Healthcare bill a mixed bag for local providers
April 28, 2010
With the passage of the Healthcare Reform bill in March, the general public, hospitals, and local providers will start to see some changes, but healthcare professionals say the long-term effects of the bill are uncertain.
Although some changes will take decades to process now that healthcare is being extended to millions of people, certain items on the bill will affect Americans and the future of healthcare almost immediately.
Within a year, the underwriting of children in the individual market will be prohibited, and young adults can stay on their parents health plan until the age of 26.
Vice President and CFO Henry Lipman of LRGHealthcare said some immediate changes will affect hospitals, and some will be more positive than others. Hospitals may lose revenue as a result of the recently passed bill, Lipman said, but it is important to provide optimal healthcare to those in need and to prevent insurance companies from denying coverage for ill patients.
This year, insurance companies will be prohibited from revoking coverage when people become ill, and from setting lifetime limits on benefits. Small businesses will be eligible for new tax credits to offset their premium costs, and people with preexisting conditions will be eligible for subsidized coverage through a national high-risk pool. New limits will also be set for the percentage of premiums that insurers can spend on non-medical costs and, beginning in 2011, carriers that exceed those limits will be required to offer rebates to enrollees.
Lipman said that Medicare will provide $250 rebates to beneficiaries who reach the "doughnut hole," and Medicare will eliminate cost sharing for preventive services in Medicare and private plans.
Lipman said he agreed with a recent New York Time's article that said the bill really is "a mixed blessing" for hospital facilities such as LRGH. Hospitals have agreed to contribute $150 billion over 10 years, partly by accepting lower payments under the Medicare program for elders.
Lipman said expanded enrollments in the low-income Medicaid program could pose concerns in terms of financial resources, since Medicaid already tends to pay hospitals a mere percentage of the full price for care, a percentage that may continue to be shaved down over the years.
"There are some long term credit challenges. How this will impact hospitals financially is really a discussion on how the bill will be implemented," said Lipman. "We will be paid less next year for the same service."
Although the financial impact on local hospitals may be a downside to the bill, Lipman said certain items in the bill will "enhance" healthcare and allow for millions to obtain insurance coverage. He added that there would be some reimbursement protections for hospitals and that tax incentives for smaller businesses may help employees maintain their insurance.
"In the long run, more people will have access through Medicaid and insurance exchanges. For the community, this should be positive. For the public at large not covered now, this is a net plus," said Lipman. "For people covered now, it remains to be seen."
Lipman said the healthcare bill breaks down and affects different groups of people in contrasting ways, although the outcome of the bill as a whole is still not clear, and perhaps will not be clear for years to come.
"Some providers will get less from the government, yet the hospital association feels it is important to increase insurance access. The bottom line is, it's hard to tell, but providing more coverage is a step in the right direction," said Lipman.
Lipman said there are provisions in the bill that show promise, and offer the more "vulnerable" access to proper healthcare and protections against discriminatory treatment.
"The most vulnerable will be helped. It may be an economic strain, but it might not be life or death for us, as it is with other people," said Lipman. "In this area, we hope it will be positive, and we will try to make it work."
Gilford general surgeon Shafique Taj also described the healthcare bill as "a mixed bag" and said he supports extended health care coverage and some of the vital protections it offers, yet when it comes to its future affect on local providers, he is not sure which way the bill will go.
"The whole bill and the way it is right now – no one knows how it will impact anyone. The problem lies in the implementation of it," said Taj. "What it is doing with insurance companies is the right thing to do. They shouldn't be refusing people. More people getting insured is a good thing, if it's implemented properly."
Taj said one favorable element of the bill is the fact that insurance companies will spend 85 percent for direct healthcare. However, he said the Medicare reimbursement formula should be corrected and has yet to be addressed, even though it is a concern of local physicians and surgeons. He added that the bill does not address medical liability on the cost of healthcare.
"It's impossible to tell how it will affect us over the next 40 years. The truth is, it's somewhere in the middle; there are a few good things," said Taj. "We don't know how it will affect physicians, and if it will result in cuts of physicians. It's a mixed bag right now."