Health Options.

[Natasha (Class Assign)]

Natasha McCrary

02.25.19

Congressional Budget Office: Options for Reducing the Deficit


Option 5: Repeal the individual health insurance mandate.


According to Eibner and Nowak, (2018) “The Affordable Care Act (ACA) includes a mandate for every person to obtain health insurance to guard against adverse selection in the markets. This occurs when enrollees are disproportionately older and sicker than the general population and can lead to high insurance premiums overall”. The increase of the national deficit will occur due to removing the mandate as well. Eibner and Nowak state that, “CBO estimates a net deficit decrease of $14 billion in 2020. To the extent that people who receive federal financial assistance — either through marketplace tax credits or Medicaid — drop coverage in response to the penalty’s elimination, federal spending may fall, leading to decreases in the deficit”. My understanding is that the deficit statistics are on a case-by-case basis and can vary.


Repealing the required individual health insurance mandate will affect any and every healthcare facility. My selected healthcare facilities are pharmacies. Pharmacies are usually only useful if patients frequent that facility and unless you’re frequently in a hospital you probably won’t be consistently prescribed meds. According to Amadeo, 2019, “Pharmaceutical companies pay an extra $84.8 billion in fees between 2013 and 2023. That pays for closing the "doughnut hole" in Medicare Part D. Drug costs could rise if the companies pass this onto consumers”.


According to Lai and Parlapiano, (2017), “If the Senate and House pass a tax bill that includes the mandate repeal, those who do not purchase health insurance will no longer have to pay the penalty, and an estimated $338 billion would be saved to pay for tax cuts. The savings would come from fewer people claiming federal insurance subsidies or Medicaid benefits”. I also like to think of people who don’t go to the doctor often. We currently are required to have health insurance and I don’t go to the doctor a lot because I am either never sick or my checkups are up to date. With that being said people who do not frequent their medical offices could save money and be able to put those saving elsewhere. Removing the mandate, which is respectively called Obama care, would lower the income tax rate and would not have pharmaceutical companies paying for the hole as thebalance.com states they had to pay for any extra missed costs.


In conclusion, I see that there are many pros and cons to all of the options. I think finding the one that makes the most significant impact is important and will take the longest to find out with extensive research and all.








References:


https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52142-budgetoptions2.pdf


Lai, R. K., & PARLAPIANO, A. (2017, November 28). Millions Pay the Obamacare Penalty Instead of Buying Insurance. Who Are They? Retrieved February 25, 2019, from Millions Pay the Obamacare Penalty Instead of Buying Insurance. Who Are They?


Eibner, C., & Nowak, S. (2018, January 11). The Effect of Eliminating the Individual Mandate Penalty and the Role of Behavioral Factors. Retrieved February 25, 2019, from The Effect of Eliminating the Individual Mandate Penalty and the Role of Behavioral Factors | Commonwealth Fund



Amadeo, K. (2019, January 17). 10 Pros and Cons of Obamacare. Retrieved February 25, 2019, from 10 Pros and Cons of Obamacare

 

[K Turner]

Congressional Budget Office: Options for Reducing the Deficit​

For more than 20 years, the decision to raise the eligibility age for Medicare from 65 to 67 has been a relevant topic regarding budget options for reducing the deficit, as current patterns show that feasible alternatives to Medicare are available (Davidoff & Johnson, 2003). That said, raising Medicare eligibility by two years would not affect its purpose of providing health care benefits to individuals nearing the end of life. Arguments against this option include shifts in costs due to the total population of uninsured individuals by 2026, the quality of care the affected would receive, and an increase in federal and state spending. The purpose of this document is to discuss the effects that implementing this option would have on a physician’s practice and propose changes to mitigate the aforementioned negative effects.

Consider Variables Among the Population​

The first proposed change is to consider that, even though this option has specific numbers, nothing is set in stone. There are too many unknowns to say this options is not plausible because while many still correlate retirement to age 65 just as they do Medicare, a vast majority of this group does not. They continue to work into their early 70’s (some full-time) and can afford to maintain coverage by their current health insurer. The takeaway is that each person’s situation is different; he or she could transition to a spouse’s insurance, purchase insurance in or outside of the marketplace, or work with state and local programs that provide the aid necessary to accommodate the situation. According to Carpenter (2011), most of the affected would obtain alternative sources of health care coverage. Additionally, people are living longer, which means the market for physicians’ care is even more relevant for this demographic than in the past.

