Health Care Reform Arrives as the Cost Debate Rages

More changes to the American health care system take effect on Sept. 23 when provisions of the new "Patients Bill of Rights" become active as part of federal health care reform.

Among the measures, insurance companies will be prevented from denying coverage to children with preexisting conditions, placing lifetime limits on the amount of coverage you can receive when you're sick, or charging extra for emergency services obtained outside their network. Children will now be allowed to remain on their parents' health plans until age 26, and consumers will be given stronger rights to appeal insurance company decisions to a third-party arbitrator.

The new law also prevents insurers from cutting off lifesaving coverage because of errors on your application, allows consumers to choose their own doctors within their networks and provides for recommended preventive care, such as mammograms, colonoscopies and prenatal and new-baby care with no out-of-pocket costs.

While few disagree with the premise that the changes will bring some much-needed relief to hundreds of thousands of American families, the debate still rages over whether the changes will bring the cost of health care down for the majority of Americans. However, the administration says health care reform law signed in March is already bearing fruit.

Signs of Savings Appear

On Sept. 21, the Department of Health and Human Services announced that the average premium for 11.3 million seniors in the Medicare Advantage program would decline by 1%, while enrollment in the program is likely to increase by 5% in 2011. While the administration argues that some of these savings can be attributed to the Affordable Care Act going into effect, insurers say they will be forced to raise premiums anywhere from 10% to 25% next year, partly due to the new laws. Consulting firm AON projects health care costs will rise between 10.6% and 11% next year, a decline from the 13% to 16% annual increases during the middle of the last decade.

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The Obama administration denies that the new laws will raise the cost of health care, and for proof points to Blue Cross Blue Shield of North Carolina, which announced on Monday that it will be refunding $155.8 million to 215,000 customers partly due the effects of the health reform law. The administration sees this as evidence that costs can go down with the help of the health reform legislation.

Determining how much consumers will save thanks to the new law won't be simple. Most people won't see a change in their health care costs until Jan. 1, 2011, because that's when most health care plan changes normally go into effect. Health Secretary Kathleen Sebelius said some insurance companies have already begun announcing rate hikes for 2011, claiming the increased costs are tied to the new health care law. Sebelius warned that the agency won't tolerate unjustified rate hikes, and will be on the lookout for waste and fraud in an effort to keep health care affordable.