The New Health Care System

The new law is going to try a lot of ways to cut health care spending, since there’s a lot of waste and that is part of the reason why health insurance is so ridiculously expensive. The book talks about these experiments in Chapter 14, “How They’ll Cut Costs.” But we’re already seeing how quickly the most promising ideas can get killed by political pressure.

The Boston Globe looks at what happened when Massachusetts political leaders proposed changing the way doctors and hospitals get paid (h/t Shots blog). Instead of getting a payment every time they do a test or procedure, they would get a single payment for each patient that would cover all of the patient’s care for a year. That’s called a “global payment,” and it is similar to some of the ideas that will be tried out under the new law so doctors and hospitals don’t give us more medical care than we need.

What happened, as you might have guessed, is that the idea got completely bogged down in political disagreements. People are arguing over how much freedom patients should still have to choose the doctors and hospitals they want, how much power a new board should have to set the payments, and how much money hospitals should get to help them improve their care. So the idea is off for the rest of this year.

It’s not a good sign. Massachusetts already blazed a trail for the rest of the nation by expanding health coverage with a system that’s something like the new law. But it never got its costs under control, and now its attempts to do that are not going well.

This may be the biggest long-term challenge of the new law. It will make a lot of changes to help people get health coverage, but if it doesn’t bring down health care spending as well, our coverage will just keep getting more and more expensive. The experiments in the coming years will have to find the right way to do that, without hurting patients or putting doctors and hospitals out of business. But it won’t help anybody if we keep overspending on health care just because no one could figure out how to fight through the political pressure.

Today is the day when the temporary high-risk pool program begins for people with pre-existing conditions. If you have a pre-existing condition and haven’t been able to get coverage, this program might help you until 2014, when health insurance companies won’t be able to turn you down anymore. But depending on what state you’re in, it might be a while before your coverage can actually begin.

The new HealthCare.gov Web site has an interactive map where you can find out when your state’s program begins and when you can apply for coverage. Not all of the states’ programs are open for business as of today. Some states, like Wisconsin, New Mexico, and Oregon, are open for business today. That’s also true in the 19 states — including Texas, Virginia, and Florida — that are letting the federal government run their programs for them.

However, some of the states that are running their own risk pools aren’t ready to enroll people just yet. Pennsylvania, for example, starts taking applications on July 12. Iowa will start on July 15. Other states, including New York, California, Washington, and Colorado, will wait until August to start their programs. Illinois won’t be ready until mid-August.

If you need coverage and haven’t been able to get it through private insurance for at least six months, check out the interactive map to find out when your state program will begin and how to apply.

There is a mistake in the book that I caught just a bit too late to fix it. In Chapter 5, “What Employers Have to Do,” there is a discussion of “free choice vouchers” (page 64). Starting in 2014, if your employer’s health coverage would cost more than 8 percent of your annual income, you will be able to use your employer’s money to get cheaper coverage through one of the new health insurance exchanges. (There is also some discussion of this rule in Chapter 6, “The New Health Insurance Exchanges.”)

The book says you can do that if your workplace coverage would cost more than 8 percent, but less than 9.5 percent, of your annual income. The upper limit is actually 9.8 percent. If we do a second edition of the book at some point, we’ll fix that part.

The new federal Web site that is supposed to help you look for health coverage options has just gone live. It’s called HealthCare.gov, and it is run by the Department of Health and Human Services. You can find it at — guess where? — www.healthcare.gov.

Under the new law, HHS was supposed to set up this Web site by July 1 as a temporary measure to help people find health coverage in their area. In the book, this is covered in Chapter 8 (“While You’re Waiting …”), page 99. But the book doesn’t have the Web address, because it didn’t exist yet when we went to press.

At a quick glance, the site looks pretty slick, with easy-to-understand options and questions to guide you to the right choices. You can look up health insurance plans in your area, link to your state’s Medicaid Web site (which may have a lot more jargon, unfortunately), and even find out if there’s a community health center than can help you if you need low-cost medical care.

