With apologies to the National Journal, I copied and posted a recent piece detailing the issues associated with implementing the recently passed health care legislation.
Writing The Rules For The Health Law: The new law offers some benefits this year, but a quick turnaround on writing regulations could prove difficult.
by Marilyn Werber Serafini
Saturday, May 1, 2010
The Obama administration faces a monumental task this year in implementing the first changes dictated by the new health care reform law, not to mention laying the groundwork for the bigger changes to come in 2014.
On the political front, meanwhile, Obama and his team have a challenge in selling the public on health reform's benefits before November's congressional elections. Surveys show that opposition has grown since the law was enacted on March 23, with various April polls finding 40 to 54 percent of respondents unhappy. The White House announced last week that Stephanie Cutter, who handled the president's nomination of Sonia Sotomayor to the Supreme Court and advised first lady Michelle Obama on her childhood obesity initiative, will spearhead the effort to bolster public understanding of and support for the reforms. (See "Winning the Perception Game," NJ, 4/24/10)
Democrats wrote the law so that some of its most appealing reforms come this year -- a good strategy so long as those changes happen smoothly and on time. "The major benefits of the law -- the coverage expansions, subsidies, and insurance market reforms -- do not kick in until 2014," Drew Altman, president of the Kaiser Family Foundation, wrote on the foundation's website. "To compensate for that, the architects of the legislation built in a long list of early deliverables so the public would see tangible and understandable benefits right away -- from allowing dependent children to stay on family policies until age 26, to beginning to eliminate the prescription drug doughnut hole for seniors."
These early reforms will help only a modest number of people, he cautioned, and premiums and out-of-pocket costs will continue to rise faster than wages. "So, on the one hand, the law might not provide the kind of help people are expecting in the first few years. On the other hand, the sky will not immediately fall, as many people seem to believe it might."
Altman predicted that few people will see any changes in the near term. "If the benefits and timetable for the law are communicated effectively, the expectations gap should be manageable; over time, the benefits the law provides will be highly valued by the American people, but it will be crucial to develop mechanisms to answer people's questions and link them to the benefits the law provides."
The Health and Human Services Department and other federal agencies are tasked with producing regulations for the changes that take effect this year. Nancy-Ann DeParle, director of the White House Office of Health Reform, is confident the administration can move quickly, although some observers predict missed deadlines.
The law provides $1 billion to help HHS implement the new law -- probably not enough, said Mark McClellan, director of the Engelberg Center for Health Care Reform at the Brookings Institution. As the Medicare administrator in the Bush administration, he launched the program's huge prescription drug benefit enacted in 2003. The Congressional Budget Office has estimated that HHS and the Internal Revenue Service will need $10 billion to $20 billion over 10 years to carry out health reform.
McClellan said that speeded-up hiring procedures helped him implement the drug benefit but added that HHS no longer has such authority. Even with that boost, he said, he needed six to nine months to get key staff on board, and he faced his share of criticism. As the program geared up, the media trumpeted stories of seniors who were turned away from pharmacies empty-handed because of confusion over coverage. The program's telephone help line sometimes kept frustrated seniors on hold too long and then provided incorrect advice. Still, McClellan was able to smooth the wrinkles quickly enough to earn good marks for the program in opinion polls.
The "biggest challenge coming up fast" for HHS, he said, is ensuring that states and the federal government meet a June 23 deadline for establishing subsidized high-risk insurance pools for the people who are hardest to insure. More than 30 states operate such pools, and they may enhance those programs or let the federal government step in.
Georgia's insurance commissioner last month announced that his state would let the feds take over. It will be much easier (and cheaper) if states build on their existing pools, said McClellan, who agreed with other health care experts that the $5 billion to fund the pools until 2014 won't be enough; that amount might not last even a year, he said. If the funding runs out, the administration will have to ask Congress for another appropriation. Conversely, if the money lasts, it would probably signal that the pools are reaching too few people.
"Insurance availability for people who can't get it now is expected to be a high-profile issue," McClellan said. "If programs are not working, then that would confirm some views of the critics and create momentum for change. On the other hand, if the initial provisions go well and the administration can point to people who are benefiting, it keeps the overall package on track."
Also this year, Medicare beneficiaries who hit the so-called doughnut hole -- a gap in their prescription coverage -- will get a $250 rebate. Under the drug program, when spending on an individual has reached $2,250 on prescriptions in a given year, the person must pay 100 percent of the cost of their medications unless and until spending reaches $5,100. The doughnut hole, which Congress created to lower the cost of the program, has been an irritant for seniors and Democrats, who have long vowed to close the coverage gap as soon as possible.
Small businesses that have up to 25 workers and pay average wages under $50,000 are eligible for tax credits to help cover their employees. States may also draw down federal matching money this year if they begin expanding Medicaid to people who earn up to 133 percent of the federal poverty level (about $14,400 for an individual). Moreover, the government will reimburse employers up to 80 percent of the cost if they offer health insurance to retirees over 55 who don't qualify for Medicare. Regulations must spell out all of this in detail, and Health and Human Services Secretary Kathleen Sebelius has significant leeway in defining such concepts as pre-existing conditions and dependent care.
By the end of September, the act will prohibit insurers from imposing cost-sharing on patients for preventive medical services identified by the U.S. Preventive Services Task Force. In addition, insurers must cover young adults up to age 26 on their parents' policies and must not exclude children under age 19 from coverage because of pre-existing medical conditions. Insurers are forbidden to cancel anyone's policy unless the initial application was fraudulent, or to impose lifetime benefit limits.
Sebelius is encouraging insurers to voluntarily make some changes sooner, and already a handful of carriers have agreed to speed up their coverage of young adults on their parents' policies. The secretary announced last week that Blue Cross Blue Shield plans, Kaiser Permanente, and Humana will begin covering young adults before the end of September.
The law requires HHS and other agencies to take a number of other steps by the end of the year, including:
• Reduce annual increases in Medicare payments for inpatient hospital, home health, skilled nursing, hospice, and other services.
• Increase the Medicaid drug rebate for brand-name drugs.
• Create a process for the approval of generic versions of biologic drugs.
• Launch a nonprofit institute to research and compare the effectiveness of medical services.
• Establish a committee to develop a national health care workforce strategy.
• Administer a 10 percent tax on indoor tanning services.
The federal government, states, employers, insurers, and medical providers have all begun laying the groundwork for the massive changes to come in 2014 and beyond. Washington will need to work with states to establish health insurance exchanges and expand Medicaid programs. Federal administrators will also have to prepare for new taxes (and tax breaks), and for Medicare pilot projects to test such concepts as accountable care organizations and bundled payments.
