Tuesday, March 23, 2010
How will the health care reform bill impact local health care providers? We speak to representatives from hospitals and community clinics about how they will be affected, and get an update on what changes will begin this year and what will take place in 2014.
MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. Just minutes ago, President Barack Obama signed the healthcare reform bill into law. Now, whether you like the bill or not, the signing of the Patient Protection and Affordable Care Act by President Obama is a historic moment. The new law's combination of government regulation and market competition will be changing the face of healthcare in America, but not overnight. This hour on These Days, we'll be talking about what the new healthcare law will change by the end of summer, by the end of the year and beyond. And we’ll be taking you calls and questions about the upcoming healthcare reforms. Our number is 1-888-895-5727. But first, there are still legislative fixes that have to be put in place by lawmakers in the Senate. Joining us now to explain what’s next in this complicated healthcare legislation is my guest, April Fulton. She is health editor for National Public Radio. And, April, good morning.
APRIL FULTON (Health Editor, National Public Radio): Good morning, Maureen. How are you?
CAVANAUGH: I’m fine. Thank you for being here.
CAVANAUGH: Now, the signing ceremony, as I said, just took place a few minutes ago and it was a very happy ceremony for a lot of people who’ve been working for healthcare for a long time. What did the president say at that ceremony?
FULTON: Well, that’s right, Maureen, a lot of people have been working on healthcare reform for years, decades, in congress and whether you agree with the bill or not, as you said, the law now, it’s an historic moment. Vice President Biden introduced the president. He said that the president deserves a lot of credit for setting healthcare in this country on a new course. President Obama himself talked about the year-long debate that they’ve been having in congress over how to shape up this bill. And now he suggested that the rhetoric of the year is becoming reality. He did acknowledge that the Senate still has a round of improvements to come up with but he’s confident that they will, in the next week, do that. He praised a lot of people in congress for their courage and suggested that they’ve taken their lumps during this time, which generated a little laughter in the packed room. So it was all smiles all around, and a lot of people congratulating themselves today.
CAVANAUGH: Now clarify it for us, if you would, April. What version of the healthcare bill did the president actually sign today?
FULTON: Well, part of the issue during this whole debate has been somewhat about the process. I think a lot of people have been hearing a lot about words like reconciliation and deeming and all this sort of – who, to us in Washington, is kind of standard fare to some extent but here’s what happened. Generally, the president signed the bill that’s recurred – referred to as the Senate bill. This is the one that the Senate passed on Christmas Eve. Now the House had earlier passed its own version of a healthcare overhaul bill in November. So what it does is it takes steps to ensure that 32 million more people who don’t have health insurance now will be able to buy it. It tightens up some restrictions on insurance companies, it provides new tax credits for small businesses to, you know, keep their employees covered, it requires people to buy insurance which is a bit controversial, which we’ll talk about later. And – But it provides assistance to low and middle income families to do just that.
CAVANAUGH: Now since the House passed the version of this – passed the Senate bill, why does the Senate have to pass a fixer bill now?
FULTON: Well, the House, last night, Sunday night – losing track of time here. It’s been quite a long week for us. The House passed the Senate version of the bill and then they passed a fixer bill, this thing known as the reconciliation bill, which is a special budget bill which makes changes and, the Democrats would say, a lot of improvements in the base bill, the Senate bill.
CAVANAUGH: And so that goes…
FULTON: So the Senate has to go back and…
FULTON/CAVANAUGH: …pass that…
FULTON: …and then it goes on top of the bill that the president just signed today.
CAVANAUGH: As you say, this is easy stuff in Washington, but for the rest of the country it’s like, uh, we’re shaking our heads. But anyway, let’s go on to what’s in what the president signed today. Some of the key elements of the health reform bill will kick in within the next year but what are they? The early things that are going to kick in.
FULTON: Well, a lot of the early things that are going to kick in have to do with helping people right away. It’s kind of interesting, some of the more difficult things like how we’re going to start paying for this bill kicks in a little bit later and some of the bigger benefits kick in later. But right away, in the next 90 days, you’ll see a ban on insurance companies from dropping people who get sick. So if you get sick and you have insurance and your insurance company can now currently drop you under many circumstances, that will be much more difficult to do. That’s going to happen in six months. There is new small business tax credits of up to 35% of the premiums to help firms who choose to offer their coverage, so the government here is trying to encourage businesses to keep covering people under their employer plans if possible. So a couple of other things will happen pretty quickly. The insurance companies will no longer be able to discriminate against kids who have preexisting conditions and who’ve been very sick. It also would ban the lifetime limits that insurance companies can now put on your coverage, a lot of help for the uninsured until the insurance exchange is set up in 2014. Setting up this thing called a high risk pool where people who can’t buy insurance now because they’re sick and no one wants to insure them will have an opportunity to get into some sort of insurance system quickly.