However, don’t expect too much. The site is clearly meant to give you basic information on your coverage choices. It’s not the “Expedia of health care” that the new health insurance exchanges are supposed to be when they begin in 2014. For example, you won’t find pricing information on this site yet, although HHS is trying to collect it so it can be posted in October. It’s also possible that this site won’t have the complete list of plans in your area. I just tried to look up my family’s own individual insurance plan, a perfectly good CareFirst plan in Silver Spring, Maryland. The site listed three CareFirst options, but not my plan.

Still, it’s no small accomplishment that HHS was able to get even a basic site up and running by the deadline. It is bound to improve over time. And it can be a good starting point for your research if you need to find health coverage quickly.

If you use it, though, your best bet is to start with this site and then do more research on your own. You’ll have to do that anyway, since the information on your local health insurance plans will be very limited. Start with what you see on the site, and if you see a promising health plan, go to that insurance company’s Web site for more information. And while you’re there, look for other options they may have, because there may be more than the ones listed on the HHS site.

And remember, most of the new protections you are supposed to get under the law have not started yet. Some will start in September, while others will not begin until 2014. If you can hold out until Sept. 23, you probably will have an easier time getting accepted for coverage under some of the new rules. But the biggest changes, the ones that might really make the system work better, will not come together until 2014.

Next month, there will be a new place to go if you have a pre-existing condition and can’t get health insurance because of it. A new high-risk pool program is set to begin on July 1, offering health coverage specifically for people who have been turned down by other plans because of their health. It’s a temporary solution that is supposed to help people until 2014, when health insurance companies won’t be able to reject you for pre-existing conditions at all.

This program is covered in the book (Chapter 8, “While You’re Waiting …”), and I’ll post a link where you can get more information after it launches. It could be a big help to you if you are struggling to find coverage just when you need it the most. But there are some more issues that you should know about now that it’s about to start.

– It’s only for people who have been unable to get health insurance for six months. Under the law, you have to have been uninsured for six months to qualify, because the point of the program is to help people who don’t have any options now. This New York Times piece explains it well.

– It’s separate from the high-risk pools many states already have, and if you’re already in one of those, you may be locked out of the new program. Again, this is because the program is meant for people who don’t have any options now. But it will be a problem in states like New Mexico, where a lot of people in the existing high-risk pool will pay more than they would in the new one. And it’s too bad for people in the 35 states that already have high-risk pools, because:

– The premiums should be better than those in the existing high-risk pools. They have to be based on the rates for an average population, which is not true of the existing state high-risk pools. So they may be an improvement over the current risk pools, many of which are priced out of many people’s reach. However, older people can be charged as much as four times as much as younger people.

– Most of the new pools will be run by the states, but at least 19 will be run by the federal government. This is because the law allows states to choose between setting up the new pools themselves and letting the Department of Health and Human Services do it for them. As of today, 29 states and the District of Columbia have chosen to operate their own high-risk pools, but 19 have punted to HHS. You can check your state’s status through this chart from the National Conference of State Legislatures.

– It could run out of money. Congress gave the program $5 billion in funding, which has to last from now until 2014, when everyone has to be accepted for health insurance even if they have pre-existing conditions. But it is, by definition, expensive to cover people with health problems, and experts don’t think $5 billion is enough to go very far. So HHS will have to use some creative tactics to make the money last.

The Obama administration put out new federal rules today to explain how the first new consumer protections will work. In doing so, they added some details to one protection that is pretty vague in the law: new restrictions on how much your health plan can limit your benefits in any given year.

Right now, your health insurance company can put a cap on how much they’ll pay in benefits each year. That’s a problem if you get an expensive illness, like cancer, that might cause your medical expenses to go way up in one year because of all the treatment costs. So the law says those annual payment limits will be restricted until 2014, and then they will be banned completely.

