Something Wicked This Way Comes
Saturday, 30 June 2012 07:59
June 28, 2012
The New Yorker
A few days ago, while awaiting the Supreme Court ruling on the Obama health-care law, I called a few doctor friends around the country. I asked them if they could tell me about current patients whose health had been affected by a lack of insurance.
“This falls under the ‘too numerous to count’ section,” a New Jersey internist said. A vascular surgeon in Indianapolis told me about a man in his fifties who’d had a large abdominal aortic aneurysm. Doctors knew for months that it was in danger of rupturing, but, since he wasn’t insured, his local private hospital wouldn’t fix it. Finally, it indeed began to rupture. Rupture is an often fatal development, but the man—in pain, with the blood flow to his legs gone— made it to an emergency room. Then the hospital put him in an ambulance to Indiana University, arguing the patient’s condition was “too complex.” My friend got him through, but he’s very lucky to be alive.
Another friend, an oncologist in Marietta, Ohio, told me about three women in their forties and fifties he was treating for advanced cervical cancer. A pap smear would have caught their cancers far sooner. But since they didn’t have insurance, their cancers were only recognized when they caused profuse bleeding. Now they required radiation and chemotherapy if they were to have a chance of surviving.
A colleague practicing family medicine in Las Vegas told me about his clinic’s cleaning lady, who came to him in desperation about her uninsured husband. He had a painful rectal fistula—a chronically draining infection. Surgery could cure the condition, but hospitals required him to pay for the procedure in advance, and, as unskilled laborers, the couple didn’t remotely have the money. He’d lived in misery for nine months so far. The couple had nowhere to turn. Neither did the doctor.
The litany of misery was as terrible as it was routine. An internist in my Ohio home town put me on the phone with an uninsured fifty-five-year-old tanning-salon owner who’d had a heart attack. She was now unable to pay the bills either for the cardiac stent that saved her or for the medications that she needs to prevent a second heart attack. Outside Philadelphia, there was a home-care nurse who’d lost her job when she developed partial paralysis as a result of a rare autoimmune complication from the flu shot that her employers required her to get. Then she lost the insurance that paid for the medications that had been reversing the condition.
Tens of millions of Americans don’t have access to basic care for prevention and treatment of illness. For decades, there’s been wide support for universal health care. Finally, with the passage of Obamacare, two years ago, we did something about it. The law would provide coverage to people like those my friends told me about, either through its expansion of Medicaid eligibility or through subsidized private insurance. Yet the country has remained convulsed by battles over whether we should implement this plan—or any particular plan. Now that the Supreme Court has largely upheld Obamacare, it’s tempting to imagine that the battles will subside. There’s reason to think that they won’t.
In 1973, two social scientists, Horst Rittel and Melvin Webber, defined a class of problems they called “wicked problems.” Wicked problems are messy, ill-defined, more complex than we fully grasp, and open to multiple interpretations based on one’s point of view. They are problems such as poverty, obesity, where to put a new highway—or how to make sure that people have adequate health care.
They are the opposite of “tame problems,” which can be crisply defined, completely understood, and fixed through technical solutions. Tame problems are not necessarily simple—they include putting a man on the moon or devising a cure for diabetes. They are, however, solvable. Solutions to tame problems either work or they don’t.
Solutions to wicked problems, by contrast, are only better or worse. Trade-offs are unavoidable. Unanticipated complications and benefits are both common. And opportunities to learn by trial and error are limited. You can’t try a new highway over here and over there; you put it where you put it. But new issues will arise. Adjustments will be required. No solution to a wicked problem is ever permanent or wholly satisfying, which leaves every solution open to easy polemical attack.
Two decades ago, the economist Albert O. Hirschman published a historical study of the opposition to basic social advances; “the rhetoric of intransigence,” as he put it. He examined the structure of arguments—in the eighteenth century, against expansions of basic rights, such as freedom of speech, thought, and religion; in the nineteenth century, against widening the range of citizens who could vote and participate in power; and, in the twentieth century, against government-assured minimal levels of education, economic well-being, and security. In each instance, the reforms aimed to address deep, pressing, and complex societal problems—wicked problems, as we might call them. The reforms pursued straightforward goals but required inherently complicated, difficult-to-explain means of implementation. And, in each instance, Hirschman observed, reactionary argument took three basic forms: perversity, futility, and jeopardy.
