Repeal and Replace or Cut, Copy and Paste?

The speaker of the House, Paul Ryan, gave a PowerPoint presentation today to explain the GOP’s replacement for the ACA. Before I go any further, I need to give clarification to my readers. I have over a decade of work experience in the healthcare field for, both insurance companies as well as healthcare and behavioral healthcare providers where I worked with a vast array of insurance companies, on behalf of patients, doing everything from verification of benefits to obtaining prior authorization and concurrent review for continuous authorization to arranging continuation of care for patients discharging from inpatient care.

All of this professional experience in the healthcare field, where I dealt “hands-on” with insurance companies for patients being treated by providers (whether working for an insurance company in Utilization Management or working for providers of service – hospitals, Long Term Acute Care/LTAC facilities or residential substance abuse facilities) gives me a comprehensive understanding of how insurance works – or doesn’t work – for patients.

So, when I heard Speaker Ryan’s presentation of the ACA replacement plan, I wasn’t hearing it as a layman, average constituent or (even) as a journalist who may not possess this knowledge while at a press conference without the help of producers or correspondents. I heard it as someone who knew, exactly, what he was talking about so I want to break down and clarify some of the bullet points he touched upon.

First, the only thing good that he presented was the items that are already in place with the ACA like: coverage for those with pre-existing conditions and parents able to keep children on their insurance until age 26. He mentioned that there would be “help” in the form of credits for certain folks – I don’t believe they are credits to offset premiums, deductibles or Out-Of-Pocket (OOP) maxes. However, the dollar amount wasn’t specified for these credits in today’s presentation. I heard mention of what that proposal was, yesterday morning, with Ari Melber’s breakdown during his program on MSNBC. If those figures are the actual dollar amounts to be issued as such “help” for patients they don’t make sense and are grossly inadequate.

Second, Ryan’s proposal that a HSA (Health Savings Account) will offer transparency for healthcare costs is (not only) untrue it is (just) asinine. Health Savings Accounts have been around for quite a long time. All they are is an account that employees “opt into” in order to put away money for healthcare costs like deductibles, out-of-pocket maxes, prescriptions and co-insurance (patient portion of services such as when your insurance covers 50-90% of services leaving you responsible for 10-50% or “the balance”). The money that goes into the HSA is deducted from the employee’s paycheck prior to tax, FICA and Medicare deductions.

Don’t be misled when you read about HSA’s online or in other information materials when that information states that, “it’s a pre-tax contribution made by your employer…” or “the contribution comes from your employer…” Your employer doesn’t give you money – your, pre-taxed, salary (your money) is put into the account by your employer. Money given to you by your employer for healthcare cost offsets isn’t a Health Savings Account; it is a Health Reimbursement Account (HRA). HRA’s are great. They pay for co-insurance charges, deductibles, OOP maxes, labs, pharmacy co-pays and over-the-counter medications.

But, back to my point about the fact that HSA’s aren’t going to magically bring transparency to medical costs. The only time a patient will get a definitive cost breakdown for medical care is if they are paying cash. The reason that there isn’t a way to “shop around” (as Speaker Ryan put it today) like a consumer at a retail establishment is because of something specific to insurance companies called “contractual agreements/contracted rates.” Insurance companies have an entire department (usually called “provider relations”) that is dedicated to establishing contractual agreements with providers of service. A provider of service can be a hospital, a doctor, a lab, a physical medicine and rehabilitation facility, a skilled nursing facility, a home healthcare and hospice provider, etal.

That is why (if you read your bill from any provider or your Explanation Of Benefits/EOB from your insurance company) you will notice “billed charges, contractual adjustment, amount paid.” The billed charges are the charges the provider bills (in general) which would be applicable to cash pay patients or patients who are seeing an “out-of-network provider” (non-contracted provider or non-participating provider). The “contractual adjustment” is the difference between what you’d pay in cash and what the provider agreed to be paid as part of their “participating provider” or “contracted provider” agreement.

But wait, it gets more complex. If you’ve ever had insurance you’re aware that you have an “ID number,” right? But, many people are unaware that they have a group number as well (unless they’re meticulous about looking over their insurance card or unless a provider asks for it). The group number is specific to your employer’s contract with the insurance company. That group number tells the insurance company a whole lot about everything. Every group goes to an underwriting department within the insurance company to determine how much the insurance premiums will be for that group. The underwriting is done to determine risk and profitability.

Also, each group will have contractual agreements for the different providers of services. So, if you work for company X and your husband works for company Y and both companies offer insurance from only one insurance company (let’s say Aetna) – company X’s premiums for the employee (alone, employee/spouse or family) will be different than company Y’s premiums for the same. Also, even though they have the same preferred provider network, the contractual agreements for each provider of service will (usually) be different as well.

It’s because of the contractual agreements that makes Paul’s statement of “having HSA’s for everyone will bring transparency to healthcare costs…” completely untrue. That means one of two things. He either blatantly lied to the press and American people or he (truly) has no idea about what he’s talking about and if the latter is true – he has no business being the “man with the replacement plan.” However, if he’s been working on healthcare reform for twenty years (as he has stated multiple times) then he has to know that what he said was complete bull shit that he knew would go over the heads of most Americans since most Americans don’t possess this knowledge.

Also, he has blamed the Obama administration and legislative Democrats who created and passed the ACA of creating an “over-complex piece of legislation that was made with special interest groups/lobbyists…” From what I’ve heard, so far, from Paul Ryan’s plan and the fact that he stated, openly, that he met with the CEO of Aetna who told him that, “Obamacare is in a downward spiral…” (I’m paraphrasing a bit) and the fact that the information he gave in his presentation was not truthful begs the question of “Who’s, really, pandering to lobbyists and trying to sell the American people a plan that will greatly benefit the insurance companies at the expense of the American citizens?”

The ACA isn’t perfect, but it is very fixable. If the GOP’s real concern is for the people of this country who need healthcare that they can afford and afford to use then it’s a pretty easy fix. The ACA eliminated the pre-existing condition exclusion, lifetime caps and booting kids off their parents insurance at the expense of the insurance companies – yet the insurance companies are still making billions of dollars a year so it didn’t drive them into bankruptcy as was the argument for allowing them to get away with rules such as those in the past. All that’s really needed to fix the ACA in order to make it work for everyone is to limit the deductible amounts insurance companies can charge for individuals and families as well as the out-of-pocket maxes. Also, it should encourage companies to offer both HSA’s and HRA’s.

I work for a very large company and they offer both. The HRA dollars are earned by engaging in “health promoting” tasks that, once completed, earns you dollars that go onto a debit/credit card that’s issued through an outside company that manages these health promoting assignments and education. It’s all done online and is very easy to do in your spare time. My deductible (as an individual) is $1,000 per year and I’m able to earn up to $500 a year in HRA money. So far I haven’t had to pay for any prescriptions or office visit charges to my primary doctor, the two specialists I see nor for any labs I’ve had done. It’s awesome and if the GOP was truly interested in making healthcare work for the poor, working poor and middle classes they’d take notes from my employer and others like them.