Healthcare Reform: Are you ready for September?

It’s been a little while since we’ve talked about healthcare reform, but that doesn’t mean that the changes are coming any slower. In fact, there’s a lot happening in September. Here’s a list of changes effective September 23rd, 2010 for all new plan years starting on or after that date. I picked the topics that I believe will impact business owners the most, but this is by no means an exhaustive list:

• Young adults that are covered by your plan as dependents must be offered coverage until they reach age 26 (unless covered by an employer of their own).
• Plans must include preventive care services such as mammograms and colonoscopies for free. Co-pays, deductibles, and co-insurance are not allowed.
• Insurance companies cannot rescind coverage for someone who is ill due to a technicality or application error.
• There is a new external review process for individuals to appeal insurance company decisions.
• Lifetime benefit maximums have been eliminated
• Annual limits on essential services have been eliminated
• Pre-existing condition clauses have been eliminated for all children under the age of 19.

Those are the key changes for September and there are some additional changes that will take effect on January 1st, 2011. Those changes include:

• Large employer plans will be eligible for rebates if medical claim costs are less than 85% of the insurance costs.
• Small employer and individual plans are eligible for rebates if medical claim costs are less than 80% of the insurance costs.

The rebates are designed to limit the profit and administrative expense amounts available to insurance companies.

If you have not yet reviewed your plan for changes, I would strongly encourage you to do so soon. Additional information is available on the web at: www.healthcare.gov

Michigan’s Healthcare Reform Surprise

While at a local coffee shop this morning I came across a newspaper article on healthcare in Michigan that made me almost fall out of my chair. Believe it or not, one of our current state senators, and Republican gubernatorial candidate, has introduced legislation for healthcare reform in Michigan (SB 1242.1245). Senator Tom George M.D., from Texas Township states:

“It is no secret Michigan is struggling and health care in the United States is broken. These issues have been ongoing for years. This was an issue last year and it was an issue two weeks ago. Especially in light of recently passed federal legislation, Michigan needs to address our problems sooner rather than later.”

In a statement on his website and in a recent speech at CMU he explains that 30% of Michigan’s current budget is spent on Medicare and that it isn’t sustainable without change. He also says that we can’t wait until 2014 when many of the provisions of the recently passed federal legislation take effect.

George’s decision to introduce this legislation is absolutely amazing because not many Republicans are gutsy enough to back healthcare reform in our current political climate. He is also bucking the trend by working with a Democrat to co-sponsor the bill. (Rep. Marc Corriveau, Northville HB 6034-6037)

As a practicing physician, George clearly has some strong opinions about health care reform – this is not the first time that he has sponsored legislation on this topic.

Regardless of your opinion of the health care debate, you have to admire someone who sticks to his guns regardless of the political climate. In this case, it may be helpful that Mr. George is a physician. He’s taking a big gamble with this legislation so it’s a good thing that he has a career to fall back on. He may need it.

Healthcare Reform – What Does This Mean for Business?

First off, healthcare insurance fascinates me. I’ve been doing plan design for years and I couldn’t tear myself away from watching this unfold on CNN last night or from the internet updates for the past several weeks. As you know by now, the House passed the healthcare reform package and reconciliation legislation. This is one of those “love it” or “hate it” proposals and with opinion polls running nearly equal (46% for and 45% against). There’s been a tremendous amount of debate. It’s mostly done now and the new question is: What does this mean for business?

This is an emotional topic, so there’s been a fair amount of misinformation on both sides of the aisle. Let’s start with some things that are not included in the reform package: Death panels, government provided or socialized healthcare (other than Medicaid and Medicare), coverage for illegal immigrants, and, if the reconciliation package is passed by the Senate, government funding of abortions.

What is included? Here are some of the main items of the combined legislation:

- Elimination of lifetime benefit maximums
- Coverage for dependents up to age 26
- Removal of rescission provisions
- Elimination of pre-existing condition exclusions
- A requirement that companies with more than 50 employees either provide healthcare coverage or pay a $2,000 per employee penalty
- A requirement that every individual either obtains insurance through his/her employer, purchases it independently, or pays a $695 fine or 2.5% of income, whichever is higher.
- A new tax on individuals earning greater than $200k per year ($250k for couples).
- Subsidies in the form of tax credits for families of four earning less than $88,000 per year to purchase insurance.

Will healthcare cost more or less in the future? I looked into my crystal ball and it looked like my bathroom mirror after a long shower. Here are some things to keep in mind:

- When you increase benefit levels, you increase costs.
- Since insurance companies will be insuring everyone, not just those who have to have insurance based on their health conditions, the cost per person for individual purchasers could be reduced.
- If more people are able to get preventive care, that will help reduce costs. We’re already paying for the uninsured in the form of pass through costs for emergency care at the highest possible rates.

Only time will tell what the real impact of this legislation will be. In the meantime, I’ll be watching how this develops and will keep you posted. I’m certain that there won’t be any shortage of communications on this leading up to our elections in November.