Between 36 million and 112 million Americans have pre-existing conditions

Americans with pre-existing conditions represent between 20 and 66 percent of the adult population, with a midpoint estimate of 32 percent.  The differences among the estimates can be attributed to the number and type of conditions included in the different lists of pre-existing conditions.

The GAO compared several recent studies that tried to determine how many adults have pre-existing conditions,  based on the prevalence of certain common conditions.  Hypertension, mental health disorders and diabetes are the most common ailments that lead insurers to deny coverage, GAO said.  The report doesn’t say how many of those people are presently uninsured, but the insurance industry said that number could be relatively low.  Most people have insurance through an employer that is available irrespective of pre-existing conditions, according to America’s Health Insurance Plans (AHIP).  The trade association stressed that requiring plans to cover everyone is closely linked to the individual mandate, which the Supreme Court could strike down this summer.  There is widespread agreement that the two policies must go hand-in-hand — the Obama administration told the Supreme Court that if it strikes down the mandate, it should also toss out the politically popular requirement to cover people with pre-existing conditions.

Adults with pre-existing conditions spend $1,504 to $4,844 more annually on healthcare, and the majority — 88 to 89 percent — live in parts of the country “without insurance protections similar to the Affordable Care Act provisions, which will become effective in 2014.”

GAO’s analysis found that nearly 33.2 million adults age 19-64 years old, or about 18 percent, reported hypertension in 2009.  People with hypertension reported average annual expenditures of $650, but expenditures reached $61,540.  Mental health disorders and diabetes were the second and third most commonly reported conditions.  Cancer was the condition with the highest average annual treatment expenditures — approximately $9,000.

Tired of feeling sick but worried about the cost of a doctor’s visit?

NowClinic, which debuted in 2010 and currently operates in 22 states, is part of the upsurge of Web- and telephone-based medical services that experts believe is transforming the delivery of primary healthcare.  The movement gives consumers easier access to reasonably priced, round-the-clock care for routine problems — often without having to leave home or work.

Insurers such as UnitedHealthcare, Aetna and Cigna, and employers such as General Electric and Delta Air Lines are getting on board, advocating telemedicine as a way to make doctor “visits” cheaper and more easily available.  Proponents also see it as an answer to a deteriorating physician shortage.  Nevertheless some physician and consumer groups worry about the trend.  “Getting medical advice over a computer or telephone is appropriate only when patients already know their doctors,” said Glen Stream, president of the American Academy of Family Physicians.  “Even for a minor illness, I think people are going to be shortchanged.”

Carmen Balber, a spokeswoman for Santa Monica-based Consumer Watchdog, is concerned that lower co-payments will cause people to see doctors or nurses online just to save money.  “People will choose the more economical option, even if it is not the option they want,” she said.

Employers are getting mostly positive reviews.  “Our employees just love the convenience, the low cost and the efficiency,” said Lynn Zonakis, managing director of health strategy and resources at Delta Air Lines, which offers NowClinic for $10 a consultation.

The global telemedicine business is projected to almost triple to $27.3 billion in 2016, according to a report by BBC Research.  “Virtual care is a form of communication whose time has come and can be instrumental in fixing our current state of affairs within the healthcare system,” said Robert L. Smith, a family doctor in Canandaigua, NY, and co-founder of NowDox, a telemedicine consulting firm.  The field developed gradually over four decades as a way to deliver care to geographically isolated patients.  That’s changed over the past 10 years thanks to the development of high-speed communications networks and the push to cut health costs.  “It’s the wave of the future,” said Joe Kvedar, director of the Center for Connected Health, founded by Harvard Medical School.

Just one major hurdle remains: Many state medical boards make it complicated for doctors to practice telemedicine, particularly interstate care, by requiring a prior doctor-patient relationship, according to Gary Capistrant, senior director of public policy at the American Telemedicine Association.  “The situation seems to be getting worse, not better.”  He cited a 2010 ruling by the Texas Medical Board that effectively blocked a physician from treating new patients via telemedicine.  The sole exception is in cases where the patient has been referred by another physician who evaluated him or her in person.  “It’s about accountability,” said Dr. Humayun Chaudhry, CEO of the Federation of State Medical Boards.  State boards insist on licensing doctors treating patients in their states so that if patients are injured, they have a state agency they can go to for help.