The perversity thesis is that the change will not just fail but make the problem worse. The futility thesis is that the change can’t make a meaningful difference, and therefore won’t be worth the effort. We hear both of these lines of argument against the health-reform law. By providing coverage for everyone, it will drive up the system’s costs and make health care unaffordable for even more people. And, some say, people can get care in emergency rooms and through charity, so the law won’t do any real good. In fact, a slew of evidence indicates otherwise—from the many countries that have both universal coverage (whether through government or private insurers) and lower per-capita costs; from the major improvements in health that uninsured Americans experience when they qualify for Medicare or Medicaid. The reality is unavoidable for anyone who notices what it’s like to be a person who develops illness without insurance.
The jeopardy thesis is that the change will impose unacceptable costs upon society—that what we lose will be far more precious than what we gain. This is the sharpest line of attack in the health-care debate. Obamacare’s critics argue that the law will destroy our economy, undermine health care for the elderly, dampen innovation, and infringe on our liberty. Hence their efforts to persuade governors not to coöperate with the program, Congress not to provide the funds authorized under the law, and the courts to throw it out all together.
The rhetoric of intransigence favors extreme predictions, which are seldom borne out. Troubles do arise, but the reforms evolve, as they must. Adjustments are made. And when people are determined to succeed, progress generally happens. The reality of trying to solve a wicked problem is that action of any kind presents risks and uncertainties. Yet so does inaction. All that leaders can do is weigh the possibilities as best they can and find a way forward.
They must want to make the effort, however. That’s a key factor. The major social advances of the past three centuries have required widening our sphere of moral inclusion. During the nineteenth century, for instance, most American leaders believed in a right to vote—but not in extending it to women and black people. Likewise, most American leaders, regardless of their politics, believe people’s health-care needs should be met; they’ve sought to insure that soldiers, the elderly, the disabled, and children, not to mention themselves, have access to good care. But many draw their circle of concern narrowly; they continue to resist the idea that people without adequate insurance are anything like these deserving others.
And so the fate of the uninsured remains embattled—vulnerable, in particular, to the maneuvering for political control. The partisan desire to deny the President success remains powerful. Many levers of obstruction remain; many hands will be reaching for them.
For all that, the Court’s ruling keeps alive the prospect that our society will expand its circle of moral concern to include the millions who now lack insurance. Beneath the intricacies of the Affordable Care Act lies a simple truth. We are all born frail and mortal—and, over the course of our lives, we all need health care. Americans are on our way to recognizing this. If we actually do—now, that would be wicked.
Read more http://www.newyorker.com/online/blogs/comment/2012/06/something-wicked-this-way-comes.html#ixzz1zHyIyw3i
Health insurance plans owe $1.1 billion in rebates
Saturday, 23 June 2012 09:42
The Washington Post
Millions of consumers and businesses will receive $1.1 billion in rebates this summer from health insurance plans that failed to meet a requirement of the new health-care law, according to the Health and Human Services Department.
That Affordable Care Act rule requires insurance companies to spend at least 80 percent of subscriber premiums on health-care claims and quality improvement initiatives. The other 20 percent is left for administrative costs and profits.
Health insurance plans that don’t hit that threshold will send a rebate to consumers to cover the difference.
There could, however, be one big hitch. If the Supreme Court overturns the health-care law — a decision that could come as early as Thursday morning — experts say those checks are unlikely to hit Americans’ mailboxes.
“If [the Supreme Court] says the law is unconstitutional, insurers couldn’t be forced to pay rebates based on unconstitutional laws,” said Tim Jost, a law professor at Washington and Lee University.
In a new report, the Obama administration found that 12.8 million Americans will receive rebates this year, with an average value of $151 per household.
“The big improvement here is a better value for the premium dollar,” said Mike Hash, interim director of the Center for Consumer Information and Insurance Oversight. “What this standard encourages issuers to do is be prudent in their administrative expenditures, so the bulk of the premium dollar is going to pay for benefits.”
Hash would not speak to what might happen to the rebate checks should the Supreme Court strike down the law. “We are quite confident the court will uphold the Affordable Care Act in its entirety,” he said.
This requirement — known in the law as the “medical loss ratio standard” — came into effect on Jan. 1, 2011. Rebates will go to customers in plans that exceeded the limit last year.
