Big picture health reform

Jan. 30, 2014 @ 03:30 PM

Much has been said about the Affordable Care Act or Obamacare, especially since the botched launching of the website. However, several big-picture changes deserve more attention.

The law does three major things. First, the ACA restructures how health insurance companies provide coverage and how other health care businesses (including providers and hospitals) are rated and paid. Second, it creates state-level exchanges or marketplaces for individuals and families who are un- or underinsured to purchase health insurance. Many with middle and limited incomes are eligible for tax credits to help pay premiums. Finally, each state has had the opportunity to decide whether or not to expand Medicaid to citizens with very limited incomes regardless of their health status or “category” (don’t have to be a pregnant woman or disabled, etc.). North Carolina leaders have rejected Medicaid expansion for now.

The plans offered on the federal or state-based marketplaces (for states that created their own online systems) are intended for people who do not have Medicare, Medicaid or employer-sponsored coverage that meets a new set of “essential health benefits.” Individuals and businesses can also purchase policies outside of the marketplaces; however, these must include the minimum standards and will not include the tax subsidies.

The new benefit structure for health insurance transforms catastrophic risk. Not only can insurance companies not deny individuals coverage because of pre-existing conditions, the annual and lifetime benefit caps that individuals faced in the past (if they had catastrophic illness) are gone. Now, individuals in revised plans will not pay more than $6,350 a year in medical expenses for in-network services (beyond premiums).

And a long-time complaint of separating the heart and soul from the body has been addressed. Mental health coverage is now required. In addition, for children younger than 19, dental coverage must be offered, and vision care is included as an essential health benefit.

Many individuals and businesses are pleasantly surprised by the tax credits and expanded coverage. Many others are shocked by the sticker price if not eligible for tax credits. Of course, this is how insurance is designed: all pay in and those who use few services pay for more than they receive in a year (if fortunate enough to stay healthy), and those who need more care pay less than they would if they did not have coverage.

Health care reform will not be without struggle for many and pure relief for others. It has meant consolidation in the health care industry, and we do not know at this time if this will improve quality and drive overall prices down or up. The reality is that we have a market-based system that organizes how we deliver and pay for health care in America.

Gina Upchurch is executive director of Senior PharmAssist in Durham.