NEAL CONAN, HOST:
This is TALK OF THE NATION. I'm Neal Conan in Washington. The country is about to undergo the largest transition of national health policy ever. The Affordable Care Act, the signature legislative achievement of President Obama's first time, continues to phase in. Some of the more popular measures are already in effect. Parents can keep children on their own plans until they turn 26. Women have greater access to birth control.
But important parts of the law kick in next January 1, and they involve more complications and more controversy. Doctors, patients, medical professionals, how does this law affect your life? Give us a call, 800-989-8255. Email us, [email protected]. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.
Later in the program, Ysaye Barnwel of Sweet Honey in the Rock. But first health care. Over the next two months, we'll have a series of conversations to look ahead on a range of topics. To start we're joined now by Julie Rovner, NPR's health policy correspondent, here in Studio 42. Nice to have you here in our new studio, Julie.
JULIE ROVNER, BYLINE: Nice to be here in this nice new studio.
CONAN: The new law was passed, it's been upheld by the Supreme Court, so where are we now in terms of what's phased in and what has yet to phase in?
ROVNER: Well, we phased in a lot of the less controversial, if you will, pieces of it and some of the very popular pieces of it. As you mentioned, young adults can stay on their parents' health plans until they're 26. We've had what they call the Patient's Bill of Rights, these are things that apply to most people's existing health insurance, things like banning lifetime limits on policies.
So no longer can you have health insurance, they can't say, well, you've gotten something very expensive, you've spent $2 million, now your health insurance has run out. That doesn't happen anymore. Easier access, as you mentioned, for women to birth control and to other forms of preventive care. Seniors on Medicare now get better coverage for their prescription drugs, so things like that, that were sort of - that were meant to be front-loaded, frankly, so they wouldn't...
CONAN: Before the elections, to no one's great surprise.
ROVNER: Yeah, many of them before the election. Insurance companies have to spend a certain amount, either 80 or 85 cents of every dollar, on actual medical expenses rather than on administrative expenses or profit, that's the so-called medical loss ratio. These things have all been put into effect. Next year, starting 2014, comes what we think of as the big stuff.
It's really three different things. One of them is the requirement, the controversial requirement, that everyone either have health insurance or pay this fine. At the same time comes one of the most popular provisions of the law, which says that insurance companies can no longer either exclude or charge more for people who have pre-existing health conditions, and obviously those two things go together.
The insurance companies said that if you're going to make us cover sick people, we're going to have to have more healthy people with insurance. So...
CONAN: So everybody's got to buy in.
ROVNER: Exactly, everybody's got to have health insurance in order for the insurance companies to be able to afford to cover people who have pre-existing conditions. And then the other big part of this was supposed to be this expansion of Medicaid. About 17 million people were going to be covered by this expansion of Medicaid to - mostly this would be able-bodied adults with income under about 133 percent of poverty, about $15,000.
But of course the Supreme Court kind of threw a little bit of a wrench into that by saying that states didn't have to, that it would be optional. And right now we've really only got about half the states who have said they were going to do that.
CONAN: Now you mentioned that was intended to pick up 17 million people. The idea overall was to get 40, 45 million who are uncovered now into health coverage. How is that going?
ROVNER: Well, it wasn't going to be 45. That's how many people didn't have coverage. It was never going to cover everybody. Remember this doesn't apply to undocumented immigrants. They were always going to be not covered and perhaps picked up by community health centers. There was a big chunk of money extra for community health centers who would be serving people who did fall through the cracks.
There are things if you can't afford it, for instance, you're not required to purchase insurance. A lot of people don't realize that. There's a lot of complaint still, you know, what if I can't afford it. If you truly can't afford it, can show you can't afford it, you don't have to buy it, you don't have to pay the penalty.
But it was supposed to pick up about 30 million people, and right now it's looking like it's not going to be quite that much again because of this Medicaid expansion that is - that a number of mostly Republican states and including some of the very large states, Texas for example is a state that's looking like it's not going to expand Medicaid.
But again states don't have to do this right away. When the Medicaid was first established, a lot of states didn't come in. Arizona, for instance, didn't join Medicaid, which was started in 1965, until 1982. So that's not to say that states can't see other states doing this, getting a big chunk of federal money and saying oh, maybe we're going to change our mind and do this after all.