The rebates will go to those in both individual and group plans, with the amount varying greatly by state. Consumers in Vermont’s individual market will see the country’s biggest rebates, averaging $807. In Washington, D.C., 592,234 households will receive rebates averaging $157. The 141,129 Maryland residents receiving rebates will see a higher amount, $340, while in Virginia, 686,738 customers will be rebated an average of $115.
Not all money will flow directly to consumers: For those who receive insurance through their workplace, the health insurance plan will send a rebate to the employer. It is then the employer’s responsibility to either pass that rebate on to the individual or use it in other ways that may benefit the employee, such as lowering premiums for the next year.
Customers in every state will, however, receive a notice with information on the new requirement, whether their insurance plan missed the threshold and, if it did, by how much.
In future years, the Obama administration says the level of rebates may decrease as health insurance companies become increasingly compliant with the spending rules.
“It’s not a failure of the policy if the level of rebates goes down,” Hash said. “The goal is to give consumers more value for their premium dollars.”
The New Normal in Health Insurance: High Deductibles
Sunday, 17 June 2012 17:49
Kaiser Health News
By Jay Hancock
Angela Wenger calls herself a self-reliant “German Midwesterner” who hates to complain. But the Wisconsin mom was dismayed when husband Dan’s employer switched to an insurance plan that increased the family’s medical expenses tenfold.
Two years ago, the company put white-collar workers on a “high-deductible” plan similar to those typically bought by small businesses and individuals. The Wengers’ out-of-pocket medical costs, mainly for treating daughter Emma’s juvenile arthritis, soared from a few hundred dollars a year to $7,000, she says.
The employer: General Electric, one of the largest companies in the world. High-deductible health plans, once deemed a last-resort, “catastrophic” alternative for those with few resources, have gone Fortune 500.
“A number of employers have looked at this over the last couple of years, and they’ve said, ‘No, this isn’t the year, no this isn’t the year,’ ” said Mark Olson, a senior actuary at benefits consultant Towers Watson. For many, he says, this is the year.
“I don’t really see it stopping at this point,” he said.
Seventy percent of large companies recently surveyed by Olson’s firm said they’ll offer high-deductible insurance by 2013 combined with accounts that let patients buy medical services with pretax dollars, often funded by the employer. Nearly a fifth of the firms responding to the survey, conducted by Towers and the National Business Group on Health, a nonprofit alliance of large companies, said high-deductible coverage would be the only option in 2013.
Half of all workers at employer-sponsored health plans — including those working for the government — could be on high-deductible insurance within a decade, according to a new paper from Rand Corp.
Supporters say the plans can contain health costs. Patients who have to pay for care up front will take better care of themselves and shop more carefully, the thinking goes, seeking lower-cost providers or asking whether tests are necessary. High-deductible plans, known as “consumer-driven” insurance, may partly account for a recent slowing in the upward spiral of medical spending, analysts say, although reluctance to buy health services in a poor economy is also a factor.
Critics say high-deductible insurance is just a way for corporations to shift costs onto workers, especially those dealing with chronic illness such as diabetes and arthritis. Further, consumers aren’t prepared to shop for treatment because reliable information on price and quality is difficult, if not impossible, to find. High deductibles, they say, boost chances that patients will delay seeking care until ailments become acute. Still, high-deductible plans, long promoted by Republicans as a way to bring market forces to medicine, are here to stay no matter how the Supreme Court rules on the 2010 health-care law, experts say.
“There’s no question that high deductibles are spreading,” said Jonathan Oberlander, a health policy professor at the University of North Carolina. “That’s a pretty significant trend, and I don’t expect it’s going to slow up anytime soon. Employers like it because they’re providing less coverage. If they can relabel it as consumer-driven then it even sounds good.”
Deductibles are expenses paid by employees and families each year before their medical insurance kicks in. In the past, they’ve typically been a few hundred dollars. Definitions vary, but deductibles for consumer-driven plans are usually at least $1,000 for individuals and $2,000 for families. This year, banking company JPMorgan Chase narrowed its choice for most employees to two medical plans, one with a $3,000 deductible and another with a $5,000 deductible, both for family coverage, plan documents show. The company declined to comment on the switch.
