Pros analyze health care law

Editor's Note: This is the first story in a two-part series about Obamacare. The second part will be published next weekend.

Just how complex is the health care reform legislation called "Obamacare?"

If you read all 2,400 pages, the U.S. Patient Protection and Affordable Care Act of 2010 can be hard to grasp, as even U.S. Supreme Court justices admitted during their consideration of its constutionality.

But it is more comprehensible if you break it down into components and talk to medical professionals in Missouri and Kansas whose business is to apply it.

Already in effect, some aspects have become relatively well known like prohibiting insurance companies from refusing to cover people because of pre-existing conditions; covering people up to age 26 by their parents' insurance; and eliminating lifetime coverage caps that stopped insurance when the cap, such as $1 million, was reached.

"It's more insurance reform than health reform," said Missouri Hospital Association Media Relations Vice President Dave Dillon of Jefferson City Friday.

"We've pushed for years to expand coverage because we have a real problem with the uninsured in Missouri.," Dillon said.

MHA's member hospitals' combined charity care was just south of $1 billion in 2010, Dillon said. This was kept on the books, but immediately written off as bad debt with no real intent to pursue payment.

Reporting that Missouri has 853,300 uninsured citizens and Kansas 351,000, Dillon said the MHA hopes both states expand Medicaid and have insurance exchanges of coverage choices because the U.S. Department of Health and Human Services will cut hospitals' DISH (disproportionate share) payments by 50 to 60 percent between 2014 and 2019 whether they do those things or not.

"It would hurt most in the rural areas because the poverty there is more pronounced in some ways," he said.

Reviewing the financial aspects of Obamacare, the federal Centers for Medicare and Medicaid Services says that by 2019 it will bump Medicaid expenses and individual subsidies by $165 billion and cut Medicare costs by $125 billion annually.

The Congressional Budget Office estimates it will require more than $1.7 trillion in gross federal spending by 2022 or $1.2 trillion in net spending after offsetting penalties and tax increases are accounted for.

The CBO says that is a partial accounting, excluding offsetting expense cuts and revenue hikes that result in a net deficit reduction, according to references.

Those reductions and increases include broadening the Medicare tax base for high-income taxpayers, $210 billion; charging an annual fee to health care providers, $60 billion; raising the adjusted gross income floor on medical expense deductions from 7.5 to 10 percent, $15 billion; imposing a 40 percent excise tax on insurance policies that cost more than $10,200 annually for an individual or $27,500 for a family, $32 billion; charging fees to manufacturers and importers of branded drugs, $27 billion; and enacting a 2.3-percent excise tax on manufacturers and importers of certain medical devices, $20 billion.

Effective in 2014, the much-debated "individual mandate" will put an annual penalty of $95, or one percent of income over the filing minimum, whichever is greater, on taxpayers not covered by "an acceptable policy," according to references.

Ruled a tax by the Supreme Court, the mandate will increase by 2016 to a minimum of $695 for individuals and $2,085 for families, or 2.5 percent of income over the filing minimum, with exceptions made for religious reasons and people whose least expensive policy exceeds 8 percent of income.

However, the Health and Human Services Department will subsidize people whose income ranges from 133 to 400 percent of the Federal Poverty Line. For example, a family of four that makes 250 percent of the FPL, or $55,125, will pay a maximum out-of-pocket premium of $4,438 and get an additional $1,930 cost-sharing subsidy.

Karen Endicott-Coyan, regional director of reimbursement at Mercy Hospital in Fort Scott, said families of four whose income is between 100 and 133 percent of the FPL, or $23,050 to $31,900, may choose, beginning in 2014 in states that expand Medicaid, between Medicaid and insurance bought through their state health insurance exchange.

"Gov. Brownback has said he will wait until after the election to make a decision," Endicott-Coyan said Friday. "The Urban Institute (of Washington, D.C.) estimates that another 141,000 people would be covered in Kansas.

Noting that Kansas has returned a $31.5-million federal exchange-planning grant, she said, "I don't have the numbers for Bourbon County, but I would certainly expect that a number of people here would be eligible.

"A lot of regulations to implement the law still have to be written by Secretary (Kathleen) Sebelius and the Health and Human Services Department."

The Associated Press reported that Missouri Gov. Jay Nixon said he would not immediately declare a position on Obamacare after the Supreme Court's June 28 decision.

Next week: Moving the American medical industry from a fee-based to a quality-based system emphasizing preventative care, increasing federal support by establishing accountable care organizations and enhancing rural hospitals' ability to recruit doctors.