It has been a year and a half since the Patient Protection and Affordable Care Act became law. Now seems a good time to check in on its progress.
First of all, what’s in this law that might be useful to Local 802 members? We answered that question in an Allegro story last year; see http://bit.ly/HealthCareStory
The law was designed to roll out over ten years, with the biggest changes in 2014. Starting then, those who don’t have health insurance can buy it through new, so-called “exchanges.” The health insurance offered through these exchanges must include comprehensive medical coverage.
The law also contains two other major provisions designed to kick in in 2014: federal subsidies to help people buy insurance and a requirement that everyone participate.
But the law also has a number of mandates that have already taken effect:
The eligibility age of dependents is now 26.
Plans must offer preventive care without co-pays. Plans that existed before March 23, 2010, such as Local 802’s health plan, are exempt. This is called “grandfather status.”
Beginning in 2012, Medicare will cover all annual physicals and screenings without co-pays
Annual coverage limits must be no lower than $750,000. Local 802’s Plan A and B, with annual limits of $50,000 and $5,000 respectively, obtained waivers for this because not doing so would have meant discontinuing the plans.
Over-the-counter drugs like Claritin or heartburn medications bought using special savings accounts for health care now require prescriptions.
Medicare prescription drug (Part D) participants who hit the “doughnut hole” are entitled to a 50 percent rebate on their drug costs while in the “hole.”
Between now and 2014 there will be an annual $2,500 cap on what you can deposit in a Flexible Savings Account.
There was supposed to be voluntary, public, long-term care insurance called Community Living Assistance Services and Support (CLASS). Implementation of this program has been suspended by the Department of Health and Human Services because of actuarial concerns.
Treat patients in a smarter way
Bending the curve on the rising cost of Medicare is a lesser known intent of the health care reform law.
Research shows that overtreatment, redundant treatment and the overuse of technology are the primary drivers of health care costs rising at three times inflation. (Please e-mail me for links to this research.)
Because our system is largely fee-for-service, there are incentives for doctors and hospitals to order more tests, do more treatments and use more services.
Also, the U.S. system is so fragmented that whole teams of doctors often treat seriously ill patients without communicating effectively with each other or coordinating care, often leading to expensive care and harmful outcomes.
The health care law is designed to encourage new entities called Accountable Care Organizations. The goal is to put an emphasis on positive patient outcomes instead of overtesting and overtreating. These ACO’s may receive bundled payments for whole episodes like bypass surgery, covering everything all the way up to the last follow-up, maybe a year later.
Additionally, an entity called the Independent Medicare Advisory Board has the task of finding more cost savings by evaluating quality and efficacy of care.
Most of the cost savings provisions in the law are for Medicare but the thinking is that the private sector will follow if they see positive results.
Challenges to the law
The health care reform law faces some structural challenges. The Independent Medicare Advisory Board is controversial because some feel it takes spending of Medicare tax dollars out of the hands of Congress and gives it to unelected officials. Others think this is a good idea. It should be noted that the Independent Medicare Advisory Board cannot ration care or make benefit changes and Congress also has the power to overrule it.
When it comes to the proposed health care exchanges, what constitutes “comprehensive medical coverage” is not defined.
Some services like contraception are controversial if tax-subsidized, as these exchanges would be.
The internal structure of the Accountable Care Organizations is also undefined, so there may be a lot of confusion as they get off the ground.
The law also faces political challenges. It can only be repealed by an act of Congress together with the president’s signature, despite what some presidential candidates say. If the Senate becomes controlled by Republicans, this will be more likely, but not guaranteed. Any such repeal will be vetoed if President Obama stays in office.
However, those who oppose the law don’t have to repeal it in order to kill it. They can merely not fund it. These efforts are underway in Congress.
Meanwhile, many state governors who favor the law are already implementing parts of it where they can.
The most serious challenges to the law are legal. Attorneys general from 26 states and the National Foundation of Independent Business have asked the U.S. Supreme Court to rule on the constitutionality of the “individual mandate,” the stipulation that everyone obtain insurance or pay a yearly fine.
The plaintiffs also claim the new Medicaid requirements are unconstitutional.
Federal circuit courts have issued conflicting rulings. The 11th Circuit in Atlanta ruled the mandate unconstitutional. The 4th Circuit in Richmond and the 6th Circuit in Cincinnati ruled the plaintiffs had no standing and sent the cases back to the lower courts.
All rulings were issued by three-judge panels, not by the full courts.
In late September, the Obama administration skipped asking for a hearing by the full 11th Circuit Court and asked the Supreme Court to hear the case, which it almost certtainly will. If so, a ruling may be handed down in June 2012, making the presidential campaign – which will be in full swing – very interesting indeed.
Martha Hyde is a multi-woodwind player who performs on Broadway. A member of Local 802, she is also a trustee on the Local 802 Health Benefits Fund and a member of the Local 802 Executive Board.