Rising Costs: A Health Care Challenge For Democrats
For Democrats, passing the new health care law may have been the easy part. Now that it's the law, everything that happens in health care, whether due to the Patient Protection and Affordable Care Act or not, is their responsibility.
"The Democrats have guaranteed that the American health care system is going to be affordable. They put it in the title of their bill," health policy analyst Bob Laszewski said. "So everything that happens after March 23, 2010 [the day President Obama signed the measure] is theirs. They own it."
Democrats came under fire from Republicans on Monday for the latest set of regulations they issued. The new rules lay out which insurance plans can remain as is when new consumer protections and other requirements take effect.
"This rule reflects the president's policy that Americans should be able to keep their health plan and doctor if they want," Health and Human Services Secretary Kathleen Sebelius said.
But plans won't be able to remain "grandfathered" if they raise premiums too much, or cut too many benefits. Sebelius said the idea was to create a balance, "to make sure the grandfathered plans still have the flexibility they need to make reasonable changes, but also making sure that insurance companies don't use this additional flexibility to take advantage of their customers."
Republicans, however, were quick to point out that by the department's own estimates, many insurance plans would not qualify to remain unchanged.
Despite repeated promises by President Obama to the contrary, said Senate Minority Leader Mitch McConnell (R-KY), "the government is about to change the plans most Americans have. Here's one more promise the administration has broken on health care and one more warning Republicans issued on this bill that's been vindicated."
What Republicans don't say is that plans that do have to change will have to offer more, rather than fewer, benefits and consumer protections. That includes things such as free preventive services and guaranteed direct access to obstetrician/gynecologists for women.
But most of those new benefits won't take effect for another three years. What makes Democrats more immediately vulnerable is what's going to happen to people's health insurance costs next year. They're going up.
At least that's the finding of a new report from the consulting group PricewaterhouseCoopers.
"I think you can expect to continue to see significant increases in what you pay for your health care," says Mike Thompson, a principal with the firm and the study's lead author.
In order to cope with a projected medical inflation rate of 9 percent next year, Thompson says, he expects that employers will load more costs onto workers, both through higher deductibles and by replacing flat co-payments with percentage coinsurance. In other words, rather than paying a flat $20 fee to see a doctor, more workers will be expected to contribute 20 percent of that doctor's bill.
Both Thompson and Laszewski say next year's rising costs aren't due to the new health law. And none of the new law's provisions intended to restrain health spending have yet to take effect. But those are subtleties likely to be lost on most of the public. They're simply going to wonder why their costs keep going up.
"I myself would not have called it the 'affordable' health care act," Laszewski says. "I think that's making a promise you're not likely to be able to keep."
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STEVE INSKEEP, host:
Rolling out the new health-care overhaul law is proving almost as tricky as getting it passed. Democrats now face criticism for whatever happens in health care, as NPR's Julie Rovner reports.
JULIE ROVNER: Bit by bit, the Obama administration is making the critical decisions fleshing out parts of the law that legislators left undefined. Yesterday, Heath and Human Services Secretary Kathleen Sebelius announced the rules to determine which health plans can remain as is when the new system goes fully into effect in 2014.
Secretary KATHLEEN SEBELIUS (Department of Health and Human Services): As we designed the new law, we knew that a lot of Americans actually like their current insurance plans. They want more choices, but they want one of those choices to be the plan they have.
ROVNER: Under the rules, companies can keep their plans unchanged, be grandfathered in - if they dont raise premiums too much or cut benefits substantially. The idea, said Sebelius, was to strike a balance.
Sec. SEBELIUS: These rules are carefully written to make sure the grandfathered plans still have the flexibility they need to make reasonable changes, but also making sure that insurance companies don't use this additional flexibility to take advantage of their customers.
ROVNER: Republicans, however, including Senate Minority Leader Mitch McConnell, were quick to pounce on the fact that HHS's own estimates show that many health plans, particularly those serving small businesses, won't qualify.
Senator MITCH MCCONNELL (Republican, Kentucky): The government is about to change the plans most Americans have. Here's one more promise the administration has broken on health care, and one more warning Republicans issued on this bill thats been vindicated.
JULIE ROVNER: What Republicans don't say is that plans that do have to change will have to offer more, not less, benefits and consumer protections - things like free preventive services and guaranteed direct access to obstetrician-gynecologists for women.
But most of that's not going to affect people for another three years. Where Democrats are more immediately vulnerable is what's going to happen to people's health insurance next year.
Mr. MIKE THOMPSON (Pricewaterhouse Coopers): I think you can expect to continue to see significant increases in what you pay for your health care.
ROVNER: Mike Thompson is with the consulting firm Pricewaterhouse Coopers. He's just completed a study of how employers plan to cope with medical inflation next year, which is expected to be about 9 percent.
Mr. THOMPSON: There's been a dramatic change over the last few years in terms of employers moving their plan designs to have much higher deductibles and higher co-insurance in-network.
ROVNER: In other words, employers are passing many of increased costs back to workers. Rather than paying $20 for an office visit, more plans are calling for a 20 percent share of the bill. And Thompson says next year, a majority of workers will have deductibles higher than $400 for in-network care.
Now, next year's higher costs dont stem from the new law, and none of the cost-constraining elements of the new law have taken effect yet. But those are niceties likely to be lost on most of the public, says health policy analyst Bob Laszewski.
Mr. BOB LASZEWSKI (Health Policy and Strategy Associates): The Democrats have guaranteed that the American health-care system is going to be affordable. They put it in the title of their bill. So everything that happens after March 23, 2010, is theirs. They own it.
ROVNER: That was the date President Obama signed the bill into law. In fact, Laszewski says, for the next few years, at least, many of the things the law calls for - like major investments in electronic medical records - will at least temporarily boost spending.
Mr. LASZEWSKI: There's no chance we're going to have affordable health insurance in this country in the next few years, at least.
ROVNER: Meaning the political fight over health care is a long way from being over.
Julie Rovner, NPR News, Washington.
INSKEEP: And you hear Julie on MORNING EDITION, from NPR News. Transcript provided by NPR, Copyright National Public Radio.
