Health care reform made easy, thanks to a pair of Heller School experts
Mike Doonan and Katharine Tull explain the reform basics, and size up the politics
Following the historic healthcare reform legislation signed into law Tuesday, BrandeisNOW asked Heller School for Social Policy and Management health care expert Michael Doonan, and Katharine Tull, MPP’09, to make sense of its major provisions and assess its political implications. Doonan is an assistant professor at the Heller School and the executive director of the Massachusetts Health Policy Forum, and director of the Council for Health Care Economics and Policy. Katharine Tull is associate director of the Massachusetts Health Policy Forum.
BrandeisNOW: When and how are the uninsured covered?
Doonan and Tull: The bill will cover an estimated 31 million uninsured, but not until 2014. Coverage for the very poor will be provided by extending Medicaid coverage to most people with income up to133 percent of the poverty level. Undocumented immigrants are not eligible for this coverage. An individual mandate, or requirement that people have coverage, will lead more people to sign up for coverage at work, join government programs, or purchase coverage through newly-created health insurance exchanges. Premium and cost-sharing subsidies will be available for people with family income up to 400 percent of the poverty level.
BrandeisNOW: Will the proposal actually control health care costs?
Doonan and Tull: Theoretically, if more healthy people have insurance, costs are spread over a larger population so individual costs should be reduced. Health care costs may be mitigated for individuals and small businesses by purchasing insurance through state-based health care exchanges. However, the major drivers of health care costs, like utilization of services and new technology, may not be significantly affected by this bill.
BrandeisNOW: Will the insured see significant changes now? In premiums, benefits?
Doonan and Tull: Most people will get care through their employer, just like they always have. When the bill is fully implemented in 2014, the insured will have more peace of mind because they won’t be dropped if they get sick or be excluded from coverage by a pre-existing medical condition or a job change.
BrandeisNOW: Is reform good for business?
Doonan and Tull: On balance this looks good for business. Many small businesses will be eligible for tax credits to help subsidize employee coverage. By 2014, small businesses will be able to buy insurance through an exchange, which will increase purchasing power and is estimated to lower costs. Businesses with more than 50 employees that do not provide health insurance to their employees will face penalties of $2000 per full-time employee if any of their employees receive government subsidies through insurance purchasing exchanges. Businesses that do offer coverage but have any employees receiving subsidies for coverage through an insurance exchange may be fined $2000 per full-time employee or $3000 for every employee receiving premium subsidies.
BrandeisNOW: Is reform good or bad for insurers?
Doonan and Tull: Insurers love the individual mandate. It will generate more customers for them. Some could do without additional regulation because they make a profit by excluding certain people from coverage. Most will do just fine.
BrandeisNOW: Why will so many people (up to 16 million) still remain uninsured?
Doonan and Tull: Some will simply continue to fall through the cracks. Many remaining uninsured will not have access to employer-sponsored insurance, but will make too much money to qualify for subsidies or these subsidies will not be enough to cover their cost of insurance. These people may have to pay a penalty and still go uninsured. A considerable number of uninsured will be undocumented immigrants or legal immigrants not eligible for public programs.
BrandeisNOW: Impact on mid-term elections?
Doonan and Tull: The polls have not been looking good for the Democrats. Prior to reform, we thought they would lose seats if reform passed but would lose even more seats if reform failed. It seems like the president and Democrats will enjoy a bit of a bounce from this legislative victory, depending on the success of the public relations efforts now underway. Opposition, however, will continue to be fierce. We still expect Democratic losses in the fall, but more based on the economy and frustration about a slow and jobless recovery.
BrandeisNOW: How will Massachusetts residents be affected?
Doonan and Tull: Since many of these reforms have already been implemented in the Bay State, we expect little to change. Some people who are not now eligible for subsidies in Massachusetts will become eligible for subsidies under the federal plan. The state may also receive increased federal Medicaid funding to recognize past efforts to expand public coverage to the level other states will now be required to reach.