Benefits Column

National Health Reform Begins

National Health Reform Begins | Human Resource Executive Online Many of those working on health-reform issues in Congress and the new administration were part of the failed effort during the Clinton administration. One of their lessons learned was to make the effort more of an open process -- so now is the time for HR leaders to make their views known.

Monday, January 19, 2009
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Tomorrow, the nation will enter the era of President Barack Obama. The initial efforts of national health reform are likely to be signed into law before he has served his first month as president.

Step one will be expansion and extension of the children's health insurance program: SCHIP. For employers, the most direct impact of the expansion will be the reduction of uncompensated care and the number of uninsured in their communities, reducing cost-shifting levels in the community.

Step two will be included in the economic-recovery package. 

On the list for that package are funds for health-information technology and comparative-effectiveness research; health-workforce training and development; and, possibly, up to a two-year increase in the match rate the federal government provides to the states for Medicaid. 

For employers, health-information technology has been a high priority. Comparative-effectiveness research is an essential requirement to provide the information needed to expand evidence-based health delivery and the basic information needed by health consumers in consumer-driven plans, so they can select high value services and providers. 

Increased matching for Medicaid will help financially troubled state governments maintain their programs. Again, this provides cash flow to the health community that might otherwise resort to higher levels of cost shifting to those paying for insurance.

Step three -- the development of legislation -- has begun with the appointment of former South Dakota Sen. Tom Daschle to the dual role of secretary of Health and Human Services and director of the new White House Health Reform office.

Congress is moving aggressively on a bipartisan basis, with hearings and task forces and roundtables. Employers have the opportunity for direct input to this process as the administration and Congress strive for an open exchange that includes all those willing to assist. 

The objectives for 2009 are ambitious. 

* Insurance-market restructuring will include the guaranteed ability of individuals and small firms to get health coverage. 

* There will be some approach to ensure individual responsibility, so that adverse selection does not undermine success.

* A subsidy will be designed to allow those between 100 percent and 400 percent of poverty income to purchase coverage to meet their responsibility. 

* Delivery system and payment reforms will begin with prevention and wellness, including chronic disease management; will develop and deliver transparency of comparative data and effectiveness data; and will promote a greater emphasis on primary care. 

All of these are areas employers have experimented with in recent years, and have urged policymakers to take action on. Now, as legislation is being developed, is the time for employers and their associations to communicate their desires to both the administration and Congress.

The most controversial part of the potential legislation is likely to be getting all sides to agree on the financing. 

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Employer-based health insurance will be at the center of this discussion. Consideration of a limit on the dollar value of tax-free insurance a worker can be provided is on the table, along with the question of whether or not employers should be required to "play or pay" -- that is, employers must either provide a certain level of health insurance or pay the government so that it can provide insurance-premium subsidies for low-income households.

Two recent reports from the Congressional Budget Office are "must read" material for employers that want to understand what might happen, why it might happen and how it might affect their health programs. 

At long last, the health-reform process has begun again.

Many of those in the Obama administration and in Congress who are working on the issue were part of the failed effort during the Clinton administration. They believe they learned a lot of lessons from that experience; lessons that will allow them to achieve reform this time around.

They believe that they need to keep the efforts as an open process and that they need to learn from employers. The door is open. HR executives should be at the front of the line to ensure that their views are known. 

Dallas Salisbury, an expert on economic-security issues, is president and CEO of the nonpartisan Employee Benefit Research Institute in Washington.

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