Costs, effects on business questioned as health overhaul analysis continues

Apr 27 2010

The Associated Press: The biggest unanswered question in the health overhaul debate remains what the new law will mean for ordinary Americans. "Many experts believe the law falls short on taming costs, and that will force Congress to revisit health care in a few years. While it seems hard to believe now, Republicans might want to participate in a debate over costs, perhaps opening the way for limits on malpractice lawsuits and other ideas they've advocated." But Republicans and Democrats are far apart on the issue, perhaps even too far to begin talking about more cost containment. "But economic reality probably will bring lawmakers back to the table. Insurance premiums are likely to keep going up over the next few years. Experts predict that the law's early benefits — such as expanded coverage for children and young adults — could nudge rates a little higher than would otherwise have been the case." A major problem remains that there's no overall cost control strategy in the law and no single official who will attempt to coordinate the measures (Alonso-Zaldivar, 4/25).

The Associated Press/MSNBC, in a separate story: Some industries are continuing to fume over the details of the law, including the impact on tanning bed salons, which will see a significant tax increase on their services that they say could drive them out of business. "A 10 percent tax on tanning bed use starts nationwide this July. … Congressional tax writers project the tax will raise about $2.7 billion to help expand health coverage to uninsured Americans over the next decade, and they're betting that indoor tanners won't be turned off by a few extra dollars. After all, customers already are paying sales tax on tanning lotions and oils." Some say they'll continue tanning, but others won't and some public health officials hope it could be the end of the tanning bed as America knows it (Wyatt and Alonso-Zaldivar, 4/25).

The (Jacksonville) Florida Times-Union: Small businesses are worried the reforms might not be enough to keep them afloat and could leave health care still too expensive to provide to employees. "The health care reform bill, which Obama signed into law March 23, includes tax credits to encourage business owners who employ fewer than 25 and pay an average salary of less than $50,000 to offer employees health care insurance. The credit reimburses up to 35 percent of the premiums those employers pay — a percentage that will go up to as much as 50 percent in 2014. … Under the reform law, businesses that employ more than 50 full-time workers are required to provide them all with health care insurance or face $2,000 annual fines for each uninsured worker. Smaller businesses are exempt, and the tax credit is an incentive to persuade them to insure their workers" (Turner, 4/25). 

Times Herald-Record (Middletown, N.Y.): Hospitals are taking a "wait-and-see" approach to health reform. Hospital "officials want to see how implementation of the law plays out. … If the provisions don't work as planned, it could cause problems for hospitals, said Beth Duffy, chief financial officer and senior vice president of finance for St. Luke's Cornwall Hospital. … Duffy worries that even with the subsidies, some people might wind up with a lot of out-of-pocket costs they can't pay, which the hospital would still have to absorb" (Livermore, 4/26).

In the meantime, the health law will require the medical industry to reveal payments it made to doctors, Kaiser Health News reports. "Doctors who accept speaking fees, five-star meals and other compensation from pharmaceutical or medical device companies will soon see their names - and the value of the gifts they accept - revealed on the Web, under a new federal law that follows several states in drawing attention to such financial benefits." In Vermont, which has experience requiring such disclosures already, payments in fiscal year 2009 were down 13 percent. "Consumer advocates have complained that industry compensation can affect a doctor's choice of drugs or treatment and that exposing the doctors will dissuade such behavior. But some consumer groups say that the new law is too narrow in its scope. And it has raised complaints among some doctors, who say the provision will unfairly stain legitimate work they do for industry" (Weintraub, 4/26).

American Medical News: "The new health system overhaul law includes significant expansions of the government's reach under the federal False Claims Act, and experts warn that doctors need to be ready. Although the changes largely enhance prosecutors' fraud-fighting tools, often with the help of whistle-blowers, they also put physicians in line for additional liability exposure, experts say. … In one of its more significant false claims provisions, the health reform law imposes an explicit duty on physicians to return known overpayments to the government within 60 days of discovering an error, according to health care fraud defense lawyer Gadi Weinreich. Retaining an overpayment beyond that deadline could constitute a false claim.' In addition, experts said that anti-kickback violations could also put doctors at risk of false claims charges. A wide range of activities could be considered kickbacks -- from discounts to referral fees to marketing practices (Sorrel, 4/26).

Los Angeles Times: Despite prognostications that the bill will meet implementation bumps, they may be fewer than forecast, especially for the young, students and those with pre-existing conditions. "Starting this year, the new law will allow children to stay on their parents' policies until they turn 26, as long as they can't obtain insurance through their employer. 'This will have an impact on young adults transitioning into and out of different types of coverage,' said Sara Collins, vice president of the New York-based Commonwealth Fund, a nonprofit, nonpartisan foundation focused on improving the healthcare system. Also, until 2014, people with preexisting conditions will be eligible for a federally funded so-called high-risk insurance program. Collins said that starting in 2014, individuals who make about $14,000 a year and four-person families with incomes of about $29,000 a year — both groups comprise substantial numbers of young adults — would be eligible to enroll in an expanded Medicaid program" (Simmons, 4/26).

The (Missoula, Mont.) Missoulian: Other provisions in the law include help for 28,000 Montana seniors who hit the Medicare "doughnut hole" this year. Their help will come in the form of a $250 check if their Medicare prescription drug benefits spending reaches $2,830 — when the federal government stops paying for prescription drugs and doesn't resume until a beneficiary's spending reaches $6,440 in a year. "It may not be much, but it's a start, advocates for the elderly say, for the bills take further steps next year and down the road to reduce the out-of-pocket cost for some seniors who have Medicare coverage for prescription drugs" (Dennison, 4/25).

McClatchy: Others, too, stand to benefit right away, including a Texas couple urged to divorce so their son could qualify for federal health benefit assistance. Attorney Andrew Griffin had just graduated from law school, and he made too much to let his epileptic son qualify for Texas' Children's Health Insurance Program, whom no insurer would cover. So his employer capped his salary to allow him to qualify for CHIP. "Griffin had to make sure that he didn't have any assets — a leased car passed muster, but not one he owned, and a house had to be rented — but that way Alec could get the coverage and the surgery he needed. When the new law kicks in three months from now, however, Griffin looks forward to getting out from under CHIP — and nearly doubling his salary. The health care law requires insurance companies to accept all applicants, regardless of pre-existing conditions, starting in 2014. Between now and then, the federal government will fund high-risk insurance pools in the states" (Recio, 4/25).

Kaiser Health News tracked the weekend press coverage of health issues, including news about a report on cost estimates issued last week by economic experts at the Department of Health and Human Services and Sunday's reports on health reform implementation and related issues.