The New Health Care System

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.

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.

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.

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.