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Preserving Health Care Reform

The Urgent Need for Reform

When the Affordable Care Act (ACA) was signed into law last March, it was an important victory in the long fight to ensure access to quality, affordable health care for all. The case for reform has never been clearer, or more urgent. More than 50 million Americans – roughly one in six – were uninsured in 2009. The number of Americans with employer-provided coverage is shrinking, and for those who do have coverage, premium payments and out-of-pocket costs are skyrocketing. Medical bills are a leading cause of personal bankruptcy filings. And yet, for all that we spend on health care in the United States – more than twice as much, per capita, as most other industrialized nations – we die younger and face higher rates of infant mortality than the citizens of Canada, Japan and most of Europe. This is the unsustainable situation that the health care reform law addressed, and that the enemies of reform are trying to return us to.

What the Reform Law Does

While the law is complex, its key provisions are easy to summarize. First, it reforms the insurance market by eliminating the worst abuses of the current system. The law bars the practice of rescission, in which insurance companies aggressively seek excuses to cancel the policies of patients with cancer and other serious health conditions. It requires that recommended preventative services be covered in full, at no 2011 CAP logoout-of-pocket cost. The law also eliminates lifetime limits on essential health benefits, and will eventually require insurance companies to extend coverage to individuals with pre-existing conditions.

 Second, the law encourages (but does not require) employers to provide coverage. Small employers are eligible for tax credits to make health care benefits more affordable. Large employers that do not provide coverage (or that provide inadequate or unaffordable coverage) will not get a free ride; if their employees are forced to seek subsidized coverage on their own, the employer will be charged a tax penalty. (Currently, the rest of us pick up the tab when employers such as WalMart dump their employees into taxpayer-funded programs like Medicaid.)

Third, the law will extend coverage to most of the currently uninsured. It does so by a combination of means. Young adults (a significant portion of the uninsured) can now remain on a parent’s plan until they turn 26. Low-incomeindividuals with incomes up to 133 percent of the poverty level will be eligible for an expanded Medicaid program. Americans who do not qualify for Medicare or Medicaid and do not have insurance through an employer will be able to buy coverage through a reformed marketplace – insurance “exchanges” – and may receive an income-based subsidy from the federal government for their premiums. With certain exceptions, those who decline coverage will face a tax penalty. (This requirement is probably the most unpopular part of the law. It is important to understand that the most popular parts of the law – such as the banmon exclusions for pre-existing conditions – are only workable if coverage is universal or close to universal. Hence, the expectation that all who can afford coverage carry it.)

Fourth, the law improves the Medicare Part D program to eliminate the “doughnut hole” for seniors’ prescription drug coverage.

Finally, the law establishes a number of pilot programs to improve the quality of care, to strengthen prevention and primary care, and to contain costs.

Immediate Benefits for Millions of Americans

While key provisions of the new law will not take effect until 2014, many important reforms are already in place. The federal government moved quickly to launch a $5 billion reinsurance program to make coverage for pre-Medicare retirees more affordable. More than 2,000 employers and Voluntary Employee Beneficiary Associations (VEBAs) that provide coverage for pre-Medicare retirees (including the VEBA covering retirees from Ford, General Motors and Chrysler) have already been approved for the program.

On Sept. 23, just six months after the ACA was passed, a number of major insurance market reforms took effect (or for existing plans, will take effect with the next plan year.) Some of these provisions include:
 

  • Adult children who do not have employer-sponsored coverage may now stay on their parent’s plan until they turn 26.
  • Insurance companies may no longer discontinue coverage for seriously ill people based on technicalities (“rescission”).
  • Insurers must now cover children with pre-existing conditions.
  • Insurance plans may no longer impose lifetime dollar limits on essential benefits. Annual limits are now regulated, and will be lifted completely in 2014.
  • Insurers are required to spend at least 80 percent of premium dollars (85 percent in the large group market) on medical and wellness services and quality enhancement – not on administrative overhead and executive salaries.
  • All new plans must cover recommended preventive services at no out-of-pocket cost to the patient. By the end of 2010, more than 1.2 million seniors in the Medicare Part D “doughnut hole” had already received $250 rebate checks. Starting in 2011, they will be eligible for a 50 percent discount on many prescriptions.

Long-Term Benefits for American Families

By providing coverage to most Americans, the health care reform bill will eliminate most “uncompensated care,” and as a result, these costs will no longer be passed on to everyone who already has insurance coverage. Through a variety of incentives and pilot programs, the new health care law also seeks to reform provider payment and delivery mechanisms to ensure that patients receive better quality care at lower costs.

The ACA further establishes insurance exchanges (or marketplaces to purchase coverage) in all of the states. It will provide a mechanism for delivering more cost-effective insurance to individuals and small business and, over time, these exchanges may be expanded to cover larger employers. Under the law, insurers will no longer be able to deny coverage to individuals because of a pre-existing condition, or to charge them more because of their health status. When the law is fully implemented, it will extend coverage to 32 million Americans who would otherwise be uninsured.

Dispelling Myths About the Affordable Care Act

From the beginning, conservative opponents of health care reform have been spreading lies that the law would somehow hurt Americans and their families. The lies ran the gamut, from the infamous “death panels” touted by defeated vice presidential nominee Sarah Palin, to viral e- mails warning of an array of new taxes “hidden” in the health reform act.

The facts are the best response. A new website, healthcare.gov, provides accurate and up-to-date information on what the law does – and does not do. Independent watchdog sites such as snopes.com and Factcheck.org can also help put unfounded myths to rest.

Defending the New Health Care Law

Republicans have made it clear that their ultimate goal is to repeal health care reform and return to the status quo, leaving tens of millions of Americans uncovered, forcing tens of millions more to pay ever-rising costs for evershrinking benefits, and putting U.S. employers at a disadvantage in the global economy.

Republicans are not expected to come up with enough votes in the 112th Congress to repeal the health care reform law outright. But they are expected to use a number of strategies to try to derail full implementation of the legislation. For example, they could propose limiting the funding and personnel available to the Internal Revenue Service to provide income-based subsidies under the law. They also plan to use spending bills to try to block federal insurance regulations. In short, the Republican strategy is to dismantle the ACA piece by piece by refusing to fund it and by blocking the issuance of the necessary regulations to implement the law. In the new Congress, the UAW will work to ensure that the health care reform law is fully implemented. This will require a grassroots effort to hold elected officials accountable if they vote to repeal reform or to defund the law’s implementation.