Healthcare towards 2014

As we continue to digest the U.S. Supreme Court rulings last week, here is a snapshot of how I am digesting it all.

Mandate: Every US citizen must have health insurance and if not, we get penalized in the form of a tax. It’s not an enforceable tax (nor is it very much money) so unfortunately, many people will opt not to purchase insurance – this is a weakness in the economic model.

Starting now, and for sure by the start of 2014, all insurance companies are required to sell insurance, and US states must put a cap on those rates. Theoretically, this means decent health plans that are affordable 🙂

If you are:

  • Poor– the gov’t (using tax money) will supplement health insurance premium costs, so you can get it.
  • Rich– don’t care b/c you can afford it
  • Middle class — Tax increases to subsidize poor, so that stinks, but you will get good insurance.

Big Win: No longer will any US citizen be denied healthcare! Yay.

Here’s one of the rubs: Obamacare ties healthcare not just to U.S. states but corporations. Any business that is 50+ employees must provide healthcare benefits. We are going to see more of a hiring freeze in the next year or so while companies figure out if it’s cheaper to provide healthcare or pay the penalty. The largest corporations don’t care, but this law will encourage U.S. businesses to hire part-time employees, freelancers, etc. It is going to be harder for Americans to secure full-time positions; but easier to get healthcare – and this trend has already started.

Forcing the states to participate in mandatory insurance was ruled unconstitutional; so states can opt out; and some have already. This is a weakness because we have state-by-state insurance, not federal insurance, so it matters very much which state you reside in. However, most states have set up insurance pools for individuals like us (independents/freelancers/small businesses) so we can get group insurance –.this is called a “healthcare exchange.” California has a healthcare exchange. Florida does not. With health exchanges right now, we have no choice about the carrier, because the carrier is whichever company the exchange is contracted with. By 2014, there will be choices and the companies will not be allowed to deny.

The economics are crappy no matter how you slice it. For example, the federal government cut $500 Billion out of Medicare. This is terrible news for the aging population, hospitals, clinics, etc.

Wellness and Prevention: Insurance companies must cover wellness (annual physical exams, mammograms, preventative testing). These preventative exams and screenings are now going to be covered 100%. 

About ACOs (Accountable Care Organizations) –  this is how it was 30+ years ago in the U.S. Essentially ACOs are community pricing models to cover everyone. The idea is that enough healthy people will be paying for insurance but not using it, so the money needed to pay for sick people will come from that. Which means health insurance companies are more incentivized than ever to make people healthy = since they have to cover everyone, the healthier their customers are, the less they use healthcare services, the more money insurance companies make.

There’s lots of media coverage — you can learn more by starting with this article.

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