Insurance professionals could help avert trauma, pain and remorse by helping clients construct a Plan B should they carry debt.
Feb. 02--The healthcare industry in South Florida, like the rest of the country, faces huge challenges in the year ahead as major federal reforms kick in, experts told about 700 people at a University of Miami conference on Friday.
"We are at a critical time in health policy," said Mark McClellan, former head of the Centers for Medicare and Medicaid Services. "There are going to be some bumps along the way," especially starting in 11 months, when the biggest changes in the Affordable Care Act kick in.
"Bumps may be understating what we may go through," said Patrick Geraghty, chief executive of Florida Blue, the state's largest health insurer.
They spoke at the conference on the Business of Healthcare Post-Election. The speakers accepted the federal reforms -- often referred to as Obamacare -- as not only inevitable but necessary. As Tom Daschele, a former Democratic U.S. senator from South Dakota, put it, "having 50 million uninsured is just unacceptable."
But the reform act, signed into law in 2010, contains more than 2,000 pages, plus thousands of pages more of enabling regulations -- details that will have major, and perhaps unexpected, impacts on the healthcare industry, which now makes up almost 20 percent of the nation's economy.
In October, insurance exchanges will open for enrollment -- groups that will allow individuals and small businesses to purchase policies with no exclusions for pre-existing conditions. Starting next January, virtually everyone will be required to have insurance, Medicaid will expand in many states, and businesses with more than 50 full-time equivalent employees will be required to provide insurance or pay fines.
"Jan. 1 is a very significant date," said Steven Ulllmann, director of health policy programs at the UM business school. He called reforms "a process" that will change over time.
"The one thing we know is that healthcare reform will be reformed," said Chris Jennings, a Washington health policy advisor for the Clinton administration and three senators.
Karen Ignagni, president of America's Health Insurance Plans, the insurers' trade group, said she had strong ideas about tweaks that could minimize disruption. One arcane, but crucial provision of the law requires that an older person's policy can be no more than three times as expensive as a young person's.
The provision will mean huge increases in the policies of younger persons, to pay for the much higher costs of their elders. Insurers are asking for that policy to be postponed for two years, retaining the present maximum spread of about five to one, so that younger people could sign up for insurance without huge sticker shock.
For example, if a 25-year-old pays $100 and a 60-year-old pays $500, the new rule would hike the younger person's premium to $150 and cut the older person's premium to $450 -- a 50 percent increase for one and a 10 percent decrease for the other.
The thinking of lawmakers was that by lowering ratio, the costs of healthcare would be spread out and shared more equally by the population.
Anne Phelps, a healthcare principal with Ernst & Young, said she favored another change in the law, which now requires that next year a company with the equivalent of 50 employees to provide insurance for anyone working more than 30 hours a week or pay a fine. She thought the threshold should be raised to 32 or 34 hours.
That brought an objection from UM President Donna Shalala, who served as secretary of Health and Human Services during the Clinton administration. She argued that many companies are building part-time worker pools simply to avoid providing insurance, and it made sense for the law to help part-timers.
Shalala also noted that the law is designed to help people who now have "lousy insurance," with such high deductibles or other limits that the people tend to avoid healthcare.
Many speakers noted that the law makes only small steps toward controlling healthcare costs. All agreed that cost containment is necessary to keep healthcare from overwhelming the economy. But that could be difficult.
But a 1997 act sought to limit Medicare payments if the program was losing money -- and every year since, doctors groups have successfully battled cuts to maintain their payment levels.
"The quickest way to clear a room on Capitol Hill," said Ignagni, was to talk about cutting healthcare costs, because that would mean losing jobs. She estimates that over the next decade, Washington needs to cut $1 trillion or $2 trillion out of healthcare spending.
The reform act attempts to reduce cots by creating accountable care organizations, in which groups would join together for coordinated care that many believe would reduce duplicated services and reduce costs. This ACO trend means that many hospitals and other groups are consolidating to form larger organizations.
But Robert Galvin, former chief medical officer of General Electric cited a study of about 20 markets where there has been consolidation of healthcare businesses. With less competition, he said, "prices are up. ... Right now I'd say we're losing that battle."
Summing up one panel discussion, Richard Clarke, former president of the Healthcare Financial Management Association, noted there has been a "shift in focus from acute to non-acute care, from federal to state controls. So I guess you have to say shift happens."
NOTE: An earlier version of this story misspelled the name of Steven Ullmann and gave the wrong numbers in an example on younger and older workers.
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