Big decisions coming with health care reforms

States get more time to work on plans


Key questions:

Will Ohio agree to expand Medicaid, a key part of the plan to expand coverage to uninsured Americans?

Will Ohio set up its own health care insurance exchanges, or leave it up to the federal government? The deadline to submit plans is Nov. 16.

Will federal lawmakers agree to appropriate the funds needed for states to expand coverage to the uninsured?

Will there be enough doctors to handle the increase in patients?

The nation’s controversial health-care reform law will likely move forward after the re-election of President Barack Obama.

Key questions remain, though, even after Tuesday’s election gave the apparent go-ahead to the Patient Protection and Affordable Care Act.

Pockets of state-level resistance may delay or stall the law in some parts of the nation where governors, and in some cases, voters, are resisting enacting some of the key structures.

In Montana and Missouri, voters Tuesday approved legislation blocking the establishment of state-administered health-care exchanges required to set up marketplaces where the uninsured can buy individual coverage at lower rates than currently available. PPACA, though, includes a provision that the federal government can establish and administer exchanges in states that do not set up their own exchanges.

Republican governors in Florida, Texas and other states have publicly refused to sign on for the Medicaid expansion that is considered key to expanding coverage to millions of uninsured Americans and to set up the insurance exchanges.

In Ohio, Gov. John Kasich has not announced a decision on the Medicaid expansion, and Mary Taylor, Ohio’s lieutenant governor and insurance director, is leaning toward letting the federal government handle the establishment and administration of the exchanges, said Chris Brock, communications director for the Ohio Department of Insurance. The deadline for states to notify the federal government about their participation is Nov. 16, Brock said, “and we’ll have more information by then.”

On Friday, Health and Human Services Secretary Kathleen Sebelius announced states would have an additional month — until mid-December — to submit detailed blueprints of their insurance exchange plans. Seventeen states and the District of Columbia are on track to setting up their own exchanges, while 10 have decided not to do so, apparently awaiting the outcome of the presidential election.

Sebelius said states considering a partnership with the federal government to run their exchanges can now have until mid-February to make a decision and submit their blueprints.

Politics can still play a part, though it is unlikely Republicans can repeal the law outright. A divided Congress could still refuse to appropriate funding to implement parts of the law going forward.

And there are practical considerations. There is already a shortage of primary care doctors in the country. Bringing another 30 million or so adults into the system will worsen that shortage, and it may mean that those with new Medicaid coverage may still have to rely on emergency rooms as their main providers, since private practice physicians may choose to refuse or limit the number of Medicaid patients they see.

Some provisions of the law are already in effect, including provisions that let young adults receive coverage through their parents until age 26 and that forbid insurers from refusing coverage to children with pre-existing conditions.

Beginning in 2014, most adults will be required to have health insurance, and businesses with more than 30 workers will be required to provide coverage that meets federal standards for affordability or pay penalties.

Here’s a look at what consumers can expect going forward.

Already insured: Some coverage changes are already in place, and by 2014, others will be complete, including the elimination of lifetime caps on coverage. Premiums and cost-sharing will likely continue to increase, but insurers will no longer be allowed to charge women more for coverage based solely on their gender or deny coverage to adults with pre-existing conditions. New taxes and other funding mechanisms aimed at paying for the law's implementation will kick in, including:

  • Increases in Medicare taxes. Beginning in 2013, singles who earn more than $200,000 and married couples earning more than $250,000 will pay more, both in the form of payroll deductions (an increase of 0.9 percent) and a 3.8 percent surtax on investment income.
  • New limits on flexible spending account (FSA) contributions. In 2013, tax-deductible contributions to FSAs will be capped at $2,500.
  • Changes in tax deductions for medical expenses for adults under 65. Under current guidelines, taxpayers who itemize can claim qualifying medical expenses that add up to more than 7.5 percent of their adjusted income. But next year, those expenses have to total more than 10 percent of adjusted income for adults under 65.

Medicare: In 2011, new provisions for Medicare recipients with Part D prescription coverage went into effect, letting them receive 50 percent discounts on name-brand prescriptions when they hit the coverage gap, or "doughnut hole." Additional discounts will kick in over the next few years until the "doughnut hole" is eliminated by 2020. In addition, last year Medicare recipients started getting free preventive, including annual wellness checks and screenings. The program also implemented steps to help prevent hospital readmissions by better coordinating after-care for seniors.

Currently uninsured: Starting in 2014, most adults who are uninsured will have to get coverage, either through their employer, through Medicaid or by buying it through their state exchange. Most adults who earn up to 400 percent of the federal poverty level will be eligible for subsidies or tax credits to help pay for their premiums if they do not qualify for Medicaid or they cannot get insurance through their jobs. Ohio has not yet taken steps to create an exchange, or market place, but officials say they will likely let the federal government handle that task.

PPACA calls for expanding Medicaid coverage so that adults who earn up to 133 percent of the federal poverty level can get coverage through the state-federal program. The federal government has promised to pick up most of the of the tab for the first several years. Several states, including Texas and Florida, are refusing to sign up for the expansion. Ohio officials have not announced a decision yet.

Medicaid payments are a sore spot for providers, since they are lower than the cost of coverage. Primary care physicians, though, will see Medicaid payments increase to the same level as Medicare payments.

Employers: Starting in 2014, companies with more than 50 full-time employees will be required to provide health insurance that meets federal standards for coverage and affordability or pay penalties. Some small businesses can receive tax breaks for providing coverage to their employees.

Business owners are studying their options, said Chris Ferruso legislative director of National Federation of Independent Business-Ohio. “It’s safe to say that all small business owners are exploring their options,” he said. “Suffice it to say that nothing’s off the table.”

Ferruso said he hopes employers will not eliminate workers so that they will be exempted from providing coverage.

Right now, he said, business owners are waiting for federal officials to release the regulations about what type of coverage they’ll be required to offer so they can start planning and budgeting. So far, few details have been released, but now that the election’s been decided, most experts expect the new rules and regulations to be released.

Many employers are unhappy about the new requirements, and worried the cost increases will harm their businesses. “The concerns the business community had about health care reform are still there,” said Chris Kershner, vice president of public policy and economic development with the Dayton Area Chamber of Commerce. “The cost concerns, the government telling them how to run their private business. Those concerns are still there.”

But some favor the legislation.

Bob Mendenhall, owner of Blind Bob’s, a tavern in Dayton’s Oregon District, supported PPACA from the start. The tax breaks are a nice incentive to offer coverage to his employees, he said, “but in terms of pushing us over the line, I think we probably would have made the decision any way.” The exchanges, he said, should make buying coverage more affordable, though.

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