“We want to enable telemedicine to flourish, but at the end of the day we want patients protected,” Chaudhry said.

OptumHealth, a UnitedHealth Group subsidiary that operates the NowClinic, said it leaves it to physicians to determine if they can diagnose a patient via computer.  “This is not intended to replace the intimacy of the doctor-patient relationship,” said Chris Stidman, senior vice president.  The company did not reveal the number of people have used the service or how many physicians it employs.

If the Supreme Court overturns the individual mandate that requires Americans to buy healthcare insurance that is contained in the Patient Protection and Affordable Care Act (ACA),

“If the Supreme Court overturns the individual mandate, the private health insurance market would likely weaken under the unbalanced weight of strict provisions to cover all those who seek insurance without the counterbalancing benefit of a new, largely healthy, population segment that would be provided under the mandate,” Moody’s said.  “This scenario could become untenable for many insurers and hospitals, as costs would rise but revenues would not.”

There are additional challenges to non-profit hospitals in the ACA, specifically cuts in reimbursement rates for Medicare and reduction of funds paid to hospitals that serve a disproportionate share of Medicaid recipients, Moody’s said.  “Removing the mandate would make the negative features of reform loom much larger.”  Moody’s said the federal government could turn to a voucher system in which individuals would receive public help for them to buy health insurance, but the results for non-profits hospitals “would be more complex and hard to foresee.”

This is bad news because by a nearly five-to-one margin, hospitals expect the ACA to shrink their revenues. The result suggests that hospital executives are having second thoughts about the deal they made with the Obama administration in exchange for supporting the healthcare overhaul will help them weather the law’s financial repercussions.

According to a recent poll, 55 percent of hospitals and health systems anticipate falling revenues as a result of the law, while 12 percent expect an increase.  Twenty-eight percent were unsure of the law’s effect on revenue, indicating continued concern in the industry over the changes wrought by healthcare reform.  Hospital executives agreed to give up $155 billion in government payments over 10 years in a deal to cap costs borne by the industry as a result of the ACA.  The agreement followed a similar agreement with pharmaceutical companies and enabled the reform.  Two crucial hospital groups — the American Hospital Association and the Federation of American Hospitals — backed the law.  “Hospitals have acknowledged that significant healthcare savings can be achieved by improving efficiencies, realigning incentives to emphasize quality care instead of quantity of procedures,” Vice President Joe Biden said at the time.  “Today’s announcement, I believe, represents the essential role hospitals play in making reform a reality.”

“Hospital and health systems’ financial health has a direct impact on the benefits offered to their employees,” said Maureen Cotter, a senior principal at HighRoads, which took the poll.   “Even though 70 percent of those surveyed stated that they are committed to providing coverage in the long term, and no organizations have plans to discontinue coverage now or in the future, the coverage provided may take a new shape,” Cotter said.

There’s even more bad news in the fact that Howard Dean, a physician who formerly was chairman of the Democratic National Committee, a 2004 presidential candidate and governor of Vermont thinks that the high court will declare the mandate unconstitutional.  Dean believes that Justice Anthony Kennedy’s swing vote will side with the conservative justices when it comes to the individual mandate.  “I do believe that it’s likely the individual mandate will be declared unconstitutional.  Kennedy will probably side with the four right-wing justices. The question is going to be, is this individual mandate question, can that be considered separately from the rest of the bill?  And I think it will be.”

Dean also said the ACA can remain in place without the mandate.  “It’s definitely not necessary for the bill to succeed,” Dean said.  “It was mainly put in by academics who built the program for Governor Romney in Massachusetts, they had did it there, and for insurance companies who will benefit from extra customers.”

According to Dean, “The number of so-called free riders — people who will refuse to get insurance until they get sick — is going to be very, very small.”  Dean noted that the actual benefit of the individual mandate is “relatively small.  Everyone is a libertarian in America, whether Democratic, Republican or independent.  They don’t like to be told what to do by government.”

