A Second Reformation?

Here’s what the new healthcare reform bill will mean for you.

Paula Roy is executive director of the Delaware Health Care Commission, which will work to get the word out to the state’s uninsured that there are affordable alternatives to not being covered. Photograph by Jared CastaldiPaula Roy’s eureka moment came when the recent federal healthcare bill passed. “I couldn’t believe it had actually happened,” says the executive director of the Delaware Health Care Commission. “But the devil is most certainly in the details.”

With more than 2,000 pages of devils, there’s no doubt going to be a lot of scrambling, head-scratching and inter-departmental emails flying around between now and the bill’s mandated full implementation date of 2014.

Yet Delawareans—and all other Americans—will immediately benefit from two particulars of the new bill, says John Taylor, executive director of the Delaware Public Policy Institute: Family coverage is extended to children up to 26 years old, and people with pre-existing medical conditions will have access to affordable insurance. “The best outcome of the bill’s passage has been the immediate elimination of the pre-existing clause from health insurer policies,” Taylor says.

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So we’re off to a good start, but what do the next four years hold for Delaware residents—both the insured and the uninsured?

Now that we have a blueprint for the future of healthcare, “The bill will reduce the number of uninsured,” says Blue Cross Blue Shield of Delaware CEO Tim Constantine. “There are provisions to fund pilot projects on innovation, improved outcomes, electronic record-keeping and pay-for-performance standards. But we are still going to wrestle with the overall costs of healthcare, especially when it comes to treating a growing population with chronic health conditions and the lack of transparency regarding actual healthcare costs.”

Yet Constantine is encouraged by some of the changes under study. He points to a $15 billion Prevention and Public Health Fund to invest in programs that are proven to keep Americans healthy. The new law provides consumers with a Website for comparing costs. Other provisions will encourage healthcare providers to implement the electronic exchange of healthcare information. (Delaware’s electronic health information system is well underway.)

The law’s Center for Medicare and Medicaid Innovation will test new ways of delivering care to patients. The law’s value-based purchasing program will offer financial incentives for hospitals to improve quality of care, including new reimbursement methods, where providers are paid a flat rate for an “episode of care” instead of billing separately for each service.

“Starting in 2014, there will be a mandate for individuals to purchase health insurance, which will help insurers subsidize the cost of high-risk individuals by providing a pool of revenue from healthy subscribers,” Constantine says.

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Roy cites that mandate as one of the most exciting provisions of the new law, as well as its real opportunity to transform the delivery of healthcare.

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“We have a timeline for implementation set by the bill,” says Rita Landgraf, secretary of the Delaware Department of Health and Human Services. “But there are still no regulations to go along with that timeline.”

Roy says there are big roles for the states to play in designing and implementing a new system of care, especially in light of the current and continued strain on state budgets.

“Our commission will play that of a policy-development role rather than in implementation,” Roy says. “One of our immediate focuses will be to communicate to Delaware’s population of the uninsured that there are affordable alternatives to not being covered, especially in the area of the new insurance exchanges.”

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Paula Roy views the bill as significantly improving the approach to wellness and prevention in this country. “The current system tends to treat the sick and not reward the healthy,” she says. “The new legislation’s focus on wellness and prevention, with no attendant deductibles or co-pays, is going to be of immediate benefit to Delawareans.”

To implement those exchanges, the bill provides subsidies of about $5 billion so states can contain the costs of absorbing new patients with pre-existing conditions.

“Each state had a choice of having the federal government fund their existing high-risk pools or allowing the government to implement and manage the pool itself,” says Landgraf. “Delaware chose to allow the government to implement the state’s plan, because Delaware did not already have a high-risk pool of its own.

“The pool will be composed of insurers who will provide low-cost premiums subsidized by the government’s $5 billion allocation of funds. The pool will cover a broad range of health benefits, including primary and specialty care, hospital care and prescription drugs, even if they’re to treat pre-existing conditions.”

Landgraf says the annual premium from the pool for a 50-year-old will be $510-$624 in Delaware.

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There will be a lot of money flying around over the next few years, and much of it will be of the government printing press variety. But Taylor says critics of increased government spending for healthcare need to take a closer look at the issue.

“We are the only industrialized country in the world without universal coverage,” he says. As for critics’ chest-thumping over “creeping socialism” and rationing of care, “Have they never heard of Medicare,” Taylor says, “or how about the VA?” Pointing to recent news stories about health insurers relying on third-party firms to approve or deny medically ordered tests, such as MRIs, he says, “We already have rationed care.”

The industry seems to be adjusting. Constantine says BCBS is focused on implementation of the new law, but many insurers still need to determine how to address the underlying costs of the new legislation. One issue—arbitrarily raising premiums to offset the anticipated costs of the new bill—seems to be a non-issue. “I don’t really see that as being a major problem,” says Constantine. “We should expect greater scrutiny regarding proposed rate increases. Additionally, we are in a very competitive environment.”

Constantine’s goal as BCBS enjoys its 75th anniversary is to do as much for subscribers as possible. “As of this past May, in advance of the law, we’ve already implemented insuring the children of family members up to the age of 26,” he says.

Roy views the bill as significantly improving the approach to wellness and prevention in this country. “The current system tends to treat the sick and not reward the healthy,” she says. “The new legislation’s focus on wellness and prevention with no attendant deductibles or co-pays is going to be of immediate benefit to Delawareans.”

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