Future costs pure guesswork

April 1, 2013

Experts and economists are looking at healthcare through the lens of their own ideologies

THE CONGRESSIONAL BUDGET OFFICE (CBO) foresees a $233 billion overall increase in healthcare spending from August 2012 to August 2022.

“We have a complete political stalemate over how to shift these questions into cost sharing, and there’s not a lot of compromise” says J.D. Kleinke, medical economist, author and MHE editorial advisor.

Privatization is one compromise that many states seem to rely on for Medicaid populations, for example, and insurance exchanges that offer private-payer products is another area of general agreement.

Stakeholders are unable to predict how market segments are going to react to the exchanges and what it’s going to cost, which explains the significant adjustment in the CBO estimate, Kleinke says.

“It’s a ‘guesstamate’ based on price, which we have no idea what that will be,” he says.

“The exchanges are going to limp out just barely in time, but is anyone going to show up to buy them?”

HISTORY REPEATS

Experts and economists are looking at healthcare through the lens of their own ideologies, Kleinke says, but the real answer is unknown and will only come with time.

Specifically he says, the Patient Protection and Affordable Care Act (PPACA) reminds him of when Medicare Part D was enacted in 2003.

“The task is much bigger and much more complicated,” he says. “You don’t hear anybody complain the Medicare prescription drug benefit now, which is a remarkable thing in healthcare.”

Although Kleinke admits that implementing Medicare Part D wasn’t as complicated as implementing PPACA, it was implanted in a much shorter timetable

“Many of the folks who worked in the trenches at the Centers for Medicare and Medicaid Services and the Bush White House are still in Washington and are now trying to make ‘Obamacare’ work. That gives me some confidence,” he says. “It worked and for the same reasons ‘Obamacare’ will probably work. The health plans that were selling those products wanted to sell them; they wanted to succeed in the marketplace.”

Kleinke says that trying to estimate subsidy cost is a laudable effort, but there will be reassessments and readjustments as the provisions roll out. The industry as a whole will have a much better idea of what to expect come October’s open enrollment.