Health care reform biggest change since Medicaid

Perhaps no recent issue has dominated or electrified political debate in our country the last couple of years quite like health care. We saw spirited town hall meetings play out across the nation, including here in Arkansas. The topic permeated the news outlets, with pundits and politicians throwing around terms like "pre-existing conditions," and "universal coverage." It has been a polarizing and complex topic, for certain. Then, earlier this year, after months of heated debate, the U.S. Congress passed comprehensive health care reform. It is the biggest change of our health care system since Medicaid (the federal health program for low-income individuals) and Medicare (the federal health program for qualifying seniors) went into effect in 1965. Regardless of which side of this issue we find ourselves politically, the Patient Protection and Affordable Care Act is now the law of the land. It will be fully implemented by 2014, and it is important that we all understand just what it will mean for Arkansans and for the future of health care in our state.

Last week, Arkansas' Surgeon General, Dr. Joe Thompson, gave an in-depth presentation on the new law to members of the House Public Health, Welfare and Labor Committee. Dr. Thompson outlined the timeline for implementation of reform, and he highlighted components that will have the greatest impact on Arkansas.

Perhaps most significant: 500,000 Arkansans are currently uninsured, and the new law could mean that up to 90 percent of those folks will now be able to get coverage.

"This represents a huge opportunity if we do it right," Thompson said of implementing the law. He said states that have a high percentage of low-income families, like Arkansas, will benefit the most from the reform, and the highest number of uninsured Arkansans live in rural areas. "This is going to really help rural parts of the state by eliminating financial barriers," Thompson said. A majority of currently uninsured Arkansans are ages 19 to 64, since the ARKids First low-income insurance program covers children, and those over 65 are covered by Medicare. He added that 75 to 80 percent of uninsured individuals are in working families, but don't have access to employer plans and can't afford individual coverage. In Arkansas alone, insurance premiums have nearly doubled in the last decade.

The new law will require that all individuals have health insurance, so the government will help make sure they can afford it. Many low-income individuals will receive a tax credit to offset the cost of buying health insurance. Employers will be required to offer plans. Small employers can either offer insurance, or provide employees with vouchers to buy insurance. Some small businesses will be eligible for tax credits to help offset the cost. Also, Medicaid will be expanded to cover more people. The new rule requires states to offer Medicaid coverage to anyone who makes up to 133 percent of the federal poverty level. That would be $14,400 for an individual and $29,326 for a family of four. The federal government will pay for 100 percent of the Medicaid expansion in our state through 2016, and then the amount will gradually be reduced to 90 percent by 2020. That means in ten years, the cost to the state will be about $200 million a year.

The impact on insurers will be major, as well. By 2014, insurance companies will no longer be able to create high-risk pools. The law will also eliminate pre-existing conditions, lifetime caps, and it will require the guarantee of issue, with renewability. Furthermore, the only factors insurance companies will be able to consider when determining your premiums will be your age, the number of people in your family, and whether you use tobacco products.

Parts of the law taking effect this year include a temporary reinsurance program to help offset employers' costs of providing early retiree health benefits. That will affect an estimated 71,000 Arkansans. Starting this fall, parents will be able to keep children on their health policies until their kids turn 26, if they are claimed as dependents. About 14,000 young Arkansans are expected to benefit immediately. Starting Aug. 1, those with pre-existing conditions who have been unable to get insurance for at least six months will have access to a temporary, subsidized high-risk pool, with out-of-pocket costs capped at $5,950 for individuals and $11,900 for families. Also this fall, all new private group and individual health plans will be required to provide preventative health care services at no out-of-pocket cost.

This overview is simply a brief look at some components of the new health care legislation. We will continue to learn more as federal rules are developed for the law, and as top health care officials in our state continue to gauge the reform's impact on Arkansas. In addition, we in the General Assembly will continue to monitor the law and make sure we are maximizing its potential to benefit the people of our state.

More information on the new health care law can be found on the website for the Arkansas Center for Health Improvement (www.achi.net).