SARANAC LAKE - To paraphrase Vice President Joe Biden, the health care bill that President Barack Obama signed this week is a big deal.
As of Thursday afternoon, the reconciliation bill was going to be returned to the House of Representatives for repassage, but the parts that were in the Senate bill became law when Obama signed it. People here and throughout the country were still assessing over the past week what sort of impact the 2,309 pages worth of changes to our nation's health care system would have on them.
"I expect that this thing is going to start to get changed today, before the ink is even dry," said Saranac Lake Central School District Superintendent Gerald Goldman on Thursday. "I'm not sure what the ultimate effect is going to be on our staff and our insurance costs."
Staff at the AMC-Mercy nursing home in Tupper Lake look over records.
(Photo courtesy of AMC)
The plan features major changes to Medicare and Medicaid, the two existing federal health programs for seniors and some poor people, respectively. Federal payments for Medicare services would be linked to better-quality outcomes, Medicare patients would be eligible for some free preventative services they aren't now, and the so-called "donut hole," under which some prescription drugs aren't covered, would be gradually eliminated with increased payments. Rural areas would see increased provider fees and bonus payments for ground and air ambulance services. Medicare Advantage payments, or payments from Medicare to private plans that nearly a quarter of seniors use, would be cut, reducing direct spending on this by $129.7 billion over 10 years.
As for Medicaid, which is paid jointly by the federal government, the state and counties in New York, the 50 states can expand eligibility starting on April 1 and will be required to do so by Jan. 1, 2014. This expansion is supposed to cover as many as 15 million of the 32 million new Americans the health bill aims to extend insurance to. The federal government will pay 100 percent of the expansion cost from 2014 through 2016, with its share gradually declining to 90 percent by 2020.
Locally, Medicaid is a giant chunk of county budgets - Essex County spends about 43 percent of its $93 million budget on Medicaid.
Before the House vote on the health care reform bill, the Committee on Energy and Commerce produced short reports entitled "The Benefits of Health Care Reform," outlining the supposed benefits in specific districts. The following are a few of the numbers for New York's 20th and 23rd Congressional Districts, which bisect Saranac Lake. The 23rd extends east to Lake Champlain and west to Lake Ontario, and the 20th extends south to the outskirts of Poughkeepsie and Cooperstown, including much of the Hudson Valley.
- 405,000 people are already insured through employers
- 27,000 people who aren't covered now would be, it is estimated
- 177,000 families (those making up to $88,000 yearly for a family of four) and 12,600 small businesses will be eligible for tax credits to help pay insurance costs
- 8,000 residents have pre-existing conditions that they could not be denied coverage for
- Uncompensated care costs, or money spent providing services to people who can't pay their bills, would be reduced by $67 million yearly
- 455,000 people are already insured through employers
- 20,000 people who aren't insured now would be, it is estimated
- 151,000 families and 15,500 small businesses will be eligible for tax credits to help pay insurance costs
- 8,600 residents have pre-existing conditions that they could not be denied coverage for
- Uncompensated care costs, or money spent providing services to people who can't pay their bills, would be reduced by $26 million yearly
The Medicare changes should end up evening out for Adirondack Medical Center, said spokesman Joe Riccio.
"I think while the reimbursement rates go down, the idea is, if you have more people covered on insurance and more people to take care of, (this) will offset any cuts to reimbursements."
Essex County Manager Dan Palmer said it was too early to tell how much of an impact the Medicaid changes would have on the county budget.
"It would depend on the increased rolls we end up with," he said.
AMC's President and CEO, Chandler Ralph, put out a statement on the bill saying that the bill "is far from perfect" but "the cost of inaction with regard to the uninsured is too great of a price to pay both fiscally and morally. Congress has taken a critical first step, and AMC will continue our work to make sure the health care needs of the Tri-Lakes region do not go unmet."
One of the bill's more controversial provisions is a 40 percent excise tax, or "Cadillac tax," on high-cost employer-sponsored health plans. Unions whose members have generous health benefits objected, and the reconciliation package extends its kick-in date from 2013 to 2018.
The tax hits plans that now cost more than $8,500 for an individual plan and $23,000 for a family plan now, with the amount indexed to the Consumer Price Index, plus 1 percent.
