While the Affordable Care Act (ACA) was passed by Congress and signed into law in 2010 and was substantially upheld by the U.S. Supreme Court in mid-2012, the impact of its reform efforts will not take full effect until January 1, 2014 when individuals and employers will be mandated to purchase coverage under the new requirements set forth in the legislation and directed by the administrative rules established by the Department of Health and Human Services (HHS).
In all likelihood, you have an opinion about this Act and what it will do to or for your life, your business and your family. Regardless whether you support or oppose its implementation, it is the law and we must make every effort to comply with it.
What is important to know is that the Affordable Care Act is not incremental, but substantially systemic reform of our health care system. Our system of health care in the United States is badly in need of changes. The primary funding for health care—employer-provided coverage, Medicare (coverage for those over 65) and Medicaid (means-tested coverage) are failing or have failed to deliver coverage at an affordable cost for a significant share of the U.S. population.
Businesses are reaching the breaking point. An increasing number can no longer afford coverage for their employees or their families. As a result, more and more are going without coverage.
At the same time, health care costs continue to skyrocket. Those without coverage are receiving uncompensated care which is significantly more expensive than regular primary care. Add to that the advancements in medicine, technology and pharmaceuticals, as well as the fact that individuals are living longer, and it becomes apparent why total spending on health care has soared to 18 percent of GDP.
Total spending for 2013 will be nearly $3 trillion in the United States. Private insurance and out-of-pocket spending will reach $1.26 trillion or 42 percent of the total. Public spending through Medicare, Medicaid, and all other federal programs will total $1.72 trillion or 58 percent of the total. With nearly 10,000 Americans reaching 65 years of age each day, total spending will climb to about $4.6 trillion in 2020. Per person, that is $9,348 per year in 2013 and $13,708 per year in 2020.
Considering all these elements, it is important that our health care system change. There are four yardsticks that need to be applied to reform—access, coverage, quality and cost. To a degree, the Affordable Care Act addresses access, coverage and quality, but it does very little to address cost. Costs to the individual, costs to the employer and costs to the health care provider are going to grow.
The ACA’s mandated Health Insurance Exchanges (HIX) open for enrollment Oct 1, 2013. They are state or federal online marketplaces where Americans can purchase “affordable” health insurance from private health care providers. Shoppers can use a price calculator to find the best deal for them and their family. The health insurance exchanges are estimated to provide up to 23 million people with affordable health insurance.
States can build a HIX on their own, partner with one or more other states, or have the federal government build and run the insurance exchange for them. Both North and South Carolina have opted out of forming an exchange, so individuals will participate in their federal exchanges for coverage to take effect as of January 2014.
The HHS will soon release the package of essential benefits required of insurance carriers to offer individuals through the exchanges. Among the choices will be coinsurance at 60, 70, 80 and 90 percent levels.
We want to be helpful to you in complying with the implementation of the new laws and regulations and choosing your appropriate options. We are planning content for upcoming issues and would welcome hearing about your questions and concerns. We are assembling resources and experts who are knowledgeable and thoughtful to deliver you comprehensive information on your options.
The Affordable Care Act is not a finished product. It will undergo many changes, amendments and improvements over the next several years. We must act to address care from the direction of access, coverage, quality and cost so that we can continue to succeed as individuals and as a nation.
I invite your input, feedback, recommendations, questions, concerns, thoughts and ideas. Please email me at email@example.com or call me at 704-676-5850 x102.