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Closer look at health care law and its impacts

  • Bill Owen of Hancock, while exercising at the Bond Wellness Center, talks with Richard Scheinblum, chief financial officer at Monadnock Community Hospital. Scheinblum says keeping people healthy will become a goal for hospitals as they adjust to changes prompted by the Affordable Care Act.<br/><br/>(Staff photo by Dave Anderson)

    Bill Owen of Hancock, while exercising at the Bond Wellness Center, talks with Richard Scheinblum, chief financial officer at Monadnock Community Hospital. Scheinblum says keeping people healthy will become a goal for hospitals as they adjust to changes prompted by the Affordable Care Act.

    (Staff photo by Dave Anderson) Purchase photo reprints at Photo Finder »

  • Bill Owen of Hancock rides an exercise bike at the Bond Wellness Center while talking with Richard Scheinblum, chief financial officer at Monadnock Community Hospital. Scheinblum says keeping people healthy will become a goal for hospitals as they adjust to changes prompted by the Affordable Care Act.<br/><br/>(Staff photo by Dave Anderson)

    Bill Owen of Hancock rides an exercise bike at the Bond Wellness Center while talking with Richard Scheinblum, chief financial officer at Monadnock Community Hospital. Scheinblum says keeping people healthy will become a goal for hospitals as they adjust to changes prompted by the Affordable Care Act.

    (Staff photo by Dave Anderson) Purchase photo reprints at Photo Finder »

  • Bill Owen of Hancock rides an exercise bike at the Bond Wellness Center while talking with Richard Scheinblum, chief financial officer at Monadnock Community Hospital. Scheinblum says keeping people healthy will become a goal for hospitals as they adjust to changes prompted by the Affordable Care Act.<br/><br/>(Staff photo by Dave Anderson)

    Bill Owen of Hancock rides an exercise bike at the Bond Wellness Center while talking with Richard Scheinblum, chief financial officer at Monadnock Community Hospital. Scheinblum says keeping people healthy will become a goal for hospitals as they adjust to changes prompted by the Affordable Care Act.

    (Staff photo by Dave Anderson) Purchase photo reprints at Photo Finder »

  • Bill Owen of Hancock, while exercising at the Bond Wellness Center, talks with Richard Scheinblum, chief financial officer at Monadnock Community Hospital. Scheinblum says keeping people healthy will become a goal for hospitals as they adjust to changes prompted by the Affordable Care Act.<br/><br/>(Staff photo by Dave Anderson)
  • Bill Owen of Hancock rides an exercise bike at the Bond Wellness Center while talking with Richard Scheinblum, chief financial officer at Monadnock Community Hospital. Scheinblum says keeping people healthy will become a goal for hospitals as they adjust to changes prompted by the Affordable Care Act.<br/><br/>(Staff photo by Dave Anderson)
  • Bill Owen of Hancock rides an exercise bike at the Bond Wellness Center while talking with Richard Scheinblum, chief financial officer at Monadnock Community Hospital. Scheinblum says keeping people healthy will become a goal for hospitals as they adjust to changes prompted by the Affordable Care Act.<br/><br/>(Staff photo by Dave Anderson)

Greenfield resident Tom Welden insists on using the full title of the new federal health care law that most people refer to as the Affordable Care Act and many call Obamacare.

“It’s actually the Patient Protection and Affordable Care Act,” says Welden, who is a principal with Eaton and Berube Insurance of Milford and Nashua and president of the N.H. Association of Health Underwriters. “They did an excellent job with the patient protection part. But it’s not going to be affordable.”

The law allows parents to keep children under the age of 26 on their family coverage plan. It creates a high-risk pool to provide coverage for those with pre-existing conditions. And it greatly expands the number of lower-income people eligible for Medicaid. But those benefits don’t come without a cost, according to Welden and others who are wrestling with the implications of the complex new law.

Individuals face choices

Welden says the impact will be especially hard on those who do not get coverage through an employer. Under the individual mandate provision of the law, everyone will be required by 2014 to have health coverage or pay a penalty. While families of four making less than about $29,000 will be covered by Medicaid and families making up to $88,000 will get tax credits to help pay for private insurance, the cost of individual insurance plans is expected to go up dramatically, according to Welden.

“It will be devastating to the individual market because of all the provisions that will raise costs,” Welden said. “Costs will be based on age, and someone who’s 60 will pay three times what a 20-year-old will pay. Smokers will pay much more. Families will have to have maternity coverage. As a result, the state’s insurance department is projecting about a 30 percent cost increase in the individual market.”

The fine to individuals without coverage will be $95 or 1 percent of income in 2014, Welden said, and it will gradually rise to $695 or 2.5 percent of income by 2016.

“I think a lot of people will pay the fine,” Welden said. “It will be a lot cheaper than going out and getting insurance.”

