Tracking Health Reform Changes Already in Effect

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The health reform law certainly generates passionate and divisive opinions, but what it hasn't seemed to generate is informed knowledge. People know very little about specific provisions of the law. Its primary overseer, the U.S. Department of Health and Human Services (HHS), lists more than 30 distinct parts of the law that already have gone into effect. The Kaiser Family Foundation's health reform timeline tracks 60 items. If you can name more than a handful, go to the head of the class.

Even knowing these provisions is of limited help unless you can get solid information on what it has cost to implement them, how much impact they've had to date, and what the future looks like. Election-year politics have delayed the pace of some changes and thrown others into doubt. U.S. News sought informed feedback from several leading organizations that do extensive work on health reform. None of them have issued detailed and systematic assessments of whether health reform has actually worked as intended.

In some cases, it is just too early to be issuing report cards on health reform. Many provisions have been in place only a short time. It may take many years for Obamacare to change how consumers and practitioners use the healthcare system.

In other cases, the lasting impact of some changes won't truly be known, or felt, until the law's more momentous provisions take effect in 2013 and 2014. These include the personal mandate requiring most people to have health insurance or face financial penalties, subsidizing the purchase of insurance through state exchanges, ending the use of pre-existing medical conditions as grounds for denying someone health insurance, and greatly expanding Medicaid coverage for lower-income Americans.

At U.S. News' request, HHS assembled details on health reform changes that have already taken effect. This is not a health reform for dummies guide. If you want to know enough about these provisions to make an informed assessment, you will need to do more reading and in some cases a lot more reading. We augmented this material with information developed by other sources, most notably Kaiser, which is widely cited as the leading private provider of health reform information.

Recession or not, healthcare has continued to grow and now represents about a sixth of the entire U.S. economy. The nation's gross domestic product (GDP) was running at an annual rate of $15.6 trillion during the second quarter of this year. The healthcare slice of this enormous pie thus totals about $2.6 trillion.

If you add up the total value of every good we make in the United States--all the cars and other durable goods, and all the food, clothing, fuel, and other nondurable goods--it totals a bit less than $3.8 trillion. So, the healthcare sector is nearly three-fourths as large as the value of everything we make.

That's how big healthcare is, and the Patient Protection and Affordable Care Act (the formal title of the health reform law) involves regulating or re-regulating just about all of it. There is no question that this entails a huge amount of government oversight. To cite just one example that doesn't get a lot of attention, creating insurance exchanges and new rules for employer-provided health insurance will change the incentives for many people to even seek employment in the first place.

"Some provisions of the legislation will discourage people from working more hours or entering the workforce, and other provisions will encourage them to work more," the non-partisan Congressional Budget Office said in one of its many reports on the impact of the new law. "CBO projects that it would reduce household employment in 2021 by about 800,000."

The CBO has consistently said that the law will, over time, reduce the size of the federal budget deficit. The law does raise spending to provide health insurance to a projected 30 million people who don't now have it. But it more than pays for itself, the CBO says, through a host of new taxes and fees, plus cuts in government payments to healthcare providers and insurers. These include reductions in payments for Medicare services, but no reductions in the services themselves. In fact, most seniors will wind up clearly receiving more healthcare for less of their own money under the law.

Nearly everyone seizes on the specific numbers in the CBO reports. But perhaps a more compelling take-away from them is the prevailing sense of uncertainty in nearly every financial projection made by the CBO. Earlier this summer, the agency issued a report on the budget impact of the Republican proposal--House Resolution 6079--to repeal health reform.

"Projections of the budgetary impact of H.R. 6079 are quite uncertain," it said, "because they are based, in large part, on projections of the effects of the ACA, which are themselves highly uncertain."

Next up: Major Health Reform Changes Effective in 2010

Twitter: @PhilMoeller



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