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This is the year Obamacare becomes real for the general public. The day of reckoning with their employers comes later. Physicians are in the middle.
This year’s dominant challenge to physicians, as was last year’s, to prepare for the unpredictable. This time, as they say in the movies, it’s for real.
Because the upcoming mid-term elections have vulnerable Democrats wavering in the face of growing unpopularity, the botched rollout of the federal health insurance exchange is turning out to be the least of the problems. While both sides remain deeply invested in their belief that their position is best for the country, negative polls and re-election vulnerabilities may make for positive progress.
For physicians, paying for the 10 essential benefits mandate overlaid with eliminating pre-existing conditions and lifetime limits should be keeping you up at night for many reasons, but these are my top four for 2014 - and they all add up to a cash flow crisis in the making:
1. You’re on the Hook if Exchange Premiums are Unpaid. Insurers are obligated to give a three-month grace period for premium payments. This means they have to keep people active for three months of coverage from the last payment, but only pay benefits for the paid month. That means physicians and other providers won’t get paid by insurers for the succeeding two months if your patient doesn’t pay their premium. Oncologists are in "crisis." The rest, well, get those credit and debit cards on file.
2. Soaring Deductibles. Despite deductible limitations of $6,350 per person and $12,700 per family, going from $1,000 to $5,000 is a game changer for patients and providers. Physicians, who represent the first line of care, are particularly vulnerable to cash flow problems particularly early in the year when health savings accounts (HSAs) and other medical savings accounts are thinly funded or unfunded. The combination of a deeply embedded expectation that insurance pays after copays, and new reality that insurance will not, is real trouble because many people don’t see these as real obligations. Combine that with the popularity of lower premium, high-deductible "bronze plans" on the exchanges and low likelihood that people will even start an HSA without the discipline of employer assistance, and lower likelihood that they will fund it if they do, means that payment at the time of service will have to be strictly enforced. It also means that you’re the bad guy if they can’t, or won’t.
3. More Uninsured? That’s the trillion dollar question, and it all comes down to demographics. Sabrina Corlette, project director at the Center on Health Insurance Reforms at Georgetown University, calls the mass cancellations a "red herring" because Obamacare requires insurance carriers who cancel policies to offer an alternative. True, but the Census Bureau estimates that about 11 million Americans have private policies and the insurance industry estimates that about 4 million cancellation letters were sent affecting over 8 million of those people. HHS just announced that over a million have enrolled for (but not necessarily secured) policies before the December 24, 2013, deadline. According to Families USA, a nonprofit organization that backs health reform, just 1.6 million Americans under age 65 are both at risk of losing their individual policies and also ineligible for subsidies on the health exchanges. Good news unless the subsidies do not offset the increased premiums. The jury is way out on that.
The simple math is that, for now, the ranks of uninsured have likely increased, and, physicians are on the front lines in dealing with it - and the further challenge to their solvency. This is just the tip of the iceberg. Employers got a bye for compliance until 2015, which means tens of millions more being dumped onto the exchanges. The exchanges will likely be able to handle the load, but will the public respond?
4. "Narrow Networks." Increased premiums, deductibles, and copays are only three legs of the six elements that pay for all of the added benefits and protections. Taxpayer dollars, reduced reimbursements, and limited networks are the other three. Of these, the one most affecting many physicians is going out of network, voluntarily because the compensation is not worth it or involuntarily to allow insurers to manage and contain costs. This is not an issue of "choice" or one of the lies of the year for 2013 ("If you want to keep your doctor, you can keep your doctor. Period."). It is a fiscal reality, and always has been. Once again, how do physicians handle out of network patients who want to be seen and can’t afford the cost?
Pro or con, Obamacare is no longer ideological as it is implemented in the real world. The reality is that doing good is not good enough - you have to do well to do good - and if this program is to be saved in any measure, its fatal flaws have to be fixed, and soon.