CONAN: And in effect getting their money. The money unspent on Texas will be distributed to other people.
ROVNER: That's exactly correct. Texas, you know, for all the federal taxes that Texans pay, that money is now going to be going to other states that are going to expand Medicaid.
CONAN: So we want to hear from those of you who are affected by this law, recipients of course but doctors, medical professionals. Well, how does the new health care law affect your life? Give us a call, 800-989-8255. Email us, [email protected]. And we're going to start with Charles(ph) and Charles on the line with us, well, from Texas - Austin, Texas.
CHARLES: Yes, sir. Hi, I just moved to Austin, Texas, from Houston, Texas. I'm on Medicare. And there's not a single internist or family practitioner that will take Medicare.
CONAN: And this, Julie Rovner, is a problem more and more people report.
ROVNER: It is. Now this has nothing to do with the Affordable Care Act. This is a separate problem that has been going on with Medicare, really it started in 1997 with the Balanced Budget Act, actually. That's - that really goes back a long ways. It had to do with a formula that Congress enacted to try and constrain physician spending.
It started out by giving physicians sort of extra bonuses, extra pay, and then in 2002 it started to cut physician fees, and Congress let it - let them actually cut those fees for the first year, and after that it started to not make those cuts, but it didn't give them any increases. So basically physicians have been not - the physician pay under Medicare has been not keeping up with inflation really for more than a decade now.
It's something that Congress has been trying to grapple with, but mostly they've been doing that old phrase kicking the can down the road, and they've been kicking this can down the road really since 2002. And every year they say we're going to give it another year, and during that year we're going to try to figure out a problem - how to solve this problem, and in the meantime - you know, for a long time we've seen these expert reports that say there is no big access problems for Medicare, but now we are really starting to hear exactly this, particularly in larger metropolitan areas, where doctors have choices of other patients.
Not so much that they're kicking off existing Medicare patients, but they are not taking new Medicare patients. So if you turn 65, you have trouble getting a doctor. Or if you move, as this gentleman did, you have trouble finding a doctor, and it is getting to be more - a bigger and bigger problem.
Congress knows it needs to do something about it, but fixing this problem is going to cost in the tens or possibly hundreds of billions of dollars. So it's been a difficult problem.
CONAN: So that can is going to be pretty well dented before they get around to fixing it.
ROVNER: That can is already pretty well dented.
CONAN: You mentioned the Medicaid expansion. Another factor that takes effect next year is exchanges.
ROVNER: That's correct, and the exchanges are going to be where individuals and small businesses will go to purchase insurance. These will mostly be online exchanges. And there's been so much talk about whether the states will run the exchanges or the federal government will run the exchanges or whether it will be a partnership between states and federal government.
From the point of view of the people going to purchase insurance, it doesn't matter. It will be invisible. When you go to purchase insurance on the exchange, it will say if you live in Texas, welcome to the - excuse me - Texas exchange. If you live in Michigan, welcome to the Michigan exchange, if you live in Maryland welcome to the Maryland exchange. It will not matter to you who is building or operating that exchange. So that's kind of a, you know, inside-the-Beltway, you know, discussion that people seem to love. But it's not really very important for the - for you once you get to the exchange.
Part of what's important is how much there will - effort there will be and how much money there will be to guide people to get to the exchanges, to help them enroll once they're there. There are going to be what's called navigators, these are people who are supposed to help people sort out how to use the exchanges.
So there will be some differences among states about, you know, how much effort is put into getting people to the exchanges and enrolled. But the exchanges themselves should look pretty much the same regardless of who's running them.
CONAN: Let's go now to Chris(ph) and Chris on the line with us from Columbus.
CHRIS: Yes, Julie, so the insurance companies are going to offer products on the exchanges and off the exchanges. And as you've already said, they can't charge people...
CONAN: Whoop, somehow the line dropped. Well, they can't charge - I'm not sure what the question was.
ROVNER: I'm not sure what the question was, either. They can't charge - I know one of the things they can't charge women more, depending on how they're - which they used to be able to do, but I'm not - there are going to be - it is - it does get very technical about what companies can offer inside and outside the exchange.
And there is a lot of concern about whether insurers are going to play, if you will, what they're going to offer inside these exchanges and whether there will be enough choice and enough competition. And that's one of the big things that people are worried about, I know.
