What the recently enacted Patient Protection and Affordable Care Act will actually mean for millions of Californians will remain somewhat opaque until it begins January 2014, but broad details of the plan became a bit clearer after an informative panel was held Monday night in Santa Barbara featuring the state insurance commissioner.
Commissioner Dave Jones was the keynote speaker of a forum hosted by Antioch University and held at its new facility at 602 Anacapa St. He was flanked by an impressive panel of local health-care heavyweights who posed questions about the new law to Jones as well as answered some from the audience. About 150 people attended the forum.
The Affordable Care Act seeks to enroll 32 million people not currently covered by health insurance, requiring them to sign up for health care via online exchanges.
Jones began the talk by saying that California was the first state to implement the legislation after the ACA became law, and that the nation is watching how the program unfolds.
“It’s not socialism,” Jones told the audience, adding that the plan had been championed by presidential candidate Mitt Romney during his governorship of Massachusetts.
One of the biggest benefits of the new plan states that a larger share of health insurance premium dollars must actually go to health care for patients, instead of to profits, he said.
Ironically, health insurance companies call money spent on direct patient care “medical losses,” Jones said. Before the bill, companies such as Anthem Blue Cross had a medical loss ratio of 60 percent, which meant the other 40 percent was profit, he said.
“It’s striking,” he said, adding that now companies will be required to have 80 to 85 cents on every dollar go toward care. If they don’t meet that, the insurance company is required to rebate that money.
Another popular facet of the plan will allow adult children to stay on their parents’ insurance coverage plan, benefiting 350,000 young people across the state. Lifetime caps for care would also be eliminated, he said, as well as the “donut hole” for prescription drugs for seniors.
“A lot of folks are not aware of the benefits that are there and to lose them would be a tremendous loss,” he said.
In 2014, an online marketplace will be made public for businesses and individuals to purchase insurance, and each health insurer must meet a minimum floor of benefits.
“Many small businesses want to buy health insurance for their employees,” Jones said, adding that there’s a federal tax credit of 35 percent for those who provide insurance for their employees.
One thing the plan doesn’t adequately address is the ability of insurance companies to raise prices. To address that, Jones said he’s working to collect the 800,000 signatures needed to give him the authority to reject the rate hikes, as many states already do.
Kurt Ransohoff, CEO of Sansum Clinic, was the first of the panel to speak. Because he’s a doctor with his own patients, as well as an administrator, “I am uniquely qualified to be anxious,” he said.
He asked Jones, how would the rising costs of medical care be regulated?
Jones said that while medical costs are indeed increasing, a sizable portion of those costs stem from profit. For example, he said, Anthem Blue Cross made a 26 percent return on equity in 2010, “at the height of the great recession,” he said.
Dr. Takashi Wada, director of the Santa Barbara County Public Health Department, asked Jones how many people will still lack coverage after the exchanges are set up.
Out of the 7 million uninsured Californians, 4 million to 5 million will be receiving care, depending on how they respond to the penalty for not purchasing insurance, Jones said.
The Affordable Care Act doesn’t provide care for undocumented people, who still could receive care in emergency rooms and in clinics. But those who are uninsured will “fall on community health providers, counties, and I don’t see the state creating some new program to help that,” Jones said.
Cottage Health System CEO Ron Werft asked if employers would buy into the new system, adding that because two-thirds of Cottage’s patients have health care via government programs that don’t pay the full cost of medical care, patients with private insurance are asked to make up the difference.
“What is the response from the employer going to be?” he asked.
Jones responded that every employer is going to do an economic calculator, and “the belief is the majority of the business community will stick with it.”
A larger pool of insured people will also mean more help to bear the costs, he said.
Dr. Cynder Sinclair, executive director of Santa Barbara Neighborhood Clinics, asked what they could do to get ready for January 2014 and about pent-up demand among previously uninsured.
“The real challenge is for physicians to take those patients,” Jones said. “Not only is there a shortage of primary care physicians nationally, but the reimbursements for Medi-Cal are such that it’s difficult to take on those patients. It’s going to be a challenge.”