Public-sector health plans in this area, for the most part, wouldn't be affected. Goldman said Saranac Lake's plans are a couple thousand dollars away from that now for a single plan, $6,000 or $7,000 away on a family plan.
However, insurance costs have been increasing rapidly. Saranac Lake is expecting to increase about 8 percent in the 2010-11 budget year, and have increased 12 or even 15 percent in some recent years. Saranac Lake pays less than many other districts in the North Country, due to its history of low claims.
The hope is that the bill will level off or reduce health insurance premiums. If this doesn't happen, the Cadillac tax could be a Chevrolet tax by the time it kicks in.
"With 20 to 25 percent increasing health insurance premiums every year, it's not going to take very long to hit that," Palmer said. "For most municipalities that offer the better plans, you're going to see that pretty quickly."
What will happen when?
Even though the Senate still has to pass, and the House re-pass, the reconciliation bill, a number of the changes went into effect when Obama signed the bill on Tuesday.
One that has already taken effect is a tax credit to businesses with 25 or fewer employees that choose to offer health insurance. They are eligible for a credit of 35 percent of premium costs that would increase to 50 percent in 2014. Six months after enactment, young adults will be able to stay on their parents' insurance until they turn 26 and health insurance companies won't be able to drop people when they get sick.
Lifetime caps on coverage will be banned, as will discrimination against children with pre-existing conditions. This ban will be extended to all people in 2014. Annual limits by new plans will be tightly restricted, and new private plans will be required to cover more preventative services. In 2014, this second change will be extended to all plans.
Starting on Oct. 1, an additional $11 billion will be available over five years to help fund community health centers nationwide. They serve many rural areas, and their principal purpose is to provide preventative care.
"The intent is to create new ones" with the funding, said U.S. Rep. Bill Owens, D-Plattsburgh, who voted for the bill. "We'll be looking at how to best use those resources in the district."
There are already 12 such centers in Owens's district, including Elizabethtown Community Health Center. The federal Department of Health and Human Services will be in charge of drafting the regulations for the program and how the money is spent, Owens said, with input from other agencies.
Some of the more controversial and far-reaching provisions of the bill won't take effect until later. Starting in 2014, all people - except the poor and a few other exceptions - would be required to have insurance or pay a fine. Employers with 50 or more employees would be fined $2,000 per worker per year if any full-time employee receives federal subsidies to buy health insurance. Employers of 200 or more would be required to enroll new full-time employees in coverage automatically. Municipalities would be included in the definition of a business.
Also by 2014, states will be required to establish exchanges to help individuals and small employers get coverage. Participating plans will be screened for quality and will have to use a standardized form, the idea being to increase competition and make it easier for people to shop for coverage. Those not eligible for public or affordable employer-sponsored insurance would get tax credits to help them pay.
Student loan changes
It may seem counterintuitive that a program that is projected to cost $940 billion over 10 years will reduce the federal deficit by $143 billion during that period, but the Congressional Budget Office is claiming it will do just that. Much of this is due to expected Medicare savings and the "Cadillac" tax, but a significant chunk of it - a $19.2 billion deficit reduction over 10 years, according to the CBO - comes from an unrelated change that wasn't quite as hotly debated as the health care portion.
The federal government is switching to direct lending for federally subsidized student loans, which means the government will make the loans directly instead of using banks as intermediaries.
Both Paul Smith's College and North Country Community College started to make the switch before the health care bill passed. Funding from private lenders has become less readily available over the past two years, said Paul Smith's spokesman Ken Aaron.
"Our financial aid people have reported they've seen lenders leave the market," Aaron said. "Funding has been a little tougher."
Aaron said he expected all students to be going through direct lending by the fall.
"There are generally lower fees associated with the direct lending program," Aaron said. "And also, for the student, it means they have the benefit of one-stop shopping with their loans instead of having the choice of five or six lenders."
Aaron also said it should be more stable for the students.
"They won't have to worry about which banks are coming and going," Aaron said. "The vagaries of the economy shouldn't necessarily affect who's lending what."
Interest rates would be about the same, Aaron said.
Contact Nathan Brown at 891-2600 ext. 26 or email@example.com.