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Affordable Care Act’s impact pondered on peninsula
Now that the Supreme Court has declared the Affordable Care Act (ACA) constitutional, the law’s already significant influence will continue to expand on the peninsula.
Eric Lewis, CEO of Olympic Medical Center, said the law will greatly increase access to insurance.
Currently there are more than 10,000 uninsured citizens in Clallam County. If the ACA works as its designers hope, as many as 6,000 of these citizens will have access to insurance by January 2014, Lewis said.
The plan provides much of the additional coverage by bumping up the income level that qualifies individuals and families for Medicaid, a joint federal-state program.
Lewis said the state of Washington’s own Medicaid budget is strained and is likely to grow more so with the new plan. In 2014, 2015 and 2016 the federal government will spring for the increase in payments, but in year four the state will begin paying a portion of the cost.
Eventually the state will pay 10 percent of the cost of covering those newly qualified for the plan, requiring significant new dollars from Olympia.
“The point is, the state doesn’t have any money,” Lewis said. “That’s the question. How does the state find that money?”
The ACA also provides small employers with tax credits to help provide insurance plans for workers.
Lewis said that taken together the ACA will likely be a plus for the local population and also for OMC. He noted that OMC now provides a great deal of uncompensated care. “It will be positive for us from that standpoint,” he said.
But, he added, the ACA will bring new challenges.
He pointed out that the law raises funds for the greater access in two ways: first, by cutting Medicare payments and second, by raising taxes.
He estimated that Medicare payments to OMC will be reduced by $26 million over the next 10 years.
“We’re a Medicare-dependent hospital,” he said.
Lewis said while those payments will decline, expenses for the hospital are rapidly rising. “The cost of drugs alone — pharmaceuticals — went up 8 percent last year.”
“I’m glad for the individuals,” Lewis said. “When you get sick and have no insurance — that’s a tough thing for people.”
Lewis added that some of the rumors circulating about the ACA are simply not true.
“There are no death panels in the ACA. The end-of-life decisions are still between the patient, the physician and the family. I’m very comfortable with that.”
Mark Harvey, director of Senior Information and Assistance for the Olympic Area Agency on Aging, said his office has been receiving calls about the ACA, including questions about death panels. There are none, he said, but “there are creative folks who can twist it around.”
He said elders and the people who take care of them “don’t need to be afraid. If you get stuff in mail you don’t understand, just give us a call.”
Benefits in place
Phil Castell owns Castell Insurance, which specializes in health insurance for all ages, but especially those 65-plus.
He noted that several of the ACA’s provisions are already in place.
“What the government tried to do is front-load as many benefits as possible for everyone before the 2014 date,” he said.
That includes an effort to close the coverage gap on Medicare Part D medication benefits — the so-called “doughnut hole.”
Formerly the plan provided for a $32 deductible for prescription drugs. The program then paid for all additional drugs up to $2,930 at which point the patients hit the coverage gap — the “doughnut hole,” which required patients to pay 100 percent of their drug costs until they spent $4,700 out of pocket.
At that point Medicare catastrophic coverage starts up, paying 95 percent of the cost of all additional drugs.
Under the ACA, the government helps ease the pain of the doughnut hole by picking up 50 percent of the tab for brand-name drugs and 14 percent for generics.
Castell said ACA provisions allowing children to remain on their parents’ insurance plan up to the age of 26 were welcomed, but he has very few clients taking advantage of it. Out of 400 clients, “I can think of probably four or five,” he said. “About 1 percent.”
Castell is more enthusiastic about ACA’s impact on older Americans. “For people under age 65 they’ve done so much. Previously all health insurance for sale — individual plans — had either a $1 million or $2 million lifetime cap.”
“Now they have no maximum.”
He also touted government funding for preventive care programs, which patients can tap into “with zero co-pay and zero deductible.”
Castell said he’s in some ways ambivalent about the program.
“Personally, I’m all for it. I think that this country as a whole should be able to provide the level of care people require without them being impoverished.”
But he added, “I also don’t know how this country can afford it.”
Medical supplies and services
Ben Feehan, general manager at Master’s Orthotics & Prosthetics, says Medicare now provides the payment for at least 60 percent of his business.
He’s concerned about the cut in funding to Medicare, but said he’s been feeling the growing pinch for some time. “We see that on a day-to-day basis — they are making even basic care very, very difficult to provide.”
Feehan said some of the cuts are accomplished “under the guise of fraud protection,” with increasing piles of paperwork required for medical appliances, including shoes and inserts for diabetics. “Even prosthetic devices,” he said.
“They’re clamping down, getting rid of different types of devices. I expect as time goes on that will continue.”
Feehan said because Medicare pays for a large percentage of the orthotics and prosthetics sold in the U.S. the agency provides “de facto price controls.”
Everyone in the industry bases their prices on what Medicare will pay, he said. “That results in higher costs to the customers.”
Reach Mark Couhig at email@example.com.