What's Next in Health Care? Implementation of Law Goes Ahead

WASHINGTON -- The waiting game is over for consumers, employers, health care providers and insurers. Thursday's Supreme Court ruling that upheld the 2010 health care law means ongoing trends will continue, and those who waited on the sidelines for the court will now have to implement their parts of the law.

For consumers, that means that those intimidated by what opponents called the overly complex part of the law will have to learn what will affect them, particularly if they have to buy their own insurance or pay a penalty for skipping it.

Employers who fought the law as a job killer will now have to come to grips with it and minimize the parts they don't like.

Hospitals have moved forward with electronic records, but not necessarily with the health care teams needed to prevent mistakes that can lead to penalties for care that falls below quality standards.

Insurers need to dig deep to pay rebates to consumers for premium money not spent on health care.

The states that balked at creating health care exchanges from which their residents can compare and buy health insurance must create them — or wait for the federal government to do it for them.

Because many of the law's provision kick in during 2013 and 2014, that leaves precious few months for the various groups to get to work.

"It's full speed ahead on implementing the law," says Alissa Fox, senior vice president for the Blue Cross and Blue Shield Association. She says insurers worry that a health insurance tax will increase premiums for families or cause rates to go up for young people, but concerns about the law will no longer hold back implementation. "We've had two-plus years of implementing legislation, and we'll continue."

Consumers

Although "nothing will change tomorrow," some consumers will see big changes by Jan. 1, 2014, when more aspects of the law take effect, said Karen Pollitz, a senior fellow at the Kaiser Family Foundation. Those changes include:

•Insurers will no longer be allowed to turn anyone down because of a pre-existing medical condition, such as cancer, Pollitz says.

•More patients will be eligible for Medicaid, a federal insurance program administered by the states that serves the poor and disabled. Today, people can qualify for Medicaid only if they are poor, pregnant , disabled or a child. Each state sets different financial standards to qualify for Medicaid, and some states have required that people be not just poor but "subpoor," with incomes substantially below the federal poverty level.

By 2014, however, people will become eligible for Medicaid based only on their incomes, Pollitz says, meaning single adult men with incomes up to 130% of the federal poverty level will also qualify.

•Also by 2014, the "working poor" — many of whom are eligible for employer-sponsored health care but can't afford the monthly premiums — will be eligible for subsidies to help them pay for their health insurance, said Mary Grealy, president of the Healthcare Leadership Council.

•Federal standards for health insurance plans will eliminate "junk" plans with huge deductibles that provide little to no real benefits for consumers, Pollitz says. That means consumers will have more confidence that any plan they buy on the private market will provide at least a minimum standard of quality that includes drug coverage, hospital care, maternity care and other essentials.

Much of the law's success depends on having young, healthy people who often skip health insurance sign up. Because they have much lower health care expenses, Grealy says, their insurance premiums help offset the higher medical expenses of older, sick people in a health plan.

"Getting young, healthy people covered — that's what we really need to focus on now," Grealy says.

Some have already benefited from the law. Brian Rose is a coach with the minor league Wichita (Kan.) Wingnuts baseball team, not for the money, but for the love of the game. Three years ago, when he was 31 and uninsured, Rose, of Austin, was diagnosed with stage 4 melanoma, a life-threatening form of skin cancer, that had spread to his brain, bones and liver.

Although Rose qualified for emergency coverage from Medicaid, his coverage lasted only six months, Rose says. Thanks to LiveStrong, the cancer non-profit founded by cyclist Lance Armstrong, Rose learned how to apply for health insurance through the Affordable Care Act. He now pays about $200 a month in premiums — a good deal, he says, given that he had more than $250,000 in medical bills last year.

Employers

Employers might have opposed the law and hoped the court would strike it down, business advocates say, but now that it has passed legal muster, they have plenty of questions about how to move ahead.

