Reform Anniversary of a Scary Baby

Now that the Healthcare Reform Act has celebrated its first birthday, Americans are getting a good look at what this new baby is shaping up to be as it prepares for the toddler stage over the next couple of years.  Like any newborn, the PPACA has given its caretakers a fair share of sleepless nights, bouts of chronic fatigue, and worrisome healthcare issues.  Like any other baby, the Act has been learning as it grows, with new lessons every day from the administration who birthed it.  Guarding its ongoing health has been a challenge as well, with outsiders who would see it harmed or overturned with a good spanking.   All things considered, it’s one scary baby.

According to Kaiser Health News, a year after Democrats in Congress pushed through the law overhauling U.S.  healthcare, Americans remain as split as ever about it.  Forty two percent of Americans support the health law while 46 percent are opposed.  Although both figures were down slightly from February, overall they have changed little since President Barack Obama signed the landmark bill into law on March 23, 2010.  The law, which will supposedly extend coverage to 32 million Americans, has come under a blistering attack from Republicans in Congress who are trying to repeal it and Republican governors who have filed suit seeking the Supreme Court to declare it unconstitutional.

Not surprisingly, public opinion of the law varies along partisan lines, with 71 percent of Democrats supporting the law while 82 percent of Republicans oppose it in the latest survey.  Of those who oppose the law, 20 percent say they are most concerned about its costs, 19 percent are worried about the government’s role and 18 percent don’t like the law's mandate that individuals get coverage. 

The public also remains as confused about the law today as it was a year ago: About 53 percent of Americans said they are confused, the survey found.  That is even more widespread among the uninsured and low-income Americans – the groups who have the most to gain from the law, particularly when most coverage expansions take effect in 2014.  About six in 10 in these groups report a lack of understanding. 

Senior citizens, the vital voting bloc that gained several new benefits in the Medicare program from the law, remains the most skeptical age group, with 52 percent opposing the law.  About 39 percent of seniors believe Medicare will be worse off under the law, compared to 19 percent who think it will be better off.  The health law extends the solvency of the Medicare Trust Fund by 12 years, gradually closes the gap in coverage in the Medicare prescription drug benefit and eliminates Medicare co-payments for many preventive services.  Republicans have raised concerns about cuts in the growth of Medicare payments to hospitals and other providers that finance the law’s coverage expansions and reductions in payments to Medicare health plans under the law that could result in reduced benefits.  So, it appears that a law that has always been controversial is even more confusing to Americans than before it was passed.

Plus, the “education” thrust from the White House have not helped the average American much.   Apparently, after a year, there is still some confusion over the most sweeping piece of legislation to come from Congress since the Declaration of Independence from Britain.   A recent poll by Politico indicates that close to half of Americans are working with either a false understanding of the status of the PPACA or are confused.  People do not understand the over 900 pages of legislative language that is the PPACA.   Even governors and presidents are having a hard time understanding exactly what it says, according to The Insurance Barn.  The idea that it has already been repealed is misleading.   The administration will veto any bill about repealing the Patient’s Protection and Affordable Care Act.   As long as he remains president, it will take 2/3 of both houses of congress to override his veto.   That is not likely to happen in the next 2 years.  Unless the law is declared unconstitutional by the U.S.  Supreme Court in 2012 it will remain law.   The only realistic chance for it to be repealed and replaced is if the congress and president are replaced in 2012 with people who are against the PPACA.   If that does not happen, the remainder of its provisions will go into effect in 2014.   Most of the changes that will affect you have either already gone into effect or will happen in 2014.

Most of the spending that the PPACA authorized over the next 3 years is directed towards the states and not individuals, according to The Insurance Barn.   It is tax payer’s money, given to the states, to prepare for the big changes to health insurance that will arrive in 2014.   At that time, unless there is a modification made, the PPACA requires every citizen and legal resident of the U.S.  to purchase health insurance approved by the Secretary of HHS.   Those people who do not obtain health insurance from their employers will purchase their health insurance through state or federally run purchasing exchanges.  Until they are operational, people will have to continue to obtain their health insurance information the exact same way they do now, from the exact same sources.   Except for some minor changes to “preventive medicine” the average working adult has not seen the benefits of the PPACA and will not be affected until 2014.

Then there are issues that also concern employers.  According to Inside Counsel online, The Patient Protection and Affordable Care Act (PPACA) will impose new restrictions and requirements on employers and employee benefit plans.  According to a new report from Ernst & Young, many U.S.  employers believe that managing the changes resulting from healthcare reform is a critical business issue, but few organizations have fully analyzed how the new law will financially impact them. 

