Friday, September 20, 2013

OBAMACARE: separating fact from fiction in the Affordable Care Act (ACA)

On 20 September 2013, President Obama stated that Obamacare would enable millions of Americans who were locked out of the system to get quality health care. He did not mention Section 10320 of the Affordable Care Act (ACA) that can be implemented when the government feels that costs are getting too high -- at this point the Indpendent Payment Advisory Board (IPAB) is enabled by law to bypass Congress and simply eliminate or disqualify specific services from coverage. While we understand the fiscal imperatives of this Section of the ACA we also feel that the public should be properly advised how such a provision might work, for instance, insulin injections for patients over 80 years of age could be denied payment, so could dialysis coverage for patients over 75 years old, or surgery for brainstem tumors in children. When push comes to shove, it will be of interest to notice if there's equity in denials of care, for instance, will Congressional representatives and staff be subject to the same denials of coverage that will be imposed on rank and file citizens? These questions have come to the surface since our original posting. The ACA under the IPAB Section is empowered to delete coverage under the act, not to tell citizens they can't pay independently for care denied coverage under the ACA. For many patients denial of coverage is tantamount to denial of care. Previously, we've touched upon whether or not Obamacare (ACA) exempts Congress and staff from the full effect of the law as Representative Jim Jordan, R-Ohio, claimed in his August 8th statement which asserted that Congress was getting "special treatment." Jordan stated that Obamacare "exempted Congress and their staff from the full effect of the law." True or not? The Office of Personnel Management says that the federal government usually pays around 75% of employees' health insurance premiums. Newly issued rules regarding payment of employees' health plans bought on the exchange won't be more than the government's contribution for other federally insured workers. Congressional representatives will decide who is employed by the "official office" as opposed to Congressional committees -- the former will be obliged to buy insurance from the exchanges whereas staffers retained by committees will not be obligated to buy from the exchanges. The group hired directly by a Congressional office will be eligible for up to 75% reimbursement or contribution to premium costs. The fact is that "all full-time and part-time employees employed by the official office of a Member of Congress" will be obliged to buy insurance through the exchanges. These employees are eligible for the Congressional co-pay which the Office of Personnel Management says is between 72 and 75% of its employees' health insurance premiums. So what's the uproar about? It is clear that there is a difference in how Congressional employees get treated under the ACA. A large part of the credit or blame for this difference goes to Senator Grassley's amendment to the ACA: it was Senator Grassley whose amendment specified that Congressional staffers "fully participate in the exchange by picking a plan, paying for it on their own, and perhaps qualifying for subsidies (italics added)." This reference to "subsidies" bothers Jordan and others who believe that the ACA is not equitable. The fact is that others besides Congressional employees will also be entitled to subsidies. Hence, the ACA is equitable although it may be more expensive than had been originally envisioned. It is also doubtful that Congressional persons will ever suffer from arbitrary decisions by the IPAB. In a nutshell, Congress and staff are not exempt from the ACA. Co-pays and subsidies are allowed but are not limited to Congress and staff.

My opinion: Grassley intended his amendment to be a poison pill that Democrats wouldn't swallow. He was wrong. The Democrats gulped it down and then shoved it down Republican throats. The real problems will be access to coverage for care. The ACA creates employment worries about full-time versus part-time employment, secretive denials of care by the IPAB under the guise of fiscal restraint whereby specific services are denied or made subject to increasingly onerous rules and regulations. Rising private insurance coverage costs with increasingly higher required deductibles are expected, e.g., middle America will find itself trapped between policies that cover too little and adequate private coverage that costs too much and requires high deductibles. In this scenario, the only winners are the insurance companies.

Credits: Paige Robbins was Chief Research Associate for this piece.

References: The Plain Dealer,; News release, Jim Jordan, 8/08/13; Lima News, "Jordan said challenging Obamacare is his top priority," 8/14/13; Office of Personnel Management press release, 8/07/13; News release, Sen. Charles Grassley, "Grassley amendment makes Congress obtain coverage from health care plan established in reform bill," 9/30/09.


  1. QUESTION: will the IPAB be empowered to deny care?

    ANSWER: no, the IPAB will be empowered only to deny coverage under the ACA.

    QUESTION: how realistic are the insulin, diabetes, and brainstem tumor examples mentioned in the column above?

    ANSWER: some healthcare systems already include age restrictions for renal dialysis. Denials of coverage for infants with poor prognoses has already occurred. In California we've already seen debate over the Brain Injury Access to Treatment Act.

  2. Currently, as of 10/16/13, Congress is finally discussing slashing its own Obamacare-subsidies and those of their staff personnel as well -- just keep in mind that many staffers on Capitol Hill are not part of a Congressional member's staff, e.g., persons who work strictly for committees and are not part of any particular Member of Congress' staff. These subsidies will continue.