According to Kaiser Health News, “At issue is a section of the law that outlines when low- and moderate-income employees can opt out of their employer’s coverage and instead get federal subsidies to buy insurance through new state-based marketplaces, called exchanges.  The debate over who qualifies for subsidies has been overshadowed by more-polarizing issues such as the government’s authority to require most people to buy insurance.  But if the Supreme Court upholds the law — or even most of the law — the way the tax-credit dispute is resolved will help determine how many people can get subsidized coverage.  A proposed Treasury Department rule says workers and their families cannot qualify for those subsidies unless their employer’s plan is unaffordable because it exceeds 9.5 percent of their household income.”

Consumer advocates are steadfast in their opposition to the rule because it bases affordability on how much an employee might pay for individual coverage, rather than on the cost of covering their entire family.  As a result, many workers won’t be able to afford family coverage, yet their spouses and children will be ineligible to get help to buy insurance.  Approximately 3.9 million dependents might be impacted, according to one estimate.

“The proposed rule excludes people Congress intended to cover,” said Bruce Lesley, president of First Focus Campaign for Children, who sent a letter to Treasury signed by more than 100 advocacy groups, including the American Academy of Family Physicians, the Children’s Defense Fund, the March of Dimes and the National Council of La Raza.  The letter asks President Barack Obama and congressional leaders to take “administrative action or legislation” to spell out what Congress intended.

Treasury officials are drafting final rules, which are expected to be released soon.  “We are working with consumers, businesses and all interested parties to ensure women and families get the affordable care they need,” Treasury Department spokeswoman Sabrina Siddiqui said.

Supporters of the proposed rule, primarily employer groups and insurance brokers, say it is in keeping with the wording in the ACA that defines affordability in terms of the cost of “self-only coverage.”  Critics, including the National Partnership for Women and Families, say it allows for basing the affordability standard on the cost of family coverage. The group notes that Treasury officials plan to use the cost of a family plan as a basis for exempting some people from penalties for not buying insurance.  “It’s unlikely that Congress intended affordability to be determined one way” for penalty fines and another for subsidies, according to the groups.

Several Democratic lawmakers who played key roles in writing and passing the law say the proposed rule is not what Congress intended.  “The notion that Congress wrote the law in a manner that would exclude many families from access to more affordable coverage…is simply incongruent,” according to Representative Sander M. Levin (D-MI), the ranking Democrat on the Ways and Means Committee, and Representative Henry A. Waxman (D-CA), the ranking Democrat on the Energy and Commerce Committee.

Employers and taxpayers have a lot at stake in the way this rule is interpreted. For every worker who forgoes “unaffordable” job-based coverage in favor of subsidized insurance, the employer pays either a $3,000 per subsidized-worker penalty or $2,000 per employee.  The government’s stake will be less if more workers retain job-based coverage and fewer people seek subsidies.  At the same time, tax credits are the main way the law is expected to help low- and middle-income Americans buy insurance if they don’t have access affordable employer-based coverage.  By 2019, for example, the Congressional Budget Office (CBO) estimated that the government will spend $70 billion in tax credits to help 18 million people buy coverage through the exchanges.

Workers paid an average of $921 for an individual health insurance policy last year. That equals 18 percent of the total cost of the plan, according to an annual survey by the nonpartisan Kaiser Family Foundation and the Health Research & Educational Trust.  An employee’s share of a family plan averaged $4,129, or 28 percent of the total cost.

Based on those figures, a worker earning $40,000 will be ineligible to get subsidies because the $921 is less than 9.5 percent of income, even though the cost of the family plan exceeds that cap. In that scenario, the worker’s dependents will be ineligible to receive subsidies.  The policy is certain to impact women, who are 2.5 times as likely as men to be insured as a dependent, the hardest, according to the National Partnership.

“It will force more people into not having an affordable option,” said Dana Cope, executive director with the State Employees Association of North Carolina.  According to Cope, family coverage costs increased the ranks of the uninsured in North Carolina, where the state subsidizes employee coverage, but does not contribute toward family insurance.  “State employees…who earn on average $41,000…cannot afford to cover their dependents,” Cope said.

Although 26 states oppose sections of the Patient Protection and Affordable Care Act,

Rhode Island, Maryland and Oregon led the pack in implementing the ACA.  In fact, those states were working to expand health coverage well before the law was passed.  If the ACA is overturned by the Supreme Court, these states — and others supportive of the law’s goals – will keep pursuing reforms.  “What I hear is, they still intend to proceed,” says John Holahan, director of the Health Policy Research Center at The Urban Institute.