Eager to contain costs, Chrysler introduced a preferred-provider plan with family deductibles as high as $3,400 for salaried workers, said health-care director Kathleen Neal in an April presentation to the World Health Care Congress. The deductible falls to $1,000 for in-network care if employees receive a physical and take other steps such as completing an online health assessment.
“Chrysler really pushed us into it,” Daniel Loepp, chief executive of Blue Cross Blue Shield of Michigan, said of the insurer’s expansion of the high-deductible menu. “We had to meet the demand.”
Big companies that have shifted all or most employees to high-deductible coverage include financial firms Wells Fargo and American Express and grocer Whole Foods. All U.S. workers at building materials giant Saint-Gobain will be on a high-deductible plan starting next year, benefits manager Natasha Romulus said.
This year, General Electric moved hourly workers to high-deductible coverage after imposing it on salaried employees two years ago.
“I won’t characterize it as a change people were delighted by,” said Ginny Proestakes, GE’s director of health benefits. But, she said, “With the tough economic environment, we felt it was a wake-up call for the industry and GE to tackle health care in a different way.”
GE has aggressively promoted the plan’s free preventive care and health coaching while urging employees to comparison shop using a “treatment cost calculator,” she said.
Among high-deductible plans’ advantages: For both companies and workers, premiums are substantially lower than for traditional coverage. Employers often use money saved on premiums to fund tax-free health savings accounts and similar arrangements to help workers pay for deductibles.
Even before the Affordable Care Act required all plans to pay for preventive care, high-deductible insurance typically covered 100 percent of the cost of physicals and screenings, benefits experts say. Like many companies, GE contributes company money to the tax-free accounts — $500 for individuals, $1,000 for families — for employees to pay some of the deductible.
The idea is for people to receive the preventive care they need and seek lower-cost treatment when they get sick, knowing their money is first in line to be spent.
Republicans favoring a bigger consumer stake in medical decisions gained congressional approval in 2003 for the health savings account, an expanded way for companies to set up tax-free savings pools for patients to cover out-of-pocket costs. But only in recent years have such accounts, usually paired with high-deductible plans, taken off.
The accounts “empower workers with more freedom to make their own health decisions that best fit their families’ needs,” said Sen. Jim DeMint (R-S.C.), a longtime supporter of consumer-driven coverage. “These plans allow Americans to become savvy health-care consumers, saving money and increasing quality.”
Another Rand study, this one published last year, showed that total medical spending on families who switched to high-deductible plans was 14 percent lower than for families on conventional plans. But the high-deductible families also cut back on preventive care — perhaps because members didn’t realize the deductible didn’t apply to such visits, the study found.
“There’s big concern about how these costs are getting cut, and not just for humanitarian reasons,” said Carnegie Mellon professor Amelia Haviland, one of the study’s authors. “If they are cut in ways that decrease people’s health, that can lead to greater cost down the line.”
For severely ill patients or families coping with chronic illness, switching to high-deductible insurance can be the equivalent of a large pay cut.
“I’ve always hated the term consumer-driven health plan,” said Oberlander, the health policy professor. “If we want to describe them accurately, they should be called employer-driven health plans for less comprehensive health insurance.”
Emma Wenger, 11, was diagnosed with rheumatoid arthritis when she was 3. The disease, which can cause swollen joints, delayed growth and even blindness, requires frequent MRI scans and drug infusions costing tens of thousands of dollars.
The family, who lives in Pewaukee, Wis., has surpassed its high deductible and hit the $7,000 out-of-pocket maximum shortly after the beginning of each year, Angela Wenger said. They adjust by driving older cars, skipping vacations and skimping on retirement saving, she said.
“The thing that worries me is if we went to $7,000 from virtually nothing, where is it going?” she said. “Because there will be a high-water mark for everyone where you say, ‘We just can’t afford it anymore.’ ”
Unlike conventional plans, in which out-of-pocket limits can be vague or flexible, many high-deductible plans put strict caps on out-of-pocket spending for in-network care, including for prescription drugs. That may be better for the chronically ill than coverage with no cap in which they never know what annual costs will be, said Roy Ramthun, a benefits consultant who worked on health policy in President George W. Bush’s administration.
“What most people are forgetting is that these plans offer true catastrophic coverage on the back end,” he said. “That’s got to be the best possible option for people who have chronic conditions.”
