Despite uncertainty surrounding the fiscal cliff and whether or not President Obama can make "compromise" a theme of his second term, one thing is for certain: the Affordable Care Act, widely referred to as "Obamacare" is going to take effect. The lion's share of the law is to be implemented on January 1, 2014. The major tenets that will impact Americans include the individual mandate and the pre-existing conditions clause that will not allow insurers to refuse coverage to anyone, even if they are in poor health.
What does this all mean for consumers and the broader health care industry? To answer that, Breakout welcomed Les Funtleyder, a healthcare strategist for nearly two decades and author of Healthcare Investing: Profiting from the New World of Pharma, Biotech, and Health Care Services. He admits that "the next 13 months are gonna be a flurry of activity" as states, insurers and the insured prepare for the law to be fully enacted. Still, he's not sure January 1, 2014 is a hard-and-fast date, citing a recent delay in the deadline for states to tell Washington, DC whether they want in on the federal plan or if they plan to handle it on the state level.
Under Obamacare, states have two key decisions to make: (1) Whether to create state-run exchanges where people can shop for and select their health insurance coverage from an online marketplace, and (2) Whether to expand Medicaid coverage for low-income Americans. So far 16 states and DC have decided to set up exchanges, nine decided against it, and the remaining are undecided according to the Associated Press.
"The fighting is far from over but there are very limited avenues for Congress, particularly the House, to make changes. They can delay, but I don't think they can delay infinitely," admits Funtleyder.Regardless, change is coming and the industry is getting ready. With more patients due to flood the system, Funtleyder believes hospitals and insurers alike will undoubtedly increase their marketing to attract new customers.
And once the law actually goes into effect it's the pre-existing conditions provision that has the potential to do a lot of damage to the consumer, according to Funtleyder. He says it is "likely insurance companies will raise premiums on everybody, given the mandate, to deal with the number of pre-existing conditions that come into the fold." And that is one of the many key criticisms of the plan: little to no direct cost-control.
As it stands, the bill has only one such feature; the Independent Payment Advisory Board, otherwise called by its acronym "IPAB" or more commonly the death panel. This provision puts 15 bureaucrats in charge of deciding where to cut costs and funding for certain health care services. Funtleyder says it's widely disliked on both sides of the political aisle, making it a reasonable assumption that the death panel could be repealed. If that happens, he argues there will be no mechanism at all to control costs.
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