Next year's health care reform will be a "mess," experts predict

BOSTON — When health care reforms begin this year and new insurance starts next year, it will not be pretty, health experts said.

“This is going to be a mess,” said Jonathan Gruber, a health economist at the Massachusetts Institute of Technology, likening it to the bumpy launch of the Medicare Part D prescription drug program in 2006, which was “1/100th as complex” as the Affordable Care Act will be.

Most Americans who are insured through their employers probably won’t be affected, and only a small number are likely to see high premiums, he said.

State governors who have so far resisted federal money to expand Medicaid, such as Georgia Gov. Nathan Deal, are likely to cave in as they see large amounts of funding go elsewhere, Gruber predicted. If not, they “should be immediately fired,” he said.

The experts spoke Friday as part of a panel on health care reform at the annual meeting of the Association of Health Care Journalists.

So far, two states – Massachusetts and Utah – have implemented some form of health insurance exchanges, which allow the uninsured to purchase health insurance with subsidies for most low- and middle-income buyers.

The two states are very different, but “the fact that both came up with an exchange should tell you something,” said Cheryl Smith, the first director of Utah’s exchange and now a director for Leavitt Partners. “Exchanges are an idea whose time has come.”

Just how quickly they will get started in other states and how well they will work is the question, she said.

More than half of the states have chosen not to create their own exchanges. The federal government will operate the exchanges for those states, but it is not know whether there will be insurance plans, most traditionally regulated by the state, approved for those state exchanges, Smith said.

“Do they have willing regulators there? That’s a big question,” she said.

Everything must be ready by open enrollment in the fall.

“We believe something will be ready to go by Oct. 1” when enrollment in the exchanges, now called marketplaces, begins, she said.

That won’t affect as many people as some have predicted, Gruber said.

“The majority of Americans, their insurance is not really affected by this law,” he said.

Those who buy insurance on their own, which is about 6 to 7 percent of Americans, probably will be most affected, Gruber said. Lower-income younger and older people might be “winners” because of subsidies in the plan. Those most likely to see higher rates will be young people whose income is above 400 percent of the federal poverty rate, he said.

“When we’re talking about ‘rate shock,’ we’re not talking about something that is going to affect America (as a whole); we’re talking about a slice of a slice of Americans,” he said. “The aggregate effect is really tiny.”

Coverage kicks in Jan. 1, but implementing it could take a year to sort out all the problems, he said.

Also up in the air is state resistance to expanding Medicaid, which the federal government will fund 100 percent for the first three years. For states including Georgia, the federal share will not drop below 90 percent. Many Republican governors originally opposed to the expansion have agreed recently to take the expansion, which would increase eligibility for Georgia and many other states from the federal poverty level to 133 percent of that level.

“They are literally doing a massive disservice (to their citizens),” Gruber said. “Their taxpayers pay, anyway.”

In states that don’t expand Medicaid, people will end up on the exchanges, perhaps raising rates 5 to 15 percent for others there, he said.

“There’s a huge pot of money that is sitting there for these states to take that,” Gruber said. “I guess I’m just enough of an economist to believe eventually they’ll take it.”

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