Now It Gets Interesting

The health care reform debate was anything but dull. Full of political maneuverings, hyperbolic rhetoric, good intentions, misguided policy, misplaced passion, serious concerns and a complex issue and played out across three 24-hour news stations, it’s hard to think of anything more dramatic and engrossing this side of Mad Men.

Until now, that is. Because now the real decisions are being made, the ones that will impact every employer, every carrier, every broker and every American in very direct ways. This is where the nitty gets gritty, the proverbial rubber is introduced to the road, and … well, jump right in with your own metaphor.

They say the legislative process is akin to the making of sausage. But when it comes to unpalatable activities, the implementation can be just as bad – if not worse. And it’s causing sleepless nights for employers, brokers, individuals and insurance executives.

Not that anyone should feel sorry for them, but just for fun, let’s walk a few steps in the shoes of those health insurance company executives. They have a lot of moving pieces to deal with. Consider, as of September 23rd: lifetime benefit caps go away; rescissions are greatly restricted; pre-existing conditions – for children under age 19 they are a thing of the past; specified preventive care services are paid at 100% – no cost sharing allowed; limits are imposed on out-of-network emergency room services; dependents up to age 26 must be covered (but not those dependent’s dependents); new criteria of acceptable appeals processes (for denied claims or treatment) take effect; and new rules concerning non-discrimination in favor of highly compensated individuals come into play.

And this list just describes the impact of the new health care reform bill. States are imposing new rules and regulations at the same time. And let’s not forget the federal mental health parity legislation that took effect July 1, 2010. Then, looming just down the road, there’s the new medical loss ratio requirement (which mandates carriers spend 80 percent of the individual or small group health care insurance premium they take in on medical claims and health quality initiatives beginning January 1, 2011 – 85 percent of large group premium must be spent on these purposes).

Now think about the answers those health insurance executives have to come up with. What specifically to these new rules require? Details on some are sketchy at best. And regulations, like legislation, is open to interpretation. How will state regulators interpret what these federal rules require? How will competitors implement them? Can our systems handle the new calculations, structures and rules without exploding? How do we explain how we’re interpreting the requirements to our customers, brokers and front-line employees? All this while the fallen economy and skyrocketing medical costs buffet their companies like Dorothy’s tornado.

Again, no need to feel sorry for them. This is, after all, what they signed up for. But it is fascinating to consider the complexity of their task. And to make their task all the more exciting, any missteps could put their company – and themselves – on the front page of their local newspaper. And trust me, that’s not where any executive wants to be for anything other than handing over a big check to the United Way.

Then there’s the reality that every decision matters. And with every decision the safety net gets smaller. When Congress passes a law, they have regulators as their safety net. Which is why most every major new law delegates a great deal of responsibilities to federal and state agencies. Those agencies , meanwhile, know that those they regulate will find a way to smooth the edges of the regulations they develop. But carriers – and employers, brokers and others who have to actually implement all this – have no safety net, no one accepting the buck they wish to pass. Lawmakers and regulators deal with what should happen. Employers, brokers, and carriers do things. They deal with what will happen. And if they’re wrong (meaning the regulators or lawmakers upstream think what they did is wrong) the consequences can be dire.

Which is all to say the summer hiatus is over. What I’ll try to bring to you in the weeks ahead is to provide readers with the information needed to track what’s happening now with health care reform, how it’s being interpreted by regulators and how it’s being implemented by health plans, employers, individuals and others. My goal is to provide links to the reports, resources, and articles you need to stay current. And I’ll do my best to provide additional insight and context to what’s happening, to the extent that’s possible.

Given the complexity of what’s involved with implementing health care reform, your help will is greatly needed. For example, a lot of the action takes place at the state level. Please feel free to leave comments with reports about what you’re seeing happening in your neck of the woods, wherever that may be.

There’s a lot happening and a lot to talk about. I hope you’ll be part of the conversation, because here we go. Again.

8 thoughts on “Now It Gets Interesting

  1. As a 30-year veteran of the health care business, I can tell you it’s still a work-in progress…and will probably stay that way until 2014. High risk state pools are finally up but will be running out of money. And who knows if the funding for other parts of reform will be there.

    Stay tuned. It is going to be very interesting.

  2. Hi: Y’all remember when, just before Health Care Reform passed, Anthem Blue Cross tried to raise premiums by about 30% in California? Various other “Blue Cross” companies tried the same thing in lots of places. In my state, New Mexico, Blue Cross-Blue Shield tried to raise my premium by 29.5%. Anyway, you folks raised such a stink that Blue Cross finally figured out that there might be a link between their incessant and exorbitant premium increases and the hue and cry for the dreaded “public option.” So they delayed their premium increase. Guess what? Now that the Health Care Reform debate is more or less over, THEY’RE BACK! I just got a notice from Blue Cross-Blue Shield stating that they plan to increase my premium by ONLY 26.2%. This, after our courageous Interim Superintendent of Insurance, Johnny Montoya, talked them down from 29.5%. So I’d like to make sure these fine folks get a little quality time in the sunshine.

