Health-care changes are arriving - slowly

Ken Weinstein plans to offer health insurance to four more of his employees this year, three at a real estate business and one at the Trolley Car Diner in Mount Airy.

In Lower Merion, Chris Vanni, 22 and just out of college, is now able to stay on his family's insurance at no extra cost. Yet Christine Rowe, who lives in Lansdale, is still struggling to find private insurance for her 8-year-old son, who has hemophilia.

These three are among the millions of Americans already exploring realities of the health-care overhaul, provisions likely to remain in place even as lawmakers threaten to repeal or defund it. Several key measures began taking effect for insurance plans written or renewed starting in September. More are scheduled for 2011, some benefiting consumers directly, others affecting insurance companies in various ways.

A judge in Virginia ruled last month that a central part of the law enacted in March - the mandate that nearly everyone buy insurance in 2014 - was unconstitutional. Two federal judges have disagreed, and the matter is expected to reach the Supreme Court. But the consumer protections already in progress are less controversial.

"Even people who may be opposed to the law overall, when asked about these particular provisions, they tend to be supportive," said Jennifer Tolbert, a health policy expert at the Kaiser Family Foundation.

Among them is a tax credit, beginning with the 2010 return, for small businesses that offer insurance to employees. The credit is available to businesses whose employees make less than $50,000 on average, and it is worth up to 35 percent of what the employer spends on insurance.

Weinstein said that he currently insured two employees - including himself - and that the tax credit would help him add four managers to the plan. He has 55 full- and part-time workers, mostly at the diner, and said he would have to raise menu prices to cover more of them.

"We need to offer small businesses like mine an incentive to insure more people," he said, adding that premiums had risen 15 to 20 percent a year. The legislation, he said, is "a move in the right direction."

The law also allows young adults to remain covered by their family's plans up to age 26. As Chris Vanni approached college graduation last year, his father, Cigus, researched individual plans and found they would cost at least $600 per month.

The father said he would have paid for it, but the ability to keep his son on the family plan was "an enormous relief."

Other elements of the health-care law are designed to protect people with preexisting conditions, both adults and children, who might otherwise be denied coverage. So far, however, these programs are not working exactly as planned.

For "high-risk" adults, the states and the federal government are combining to provide insurance as a stopgap until the broader mandate takes effect in 2014. Documentation that insurance was or likely would be denied because of a long list of preexisting conditions is required, and the beneficiary must be a citizen or U.S. national.

Most of the states that created high-risk pools with federal money are seeing lower-than-expected enrollment. New Jersey is one of them.

Yet Pennsylvania's PA Fair Care program could max out this year. PA Fair Care has lower premiums than do most other states: $283 a month plus co-payments and other fees.

Pennsylvania's federally funded program started in August and was funded to support a projected 3,500 adults with preexisting conditions in its first year. As of Dec. 1, it covered 2,046.

Insurance Department spokeswoman Melissa Fox said Harrisburg might have to begin a waiting list if applications continued at a similar pace, depending on the cost of care for enrollees.

In New Jersey, just 223 people had enrolled by the end of November, far fewer than the 21,000 projected to be eligible. Premiums for NJ Protect range from $219 to $790 per month, depending on age and benefits packages.

Although the prices at the high end of that range probably account for some of the low enrollment, other factors are likely at play. State law in Trenton, but not Harrisburg, for example, already required certain coverage for sick people.

The federal overhaul handles children with chronic conditions differently. Group and new individual insurance plans are mandated to cover them beginning with policies that were written or renewed on or after Sept. 23, no stopgap needed.

Yet Christine Rowe, the woman in Lansdale, said she was having difficulty. Her husband is self-employed and has private insurance that covers the couple and their daughter. Alex, the 8-year-old boy with hemophilia, has been covered by Medicaid since before the new law was passed.

When the new provision for children with preexisting conditions took effect, Rowe started calling private insurers to ask about a plan for the whole family. The family did not need "a handout," said Rowe, who was also seeking more flexibility with her son's doctors than was available from Medicaid.

But after mentioning hemophilia - a condition that can require treatments costing thousands of dollars a month - she never hears back, she said.

"I swear, I think their computers all shut down, and bells and whistles went off," Rowe said.

Two changes coming in 2011 are aimed at reining in insurance premiums.

