Over the last few weeks I have been asked to explain the implications of the Patient Protection and Affordable Care Act (H.R. 3590) that President Obama just signed into law, particularly as it relates to children, Children's Hospital Colorado, and the pediatric physician provider community.
My response to all of these requests is – gulp – I'll try.
It took more than 2000 pages to create this historic, game-changing health care reform package and I am just not scholarly enough to summarize it in one blog. What I can do is provide a series of blogs that (I hope) will provide greater clarity of the reforms.
What we will see in 2010
Most implementation begins in several years but a few insurance reforms will take effect in the next six months, including:
- Adults who have been denied insurance coverage because of an existing illness can join a high-risk insurance pool. It's interim until 2014 when insurance reforms kick in.
- Children with pre-existing illness cannot be denied coverage. Dependents up to age 26 will be eligible for coverage under their parents' plan.
- Insurance companies cannot revoke existing policies if someone gets sick.
- Lifetime limits on coverage will be banned and annual limits restricted.
- Preventive services will be fully covered with no co-pays or deductibles.
- A 10 percent tax kicks in for indoor tanning services, the first of the tax increases.
The most fundamental and foundational attribute of this legislation is covering more than 30 million uninsured Americans. In Colorado alone, this means insurance coverage will extend to 500,000 currently uninsured Coloradans. This has significant implications not only for the newly eligible, but also – and just as importantly – for those who are already insured.
Currently under compensated care, providers must cost-shift to recover funds they use to provide free care. This reappears as increased premiums to employers who then pass on some or all of that to their employees as higher premiums, co-pays and/or deductibles. By covering the uninsured, the cost-shifting phenomenon should decrease.
Most discourse now has to do with the mandate that everyone must purchase insurance or pay a penalty. I am not a constitutional lawyer, and as tempting as it may be to provide my own armchair counsel, I will resist.
I will, however, suggest this economic reality: if we agree that it’s good to cover the uninsured, health care economics demand that we increase the total number of people insured. This way, we can spread over a larger population the costs to cover the uninsured.
If the purchase of insurance were optional, odds are only those who need health care services would purchase it, a response referred to as "adverse selection". This would have detrimental consequences for insurance companies and cost shifting would escalate.
Whether Republican, Democrat, Independent or other, I hope we can all agree that what matters most is what matters for children.
As always, let me know what you think and stay tuned for my next blog. Up next: Insurance Reform