The burden for patients in high-deductible plans is hard to measure. Out-of-pocket costs as a portion of national health spending have been declining since the 1960s, but the latest government data are from 2010. As consumer-driven insurance gains popularity among employers, however, analysts say they wouldn’t be surprised to see that five-decade trend reverse itself. In the Kaiser Family Foundation’s 2011 employer survey, 17 percent of the covered workers were enrolled in a high-deductible plan, up from 4 percent in 2006. (Kaiser Health News is an editorially independent program of the foundation.)
The Wengers see the trend firsthand. Dan Wenger got a job at another large company in mid-2010. There, too, consumer-driven health plans — their coverage has a multi-thousand dollar deductible and a $7,000 out-of-pocket cap —were the only choice.
Hospitals Aren't Waiting for Verdict On Health Care
Sunday, 17 June 2012 11:58
The New York Times
By Nina Bernstein
Giant aquariums now soothepediatric patients at Maimonides Medical Center in Brooklyn. It has added
welcome signs in 10 languages, a state-of-the-art cardiac operating room and
programs to keep chronically ill adults safely at home. But as Pamela S. Brier,
the chief executive, was walking to the main entrance last week, she spotted a
rain-soaked plastic bag on the front steps.
Millions of dollars in revenue now depend on improving patients’ perceptions of the
hospital. “I can’t stand it,” Ms. Brier muttered, and she darted over, her
cream chiffon dress fluttering, to scoop up the litter herself.
It was the first Monday in June, counting down to a United States Supreme Court
decision that could transform the landscape of American health care. But like
hospitals across the country, Maimonides is not waiting around for the verdict.
Win, lose or draw in court, administrators said, the policies driving the federal health care law are already embedded
in big cuts and new payment formulas that hospitals ignore at their peril. And
even if the law is repealed after the next election, the economic pressure to
care differently for more people at lower cost is irreversible.
“If the Supreme Court overturns this law — I pray it won’t — the world will go on
changing,” Ms. Brier said. “In some ways, we’ve changed ahead of it.” But she
added, “Trying to manage all these different aspects of the health care system
as they are changing does make you crazy.”
The century-old hospital, at the Borough Park crossroads of Hasidic, Asian,
Caribbean and Hispanic neighborhoods, is often cited by state regulators as an
example of good management and community service.
It has been in the black since 1996, after Ms. Brier took charge of operations, and
has increased patient volume every year while achieving some of the nation’s
best clinical outcomes, including exceptionally low mortality rates for pneumonia, heart
failure and heart attacks.
Yet even in a city with notoriously cranky consumers and cramped spaces, Maimonides’s patient satisfaction scores are abysmal —
especially in its maternity units, which deliver 8,000 babies a year. And
starting next year, under “value-based purchasing” contracts mandated by the
health care law and already entrenched in Medicaid and Medicare rules, failure to improve the satisfaction of
surveyed patients will cost hospitals.
hospitals have resorted to hiring outside consultants who coach nurses to
recite a script praising the care — a strategy resented by short-handed staff
members and denounced by their unions. Maimonides (pronounced my-MON-eh-deez),
a 711-bed hospital that recently added valet parking and free Wi-Fi, instead
asked labor-management teams in every unit to invent their own improvement
projects. In one initiative, nurses are making hourly rounds to offer patients
Monday, a new father spoke with heartfelt gratitude of the night nurse who had
explained that the chair where he was dozing upright opened into a bed.
treated us like family,” said the father, Iftekhar Aslam, 23, an American
citizen born in Pakistan, beaming under his baseball cap at his wife, Sobia
Khanum, and their newborn son.
not minded sharing the room, divided by a curtain, with another pair of new
parents — “Israel people,” he said, adding joyfully, “That’s New York — it’s
Khanum, 26, was pleased, too, but mentioned that her husband had been so ill
with fever before her due date that she had feared he would miss the birth. As
a contractor without insurance, she said, “he didn’t go to the hospital because
they send a huge bill.”
theory, if the health care law works as intended, Mr. Aslam could become part
of an influx of newly insured patients, offsetting government cuts in payments
to hospitals that treat a disproportionate share of the poor and uninsured. But
no one at Maimonides is counting on it.
frankly, if everything goes perfectly and everything is upheld, there’s a lot
of confusion and a lot of uncertainty here,” said Dominick Stanzione, the
hospital’s chief operating officer. “We also have an election coming up.”
