Health Reform: The Day of Reckoning Arrives

Mike Magee

Six months ago today, the Patient Protection and Affordability of Care Act was signed into law. (1) And for many, today is “the day of reckoning”. That’s because many of the most critical consumer benefits of this transformational health bill take effect today. Yet many remain confused about what health reform is and whether it is worthy of their support.

So let’s lift up the veil here. The starting point? In 2009 there was a 10% bump in the uninsured. 50.7 million Americans lacked health insurance. (2) Clearly, that’s not a good thing most would agree because, one way or another, we all end up paying for our citizens when they get sick. The reasons so many are uninsured ties back to historic access and design issues of our health insurance, the majority of which was linked to employment. If you were poor or unemployed, you were generally out of luck. Also if you had a history of chronic disease, were born with a disability, or had a history of utilization of health care services, many insurers used a variety of techniques to keep you off their roles. Finally, even if you were insured, you were often exposed to a series of delays and denials that made it difficult to get the money you deserved for coverage. (3)

So the bill took aim at these real life problems and enacted remedies. Let’s have a quick look at 10 basic facts that define where we are today (4,5,6,7):

1. Starting today, insurers are no longer permitted to exclude some 72,000 children nationwide due to pre-existing conditions. In 2014, adults will be protected as well.

2. Starting today, companies are not permitted to drop customers with complex medical problems based on technical errors in their applications. The insurers may continue to charge more for these customers until 2014.

3. Starting today, insurers are required to provide coverage for children under 26 on their parents plans.

4. Starting today, preventive procedures like colonoscopies, immunizations and mammograms must be covered without co-payments.

5. Starting today, insurers are unable to place lifetime caps on their policies that limit the total amount an individual may receive over a lifetime of illness. In 2014, caps on annual benefit payments will also be phased out.

6. As of August 1, 2010, federal insurance became available to people with pre-existing conditions in states without high-risk insurance pools. By 2014, states are to have such back-up insurance pools functional, and health insurance will be required for all. 27 states have efforts underway on their state high-risk pools. 20 states are suing the federal government over this provision.

7. On July 1, 2010, the government launched the consumer support website, HealthCare.gov, with detailed and accessible information on the changes. In August, 2010, over 1 million seniors received $250 checks from the government to help defray the costs of the Medicare Part D “donut hole”.(6)

8. The law requires that 80% of the collected insurance premium dollars be payed for patient services. There is still an engaged battle over defining what qualifies as a “patient service”. But already many insurers are cutting their administrative costs and plan to decrease broker commissions.(5)

9. Some state insurance regulators are looking for a more gradual roll out of the 80% rule, because in several states like Iowa, insurers are threatening to pull out. In a state like Maine, you only have to commit 65% to the care of those who pay you the premiums. Proponents of the bill are resisting watering down the 80% provision which they see as a critical consumer protection element.(5)

10. Leaders are now being heard. Yesterday from President Obama: “The amount of vulnerability that was out there was horrendous. We’ve just got to give people some peace of mind.” From Karen Ignani, chief executive of America’s Health Insurance Plans: “It is really the Manhattan Project because of the scale and the scope.”(4,5)

Jacob Hacker, Professor of Political Science at Yale handed out his 6 month grades today. Here they are: Federal Government – A, State Government – C, Employers – B, Physicians, Nurses, Hospitals – B, Consumer Public – B, Insurers – D.(2)

For Health Commentary, I’m Mike Magee

References:

1. The Patient Protection and Affordability of Care Act.
2.Hacker JS. The Health of Reform. NYT. September 23, 2010. A35.
3. Magee M. Accidental Health Care. October 25, 2006. Health Politics.
4. Sack K. For many families, health care relief begins today. NYT. September 23, 2010. A16.
5. Abelson R. For insurers health care reckoning has arrived. NYT. September 23, 2010. B1.
6. www.HealthCare.gov.
7. Pear R. Sates ask for phase in on insurance change. NYT. September 23, 2010. B5