CAVANAUGH: I’m speaking with April Fulton. She is health editor for National Public Radio. That high risk insurance pool, now that won’t be free. People will have to pay for that, right?
FULTON: They will have to pay in for that and a lot of the details aren’t yet clear because, as with any new law, there is a little bit amount of time for the government to set up regulations to determine exactly how it would work but the point – the high risk pool will be set up using a substantial amount of government funds. I think it’s $5 billion so it’s going to get a big boost very fast. There’s a few other things in here, too, like…
FULTON: …Medicare improvements…
FULTON: …and things, helping seniors pay for their Medicare drug bills right away, for example.
CAVANAUGH: Now critics of this new law are saying over and over again that it increases taxes. April, who gets a tax increase and when does that happen?
FULTON: Well, I mean, you’ve always got to find a way to pay for these things and the – There’s a lot of people who will get a little bit more – who’ll pay a little more in taxes and the tradeoff being that they will have some more assurance about what their insurance coverage looks like, and that is the goal here. So by 2014, the people who earn over $200,000 a year, up to $250,000 a year for a couple, will have to start paying some taxes on their unearned income, that’s things like rent and dividends and things like that. So that will go into the pool and help shore up Medicare. But there’s also a lot of new fees and taxes on, for example, the medical device industry and on the drug industry and on the insurance industry, especially when they offer very, very expensive, high-end plans. The point being to try to discourage them from offering those type of plans to make – to put the money into offering more basic plans.
CAVANAUGH: They’re the Cadillac insurance plans that we’ve heard about.
FULTON: That’s right. Cadillac, Rolls-Royce, name your car.
CAVANAUGH: Now we do have someone on the line who has a question that you might be able to answer, April, so let me go to that now. James is calling us from Chula Vista. Good morning, James. Welcome to These Days.
JAMES (Caller, Chula Vista): Hi. Good morning. Thanks for taking my call.
JAMES: I have a question for you guys regarding, I guess, the coupling of the employment with health insurance. Why do the employers have to pay health insurance for employees? I think it might’ve made sense years ago when people would keep working for the same company almost for life but nowadays it seems like people have shorter employment throughout their lives, and also it just seems like a burden to the employers. I know, yeah, Obama has these tax credits for small businesses but it just seems fairer to let individuals buy their own insurances (sic) and…
CAVANAUGH: Thank you.
JAMES: …maybe give tax credits to the individuals right…
CAVANAUGH: Got – Got you, James. I completely understand your question and I’m wondering, April, I think that was more of a comment than a question but, if I may, does this new healthcare reform law put an extra onus or burden on employers to provide health coverage?
FULTON: Well, you know, that’s been a really interesting part of the debate here, Maureen, is about whether employers are the right place to get insurance. And it’s been a debate for years and years. But this bill does not put more requirements on employers, it doesn’t force them to offer insurance but there are penalties that they would pay to the government to help set up these insurance marketplaces called exchanges if they don’t provide coverage for their employees. So some may decide just to pay the fines, some may not. The issue I think that the caller was talking about is the concept of a single payer system where the government just provides money for healthcare for all, and that was something that a lot of the liberals in congress really wanted to see happen but, you know, pragmatically that just wasn’t going to fly. So the bill actually is built on a lot of Republican principles of using the marketplace and using – working within the current system to make changes rather than throwing the whole thing out and starting over.
CAVANAUGH: And, April, we hear a lot, since we’re talking about what critics of the new law say about tax increases and so forth, what is the possibility of this legislation being repealed as some opponents have suggested they’re going to go on this – they’re going to really make an effort to have it repealed?
FULTON: Well, there are several states considering appeal – repeal laws. Their main concern is the requirement to force people to buy health insurance. Now the bill requires people to buy health insurance by 2014 but it gives subsidies and help to people who have trouble purchasing that insurance and also expands Medicaid so for the very poorest people, they would be more – they would go into the Medicaid program.
CAVANAUGH: Now we’re going to be letting you go, April, in just a moment or two and going to our other guests who represent community clinics here in San Diego and Sharp Healthcare here in San Diego, and I’m wondering, before I do let you go, how are community clinics and hospitals being affected by this new law?
FULTON: Well, there’s a lot more money in this bill almost immediately for community health centers, which serve, you know, great portions of the population where you are. And hospitals will take a little bit of a cut, depending on where they live and who they serve, so it just depends. There’s a lot more details to come.
CAVANAUGH: I think that covers the whole thing. There are a lot more details to come. April, thank you so much for speaking with us today.
FULTON: You’re welcome, Maureen.