But the law doesn’t say how much the limits will be restricted, so there are no details in the book (Chapter 2, “Fixing the Insurance Market,” and Chapter 8, “While You’re Waiting … “). The new rules, however, explain how it will be done. The plan is to ratchet the limits upwards each year, gradually phasing them out.

Starting on Sept. 23 this year, no plan will be able to limit your benefits to less than $750,000 a year. On Sept. 23, 2011, those limits will have to be raised to $1.25 million. As of Sept. 23, 2012, the limits will go up to $2 million. And starting on Jan. 1, 2014, no health plan that is either issued or renewed after that date will be able to limit your annual benefits at all. (This will be true for all health plans except individual health insurance that is “grandfathered,” meaning that it stays pretty much the way it is and is therefore exempt from some of the new rules.)

The rest of the rules cover other consumer protections that start Sept. 23. As of that date, most health plans will have to cover your children even if they have pre-existing conditions; they won’t be able to cancel your coverage if you get sick; and they won’t be able to limit the benefits they’ll pay over your lifetime. They will also have to let you see the primary care physician or pediatrician of your choice, let you go directly to an OB-GYN, and pay for your emergency room visit even if you had to go outside the network.

You can read the rules here, if you dare.

There’s a new federal rule that spells out what changes your health plan can make, and what changes it can’t make, if it wants to be exempt from some of the requirements of the new law. The Obama administration says the rule proves that you won’t be forced to switch health plans — that “if you like what you have, you can keep it.” The critics say it proves the opposite — that a lot of health plans will be forced to change.

The bottom line is, yes, some of the biggest protections in the new law will apply to all health plans, even the ones that already existed before the law. There are others that will not apply if your health plan stays pretty much the way it was before the law. If it stays the same, it will be considered a “grandfathered” health plan. If it changes its coverage too much, it will lose its “grandfathered” status and other benefits will kick in.

Honestly, though, you’ll get some of the biggest protections either way. The other protections you would get if your plan loses its “grandfathered” status are significant, but it’s not clear that, in the short term, they would make a huge difference in the costs of your plan — at least compared to the new protections you’ll get anyway.

For example, even if your health plan doesn’t change at all, it will have to stop putting lifetime limits on your benefits as of Sept. 23. It will also have to allow young adults to stay on their parents’ health plan until they turn 26 — which a lot of insurers have started doing early. And if you have individual coverage, as of Sept. 23, it will no longer be able to cancel your coverage if you get sick. (These reforms are discussed in Chapter 2 of the book, “Fixing the Insurance Market,” and Chapter 8, “While You’re Waiting … “)

The main early benefits that would kick in only if your health plan loses its “grandfathered” status, according to the new rule, are preventive care — at no cost to you — and direct access to OB-GYNs and pediatricians without having to get permission from your plan. Those will be welcome benefits for most people, but it’s not clear that they’re as big a deal as the protections even the “grandfathered” plans have to have.

Either way, all of this talk about “if you like what you have, you can keep it” is probably a bit exaggerated. The new protections may or may not raise costs — we’ll know more once they kick in — but they’re not going to force you to switch to a health plan you don’t like, which is what most people were worried about.

You can read the rule here, but it’s very dense and it may not be the first thing you’d want to read. Instead, you might want to read the administration’s fact sheet and Q&A first — with the understanding that they’re meant to put the rule in the best possible light — and then look at the rule to answer any questions you still have.

This is the Web site of The New Health Care System: Everything You Need to Know, the new consumer guide to the health care reform law. It will be released on July 20 by St. Martins Griffin/Thomas Dunne Books. It walks you through the different parts of the law, gives you background on why Congress did what it did, and helps you figure out how it might affect you based on your situation.

This Web site will be my way of keeping the book as up to date as possible, since some of the new programs are already starting and new details are being added all the time. I will update this blog as often as possible with updates on what’s happening with the law, what new rules are coming out, what’s about to kick in, and any new information that might add to what’s in the book.

Thanks for visiting, and please check back whenever you can.