The Avoidable Care Act
United States Secretary of Health and Human Services
Dear Secretary Sebelius:
You are at the epicenter of a Katrina-like maelstrom of healthcare controversy. So, before we faint-praise you with “You’re doing a heck of a job, Kathy,” a bit of history is in order.
Reforming health care has never been easy. Medicare was signed into law on July 30, 1965, in a ceremony in Independence, Mo., where President Johnson presented former President Harry S. Truman with the nation’s first Medicare card. The first implementation of Medicare was, to say the least, bumpy, and the program was rapidly expanded as time went on. The latest estimate by the Medicare trustees (2011), and relating only to Part A of Medicare, has projected insolvency no later than 2024. As of 2009, Medicare’s unfunded obligations for Part A (infinite time frame) have been estimated to be $36 trillion. This history should be a warning to you of the toxic nature of health care funding.
In 1989, in part to meet additional difficulties in the original Medicare legislation, Congress passed the Medicare Catastrophic Coverage Act, which was supposed to protect older Americans from going bankrupt due to medical bills not otherwise covered by Medicare. The basic funding mechanism for this extra “protection” was a charge called a “supplemental premium” to be monitored and collected by the Internal Revenue Service. Needless to say, this approach, in part due to complication and in part due to the additional “premium,” was a catastrophic failure and later repealed by Congress. This, too, should have been a warning.
Twenty years ago, on Sept. 22, 1993, President William Clinton addressed a special joint session of Congress in a nationwide speech to propose the Health Security Act. President Clinton held up a card—the Health Security Card—designed to look like the Medicare card first granted to Harry S. Truman back in 1965. It was promised that all Americans from that moment forward would have full health care benefits. The back of the card states “This Health Security Card Guarantees You A Comprehensive Package Of Benefits That Can Never Be Taken Away.” That legislation never made it out of Congress, although a few cards were issued. I have one, and I am still waiting for those guaranteed comprehensive benefits that can never be taken away. Perhaps President Obama has one of those cards also.
The basic infrastructure to support the federal exchange hub was modeled after software currently used to sign up and validate a customer’s application for online banking transactions. I was informed of this by TCF CEO Bill Cooper, who went on to point out that the use of online computer systems to open banking accounts results in an approximate 20 percent rejection rate. Banks deal with this problem by having a phone assist available for that rejected 20 percent. Because you had three years to plan this system, and because the company originally hired by your department is very familiar with online banking software, it is surprising that phone assist was not included—all the more because, while initial Department of Health and Human Services estimates were for 500,000 enrollees in the month of October (only approximately 23,000 actually enrolled), call assistance or at least an interactive help desk could have been easily included. My guess is that now that you have hired the Optum subsidiary of UnitedHealth Group, these flaws will be corrected.
Large government bureaucracies frequently ignore their own histories of snafus (a phrase from military bureaucracy).
Let me end with a few predictions of where this will come out. Let me also make it clear that while I am a long-serving board member of a major nonprofit health insurer, none of these comments have anything to do with that company. Clearly, individuals who believed that they would be allowed to maintain their health policies will be allowed to maintain their health policies either by legislative action or court decision. Without question, this will undermine one of the shaky financial legs supporting the Affordable Care Act, which is to get healthy people into the insurance pool to pay for the unhealthy people already in the insurance pool. Consequently, there will be a large financial shortfall in the ACA.
There are always large financial shortfalls in government programs that are initiated for political and not economic reasons. Just as electronic pull tabs will not pay for football stadia, neither will forcing people to pay for protection they do not want pay for protection of others. And so, the federal fisc will be required to cover the shortfall. What will be unique here is that many people who never wanted to be covered (until they want to be covered) will be guaranteed, if not benefits, a way to avoid the law. For them, it will be the Avoidable Care Act.
Vance K. Opperman
A Supporter of Health Care for All Americans
Vance K. Opperman (firstname.lastname@example.org) is owner and CEO of MSP Communications, which publishes Twin Cities Business.