Huge Holes Exist in the Health Reform Law

September 1, 2001 – For time to time, Kevin Pho, MD, of kevinmd.com, reprints one of my medinnovation blogs. On August 28, he reprinted “Huge Holes Exist in the Health Reform Law.” This reprinting was timely because after Labor Day, the presidential campaign will begin in earnest, and the health reform law will almost certainly be a central issue in the campaign.

Huge holes exist in the health reform law you can drive an 18-Wheeler through. These holes are not “devils in the details.” They are so obvious nobody talks about them. They are the proverbial elephants in the room. I suppose this makes sense. It takes an 18-wheeler to transport an elephant.

Here are my six candidates of the biggest health reform holes.

One, the government’s lack of leverage over health insurers. President Obama and Kathleen Sibelius can talk all they want about the evil health plans and how they are outrageously raising premiums, on average by 10% to 20%. But other than jawboning and demonizing, the Obama administration have little control over the rates. It is fine to say the health plans must cover those with pre-existing coverage, young people up to age 26 under their parents’ plans, and to remove caps on lifetime expenses, but the plans can ignore the government and set the rates to cover the increased expenses engendered by government mandates.

Two, the government’s lack of appreciation that the U.S. is center-right not a center-left nation. At its core, America is a middle-class country that believes in limited government, limited taxes, and limited intervention in private affairs and private behavior. Two particularly sore points are; one, the individual mandate, which requires everyone to pay at least $700 , or 2.5% of income, and two, the provision that every business must submit a 1099 for every $600 spent for supplies or deserves, whether or not related to health care. In both case, the IRS may crack down and pursue non-compliance. These two things strike Americans as government meddling. These government actions, in my opinion, accounts for much of the lack of approval of the Obama agenda and for the rise of conservatism, the Tea Party movement, and the embrace of the GOP over Democrats. The public wants Washington to swing to the center.

Three, the government’s lack of price controls. Everybody but Washington seems to know you cannot expand coverage for the uninsured by 32 million(and Medicaid by 16 million) and save money while cutting Medicare by $575 billion. And you cannot save money when 58 million baby boomers, starting in 2011, will start becoming eligible for Medicare. Saving money under these circumstances is simply counter-intuitive. Congress lacks the political will, and no combination of taxation, fines, penalties, and punitive savings imposed on the health industry will make up for the deficit.

Four, the government’s incompetence in containing fraud and abuse. Fraud and abuse costs Medicare an $60 billion a year, over 11% of its budget, and that may be an underestimate. Someone has calculated that Medicare fraud and abuse consumes 7 times more money than the combined profits of the 14 largest health insurers, who are largely free of rampant fraud and abuse characteristic of Medicare. Medicare is too tempting a target for criminals who can use stolen Medicare IDs, and who know that Medicare is obligated to pay claims in 30 days.

Five, the inability of the States to pay for millions of Medicaid recipients scheduled to join the state rolls in 2014. Millions more may enroll before then when patients with current plans learn their new plans must meet government mandates that require comprehensive coverage and higher premiums they cannot afford. About 70 million will be required to change plans, and many of them will switch to Medicaid. Few Americans appreciate the Medicaid burdens States must shoulder. In California, Medi-Cal, its Medicaid program, cover 1/3 of children and 1/10 of adults under 65, 2/3 Of nursing home residents, and 2/3 of expenses of public hospitals, while costing the State of California. $46 billion.

Six, the failure of government to act to correct the looming access problem to physicians. This access crisis is already being felt in Massachusetts, said to be the model for Obamacare. There patients now have the longest waiting times in the nation to see a doctor or to seen in emergency rooms, and half the primary care physicians in the state no longer accept new patients. This is primarily a supply-demand problem. There are not enough doctors to see the flood of new patients, and the reform law does virtually nothing to increase the supply of doctors.

Richard Reece is the author of The Health Reform Maze (Greenbranch Publishing) and blogs at medinnovationblog. Health Reform Maze may be purchased directly from the publisher at 1-800-933-3711, or on amazon.com, as either a print or E-book.