One provision of the ACA is that states must set up public insurance exchanges where uninsured residents can shop for coverage.  So far, 16 states and the District of Columbia already have passed legislation enabling implementation of the law, or have governors who have issued executive orders to move forward.  New York was the most recent when Governor Andrew Cuomo bypassed Republican lawmakers who were holding up the state’s effort to create a state insurance exchange by issuing an executive order to proceed.  Another 20 states either have legislation pending or have received some federal grant money to move forward.  The remaining 15 states have made little or no progress.

Two-thirds of the states will have viable exchanges up and running by 2013, according to Sam Gibbs, president of the Exchange Technology Group at eHealth Inc., which runs an online insurance marketplace and is bidding to help build state-level exchanges.  According to the law, the federal government will operate exchanges in states that don’t start them on their own.  That could be difficult to achieve in states that are hostile to the ACA, because implementation requires close cooperation with state government and insurance regulators.

The exchanges will be the entry portal for individuals and families who are currently uninsured.  They will be eligible for a federal insurance subsidy in cases where family income is less than 400 percent of the federally defined poverty level.  The size of the subsidy is based on a sliding scale to hold costs as a share of income between two and 9.5 percent.  States also are required to offer dedicated exchanges for small businesses that would let employers provide a subsidy for employee coverage.  Lower-income families will be eligible for Medicaid under a dramatic federally-financed expansion.  Between the exchanges and Medicaid expansion, coverage will be extended to 23 million uninsured Americans by 2019, according to the Congressional Budget Office.

If the Supreme Court declares the individual mandate unconstitutional and doesn’t touch the rest of the ACA, insurance companies are certain to push Congress for a remedy sometime after the November elections.  This would ensure that enough healthy young people sign up for insurance to balance the ACA’s requirement that carriers accept all applicants and don’t charge high-cost premiums based on age or health risk.  A Government Accountability Office study identified nine alternatives to the individual mandate; for example, setting strict open-enrollment windows with harsh financial penalties for failing to enroll.  That tactic works for Medicare, which charges senior citizens a 10 percent annual lifetime Part B surcharge for each year of delayed enrollment.

Congressional action on a fix would depend on who controls the next Congress — but the recent track record isn’t encouraging. “Since the two parties don’t speak to one another, the odds of a federal fix aren’t very good,” Holahan said.

Writing for Think Progress, Igor Volsky says that “Indeed, it seems that the law has already created an unstoppable momentum towards change and it’s very unlikely that they will take away these new benefits or obtain efforts to modernize their operations (in an effort to reduce spending). Regardless of the Supreme Court’s anticipated ruling on the law in late June, the changes the ACA inspired are here to stay — in one form or another.”

The online survey is based on responses from a random sample of 2,134 adults aged 19 to 64.  Among respondents who had a gap in coverage, 41 percent lost their employer-sponsored insurance because of changing jobs, losing their job, working part-time, because they could no longer afford to pay their share of the premium, or because their employer stopped offering health insurance.  Another 18 percent who had qualified for Medicaid lost coverage because they made too much money or neglected to re-enroll in the program when they were supposed to.

After losing insurance, finding coverage was difficult if not impossible. Approximately one-third who lost their insurance and tried to find new coverage within the past three years were turned down, charged a higher price, or were denied because of a pre-existing condition.  Nearly 50 percent of those who lost their employer-sponsored coverage said they never bought a new insurance plan, typically because it was too expensive.

“For people who lose employer-sponsored coverage, the individual market is often the only alternative, but it is a confusing and largely unaffordable option,” Commonwealth Fund vice president Sara Collins, lead author of the survey, said.  “As a result, people are going a year, two years, or more without healthcare coverage, and as a result going without needed care.”

The holes in health insurance were a primary force in President Barack Obama’s push for the Patient Protection and Affordable Care Act (ACA). According to the survey, people without health insurance often skip necessary medical care and do not get crucial preventive services such as cancer screenings.  Over all, nearly 75 percent of women aged 40 to 64 with health insurance had a mammogram in the previous two years.  In contrast, only 28 percent of women in that age group who did not have insurance for a year or more received a mammogram.