CAVANAUGH: I’ve been speaking with April Fulton, health editor for National Public Radio. We’re going to continue our conversation about what the new healthcare reform legislation does in the next weeks, months and years ahead, and we’re going to be taking your calls at 1-888-895-5727. You’re listening to These Days on KPBS.
CAVANAUGH: I'm Maureen Cavanaugh. You're listening to These Days on KPBS. This morning, President Obama signed the Patient Protection and Affordable Care Act into law. And this morning we’re talking about what that law will do here in San Diego in the weeks, months and years ahead to change healthcare, and we’re taking your calls with your questions and comments, 1-888-895-5727. I’d like to welcome two new guests to our discussion. Gary Rotto is director of health policy at the Council of Community Clinics in San Diego. Gary, welcome.
GARY ROTTO (Director of Health Policy, Council of Community Clinics): Good morning, Maureen.
CAVANAUGH: And Michael Murphy is CEO of Sharp Healthcare. Good morning, Michael.
MICHAEL MURPHY (CEO, Sharp Healthcare): Good morning. How are you, Maureen?
CAVANAUGH: I’m doing quite well, thank you.
CAVANAUGH: As I said, we’d like to invite our listeners to join the conversation. Do you have questions about how the new healthcare reform law will change the way you get healthcare services? Call us with your questions, the number, once again, 1-888-895-5727. Gary, how will this legislation affect San Diego’s community clinics?
ROTTO: Well, eventually we’re going to see a significant number of people who formerly had not been receiving health coverage when they need it and rather been going to some of Mike Murphy’s, you know, Sharp’s ERs, hopefully, coming to us earlier so they can maintain their health. I mean, we’re looking at right now, based upon UCLA Center for Health Research, had shown that since the beginning of the recession, 2007, the number in California of uninsured increased by 28%. For San Diego, that means over 723,000 people without insurance. And the analysis of this bill shows that when all facets go on – you know, come online, that I think it’s a little – about 500,000 people will now be eligible for some type of coverage, and we’re hoping that they’re going to come early and come to us so we can maintain their health.
CAVANAUGH: And, Mike, let me give you that sort of an overview question, too. How will hospitals start feeling these changes?
MURPHY: Well, immediately hospitals—and actually April touched on it—are starting to feel the changes and actually even before this bill, had begun to feel some of the changes by reductions in reimbursement in the rate of increase of our Medicare payments. But I do think – agree totally with Gary that when the bill gets to 2014, and actually even earlier in some cases with children under age 26 and, as April talked about, with people who have been uninsured with preexisting conditions, there’s a catastrophic pool that immediately will kick in. Some of those people will be able to access insurance who hadn’t previously been able to access insurance. And really going to Gary’s point of 2014 when we have 32 million more people coming onto insurance, there’s certainly a hope that those people will have access to affordable healthcare in the right settings and that that will alleviate some of the challenges that hospitals currently have related to emergency rooms. It may create other capacity challenges, and I know the community clinics do a fabulous job and I think that they will be gearing up for increased volumes but that will also create capacity problems as the additional insured get covered as to whether they’re going to access the care in the community clinics, can they access the care in physicians’ offices, can they access it – or will they still access it predominantly through an emergency room. But there are very positive things around the coverage and they may create capacity challenges about where do they get that coverage.
CAVANAUGH: I want to talk more about that because I think that would be a curious side effect of this legislation but I want to be clear and I want to ask you both this question, both to chime in on this, starting with you, Gary. If I don’t have health insurance right now because I can’t afford it, will I see anything change in the next year or two because of this new law?
ROTTO: Well, probably a lot of people are going to be thinking that they will have coverage right away.
ROTTO: And it takes time for any legislation to actually be enacted. You have to have systems put in place. You want to be able to do things right, you know, and not a hodgepodge way of implementing things. There’ll be people that’ll be coming in now that won’t have coverage and that’s okay. We still want to have them come in and to see us and see us early and we’re ready. They’re in the community, we do that already. Short term, there – as Michael alluded to, there are some things that will be put in place. It’s going to be phased in, it will be primarily with children and coverage. There are some things that are in the federal law that California already does and it’s a matter of maintaining those. So, for example, the MediCal, on the national level, it’s only 72% of federal poverty level is what the standard is. Here in California, in most cases it’s 100% of federal poverty level, so you’ve got another increment of people who are eligible, because of California law, to receive coverage and we’re seeing those.
CAVANAUGH: And, Michael, do you expect to see people coming into the hospital now hearing about this healthcare reform legislation being signed into law and saying, well, I guess I have healthcare now?
