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Health Reform, Now Real, Is Just Around the Corner

Philip Moeller

Following President Obama's reelection, it's once again "game on" for health reform. By Jan. 1, 2014, as many as 30 million currently uninsured people will be able to purchase health insurance. A massive system of government insurance subsidies needs to be built, and embedded into the business practices of thousands of insurers, hospitals, doctors, and other healthcare providers.

Other far-reaching changes in the law include disallowing the denial of insurance coverage to those with a pre-existing health conditions. People with such conditions, including many older consumers, will be protected from paying punitive premiums for their coverage. Lifetime caps for insurance payments are already illegal under the law. Annual coverage limits are being phased out and will be gone by 2014.

Employer insurance rules face enormous changes. Some smaller employers won't need to offer health coverage. Larger businesses can opt out of their coverage responsibilities by paying penalties. Some companies have already begun shifting work from full- to part-time employees to reduce their exposure to the new law and its possible costs.

Finally, someone has to explain all these things to the law's beneficiaries--the American public. Health reform is widely misunderstood, yet its success hinges on extensive use of the new law by an informed public.

[Read: Health Reform Brings Standard Consumer Disclosures.]

Viewed alongside the scope of what has to change, then, 2014 looms uncomfortably near. Now that the law's future is not really in doubt, expect an accelerated pace of new government rules and deadlines.

The first one is only a week away. By November 16, states must decide whether to build their own exchanges for insurers to sell health policies, or have the federal government do it. The feds, in turn, have only until the beginning of 2013 to certify a state's proposal to set up an insurance exchange.

The first round of open enrollment for 2014 insurance plans gets underway next October. This schedule leaves very little time to develop an entirely new structure of insurance coverages, premium levels, paperwork forms, newly programmed insurer computer systems, and massive new consumer communications programs and materials.

Many states have spent the past several months on the sidelines. Even after the U.S. Supreme Court upheld the constitutionality of Obamacare, there was always the chance that Mitt Romney would win the election and follow through on his promise to dismantle the law. Now, the states must scramble to make decisions. "There will be lots of people in lots of governor's offices around the country pulling all-nighters," says Larry Levitt, senior vice president for the Kaiser Family Foundation.

[Read: Tracking Health Reform Changes Already in Effect.]

States also have to decide whether to participate in the large expansion of Medicaid eligibility rules permitted under the law. Millions of lower-income Americans are expected to get medical services through Medicaid, but only if their state governments decide to adopt the new rules and accept the federal dollars to pay for them. The Supreme Court ruling said the health reform law could not force states to expand Medicaid, and also said a state could not be punished for refusing the expansion. As with the insurance exchanges, many states decided to put off their Medicare decision until after the elections.

Health reform is largely independent of the fiscal cliff. But the automatic federal spending cuts that would occur under the compromise sequestration agreement reached in Congress would reduce some of the funding for low-income insurance subsidies built into the law, Levitt notes. And while the Republicans did not win the White House, they remain in control of the House of Representatives and a force in the Senate.

[Read: How Personal Health Reform Taxes Will Work.]

Congressional opponents of Obamacare--and there are many--"can make things difficult in a couple of ways," Levitt says. "One is to starve elements of the law through funding cuts. The other is to try and overturn regulations" using existing legislative mechanisms. The Democratic Senate can probably block such efforts, he suggests.

Despite the importance of the law and the demanding timetable for implementing it, Washington developments will be dominated by the fiscal cliff and related budget-deficit issues. "It's sort of frightening," Levitt says, "but what happens in the budget deficit debate could overshadow health reform."

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