The Commonwealth Fund’s report proves that the ACA is helping to bridge coverage gaps for young adults because of the new provision for dependent coverage that allows young adults up to age 26 to join or stay on their parents’ health insurance plan.  Nearly half (46 percent) of young adults said they had stayed on or joined a parent’s insurance policy in the last year, and about a quarter (23 percent) of parents with children under age 26 reported that they had an adult child stay on or enroll in their health plan.  Young adults in higher-income families were more likely to have been helped by the new option than those in lower-income households.  This is likely because adults in higher-income households are more likely to have health insurance with dependent coverage.  Almost two-thirds (63 percent) of working adults knew about the provision.

Writing on the Huffington Post, Jeffrey Young says that “Nearly 50 million Americans had no health insurance in 2010, according to the latest census data.  Healthcare costs, which have risen tenfold since 1980, are putting an increasing burden on families, employers, and government programs.  Costs also are driving up the ranks of the uninsured and leading fewer companies to offer health benefits to their workers.  From 2001 to 2011, the percentage of companies offering health benefits dropped from 68 percent to 60 percent, the Henry J. Kaiser Family Foundation reported.  More than two-thirds of those who lost health insurance in 2011 cited losing their job or getting a new job without health benefits as the main reason they were uninsured, according to the Commonwealth Fund survey.  Among these people, 45 percent said that they were discouraged from buying health insurance on their own because of the high cost.  Sixty-two percent of the uninsured responded that finding a new health plan was ‘very difficult or impossible,’ the Commonwealth Fund said.

At the same time, many Americans don’t know exactly what the ACA contains.  According to the survey, awareness of the health law’s provisions vary significantly depending on income.  Fifty-four percent of respondents who had incomes below 250 percent of the federal poverty level were unaware of the under-26 provision, compared to just 25 percent at or above that line.  For the high-risk pools, the totals were 63 percent and 39 percent, respectively.

“We need to do more,” said Kathleen Stoll, director of health policy for Families USA, a group that supports the health law.  She described how “it takes a while for programs like these to break through.”  People with pre-existing conditions are a specific challenge, because individual states run the high-risk pools with differing levels of publicity.

“The current system of health insurance in the United States has gaping holes, the effects of which have become increasingly pronounced during a weak economy,” Commonwealth Fund President Karen Davis concluded.  “The Affordable Care Act is beginning to close those gaps, so that people who are already struggling can maintain health care coverage that will provide for their families’ health and help ensure their financial security.”

Consumer-directed health insurance is the foundation of market-oriented health reform solutions and will be offered as an option in the public health insurance exchanges if the ACA is found to be constitutional.  At present, 59 percent of major employers have an account-based health plan option, an increase of 53 percent when compared with last year, according to a survey by Towers Watson and the National Business Group on Health.  More importantly, employee enrollment in ABHPs has risen at companies offering them as a choice.  This year, 27 percent of eligible employees are enrolled, a 35 percent increase over 2011.  That finding is similar to a Fidelity Investments report showing a 61 percent surge in sign-ups for health savings accounts (HSAs) among its client companies — the largest one-year gain on record.  ABHPs are linked to tax-advantaged HSAs, because contributions can be used to accumulate funds to pay costs not covered by the high-deductible plans.  Reduced premium costs are the key driver.

Employers anticipate that their healthcare costs to rise 5.9 percent in 2012, according to the Towers/NBGH survey.  Total yearly premiums paid by employers and workers for high-deductible plans in 2011 were 10 to 19 percent lower than for managed care or traditional point-of-service plans, according to a Kaiser Family Foundation study. According to Kaiser, the average annual cost for individual coverage through a high-deductible plan last year was $4,793 — 15 percent lower than for a PPO managed care option.  “Everyone saves some money, and that really matters in tough economic times,” said Helen Darling, president and CEO of NBGH.

The downside is that high-deductible accounts shift much of the burden to the employee.  Out-of-pocket expense can be painfully high in the event of illness.  By law, there is a maximum yearly out-of-pocket liability of no more than $5,950 for single coverage and $11,900 for family coverage, although the Kaiser survey reports that the average maximum out-of-pocket cost in plans for single coverage was $3,304.  Supporters of ABHPs say that a higher out-of-pocket responsibility will create smarter, more careful healthcare consumers — which is expected to slow the rapid growth of healthcare spending.