MURPHY: I think there’ll be a lot of confusion around that but I think that most people probably will realize that just because the law has passed today they aren’t all of a sudden being mailed a MediCal card or a Medicaid card or their employer isn’t going to provide them with an insurance card, so they won’t noticeably know any – notice that anything’s different, really, until we build up until 2014 when the reality is either people will – if you’re under 133% of the poverty level, which you will be allowed to be covered and I’m sure the processes and communication will make everybody aware in that group that they will be covered by Medicaid or, in our state, MediCal. And also at that time period, anybody making between 133% of the poverty level up to 400% will be going back to this other piece that April talked about, will have an individual mandate that they’ll be required to buy insurance on the insurance exchange. So they’ll certainly hear about it as it builds until 2014, and we’ll all understand better…
MURPHY: …as to how people really will access the system, enroll, and, in some cases, be mandated to buy.
ROTTO: And, Maureen, there are things that we’re already working with from the clinic community with the hospitals, with Sharp and with others. There’s a program called Safety Net Connect that we’ve been in the planning stage for over a year now and the hospitals are coming onto line so that we have some mechanisms for being able to communicate because that’s one of the things that has been talked about, electronic health record, but also being able to make appointment setting. And so what happens is, in this program, which is starting to be rolled out, somebody comes into an ER and their follow-up should rather be with a primary care doctor, if they don’t already have one and they’re probably going to be somebody who would go to a clinic, the ERs would be able to make an appointment right then and there, be able to get into the appointment system of the nearest clinic and give them a card, the person say here’s where your follow-up needs to be and you don’t have a regular doctor, you don’t have a primary care setting, you should make this your medical home so that we’re working more closely together, you know, in this very close knit fabric of healthcare for our community.
CAVANAUGH: Oh, yes.
MURPHY: …I not only support that, Maureen, that the – and we’ve been very blessed in this community with the community clinics and the great work that they do and they have partnered with the hospitals and with the community to try and address the issues that we currently have. And I think that will only set us up well as we move forward and more and more people are covered and actually, truthfully, even to get to some of the things that are included in the bill about demonstration projects around medical home models, accountable care organizations and other innovations in how we deliver healthcare as we move forward in this reform.
CAVANAUGH: So basically what you’re saying is in some ways San Diego has a step up to embrace these new reforms.
MURPHY: I would say we’ve worked well together across the community with the community clinics and the hospitals have worked very well together.
CAVANAUGH: Let’s start inviting our listeners to join in now. Lots of people want to join our conversation. Our number is 1-888-895-5727. I also want to remind you, if you’d like to post a comment, you can go online, KPBS.org/thesedays. Alijandra is calling us from Imperial Valley. Good morning and welcome to These Days.
ALIJANDRA (Caller, Imperial Valley): Yes, hi. Good morning. Even though I’m pro this bill, I’m a physician here in a rural community and I do anticipate a shortage of doctors and a drop in the quality of care because of the huge number of new insured people coming in to receiving our services. So what is the government doing about that and are they going to start, you know, like pushing for more people to go to medical school? I mean, anything like that? I’m just very concerned about that. I mean, currently I have like 600 patients and I think it’s going to increase significantly with this bill.
CAVANAUGH: Thank you, Alijandra. That is a really remarkable aspect to this healthcare reform legislation. Gary, I’d like you to start to address that. I know that when Massachusetts mandated everyone have health insurance in Massachusetts, they found out that there weren’t enough doctors in Massachusetts actually to take care of all the people who had been uninsured. Are we going to be starting to find the same thing?
ROTTO: Well, I – We already are. There already is a shortage in the primary care field within medicine. And there is a national program, National Health Service Corps, that encourages young doctors in medical school to go into primary care settings in underserved communities, rural settings and urban settings. There’s a hun – excuse me, $1.5 billion that, through this legislation, is being set aside to create these opportunities for more doctors to be able to come into primary care to get them into the field. What we’ve already been working on with – in the clinics locally—when I say locally, it’s both San Diego and Imperial and even in Riverside County—is working with the community colleges because not only doctors but doctors also need – you have – when you set up a doctor, you’re going to need medical assistant, you’re going to need all sorts of other people in the medical field from billers to front office to medical technicians and so we’re already coordinating with the community colleges, looking at their curriculum because even before healthcare reform passed and was signed this morning, we knew that there were more people that we needed in the healthcare field. And how do we encourage people to be – to go into that field? What are the positions that are available? Those are some of the things that we’ve been working on with the community colleges, who have a fine program for medical training.
CAVANAUGH: Now, this fund for scholarships and loan repayments to encourage more primary care physicians, is that part of the healthcare legislation?
ROTTO: Yes, it is.
CAVANAUGH: I see.
