Seven months from today, you'll be required by law to carry health insurance -- that's a fact. But, as we lead up into the full implementation of the Patient Protection and Affordable Care Act, also known as Obamacare, on Jan. 1, 2014, many aspects of the bill still remain unknown, daunting, or even intimidating to many Americans. From how much more (or less) health insurance may cost individuals and their families, to whether or not their current coverage is good enough to pass the bill's beefed-up minimum coverage standards, the PPACA has created just as many questions as answers.
Source: White House on Flickr.
I've already examined the benefits and weaknesses of the bill, so let's take a step back and look toward public opinion to tell the tale of Obamacare. If a picture is worth 1,000 words, then these six poll numbers certainly paint a picture of the trials and tribulations yet to come in the health care sector.
78%
In early April, a Rasmussen poll surveyed 1,000 likely voters and, based on those answers, 78% of them told Rasmussen that the current quality of health-care coverage that they are receiving is good or excellent. Only 4% responded that the care they're currently receiving is believed to be poor.
This is particularly interesting, as the PPACA is going to dramatically broaden the scope of the minimum coverage requirements, on the premise that the current coverage for many is simply not encompassing enough. Initial estimates from a study by the University of Chicago pegged about half of all current health-insurance policies as having inadequate coverage based on the new requirements. While that could mean bigger out-of-pocket costs for individuals, it could also mean big profits for diagnostic companies like Thermo Fisher Scientific, which provides diagnostic testing kits to the hospital and pharmaceutical industries. With expanded coverage comes the potential for more preventative testing, which would be a boon for Thermo Fisher.
73%
In yet another poll conducted by Rasmussen, this time in mid-December, it surveyed 1,000 likely voters to get their opinion on the quality and cost of health care reform. The findings of the poll showed that 73% of those surveyed expected the cost of the PPACA to be higher than initially projected.
On one hand, and in all fairness to Obamacare, when was the last time we saw any multibillion-dollar overhaul cost less than initially projected? Then again, these 73% have viable concerns, given that the Centers for Medicare and Medicaid Services, or CMS, reversed a recommendation last month to boost Medicare Advantage reimbursements by 3.3% instead of dropping them by 2.3% as it initially recommended in February. The move, the CMS claims, was made after it recalculated how doctors were being paid. However, it also came on the heels of lobbying attempts by the insurance industry and about 160 lawmakers. If the cost of Obamacare goes well over budget, that'll be great news for Humana (HUM 1.21%) Humana generates 63% of its revenue from Medicare Advantage plans, which are supplemental health plans purchased by seniors to help offset the costs not covered by Medicare. If the government is unable to lower reimbursements to these companies, then Humana may have little to worry about.
48%
Three years after the signing of the PPACA into law, Americans were surveyed with regard to their knowledge of whether or not their state had set up a health-insurance exchange. The Kaiser Health Tracking Poll (link opens PDF), which was conducted in March, showed a whopping 48% of respondents reported hearing "nothing at all," while a combined 22% of respondents reported hearing "a lot" or "some" about whether an insurance exchange was being set up in their state. Furthermore, an overwhelming 78% of respondents claimed they had not heard enough from their own state's governor to determine if Medicaid was, or was not, expanding in their state.
This poll is always a doozy because it encompasses so many variables. However, one factor that sticks out is how much of Obamacare is still largely misunderstood. As this same study points out, some of the most popular provisions in the PPACA, such as giving tax credits to small businesses to buy insurance, and creating health-insurance exchanges, are also some of the least recognized aspects of the bill. Only 58% of those surveyed knew that creating health-insurance exchanges was part of the PPACA, and even fewer knew that small businesses received a tax break to buy insurance. If anything, this proves that it's going to be an ongoing learning experience for the government, businesses, and all individuals involved in the process.
For insurers like WellPoint (ELV 1.48%), the lack of knowledge surrounding the insurance exchanges could be a worrisome point. With WellPoint's purchase of AMERIGROUP for $4.46 billion last year to become the nation's largest Medicaid-based insurer, it's counting on an influx of lower-income individuals into its network. If those members don't know how to seek out that coverage, that's a big problem for WellPoint.
42%
Following up March's eye-opening poll was yesterday's release from the Kaiser Family Foundation's tracking poll, which noted that a stunning 42% of respondents didn't know that "the Affordable Care Act is still the law of the land." In addition, the poll goes on to state that 12% of respondents believed Congress repealed the PPACA, 7% thought the Supreme Court repealed it, and 23% had no clue what its status was.
This again reinforces the notion that many Americans are simply "not in the know" when it comes to understanding how this bill is going to affect them. This is neither an endorsement nor a disapproval of the bill itself, but a simple matter of fact that insurers -- which very well could benefit from a large influx of new members -- could struggle to sign up those new members if people don't understand how the new law will affect them.
35%
Also taken from the Kaiser Family Foundation's April tracking poll, only 35% of respondents view the PPACA favorably. That marks the second-lowest reading since the Kaiser Family Foundation began keeping a record of popular opinions on Obamacare in April 2010. Conversely, the "I don't know/refused" consortium hit a high mark this past month, with 24% of surveyors responding with ignorance or indifference to the bill.
Source: Kaiser Family Foundation Health Tracking Polls. Note: No data available for December 2012 or January 2013.
Not to sound like a broken record, but this is yet another confirmation that Americans aren't really sure what to expect from health-care reform, and would rather choose to stand pat than make any drastic moves. That would certainly explain the nearly one in four respondents who appear indifferent to Obamacare. Like the previous studies, it offers a cloudy forecast to insurers who are counting on state and local governments, as well as individuals, to utilize exchanges and purchase health insurance. If disapproval or indifference toward the bill continues to grow, insurers may struggle to bring in new customers and, worse yet, their public image (and subsequently share price) may suffer.
4%
Finally, a study by the Federal Reserve Bank of Minneapolis in March indicated that only 4% of employers surveyed had shifted to more part-time workers in direct response to Obamacare. Of the remaining 96%, 89% said they had no intention of altering their hiring habits in response to Obamacare.
While those figures are optimistic on paper, it still remains to be seen whether it will translate out to a loss of jobs or hours on paper. The potential concern with the Minneapolis Fed's survey is that large corporations make up the bulk of employee compensation in this country. The New York Times reported in 2011 that corporations of 500 or more employees account for 57% of all employee compensation. If even a few of these companies are part of that 4% that have chosen to hire part-time workers, or the 7% that plan to, then we could have a serious problem on our hands.
Take Regal Entertainment, for instance. The nation's largest movie theater chain cut back thousands of employees' hours last week in direct response to Obamacare. With fewer employees working past 30 hours, it frees the company from the responsibility of having to provide them with group health-care options -- but it also leaves many employees with less take-home pay.
