Health care industry braces for reform

December 26, 2009

Congress is on the cusp of transforming health insurance—if it can pass a health reform bill that was losing popularity late in the year.

The Senate proposal would levy various new taxes to pay for subsidies to help 30 million more Americans buy health insurance through a newly created exchange. It also would force insurance companies to accept all comers and would fine individuals and most employers that fail to buy or provide coverage.

President Obama’s attempt to reform health insurance sparked debate and demonstrations across the country. (AP Photo)

The mandates and the subsidies—$34 billion a year—would boost business at Indianapolis-based WellPoint Inc. and its peers. But WellPoint turned against the reform effort when the Senate reduced to $750 the fines for individuals who don’t buy insurance. The small fines would lead many people to wait to buy insurance until they contract an expensive illness, WellPoint predicted, because insurers now must accept them.

Also opposing the bill have been medical-device companies, such as Cook Group Inc. in Bloomington and orthopedic-implant maker Zimmer Holdings Corp. in Warsaw. The industry would pay $2 billion a year in new taxes, regardless of profit levels.

Drugmakers such as Indianapolis-based Eli Lilly and Co. like the idea of 30 million better-paying customers. And Lilly is so far getting its key wish—a 12-year waiting period for generic competitors of its biotech drugs, instead of the five-year delay now required for the cheaper generic versions of its chemical drugs.

Doctors and hospitals also are glad reform would reduce their numbers of uninsured customers. But some worry the larger number of insured patients will overwhelm primary-care doctors, who are already in short supply in Indiana and nationally. After Massachusetts passed a similar law in 2006, waiting times for doctors soared.

Congress would use the federal-state Medicaid insurance program for 37 percent of the coverage expansion—a disappointment to doctors and hospitals since Medicaid pays health care providers about 40-percent less than private insurance plans do. The state of Indiana predicts it will have to increase its Medicaid payments by $118 million a year to attract enough doctors to see the higher-earning patients that Congress will make eligible for the program.•




Recent Articles by J.K. Wall

Comments powered by Disqus