ROTTO: So we’re going to start to see some of that money rolled out, I believe, after October one for additional scholarships for physicians. There’s also a state program. Senator Denise Ducheny had co-authored a bill to put additional funding in very similar to this. It’ll complement this and make funds go that much further in the state, encourage more people to become physicians in primary care settings.
CAVANAUGH: And, Michael, just a quick question to you. Do you anticipate hiring more healthcare workers?
MURPHY: Well, again, this is between now and 2014. And when the onset comes in of additional volumes, I don’t think we anticipate, say, within the next 12 months a significant increase in healthcare workers. I do think, as has been said, the bill does provide some additional funding to attract additional people to the workforce, not only in the physician area but in – across the spectrum, and I think we’re going to have to all be creative and look at additional ways and innovations about how we deliver the care. There are things in the bill, as Gary talked about, to fund additional education. There are also things in the bill to increase Medicaid reimbursement for primary care physicians to the same level as Medicare because, in reality, in our state less than 50% of the physicians actually will take care of a MediCal patient today because of the level of payment. So the payment levels need to increase, and in the bill, at least for primary care physicians, there is an increase in payment which, hopefully, will attract more physicians being able to take care of those patients. But I think both Gary and I are saying that we have a lot of work to do between now and 2014 and beyond to ensure that there is the workforce there and that we don’t encounter some of the issues that Massachusetts has. And I would suggest that in all likelihood some of those will be encountered, that it not like we just can create the capacity overnight.
CAVANAUGH: We are taking your calls to join our conversation about the new healthcare law, 1-888-895-5727 is our number, or you can go online with your comment, KPBS.org/thesedays. Devin is calling us from Escondido. Good morning, Devin. Welcome to These Days.
DEVIN (Caller, Escondido): Good morning.
CAVANAUGH: Yes, hi. What is your question?
DEVIN: Well, I wanted to know specifically if the bill addresses the issue of the insurance companies raising premiums. For example, we have a nonprofit corporation with, you know, less than 25 employees and we actually fund their healthcare 100% right now but we were concerned that with the new law, insurance companies were going to take steps to raise premiums out of fear that now they may be losing competition.
CAVANAUGH: Thank you, Devin, for that question. Who would like to address that? Gary, do you know?
ROTTO: Well, there is a provision in the bill that will set a – I hesitate to call it a cap but it says that insurance companies cannot spend – they have to spend a certain amount on direct medical services, that the non-services are capped at a certain amount. I believe that that’s 15%.
CAVANAUGH: And so, in other words, if they don’t spend all of that amount of money on – directly on medical services, they actually have to send you a refund, is that correct?
ROTTO: Yes, that’s my understanding. That’s what I was reading in some of the analysis.
CAVANAUGH: Right, yes. And, Mike, would you like to comment?
MURPHY: I would say there are a couple of additional organizations that are – will be looking at how the insurance industry behaves. But I would also tell you today—and this actually gets to be a complicating factor because one of the pieces of the bill does create a national organization that is going to work with the states to oversee insurance rate increases but the states currently regulate that. And actually under the state law, the states look to see even today how insurance rates and premiums are going up. And there will continue to be that and they’re going to be looking at how the premiums increase. One of the defenses—and I’m not here to defend the insurance industry—but one of the things that’s happening now as to why they’re suggesting some of the rates are increasing, which will be addressed by the bill maybe in 2014, but is because the level of – the number of people insured in the pools are dropping because unemployment is increasing and because of the economic conditions. And as the level drops in the pool, if there is adverse selection or a lot in the pool that have preexisting conditions, actually the insurance regulators will make the rates go up because they have to make sure that the insurance companies remain solvent to be able to pay the cost – to be able to deliver the cost that they promised the beneficiaries.
CAVANAUGH: Right. Let me ask you a question, Mike…
CAVANAUGH: …because something just occurs to me. I know one of the early things that’s kicking in is the fact that children of up to age 26 can stay on their parents’ insurance, can be covered by their parents’ insurance. I wonder how people will be notified that (sic)? If someone has a 24-year-old who comes into the hospital, will somebody in the hospital be able to tell the parent, oh, your child is now qualified under your own insurance coverage?
MURPHY: Well, we actually talked about that a little bit yesterday as an employer even…
MURPHY: …because it is saying that individuals who are 26 six months from the date of the passage, so 6 months from today, will be eligible to stay on independent coverage. But I would say the communication of how that will come, both from the federal government to employers and employers to individual employees, the parents, and actually individual policyholders, is still to be worked out as to how that will get communicated other than through shows like yours, which today I think one of the big messages out there, that one of the most immediate potential – or positive benefits or outcomes of the reform is that dependent children up to age 26 can receive coverage as a – continue to receive coverage as a dependent.
