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Policywood: Entertainment Meets Education

If you haven’t seen the movie John Q, I highly recommend it. I stumbled upon it on HBO last night while I was complaining about the lack of good TV on Tuesday nights. The 2002 movie stars Denzel Washington as John Q. Archibald, a low-income father whose son is diagnosed with a heart condition and needs a transplant. Although the depiction of our current health system wasn’t completely accurate (for example, they claim that a heart transplant is an “elective procedure”), it certainly highlighted some of the frustrations that many people feel while trying to navigate the system and access the coverage for which they believe they are paying.

Much to my boyfriend’s gripe (he was hoping for a relaxing movie night, not a lecture), I couldn’t help but verbalize which aspects of the Archibalds’ plight would be solved with provisions in ACA. Needless to say, my poor boyfriend got a valuable lesson on federal health reform. Below are summaries of a few scenes that stood out to me to most.

Lack of Adequate Coverage

John and his wife, Denise, are taken into the hospital administrator’s office to discuss their insurance situation. John says, “I’ve got major medical. Don’t worry, I’m covered.” At which point the administrator informs him that his policy does not cover this procedure. After a back-and-forth about John’s lack of adequate coverage, his wife cries out, “Our son is upstairs dying and all you can talk about is money?”

There are 10-20 million people who have a coverage plan that only covers very limited services. In 2014, every American must have a plan that offers the minimum essential benefits (yet to be defined). Under ACA, an employee who is not offered “adequate” (covers 60% or more of expected medical costs) coverage by his or her employer is eligible for coverage in the Exchange. Given John and his wife are low-income, they would receive major subsidies to purchase coverage through the Exchange.

Employer Coverage

When they find out that John’s plan will not cover the procedure, they ask Denise if she has coverage through her job. She responds, “No. I’ve only been working at the market a short time. You need to be there two years before you get benefits.”

As of 2014, employers with over 50 full-time employees (FTEs) will be required offer coverage upon hiring the employee or pay a penalty if the employee use publicly subsidized coverage in the Exchange. The penalty, however, will not apply to the employee’s dependants. Employers with less than 25 FTEs could qualify for tax credits through the Small Business Health Options Program (SHOP) in the Exchange.

Unreasonable Annual Caps

John is informed that his plan will only pay the maximum limit of $20,000 towards the procedure. The procedure is $250,000 and it costs $75,000 to put his son’s name on the transplant list. After selling everything they own, including their car, furniture and their wedding rings, and receiving donations from their church, they only come out to $14,000.

Although coverage caps are generally higher than $20,000, as of January 1, 2011, ACA bans unreasonable annual and lifetime limits on coverage. In 2014, all annual and lifetime caps will be banned.

Not “Needy Enough”

John meets with his insurance rep to understand the situation. The rep informs him that when his hours were cut, so was his policy – even though he has still been contributing the same amount to the plan from his paycheck. He and his wife then wait in a long line to meet with a state employee. They are informed that they are not eligible for state-sponsored assistance because they already have a form of coverage. The state employee suggests they go on welfare, to which Denise responds, “Welfare? We both have jobs.” The state employee says, “Oh, that’s too bad. Sorry, I can’t help you.”

First off, policies don’t dwindle when hours are cut. So that part isn’t too accurate. Regardless, ACA creates the Health Insurance Exchange to help those who are of low and moderate incomes but earn too much to meet the Medicaid income and asset limits to qualify for public coverage. Through the Exchange, individuals earning under 400% of the Federal Poverty Level ($74,124 for a family of three) qualify for premium subsidies. In addition, Medicaid expands to cover all adults under 133% FPL (approximately $24,600/year for a family of three). The low-but-not-low-enough-income Archibalds would either be eligible for the expanded Medicaid or significant subsidies in the Exchange (the movie did not specify their annual income).

Bad Incentives

When John runs out of ideas, he decides to charge into the ER with a gun and take the patients and staff hostage until they agree to put his son on the transplant list. While I certainly don’t recommend this, it was surprisingly effective in the movie. While they are waiting for an update from the outside, the “hostages” start talking about the health care system. One ER nurse named Maguire (played by Kevin Connolly…a.k.a E from Entourage) says, “You see, here’s the problem. Over here, you’ve got your insurance companies who basically want you healthy or dead. That’s how they make money. And over here, you’ve got your medical establishment, doctors, pharmaceutical companies, who don’t want you healthy or dead. They want you sick. That’s the way they make money. And the individual is caught in the middle of this gigantic tug-of-war. It’s a game. And the end result is, people don’t get the treatment they deserve.”

This quote hones in on the issue of incentives. Insurance companies make their money if people are healthy and pay their premiums and hospitals make their money if people are sick (and have insurance). So how do we make sure insurers pay for care after we have paid our premiums? How do we realign incentives? There are a few answers. First, Medical Loss Ratios (MLR) began on January 1, 2011. This requires that insurance companies spend 80-85% of premium revenues on actual medical care (as opposed to administration or profit). Second, Accountable Care Organizations and Pay for Performance offer financial incentives to doctors and hospitals who are able to improve the health outcomes for their patients, thereby reducing costs.

The Uninsured

So you might be wondering….what about the requirement that ERs don’t turn people away? Maguire says, “There are laws [about not turning people away]. But there are also ways around the laws. All we have to do is stabilize them. After that, we’re off the hook…. If you ain’t got no money, you get a band-aid, a foot in the ass, and you’re out the door.”

Federal reform will expand coverage to 95% of the population, covering an additional 33 million people. That’s 33 million LESS people who could potentially show up in the ER without health coverage and be limited to a quick fix.

Taking Action

This quote from the hospital administrator made me do a bit of a fist pump, “The fact is there are fifty million people in this country without medical insurance, sir. And there’s one of me in every hospital. That’s not my fault. It’s just the way the country’s set up. You want to change it? Write your congressman.”

Needless to say, the movie was inspiring and reminded me of the importance of what we are doing. Lately, the politics have gotten in the way and this movie was a genuine reminder of what and whom we are fighting for. Cohen and Company give it two thumbs up.