Health care reform: Separate rhetoric from policy, rules

By Dr. Peter Damiano

Now that health care reform legislation is law, it is important to move past political rhetoric to understand the policy implications that will affect patients and health care providers in Eastern Iowa and the nation.

This law is neither a government takeover of health care nor a panacea. It is a slightly right-of-center approach to improving access to care using private insurance companies to expand coverage.

That said, the law does have the potential to improve financial access to care for an estimated

32 million Americans and to lay the groundwork for improving the coordination and quality of care while beginning to bend the health care cost curve.

Most of the reforms are designed to assist individuals and small businesses that buy policies from an insurance company. The limited purchasing power of individuals and small businesses has put them at a serious disadvantage in the current environment.

In the next six months, several significant changes set to go into effect may impact families and small businesses in Iowa, including:

1) Mandatory coverage of children up to age 26 on parents' insurance policies

2) Eliminating denial of coverage for children with pre-existing conditions in policies purchased by individuals and small businesses

3) Establishing a national, high-risk pool for adults with significant health problems.

4) Providing subsidies for small businesses to purchase insurance.

The most significant changes in the law will not begin until 2014, when all individuals will be required to have health insurance. The mandate is an effort to bolster the private insurance market by forcing young, healthy, uninsured adults into the insurance pool, thus compensating companies for covering higher-cost individuals who are often now excluded.

The expansion will begin by covering all individuals up to 133 percent of the federal poverty level in the Medicaid program.

Next, children from 134 percent to 300 percent of the federal poverty level will be eligible for hawk-i (Iowa Children's Health Insurance Program).

Adults, children over 300 percent of the federal poverty level, and small businesses will be able to purchase insurance in new health insurance exchanges, an insurance bazaar of sorts. Subsidies will be provided to assist with purchases for those up to 400 percent of the federal poverty level.

The infamous “public option” originally was proposed as a way to encourage cost competition in the exchange, since in many states, including Iowa, one company dominates the individual and small business insurance market and there is little incentive to keep premiums low. Competition in the exchange will now be provided by non-profit cooperatives and by making federal employee policies available.

Challenges the new law presents already have become apparent:

1) How will the price of policies offered in the exchange be kept affordable - both to the uninsured and the taxpayers paying the subsidies (Massachusetts faces this problem)?

2) How to ensure an adequate number of doctors to deal with the increase in insured patients?

3) How to ensure an adequate number of providers willing to see the people, especially adults, in Medicaid?

4) Whether the decrease in uncompensated care for hospitals because of the expansion will make up for potential future cuts in Medicare reimbursement.

5) Whether the relatively modest cost-containment provisions can begin to reduce costs.

It will take every bit of the next four years for state and federal agencies to develop the regulations necessary to deal with the proposed changes. The success of the implementation will be even more important.

We need to remain vigilant in trying the tease out the policy from the rhetoric as we try to understand the implications of this law as it is implemented.

Dr. Peter C. Damiano is director, Public Policy Center, and professor, Department of Preventive and Community Dentistry, University of Iowa. Comments: peter-damiano@uiowa.edu