As some employers adopt health plans that require patients to pay more out of their own pockets, demand for medical pricing information is on the rise.  In response, a new crop of entrepreneurial companies is providing price transparency tools to self-insured employers.  “The consumerism movement is finally getting wired,” said Cyndy Nayer, president, CEO and founder of the Center for Health Value Innovation in St. Louis, who believes pricing transparency in health care will lower costs by fostering competition.  “This is one of the best disruptive technologies.”

The dearth of price information in healthcare has been a major driver of ballooning costs, medical cost containment experts say.  Managed care had made pricing of individual medical services unknown to health care consumers.  Providers participating in HMOs had traditionally been paid on a per-head-per-month — basis, while insurers’ negotiated discounts off fees charged by doctors participating in their preferred provider networks were rarely disclosed to patients.  Because health insurance has been primarily paid for by employers, employees had little incentive to shop around for medical care.

The aging population as millions of baby boomers turn 65 and a slowly recovering economy are stretching the long-term finances of Social Security and Medicare.

Soaring healthcare costs have put Medicare in a worse position than Social Security.  But both programs are likely to become insolvent in the coming decades, unless Congress takes action.  In 2011, the trustees projected the Medicare hospital insurance fund would run out of money in 2024.  Social Security’s retirement fund was projected to dry up in 2038, while the SSDI (Social Security Disability Insurance) fund was projected to be empty by 2018. Revised projections provided a more ominous assessment of the disability program, which has seen growth in applications as more disabled workers lose jobs and apply for benefits.  The non-partisan Congressional Budget Office said the disability fund will run out of money in 2016.  Social Security’s trustees have asked Congress to strengthen the disability system by reallocating money from the retirement program.  There is precedent for this since lawmakers did the same thing in 1994.

If the Social Security and Medicare funds ever run out of money, both programs would collect only enough money in payroll taxes to pay partial benefits.  “I don’t know how to make it clear to the public, but in my mind the sirens are going off,” said Mary Johnson, policy analyst for the Senior Citizens League. “I wouldn’t say we’re under attack, but we are in a very, very serious position.”

Tax revenues have started to rebound but they are still below pre-recession levels.  Also, this year’s cost-of-living adjustment (COLA) was much higher than the trustees projected it would be.  Last spring, the trustee’s projected that Social Security recipients would get a benefit increase of 0.7 percent for this year, but higher-than-expected inflation pushed it to 3.6 percent.  That was good news for seniors but it drained more resources from the system.

The trustees overseeing the programs include Treasury Secretary Timothy Geithner, Labor Secretary Hilda Solis, Health and Human Services Secretary Kathleen Sebelius and Social Security Commissioner Michael Astrue.  More than 56 million retirees, disabled Americans, spouses and children collect Social Security.  The typical retirement benefit is $1,232 a month; the average benefit for disabled workers is $1,111.

According to Geithner, the trustees’ reports demonstrate a real need for Congress to make substantial changes to entitlement programs, although he continues to oppose Republican proposals to partially privatize Medicare.  “We will not support proposals that sow the seeds of their destruction in the name of reform, or that shift the cost of healthcare to seniors in order to sustain tax cuts for the most fortunate Americans,” Geithner said.  Last year, the trustees said that the Patient Protection and Affordable Care Act (ACA) would extend the life of the Medicare trust fund — a point that Geithner emphasized.  According to Kaiser Health News, “One of the most important things we can do right now to preserve Medicare is to implement the Affordable Care Act fully and effectively.” Geithner said.  “Still, more needs to be done.”

The positive news for Medicare is that the pace of cost increases has eased a bit. “The trends in Medicare are more modest than the cost increases we have seen in the private commercial sector,” said economist David Blitzer, who administers Standard & Poor’s index of healthcare costs.  “But both Medicare and the commercial sector face rising cost pressures no matter what, and they seem to come from virtually all directions.”

