Health overhaul first provisions start to kick in

WASHINGTON (AP) - The first stage of President Barack Obama's
health care overhaul is expected to provide coverage to about 1
million uninsured Americans by next year, according to government
estimates.

That's a small share of the uninsured, but in a shaky economy,
experts say it's notable.

Many others - more than 100 million people - are getting new
benefits that improve their existing coverage.

Overall costs appear modest at this point, split among
taxpayers, employers and individuals who directly benefit, although
the biggest part of the health care expansion is still four years
away.

For weeks, the White House has been touting the new law's
initial benefit changes, even as Obama dares Republicans to make
good on their threat to repeal his signature social policy
achievement. Now, a clearer picture is starting to emerge from the
patchwork of press releases.

In 2014, government tax credits will help uninsured workers and
their families pay premiums, and Medicaid will take in many more
low-income people. Eventually, more than 30 million will gain
coverage, sharply reducing the number of uninsured and putting the
nation on a path to coverage for all citizens and legal immigrants.

Political salesmanship and an attempt to address some glaring
health insurance problems are key elements of the strategy to
explain the initial changes resulting from the law. After battling
for a year to pass the legislation, Democrats desperately wanted to
have tangible accomplishments to point to in high-stakes
congressional elections this fall. But they also have to deflect
lingering questions, often stirred up by opposition candidates, and
doubts about the effectiveness of the overhaul and its costs.

"We've seen increasing numbers of people losing their health
insurance, particularly in this recession," said Sara Collins,
vice president of the Commonwealth Fund, a New York-based health
research clearinghouse. "Providing this early relief will help
people who are particularly affected by the downturn." Collins
reviewed coverage estimates in federal regulations for The
Associated Press.

Among the beneficiaries will be many people locked out of
insurance because of medical problems.

The Raether family of suburban Milwaukee will gain from two of
the changes: Elimination of lifetime coverage limits and a ban on
insurers turning away children in poor health.

Four-year-old daughter Mira, who was born prematurely and has
kidney problems, exhausted the lifetime limit on her parents'
policy earlier this year. Mira now has temporary Medicare coverage
because of a kidney transplant, but her parents were worried about
what would happen when they have to get her back on private
insurance.

"A huge weight has been lifted," said Sheryl Raether, the
mother. "She has ongoing health care needs, and I was afraid she'd
hit another lifetime limit." Medicare not only covers seniors, but
people of any age with permanent kidney failure.

The major early coverage benefits include:
- Allowing young adults to stay on their parents' coverage until
they turn 26. In 2011, an estimated 650,000 young people who would
otherwise have been uninsured will gain coverage. Another 600,000
will benefit by switching from individually purchased policies to
less costly, more comprehensive employer plans. The number with
coverage will grow in 2012 and 2013.
-A health plan for uninsured people with pre-existing health
conditions. From 200,000 to 400,000 could benefit in 2011,
according to the Congressional Budget Office. The government may
limit enrollment if $5 billion allocated through 2013 starts to run
out, as projected. Beginning in 2014, insurers will be required to
accept all applicants, regardless of medical history.
-Ending lifetime limits on coverage, and restricting annual
limits. As many as 20,400 people a year hit lifetime limits, as did
Mira Raether. Many more - an estimated 102 million - are in plans
that impose such limits and will no longer be able to do so.
- Requiring insurers to cover children with medical problems. An
estimated 51,000 uninsured children are expected to gain coverage.
Another 90,000 children who have been excluded for coverage for a
particular condition - asthma, for example - will also benefit.
Many Americans covered through employers won't see the changes until Jan. 1, the start of their next health plan year. That means
2011 will be the first year that the early benefits are fully in
place.

What that entails for costs is a matter of intense speculation.
A recent survey of employers by Mercer, a major benefits
consultant, found that 42 percent expect an increase of 2 percent
or less, while one-fourth expect an increase of 3 percent or more.
Government estimates are generally lower.

Beth Umland, research director for Mercer, said employers were
expecting health cost increases averaging about 6 percent a year
before the law. "Now they are looking at an additional 2 or 3
points, so that 6 percent can become a 9 percent, and that seems to
be above their comfort level," she said.

Dave Osterndorf, chief health actuary for the Towers Watson
consulting firm, said large employers will respond by passing on
costs to their workers. "These first few changes, in and of
themselves, will not dramatically change the way employers look at
the provision of health benefits," he said. "Employers will feel
part of the impact, and employees will feel part."

Some coverage gains may take a while to add up. For example,
Blue Cross Blue Shield Kansas City reports brisk sales to small
businesses by advertising Obama's new tax credit for those who
offer coverage. CEO Tom Bowser said more than 60 of the 227 small
firms signed up so far did not previously offer health benefits.

"Small groups are one of the toughest markets we have," said
Bowser. "Because of the economy, more and more were dropping
coverage entirely, and we've able to reverse that."

(Copyright 2010 by The Associated Press. All Rights Reserved.)


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