The cuts, on the other
hand, seem inexorable, and not only because Medicaid and Medicare budgets are
strapped. The policy thrust in health care financing, private as well as
public, is to abandon reimbursements to hospitals according to the number of days
patients spend in a bed, in favor of models that use a fixed sum per patient or
set of patients over time, regardless of where care is delivered or how little
Maimonides’s own successes
have helped sell policy makers on the idea. Its collaboration with a state
psychiatric hospital a few years ago, for example, put medical-mental health
teams in storefront offices to manage the care of low-income patients with
serious mental illness. Such patients, who are eligible for both Medicaid and
Medicare, are among the health system’s most expensive and tend to have the
worst outcomes. The program cut hospitalizations in half and reduced
emergency-room use by 30 percent.
Ozier Muhammad/The New York Times
Pamela S. Brier, chief
executive of Maimonides Medical Center, is trying to raise the hospital’s
patient satisfaction rate.
“When the State Health Department people saw
our data, the little dollar signs danced in their heads,” Ms. Brier said.
under a government contract, Maimonides is gambling on a bigger version of that
program in partnership with 50 community agencies and Lutheran Medical Center,
its closest competitor, to care for 15,000 mentally-ill people in what policy
makers call a Health Home.
models immediately mean fewer visits to the emergency room, which is still a
hospital’s “cash cow,” said Dr. Karen R. Nelson, executive director of the
Health Home consortium. But ways for hospitals to reap part of the government
savings are still in development, and patients excluded from the Affordable
Care Act as illegal immigrants will still require costly emergency care.
hospital to undertake this when A.C.A. is uncertain is very scary,” Dr. Nelson
same time, Maimonides is competing on the old fee-for-service turf by
recruiting surgical and cancer specialists, partly to woo more commercially
too, pitfalls abound: a growing share of the hospital’s unpaid medical bills
are for patients who have private insurance but have been pushed into
high-deductible plans, administrators said. Moreover, such plans typically do
not reimburse care in the collaborative models the hospital is working so hard
to develop — a problem that could intensify, they said, if the court rejects
the individual insurance mandate but lets the rest of the health care law
between model and reality was evident last week in the emergency room, which
had more than 114,000 visits last year, up from 83,000 eight years ago.
section where triaged patients are seated to save space for more stretchers,
one of those known as “frequent fliers” was back for the seventh time in six
months, covered by Medicare.
Lewis Rosen, 62, who said he had to come in for a psychiatric visit anyway, was
unhappy with the rate of healing of an incision in his leg, despite treatment
at an outpatient wound care center and home visits by a nurse.
our own worst enemy,” said Dr. Kenneth Sable, head of the emergency department,
scrolling through Mr. Rosen’s electronic medical record. “Instant gratification
is what people have come to expect.”
man hunched on a stretcher began to cry. It was his third visit in three days
with a complicated story about a dental problem that he said had affected his
mobility. After tests, he had been referred to a neurologist, but had not gone.
want pain medication,” cried the man, Salvador Monduori, 68. “I don’t want to
hours later, when doctors concluded that there was nothing more to do, they had
to call security to make him leave, Dr. Sable said.
gurney at the other end of the room, Luis Velecela, 36, a construction worker,
was confused but stoic after a diagnosis of stomach cancer. He had no
insurance, he said, and had been treating his pain and nausea with antacid
pills until an endoscopy at Maimonides revealed the tumor.
“All hospitals in the country
are facing the same changes,” Dr. Howard L. Minkoff, head of obstetrics, said
later. “We are doing it without a net.”
Health care court ruling could paralyze Medicare
Sunday, 17 June 2012 11:52
CHICAGO | Tue Jun 5, 2012
CHICAGO (Reuters) - Opponents of President
Barack Obama's health care law have been predicting dire consequences for
seniors on Medicare ever since the legislation was signed last year. The
warnings are mostly political spin, but there could be real problems if the U.S.
Supreme Court strikes down the Affordable Care Act this month.
The ACA, a cornerstone of President Obama's health care plan, would extend
health insurance to an additional 23 million Americans by 2019. But it's run
into significant roadblocks as opponents argue that key components are
The Supreme Court could decide to uphold the law, strike down specific
portions or toss it out entirely. A decision is expected by late June.
