---Terri Bernacchi, PharmD, MBA, Senior Partner, Valiant Health
So what is it? Will
premiums go up by double digits or will they go down? Is it possible that for a small group of
people in some states, premiums will go down, but for a larger group of people
on some exchanges or in some states, the premiums may be fairly criticized as “sky-rocketing”?
It’s really hard to understand if any side in the health
care debate is completely lying when the news headlines on what is coming are
so completely polar opposites. Is it
possible that recent media “spin” on Obamacare’s health exchanges are fairly
characterized as “lies, deceit and untruth”?
The political stakes are high, to be sure, but as people ask you for
advice on what to do in their own personal situation, it would certainly be
nice to be able to go somewhere and actually “see through the fog” on their
behalf. My premise is this: people will do what is in their best
interest, assuming they can see it.
On Friday, Senator Harry Reid admitted to a PBS audience
in Nevada, that the Accountable Care Act was always just a step toward a public
system, getting there by pushing private health care insurers out of
business. At least now, the truth seems
to be coming out as some portions of the new law (widely panned by experts and
consultants on all sides of the political spectrum as a failure in process.)
An article by CNN Money noted that under the health care
reform act, insurers must offer a package of essential benefits -- including
maternity, mental health and medications -- and they must cover all who apply.
The imposition of these richer benefits will cause price hikes in some states
where a lower cost, bare bones policy may have been sufficient for coverage for
young, healthy people in the past. Isn’t it logical then, for a primitive
student of human behavior, to predict that some young, healthy people won’t
want to take on the increased cost because they don’t “need” the additional
benefit or the additional cost? They’ll
pay the $95 per year or 1% of their income to avoid a cost that may be $3,000
per year or more.
- “Our analysis found that 21-year-old men will pay a lot more for an exchange plan, but 42-year-old women and 62-year-old men will shell out less for a silver-level plan that comes with a $2,500 deductible and a roughly $25 co-pay for office visits.”
It may be that part of what must happen as this mess
unravels is that we must better understand what happens in terms of individual
incentives. If a premium increase is
unaffordable and if the individual has other alternatives (including doing
nothing), then young, healthy people can be expected to forego coverage, and
older/unhealthy people will sign up for lower cost coverage. Predictably, then the exchanges will fail
under the weight of insufficient premium to cover incalculable risk. And people will be begging for something to
be done.
Is this, therefore, given Harry Reid’s recent comments,
an unintended consequence of a well-meaning public policy or is it the success
that was anticipated all along, leading the country to a federally controlled,
single-payer system?
Terri is a Senior Partner at Valiant Health, LLC, and
founder of Cambria Health Advisory Professionals. The thoughts put forth on these postings are
not necessarily reflective of the views of her employers, clients nor other
Valiant Health colleagues. Terri has had a varied career in health related
settings including: 9 years in a clinical hospital pharmacy setting, 3 years as
a pharmaceutical sales rep serving government, wholesaler, managed markets and
traditional physician sales, 3 years working for the executive team of an
integrated health system working with physician practices, 4 years as the
director of pharmacy for a large BCBS plan, 12 years of experience as founder
and primary servant of a health technology company which was sold to IMS Health
in late 2007. She has both a BS and a
PharmD in Pharmacy and an MBA.
