Will it stay or will it go? Despite being signed into law in March 2010, the Patient Protection and Affordable Care Act (ACA) remains politically radioactive. Republican presidential candidate Herman Cain, a critic of President Bill Clinton's health care reform proposal nearly 20 years ago, says it is time to "repeal and replace Obamacare with patient-centered, free-market reforms." Mitt Romney, who himself has been roundly criticized by Republican competitors for health care legislation passed in Massachusetts, says he wants to "stop that law in its tracks."
For his part, President Obama recently began to embrace the term Obamacare, telling a campaign stop in August: "I have no problem with folks saying Obama Cares.' I do care. If the other side wants to be the folks who don't care, that's fine with me."
The political debate has spilled over into the courts, where more than 20 challenges to the law have largely focused on the individual mandate provision of the law that will require all Americans to buy health insurance or face a fine. The next stop for the legal battle is expected to be the U.S. Supreme Court. On Sept. 28, the Obama Administration asked the court to hear an appeal of the Eleventh Circuit Court of Appeals' decision that struck down the individual mandate. The Supreme Court is expected to rule on the case next June, adding a likely spark to the November presidential campaign.
While the law continues to be debated, one issue is clear. The reform law has not curtailed the steady rise in health care costs for employers. In fact, it appears to have exacerbated it, at least in the short term. Employers expect the average cost of health care benefits to increase 7.2% this year, according to a survey by the National Business Group on Health (NBGH) and Towers Watson. That is up from an average of 6% in 2010, and both figures are well above current inflation rates. About 1% of the rise this year can be attributed to the health care reform law and requirements it has imposed for coverage, says Helen Darling, president and CEO of the National Business Group on Health.
For example, ACA requires medical plans to cover dependent children up to the age of 26. For The Sherwin-Williams Co., a Cleveland, Ohio-based coatings manufacturer and retailer, that resulted in 700 adult children being added to its plan. However, notes Martha Lanning, the company director of health and welfare plans, the impact was tempered by the fact that these young adults tend to be healthy and make fewer claims than older enrollees.
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| "Manufacturers will be looking at costs going higher." -- Ed Bray, director of compliance for Burnham Benefits Insurance Services |
Concern about the affordability of health care was evident in a recent report from the Institute of Medicine. An IOM committee was charged with providing the Department of Health and Human Services with criteria for determining what "essential health benefits" must be included in health plans sold in the state-based insurance exchanges mandated by the ACA. The committee said it recognized "two competing goals: to provide health insurance coverage for a wide range of health needs and to make it affordable."
The panel compared the choices ahead to a shopping trip for groceries. You can either go to the store, fill your cart with the groceries you want and then find out what the costs are, or "walk into store with a firm idea of what you can spend and fill the cart carefully, with only enough food to fit within your budget." The committee recommended the latter approach, urging HHS to develop the essential benefits package with a focus on what small employers and their employees can afford. The committee also recommended that HHS update the benefits package annually, beginning in 2016. It said HHS should scrutinize costs on an ongoing basis, so the essential benefits package did not become unaffordable. It also urged development of a "strategy to reduce the rate of growth in health care spending, bringing it in line with the rate of growth in the economy."