CAVANAUGH: Right. Let’s take another call. Darlene is calling us from Sabre Springs. Good morning, Darlene. Welcome to These Days.
DARLENE (Caller, Sabre Springs): Hi. Thanks for taking my call.
CAVANAUGH: You’re welcome.
DARLENE: I just wanted to make a comment. I’ve been covered under the Federal Employee Health Benefit Plan, which is the model for one of – for these exchanges, for over 20 years, and I think it’s a really good thing. I hope – I think the bill’s been really misrepresented and I hope, you know, in the next week or so that people will start to see the look of these. Every year during the fall, we have what’s called an open season where we can reexamine our choice from a long list, I think it’s 260 different choices, includes all the major carriers, high options, standard options, so forth. And if I, you know, if I’m not pleased with my Blue Shield of California that I have now, I can change it to one of the other major carriers or one of the other options. And I believe that has brought choice and competition that’s kept our costs low. I think I have a very good plan for a very reasonable cost. I think all this has been overblown as this major overhaul when really it’s just an extension of something that has served congress and federal employees very well. And I wish the Wyden Amendment had made it because that would make it available to others, not just the uninsured. I think it’s a really good thing. I think people are going to be pleased.
CAVANAUGH: Well, thank you very much for that, Darlene. I appreciate that. It clarifies and puts this change in a context we haven’t heard.
ROTTO: And I think, Darlene, that what you described as far as that exchange is what the Health Insurance Exchange is modeled on, a lot of the same concepts that even some of the businesses, small businesses, will be able to feed into when all the provisions of this bill are – come into law, come into effect.
MURPHY: And actually even in time, larger businesses. In the beginning, it’s smaller but in time, as it rolls forward, they increase the size of the businesses that can access the exchange.
CAVANAUGH: We have to take a short break. When we return, we will continue to talk about the new healthcare reform law and how it will affect us right here in San Diego and we will continue to take your calls at 1-888-895-5727. You’re listening to These Days on KPBS.
CAVANAUGH: Welcome back. I'm Maureen Cavanaugh. You're listening to These Days on KPBS. My guests are Gary Rotto. He’s director of health policy in the Council of Community Clinics in San Diego. And Michael Murphy is CEO of Sharp Healthcare. And we are talking about how the new healthcare reform law, signed into law by President Obama this morning, may begin to affect us here in San Diego. Our number is 1-888-895-5727 if you’d like to call us with a question or a comment. Let’s take a call to start off. Dulcie is calling us from Tierrasanta. And Dulcie, welcome to These Days.
DULCIE (Caller, Tierrasanta): Thank you. Thank you. Good morning.
CAVANAUGH: Good morning.
DULCIE: My question is this. I heard one of the speakers say that primary care physicians would be getting an increase with MediCal patients but what about the providers? I’m a physical therapist and doctors send us patients with a prescription that says back pain after they’ve diagnosed them and then they send us to us (sic) for about three times a week for about four weeks. So we are the ones who are actually the caregivers of many of these patients. Will the other caregivers, other specialties, be getting any increase in reimbursement for their care?
CAVANAUGH: Good question, Dulcie, let’s see if we know. This is something perhaps unknown at this point.
ROTTO: That’s me, too. You know, I’m not familiar with that aspect of the bill so I don’t know.
MURPHY: There’s nothing, to my knowledge, that calls out specifically to others. I mean, the language in the bill says increased Medicaid payments to Medicare levels for primary care physicians…
CAVANAUGH: I see.
MURPHY: …beginning in 2013. So that doesn’t happen right away either.
CAVANAUGH: Right. Exactly, so all of these details that we don’t know about this bill yet. You know, another big part of the bill that we do know about it is that it will affect seniors, people on Medicare. What are some of the big changes that will affect seniors within the next year, Gary?
ROTTO: Well, right away you’re going to see a closing of the donut hole. I was just talking with my father this morning, who fortunately is part of the VA system, but we were looking at what would happen if he, age 87 with 12 medications, was part of this donut hole. And he had looked at this previously.
CAVANAUGH: Tell us what the donut hole is.
ROTTO: The donut hole is where this Medicare Part D provided a prescription drug benefit. Several years ago it was enacted, and the benefit lasts up until I think it’s $2800 of expenditures and then you have this gap which has been called the donut hole. It’s a gap until you get to I think it’s $6500 of expenditures on an annual basis.
CAVANAUGH: That’s a big gap.
ROTTO: It’s a huge gap for many people who may be on fixed incomes. And so those people in the gap, what did they do? Can they afford on a fixed income, retired, for – with expensive medications, you know, that extra four, five thousand dollars out of pocket? So what’s going to happen right away is as soon as, I think, October, November, maybe even earlier, if they’re subject to that gap, to that donut hole, they’re going to get a rebate check of $250 from the federal government. And over time, then the next year, the gap is going to start to close so there’ll be a greater discount on the drugs that they receive, the prescriptions that they receive, in that increment.
