August 2012 President’s Corner

Office of the President and
Vice Chancellor for Health Affairs
Clinical Building I, Suite 3100
8441 State Highway 47
Bryan, TX 77807

August 8, 2012

Dear TAMHSC Community,

What an interesting time to be a health care provider – and perhaps, what a frightening time to be a patient or a potential patient!

The discussions about what a great health care system might or should look like are not new to this country. The United States has had many conversations as a country and among our policy and lawmakers. And, numerous steps have been taken over the last nearly five decades.

The most significant program introduction regarding health insurance was Medicare and Medicaid in the mid-1960s. These programs promised to provide a vehicle for health security for the elderly (over age 65) and poor. Today, as a result of these two programs along with military and Indian Health, the federal government provides more than 50 percent of health insurance for Americans.

Passed in March 2010, the Affordable Care Act (ACA) promised to help assure further steps to health security for Americans by providing vehicles for the nearly 46 million Americans without insurance – more than 15 percent of the country’s citizens. It’s the most significant regulatory overhaul of the U.S. health care system since the passage of Medicare and Medicaid in 1965. The ACA was to be implemented over 4 years, and while it did not promise to provide universal health insurance, it was supposed to get the percentage of uninsured Americans down to single digits. It purported to do so in a fashion that preserved choice for patients, enhanced quality and made major steps to reducing the runaway cost spiral of health care.

The ACA offers a number of incentives including subsidies, tax credits and fees to employers and uninsured individuals to increase insurance coverage. The act requires insurance companies to cover all applicants and offer the same rates, regardless of pre-existing conditions or gender.

One of the issues that received tremendous scrutiny was the demand that individuals either buy health insurance or pay a penalty. In June, the Supreme Court upheld this portion of the act.

There is significant debate about how many people the proposed penalty will push to buy insurance since in the early years, the penalty will be relatively low – no more than $285 per family or 1 percent of income. Most individuals are paying significantly more than that on a monthly basis to have insurance. However, the penalty will increase annually and by 2016, the penalty will be up to $2,085 per family or 2.5 percent of income (whichever is greater) – perhaps a greater incentive to consider buying insurance.

At the same time, the Supreme Court ruled states could opt out of the part of the law that demanded states expand their Medicaid (insurance for the poor) programs. It is not known how many states may opt out, though our governor has stated Texas will NOT expand our program. The Congressional Budget Office suggested as a result of the opt-out decision, 3 million fewer Americans will gain health insurance as part of the overhaul.

Many health care providers are a bit skeptical about the estimates that accompany the bill. Their skepticism is based upon a less than accurate track record for the proposals that have preceded the ACA.

For example, when stumping for Medicare – a plan to provide health security for those over the age of 65, President Lyndon Baines Johnson said, “….There is a…program where you and I must stand together today. We must unite in passing a bill in Congress to help our older citizens secure decent medical aid under Social Security. Inadequate hospital care is an indecent penalty to place on old age….All we are asking for is a program under Social Security which will let the worker put in about $1 a month from his average lifetime earnings. The average manufacturing earnings in this country are now $100 a week. We ask $1 per month when he enters the labor market from the employee and $1 per month from his employer and the Government does not put in a single cent. But under this plan all Americans, not just the rich and affluent Americans, all Americans can face the autumn of life with dignity and security. Twenty-four dollars a year, if you enter the labor market at 20 and stay until you are 65 – 45 years at $24 – makes a little over $1,100, multiplied by the formula 3.75, and you have almost $4,000 when you are 65 in your account to take care of your hospital needs.” (President Johnson before the 50th Anniversary Convention of the Amalgamated Clothing Workers convention May 1964)

The ACA? Well, it will morph as has Medicare and Medicaid. It will likely help close the gap of the uninsured and bring health security to millions more Americans, though it will not close the gap to 0 percent. There will be those left who do not have coverage. It will probably incentivize some changes in health care delivery and efficiency. And it is probably fair to say that what it looks like 25 years from now will be very different from what it looks like today in its infancy.

Our role as heath care providers is to understand the bill, help our patients understand the bill and to work for modifications that emphasize quality, efficiency and choice.

Until next time, best regards. You can always reach me at president@tamhsc.edu. I value your ideas, learn from your concerns and believe in your commitment.

Best regards,
Nancy W. Dickey, M.D.
President, Texas A&M Health Science Center
Vice Chancellor for Health Affairs, The Texas A&M University System

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