CONAN: Well, let's see if we can get another caller in. Let's go to Erica(ph), Erica with us from Fort Myers. And the system is hanging up on people as soon as we pick up their phone calls. So we're going to have to see what's wrong with our telephone system. I apologize for the last two phone calls, and please call back if you can, try to get through. We're talking with NPR's Julie Rovner.
Now as we talk about what's going into effect next year, people also talk about new taxes going into effect to pay for all of this.
ROVNER: That's right, and there are a number of taxes. Congress tried very hard to spread them around. There are taxes on wealthier people. There's an expanded Medicare tax on wealthier people. There are taxes on health insurance plans. And of course it's expected that the tax on health insurance plans will probably be passed back through.
There's a lot of concern about premiums going up. There's a tax on medical devices. There's already, in effect, a tax on tanning salons. So there are a lot of different taxes, and indeed this is, you know, a trillion-dollar bill over 10 years, and Congress was very insistent that this be paid for, and the president also, that this not add to the deficit.
So yes there are a variety of taxes to help offset the cost of this law.
CONAN: Yet the idea is to constrain the growth of the country's health bill.
ROVNER: Yes, and it is hoped that there will be ways to - that there are efforts underway. Mostly these are demonstration programs within the Medicare program. That's what Congress has - the federal government has the most immediate power over to try and find better ways, what they call better incentives to help get better outcomes rather than paying - a lot of the health system is sort of paid by inputs, the more you do the more you get paid.
And that's seen as sort of inherently inflationary. It gives people, it gives the medical system the incentive to do more. So the idea is let's change the incentives and have the incentive be to do things more efficiently rather than to just do more. So one example is hospitals now get dinged if patients come back to the hospital too soon, it's called readmissions. If you get, you know, discharged, and you come back, you don't get paid extra for another hospital admission. In fact you get punished for having that readmission. So that's one example.
CONAN: Over the next two months we're going to be looking at a variety of issues ahead for the years to come. We're beginning with the transformation of the American health care system, and NPR's health policy correspondent Julie Rovner. How is your life being affected by the new law? 800-989-8255. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.
(SOUNDBITE OF MUSIC)
CONAN: This is TALK OF THE NATION from NPR News; I'm Neal Conan. Today NPR health policy correspondent Julie Rovner joins us to walk through the rollout of the Affordable Care Act. Now that it's the law of the land, changes have already begun. Julie's been with us through it all, from expanded Medicaid coverage through the doughnut hole and from electronic health records to hospital performance reporting; more changes yet to come: the health insurance marketplace, tax credits for some Americans in the middle class and the elimination of annual coverage limits, to name just a few.
If you're a doctor, a patient, a medical professional, how is this law changing your life? 800-989-8255. Email us, [email protected]. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION. Erica has managed to get back through on the line from Fort Myers. Again, we apologize.
ERICA: That's all right, Neal, and thank you very much. I hope - good luck to you going on in the future.
CONAN: Thank you.
ERICA: As part of my medical regime, I go in every six months for a blood draw and just for a following checkup, never had a problem with it. Changed jobs last year, same insurance provider, same coverage, but now they didn't cover my blood draw. They say it's a pre-existing condition because my plan has limitations on it.
And, you know, it's - I never, ever had an issue, but this is - you know, I talk to my friends, and I say, well, didn't Obamacare fix that? And it's like no, it didn't, not until next year. And, you know, the education isn't out there, and it's really disheartening that just because I had something done in the past, I can't get it paid for now because of my plan's stipulations.
CONAN: And again I suspect, Julie, that Erica's not the only person in her situation. Can we get your mic on? There we go.
ROVNER: Although I should say that if you've been continuously covered, you shouldn't have a pre-existing condition exclusion. That should've been taken care of by HIPAA, which was passed in 1996. The pre-existing condition exclusions are usually only for people who have had a break in health insurance coverage. So that actually surprises me, and you should probably take that up with the HR office where you work, or if you have your own insurance, you should really actually argue against that because that is something that you shouldn't have to wait until 2014 for.
