The New Health Care System

I have a piece about Medicare spending today on the Web site of the Center for Public Integrity, a nonpartisan investigative journalism organization. It’s the setup for an investigative series that will look at where Medicare is spending its money, and my piece looks at why we should care. (Answer: because its costs are going up so fast that we’re not going to be able to afford  it.)

It’s very hard to write a story like this without sounding like an anti-Medicare screed. I’m hoping the piece strikes the right balance, and that readers will get the point: Medicare has saved millions of people from hardship, it has to continue, but it can’t go on the way it’s going. Some of the issues are unique to Medicare, but for the most part, spending is rising too much for the same reasons all health care spending is rising too much.

Of course, bringing down spending in the right way — cutting out the fat, without hurting people along the way — is the biggest challenge of our time. The book covers the changes that the new law will make to Medicare (Chapter 9) and some of the experiments that will try to bring down health care costs (Chapter 14), but this piece should tie some of those themes together and explain why we’ll all have to have a grown-up conversation about what we can and can’t afford.

Take a look and let me know what you think. Nicely, of course.

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.

During the August break, I had the chance to give a book talk to an audience at Querencia, my parents’ retirement community in Austin, Texas. It was a valuable chance to hear what seniors are concerned about — especially in Texas, where your typical audience isn’t exactly wild about the law in the first place. There has been a lot of discussion about why seniors are so convinced that the law will be bad for them, even though it gives them new Medicare benefits (Chapter 9: Medicare Changes) and creates stronger regulations to improve the quality of long-term care facilities (Chapter 11: Long-Term Care).

What I found is that there are a lot of valid concerns out there, and it’s not based on the misinformation we hear so much about, like the widely debunked claims that the law creates “death panels” and rationing. Nobody challenged the part of the speech where I shot those claims down. Instead, people at the Querencia audience worried about whether the health care workforce will be ready for the new demands it will face; whether providers can really take any more cuts in Medicare payments; and whether there will be any actual, practicing medical professionals — not just academics — guiding the research on what medical treatments and procedures work the best.

It was a lot easier to answer some questions than others. The whole experience proves that people are willing to listen to the facts of the law, but even when they’re able (mostly) to sort fact from fiction, there are a lot of legitimate questions out there. The administration has plenty of work ahead.

Special thanks to my lovely wife, Elissa Leif, for editing the video through her Web video business, MiniMatters (www.minimatters.tv). And to my sister, Wendy Nather, for shooting the footage in crowded, less-than-ideal circumstances.

Kaiser Health News has a good piece about the new risk pool program for people with pre-existing conditions. So far, it’s getting a lot less business than officials expected. That could be partly because of a lack of publicity, but it’s also clear that the program has a lot of problems. The money may not last as long as it needs to, and people have to be uninsured for six months to be eligible. That rule is supposed to screen out people who don’t need the help, but really — how many people can wait six months for health insurance?

The high-risk pool program was always supposed to be a temporary measure. It would help people who can’t get coverage because of their health, the thinking went, until the broader reforms start in 2014 that will allow everyone to get coverage even if they have health problems. Unfortunately, a lot of people may also see this program as a preview of how well the rest of the reforms will work.

Granted, it’s early — the program just started in July — and probably too early to draw any conclusions. But it will not be good for the reform effort if the program doesn’t pick up momentum in the coming months. If the high-risk pools don’t work well, either because they’re cumbersome or because they don’t have enough money, that’s not exactly going to build confidence in the rest of the law.

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.

A new Web site, Business News Daily, interviewed me for a story on what small businesses should do to get ready for the changes ahead. It covers topics that are in the book, such as the small business tax credit (Chapter 4), the help they could get from the exchanges (Chapter 6) and new taxes that could hit small business owners (Chapter 15). It also looks at newer topics, such as which health plans will get “grandfathered” status and be exempt from some of the new rules.

This has to be an anxious time for small business owners, who must be wondering how much they might pay in new taxes and how much new paperwork they might have. They will certainly see some of that. But some of the smallest businesses will get help paying for coverage, and you can bet that small business lobbyists will try to get that help expanded in future years. And the exchanges do have the potential to give small businesses what they have always needed: larger groups to help share their health risks, and as a result, more stable health insurance costs.

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.