Improvements sought for health insurance law

While the future of the 2010 health care law stabilized with the re-election of President Obama, both Democrats and Republicans say now is the time for them to come together to fix it.

"They need to actually create some solutions together," said Don Berwick, former administrator of the Centers for Medicare and Medicaid Services. "I've had a few conversations with people from both sides; everyone resonates with the idea that something needs to happen."

Until Tuesday, when Obama's future was determined, Republicans opposed to the law waited for a change in administrations that would allow them to repeal the law. That will not happen now with a Democrat in the White House for the next four years. Repeal is no longer an option, and House Speaker John Boehner, R-Ohio, called it the law of the land.

But changes are imminent. "It's pretty clear to me that the [law] will not end up the way it is now," said Doug Holtz-Eakin, president of the American Action Forum and former economic policy adviser to 2008 Republican presidential nominee John McCain.

The analysts do agree on one thing, even if they don't necessarily agree on how to go about it: Cutting costs through provider payments, rather than through the health care system itself, won't cause health care costs to stabilize.

"I think with the lack of continuity in care and excess costs to the system, the very best way to address the problem is to improve care," Berwick said.

That's partially built into the law with a move toward coordinated care in Medicare, as well as charging hospitals if a Medicare patient is readmitted for preventable issues. But more must come from prevention, experts say.

"We're not going to cut entitlements by continuing to cut payment rates," said Ken Thorpe, chair of the department of health policy and management at Emory University in Atlanta.

Instead, he said, lower costs must come from encouraging people to take better care of themselves through proven diabetes-management and weight-loss programs, as well as improved coordination of care inside medical organizations so everyone on a team knows what the other is doing for a patient.

"We need to avert disease in the first place," Thorpe said. "All of our growth is in multiple chronic health problems. The IPAB and premium control won't work without prevention."

The IPAB is the Independent Payment Advisory Board. The president-appointed and congressionally approved board goes into effect when Medicare and Medicaid spending goes above a certain level. It can determine if payments to providers should be lowered, but it may not do anything to affect the care received from those programs, such as by limiting the kind of care a person receives. Congress may reverse the board's actions by passing legislation for specific recommendations.

Holtz-Eakin said the board "will go away. Only being able to cut payment to providers is always going to backfire."

State exchanges — the websites created by states to let people quickly and easily compare and choose insurance plans — are a "very sensible idea," Holtz-Eakin said. But the states should create them, not the federal government, he said.

So far, however, some states led by elected officials opposed to the law have delayed creating exchanges, a delay that will mean the federal government will create the exchanges for those states.

Some people may have too many health benefits under the law and will consume more health care, said John Goodman, president of the National Center for Policy Analysis and a promoter of private-sector solutions to health care issues. That could drive up overall costs unless people have high-deductible plans that force them to shop for better prices.

Otherwise, "Costs will continue to grow," he said. "Obama didn't create this problem; it's been going on for 40 years. I think you have to deal with the problems."

That's where the differences lie: Thorpe argued that a $5,000 deductible won't help someone who is already dealing with a multitude of chronic illnesses.

"The market doesn't matter much when someone is already sick," he said. "The challenge is more on the clinical management side."

Julie Barnes, director of health policy at the Bipartisan Policy Center, said the country needs a bipartisan plan for the whole health care system — not just the Medicare and Medicaid programs.

"We need comfort that our doctors can focus on taking care of us, insurers and employers can help keep costs down, and we all start taking more responsibility for our own good health," she said. "A bipartisan plan would include paying health care professionals for keeping patients healthy, modernizing facilities with the technology that would streamline processes and reduce medical errors, and cut back on unnecessary tests and treatment by better coordinating care for patients."

And that, she said, would go a long way toward fixing the economy, because health care takes up much of the budget.

Insurers, reassured that the individual mandate requiring people to buy health insurance and the state exchanges will go forward, also have a wish list.

Justine Handelman, vice president for legislation and policy for the Blue Cross and Blue Shield Association, would like to see a change to the "health insurer's tax," which she said a Joint Committee on Taxation study found could add between $350 to $400 a year to family premiums. This is an annual tax of $60.1 billion beginning in January 2014 based on premiums collected that year, and fully imposed on insurance firms that make $50 million or more in profits. Blue Cross would like to see that lowered.

Others, such as Ron Pollack of Families USA, have argued that Americans now pay $1,000 a year more in premiums to account for care received by the uninsured, so the $400 increase should be offset.

As the states begin building exchanges, they are required by the federal government to include some elements in basic health plans, such as preventive care and dental care for children. States may also mandate that plans include benefits to participate in the exchange. Handelman said it's important to keep those plans "reasonable and cheap."

America's Health Insurance Plans released a statement congratulating the president on his re-election, but making the same points Handelman did.

"Several provisions in the law, such as the new premium tax, minimum coverage requirements and age-rating restrictions, need to be addressed to keep coverage as affordable as possible and ensure broad participation in the system," AHIP President Karen Ignagni said in the release.

Handelman said she also was concerned that insurers may no longer base premiums on age, so the young and healthy, in what the Obama administration has called an end to "age discrimination," no longer pay less than older or chronically ill people. She argued that the more young people on the insurance rolls, the cheaper it will be for everyone.

But some things won't change at all because, she said, Blue Cross has already implemented coordinated care to prevent duplicate tests or to ensure people have what they need to avoid expensive hospitalizations.

"We're really beginning to see costs go down," Handelman said. "That started long before the Affordable Care Act and will continue."