Your Health: Affordable Care Act II
by Terry Hollenbeck, M.D.
Sep 20, 2012 | 2744 views | 0 0 comments | 8 8 recommendations | email to a friend | print

In a previous column, I explained the various components of the Affordable Health Care Act. Now, I would like to give my perspective on this politically controversial plan.

I’ve seen a lot of changes to health care during my 40 years of medical practice. Needless to say, we’ve come a long way, but we still have a long way to go.

The provision of health care today, as we know it, is not sustainable. It worked well for many decades but needs drastic changes beginning now and into the future. To not change the way health care is delivered will bankrupt our nation.

It is that realization that makes me able to accept the new health care act, even with potential faults and uncertainties. No alternative plan has been offered to the public, so I am hopeful that this act of Congress will be the beginning of a change that is so desperately needed for our health care delivery system.

I want to be clear that I strongly believe that we, as a compassionate and caring society, ought to make sure that every citizen has the right to health care. How we can actually provide it and pay for it will be the biggest of uncertainties.


A recap

Regarding the Affordable Care Act, I previously mentioned some changes in health insurance regulation that have already taken place and some that will occur by 2014 (“Many parts to federal health care law,” Page 10, Aug. 3).

These include the elimination of preexisting conditions as a barrier to obtaining insurance, allowing children of policy holders to be covered until they are 26 years old, covering more preventative care and eliminating lifetime limits on how much in benefits insurance will pay.

These great new concepts should have been implemented years ago.


Health insurance required

Under the new law, most Americans will be required to have health insurance by 2014. Low- and middle-income families will be eligible for tax credits and subsidies to help pay the insurance premiums, unless they are covered by affordable insurance through an employer.

A potential problem here is that under the provisions of the law, some working-class families could be unable to afford family coverage offered by their employers. I am hopeful that under the new law they will be eligible for government subsidies to purchase their own insurance through the newly-created insurance exchanges.

It is also possible that companies expecting increased insurance premium costs may raise their employees’ deductibles and co-payments. Small businesses will be eligible for tax credits to help cover their workers, and yet it is reported that some small companies are thinking of dropping health insurance altogether. However, if that were to happen, those affected employees could buy coverage through insurance exchanges.


Possible scarcity of doctors

Another problem is that about 30 million citizens will be newly covered by health insurance, and there won’t be enough doctors to meet their needs. The Association of American Medical Colleges estimates that in 2015, the country will have about 62,000 fewer physicians than it needs.

The new law will attempt to forgive medical students of burdensome loans and reimburse higher Medicare rates to doctors who work in underserved areas.

Initially, it may be very difficult for the newly insured to find primary-care doctors, causing long waiting lists and overused emergency rooms and possibly driving some people with insurance to forgo needed care.

I envision that more treatment of patients will have to be done by non-physician providers, such as nurses and nurse practitioners, certified assistants and home health care aides.


Medicaid expanded

The new law expands Medicaid, the government health insurance program for the poor, to cover about 16 million citizens who will be newly enrolled in the program.

Each state was given the option of whether to participate in this expansion of coverage for Medicaid patients. States that participate will receive full financing from the federal government to fund the newly insured. In states that don’t participate, there could remain a number of our nation’s poor without coverage.

Also, the reimbursement to health care providers from Medicaid is so low that many providers may not want to accept Medicaid patients.

On top of this, and not covered by the new law, all physicians face a 32 percent cut in Medicare rates at the end of this year.


Hospitals affected

Hospitals have major concerns, too. They are scheduled to receive decreased reimbursements from Medicare and Medicaid for the uncompensated care they provide. The federal government now spends $20 billion annually to hospitals to help cover costs of the uninsured and illegal immigrants, neither of whom, by law, can be turned away from the doors of a hospital.

Under the new law, eventually one half of that reimbursement to hospitals will cease. Hopefully, the number of uninsured patients will decrease in proportion so as not to further financially burden the hospitals.


Who will pay

Last is the concern for how the new law will be financed.

Mostly, there will be new taxes. Individuals who choose not to buy insurance and employers who don’t offer it will pay billions of dollars in penalty taxes. Individuals making more than $200,000 and couples making more than $250,000 will pay increased Medicare tax on wages and an additional 3.8 percent on investment income.

Tanning salons, insurance and drug companies, and medical device manufacturers will pay more taxes. Individual Flexible Spending Account contributions will be lowered and medical-dental income tax write-off thresholds will be increased.

Hopefully, these changes will be offset by new insurance policies that have lower deductible costs and cover more care than was previously provided, thus lessening out-of-pocket expenses.

In summary, my opinion of the Affordable Health Care Act is that it does offer many improvements in the delivery of health care in general and will offer this care to many who now lack it. But who provides the care, how much it will ultimately cost, how highly we will be taxed for it and how much new bureaucracy will be created to administer it are all questions that remain to be answered.

- Terry Hollenbeck, M.D., is an urgent-care physician at Palo Alto Medical Foundation Santa Cruz in Scotts Valley. Readers can view his previous columns on his website,, or email him at Information in this column is not intended to replace advice from your own health care professional. For any medical concern, consult your own doctor.

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