Health reform looks good from here
Better coverage, more doctors, more state jobs and more people insured are coming to central Illinois
Ed and Diane Osman have health insurance. The Springfield couple buys health insurance separately from two different insurance companies, together paying more than $13,000 each year for what they hoped was protection from huge medical bills if they needed health care.
“I’ve always had health insurance,” Ed Osman says. “It’s a necessity. I’ve had health insurance ever since I was married 38 years ago.”
But when both Ed and his wife had to have surgery last year – he for chronic foot pain and she for a hernia – Ed Osman says he wasn’t surprised that both insurance companies denied their claims.
“They just said it wasn’t covered,” Osman says, adding that his insurance agent went to bat for him and got his insurance company, Assurant Health, to pay at least some of the nearly $11,000 in medical bills from his surgery. Five months after his operation, however, Osman says he is still fighting with Assurant over who will pay, and he has paid about $6,000 out of his own pocket in the meantime.
“I got a statement Saturday saying they finally paid a radiologist just $50 from several months ago,” he says with obvious disgust. “If you’re late by a day paying your insurance, you could lose your coverage, but they can be late by six months and screw up your credit, and there’s not a damn thing you can do about it. It’s very much a double standard.” Diane Osman’s insurance company, Humana Inc., still refuses to pay for her operation.
It’s a familiar tale for many Americans needing health care: health insurance can turn out to be no assurance at all.
Stories like the Osmans’ are the reason Congress recently passed a sweeping health care reform law aimed largely at health insurers. The law includes measures that prohibit insurers from denying coverage based on pre-existing conditions, canceling policies when customers get sick, capping benefits paid over a customer’s lifetime or excluding from coverage certain long-term illnesses like cancer. The law also requires insurance companies to report data about health care expenditures to regulators, prohibits premium cost differences based on anything but age, geographic location or tobacco use, and it ends an exemption that allowed insurance companies to carve up markets and fix prices. It even requires insurance to cover preventative services like cholesterol and cancer screenings. In addition to insurance reforms, the law includes tax credits, tax hikes, Medicaid expansion, community health care funding and plenty more.
The Patient Protection and Affordable Care Act was signed into law March 23, after months of partisan bickering, failed compromises and mass confusion among Americans struggling to comprehend just what the novel-length 900-page law does. In Illinois, it will likely have far reaching effects for individuals, insurers, businesses and health care providers.
What’s in it for us?
Health care reform has taken on three main components: insurance reform, coverage expansion and cost containment. In Illinois, the law will beef up state health insurance regulations, force insurers to cover certain previously-uninsured groups, expand Medicaid to cover more low-income populations and help build health care infrastructure to lower costs.
Illinois Department of Insurance director Michael McRaith says the new law is a “significant landmark improvement for Illinois families and businesses who purchase health insurance.”
Current Illinois law does not restrict health insurance rate increases, McRaith points out, adding that his department recently released a report showing rate increases in Illinois of up to 60 percent during 2009. While most increases were less dramatic – in the neighborhood of five to 15 percent – the state had no authority to regulate even the largest ones. The new law supersedes lax state laws on the subject, effectively giving Illinois the authority to control rate increases and enforce rules on how insurance companies spend money derived from premiums, among other powers.
McRaith says Illinois passed a law last year to provide independent, external review of denied insurance claims through state panels, and the new national law extends that protection to consumers with self-insured health plans – those whose employers act as their insurers.
“The effect is that doctors will now be making health decisions rather than insurance companies,” he says.
Dr. Jerry Kruse, chairman of Family and Community Medicine at SIU School of Medicine in Springfield, says the law will particularly benefit Springfield by encouraging primary care providers to expand services and hire more staff, which in turn increases access to care for under-served populations.
Kruse says certain “practice reforms” – such as Medicaid reimbursement increases and medical school loan help for primary care doctors – will bring more medical students and practicing doctors to primary care, the non-specialized form of medicine that has long seen a decline in practitioners. Only about two percent of medical students go into primary care. Kruse is particularly encouraged by increased Medicaid reimbursements that will prompt more hospitals to accept low-income patients, as well as other measures he says will build infrastructure and lower costs.
“If you’ve got this primary care infrastructure there, what you’ll see in hospitals is fewer unnecessary emergency room visits, fewer readmissions for chronic problems and hospitals focusing on patients who really need to be focused on,” Kruse says. “There actually is very good evidence that when you insure more people in the population and you have the proper primary care infrastructure to take care of them, then costs go down.”
Illinois will also benefit from $11 billion in new funds for community health centers nationwide, such as the Capitol Community Health Center at 2239 E. Cook St. in Springfield.
Forrest Olson, executive director of CCHC, says it’s too early to tell how they will benefit, but he has high hopes for funds which he says could be delivered as early as June.
“There haven’t really been many details yet,” Olson says. “We assume some of the money will be for capital, some for service. … We can always use more space, more doctors and more dentists.”
CCHC, which served 15,769 patients in 2009, is currently in the middle of a planned expansion that will help meet the growing need for health care.
The Illinois Primary Health Care Association, based in Springfield, says community health centers are important because they serve low-income populations that otherwise would have little or no access to health care.
