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News September 2013

Washington Watch

Early Positive Results of Obamacare Enactment Enumerated while 'Defunding Efforts' Continue and Enrollment Startup Just a Few Weeks Away

By Alan M. Schlein

According to the Obama administration’s numbers, the law has provided 54 million Americans free access to preventive services like check-ups and mammograms. More than six million seniors have saved more than six billion dollars on their prescriptions and nearly 13 million consumers have received rebates from insurance companies that had overcharged them, totaling more than one billion dollars.

As Congress prepares to negotiate the federal budget for the fiscal year that starts Oct. 1, dozens of conservative Republican House members and U.S. Senators are pushing their leaders to use the threat of a government shutdown as a way to kill the president’s landmark health care law.

There have already been 40 unsuccessful votes to repeal or undermine Obamacare in the Republican-controlled House of Representatives. Several lawmakers have suggested passing government-funding legislation without any money for implementing the president’s health care initiative. But the fact is, the spending is mandatory.

The strategy to “defund” Obamacare has led to a nasty name-calling split between Tea Party conservatives and older, more moderate Republicans – largely among generational lines – fueling a battle over stopping the health care law before major portions take effect January 1. October 1 is the start of the initial sign-up period of the state-run online insurance exchanges.

The more moderates in Congress –  many of whom remember the government shutdown in 1995 –  worry that if Congress fails to pass a spending bill by Sept. 30, Republicans and not President Obama will be blamed for a shutdown. Time, once again, is not on Congress’s side. The House returns from its August recess Sept. 9, just nine legislative days before the government runs out of money.

It’s not just the level of funding, or the desire to continue to slice away at Obamacare, that complicates the Capitol Hill debate. Republicans and Democrats on both sides of the aisle want to replace the automatic spending cuts known as “the sequester.”

If Congress fails to approve new spending authority by the end of September, government agencies would shut down as the new fiscal year starts on October 1. That would not only shut down the government but it could also mean no Social Security, Medicare or Medicaid payments as well as no money for the active duty military.

Politically, the question, from the Democrat’s point of view, is do these Tea Party Republicans want their number one priority to be making sure that millions of people do not get the health care they are expecting?

 

What the Law Is Already Doing

The most significant parts of the Affordable Care Act, take effect January 1st. Parts of the president’s health care plan are already in place:

  • Young adults can stay on their parents’ health plans until they’re 26.
  • The Patient’s Bill of Rights which includes a ban on lifetime limits on policies. This means that if you get sick and need a major operation such as a heart bypass, and you’ve already spent $2 million, your insurance will no longer run out, providing financial relief and peace of mind.
  • The law also has given women easier access to birth control and has provided men and women other forms of preventive care.
  • Seniors on Medicare now get better coverage for their prescription drugs.

According to the Obama administration’s numbers, the law has provided 54 million Americans free access to preventive services like check-ups and mammograms. More than six million seniors have saved more than six billion dollars on their prescriptions and nearly 13 million consumers have received rebates from insurance companies that had overcharged them, totaling more than one billion dollars.

In addition, the law requires insurance companies to spend a certain amount, either 80 or 85 cents of every dollar, on actual medical expenses rather than on administrative expenses or profit, which is known as the medical loss ratio.

 

What’s Coming Next

If and when the rest of the health law goes into effect, in January 2014, three other key requirements are on tap.

First, is the controversial requirement that everyone either will have health insurance or pay a fine. At the same time, insurance companies can no longer either exclude or charge more for people who have pre-existing health conditions, and obviously those two things go together. The pre-existing provision is one of the most popular parts of the new law. Those two items were coupled together because the insurance companies worried that if they were going to have to cover sick people, they also needed to have more healthy people with insurance.

The other big part of the law is the expansion of Medicaid. Roughly 17 million people were going to be covered by this expansion of Medicaid – mostly this would be able-bodied adults with income under about 133 percent of poverty, or approximately $15,000.

But the Supreme Court changed that slightly, saying that states had the option whether or not to provide Medicaid. So far, 22 states and the District of Columbia plan to expand Medicaid eligibility, while 19 states including Texas, Florida and Pennsylvania will not and the remaining states have not yet made a decision.

(See http://www.avalerehealth.net/news/spotlight/20130514_Medicaid_Expansion.pdf for the most up-to-date list).

One of the big changes next January will be the creation of the exchanges – the places where individuals and small businesses will go to purchase insurance. Most of these will be online exchanges. There's been a lot of talk about whether the states or the federal government will run the exchanges or whether it will be a federal-state partnership. But it won’t really matter as long as you have options once you get to the exchange.

What will matter is what happens once you get to the exchanges. There are going to be people known as navigators, who are supposed to help people sort out how to use the exchanges and there will, in fact, be differences between the different exchanges.

The nonpartisan Congressional Budget Office estimated recently that roughly seven million people will purchase insurance on the exchanges during the first six-month open enrollment period. If too many of them are older or unhealthy, then monthly premiums will likely skyrocket. If that occurs, that high profile part of the law will be viewed as a failure.

"The law would not be judged a success if the exchanges fail," Drew Altman, president and chief executive of the Kaiser Family Foundation, a private, non-profit health care research organization, told CNN recently. According to Altman, success will require the government to make sure the exchanges are up and running on time, that early glitches are few and relatively minor, and that people can enroll at an affordable price.

The administration figures roughly 40% of exchange consumers – 2.7 million if the CBO's estimates are correct –need to be between the ages of 18 and 35. Younger and healthier premium pools will keep overall costs lower and ease the financial hit to the program when it does pay benefits.

Through publicly available data, administration officials believe they have a pretty good idea of the target audience. In the administration's calculus, the population of younger, uninsured Americans skews slightly more toward African American and Hispanic males living in urban areas. A third of that population lives in California, Florida or Texas, and the administration believes many will qualify for government subsidies to purchase insurance.

As the fall rollout moves closer, other real threats have caused worries for the Obama administration and its supporters. Without the strong participation of young people, the health care law could fail. Another one to watch could be the issues of data security and privacy.

A few other issues are also components that could change the future of the president’s health care initiative.

  • The White House recently announced that it is postponing a key part of the law until 2015. The delay denies Republicans powerful anecdotes to use against Democrats in the election — about small businesses crushed by higher costs and regulations. But it also hands the GOP ammunition to attack Obamacare as an albatross that conservatives should go to the polls to undo.
  • Polls continue to show that Americans are seriously confused about the health care law. A recent Kaiser Family Foundation poll in April showed 49 percent of those surveyed didn’t know how Obamacare would affect them and roughly 40 percent were unaware that the law was being carried out. Credit the Republicans’ efforts to kill the law over the past few years with those large numbers.
  • In another setback, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care. The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family. But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all on some costs, in 2014. The discovery is likely to fuel continuing Republican efforts this fall to discredit the president’s health care law.

 

(Also contributing to this story were: Washington Post, National Public Radio, New York Times,
Politico, Reuters, CNN and US News and World Report.)

Have a question about how The Affordable Care Act may affect you or your family, any part of the plan that seems confusing or not yet fully explained, or what you need to do – or not do? Send your questions to: " This email address is being protected from spambots. You need JavaScript enabled to view it. " for possible inclusion in the next two months’ Washington Watch columns. There is no need to identify yourself, but do include your age and what state you live in.

Alan Schlein runs DeadlineOnline.com, an internet training and consulting firm. He is the author of the bestselling “Find It Online” books.

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