Most brokers who plan to stay in the industry in 2014 are learning to embrace the Patient Protection and Affordable Care Act. But as two health policy minds from opposite sides of the political spectrum discussed Wednesday at America’s Health Insurance Plans conference in Washington, unknown effects of PPACA and rising costs of health care should still be on the minds of carriers and brokers alike.
James Capretta, a visiting fellow at the American Enterprise Institute and senior fellow at the Ethics and Public Policy Center, said during the panel that the individual mandate is hypocritical and “there could be a very powerful magnet in the exchanges to draw people out of the employer based system.” Capretta, who worked in the White House Office of Management and Budger for three years during the George W. Bush-era from 2001-2004, provided an example to the audience where a family of three, with earnings of $60,000, could save about $4,000 by moving to the public exchange rather than continuing insurance under their employer. Capretta accounted for employer taxes and fees as a result of the family exiting their system. It also saved the employer money. His take is that it “remains to be seen” whether people will follow the law as an “obligation of citizenship.”
Capretta also pointed out the changes in the Congressional Budget Office estimates for the number of uninsured people expected in the country in 2014 and 2019. The updated figures, released and reported on by EBA in February, showed less Americans are expected to enroll in exhanges in 2014 since the original estimates in March 2010 when PPACA was passed. A total of 44 million Americans will remain uninsured in 2014 as opposed to 31 million as originally predicted.
Jonathan Gruber, an MIT economist, architect of the Massachusetts health care law and self-proclaimed champion of PPACA, told the audience that everyone’s attention should be on health care spending. “Health care costs will always be a problem in America as long as we exist as a nation. We need to move slowly towards a solution that works,” he said. The four biggest sources of spending, he said, are Medicare, Medicaid, the employer tax solution for health insurance and PPACA.
In response to Capretta’s numbers and questions, Gruber noted that the CBO predicts less than 8 million people will move from their employer-based insurance to the public exchanges by 2019. “So the disruption is small,” he said. He also noted that the Centers for Medicare and Medicaid Services actuary office numbers show that total health care costs will rise 2% as a result of the exchanges.
Later in the day another panelist, Suzanne F. Delbanco of the Catalyst for Payment Reform, who said she’s the voice for the employer, said that the biggest driver of cost today is price. “Evidence demonstrates there’s wide price variation and there is provider market power at work,” she said. “Employers should consider coming together through organizations like mine to ensure adequate pricing amongst providers.”
For more from Jonathan Gruber, MIT economist, read EBA’s March Newsmakers story here.
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