ERICA: Well, with the current economy there was a break between physicians, and they're currently investigating it, but it was somewhat disheartening to come across that. And I guess I've just been very fortunate to never have an issue with, you know, uncovered expenses through insurance. But I can definitely see why, you know, experiencing this, you ask, well, why wouldn't you cover it, and I can see why there are countries that, you know, have different health care systems would look at us and say why wouldn't you cover these individuals?
CONAN: Erica, thanks very much for the phone call, appreciate it.
ERICA: No problem, thank you.
CONAN: And let's go to good old email. This one's from Rachel(ph) with a not dissimilar problem: My daughter was rejected from most health insurance companies due to a condition she was born with. We were finally accepted by one but with a 50-percent rate increase. Does the new health law affect this? Should I be able to drop the increase, or should I be able to apply for the new health insurance without being subjected to pre-existing conditions?
ROVNER: Yes.
(LAUGHTER)
ROVNER: Fairly short and sweet. I mean, you know, most people - it's important to remember here that, you know, everybody talks about how big a change this is going to be next year. For most people it's not. For most people, they're going to continue to get their health insurance the way they get it now, which is through their employers.
What's happening next year is really only a change for people in the individual and small-group markets, and that is really a minority of people with health insurance. So we're talking about people who buy their own insurance. It's going to be, they estimate next year, about 14 million people. So if you think of the universe of people with health insurance, it's about 256 million people. So we're talking about a very small number of people that this is going to impact.
But yes, for people who do go out on the open market and buy their own insurance and get, you know, either denied or told that because you have a pre-existing condition, you're going to have to pay half again as much, those are the people who have really been suffering over the years, and those are the people who are going to get pretty dramatic help come next January 1.
CONAN: Let's go next to Crystal(ph), and she's on the line with us from Denver.
CRYSTAL: Oh hi, thanks for taking my call.
CONAN: Go ahead.
CRYSTAL: I could not praise the Obamacare too highly. I am just so excited and so grateful for it because last year I was diagnosed with cancer. I'm self-employed, and I didn't have insurance. But under Obamacare, I was able to get an insurance that had two criteria: One, you did not already have insurance; and two, you had a pre-existing condition.
So because of that I was able to get insurance and got the surgery to remove the cancer, and now I'm cancer-free. So I am totally, completely ecstatic about Obamacare.
CONAN: Well that's great news, Crystal, and congratulations. Thank you.
CRYSTAL: You're welcome.
CONAN: And winners under the health care law, obviously there will be losers, too.
ROVNER: Yes indeed, and this was clearly one of the winners. I imagine this was part of one of the smaller programs to tide people with pre-existing conditions over, and this program has actually been closed down because it ran out of money. And it was expected to run out of money, they only put $5 billion into it, but they closed it down in February, not taking anybody else. So nobody else is going to be allowed in between now and, you know, 2014, when obviously people like this will be able to get insurance on the exchanges.
There's also concern, and we're seeing a lot of this, that when people with pre-existing conditions are allowed to buy insurance on the open market that rates will go up. And we keep hearing these, you know, this phrase rate shock. And we are starting to see some states who are starting to ask for their rate increases for next year.
No one's quite sure how this is going to work out. The concern is that if rates go up too much that younger, healthier people won't buy insurance because after all, particularly for the first few years, they have the option to buy insurance or pay this fine. And the fine is very low starting out, it's a couple of hundred dollars compared to what could be several thousand dollars for insurance.
Now the thing that - sort of what could, you know, militate against that is that for younger people there is lower-cost insurance that they can have. Many of them can stay, as we mentioned, on their parents' plan. And many of them will be eligible for large subsidies. You can get a subsidy all the way up to 400 percent of poverty. So you won't - even if you're a young person, you won't pay that, and even if the rates go up, you won't pay that entire amount. You'll be eligible for help from the government.
So at least - it depends how good a job people do, these states do and the federal government and everybody else who's going to help, you know, get people educated and enrolled in these plans, how good a job they do convincing young people that it's important for them to have health insurance not just so that the exchanges work, but it's important for people to have health insurance in case something happens to them.
CONAN: If you get sick. Martin's(ph) on the line with us from Tucson.
MARTIN: Good afternoon. I'm not an avid listener; I'm just driving to the hospital. I wanted to make a couple comments as a physician. And I may be a bit long-winded. My - I have a father-in-law who practiced medicine in France for 45 years with no employees whatsoever. And contrast that to the way I practice medicine: three physicians with 25 employees.