“Community health centers are the quintessential health care safety net for people who are low-income, who don’t have regular access to the health care system,” says Philippe Largent, vice president of governmental affairs for IPHCA. “(The law) is a gigantic step in the right direction, not only for community health centers and their patients, but for the country relative to increasing access to care, increasing (insurance) coverage and starting us on a path of becoming a healthier country.”
Illinois has about 350 community health centers, Largent says, covering about 1.2 million people.
“It’s historic,” says Jim Duffet, executive director of the Campaign for Better Health Care, based in Champaign-Urbana. “We have to make sure that it does succeed and that we can build upon it. This is not a silver bullet, but it’s a damn good framework that’s going to have massive impact, not only for those of us who have health insurance, but for those folks who don’t.”
CBHC has already begun pushing for a state task force to help reshape existing state programs to fit the new federal law and explore a public health insurance option at the state level. Duffet says he has worked for health care reform for nearly 30 years, lobbying Congress and researching reform options, and he says his fight isn’t over.
“We’re going to continue to push for a public option at the state level,” Duffet says, referring to the idea of government-run insurance that would compete with private insurers. “Plus, we know that a large chunk of hardworking Illinoisans are not covered under this proposal, and we also know there’s no money in Illinois right now. We’ve got to be sure this program succeeds and gets implemented correctly.”
In early March, the U.S. House Committee on Energy and Commerce published a breakdown of benefits for each of the nation’s 435 Congressional Districts. However, since Springfield is split between three districts – Illinois’ 17th, 18th and 19th – encompassing close to half of the state, it’s tough to tell what share of the benefits Springfield will enjoy. Yet it is clear the benefits will be substantial.
Combined figures for the three districts estimate that about 80,500 previously uninsured residents will gain coverage. The House committee also estimates about 3,700 families in the three districts will benefit from bankruptcy protection in the form of limits on out-of-pocket medical expenses of $5,950 for individuals and $11,900 for families. Long-term diseases like cancer can cost more than $100,000 per year, even with health insurance, says a study from the Henry J. Kaiser Family Foundation, so caps on out-of-pocket expenses could help prevent heavy medical debt.
“These reforms ensure that no family will have to face financial ruin because of high health care costs,” the House committee said.
No free lunch
Despite all the new health care law accomplishes, it doesn’t come for free.
Since more people will soon qualify for Medicaid and that program’s reimbursement rates for doctors are scheduled to increase to Medicare levels – sometimes double current Medicaid levels – Illinois will soon see an influx of new enrollees in Medicaid. It is too early to tell how many, but the Congressional Budget Office in Washington, D.C., estimates 16 million new people nationwide will enroll in Medicaid by 2019. The Kaiser Foundation estimates that 812,100 uninsured Illinoisans currently fit the new Medicaid qualification of income below 133 percent of the federal poverty level. Kaiser spokesman Chris Lee says that number includes illegal immigrants, who do not qualify for Medicaid, as well as people wh
o already qualify but aren’t enrolled.
Luckily for the cash-strapped State of Illinois, the federal government will pay 100 percent of the cost of new enrollees in 2014, when the expansion takes effect. That will drop to 90 percent by 2020, and much of the cost will be paid by taxes on high-earning individuals and couples, as well as taxes on investment income, expensive health insurance plans and even indoor tanning.
Stacey Solano, spokeswoman for the Illinois Department of Healthcare and Family Services, which oversees Medicaid in Illinois, says the department will likely have to hire more staff to administer the swelling Medicaid rolls. However, those arrangements have yet to be made, Solano says, so it’s difficult to tell how much money the extra workers will cost the state. For Springfield, more HFS workers likely means more jobs, since HFS bases a large number of its workers here.
Small businesses, comprising more than 70 percent of Sangamon County businesses, will also be affected by the new law, with incentives to provide employees with health insurance and penalties if they don’t. Businesses with 10 or fewer employees and annual average employee wages of less than $25,000 will be eligible for a tax credit of up to 35 percent of employee premiums until 2013. A sliding scale provides smaller benefits for larger companies, and small businesses that purchase insurance through a public health exchange will be eligible for a tax credit of up to 50 percent. There are more than 3,700 Sangamon County businesses with fewer than 10 employees, employing more than 10,000 workers county-wide, according to the Illinois Department of Employment Security. Businesses that fail to provide adequate health insurance – the meaning of which is to be determined later by the government – will pay a tax penalty of $2,000 per employee.
Opposition to the new law has run hot in Illinois, with all of the state’s Republican representatives in Congress voting against the law and many now vowing to repeal it. U.S. Rep. John Shimkus, a Republican, represents Illinois’ 19th congressional district, which covers the northwestern third of Springfield. Shimkus has an entire section on his official Web site devoted to the negative aspects of the new law. Republican Rep. Aaron Schock, representing the 18th district, which covers the southwestern third of Springfield, said in a statement on his official Web site that “a government takeover of health care will raise taxes, ration care and let government bureaucrats make decisions that should be made by families and their doctors.”
There’s so much to this law that it is easy to see why it has spawned so much controversy. But don’t get too excited (or angry, depending on your views) just yet; many aspects of the law don’t take full effect until 2014.
In the meantime, Ed Osman isn’t holding his breath for things to improve.
“Some of that stuff doesn’t take effect for years,” he says. “We’re not really going to know what it all does until it they start implementing it.”
His advice for now?
“Don’t get old. It sucks.”
Contact Patrick Yeagle at firstname.lastname@example.org.