Cathie's Corner Blog

Health Care Reform: The New Hot-Button Item

(Published June 22, 2009)

My husband just got back from two weeks in Washington, DC, making the political rounds. He told me that the hot-button item down there is health care reform, and we should be seeing a lot about it shortly.

Let me back up a bit. My state of Massachusetts is one of two where employers are required by state law to offer health insurance to its full-time employees, with full-time being defined as those who regularly work 35 hours a week. (The other state, Hawaii, has a different definition.) Indeed, Massachusetts residents are required by law to have health insurance. To assist those who do not have access to employer-sponsored health insurance, or small business owners who cannot afford the premiums offered by independent health care insurers, a semi-public agency has been set up by the state to offer no- or low-cost insurance to those who qualify. The agency also determines who qualifies for this assistance.

Evidently, the most likely scenario that we will see on the national level is some variance on the Massachusetts plan. Although some would prefer simply tinkering with the existing set-up, it is more likely that some form of quasi-governmental agency will offer no- or low-cost care to individuals and business owners. Since the federal government will not have to make a profit, these plans will be more affordable than those offered by private insurance carriers. This, in turn, or so it is hoped, will force Blue Cross, et al., to reduce their premiums, making private insurance more affordable, as well.

I asked my husband whether or not employers would have access to the plans offered by the semi-public agency, the way they do in Massachusetts, since that would really provide competition to the health insurance industry. He said it would depend on how the final bill panned out, but that it seemed likely.

The reason I'm telling you about this now is that whatever bill the House and the Senate finally agree on is likely to be finalized this year, before we all go to open enrollment. And it's quite likely that President Obama will sign it.

We all know that just because Congress comes to an agreement on the bill doesn't mean that it will be effective this year. We may have another year or so on the old system while details are finalized and the quasi-governmental agency is set up and put into operation. Plans will have to be customized and established. But there is no getting around it; health care reform, for what it's worth, is coming and coming soon, whether we like it or not. Those of us in HR, and particularly those of us who manage benefits, will be the ones to put our employers into compliance with whatever law goes into effect, not to mention explaining it to our employees. Let's keep in touch with what's going on on Capitol Hill, so that we're prepared with answers when employees come asking.

Catherine Bannon is an HR consultant in Marshfield, MA (catherine.bannon@gmail.com). Bannon worked for 10 years in HR management before starting her consulting practice.

Posted by Editorial at 6/19/2009 3:14 PM

Has the MA plan produced the desired result of reducing health care costs and premiums for the state?
Posted by: Joann at 6/23/2009 11:29 AM

Joann has posed an excellent question and hopefully Congress has/is looking very closely at their success/failure. "Forcing Blue Cross,et al., to reduce their premiums" is not going to work unless the cost of medical care comes down correspondingly.
Posted by: Linda at 6/23/2009 12:37 PM

The "cost" of medical care is complicated and encompasses facilities, professional services, pharmaceutical and legal expenses. To truly evaluate the costs, one must assess all of these expenses and the processes that drive those costs up. Lowered costs for medical care cannot result in less quality care. As a medical practice administrator, I am very concerned that our current legal system will destroy quality medical care and drive the supply of qualified M.D.s down, thus raising the cost for professional services. There is no easy solution.
Posted by: Barb Peterson at 6/23/2009 1:16 PM

I hate to point out the obvious, but providing medical care to everybody is going to raise the total amount of money spent on medical care. In the past the governments plan for controlling medical costs is simply to pay doctors and hospitals less money. They transfer the cost of subsidized medical care onto somebody else. Estimates by the CBO are that Obama's plan will cost $1 trillion a year. Since they always underestimate the cost we can assume it will cost substantially more than that. We can still hope they don't pass anything becasue it will cost us all a lot of money. To believe the insurance companies control the cost of medical care is naive.
Posted by: Greg at 6/23/2009 2:30 PM

What really needs to happen in the whole health care arena is to get rid of the 3rd party administrators. These are organizations that do nothing for the patient except regulate payments to providers. They don't care for the patient, they don't buy any drugs or supplies, they are not involved in health care site at all. They are on the other end of a computer, regulating payments. And the worst part is that, in my industry, pharmacy, they are taking HUNDREDS of MILLIONS of dollars from the health care system as profits to their companies. All this at no risk to them, and no benefit to patients whatsoever. It is so obscene that it is hardly believable to someone not in the field but I assure you it happens everyday, at your expense.
Posted by: Karen Tilley at 6/25/2009 12:22 PM

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Cathie's Corner Blog

Health Care Reform: The New Hot-Button Item