Regular readers of this Commentary know that we are not fans of the reform law and particularly the manner in which it was enacted and sold to the American people. As its full implementation nears, we believe that prudent risk management requires that those people responsible for health care businesses and those who own or invest in such businesses should be prepared for very difficult circumstances toward the second half of this year and for 2014. The sheer complexity of all the reform associated changes is overwhelming, particularly for providers. The cost impacts are finally becoming apparent and consumers, employers and health plans will find themselves forced to make difficult decisions to limit the impact of those effects. The plethora of changes and decisions will have the natural tendency of slowing everything up and creating more uncertainty. The pain caused to consumers and businesses will cause legislative and regulatory reactions which will likely only exacerbate the problems and cause further uncertainty, including about whether the reform law might be significantly changed.
The most difficult problems will surround the uncertainty about coverage. Will employers begin to drop their sponsorship of health benefits and send employees to the exchanges or pay a penalty? Will employers stop covering spouses and dependents due to costs or force employees to bear a much greater share of such additional coverage? How drastically will employers cut benefits to the minimum permitted, which also imposes more cost on employees? Do the uninsured understand that they must buy insurance or pay a fine and how will they react? Do those persons who currently have individual coverage know what kind of premium increases they are going to face? Will individuals be able to cope with the complexity of the new exchange processes? What kind of administrative problems will be caused for providers by new uncertainty about the source of coverage or the level of benefits for a given patient? These are just a few of the questions. Those of us who have been around health care for many years have seen the disruption that can be caused by even a relatively simple change. Nothing of this scope has ever been experienced and it is highly, highly unlikely that companies or consumers are at all prepared to cope with the changes.