The Immediate Challenges Facing Health Reform

Last night, in a vote of 220-207, the House of Representatives passed the Reconciliation Package of 2010, officially ending a legislative battle that has engrossed Congress for the better part of the last 17 months. President Obama is expected to sign the amendments to the health care law in the next several days and the work of health care reform now moves to the states and the various federal agencies charged with translating the bill’s 2,000+ pages into enforceable regulations.

I tried to outline what Congress can do to fine tune the bill here, but health reform faces more immediate implementation challenges. As Henry Aarons reminded us in this NEJM piece, the war isn’t over. “Passage of health care reform legislation is a cause for celebration. But supporters must not relax. They should prepare to meet the serious challenges that remain. If those challenges are not recognized and surmounted, health care reform could go the way of the Medicare Catastrophic Coverage Act of 1988“:

That bill, enacted with almost self-congratulatory enthusiasm, provoked vociferous resistance from some observers and was repealed 16 months later. If supporters of the current reform meet the remaining challenges, its course could instead resemble that of the Medicare drug bill, which was widely regarded as a case study in efficient and effective implementation.

Already, lawmakers have identified a loophole in one of the interim benefit provisions. In six months, the new law will prohibit insurers from refusing to cover pre-existing conditions as long as the child is already covered, but could allow insurers to refuse new coverage to children because of a pre-existing medical problem. HHS Secretary Kathleen Sebelius has promised to address the problem with new regulations, but it’s unclear if the protection would be in place once the benefit kicks in. Many other immediate challenges lie on the horizon:

– Establishing high risk pool program: In the next 90 days the government will have to implement a federally funded program to cover people turned down by private insurers because they have a pre-existing medical condition. But as Kaiser Health News points out, many questions remain — How much will the coverage cost? Will enrollees have a choice of plans? What medical services will be covered? What hospitals and doctors and other health care providers will participate in the networks to be created? How will the new entity interact with already established state-run high-risk pools?

– Administering small business tax credits and temporary reinsurance program: The government will provide tax credits to small employers with no more than 25 employees and average annual wages of less than $50,000 that provide health insurance for their employees. It will also have to establish a new program that will provide temporary reinsurance for employers providing health insurance coverage to early retirees between the ages of 55 and 64.

– Preventing insurers from dramatically increasing premiums: The government will have to create a process for reviewing increases in health plan premiums and requiring plans to justify increases. HHS will also have to establish a process for making recommendations to states about whether certain plans should be excluded from the Exchange based on unjustified premium increases.

And those are just some of the challenges for 2010. As we move forward many health policy wonks worry about the effectiveness of the state-based exchanges in regulating insurers and providing guidance to confused customers. Some fear that crafty health insurance executives will lure younger and healthier consumers into the less-well-regulated individual health insurance market, causing the exchanges to become populated with poorer and sicker Americans. Others argue that state-based regulators — many of whom oppose reform — will fail to effectively regulate insurers and render many of the law’s new consumer protections meaningless. There is concern that the individual health insurance mandate won’t bring enough people into the system. Free riders will continue to exploit the guarantee issue provisions to purchase coverage only after they become sick and insurance rates will continue to skyrocket.

So the road ahead will be full of speed bumps and sharp turns, and this blogger will try his best to track the progress of implementation piece by piece. After all, “[f]ar from having ended, the war to make health care reform an enduring success has just begun. Winning that war will require administrative determination and imagination and as much political resolve as was needed to pass the legislation.”