No one ever thought the implementation of Health Care Reform would be easy. Even fervent supporters of the law admit that things are going worse than expected.
Implementation got off to a rough start because the Obama administration didn’t want to release unpopular rules before the election. Regulators have been working hard but are clearly overwhelmed, trying to write rules that influence the entire health care sector — an economic unit roughly the size of France.
The process has been made more difficult with Congress refusing to provide enough money for implementation.
It seems most everybody involved is in a state of anxiety.
- Insurance companies are trying to put out new products, but they don’t know what federal parameters they have to meet.
- Small businesses are angry because the provisions that benefited them have been put on the back burner.
- Health care systems are highly frustrated. They can’t plan without a road map.
There is a minority, including some supporters of the law, who think the whole situation is a complete disaster. They predict Health Care Reform will collapse and do serious damage to the underlying health system.
The clear majority, including some of the law’s opponents, believe that we’re probably in for a few years of shambolic messiness, during which time everybody will scramble and adjust, and eventually we will settle down to a new normal.
Experts talk about the problems that lie ahead in cascades.
The Structural Cascade
- Everything is turning out to be more complicated than originally envisioned.
- The Supreme Court decision made the Medicaid piece more complicated.
- The decision by many states not to set up exchanges made the exchange piece more complicated.
- The lines of accountability between state and federally run exchanges have grown unclear.
The Technical Cascade
- At some point, people are going to sit at computers and enroll. If the data process isn’t easy & streamlined, the public opinion hit will be catastrophic.
The Cost Cascade
- Nearly everybody not in the employ of the administration agrees this law does not solve the cost problem, and many of the recent regulatory decisions will send costs higher. A study in California found that premiums could increase by an average of 20 percent for people not covered by federal subsidies. A study by the Society of Actuaries found that by 2017 costs could rise by 32 percent for insurers covering people in the individual exchanges.
The Adverse Selection Cascade
- Under the law, young healthy people subsidize poorer, sicker, and older people.
- But the young may decide en masse that it is completely irrational for them to get health insurance that subsidizes others while they are healthy. They’ll be better off paying the fines, if those are even enforced, and opting out.
- Without premiums from the young, everybody else’s costs go up even higher.
The Provider Concentration Cascade
- The law further incentivizes a trend under way: the consolidation of hospitals, doctors’ practices, and other providers. That also boosts prices.
The turmoil around Health Care Reform could dominate politics for another election cycle, and the changes after that — to finally control costs, to fix the mind-boggling complexities, and the unintended consequences — will never end.
Regulatory regimes can be simple and dumb or complex and sprawling. When you build complex, it takes a while to work through the consequences.
