Press Release

Embargoed Until Contact

June 8, 2010
12:01 AM EST

Kay Campbell
(301) 652-1558


Sue Ducat
Director of Communications
(301) 841-9962


New Issue of Health Affairs Outlines Significant Challenges--and Opportunities--in Implementing Health Reform


June Issue Examines Prospects for Medicaid Expansion, High-Risk Pools, and New Regulations on Insurers


Bethesda, MD -- State and federal officials, insurers, and health care providers face thousands of important decisions in implementing the Patient Protection and Affordable Care Act of 2010, according to the June issue of Health Affairs. In this issue, some of the nation's leading experts weigh in on the nuts and bolts of what's needed to achieve the key goals of health reform: expanding health coverage, improving quality, and controlling costs.

Putting in place the provisions of the new law entails many daunting tasks: establishing new rules for insurers; setting up insurance exchanges; getting states ready for Medicaid expansion and other new roles; and meeting legal challenges to the law itself. As Susan Dentzer, Health Affairs' editor-in-chief, points out, just because the potential for system transformation is now "enshrined into law" doesn't guarantee it will happen.

"If it does, it will be because people seized the opportunities and took action despite whatever inertia or inevitable complexities of implementation arise to impede their path," she says. Revamping payment systems and stimulating delivery system reform will be central to achieving success, according to Dentzer.

If implemented effectively, the new health care law will expand coverage to an estimated thirty-two million uninsured Americans by 2018, according to the Congressional Budget Office. An interim step is the creation of a federal high-risk program now being devised by the Department of Health and Human Services together with the states. Deborah J. Chollet of Mathematica Policy Research warns that restrictions in the federal program, and a projected funding shortfall, will force many Americans to rely on the existing thirty-five state-run programs, which can charge prohibitively high prices and deny coverage for preexisting conditions.

States will also need to put systems in place to support Medicaid expansion to fourteen million low-income people, according to Leighton Ku of George Washington University. Ku's analysis also shows that opposition to provisions of the law among a number of state attorneys general may run contrary to the economic and health interests of state residents. For example, on average, 39 percent of the Medicaid-eligible adults in the twenty-one states challenging the health care law in court were uninsured, compared to 26 percent in the other states, so the opposing states have more to gain.

Insurers, States Must Adapt to New Environment


Several articles in this issue highlight the important role of health insurance exchanges and the ability of insurance companies to comply with new regulations and adopt new business models. For example:

• Many insurance companies will face choices such as whether or not to offer policies through the health insurance exchanges, say Troyen A. Brennan of CVS Caremark and David M. Studdert of the University of Melbourne. Insurers will also have to walk a difficult line between what will be required of them under the legislation and their own relative inability to manage health costs--control of which largely remains in the hands of providers.

• The health reform act relies on the new state-based health insurance exchanges, as well as a new federal exchange, to provide a choice of health plans to small employers and individuals purchasing coverage directly. Jon Kingsdale, the former executive director of the Commonwealth Health Insurance Connector Authority, and John Bertko of the Brookings Institution, say that states must forge public-private partnerships and develop expertise in insurance operations and marketing to operate exchanges successfully.

• Some states, such as Georgia, have already signaled that they will not set up a high-risk program for people with preexisting health conditions and will leave it to the federal government to operate the pool in their states, says Len M. Nichols of George Mason University. Partisan politics has played at least some role in those decisions, Nichols observes. He argues that such political opposition must be overcome if the reform is to proceed as a federal-state partnership.

Alan Weil of the National Academy for State Health Policy and Raymond Scheppach of the National Governors Association contend that states will need assistance from the federal government, stakeholders, and each other to carry out a range of activities. These include crafting effective new regulations for insurance companies, executing expansions in Medicaid, and developing the insurance exchanges.

• Reinsurance provisions offer insurers crucial help in managing risk during the early years of health reform implementation, according to Mark A. Hall of Wake Forest University. Until 2014, reinsurance will offer protection for early retirees receiving employer-provided coverage. A separate reinsurance program will also give insurers greater ability to adapt to a new rate regulations and other compulsory changes in the way they do business, Hall observes.

• The new health legislation contains numerous payment and delivery system reform provisions, including the creation of a Center for Medicare and Medicaid Innovation, which will have the authority to implement pilot projects aimed at improving quality and slowing health cost growth. Stuart Guterman of the Commonwealth Fund and colleagues offer recommendations to help the center to achieve its potential.

Pro & Con: Legal Challenges to Health Reform

A number of states have moved to challenge provisions of the Patient Protection and Affordable Care Act in court, arguing in particular that the individual mandate to buy insurance is unconstitutional. Two papers in this issue present opposing viewpoints:

Timothy S. Jost of the Washington and Lee University School of Law says that the reform law looks to the states to play a major role in implementing reform and offers them considerable authority and flexibility to carry out their responsibilities. In his view, the lawsuits challenging the health reform act are politically motivated, have no legal merit, and simply distract the states from becoming partners in reform implementation.

• In a dissenting view, Ilya Shapiro of the Cato Institute argues that the lawsuits raise serious legal issues, including whether the federal government can constitutionally require that all people buy health insurance or pay a penalty. He says that the individual mandate should be struck down.

Delivery System Reform: Bending the Cost Curve

Three papers in this issue explore the promise of health reform to curb medical costs and improve quality:

In an interview with Health Affairs' Editor-in-Chief Susan Dentzer, Glenn Steele, the president and CEO of Geisinger Health System, spells out opportunities and challenges for Geisinger arising from the provisions of health reform. He says that providers don't have to choose between cost cutting and quality-- and contends that, through Geisinger's advanced medical home model, the system has demonstrated the ability to bend the cost curve for chronically ill Medicare beneficiaries by up to 7 percent.

• The health reform act calls for several measures that could push providers to reduce waste and inefficiencies, says David Cutler of Harvard University. For example, bundling medical services into larger payment groups, coordination of care, and pay-for-performance might lead to lower-than-expected medical spending over the long haul, he says. Cutler estimates that the savings from these reforms could amount to $9 trillion over the next quarter-century.

• The Congressional Budget Office analysis of the health care reform act indicates that it will reduce the federal deficit over the next ten years. But that analysis is flawed, say Douglas Holtz-Eakin of the American Action Forum and Michael J. Ramlet. They argue that a more realistic projection suggests that the reform law will not save any money but will actually increase the deficit by more than $500 billion in the first decade after implementation.

About Health Affairs

Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears each month in print, with additional Web First papers published weekly at The full text of each Health Affairs Web First paper is available free of charge to all Web-site visitors for a two-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund.