The Results Of Healthcare Reform One Year Later

Welcome to today’s online chat about healthcare reform, a look at the first year. Thank you to Eric George of the Connecticut Business & Industry Association, Jill Zorn of the Universal Health Care Foundation of Connecticut and Congressman Joe Courtney for joining us today.

I’ll start by asking each of our panelists, what are some of the expected outcomes — and unexpected outcomes — of health reform in this first year?

Thank you for having me on this panel. One year after the passage of federal reform (a/k/a PPACA), we are learning about how the law impacts employers and citizens. But, since this is one of the most expansive changes in domestic policy for the nation, there is still so much we don’t know. We all agree that we want better access to affordable, quality care. The question is “how do we get there?”.

PPACA makes some progress, but unfortunately leaves much of the cost issue still up in the air. And it¿s the cost of care that we need to be concerned with the most.

Many of the provisions that have been tauted in federal reform as being beneficial changes to our healthcare system actually have been in place in Connecticut for years – if not decades. This is not to say that these parts of PPACA aren¿t good things ¿ they are. But, Connecticut has enjoyed their benefit for some time since they are part of our state¿s laws.

Congressman Courtney, when he served in the Connecticut General Assembly, was a strong supporter of these changes to our laws, which are commonly referred to as small case reforms. These laws govern how insurance carriers can set premiums for small companies (i.e. – fifty or fewer employees).

Hi Matt, thanks for setting up this live chat today. As you and I discussed the other day, private employers in Connecticut such as UTC, Lego, EB, and many others were some of the firsts major employers in America to extend ACA benefits for adult children and enrolling in the Early Retiree Reinsurance Program. The state also took advantage of these benefits at the earliest possible start date. Please go to my website to see a youtube with personal testimony from Connecticut patients and doctors regarding their experience with the law: http://www.youtube.com/watch?v=-2_SvuPiAi8.

Eric George mentioned provisions of federal reform that were already laws in Connecticut. One that comes to mind: allowing young adults to remain on their parents’ insurance until they turn 26. What do you know about the Connecticut law and how it compares with the provision in federal reform?

Hi Matt. Thank you for the opportunity to participate in this important discussion. As Congressman Courtney has pointed out, residents are already realizing many of the consumer benefits. The federal law is off to a great start. All of the parts of the law envisioned to be implemented in 2010 and 2011 are rolling out as anticipated.

Thank you, Eric, for the shout out. Connecticut did enact some of these patient protections, but for ERISA employers like UTC and EB, age 26 coverage was not enabled by state law.

The federal law improves on the state law. Now everyone up to age 26 can stay on their parents’ insurance, including those whose parents work for larger companies that self-insure.

This is a great example of how people in Connecticut have benefited from the federal law.

Coverage for dependent children is a perfect example. Connecticut has allowed children to stay on their parents’ health plans through age 26 since 2007 – although the federal change will now apply to individuals and self-insured companies as well.

So, the major impact of PPACA here is that the provision will now apply toi all companies and everyone.

Jill, can you explain that a little bit? I don’t understand the tax part.

Again, Connecticut deserves credit for enacting age 26 coverage. However, as I mentioned earlier, employers whose health plans fell outside state purview such as UTC and EB, the state law was ineffective. Also, for those state regulated health plans, the IRS treated coverage for Connecticut dependents as taxable income which the ACA fixed.

There’s a great example of the age 26 provision that I linked to earlier.

The federal reform says that this new benefit to kids up to age 26 isn’t taxable. When it was only a benefit provided through state law, people had to pay income tax on this increased benefit.

In year one, the law prohibits the use of pre-existing condition exclusions for children through their parent’s health coverage. By 2014, that reform will extend to all Americans.

Connecticut has had a ban on preexisting condition exclusions (for small companies) for nearly two decades. In Connecticut, health insurers have been prohibited from denying anyone coverage based on preexisting conditions since the early 1990’s for employers with fifty or fewer employees. Simply put, insurers can¿t deny coverage (or base insurance premiums) for these groups because of someone¿s health or claims history.

Your guest asks a great question. Now children received pre-existing condition protections. Adults will receive this in 2014. In the interim, there is a new pre-existing condition insurance pool set up to help adult in the state receive coverage.

One provision was a tax credit equal to 35 percent of health insurance costs for small businesses. How does that work, and how is it working?

As large employer plans which today do not exercise pre-existing condition exclusions, such as the federal health insurance plan shows, as long as there is an adequate pooling mechanism, the cost of insuring individuals with chronic conditions can be absorbed. The individual and small group market is where a pooling mechanism needs to be implemented simultaneous with reform to achieve the same premium balance.

With regard to costs, one of the great things about the federal law is that the uninsured will be able to receive coverage, lowering the costs that those of us lucky enough to have insurance now pay to cover the costs of caring for the uninsured in emergency rooms.

Small Business Majority has a calculator which again we have found to be very useful to businesses who want to determine its value: www.smallbusinessmajority.org.

The tax credit applies to companies with less than 25 employees and whose average salary (after you back-out owners and operators) is not more than $50,000/year. With Connecticut being on the high-end nationally in terms of employee salary, it is likely that fewer Connecticut companies will be able to get this tax credit than companies in states with lower average salaries.

The actual benefit package for the coverage available in 2014 hasn’t been determined yet. The main thing the law does is make insurance affordable and available to everyone, regardless of their income or their health status.

Congressman Courtney, you mentioned that the cost of insuring individuals with chronic conditions could be absorbed as long as there is “an adequate pooling mechanism.” What does that mean, are you referring to the mandate to make sure that insurance pools aren’t just for the sick and injured?

Health insurers often say that allowing everyone in regardless of pre-existing conditions requires a strong mandate. Otherwise people will sign onto coverage on their way to the hospital. That means only the sick would buy insurance, and the insurers would raise the price, right?

The small business tax credit is helping companies who want to do the right thing and cover their employees. It is especially helpful to companies that employ low wage workers.

What I was referring to is the real life experience that large employer-based plans in both the private and public sector have been able to handle new covered lives with chronic conditions far better than policies purchased in the individual and small group market. For example, today, the federal insurance plan covers roughly 8 million lives and does not apply any waiting period or rating penalty for a new enrollee with a chronic illness. For a self-employed professional with diabetes, for example, coverage is far more expensive and difficult to obtain. Thus, ACA seeks to mimic the model which works today that provides affordable coverage through a pooling mechanism.

Making sure quality, affordable health care is available to everyone just makes good sense. People have no way of predicting when a health care crisis is going to strike.

Beginning in 2010, seniors that fell into the Medicare Part D donut hole recieved a $250 rebate check to help cover the costs of prescriptions. Beginning this year, seniors will receive a 50 percent discount on prescription drugs. This discount will continue until the hole is completely phased out in 2020.

We hear stories all the time from seniors all the time about the high cost of prescription drugs. Residents should not have to worry about the so-called doughnut hole, and have to choose between medicine and food.

The reason why insurance premiums are high is that the cost of medical care is high. Approximately 85% of the cost of premium is a result of the cost of care. So, if we can successfully tackle the cost of medical care, we would be in the best position to bring the cost of premiums down.

After 2014, the idea is that the cost of the uninsured will no longer be part of our premium. What will also address cost is making sure that preventive measures, better care coordination and more efficiencies are in place.

As the rate filings at the state Department of Insurance shows, ConnectiCare and United Health Care calculated that only one percent of their rate requests was attributable to ACA. Other carriers such as Blue Cross, which had very stripped down policies claimed a higher cost in their request. Clearly, this law did not eliminate rising health care costs with one stroke of the pen, and there will be some premium increases as it is implemented. However, the ACA provided the state with resources to beef up rate review and as was seen in California two weeks ago, Blue Cross WITHDREW its 59 percent rate request after it was challenged under the ACA enhanced review. Connecticut needs to scrutinize all these requests to protect patients and payers.

Unfortunately, the federal reform law doesn’t squarely address tort reform. Nor does it truly address the root causes of high healthcare costs.

Health reform is necessary and it must be reform that lowers medical costs to increase access for everyone to high quality care.

One of the major tenets of reform is this idea of “accountable care” which is intended to reduce medical costs and improve patient quality. I had a story about this in today’s paper. Private health insurers are already trying it with groups of doctors. Today, the U.S. Department of Health and Human Services announced new guidelines for trying this system in Medicare.

Basically, it’s an alternative to the fee-for-service system, which some say pays for quantity, but allows patients to drift from primary doctor to specialist without an coordination of care.

What do you see as the pros and cons of accountable care?

Malpractice reforms should be looked at, too. Eric makes a good point that there are many reasons for the high costs in the health care system. We need to shift to rewarding good outcomes, rewarding prevention.

Sorry. — improve quality of patient care. I’m guessing the quality of patients is a separate discussion.

Establishing accountable care organizations is an example of a new approach to paying for care delivery that the federal law is promoting. The goal is to coordinate care better and have incentives to care for people in the most effective and efficient way possible-promoting both better care and lower costs. The devil will be in the details of how they are implemented.

The pros of this approach are apparent everyday in clinics such as the Mayo Clinic and the Cleveland Clinic which the ACOs are modeled. That is, creating a health care system where primary care and hospital care are linked to weed out inefficiency and improve outcomes. Both of those examples show you can reduce costs and provide top notch patient care. The new regs will provide a road map for doctors and hospitals in a totally voluntary way to collaborate for a higher quality, less wasteful system.

At this point, the repeal measure is clearly not going to move in the Senate. On the other hand, some bills to, for example, repeal the 1099 reporting requirement, which passed the House a month ago, which I voted for, I believe will be enacted. Such modifications are completely appropriate. The nonpartisan Congressional Budget Office (CBO) has scored repeal of the law at over $200 billion.

Just a quick note of clarification, the CBO score relates to total repeal of the health care law, not repeal of the 1099 reporting requirements, which was offset and would have no impact on the budget.

Connecticut is fortunate to have a congressional delegation that has consistently shown strong leadership on health care reform. When everyone has access to coverage, people will not be resorting to getting care in the emergency room – creating long lines there. In addition, federal reform provides funding to states to grow the primary care workforce.

Congressman Courtney raises a good comparison there with the Mayo Clinic and the Cleveland Clinic. Some people also point to Kaiser Permanente in California where the managed care organization employs salaried doctors. Is that system where accountable care is headed — an insurer/hospital employs the doctors and patients are members of a regional accountable-care-organization?

If so, what happens if you travel to a different city — outside your accountable care organization’s regional reach? Would that be some sort of out-of-network fee structure?

What does this do to independent physicians and their small-businesses?

The ACA made immediate investments in building up our network of primary care providers. For example, there is a robust increase in primary care clinics, such as those which operate in Enfield, Windham, and New London. In addition, the ACA expands loan forgiveness for medical students and increases payments to primary care providers that serve Medicare and Medicaid patients. These new investments should provide better incentives for medical students to enter primary care fields.

The question about access to care is heavily dependent upon how the reimbursement rates are set. Currently, both Medicare and Medicaid underfund doctors and hospitals, which results in a huge costshift to those with private insurance. And many doctors refuse to see patients with government-paid-for health plans now. So, if the rates are not at least somewhat close to commercial rates, I would suspect that access to care (i.e. – getting a doctor to see you) will be hindered.

I think Accountable Care Organizations are not a way to get insurance, but a way to provide care, so out of network issues shouldn’t be a problem. There will still be a place for small practices.

With that, I have to run to a meting. Thank you all for great questions and thank you to Matt, Eric, Jill, and the Courant for a lively discussion.

Thank you, Congressman Courtney-great “talking” with you today.

Congressman Courtney, Thank you very much for joining us today. I appreciate your input.

Eric — what are you hearing from small businesses that are CBIA members about the changes in reform?

Thank you Congressman Courtney.

Matt – What we are hearing from our small business members is “what does this all mean?”. They want to know about the new costs assciated with federal reform (i.e. – the employer mandates, and taxes on the healthcare system under the law that will be passed onto consumers).

More Top Picks Irlen Syndrome Symptoms In Adults You Might Be Missing

They are confused. And quite frankly, so is everyone. The law says alot in nearly 3,000 pages. But considering that its lack of detail leaves many questions unanswered, we will have to wait to see how the implementation proceeds.

The old adage is right – the more we know, the more we know that there is more we don’t know.

We work with many small businesses that are supportive of reform. Small businesses have to spend much more for insurance than large businesses. Polls show that they would like to offer coverage but simply can’t afford it. They welcome the chance to afford coverage through the Affordable Care Act. Any ” employer mandates” will NOT apply to small businesses. But they will now have more opportunity to buy insurance if they want to.

Jill, what illustrations or statistics do you have that consumers have benefitted already from reform?

Readers — we’ve got four minutes left in this discussion. Please submit any last-minute questions. We will conclude the discussion at 1 p.m.

I don’t have them at my fingertips, but I know that more kids under age 26 are covered. The state has saved significant dollars on the coverage of some of our lowest income residents. There is more support for paying for early retiree health care. Many seniors have received rebates to help pay for their prescriptions. More federal grant funds have come into the state. I can try to find some actual numbers and send them to you after we are done.

SustiNet and federal reform go hand in hand. Federal reform will provide us with the financial support to expand coverage and to move forward on the many delivery system changes to reduce costs and improve quality. To learn more about how SustiNet and federal reform work together, please go to www.healthcare4every1.org

Thank you Jill, Eric and Congressman Courtney for taking the time to answer questions today. I appreciate the comments and the questions from readers.

If you would like to read the transcript of this chat in the future, it will be available at www.courant.com/ctheatlh

Much has been said about SustiNet, but in a nutshell, it would be Connecticut¿s version of a health insurance public option. It would be a series of state-run health plans that would compete directly against the private market. And it would do so under a self-insured system.

We have very significant concerns with the SustiNet proposal.

First, by operating this system as a self-insured program, it is true that the state would avoid paying premiums to a health insurance carrier. However, the state would have to pay the resulting medical claims of the SustiNet participants. Now, that could work out well if the participants are relatively healthy (their medical claims would likely be less than the premiums you otherwise would have had to pay). But, if the participants are not so healthy, their claims very likely would be more expensive than the premiums would have been.

So it is a very risky gamble.

Also, since SustiNet is self-insured, it wouldn’t be able to be sold in the exchange that will be created under federal reform.

So, I’m not sure SustiNet is at all in comploiance with fedral reform.