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Health Care Reform Under Scrutiny

Q&A with School of Public Health Associate Professor Timothy Hoff

Doctors perform surgery.

Delivery of services and Medicare are among the areas scheduled to undergo changes in 2011 under U.S. health care reform legislation passed in 2010.

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ALBANY, N.Y. (January 25, 2011) -- As the Patient Protection and Affordable Care Act (PPACA) enters its second year, the House of Representatives, now under Republican control following the 2010 midterm elections, has taken steps to enact a full repeal of the measure.

Timothy Hoff, UAlbany associate professor of Health Policy Management and Behavior at the School of Public Health, explains the forthcoming changes and challenges ahead. Hoff is the author of Practice Under Pressure: Primary Care Physicians and Their Medicine in the Twenty-First Century.

Q. In 2011, what are the major changes patients can expect in their health care coverage Patient Protection and Affordable Care Act?

A: Several big changes were implemented in 2010, such as children being able to stay on their parent’s insurance until 26 years of age, a ban on pre-existing condition exclusions for children, insurers no longer able to drop someone from coverage if they become sick, a ban on lifetime insurance coverage limits, tax credits to small employers to offset health insurance expenses, and first dollar coverage for a number of preventive services such as cancer screenings.

UAlbany School of Public Health Associate Professor Timothy Hoff

Timothy Hoff, Ph.D.

In 2011, additional provisions kick in, mostly in the area of Medicare. These include free annual wellness visits and coverage of preventive screenings for Medicare patients, enhanced Medicare reimbursement for primary care services, and prescription drug discounts for seniors who have fallen into Medicare's Part D "donut hole" drug coverage gap. Also beginning in 2011 insurers are required to spend anywhere from 80-85 percent of every health care premium dollar collected on actual service delivery, which limits the amount they can keep for administrative costs or overhead. There are also other changes being implemented this year that benefit the consumer, such as required nutritional labeling for foods sold in chain restaurants and vending machines.

Q. Will PPACA raise or lower the Federal Deficit?

A: According to the Congressional Budget Office (CBO), which is our most credible source for this type of information, the health reform bill passed is expected to reduce the deficit over the first ten-year period of implementation by approximately $140 billion. Deficit reductions of over $1 trillion are estimated for the second ten years of implementation. These reductions would be achieved largely through new revenues such as increased Medicare payroll taxes on wealthier households and new fees on various parts of the health industry, and reductions in Medicare payments to physicians and hospitals.

Of course, like any long-term estimate, the CBO analysis is speculative. We cannot know for sure just how much health reform will cost or save us. But the CBO's analysis is the most trustworthy. Certainly, this bill can reduce the deficit significantly if the above steps are taken. However, the key issue that bears watching is if future Congresses are motivated to raise taxes and reduce Medicare payments -- two policy actions that are never politically appealing.  If these actions are not taken, and in a timely way, all bets are off as to whether or not the reform bill will lower the deficit and by how much.

Q. The House recently voted to repeal the measure. Many saw the outcome of the 2010 midterm elections -- at least in part -- as a mandate to overturn the legislation. Why are so many people opposed to "Obamacare?"

A: The House recently voted for repeal, but it's a symbolic action that has little chance of moving further at the present time given a Democratic controlled Senate and White House. Public opinion on the health reform bill passed has always been divided, with equal percentages of people favoring full repeal, partial repeal, or no repeal of any kind. Yet, recent polls show something new: increasing public support for keeping some or all of the legislation in place and less support for a full repeal of the bill.

Ironically, a new Associated Press poll shows that an increasing percentage of Americans wanted the reform law to go even further than it did in fixing our broken health care system. This increasing support is probably due in part to people seeing some of the early benefits of the legislation for themselves and their families. It also may be the result of more people seeing first-hand what happens to their health care coverage in a troubled economy.

Q. What is the "individual mandate" requirement, and what is the potential role of the Supreme Court when it comes to the future of the PPACA?

A: The individual mandate requirement is the heart and soul of this legislation.  Without it, the real benefits of this legislation for improving our health care system won't materialize. Simply put, the individual mandate requirement, starting in 2014, says that everyone must purchase some form of health insurance for themselves or pay an annual financial penalty for not doing so.  The penalty starts small and gets larger over time.

Similar examples can be found in how we require everyone to have automobile and homeowner's insurance. This allows insurance companies to spread the overall cost among higher and lower-risk individuals, keeping insurance prices lower in the process and coverage benefits more than they normally might be if only the highest-risk individuals sought coverage.  Imagine an automobile insurance market where only high-risk drivers sought coverage, and low-risk drivers never bothered to get covered. Such a market wouldn't be viable for long because insurers would lose so much money they would either raise prices astronomically or stop offering coverage.

By having everyone participate in the same health insurance pool, we can ensure a health insurance market that is more affordable for everyone.  One of the problems with our health insurance market has been that people have a hard time getting insurance coverage on their own -- it's very costly and often does not cover a lot. The health reform bill also offers subsidies to poorer individuals to purchase insurance coverage, and make lower-cost plans available through state insurance exchanges.

With the numerous state-level challenges now occurring to the individual mandate requirement, there is little doubt this will make its way to the U.S. Supreme Court for a final decision.  What decision gets made there is anyone's guess, although a more conservative court may be more inclined to rule the mandate unconstitutional. However, challenging major policy actions through the courts is as old as our country itself, and hopefully invites a healthy debate regarding the separation of powers, federal vs. states' rights, and how important decisions in a democracy that affect peoples' lives should get made.

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