Well, what the bill didn’t address is that there is no cap on the maximum yearly increases the health plans can pass along to its subscribers.
Health plans can work their way around these guidelines by just increasing premiums. This means higher premiums which will be passed onto employers and then onto their employees in the form of employee contributions towards healthcare.
Employers may pass these increased costs down to employees in the form of increased employer contributions as well as higher deductible and copayments. Is it no coincidence that health plan stocks rose the Monday after the bill was signed?
In addition, many employees will be taxed on their current employer-sponsored health benefits; current benefits that they receive without paying these additional taxes. Health plans’ fear, uncertainly and doubt was replaced by relief and the knowledge that, if anything, this bill will increase their profitability by adding additional subscribers to their rolls without any real controls on premium increases.
In particular, seniors will get hit from all sides and suffer the most under ObamaCare. Under the bill, federal subsidies to health plans for their Medicare HMO/risk plans will be phased out. The health plans will have no incentive to offer this product, thereby dumping approximately 10 million seniors back into standard Medicare.
Simultaneously, Medicare (having postponed until October) will implement its 21 percent decrease in physician reimbursement. In addition, Medicare will implement a 3 percent withholding tax on top of the 21 percent decrease — that means it plans to withhold 3 percent of all reimbursement to providers in order to ensure that it receives their Medicare taxes on a timely basis.
Under these circumstances, one can predict the possibility of an exodus of physicians from Medicare especially by the super-specialists such as urologists, cardiologists, and orthopedic surgeons. Given their specialties, many of these physicians feel that they will be able to maintain their patient base regardless of whether or not they participate with Medicare.
Seniors will find their Medicare coverage increasingly useless as they will not be able to find physicians to treat them as their will be no financial incentive for these physicians to remain as participating providers in the Medicare program.
These same physicians will, however, offset the loss of Medicare revenue by continuing to maintain their standard non-Medicare health plan agreements (at significantly higher rates) as many of these plans will allow physicians to maintain their agreements as long as they are Medicare certified. (i.e., physicians are first certified by Medicare and then choose to be either participating or non-participating with Medicare). Seniors will then be forced to sign up with these same health plans with substantial fees (remember: no caps on insurance premiums) to have the same coverage as they now have under the current Medicare system.
In short, this bill is good for the insurance industry: The potential of millions of new patients in addition to the continuation of no caps on premium increases and health plan profitability margins make this a good day for the insurance industry. The bill is bad for clinical providers such as physicians as well as employers, employees (union and non-union members) and seniors. A reduction of Medicare reimbursement will result in fewer physicians to provide services, increased premiums for employers, increased contributions by employees, significant additional taxation as well as higher out-of-pocket expenses for many to receive the same services as they do now.
Susan Charkin is the owner and operator of Healthcents, a national healthcare contracting company based in Monterey, Calif.