Legally Require Two-Year Age Increase for All Health Insurance Providers​

A law requiring health insurance providers to cover patients until the age of 67, including Medicaid, could mitigate some of the negative effects of increasing the eligible age for Medicare to 67. This is sensible because only 5% of this population is projected to be uninsured during this timeframe (CBO, 2016). Although this remedy would increase states’ spending, the effect is less detrimental because costs would also fall on employers and insurance companies. Physician’s practices would still provide the standard of care they always have, within the usual guidelines of the patient’s respective policies. Lawmakers could ease concerns and tension of patients, physicians, employers, and even private insurance companies by conveying the fact that regardless of the measures taken., costs will be incurred. The best outcome would be the result of working with physicians and businesses involved to set regulations and standards to be followed throughout that two-year timeframe. This way, input from each perspective is considered.

Monitor and Audit Medicare Advantage Plans​

People between the ages of 65 and 67 are the lowest cost Medicare recipients (Carpenter, 2011). They are more able-bodied and self-sufficient regarding transportation to and from physician’s practices, capable of following instructions, and returning for follow-up visits when necessary. This means they are now deciding what is best for themselves and able to discern the best decisions regarding personal care. However, insurance companies are constantly advertising “Medicare advantage plans” that provide more coverage and saves on out-of-pocket costs. The reality is, those who buy in and taxpayers alike end up spending more because treatment for qualifying individuals were not always legitimate; unnecessary procedures, inaccurate medical records, and overall bad business practices with these insurance companies cost the government even more money (the sicker the patient, the more Medicare pays the supplemental insurance providers) (CBO, 2016). Additionally, insurance in general is for the “just in case” moments in life; not everyone goes to their physician’s practice for every ailment, but those premiums are always paid in case they have to. In these instances, the money is simply pocketed by insurers, who can afford to use these enormous profits to continue cover qualifying persons until they reach 67.

Hold Private Insurers More Accountable for Bad Debt​

Bad debt, which is generated by patients and is often paid by Medicare instead of private insurance plans, needs a cap, should be split between Medicare and private insurance companies (for applicable patients), or paid in full by those companies. This policy should be revised because not every patient has bad debt, but all patients with private insurance pay premiums for contingency funding that often foes unused and is pocketed by the insurers, while the government and taxpayers take on that debt. Physician’s practices would still recover the debts while this remedy softens the financial trickle-down effect that falls on people who are not Medicare recipients. More responsibility would be placed on insurance companies to make sure physicians who accept their plans are being honest and compliant, thereby cutting costs by eliminating unnecessary procedures, researching covered services, and providing the most relevant services instead of an array of overwhelming options (Erde, 2008).

Conclusion​

Overall, the proposed remedies can be likened to pushing on one side of an air mattress; where one side decreases, the other grown and in the end, the size of that mattress does not change. No matter the remedy, it seems that there will always be a case for or against this Medicare age increase. Physician’s practices should continue to operate and see patients ages 65 up to 67 as usual under the proposals listed to counter the negative effects of raising the eligibility age to qualify for Medicare. The real changes would occur on the business side with employee and private insurances, and within Medicare and Medicaid. This might then affect what procedures are covered by a physician’s practice but should not affect the quality of care. Even still, while there is no true way to balance the scale while decreasing the deficit, there are options that can place more financial responsibility on the insurance companies involved, most of which can afford them.

References​

Carpenter, C. E. (2011). Medicare, Medicaid, and Deficit Reduction. Journal of Financial Service Professionals, 65(6), 27–30.

Congress of the United States Congressional Budget Office (CBO). (2016). Options for reducing the deficit: 2017 to 2026. Retrieved from https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52142-budgetoptions2.pdf

Davidoff, A. J., & Johnson, R. W. (2003). Raising the Medicare eligibility age: effects on the young elderly. Health Affairs (Project Hope), 22(4), 198–209.

Erde, J. B. (2008). Medicare bad debts are you losing money? HFM (Healthcare Financial Management), 62(6), 70.