Saturday, October 9, 2010

Health Reform Dislocations

Dislocations – Putting out of place to put or force something out of its usual place or position.

Dictionary definition

Those of us who understood the economic disincentives that the health overhaul law set up warned of the dislocations it would create..'…The administration is going to be swamped with legitimate pleas for relief from its heavy-handed regulations that are causing massive dislocations throughout the health sector and employer community.

Grace Marie Turner, “The Tip of the Iceberg,“ Health Care Matters, October 8, 2010

I am not yet ready to call the Accountable Care Act a failure , but it does have dislocating consequences.

When Congress passed the health reform law on March 23, 2010, they slapped a number of mandates and regulations on individuals, health plans, and businesses.
The effects of these mandates and regulations are just becoming evident. They are causing “dislocations.”

For the purpose of this blog, I am using “dislocations” to mean forcing various health care stakeholders out of their usual places or positions.

• Among the young and others who chose to spend their money on other things besides health care, the law is forcing them to “dislocate” their money on health care to be spent for the rest of us. This may be a good thing if you consider yourself a progressive, But it is causing angst among those, particularly the young. They not have the money to spend on premiums. They may be healthy and feel they do not need health coverage. Nor do they believe they should bear the burden of paying for the sick.

• Among those firms in fast food industries who hire young generally health workers and cover their health benefits with limited “Mini-med policies,’ which cost far less than comprehensive government-qualified policies, there is outrage and the threat to drop benefits altogether. To prevent millions of more uninsured workers, the government has backed off and given McDonalds and 30 other large employers a waiver allowing them to bypass the law. MacDonalds, in a memo to HHS, recently announced it would be unable to meet requirements to cover 30,000 workers because it has a high employee turnover. It claimed it spent more on signing people up and carrying out other administrative duties than the new rules will allow (85% medical care and 15% administrative).

• Among those businesses in retail business, such as Home Depot, Walgreens, Staples, Disney and Blockbuster, The National Retail Federation announces millions of more policies are at risk for the same reason at Home Depot, Disney, Staples, CVS, Walgreens, Blockbuster, the National Retail Federation announces millions of more employees are at risk of losing health benefits because their employers could not afford to cover them under new government rules.

• Among 11 million senior covered by Medicare enrolled in Medicare Advantage plans, the reform law “dislocates” them back to regular Medicare, forces them out of audiology, vision, and dental coverage, and causes many of them to now pay for Medicare supplement plans, a big source of revenue for AARP, which endorsed the Obama plan.

• Among major international corporations, like John Deere, Verizon, Caterpillar AT&T, and others, have said they may drop drug benefits for retirees. Overall, Fortune 500 companies face losses of $4.5 billion because of Obamacare-induced tax hikes of these magnitudes - AT&T $1 billiom John Deere $150 million, Caterpillar $100 million, and 3M $90 million.

• Among 840,000 people covered by The Principal Financial Group, company, who said it is leaving the medical insurance business because it cannot afford to meet the requirements of the Affordable Care Act. The Act may be “affordable” in the eyes of Congress, but it is not affordable to those pay for coverage.

• Among millions of Americans, variously estimated at between 50 million and 100 million, who will either be “dislocated” because their employers will be forced to drop current coverage because of unaffordability or because they will be forced to switch and enroll in plans approved by government-dictated and run health exchanges. An estimated 16 million will be “dislocated” into Medicaid plans, which are having a hard time finding primary care physicians to deliver care.

These dislocations, of course, are not necessarily a bad thing, especially if you trust government to do the right thing and to select and/or to manage efficient health plans. But for millions of Americans, the reform act will disrupt the status quo and lead to sometimes confusing and often unwelcome changes with new doctors and new health plans.

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