CAVANAUGH: And also another impact to people on Medicare is the fact that I believe, Michael, beginning next year, seniors are going to be able to come in for free preventive care. Are seniors not able to do that on Medicare now?
MURPHY: They’ll take away the co – they are – they come in for preventative care but they have co-pays and deductibles that are associated with some of those preventative visits. And for certain of the preventative visits, the deductibles and co-pays would be – would go away for those services.
CAVANAUGH: Gotcha. Okay. We are taking your calls at 1-888-895-5727, and right now Jeff is calling us from Escondido. Good morning, Jeff. Welcome to These Days.
JEFF (Caller, Escondido): Well, great show.
CAVANAUGH: Thank you.
JEFF: Wondering if the panelists could enlighten us on how the new healthcare program will address the emergency room care of illegal immigrants. I think there are – at last count, I heard there were somewhere between 10 to 15 million in the United States and I’ve been to the – to an emergency room visit with one of my children and it’s backed up for six or eight hours, and a lot of them are getting primary care there. How will the hospitals be reimbursed for that because we’re not talking about a premium here, we’re talking about payment for services.
CAVANAUGH: Thank you for the call, Jeff. It’s my understanding that this new bill does not address illegal immigration in any way. Michael, is that your understanding?
MURPHY: That is correct, so just as today when somebody comes to the emergency room, whether they are an illegal alien or a U.S. citizen who doesn’t have insurance, the emergency rooms are obligated and part of our mission and try to take care of and triage those patients to ensure that they get the appropriate care regardless of insurance status. And part one of the critiques of this plan is that it still only covers 32 million of the 47 to 48 million uninsured. It does not do anything specifically related to illegal aliens and when the patient, again whether insured or uninsured, presents even subsequent to 2014, the hospital will still be taking care of them. I’d even go one step further, you know, there is, in 2014, it will be required that everybody buy insurance but even in these projections they acknowledge not everybody’s going to because the fee related to not buying insurance is actually cheaper than the fee to buying.
MURPHY: So we will still have many U.S. citizens that may not have insurance and they will be presenting in the emergency rooms and, as we do today, we will do everything we can to treat all comers to emergency rooms.
CAVANAUGH: But as Gary was saying earlier in our conversation, you are expecting a little less of a burden on the emergency rooms because of this new insurance exchange that’s kicking in in 2014, is that right?
MURPHY: Oh, I think clearly one of the goals of healthcare reform is to get people covered and, clearly, this bill anticipates we’ll have 32 million people covered. 16 million of them will be covered by MediCal, 16 million more through the insurance exchange. And the total desire and appropriate thing to happen in this healthcare reform is for those people to get attached to medical home models so that their issues do not become emergency room issues and are treated in the most appropriate and cost effective setting in either community clinics or physicians’ offices or ambulatory sites long before they need an emergency room. And, clearly, that should have a positive impact on the emergency room.
CAVANAUGH: Let’s take another call. We are taking your calls at 1-888-895-5727. Denise is calling us from Cardiff. Good morning, Denise. Welcome to These Days.
DENISE (Caller, Cardiff-By-the-Sea): Well, good morning. This is very interesting. I wish we could’ve had this sort of forum before all the concerns and worries and people thinking that they’re going to be forced into having to procure insurance but I never really heard anything regarding those people who’ve worked for many years, who, such as myself, who now am unemployed and must be, you know, depend upon COBRA at age 58. It’s really expensive. And what will the alternatives be other than COBRA? We’ve never really discussed the COBRA issue in terms of the unemployed.
CAVANAUGH: Got it. Thank you for the call. Is there – I’m going to offer this to Gary, Michael, anything about COBRA. How this changes someone who’s basically getting their health insurance from this extended employer coverage through COBRA.
ROTTO: Well, my understanding is it’ll be based upon your income. So if you’re unemployed, you don’t have an income.
CAVANAUGH: And, in other words, if – we’re going to 2014 now.
CAVANAUGH: If someone wanted to get into one of the health exchanges in 2014, they would probably subsidize – it’d be subsidized if they didn’t have income.
ROTTO: That’s my understanding. I’m wondering if Mike has additional information.