Many employers are confused about whether their health benefit plans are "grandfathered" (exempt from new coverage requirements) and the effects if their plans lose their grandfathered status.   The healthcare reform law is already affecting executive employment agreements and severance arrangements.  PPACA's new rules for the first time will prevent employers from discriminating in favor of highly compensated employees in the administration of insured health plans.  Consequently, employers will no longer be able to offer to pay for continued health coverage or pay COBRA premiums for departing executives, even though this had long been a standard component of many CEOs' severance packages.  Given that Congress has not yet appropriated funds to implement PPACA, the confusion over its effect may continue well into 2011, according to Inside Counsel.

Just as the economy is starting to look up, building service contractors are being faced with a challenge just as frustrating as the recession.  This, too, has the potential to impact profits, according to Contracting Profits.  The provisions of PPACA that became effective in 2010 include no lifetime limits on health insurance, no co-pays or deductibles for preventive services and extension of coverage for dependent children until age 26.  Despite the good intentions of the law, most people felt that the healthcare system wasn't broken in the first place, and now, employers are getting hurt.  What has happened, in anticipation of legislative healthcare becoming effective, is we've seen insurance premiums go up.  Some policies have gone up as much as 20 percent.  Employers are already seeing that instead of their bills going down, they're going up. 

Those in the health insurance industry are seeing increases in health insurance rates, according to Moody Insurance Worldwide.  Despite the perception that brokers make lots of money on accounts, they really make only three to five percent of the premium paid.  When the carriers cut commissions, it affects the bottom line.  It will cause a lot of brokers to go out of business.  There is talk in the industry that the insurance broker's commission may be cut out completely.  The only way they can continue to work with clients is to charge a fee to the insured on their own.  Clients may lose out on getting the best renewal options if they bypass brokers to work directly with insurance companies, she adds, as brokers do a lot of administration work and help solve problems with claims, billing and enrollment.  Unionized employers, especially, are paying attention to PPACA and the political drama surrounding it.

In addition to getting updates from trade groups and associations, brokers and accountants are valuable sources of information.  Insurance brokers have to keep abreast of the law and accountants have to be aware of the tax consequences of non-compliance.  So those groups of professionals, in particular, seem to be tracking the law with almost an obsession.  Lawyers, too, who specialize in labor and benefits law are also tracking this on a daily basis, according to Contracting Profits.  The PPACA will likely undergo significant changes this year, based on rulings from HHS.  The business community can only hope those changes will prevent their costs from increasing even more.

And the States are going to take a major hit along with taxpayers, according to Health Plan Week.  The health reform law will cost state taxpayers at least $118.04 billion through 2023, according to a report released March 2 by House and Senate Republicans during a House committee hearing on Medicaid and state health reform.  While fewer than 5 million individuals used Medicaid services in the program’s first year, today nearly one in four Americans is enrolled in the program, according to the report.  Over the next decade, the federal government will spend $4.4 trillion on Medicaid.  At the state level, Medicaid spending consumes nearly a quarter of state government budgets.  The National Governors Association quantified that crisis at a collective $175 billion budget shortfall through 2013.  The report offers a state-by-state breakdown of likely spending on Medicaid between now and the end of the decade.  Man, that’s a lot of cash to take care of a new baby.

As the healthcare baby grows, watch out for tantrums.  Employers, consumers, and brokers must keep a sharp eye out for any changes.  Some of those may stink, but working within the law sometimes does.  Business is never easy, and the business of healthcare has definitely changed. 

ABOUT THE AUTHOR:

Mark Roberts’ professional sales background includes almost 30 years of sales and marketing in the tax, insurance, and investment markets.  Currently his key focus is developing relationships with large national client groups, including insurance plans, employers, unions, affinity groups, and associations, and financial institutions in various areas of responsibility including sales, marketing, and account management.  Mark also is a licensed life, health and accident insurance agent in all 50 states and DC, and has participated in multiple large national employer open enrollments for voluntary products including limited medical benefit plans, short term disability, term and universal life policies, cancer and critical illness policies, and many other insurance products.  Additionally, Mark has been writing a healthcare blog for the past 3 years, found at www.yourbesthealthcare.blogspot.com , which is a topical weblog about various healthcare issues.  He has been noted recently as the Medical Reporter for an online news service with over 110,000 subscribers at www.thecypresstimes.com , and he has been pleased to regularly contribute articles to magazines for both medical and dental topics both in the US and the UK.  You can reach Mark at markr@careington.com or by phone at 800-441=0380, x2905.