For example, says Andy Webber, president of the National Business Coalition on Health, how much insurance must they provide to avoid paying a penalty? How much of a tax credit will a small business receive for paying part of an employee's insurance?

"The Supreme Court has ruled, but we need greater clarity about implementation," Webber says.

Because employees are "comfortable" receiving their insurance through work, most employers will remain in that business, Webber says.

Businesses have learned that wellness programs lead to higher productivity, better retention and recruiting, so they'll want to keep control of those elements of health care, Webber says. The law also calls for more support for wellness and preventive care.

Employers will probably embrace parts of the law that address quality and innovation, he adds, but want the government to back things that are already working in the private sector.

Small business interests have been some of the law's most vocal critics, and they still believe it will drive up their costs and limit their freedom, says Dan Danner, president of the National Federation of Independent Businesses, an advocacy group for small businesses.

Fighting the law now, however, is counterproductive, Danner says.

"We'll do anything we can about the parts we think are most onerous, but by the end of the day, there's not much we think is going to happen before the elections," he says.

The main worries for small businesses, Danner says, are the penalty tax for not providing insurance and the type of minimum benefits package they must provide.

Employers expect health costs to rise between 2% and 4% each year, says Joe McGinty, vice president for employee benefits of The Graham Company, one of the largest employee benefits brokerages in the mid-Atlantic region.

However, he said, it's difficult to measure the cost benefits of preventive and wellness programs, which already have employers thinking in different ways about health costs.

Providers

Health care providers, such as hospitals and physicians, have made some of the most progress under the law so far, Emanuel says.

They've started switching to electronic medical records, and cutting readmission rates and medication errors. Those moves, he says, have nothing to do with the controversial requirement that Americans buy health insurance or pay a fine.

Those trends, which were in play before the law passed, will continue, says Jeff Goldsmith, a health industry analyst and founder of Health Futures. Hospitals will keep merging and acquiring small doctors' offices, he says. "That has been going on for eight years — long before the Affordable Care Act."

The changing nature of the ranks of new physicians — 50% of medical schools' graduating classes are women — means more doctors want a better way to control their hours and juggle their families, says Dr. Delos Cosgrove, CEO of the Cleveland Clinic.

"There's no way to keep up on your own," he says. "The Affordable Care Act is not driving this change; it's the cost of doing business."

About 60% of hospitals are now a part of a system, and there were 200 hospital mergers and acquisitions in the first part of this year.

Even without the Supreme Court decision, Cosgrove says, hospitals would continue in the direction they've been moving.

"We know that Medicare can reduce what they pay us," he says. "We know we've got to get slimmer. The insurance industry is doing the same thing — cutting the amount they'll pay for services."

Health care providers have already responded "hugely" since the law passed in 2010, said Michael Regier, senior vice president for legal and corporate affairs at VHA, a trade organization representing hospitals and other providers.

Reduced Medicare and Medicaid payments have forced providers to cut their own costs, which should mean lower costs for everyone, he says.

"In my 17 years in health care, I haven't seen change happen so fast," he says. "There's a quite evident willingness to rethink the approach to care. It will ultimately work to the benefit of the patient."

States

States that have waited for the court's decision before creating health exchanges "have to roll up their sleeves and get to work," says Neera Tanden, president of the Center for American Progress. "Many states have already started setting up exchanges, but for those who haven't, it's time to get going and join in the work that's ahead of them."

Most states have already accepted and spent federal grants to help pay for the exchanges and improvements to prepare for the expansion of Medicaid, says Joel Ario, former head of the Department of Health and Human Services' Office of Health Insurance Exchanges. That will have to continue, he says.

The exchanges have to be up and running next year, so states need to act now, says Ezekiel Emanuel, a former White House health adviser. "We certainly can't do that at the last minute," he says.

The administration needs to set up different elements of the law this year, because if President Obama loses to Republican Mitt Romney in November, there needs to be some stability in the health care industry that would survive a potential change in administrations, he said.