Medicare sets prices on take-it-or-leave-it terms for hospitals and doctors, who complain it doesn’t pay them adequately.  That causes them to charge privately insured patients at higher rates.  Some experts say the longer Congress waits to act on the two programs, the more difficult it could become to make effective changes.  If Congress acts quickly, it can phase in changes over time, perhaps sparing current retirees while giving those closing in on retirement time to prepare.  Unfortunately, Washington has had difficulty making tough political choices that involve raising taxes, cutting benefits or some combination of both.  Advocates for seniors oppose benefit cuts, noting that Social Security’s finances are secure for decades.

“No one is saying you don’t have to maintain it,” said Eric Kingson, co-chair of the Strengthen Social Security Campaign and professor of social work at Syracuse University.  “What I worry about is reducing the benefit structure or radically changing the system.”  Kingson believes that Social Security can be shored up by simply increasing the amount of wages subject to Social Security taxes — an idea that the majority of Republicans in Congress oppose.  Social Security is financed by a 6.2 percent tax on an individual’s first $110,100 in wages and is paid by employers and workers.  Congress temporarily reduced the tax on workers to 4.2 percent for 2011 and 2012; the program’s finances are being replace through increased government borrowing.  The Medicare tax rate is 1.45 percent on all wages, paid by employees and workers.

Could there be collateral damage if the Supreme Court rules to overturn the Patient Protection and Affordable Care Act (ACA)?

Sara Rosenbaum, a professor of health law and policy at George Washington University, is more blunt: “We could find ourselves at kind of a grand stopping point for the entire healthcare system.”  It’s not only Democrats warning of potential problems.  Gail Wilensky, who ran Medicare and Medicaid during President George H.W. Bush’s administration, doesn’t think it’s likely that the court will strike down the entire health law.  But if it does, she warns, “it seems like it takes everything with it, including those aspects that are only very peripherally related to the expansion of coverage.”

One reason that so many experts are concerned is that the ACA altered the payment rates for nearly every type of healthcare professional who treats Medicare patients.  Every time Medicare sets a payment rate, it must cite a legal authority.  Since 2010, according to Rosenbaum, that legal authority has been the ACA.  If the law is ruled unconstitutional, she said, every one of those changes “doesn’t exist anymore because the law doesn’t exist.”  The result?  “You have agencies sitting on two years of policies that are up in smoke,” she said.  “Hospitals might not get paid.  Nursing homes might not get paid.  Doctors might not get paid.  Changes in coverage that have begun to take effect for the elderly, closing the donut hole might not happen.  We don’t know.”

Writing for the Huffington Post, Ethan Rome, Executive Director, Health Care for America Now, says that “The Supreme Court will uphold the ACA not only because it’s constitutional, but because to do otherwise would impose a massive judicial intervention in one of the economy’s most complex sectors and derail a train with millions of individuals and businesses on board.  If the conservative justices disregard decades of legal precedents and strike all or part of Obamacare, they would not merely be tearing down the most sweeping piece of social legislation since Medicare and Medicaid, they would be taking away substantial consumer protections and benefits from millions of America’s seniors, families and small businesses.  The court would have to take responsibility for dismantling the law piece by piece, a task as difficult as it is unconscionable.  The law is two years old.  Implementation is moving forward, and hundreds of complicated provisions are in effect, helping millions of Americans.  States, businesses, doctors, hospitals and insurance companies have undertaken major, costly changes in anticipation of the improved insurance marketplace developing right now.  The fact is that serious wreckage would result from a bad decision.  Attempting to unscramble this omelet would be a national nightmare.”

Politico’s J. Lester Feder offers this perspective. “If America is hoping a Supreme Court ruling will end the legal uncertainty hanging over the healthcare system once and for all, there’s a chance it could be sorely disappointed.  Most legal experts are hoping the Supreme Court will give a clear thumbs up or down to the healthcare law.  But they’re worried about the possibility that, if the court strikes down just part of the health law, it could outsource the job of figuring out precisely which provisions of the gargantuan law stay or go.  That could mean at least another year of legal proceedings before the country — and the states that have to build the health exchanges — really know the rules its health system will operate under.  And that doesn’t even include the wild card of the election.  The parties challenging the law attempted to head off this scenario by specifically asking the court to consider whether the individual mandate could be severed from the rest of the law.  But if the Supreme Court decided it lacked the capacity — or the desire — to settle questions of how dependent the various parts of the law are on the individual mandate, it could remand the case to the lower courts to work through the details, legal experts say.  Another outside possibility is that the Supreme Court could appoint a ‘special master’ to sift through it under the high court’s supervision, though special masters usually oversee complex settlements or disputes among states, not dismantling politically charged legislation.”