MURPHY: I would agree with Gary. The COBRA issue has been addressed through the Jobs bill currently, so what’s happening today is the COBRA benefits, and they are expensive, as the caller outlined, but they have continued to be extended and the government is currently continuing to subsidize. I think they just extended that program another six months through a Jobs bill. But specifically as it relates to healthcare reform, in January of 2014, the issue will be that if you don’t have insurance so you’re no longer covered by COBRA, there will be an individual mandate and everybody, whether – regardless of your income level, will be required to buy insurance through the exchange. If you are below 400% of the federal poverty level and above 133% of the federal poverty level, the government will subsidize that in decreasing amounts. Obviously, at 134% of the poverty level, it will be virtually all subsidized; at 400% it will be a much lower subsidy. If you’re earning more than 400% then you would not be subsidized but you will still be required to buy insurance through the exchange. You’ll have four different options with varying costs and varying coverage on the four different options that are set up by the government and the insurance companies will all propose on those.
CAVANAUGH: Now I wonder, we’ve been talking a great deal and this bill – this new law, indeed, is aimed at covering uninsured Americans, how will this new law affect people who do have insurance coverage, Gary?
ROTTO: Well, you know, the president has said that if you like your insurance, you’ll be able to keep your insurance. And I know that one of the first callers asked about the employer-based system and when you survey people, that’s what they like when they say they like their current coverage. They’re very comfortable with this employer-based system. It really shouldn’t change that.
CAVANAUGH: And, Michael, I know that people will be able to keep their kids on their policies up to age 26. Anything else for people who already have insurance?
MURPHY: Well, I still think there’s a lot of question and noise about what will happen to your individual insurance and how will the cost increase actually. In the newspaper you read today that Rand Corporation believes that insurance costs will continue to increase for those who have insurance. There is significant subsidy in here because, again, half of the uninsured go on to a MediCal program or Medicaid program that significantly underpays the cost of care. Medicare underpays the cost of care today, and historically and to some degree will continue the cost shift to those who have insurance. There’ll be varying ways as to how that impacts individuals because within the bill it actually says that there have to be tighter bands of difference between insurance premiums, meaning that you can’t have a significantly larger premium for people, say, in their fifties than in their twenties. The band is getting tighted and actually – tightened and actually in the legislation restricted to a three-to-one band. So some have suggested that younger people may actually be paying more and older people may actually be paying less but that has to play out as all of these insurance products get priced. But within the healthcare reform legislation, there is a much tighter banding and a requirement in the insurance companies of only having certain bands of difference in coverage for age groups and for preexisting conditions and things like that. So it will make it tighter, which, in some cases, may make some people’s insurance go up and in some cases may make certain people’s insurance go down. But, I’ll be honest, it’s got to play out.
ROTTO: Maureen, I know that Vince Mudd has been on the show before, local small business and very active with the chamber, and he’s talked about, I think on the show as well as privately, he’s said that he’s seen multiple, high, double-digit increases to cover his workforce and that that’s not sustainable. And that’s one of the things that the outcome of healthcare reform has to be, is bringing that cost curve, as they call it, the steep increase in premium cost, to bring that down and level that off. That’s got to be one of the outcomes here that’s a measure of success for whether healthcare reform has actually worked.
CAVANAUGH: You know, we don’t have much time left and this is a sort of concept question. But let me ask you both briefly. I wonder if you’ve done any thinking, not necessarily about the specifics in this new bill but how this new healthcare legislation may change the climate, the general attitude toward providing healthcare. Do you think it’s going to take some worry off people’s minds? Loosen things up? Promote these arrangements, as you’re saying, between clinics and hospitals and things of that nature, Gary?
ROTTO: Well, from what people in general will see and will feel, hopefully, they’re going to start to focus on preventative care. How do I stay healthy? What are the lifestyle changes that I need to make and my kids need to make? How do I go about getting that? And what are the screenings that I should be taking on early? And how do I communicate and communicate well with my doctor and increase that relationship?
CAVANAUGH: And, Mike, we only have about 30 seconds.
MURPHY: Well, I would say that, you know, and you’re asking specifically about the provider side, I think all change brings challenges and people may get nervous, and all of us will be evaluating the changes that we need to implement to ensure that we continue to deliver high quality, cost effective care. At Sharp, we’ve had a great organization that’s focused with our integrated physicians to do the best that we can. This will provide us opportunities to think about new and innovative models. But change brings people’s nervousness up.
CAVANAUGH: And we all found out during this conversation there’s a lot to learn about this new law. I want to thank you both so much for speaking with us. Gary Rotto, thank you.
ROTTO: Thank you for having me come to the show.
CAVANAUGH: Michael Murphy, thanks so much.
MURPHY: My pleasure. Thank you very much.
CAVANAUGH: I want to let everyone know if you’d like to comment on what you’ve heard today, go online, KPBS.org/thesedays. You have been listening to These Days on KPBS. Stay with us for the second hour coming up in just a few minutes.