OPINION: Healthcare reform law benefits all Americans
The healthcare system is confusing, even to those who work in it. The president’s signing of health insurance reform into law this past week represents a fundamental shift in our healthcare system with expanded coverage to more than 30 million previously uninsured Americans. The new law also serves to simplify the health system for millions of Americans and to those who provide care them.
Sarah, a newborn, was born healthy but a few weeks early. She stayed in the hospital for a couple of extra days until she was old enough to eat on her own, not an uncommon problem for newborn babies born a bit early. Soon after she was born, her father changed jobs from a large employer who offered health insurance to one who did not. In order to get coverage for his family, her father looked for coverage on the open market. Even though Sarah was healthy, because she was saddled with the “pre-existing condition” of prematurity (being born early) she was denied coverage. Sarah would go without normal check-ups at her doctor’s office and without needed preventive services like vaccines. Sarah’s story was not uncommon before the president signed the health reform law. Sarah, like many others, will be helped by the new health reform law.
To understand changes that will take place in our healthcare system, it is important to start by understanding where people currently get their health insurance coverage. Most people of the United States get their health insurance coverage from their employer. Those who cannot get coverage from their employer purchase insurance on the open market. For the elderly, Medicare provides coverage for those 65 and older regardless of income. As a safety net, Medicaid provides coverage for poor children, pregnant women, disabled adults and the elderly. Lastly, the Children’s Health Insurance Program (CHIP) provides coverage for low-income children who do not qualify for Medicaid. Those like Sarah, not poor enough to qualify for CHIP or Medicaid are left among the remaining 15 percent of the US population who are uninsured.
The general principle of the health reform law includes regulating the private insurance market to protect patients, creating a marketplace for people to purchase affordable private insurance coverage and reigns in the costs of health care. By asking everyone to have insurance coverage, the law aims to bring everyone into the health marketplace to bring costs down for us all.
How do the uninsured gain coverage?
The law creates health insurance exchanges for people and small businesses to purchase health insurance on the open market. Small businesses and middle-class workers can receive tax credits on a sliding scale to help purchase coverage. Additionally, effective within the next six months, children will be allowed to stay on their parent’s insurance until 26 years of age. Lastly, Medicaid is expanded to cover everyone below 133 percent of the federal poverty level (around $14,000 for a single person).
Some of the most popular parts of the law are reforms on the health insurance market. The law eliminates lifetime caps on health insurance coverage. It ends the process known as rescission, where insurance companies review and nullify benefits after someone makes a claim. Lastly, the law eliminates pre-existing condition exclusions for children effective six months after enactment and over the next couple of years does the same for adults. In the meantime, it creates a high-risk pool for people to get coverage if they are denied for a pre-existing condition. Therefore, being born early will no longer mean that Sarah cannot purchase health insurance coverage.
Changes to Medicaid
Medicaid has been plagued by poor payments to doctors and that has limited the number of doctors willing to participate in the program. Medicaid payments in Michigan this year reached a new low of 63 percent of what Medicare pays for the same service. Healthcare reform, over the next few years, makes Medicaid payments for primary care doctors equal to Medicare payments. Additionally, it provides increased payments to all primary care doctors and to general surgeons who practice in underserved and rural areas.
The law provides funding for the successful Children’s Health Insurance Program through 2016. Importantly, it provides preventive services for children at no co-pay in private and public insurance policies. So Sarah, no matter which insurance her family chooses, would be able to get coverage for preventive services like vaccines with no co-pay.
Any senior who is enrolled in the Medicare prescription drug plan undoubtedly knows about the “doughnut hole.” The “doughnut hole” refers to the point in between were Medicare pays for drugs and where it picks up again for catastrophic coverage. This hole in coverage leaves seniors to cover nearly several thousand dollars until they reach catastrophic coverage. Seniors who are more likely to have chronic medical conditions such as diabetes, high blood pressure and heart disease are left to choose between paying for medicines to keep them alive and paying for rent and food. Health reform fills the doughnut hole over the next several years, beginning with a $250 rebate this year and a 50 percent reduction in prescription drug costs in 2011.
According to the non-partisan Congressional Budget Office, the law is estimated to cost $938 billion over the next 10 years and over the same time, reduce the budget deficit by $143 billion. Also included are multiple pilot projects to investigate ways to reduce costs, including everything from medical malpractice reform, to paying doctors and hospitals based upon quality and to routing out waste and fraud in the system.
While no law is perfect, health reform provides much needed care to our neighbors. Over 30 million Americans, just like Sarah, will now be able to see a doctor when they need help. Moreover, those who already have coverage will have increased protections and the security of knowing if they lose their job they don’t have to lose their health insurance.
Dr. Stephen Patrick is a House Officer in the Department of Pediatrics and Communicable Disease at C.S. Mott Children's Hospital, University of Michigan.