Our number one expense, of course, is collecting money from insurance companies. And our number two expense is regulatory expense. Our overhead expense is 65 percent. The - my father-in-law's overhead expense was about zero. The Obama health care law does nothing to reduce our expenses. It does nothing to reduce our malpractice expense, it does nothing to fix Medicare regulation, and in fact it makes (technical difficulty) I'm seeing Medicare patients much greater. And the risk in seeing them is also much greater.
We have audits, we have fines, we have ridiculous documentation requirements, and if you don't meet those documentation requirements, it can be a $50,000 fine and loss of your practice. You know, if this bill is designed to save costs, I don't know where it's intending to save costs, at least in my office. And health insurance has gone up. Everything is going up. And since the beginning of the year, our revenue has gone down seven percent, in part because of revaluation of codes and of course the fiscal cliff fee cut we got this month.
So, you know, I'd hoped that with Obamacare we'd get real reform for the physicians so that we can act like physicians and not be forced to act more like business people. And, you know, it's really the overhead expense, the practice expense, that drives physician behavior I think more than anything else. And that's the only comment I would make.
CONAN: All right, Julie?
ROVNER: I hear this a lot. It's hard to argue with anything that this physician is saying. One of the things that it is driving physicians to do is to sell their practices to hospitals and, you know, basically go to work for the hospital, let the hospitals undertake all of this overhead and have the physicians not have to deal with it anymore.
There's concern that that will lead to too much consolidation in the healthcare marketplace, and that could increase - they would have so much, then, bargaining power vis-a-vis the insurance companies that they could basically dictate the prices to the insurance companies, and that could run costs up.
So there is a worry about that, but it is - it's very - I mean everything that the physician said is pretty much true. There were a lot of compromises that went into the way this law was gotten through, and so there are a lot of new documentation requirements. Doctors' offices, most of them not are trying to move to electronic medical records. There was so money to help them underwrite that, but if you're a smaller practice, that can be expensive. You need a bigger staff.
There is still a multiplicity of insurance companies, so it is difficult to do all that. You know, there is not a lot in this law that makes life that much easier for doctors.
CONAN: And what's the major difference between this system that we have and the one that Martin's father-in-law worked in, in France?
ROVNER: Well, most of the European health care systems are single-payer, government-run. I mean, with the exception, really, of the Netherlands and Switzerland, most of them have - are basically run by the government. So there's not that much paperwork.
CONAN: Here's an email from Jim: What are the predictions that private employers will stop providing medical insurance for their employees and just let them buy into their own in 2014?
ROVNER: Well, this is a big concern. There's - there are many protections in the bill to try and stop that. For larger employers, it's not considered much of a concern. There have been all kinds of polls here and there and everywhere else. But, generally, the big employers are not going to stop providing health insurance. It's too important to their business. It's important for recruiting workers.
The real concern is this smaller and midsized employers, and we are seeing sort of a lot of anecdotal evidence of - the rule is that if you have more than 50 workers, more than 50 full-time workers, you have to either provide health insurance or pay a fine. It's kind of similar to the individual requirement. And what we are seeing is employers trying to either shed workers or turn full-time workers into part-time workers.
There's been - particularly in the restaurant industry, where they don't pay that well. We've seen it in some colleges, where they're taking, you know, professors who are sort of independent - or turning them into independent contractors. So there is some concern at the fringes. But generally, in large businesses, that's not considered to be a likelihood.
CONAN: Let's get another caller on the line, and go to John, and John's on the line with us from San Francisco.
JOHN: Yes. Thank you. It's great program. You could spend a whole day on this.
CONAN: I know.
(LAUGHTER)
JOHN: Yeah. Well, here's my situation. I am self-employed. Actually, I'm unemployed, but I prefer to say self-employed. I'm also self-insured. I carried my insurance from my employer through COBRA and HIPAA, and now I just got a letter from my insurer saying that I will be dropped at the end of this year, but not to worry, you can sign up for Obamacare on January 1st.
So I went on the - California's online exchange, typed in my information, and it turns out, because I take a pill every day - my pill is for depression, but it could also be for any number of other things like diabetes or high blood pressure - and I was denied. Actually, it was called a neurological disorder. So I said, well, what about Obamacare? Well, that kicks in in 2014.