Important improvements to Medicare would disappear if the high court decides
to toss out the entire law. The decision could paralyze the Medicare system
because the act lays out the benefits, payment rates and delivery systems. Some
of the changes already have been implemented, and others are works in
"If the law is struck down, there will be a high level of chaos and confusion
the very next day, especially in Medicare," predicts Bonnie Washington, senior
vice president of Avalere Health, a health policy consulting firm. "Every single
provider payment that Medicare makes now has been modified one way or the other
by the Affordable Care Act."
The Centers for Medicare & Medicaid Services, which runs Medicare, is not
commenting on how it might proceed if the law is nullified. But the
administration has warned the court of "extraordinary disruption" to the
CMS might attempt to assert its own administrative authority - and perhaps
use executive orders from President Obama - to continue paying claims and
providing benefits so the Medicare system doesn't freeze up. But disruption will
be virtually unavoidable.
"Some of this could be fixed with administrative authority," said Joe Baker,
president of the Medicare Rights Center, a non-profit consumer rights group.
"But I don't think most of it would be."
LOST DRUG COVERAGE
The most immediate change would hit seniors who enter the "doughnut hole" in
Medicare's Part D prescription drug program - the gap in coverage that starts if
total annual drug spending by a senior and his or her insurance company exceeds
a certain level. In 2012, coverage stops when spending reaches $2,930, and
resumes at $4,700.
This year, the Affordable Care Act calls for pharmaceutical companies to
provide a 50 percent discount on brand-name drugs to most beneficiaries who find
themselves in the gap; there's also a 14 percent discount on generic
Last year, 3.6 million seniors hit the gap and saved a collective $2.1
billion due to the health care law, according to the U.S. Department of Health
and Human Services. In the first four months of 2012, more than 416,000 people
saved an average of $724 on prescription drugs bought after they hit the cap,
for a total of $301.5 million. Last year, 3.6 million seniors entered the gap
and saved $2.1 billion, the health department says.
The Supreme Court ruling could come just as many seniors hit the gap, and
they could lose prescription drug insurance protection they were counting on
"The contracts between the government and pharmaceutical companies are made
possible by the ACA," says Anne Hance, a partner at the law firm McDermott Will
& Emery, who specializes in federal and state health insurance. "If the ACA
is struck down, the question will be whether there is still a statutory
obligation for the pharmaceutical companies to provide the discounts."
Pharmaceutical companies could decide to continue the drug discounts
voluntarily in order to protect sales of their branded drugs in the Part D
program, and to avoid patient shifts to generics. Drug companies also might want
to continue the discounts for public relations reasons.
But seniors worried about gap coverage should review the branded drugs they
"Ask your doctor if there are lower-cost alternatives that you could use if
necessary that are just as effective," says Washington, of Avalere
This fall's enrollment season for prescription drug plans also could be
affected by a court ruling. Enrollment runs from mid-October to early December,
and pharmaceutical companies are submitting their bids this week to the Centers
for Medicare & Medicaid Services based on the terms of the Affordable Care
"The timing for CMS would be very difficult," says Tricia Neuman, vice
president of the Henry J. Kaiser Family Foundation and director of its Medicare
Policy Project. "They would need to scramble very quickly to make decisions on
payments for 2013 just as the bids are coming. There wouldn't be a lot of time
to make adjustments."
Medicare's new free annual wellness visit and other screening services also
Starting next year, seniors could expect to pay higher premiums than they
otherwise would have faced for Medicare Part B (physician visits and other
outpatient services). The law was expected to reduce Medicare spending by $428
billion between 2010 and 2019, through cuts in payments to doctors and
hospitals, and changes in the way health care is delivered, according to the
Kaiser Family Foundation.
If the law is struck down and those savings provisions do not take effect,
Medicare spending will rise, which would lead to higher Part B premiums. By law,
Centers for Medicare & Medicaid Services sets the Part B premium so that
beneficiaries cover 25 percent of the program's cost.
"That means if Part B spending rises, beneficiaries will pay higher
premiums," Neuman warns.
(The writer is a Reuters columnist. The opinions expressed are his
(Editing by Jilian
Emery and Dan Grebler)