The Coat Check

Ripples In A Pond: Reactionary Fallout

One clear lesson from the ongoing challenges of U.S. health care reform is that ambitious programs represent flash points in a contentious national dialogue (for example, the individual mandate requiring all persons to acquire health insurance coverage). This fact, coupled with the delay evident in many major deadlines, is the reason that there was such a rush at the end of March 2014 as millions signed up for coverage in the final hours. While some may argue that the final number who eventually pay their premiums may actually be higher or lower than the official estimate, such speculation is a relatively minor point . A major topic which has received disturbingly little coverage is the fact that the U.S. health insurance market will essentially be frozen by the end of April, if not before. Unless an individual experiences a qualifying event (loss of job with health insurance benefits, getting married, etc.) he or she will effectively be barred from purchasing health insurance. 

Some libertarians may perhaps choose to argue that this is government interference in a free market, but the policy is in fact a necessary one to avoid attempts at gaming the system. Because the ACA legislation prevents insurers from excluding pre-existing conditions, this mandate is necessary to prevent individuals from only purchasing insurance coverage when they have a pressing need for it. In this specific scenario, the consequences to the overall health of the U.S. health insurance market requires that individuals be excluded from coverage outside of qualifying events, and the annual enrollment period. This is no different than how health care insurance was previously provided through employer-covered plans, for the record, but a vast number of lower wage workers (part-time, per diem, etc.) who have never or rarely held employer-provided coverage may not be aware of that fact. 

The interlocking policy implications of the individual mandate, carefully designed and rigorously enforced, stand in stark contrast to the recent decision by the federal government to delay implementation of the ICD-10 medical billing code standard. The original intent behind the new standard was to create many thousands of new diagnostic codes so that provider diagnostics and reimbursement could be much more closely correlated. Regulators hoped that the new data would make it much easier for policy makers to identify clinical care practices that were effective in preventing more serious conditions, as well as others that were less successful. Health insurers and hospital systems have invested billions in bringing their systems up to this new standard, which was ultimately delayed because a number of smaller standalone physician practices and hospitals balked at the costs involved, and delayed until the last moment (the new standard was scheduled to be implemented by October 2014, with the caveat that claims submitted under ICD-9 after October 1st would no longer be reimbursed). This sudden change risks the momentum of health care reform as those who have moved proactively now face the cost of maintaining two disparate computer systems – one of which may be in limbo indefinitely. Given the impending release of the new ICD-11 standard, all of the expense surrounding this initiative may end up as a total write-off. One recent survey found that more than half of health care organizations would have rather gone ahead with ICD-10 implementation. Assuming the status quo does not change, the added costs of doing so will only punish the industry players who have been most supportive of health care reform, while the delay rewards those who refused to support this change of process. If similar actions occur on other major policy initiatives, expect the backlash from former allies to be swift and brutal. 


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