The Affordable Care Act (ACA) choices in premium and subsidies were shown in Part 1.  Those estimates assume ACA will be implemented as intended.  At a family cost averaging about $10,000 per year (pre-subsidy), consumers will demand a working, effective system.  We are a very long way from that, and it is unclear that ACA will be ready for 2014.


Aside from the dozens of steps and milestones, there are three main tasks ACA designers set out to accomplish:

·         Set “comprehensive coverage and evidence based treatment standards” within Medicare through Accountable Care Organizations (ACO).  By halting idiosyncratic variations in treatment, “defensive medicine” and unneeded treatment, costs can be reduced by 30%;

·         Control Medicaid provider payouts through recommendations from the Independent Payment Advisory Board (IPAB), and control private insurance prices through minimum proportions of premiums that must be spent on care; and 

·         Reduce the number of uninsured persons by 32 million by 2019, with some going to Medicare / Medicaid and some to private sector coverage.


The focus on Medicare /Medicaid is driven by cost.  128 million people are covered by these programs in 2011.  Government pays for all of Medicaid, and most of Medicare (a 56-year old couple will pay $140,000 into Medicare over their lifetime but draw out $430,000 in benefits.)  A second reason to focus on Medicare is that good results will be infused into private sector plans, achieving uniformity of treatment that ACA architects value.  A third reason is that Medicare and Medicaid beneficiaries are a huge voter block that reacts to cost hikes and benefit degradation. 


ACA supporters and implementers face some tough short term battles that they might not win:

·         Today, 56% of consumers oppose ACA, with 14% opposing it because it’s not liberal enough.   54% oppose the individual mandate (pick a plan or be fined).  But voter opinions change.

·         So far, 90% of hospitals and physicians refuse to join Medicare’s ACOs saying; standards are too prescriptive, the process too burdensome, and cost containment targets are too aggressive for them to earn “incentives.”

·         So far, actuaries have difficulty modeling private insurance that accommodate comprehensive coverage yet force out-of-pocket costs into targeted percentages of personal income, while at the same time keeping the subsidy totals within government budget allowances.  This matters because when faced with higher cost sharing, consumers cutback on both non-effective and effective care with the most vulnerable patients having the poorest outcomes.

·         Electronic Health Records (EHR) are a goal, but costs are high and there are no networking standards between current EHR versions.  Many providers will wait until EHR is demanded.


But, the most difficult battles are philosophical: 

·         Hideous end of life costs. “To one person, doing a colon resection followed by chemotherapy on a 90 year man with dementia and metastatic disease is “necessary” and to another (more rational) it is not. [Response from Tony Squire to “Hard Choices” article in NEJM].  27% of Medicare’s budget goes for care in the final year of a patient’s life.  This theme is behind the “death panel” slurs.  

·         Radically different political perspectives of the left and right:  Dedicated egalitarians see patients as incapable of making good medical decisions and by elevating health care to a “human right” the poor get treatment equal to that obtained by others.  Those who are libertarian tend to distrust government “experts” and want private, consumer-physician transactions to proceed without uninvited government involvement.


ACA is nowhere near ready to try out.  The standards, prices, and relationships are not yet set, and there will probably be explosive disagreements between government departments and most parts of the health care industry.  Since government has in effect grabbed control and will radically alter current health insurance practice, consumers deserve to be reassured there is a “Plan B” (just in case).   Is there a Plan B?


Alan Daley is a retired businessman living in Florida.  He follows public policy from the consumer’s perspective.