So I'm really now wondering whether or not, on January 1st, that I have more of the same to worry about. You know, what is an exorbitant rate for someone with a preexisting condition? Is it $5,000 a month? I'm really worried about what I have to look forward to on January 1st.
CONAN: Julie?
ROVNER: No, you should be fine on January 1st. The actual enrollment for the plans that begin next year - that will not take into account what pills you take or what your pre-existing conditions are - start on October 1st. So I know - I think the existing California exchange, that the plans that are there now are not the plans that you'll have access to starting October 1st.
And this is one of the issues that's going on now. Everybody's complaining that there's not enough education, not enough outreach, not enough trying to get people, you know, to get on and sign up. And the answer is they don't want to take - they don't want to send people to places that aren't ready for them yet. So I think that's why you're not seeing a lot of it yet, because they don't want people to go there and - because there's no there there in most of these places...
CONAN: Not yet.
ROVNER: ...not yet. It's a little bit...
CONAN: Anyway...
ROVNER: It's a couple of months early.
CONAN: John, thanks very much. We're talking to Julie Rovner about the transformation of America's health care system in our new series, "Looking Ahead." You're listening to TALK OF THE NATION, from NPR News.
And this email from Kathy in Meridian, Idaho: I'm - this may not be exactly what you want to discuss. We've been told forever costs were high because uncompensated care costs had to be passed on to payers, insurance, individuals, et cetera. So my question is: If we don't have uncompensated care because everyone has coverage, shouldn't costs go down, or at least quit rising? Why do we keep hearing costs will rise dramatically?
ROVNER: Well, I mean, that's one of the reasons. It's a very good question. One of the reasons that insurance costs are high is because uncompensated care costs get put into the premium cost. But one of the reasons that costs go up is because the cost of health care goes up in general. People use more care, so costs go up. I mean, there are a number of reasons that costs go up.
There was just a very interesting study that came out last week from the Kaiser Family Foundation and Altarum, which is a health policy think tank, that talked about health costs have actually been going up very slowly over the last couple of years. The general thought is that it's because of the economy, because of the recession and that health spending recovers more slowly than the rest of the economy.
CONAN: A lagging indicator.
ROVNER: It is a lagging indicator. The - one of the other reasons that it's gone up more slowly, they think, is because employers have put - have loaded so much more in terms of health costs onto their workers, onto individuals, and people just are not getting a lot of health care, and they think that that will slow.
So we - actually, there has been a little bit of a break - B-R-A-K-E and B-R-E-A-K, in both cases - on how fast health care spending goes up. But - so even if you take care of the uncompensated care problem, that doesn't mean you're going to take care of all of the health care spending problem.
CONAN: And let's talk about incentives. You mentioned one in terms of hospitals get dinged if patients come back too quickly. There are other aspects where the quality of care is being - the outcomes are being paid for rather than fee for service.
ROVNER: That's right, and that's where the doctors come in. Again, we had this doctor who doesn't feel like this is doing much.
CONAN: Improvement.
ROVNER: And he was - that's right. And he was talking about, you know, all of these, you know, all of these process things, all of the things that the doctors now have to document. You know, this is one of the issues, but that's - there's no other way to find out the outcomes unless you document things, and it is a problem of trying to figure it out. But you do want to pay for whether people do better, rather than just what people do to patients. And that - this is one of - it's not very pretty getting there. But the idea's that if you get there, if you can pay to make patients healthier rather than to just do things for healthier, you'll have a more efficient health care system.
CONAN: Yet some people also fear that will lead to cherry-picking. Various practices will look for healthier patients, so their outcomes are better and they don't have this problem.
ROVNER: There have been a lot of stories about that. There have been surgeons who've turn down very sick patients because they don't want their quote-unquote "report card" to have a ding on it. It is indeed a problem. So it's not - as I said, this is still a work in progress. No one has quite figured this out yet, but it's certainly not a reason not to work on it.
CONAN: As a caller correctly said, we could talk about this all day and still not get to everything. Julie Rovner, as always, thank you very much for your time, and we're sorry we did not have a chance to get to everybody's question and email and phone call. Appreciate it, Julie.
ROVNER: Always a pleasure. Transcript provided by NPR, Copyright NPR.