The New Health Care System

So what happens now? Can the Republicans in the House of Representatives repeal the new health care law? Or just cut off all the funds so none of it happens? Is the book worthless now?

Here’s a quick guide to what they can do and can’t do:

1. They can’t repeal the law. They will try, just to say they did, and repeal might even pass the House. But it won’t get through the Senate, which is still controlled by the Democrats. Even if it did, President Obama would veto the repeal bill, and the Republicans don’t have the votes to override him.
2. They can withhold funds from the law. Not all of it, because a lot of it is automatic, but there are significant things that do require Congress to approve the funds from year to year. The agencies that are implementing the law will need money, for example, and House Republicans don’t have to give it to them. The House can also say, for example, that no money can be spent to enforce the requirement for everyone to get health insurance. And it can say that any money that hasn’t already been spent on other controversial things — like the research on what treatments work best — has to be given back.
3. Even then, however, those restrictions are just a starting point. All of the funding that takes place each year must pass both the House and Senate, and Obama has to sign it into law. For all of these steps to happen, all three parties have to reach some kind of agreement. So House Republicans won’t be able to cut off all the funding they’d like. But Obama and Senate Democrats won’t be able to get all the funding they’d like, either.

At the end of the day, the law isn’t just going to disappear. But some very significant initiatives in the law probably won’t get the funding they need to succeed. This is classic Congress: Pass a bunch of new programs, and then skimp on the funding. This happens even when there isn’t as huge a partisan fight as we’re seeing over the health care law.

So no, the book isn’t worthless. You need to understand what’s in the law so you can follow what happens next. Which means — you guessed it — the book is more important than ever!

Today is the day when several of the earliest, and most popular, patient protections go into effect. Health insurers won’t be able to turn down children with pre-existing conditions, and young adults up to age 26 will be able to stay on their parents’ health plans. If you get health insurance on your own, they won’t be able to limit how much they’ll pay in benefits over your lifetime, and they won’t be able to limit your annual benefits to less than $750,000 a year. And they won’t be able to cancel your coverage unless you have committed fraud or haven’t paid your premiums. (The complete list is in Chapter 8, “While You’re Waiting … “)

So what’s the catch? For one thing, a lot of people won’t see the changes right away. For most of them, you might have to wait until your new health plan year begins. The other issue, unfortunately, is that some health insurers have been raising their premiums and blaming it on the law. Health and Human Services Secretary Kathleen Sebelius recently scolded the health insurance companies for doing this, saying these early protections shouldn’t be that expensive to cover.

In the book, I focused a lot on what would happen to health insurance premiums in the long term. The Congressional Budget Office — which does all the cost estimates for the legislation Congress passes — decided the law shouldn’t raise premiums that much, especially since it would be expanding coverage at the same time and bringing in healthy people to stabilize the prices. Unfortunately, that prediction looked at the long term, not the short term. Right now, there are some new benefits that everyone will have to have, and there is no expansion of coverage to cover those costs.

Still, the administration and top Democrats in Congress insist that these are not expensive protections. Two of the Senate’s leading Democrats on health care — Max Baucus of Montana and Jay Rockefeller of West Virginia — warned insurers that they should explain why their estimates of the costs are so much higher than everyone else’s. These early protections, they said, shouldn’t raise premiums more than 1 to 2 percent.

Most likely, what’s happening is that health insurance premiums are going up anyway — because they always do — and the law might be raising them a bit more. So the insurers are putting as much blame as they can on the law, and that’s the message everyone hears. Still, if you were hoping the law would give you some relief from rising premiums, this will be a disappointment. The law will give you more secure coverage without so many gaps, but it’s hard to do that and bring costs down at the same time.

Now that Virginia gets to move ahead with its lawsuit against the health care law, and Missouri voters have declared the right to ignore the requirement for everyone to get health insurance, it’s clear that the backlash against the health care law is in full force. So it’s a good time for some background on where all of this might be headed.

The Alliance for Health Reform, a nonpartisan group that provides education and information about health care reform, has put together a background paper about the state lawsuits that explains the different legal actions and summarizes what legal experts have said about them.

The bottom line, according to the group, is that “many constitutional experts and health reform supporters believe the challenge movement is largely symbolic and unlikely to succeed in court.” And some don’t think the Supreme Court would agree to take up any of the challenges, based on its past practices. But the critics of the law raise just enough doubts, based on more recent high court recent rulings, that it’s hard to write off completely the idea that the Supreme Court could get involved.

As for the Missouri vote, the consensus is that it’s symbolic, since federal law generally trumps state law. It’s not really surprising, either. The requirement to buy health insurance was always going to be the least popular part of the law. If Congress didn’t need it to keep all of the popular parts — like insurance for people with pre-existing conditions — from making coverage too expensive, it wouldn’t have been in the law at all. (See Chapter 3, “Everyone Has to Have Health Coverage.”)

Politically, though, it’s not good news for the Obama administration. “Federal law trumps state law” is not a good talking point for them. Since there will be similar challenges in Arizona and Oklahoma later this year, the administration will have plenty of work ahead reminding the public why the requirement is in the law in the first place.

The new federal rules are out today on the beefed-up appeal rights you’ll have under the law. The highlight is the right to appeal to an outside review board, with independent medical experts chosen by your state, when your health plan has refused to pay for something. This part of the law is covered in Chapter 2 of the book, “Fixing the Insurance Market,” and Chapter 8, “While You’re Waiting … ”

You can already appeal to the plan itself, but the law gives people in every state that extra level of appeal, which currently is available in some states but not others. It’s supposed to be available for new health plans that start after Sept. 23, but in reality, it may take a bit longer for the rules to reach everybody. The states that already offer external review have until July 1, 2011, to bring their standards up to the level recommended by the National Association of Insurance Commissioners.

In the states that don’t require external reviews now, health plans will have to offer appeals that meet a new set of federal standards. For those who think this is more proof that the federal government can’t wait to throw its weight around, there is a line in the rule that hints at the real story: The feds would just as soon let the states handle most of this. “The Departments prefer having States take the lead role in regulating health insurance issuers,” the rule says, “with Federal enforcement only as a fallback measure.”

You can read the rule here, or the fact sheet here.

Today is the day. The New Health Care System: Everything You Need to Know, published by St. Martins Griffin/Thomas Dunne Books, should be in the bookstores now. You can buy it there, or if you’d rather do it online, move your cursor over the cover image on this site and click the “Buy” icon.  You’ll get a list of online vendors who are being kind enough to sell the book.

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.