Medicaid expansion

One key provision of the Affordable Care Act is the expansion of the Medicaid program for everyone under age 65. While states have the option to opt out of that portion of the law, New Hampshire is likely to participate. In her Feb. 14 budget address, Gov. Maggie Hassan called the Medicaid expansion “a good deal...[that will] allow us to save money in existing state programs, while increasing state revenues.”

Richard Scheinblum, chief financial officer at Monadnock Community Hospital in Peterborough, says New Hampshire can expect to see about 58,000 additional Medicaid enrollees if the state opts in to the expansion. Federal funds will cover the additional cost to the state for the first three years.

The change is likely to be positive for both patients and the hospital itself, according to Scheinblum.

“It’s all theory right now, but a good number of people in the Monadnock region should benefit,” he says. “Overall, the act is supposed to be about the expansion of access to coverage. In the past, many people got their medical care through the emergency room. By more access, there can be more coordinated care through primary care physicians, and you get better quality outcomes.”

In New Hampshire, about 11 percent of non-elderly residents are uninsured, according to HealthCare.gov, a federal website established under the Affordable Care Act to provide information on health insurance options. About 88 percent of those people should qualify for either tax credits to buy insurance or to get Medicaid coverage.

But a problem for hospitals and nursing homes could be the reduction in Medicaid reimbursements, even with federal support.

Ann Nunn, administrator at Good Shepherd Rehabilitation and Nursing Center in Jaffrey, says that as of April 1, Good Shepherd and other organizations were hit with a 2 percent cut in both Medicare and Medicaid reimbursements. Those cuts, Nunn says, are the result of the sequestration that impacted federal funding in many areas, but the future is unpredictable.

“New Hampshire Medicaid has chronically underpaid,” Nunn says. “We have the highest gap [between cost and reimbursement] of any state in the country. The state pays [Good Shepherd] $57 less per day than the cost of care . So we’re looking at a really challenging future.”

She says it’s difficult to assess the impact of the state’s effort to expand Medicaid under the Affordable Care Act.

“How are they going to pay for it? That’s the question,” Nunn says.

Accountable care

The reduction in the number of uninsured residents due to the Affordable Care Act will benefit hospitals like Monadnock Community in two ways, according to Scheinblum. First, the hospital will receive reimbursement for services that it has always provided but often had to write off for uninsured patients. More importantly, a provision of the act that encourages a new system for Medicare reimbursements should accelerate the effort to move away from the fee-for-service model in which hospitals bill Medicare — which covers most Americans 65 and older as well as younger people with disabilities — for office visits, lab work, hospital procedures, etc.

“Right now, we benefit when people are sick,” Scheinblum says. “We want to move toward getting paid for keeping people healthy.”

To do that, Scheinblum says, the hospital is working toward joining with other New Hampshire hospitals to develop an Accountable Care Organization. Under that model, the hospital would agree to be responsible for the total cost of health care for Medicare recipients in a given region, with a budget based on historical costs of care.

“You’d share in the savings, based on how well you perform,” Scheinblum says. “There’s definitely more accountability. When you’re responsible for the whole pie, you want to deliver the most efficient care.”

The Affordable Care Act established a council to coordinate prevention and wellness activities and a $7 billion fund for 2010 to 2015 to support such programs. It also calls for grants for small employers that establish wellness programs.

Scheinblum says there’s not enough population in the hospital’s coverage region for it to be an Accountable Care Organization on its own.

“We’d have to collaborate with others,” he says. “It might drive other services here to our area.”

Nunn says Good Shepherd has been motivated by the Affordable Care Act to look into participation in an Accountable Care Organization, too.

“We’re taking actions to coordinate with all the local hospitals, to make sure transitions between health care settings are smooth,” Nunn says. “That’s one of the goals of Accountable Care Organizations. There can be fines related to unnecessary readmissions.”

She said the Affordable Care Act calls for lower prescription costs for seniors and more preventive screening and wellness exams.

“One of our biggest challenges is coordinating care and accessibility to health care resources,” Nunn says.

Insurance exchanges

The Affordable Care Act also calls for the establishment of state-based health benefit exchanges through which individual or small businesses with up to 100 employees could purchase coverage. The exchanges would set up levels of plans, ranging from bronze to platinum, that would provide different percentages of coverage in order to give options to individuals and small companies.

“They are supposed to be a marketplace, where people will be eligible to purchase insurance reasonably,” Welden says. The problem is that a lot of this is up in the air. The state was supposed to be talking about insurance exchanges as of March 1, but that was suspended.”

Welden says the delay on providing details of how the exchanges would work is representative of the problems of implementing the tremendously complex Affordable Care Act.

“I think as a country that we can well afford to cover everyone,” he says. “We’re just doing it wrong and doing it ineffectively. It’s disappointing that we can’t work better together on the real issues. This was an attempt to change our delivery system that’s costing hundreds of billions of dollars in administrative costs.”

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