The ACA & Its Consequences

The 2300-page “Patient Protection and Affordable Care Act,” aka “Obamacare,” (hereafter “ACA”), signed into law by President Obama on March 23, 2010, is an incredibly complex piece of legislation. Its various components take effect over a 10-year period. We are now almost three years into the phase-in period, with many changes to take effect in early 2014.

With the June 2012 Supreme Court decision defining the “individual mandate” as a tax, and President Obama’s reelection, we are not likely to see the ACA overturned. It is—and will continue to become—the law of the land.

We will all have to live with it—like it or not.

consequencesAll legislation creates both positive and negative consequences, regardless of how admirable its objectives may be. And the ACA’s intent to provide affordable healthcare to virtually every American while also reducing healthcare costs is certainly admirable.

But given the ACA’s scope and complexity, we can expect to see a veritable cottage industry of highly-paid consultants and lawyers emerge to help the Department of Health and Human Services (HHS) and the fifty state governments implement its polices.

It is far beyond any blog post to detail every possible consequence—intended or unintended—of the ACA, but it is fair to say that its implementation will not be trivial or smooth.

Some of the consequences of ACA implementation are likely to include:

1. Loss of US jobs, as medical device manufacturers shift production overseas to avoid paying the 2.3% medical device excise tax, effective as of January 1, 2013, to help fund the ACA.

2. Greater difficulty for people moving to a new geographic area in finding a primary care doctor, because there are not enough physicians to deal with all the newly insured. I encountered this phenomenon in Massachusetts in 2008, shortly after that state’s healthcare law—a model for the ACA—was enacted.

3. The emergence of “boutique” or “concierge” medical practices for the wealthy that operate outside the confines of the ACA, further widening the divide between the “1%” and the rest of us.

4. Many employers will pay the $2,000 to $3,000 per employee penalty for not providing healthcare coverage–such as Wal-Mart has already elected to do–throwing further cost pressure on mandated state “insurance exchanges.”

5. Insurance companies can no longer exclude persons with preexisting conditions.  This is good for patients, especially those with chronic disease such as MS or advanced cancer.  But this socially desirable policy is highly to increase insurance costs for everyone.

And of particular relevance to those of who are both older and have cancer:

6. The newly created Independent Payment Advisory Board (IPAB) has the power to decide what services Medicare will cover. In order to deliver more healthcare to more people, the IPAB will be under severe pressure to limit Medicare costs wherever it can.

Here is where men and women with advanced cancers are likely to confront the bleak reality of large numbers of folks requiring expensive therapies and not enough resources to go around.  The controversies surrounding cancer screening–mammograms for breast cancer and PSA testing for prostate cancer–may just be canaries in the limited resources coalmine.  The real test will come with actual cancer treatment, which is where the big bucks are.

Is the “Titanic” of  recent–and very expensive–innovations for prostate cancer such as Zytiga(r) and Xtandi(r) and others still in the FDA approval pipeline about to collide with the iceberg of the IPAB?

We’ll look more closely at that possibility in a subsequent post.

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