JUNE 3, 2010 ISSUE

‘The Bulk of the Changes Begin in 2014’

How Healthcare Reform Affects You

Adam Linker, policy analyst for the North Carolina Justice Center, spoke on healthcare reform legislation at the ReelHouse Cinema & Draft in Boone on May 21. The nonpartisan, explanatory speech addressed how the changes will affect individuals. Photo by Corinne Saunders

The main difference is that ôreform will drastically change how people think about healthcare.

Adam Linker, policy analyst for the North Carolina Justice Center, spoke on healthcare reform legislation at the ReelHouse Cinema & Draft in Boone on May 21.

Watauga County Healthy Carolinians, Appalachian District Health Department, ASU’s Institute for Health and Human Services, Appalachian Regional Healthcare System and the ReelHouse sponsored the event, and Dr. Susan Roggenkamp, program director for the Healthcare Management program in ASU’s Walker College of Business, mediated the discussion.

The N.C. Justice Center’s Health Access Coalition strives to improve access and care and expand Medicare, and once the healthcare debate shifted to the federal level, the group shifted its focus to the federal level, Linker said.

After years of seeing the legislative process, “I don’t think any of us have seen a perfect bill come out of Raleigh or Washington,” and like any piece of legislation, this one “has good aspects and aspects that need work,” he said.

Beginning this July, a federal high-risk pool for individuals with pre-existing conditions will be established, and North Carolina will control the pool for its residents, Linker said.

Also starting this July, young people will be able to stay on their parents’ health insurance policies through age 26, even if they are not students, he added.

Between now and 2014, the government will begin a slow implementation of tax credits for small businesses that offer employee health plans, but “the bulk of the changes begin in 2014,” he said.

By 2014, “unless we as a state decide to implement it sooner,” each state will be required to establish a health insurance exchange, Linker said, explaining that the exchanges will allow residents to go online, search health plans and compare them side-by-side, with the goal of “more transparency” for consumers.

Another important aspect of the exchanges will be the subsidies they offer, which will put “a cap on cost sharing—how much people will pay out-of-pocket” for healthcare. The subsidies will be tax credits available to people living below 400 percent of the national poverty level, or about an annual income of $88,000 for a family of four, he said.

Each state will have the option of implementing one or two exchanges—two if the state wanted one exchange for individuals and a separate one for businesses, he explained.

States could also opt to make “interstate compacts”—North Carolina could contract with Iowa, for example, and residents of both states would have the same options, he said.

“Debates in North Carolina in the future will include how reform is implemented at a state level,” Linker said.

An independent consumer agency will be over the exchange, and the agency will have a public board—“hopefully that’s where our say will come from,” he said.

“Reform will not drastically change, for better or for worse, the way people pay for healthcare, where people get healthcare or, at least in the short term, our healthcare delivery system. It really is building on the current system. Many people will still be getting insurance at work [or] buying private insurance policies [and] Medicare benefits remain mostly unchanged.”

Changes in the Medicare Advantage program, however, will save “$100-some billion” in 10 years—about half of the total savings the Congressional Budget Office estimates will take place because of the legislation. The remainder of the savings will come from changing reimbursements to hospitals and medical facilities, he said.

The main difference, Linker continued, is that “reform will drastically change how people think about healthcare.”

After reform, there will be a presumption that everyone has insurance; the question will be “what programs they qualify for—finding where people fit in the system,” he said.

Medicaid will expand to cover people living at up to 132 percent of the poverty level, and insurance companies will no longer be able to reject people because of pre-existing medical conditions, he added.

Insurance companies will still be able to adjust rates for smokers and those living in certain geographic areas, and older persons will still be charged more, but the amount they can be charge above standard rates will be capped, he said.

Starting in 2014, U.S. residents will have to show proof that they have some sort of coverage. The IRS will enforce this by giving a tax penalty at the federal level on taxes at the end of the year, Linker said.

Exemptions will be allowed for religious reasons and for financial hardship. If a person’s finances are too low to file taxes, they will be exempt from proving they have health insurance, he said.

After talking about the changes the 2,400-page legislation will bring, Linker fielded questions from the audience of about 40 people.

One man asked if there would be a change in the tort system, to which Linker replied that the government would give grants to states “to aggressively study ways to [handle] medical malpractice.

“We’re just not sure what’s going to work. [The government] will do as many experiments as they can, find the [method] that works the best and institute that nationally.”

In response to a question about dental coverage, Linker said that “dental was on the chopping block in the government’s budget—they had reduced it to emergency services. We have to keep fighting to make sure [dental] funding is still in Medicaid.”

In response to a question about what the government is doing to reduce fraud, Linker said that the government will invest $10 billion over 10 years to fight fraud and abuse.

Another question was about changes in the state employees’ health plan. Linker said that because reform strives to build on the current system, program enrollees will not be able to buy subsidy plans in the exchange—“it will lock people into the employee system in many ways, [and] they will start charging some sort of premium to state employees.” Dependents for whom the state plan is determined to be unaffordable will be able to purchase subsidy plans.

“The amount of the premium a dependent has to contribute will be capped at 9.4 percent of the household income,” he said.

To view the full legislation, click to www.opencongress.org/ bill/111-h3200/show.