The passage of legislation last week by Congress overhauling the American health care system was undeniably a watershed moment in the nation’s history – for both supporters who say such a social safety net is long overdue in a civilized society, and for those who oppose it and believe the bill exemplifies overspending and overreaching by the federal government.
But politics aside, those who work in the Flathead’s health care industry must now prepare for changes scheduled to take effect by the end of this year, even as they wonder what the full impacts of these changes will eventually be.
“None of us really know what’s in there until the smoke clears,” Jim Oliverson, a vice president at Kalispell Regional Medical Center, said. “I think it’s too early to know.”
Over the next decade, the bill aims to expand health insurance coverage to 30 million Americans who currently lack it by, among other policy mechanisms: establishing insurance marketplaces called “exchanges”; requiring insurers to accept all applicants, including those with health conditions; and expanding state Medicaid programs. It will be paid for largely by increasing taxes on those who make more than $200,000 per year, taxing investment income, cutting Medicare subsidies for private insurers and fining employers whose workers use government subsidies to pay for insurance. Those who refuse to buy insurance could face fines of up to $695.
Most of the major, long-term provisions don’t kick in until 2014, but by the end of this year, several other changes will occur that should have immediate impacts on insurance coverage. Dependent children will be allowed to remain on their parents’ insurance until age 26. The legislation also contains $5 billion to help those with a medical condition that has left them uninsurable to enroll in a federally subsidized insurance program. Senior citizens will get more help paying for drugs through Medicare. And small businesses with fewer than 25 workers and average wages of less than $50,000 could qualify for tax credits.
Several components of the bill are likely to impact insurance providers in Montana by the end of the year, according to Tanya Ask, vice president of external and provider relations for New West Health Services. Young adults in Montana are already allowed to stay on their parents’ insurance until age 25, so that particular provision is unlikely to change much.
Health insurance companies will be prohibited from imposing lifetime caps on coverage, however, by the end of the year, and that could prove an obstacle as more patients incur medical costs approaching $1 million – the common cap for many policies.
“In the last few years there’s actually been a tremendous increase in the number of cases approaching $1 million,” Ask said. “It will have an impact on the overall cost of benefits at some point.”
Insurance companies will also soon be prohibited from retroactively cancelling, or “rescinding” coverage from those with costly medical conditions, though Ask said this is less of a problem in Montana than other states.
“For New West, we have not rescinded anybody’s coverage other than for nonpayment of premiums,” Ask said. “Rescission has not been a problem in Montana, but that’s another piece of what goes into effect in the next six months.”
For health policies that exclude a dependant with a pre-existing condition – for example, a child with asthma – that provision will go away. Ask is also waiting to see how the new plan providing tax credits for small businesses providing insurance will mesh with a similar state-based existing plan called Insure Montana.
As for whether New West expects an influx of new customers, Ask doesn’t anticipate that until the major policy mechanisms of the bill, like the exchanges, take effect in four years.
“There are a lot of good things in the bill,” Ask said, but noted, “It doesn’t go nearly far enough in reducing cost.”
The health care bill does contain extra funds for public health clinics across the country, according to Wendy Doely, executive director of the Flathead Community Health Center, “to begin to address what they anticipate is going to be an increase in demand for primary care providers.”
The Flathead could also benefit from increased funding for the National Health Services Corp., a program which offers medical school loan repayment for physicians who agree to practice in areas under-served by doctors. But when that funding could come through for the Flathead clinic, and what other changes could be in store, remains unclear.
“I think it’s going to impact a lot of different entities in a lot of different ways,” Doely said. “When and how and what it will look like, I’m not really sure.”
That uncertainty is shared by the valley’s two major hospitals, though Oliverson thinks KRMC’s size and structure will allow it to react to whatever increase in demand may be necessitated by the health care bill.
“We’re confident that whatever comes down the road that we’ll be able to deal with it,” Oliverson said. “Because we’re a small hospital and we’re not a part of the government system, we can move pretty quickly if there’s a need or a situation.”
Jason Spring, the administrator and chief executive officer of North Valley Hospital in Whitefish, anticipates an increase in demand for both primary care physicians and at the Emergency Room as more people obtain insurance coverage.
“If we have a large number of people with coverage, they may choose to use the (emergency room) more often, especially if we are not able to keep up with demand for primary care,” Spring said. “Even if individuals have preventive care coverage, it does not mean that they will use it.”
Spring does, however, believe North Valley stands to benefit from changes in the bill aimed at improving access to care in rural areas. Some provisions that reward hospitals for achieving higher value care and lower cost per Medicare and Medicaid enrollee could also be positives for North Valley.
“We would benefit greatly based on our current quality and cost rankings,” Spring said. “However, until all the rules and regulations are promulgated and we can analyze that data, it is premature to make any firm assumptions.”
A number of minor provisions in the bill could also affect Flathead businesses that may appear unrelated to the health care industry. Chain restaurants will be required to prominently post the nutritional content of each item on their menu. Tanning salons will be saddled with a 10 percent “vanity tax.” And Sen. Max Baucus, D-Mont., inserted a provision into the bill expanding Medicare coverage for victims of “environmental health hazards” – a measure aimed specifically at Libby residents suffering from asbestos exposure.
Kimberly Rowse, an R.N. and clinic coordinator at the Center for Asbestos Related Diseases in Libby, praised Baucus for providing the assistance, particularly as her clinic sees an increase in younger patients. But as for the details of the expansion, or when it could take effect, she is also unsure.
“At this point in time, we don’t have specifics on that provision,” she said. “I don’t think it’s going to be tomorrow.”