    Thanks

  3. Welcome back, Alan. I hope that you had a restful hiatus.

    It seems that we are already seeing some of the “blow-back”, the negative sides of the rush to HCR that some of us feared might happen.

    1. CIGNA, so far the first as I understand it though others are expected to follow suit, has announced that they will not pay agents commissions for the GI policies to be issued to children.

    I think that no one should be surprised, the companies clearly will make more money (keeping ours) by cutting the Agent/Broker Community (hereinafter to be referred to as “Agent” to mean both) loose wherever and whenever they can. That said, I have no doubt, knowing as I (and you) do about the need for the Agent Community to be professional in our approach and educate the consumer, that the Agents will continue to provide the education on all areas of HC funding that these benefits are available, even though the Agents won’t be compensated for their time.

    2. It has been announced by CMS and HHS that the $500Billion to be cut from Medicare in order to pay for half of the Trillion + dollars ObamaCare is expected to cost, at a minimum, will not be “gained” as future “Congresses”, who will be responsible for implementing these cuts, are not likely to do so and risk losing the Senior vote, considered to become ever more important in the next several terms as the country “ages”.

    3. Physicians (Primary Care Physicians) are already leaving Medicare “practice” as their Medicare Reimbursements have taken a recent 22% cut, a huge slice of their income as they were already being paid a rate that lags two years behind current costs due to Medicare’s archaic method of reimbursing docs.

    I recently became a Medicare beneficiary (turned 65 in July) and asked my physicians here in Seattle as well as in Palm Springs if they will continue to accept Medicare. The answer, from all three, was “Yes, but I’m not happy about it. Medicare just cut our reimbursements so low that we can barely break even.”

    4. The just passed “Small Business” bill is a day late and a dollar short. It has been on the “We need to do this”, list but has been delayed often to allow the Democrat-Controlled Congress to address other issues considered to be more important, such as HCR. It only received Obama’s public push only since July of this year (2010) and is seen as nothing more than a political ploy now that the midterm elections are upon us. The HCR Law has placed a serious burden on small business, and this issue alone is expected to cause major harm to the public and economic recovery (small business accounts for 70% of employed Americans).

    The question I’m raising on this point (#4), as well as the preceding points, is just how much damage do you think we can expect to see in the next year or two when the damage to our economy as the result of the passage of this bill, already revealed in just the first few months of its passage, is as significant as it is?

    • Alan,

      Just off the presses at NAHU: , “In their last week of summer legislating, Republicans and Democrats alike — on both ends of Capitol Hill — made gestures toward repealing a new tax-reporting requirement, raising hopes among small-business advocates who have lobbied fiercely against the measure.” Yet, “with each side claiming the others maneuvers are just feints, the prospects for repealing, or softening, the new law are uncertain at best.” The Times notes that “business groups found an ally in the IRS’ own National Taxpayer Advocate, Nina E. Olson, who expressed alarm that the new law ‘may present significant administrative challenges to taxpayers and the IRS.'” This would have the effect of scaling back over $17Billion in anticipated tax gains that would have been applied to the HCR savings.

      While this is hot off the NAHU presses, I did read about this last week in the WSJ. Clearly, it is “growing legs”, and if enacted will reduce further anticipated savings in HCR. It seems clear that the savings component of this too rushed law are unraveling at a fairly rapid pace, given that they only have just taken effect. The rumblings that this effort will, in fact, cause a far greater increase in Health Care Costs, rather than reducing them, are growing far louder and are gaining substance. In other worlds, at the pace we are reaching it seems that it will be only a short time before Health Care Savings via this new “venture” will be proven to be a “Paper Tiger” and that this important component may soon be reduced to recycled paper, as a false promise. The net result if this unraveling continues could be that we will face far higher costs of Health Care than seeing them lowered, those net increases to be borne by the already heavily taxed-burdened electorate at a time when we are struggling to pull out of the worst recession to his us since the “Great Depression”.

      Given the already divisive and contentious issues that are at odds with the imagined savings of the HCR Bill, now Law, that we touted as a major reason for passing the HCR Bill into Law, what do you think this may foretell, if anything, about the quality and strength of the law and its future as it is barely out of the gates and is already losing important gains promised the electorate in its passage?

      • Alan,

        Just back, just hitting the decks running, and already new issues are coming to the fore. It’s a good thing that you took that Hiatus!

        I am truly glad that you’re back, though you may be wishing that you postponed the ending of the Hiatus until after the Summer Congressional break. 🙂

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