One, which still requires final regulatory approval, would mandate that insurers disclose the reasons for any premium increase greater than 10 percent. The disclosures would be made on their websites and to federal regulators, starting July 1.

Last year, insurers across the country made headlines for dramatic increases, particularly for plans that individuals buy directly from the insurer instead of through an employer.

In California, for example, Anthem Blue Cross raised the ire of consumers and politicians after proposing an increase of 39 percent. It later found mathematical errors and recanted.

In New Jersey, the cost of managed-care plans for a small business of six adults and their dependents as of January 2010 increased between 18 percent and 28 percent, depending on the carrier.

Regulators may use the new disclosures to deny increases deemed "excessive" or to decide which insurers can sell their products in insurance exchanges to be set up in the coming years.

In another change, insurers will be required to spend a certain amount of every premium dollar - 80 percent for individual and small group plans and 85 percent for large group plans - on medical care, instead of administrative costs and salaries.

Starting next year, they will have to provide rebates to policyholders if they do not meet those benchmarks.

Mark Pauly, a health economist at the University of Pennsylvania's Wharton School, said that requirement could reduce competition by forcing smaller insurers to stop selling in the individual market, where the standard will be hardest to meet.

As the Obama administration introduces various provisions of the bill, Congress is gearing up for heated arguments fueled by newly elected Republicans who campaigned on a promise to "repeal and replace."

One battleground could be the $20 billion still needed to implement the overhaul.

Come 2014, everyone will be required to attach proof of health insurance to tax filings. The IRS will collect and process those forms. Starting in 2016, it will levy fines on the uninsured.

The agency needs up to $10 billion to put that system in place, and the money has not been allocated, according to a Congressional Budget Office report. The Department of Health and Human Services needs a similar amount to make changes to the programs it oversees, including Medicare and Medicaid.

The agencies need that money for the "bureaucratic legwork" of putting the law into action, said Robert I. Field, a professor of law and health management and policy at Drexel University. If Republicans block it, "that will force Democrats to fight back because it will jeopardize the whole law," he said.

The House will spend considerable time on hearings about the health-care bill, but the outcome could be minimal, said Joseph Antos, a health policy economist at the American Enterprise Institute, a conservative think tank. And final decisions will require negotiation with Democrats leading the Senate.

"You can slow it down," Antos said. "You can't stop it."

One thing that might halt implementation is a court injunction. A judge in a Virginia case challenging the law ruled last month that the mandate requiring people to buy insurance is unconstitutional, but he denied a request to block implementation. The case is likely headed for the Supreme Court. A separate 20-state case is being heard in Florida.

The possibility of an injunction, though unlikely, is "a real wild card," Field said. "It would just take one judge to issue an injunction and throw sand in the gears."

But certain things - such as having a 22-year-old on the family insurance plan - are probably here to stay.

The Affordable Care Act, also known as the federal health-care overhaul, includes more than 50 major provisions that will kick in at different times for different people and organizations.

Key provisions this year

Some of the parts that are taking effect around now:

Medicare co-payments for certain preventive services for seniors, such as colonoscopies and annual wellness visits, will be eliminated. Effective Jan. 1, 2011.

Seniors who reach the "doughnut hole" coverage gap will receive a 50 percent discount when buying brand-name prescriptions covered by Medicare Part D. Effective Jan. 1, 2011, with additional savings closing the gap by 2020.

Insurance companies will be prohibited from imposing lifetime caps on certain major benefits such as hospital stays. Effective for health-plan years beginning on or after Sept. 23, 2010.

Young adults will be allowed to stay on their parents' plan until they turn 26 years old (existing group plans are an exception if the young adult is offered insurance at work). Effective for health-plan years beginning on or after Sept. 23, 2010.

New rules are intended to prevent insurance companies from denying coverage because of a preexisting condition to children younger than 19. Effective for health-plan years beginning on or after Sept. 23, 2010 (for new plans and current group plans).

Small businesses are eligible for tax credits to help them provide insurance benefits to workers. The first phase provides a credit worth up to 35 percent of the employer's contribution to the employees' health insurance; small nonprofits may receive up to a 25 percent credit. Effective now (for 2010 tax year).

New coverage options are available for adults with preexisting conditions who have been uninsured for at least six months under plans that vary by state. Effective beginning last summer in Pennsylvania and New Jersey.

For more information

The devil is in the details. They are organized in various ways at www.healthcare.gov and http://healthreform.kff.orgEndText