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Changes to Health Care Reform

Given that many of the major reforms of the Patient Protection and Affordable Care Act will not be enacted until 2014 there has been much discussion of potential changes to the existing legislation.  This ranges from subtle modifications of small details of the bill to the Republicans’ recent vote to repeal the entire legislation.   In his State of the Union address this week, President Obama allowed that certain provisions covering small businesses should be altered to reduce the burden on certain companies.  Clearly, the individual mandate requiring most citizens to carry some form of health insurance has been the most controversial and least popular provision in the reform.

Economist Richard Thaler from the University of Chicago had an interesting piece in the New York Times this past week detailing three potential modifications or additions to the current Act that could improve its efficiency.   He makes it clear that the mandate is an essential part of the bill given its provisions for covering individuals with pre-existing conditions (which it turns out could characterize up to half of the 18-64 year old population).  States such as Virginia that are currently filing lawsuits to challenge the federal imposition of insurance mandates in each state could have funds withheld which would effectively force them to abide by the mandate given the sizable share of state’s budgets coming from federal payments for Medicaid already.

The legislation passed in March 2010 includes a wealth of major changes to our health care system that will present many challenges for health care organizations and businesses providing health insurance to their employees.   But the current debate over potential tweaks to the rules of reform are generating additional uncertainty that makes the process of preparing for change all the more difficult.  While the legislation will evidently survive the current repeal efforts, the exact reforms imposed in 2014 may differ significantly relative to the bill passed last year.

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