The most significant reform in the United States health care system in almost 50 years was signed into law on Tuesday by President Barack Obama. The program, which will be delivered in phases over the next four years, promises to provide assistance to seniors on Medicare regarding prescription drugs, cover dependent children up to age 26 on their parents health plan, provide tax breaks to small businesses and prevent insurance companies from excluding individuals from coverage due to pre-existing conditions. Some long term goals include phasing in more than 30 million Americans who do not have insurance and the creation of large health care exchanges.
What will work and what will be some major challenges? The short term objectives of covering dependents to age 26, providing additional prescription coverage for seniors, and tax breaks for small businesses are all positive changes that should be relatively easy to implement and achieve. Preventing insurers from excluding individuals who have pre-existing conditions may prove difficult to implement. The underwriting or review process used by insurers to provide insurance to healthy individuals and companies has been used to achieve greater returns and profit. How insurers address this change, who will provide oversight and the impact in terms of cost to consumers, businesses, and the insurance companies may create significant problems in administration and cost. Removing annual caps in policies will also potentially create financial distress.
In addition, phases to be implemented in a few years, specifically insurance exchanges or buying cooperatives, may not be the answer. This has been attempted before in various settings with mixed results. The problems include controlling costs, administration, oversight, benefit levels, competition, and eligibility. Probably the most important issues are adequate funding of reserves to pay for claims and identifying waste and fraud and abuse. We also must remember additional taxes and penalties for non-compliance will need to be determined and enforced. For obvious reasons, these issues may create a number of significant problems.
While the debate will likely continue regarding the federal law versus states rights, questioning whether it is constitutional to force individuals to purchase insurance, the bigger questions still remains unanswered. How will this truly impact the federal deficit, can this bill help to control costs and improve access, how will quality be impacted, and how will hospitals, physicians, insurers, managed care companies, the business community, and the pharmaceutical industries be impacted? Those questions along with how consumers, patients, and customers of health care will embrace these changes are crucial in the years to come.
From a strategic planning perspective, these stakeholders will need to be aware of the many changes in the delivery and administration of health care over the next few years. For example, the bill will implement in phases: discounts on brand name drugs to close the “donut hole” for senior citizens, tax changes for health savings accounts as well as other tax implications for consumers and businesses, electronic exchange of health information to reduce administrative costs, various penalties for employers and individuals who do not purchase health care, competition through state health insurance exchanges, and eliminating annual caps on insurance coverage. Fraud reduction is another critical part of the bill. These are just a few of the major changes we will see over the next couple of years.
Health care organizations, providers, hospitals, and consumers must now share in the responsibility of making health care reform work. Hopefully, we will see better service, improved quality, and good outcomes. Competition should also help improve health care delivery and service. Patient responsibility, improved customer service, fiscal responsibility, tort reform, and intra-state competition between insurers may also be part of the solution toward improving our health care system.
The most significant reform in the United States health care system in almost 50 years was signed into law on Tuesday by President Barack Obama. The program, which will be delivered in phases over the next four years, promises to provide assistance to seniors on Medicare regarding prescription drugs, cover dependent children up to age 26 on their parents health plan, provide tax breaks to small businesses and prevent insurance companies from excluding individuals from coverage due to pre-existing conditions. Some long term goals include phasing in more than 30 million Americans who do not have insurance and the creation of large health care exchanges. 