If the unthinkable happens and the Supreme Court does strike down President Barack Obama’s signature piece of legislation, employers and insurance companies — not the government — will be the primary drivers of change over the next decade.  They’ll borrow some ideas from Obamacare, and push harder to slash costs.  Business can’t and won’t take care of America’s 50 million uninsured.  Workers will pay more of their own medical costs as job coverage changes to plans with higher deductibles.  Another part of the equation will be tax-free accounts for routine medical expenses, to which employers can contribute.  Employees and their families will be steered to hospitals and doctors that can prove to insurers and employers that they deliver quality care.  These networks of medical providers would earn part of their fees for keeping patients healthy, similar to the accountable care organizations in the ACA.

ACO supporters say they improve care for Medicare beneficiaries and slow rising costs by altering the incentives that affect how physicians and hospitals operate.  Experts cite as models such respected health systems as the Mayo Clinic and the Geisinger Health System of Pennsylvania.  Rather than being paid for each service, ACOs reward providers that manage chronic disease and meet certain quality standards, including reducing hospital admissions and emergency room visits.  If they improve care while holding down costs, the systems can share in the savings.

CMS is reviewing another 150 applications seeking to enter the program, suggesting that the Shared Savings Program is succeeding.  The program is “off to a very phenomenal start,” said Jonathan Blum, a CMS deputy administrator.  “We are on track to fundamentally transform the (Medicare) fee-for-service program.”

Late last year, the Department of Health and Human Services (HHS) chose 32 organizations to participate in an advanced version of the Medicare program.  These “pioneers” have made significant progress in developing the ACO model, with many already largely functioning as ACOs.  During their first two years the pioneers will assume more risk, but with a greater potential reward.  Although hospitals were expected to lead the ACO field, Blum noted that the majority of ACOs are physician-led organizations.  He also said many of the organizations are working with private health insurers to serve patients not in the Medicare program.

Chas Roades, chief research officer at the Advisory Board Company in Washington, D.C., warned that as the ACOS take off and “people actually start to deliver care in a different way, it’s messy and complicated.  There will be successes and failures, and it may go slower than policy-makers would like it to.”  According to Roades, it’s important that CMS create some way for the pioneer ACOs to share their data and best practices.  “It’s a slow ramp but everyone will be watching very closely to see how these early ACOs succeed,” Roades said.

Under the shared savings program, ACOs must meet 33 quality measures relating to care coordination and patient safety, appropriate preventive health services, improved care for at-risk populations and the patient experience of care – while reducing the costs of care.  ACOs that meet the standards will be eligible to share in the program’s savings.

“We are encouraged by this strong start and confident that by the end of this year, we will have a robust program in place, benefitting millions of seniors and people with disabilities across the country,” said CMS Acting Administrator Marilyn Tavenner.

Regarding the anticipated Supreme Court ruling, Emily Brower, an executive director with Atrius Health, operator of a pioneer ACO in Massachusetts, said “It’s not changing anything for us.  This is a model of care we’ve been trying to evolve into since before the pioneer program existed.  We’ll continue making investments, and if the law is overturned, we’ll be asking where the return on investment is for us, if not in shared savings.”

Writing for the e-Care Management blog, Vince Kuraitis is unimpressed.  “I had been anticipating this announcement as a defining moment for Medicare’s thrust into accountable care.  My expectations had been that we would see either:  Boom — a big splash of new Medicare shared savings ACOs announced, including big name hospitals and medical groups that were starting large scale ACOs, perhaps with hundreds of thousands of patients.  Bust — no one showed up at the party.  Providers would have concluded that Medicare ACOs were too risky, bureaucratic, and high effort.  This isn’t the defining moment I thought it would be.  But that defining moment might be just around the corner.  Medicare’s announcement included a mention that they have 150 more Shared Savings ACO applications waiting in the wings.  Is the boom around the corner?”