Health care reform — one step closer

Jan Hudson

In June 1994, the Michigan League for Human Services’ Board of Directors adopted a set of health care reform principles.

Last night’s historic House vote brought us one step closer to realizing the implementation of many of the policies and principles included in that document, which by health care reform standards, (see a brief history of health reform) is relatively new.

The Senate bill passed by the House is Senate Bill H.R. 3590 and the ensuing reconciliation bill is Reconciliation Act H.R. 4872.  Several components of the League’s health reform principles are included below with a brief explanation of how they are addressed in health reform legislation:

  • Coverage for nearly all Americans. By 2019, it is projected that 95 percent of non-elderly legal residents would have insurance. The legislation expands Medicaid to all adults and children under 133 percent of the federal poverty level (FPL) and provides subsidies to families with incomes up to 400 percent FPL to purchase insurance.  In addition, caps, based on a sliding income scale, will protect low-income persons from excessive out-of-pocket costs.
  • Mandated enrollment in health care coverage to spread the costs as broadly as possible.  The legislation requires most people to obtain coverage or pay a penalty, which is necessary to provide an incentive for people to secure coverage before they become ill. With nearly everyone enrolled in coverage, over time, premiums should become more affordable as they will no longer include the “extra cost” of providing care for those who are uninsured.
  • Focus on disease prevention and chronic disease management.  There are numerous prevention and wellness initiatives included in the legislation.  For example, all co-payments, co-insurance and deductibles for preventive services will be eliminated for Medicare beneficiaries.
  • Coverage of the full range of mental and physical health needs.  The new state-based exchanges would have to provide minimum standards for coverage and cost-sharing protections for enrollees, making sure coverage is comprehensive and affordable. Four levels of coverage will be required. Medicaid would continue to provide comprehensive coverage to all who qualify with enhanced federal subsidies for the newly eligible.
  • Implement effective cost containment. The legislation takes a number of steps, particularly within Medicare, to institute efficiencies to lower cost and improve quality of care, through changes in the delivery system, and through the establishment of an independent Payment Advisory Board charged with developing proposals to slow the growth of both Medicare and private insurance spending and improving quality of care.
  • Comprehensive quality management and health care outcomes.  The legislation creates a research institute to conduct comparative effectiveness research, create a value-based system for hospitals and physicians, and encourages the development of new patient-care models, to name a few.

Of key importance are the provisions in the legislation that will reform the health insurance marketplace by prohibiting lifetime limits on benefits and terminations of coverage when people become ill.  In addition, the reforms will prohibit insurers from denying coverage or charging higher premiums to persons with pre-existing conditions, or higher premiums based on gender.

The reform package gradually eliminates the Medicare Part D “doughnut hole,” the coverage gap in which beneficiaries continue to pay Part D premiums, but have no pharmacy coverage, and must fully pay for their medications.  An immediate 50 percent reduction in the cost of brand-name drugs will be available to those who reach the “doughnut hole.”

The reform package passed by the House last night will also provide subsidies to small businesses to enable them to provide coverage at a reasonable cost to their employees. They will also be able to purchase comprehensive, affordable coverage through the state-based exchanges.  Many small businesses have been unable to provide, or have been forced to drop insurance coverage due to the escalating cost of premiums.  The exchanges will provide opportunities for small business to purchase coverage with more affordable and predictable premiums.

The above information is only a small sample of the benefits included in the health care reform legislation passed by the House.  The reconciliation bill, which must now be taken up by the Senate, can be passed with a simple majority (51 votes).  Action by the Senate is expected this week.

The League and the Michigan Health Insurance Access Advisory Council are sponsoring a forum on April 23, Federal Health Care Reform: Challenges for the States.  For more information and to register, click here.

— Jan Hudson

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