To debate Healthcare Reform, folks should understand terminology: Access vs. Affordability & Healthcare vs. Healthcare Financing.

Unless one listens closely to the current discussions about the repeal and replacement of the Affordable Care Act it is easy to be misinformed. By some pundits it may be intentional to mislead, to others it may simply be picking up on the mainstream statements made by others and regurgitating those as fact, but even the serious proponents of replacing the ACA don’t always define their intentions and terminology clearly. We’ll clarify.

Affordable and Access can be really misunderstood as can the terms healthcare and healthcare reform which are often used too broadly  when discussing repeal & replacement of the ACA.

So let’s break these down a bit. We’ll start with why it is critically important to understand the difference in the meaning of Affordable and Access, then we’ll tackle Healthcare, Healthcare Reform  and Healthcare Financing. When experts clump these terms together it can skew their meaning.

Affordable and Access are terms bantered about too freely in the public discussions about reform. Let’s separate them.

Affordable or Affordability can refer to either the price you pay for your health plan premium (the financing) or the out of pocket cost of a plan to members, or it can mean the amount charged by providers (the healthcare costs). The truth is that both the cost of the care and the cost of the financing that care have grown out of reach for many. Plus, affordability is now being affected by access or lack of access in many areas.

Access is possibly the most misunderstood or misused term in the entire discussion. One can be covered by a Platinum heath plan and still not have access to care.  Someone  covered by a Bronze plan in an urban area may have far better access to care than a Platinum plan member in a rural or non-urban area.  Access to care is of critical concern and magnified by insurer’s development of the so-called “skinny” PPO networks. If you have not enrolled in a plan using a “skinny” network then you don’t/can’t fully appreciate the dramatic impact on access and affordability.

On TV and in News, pundits often use the term affordability to highlight the higher deductible plans available with their higher out of pocket costs. But they usually don’t explain that most people, who were covered before the ACA, are also experiencing reduction in the number of providers they can see in-network. Many PPO networks offered by insurers have reduced providers from 40% to 80% in their PPOs affecting Access.

For perspective, if your Pre-ACA PPO plan had 1,000 providers in your town or county, your new ACA plan may now make only 500 providers available for in-network benefits. The impact is a dramatic increase in a member’s out of pocket exposure if the member’s desired provider is now out of network. Plus, one can assume that the provider you wish to see has become an out of network provider.

Two categories of our citizens experiencing this phenomenon of the “skinny” network are employees leaving their employer’s group plan and our kids ,turning age 26, and being  forced off Mom & Dad’s group PPO plan. If you have had a child turn age 26, without a job with group benefits available, then you have felt the shock of the “skinny” network as you or your child shopped the market for a suitable individual plan.

This shock is again magnified if the person seeking that individual plan has ongoing treatment with particular providers. If Vegas placed odds on your “preferred” doctor being in your new PPO the smart money would bet on NOT. Sorry to sound too synical but it is the reality of the “skinny” network.

Healthcare is a good place to start our clarifying the other important terms. If one uses the term Healthcare to describe the access to providers, delivery of care from providers and receipt of care by member then it is easier to identify the specific changes needed to make improvements. But the term healthcare, used by itself, does not include the payment(financing) for those services delivered and received. Frankly, we all can add our thoughts on the specific aspects of receiving care that we would like improved.

Here are a few things we all want improved:
*Waiting 3 months to see a doctor
*Visit where we wait 45 minutes followed by a 5 minute consultation
*Information about the effectiveness of alternative treatments
*Prescription alternatives
*We could go on and on, couldn’t we?

So the term healthcare should be expanded to mean healthcare delivery because that is really what we want and pay for, isn’t it. Remember, we are paying through premium to a plan, our out of pocket cost of the plan, and our tax dollars.

Healthcare financing is a term which sounds awkward when one hears it for the first time. We are all use to financing cars and houses but what does it mean to finance healthcare. If you pay premium to a health plan then you expect that health plan to finance (pay) for all or part of the cost for treatments you may need at some future time. These days folks may likely be unable to afford most services. Here’s what I mean.

When I entered the health insurance business in 1985 I remember more mature agents regaling us with stories about how inexpensive healthcare was in the 1950s and 60s. They would site examples of maternity costs under $500 or even bartering with providers for lower costs on services. Can you imagine bartering with a provider today. We should but of course we don’t! That discussion is for another day, however.

But time and “progress” changed healthcare and its costs. History shows us that the implementation of Medicare, in the late 1960s, was a major cause for the cost of healthcare to increase. That increase cost due to Medicare and other factors was the natural result of innovation in healthcare and the  human nature affect of somebody else was paying the bill. Who among us has not heard the phrase “I want the best healthcare available”. Of course, that phrase could be correctly extended to add “as long as someone else is paying the bill”.

Therefore, the need to finance healthcare changed because the cost to access care became more expensive than anyone’s personal budget could afford. So, a means to finance our future need for care had to be developed. Hence the rise and necessity for health insurers and HMOs to provide that financing. The system is still reliable and fixable if done wisely.

Healthcare Reform as a term can be used interchangeably but when doing so it can lead to misunderstanding. If one uses this term with the intent to include both access to and treatment by providers as well as the financing of that care, meaning who pays for it, then it is a broad inclusive term for general reform. It would include rules and regs for insurers, providers, individual members, employer sponsors and every other entity in the food chain of health care. But, we believe that if the replacement of the ACA is done in one large legislative action, such as with the ACA, then we will end up with a huge one size must fit all behemoth, as we did with the ACA.

Now, when you hear pundits and experts talk about access and affordability you can listen for the specifics. Affordability is affected by access and access affects affordability.

Employer group plans are also being affected by the “skinny” network issue. But employers can implement HRAs as a tool to help their employees deal with accessing the provider of choice and the extra out of pocket cost associated with out of network providers.

Replacing the ACA seems to be coming so we need to be tuned in to the terminology the experts throw at us. Access, Affordable, Healthcare, Healthcare reform, Healthcare delivery, and Healthcare Financing are all critical terms when discussing the replacement of the ACA. They must be understood appropriately.

This Post may seem basic or rudimentary considering that replacing the ACA is such a huge endeavor. But, unless we want to be surprised like we were last time then we need to make the experts and legislators be specific. We don’t want to wait until it’s replaced to read what’s in it, do we?

I look forward to your feedback and remember; we’re all in this together!

Mark Reynolds, RHU


2 Responses to “To debate Healthcare Reform, folks should understand terminology: Access vs. Affordability & Healthcare vs. Healthcare Financing.”

  1. Mark Rogerson Says:

    Keep up the great work! Your blogs make the most sense and more clearly articulate this complex and misunderstood topic than any I’ve seen. They should be required reading for anyone in the public media before they regurgitate whatever claptrap they’re proselytizing.

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