Health care reform: The dust settles, now what?

The Pediatric Insider

© 2010 Roy Benaroch, MD

Holly wrote to me, asking for an update on provisions of the health care reform legislation passed in March, 2010. She correctly points out that I’ve been skeptical about this in the past, writing: “The recent issue of Good Housekeeping magazine includes an interview with the US Surgeon General about the healthcare reform bill. I realize that everyone has spin, but the article did make it sound like there were some good things to come out of the bill as well – your posts on the subject have steered more to the giant mess that the thing is. So my question is – what should I, as a middle class parent, know about the reform as it affects my family? How do I reconcile the good and the bad reported about the bill? Or is there even a way to get down to something simple?”

You want simple? This legislation isn’t it. There are about 2000 pages, and few of your congressmen have even read it; even fewer actual doctors (myself included) have the stomach to churn through all of that legalese. But you can bet that industry insiders from insurance companies, drug manufacturers, and mega-hospital chains are going through it with a fine tooth comb. They’re finding all sorts of tidbits and loopholes. It will be years before the impact of many of the provisions can be assessed.

Nonetheless, there are significant changes afoot, and some of them might actually help. Some of the provisions kicked in earlier this year, while others start now, or in the future.  Most existing plans do not have to change to conform to all of these provisions, but if they make substantial changes in their policies, they must then be updated to conform to current law. Here’s my breakdown of what significant changes have occurred or will be in store:

Earlier this year:

  • A state- or federal-government insurance pool was developed for those denied health insurance for preexisting conditions. This only applies to people without insurance for more than six months, and existing programs are quite expensive. The application process is complex, and qualifying may require jumping through a number of administrative hoops. This program is meant to expire in 2014, when commercial insurers will no longer be allowed to exclude preexisting conditions or deny coverage.
  • Help for drug costs for seniors enrolled in medicare “part D” drug coverage. Earlier this year, my mom got a one-time check for $250 to help fill in the “donut hole” in coverage. This is a silly sop that will barely help anyone in the long-term, but will of course drive up our debt and put off even more bills onto our grandchildren. We ought to be ashamed.
  • A one-time small-business tax credit was enacted for tax year 2010, allowing businesses with fewer than 25 employees to claim a credit to help offset the cost of health insurance. Of course, the vast majority of businesses of this size don’t pay corporate taxes anyway. Without boring you to death on the accounting details, let me just tell you that this provision did little practical good for anyone; it’s just a talking point.
  • Potential help with health insurance costs for early retirees. I say “potential” because the details of this are being worked out; so far, companies have applied for this assistance to offset costs for people retiring from ages 55-65. What will this cost? Who will it help? Who knows.

Provisions that kick in now:

  • Young adults through age 26 can stay on their parents health insurance plans if they’re not offered insurance from an employer. Great, a simple provision that makes sense!
  • Insurers may no longer deny coverage to children with preexisting conditions. Great—unless they decide to just stop offering insurance plans to children altogether, another unintended consequence of complex legislation.
  • All new plans must now pay for certain preventive care services without requiring a deductible or copay. (Existing plans can still screw you.) This includes things like mammograms, immunizations, and many other services determined by government officials. I fear mischief here as the list is massaged, but hopefully covered services will include a comprehensive list of good, cost-effective, and proven interventions.
  • There must be an appeals process in place for denied services. Now it’s a law; but previously almost every insurer had had this anyway, so it changes nothing.
  • Lifetime caps on dollar costs of coverage are abolished. This affects very, very few people—but for those affected, that lifetime cap was a cruel nightmare. Good riddance to the lifetime caps!
  • Insurers can’t retroactively rescind coverage because of mistakes or technical errors in irrelevant details in your insurance application. Good.

The big change, coming to you in 2014:

  • Everyone must buy health insurance, or pay a fine on their income taxes. The purpose of this is to keep the insurance pool large, including many young healthy people who are unlikely to get sick along with older people and people with significant health costs because of chronic problems. Significant questions remain, not the least of which is the constitutionality of the federal government compelling you to buy something. Though this concern is dismissed as merely crankiness from tea-party lunatics, I am not so sure that we ought to be so eager to allow this crack in the door that provides some limits to federal power. Why shouldn’t the government then insist that we pay for adequate housing and food? What if I only want the least-expensive, barest-bones policy—why should the government decide what my health insurance ought to cover, potentially forcing me to pay higher rates for services I don’t want?
  • At the same time as this federal mandate becomes law, private insurers will no longer be able to exclude pre-existing conditions. We’ll all be required to buy health insurance, and the insurers will be required to sell it to everyone.
  • New “Health Insurance Exchanges” will be established to offer people a new way of buying insurance collectively. Read this mind-numbingly jargon-filled but blessedly-short explanation. Then come back here and try to explain how anyone could accurately predict how this will affect health insurance rates or availability.

So: a mixed bag, I think. Some simple provisions are common-sense, and ought to have been enacted long ago. Others are just quickie hand-outs to constituents (that is, campaign contributors like the trial lawyers), written into law for political expediency. Others? Who knows. They’re too complex to understand the ramifications.

What health care legislation didn’t do, in any way that I can see: control costs. It does nothing to reduce the insane expenditures made towards defensive medicine; it does nothing to encourage doctors or patients to use health care resources wisely or frugally, or to live healthier and less healthcare-costly lives; it does nothing to reduce the proportion of health care costs that go to administrative expenses rather than actual health care, currently about a third of about 2.5 trillion total dollars a year. It may very well provide additional health care coverage for many currently uninsured people, though at least some of these people are choosing to save money in the short run by not buying insurance. This choice will soon disappear. In any case, more insured people is going to lead to more healthcare expenditures and more costs—and who, exactly, is going to pay for this?

I suppose our grandchildren are already tapped out—we’ve already spent the taxes that they’ll be paying. Time to start writing the IOUs to our great-grandchildren. I’m sure they’ll understand.

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One Comment on “Health care reform: The dust settles, now what?”

  1. […] in the US is cost, which seems to have taken a back seat to other issues meant to be addressed by health care reform. We spend about $2.5 trillion dollars a year on health care—that’s over eight thousand dollars […]


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