factors will become clearer. However, we need to plan or strategize a successful system by adjusting the other parts of the total delivery equation.
Have a great week.