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Affordable Care Act

Effort fails to contain costs, forcing tough financial decisions ahead

Now in its sixth year, the 2010 Affordable Care Act was an attempt at an extraordinary transformation in health care, insurance and delivery for Americans, heavily involving the federal government to expand coverage. It was such a change in direction that its expectations, quantified at the time, have needed to be adjusted.

What the ACA replaced is well-remembered: limited choices for insurance, millions without insurance which in many cases caused inconsistent medical care and uncompensated hospital emergency room treatment, and in some cases those with insurance still faced personal bankruptcy or close to it.

Then, pre-existing conditions precluded insurance coverage, and children were covered only to age 21.

Today, the federal government is spending additional billions of dollars on private insurance premium subsidies and on expanded Medicaid eligibility in an attempt to find the correct mix for covering those younger than 65.

It has not been an easy transformation. Insurance exchanges created at the state level designed to match those needing insurance with providers are proving to be much more expensive to operate than anticipated. The states which expanded Medicaid coverage – Colorado was one – face significantly higher costs if the federal government holds to its mandate that states pick up a portion of the expanded coverage cost in a few years. Meanwhile, higher health care costs have caused private insurance premiums and deductibles to increase and to burden states with higher Medicaid costs prior to the responsibility for the expanded coverage.

The Affordable Care Act has significantly increased insurance coverage, but it has to only a limited degree impacted health care costs. When it came to costs, that title was a hollow promise.

A Congressional Budget Office report issued last week puts specifics to the changes in coverage compared to what had been expected, and The New York Times reported on it.

Coverage through the exchanges got off to a poor start as everyone knows, with only 12 million to be covered this year rather than the 21 million predicted; that number will climb until about 19 million participate in 2026. On the other hand, a combination of Medicaid and the Children’s Health Insurance Program will insure 68 million this year; 52 million had been predicted.

Expanded Medicaid provided in the Affordable Care Act has added 11 million, with another 4 million eligible but not included because they are residents of 1 of the 19 states that have not expanded Medicaid.

Going forward three years, the number of insured at the workplace is expected to be largely unchanged at about 150 million. Only a few employers so far have dropped coverage.

The New York Times reports that 29 percent of federal spending goes to major health programs, which would include the mostly well-working and popular Medicare for those older than 65. That percentage will grow to 32 percent in 10 years, according to the newspaper.

Those are large percentages.

Given the growth in Medicaid costs, even for those states without expanded coverage, it is not too difficult to imagine that the federal government will very shortly have to step up to cover more of Medicaid’s expenses. States will not be able to participate as they are currently.

In the coming sessions of Congress, the future of Medicaid funding could be a significant debate. Will it be deemed an excessive expansion of federal involvement in Americans’ lives or considered to be the only way a health care safety net can be provided to many?



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