After two years, the Affordable Care Act has yet to dramatically alter the health-care landscape in Pennsylvania and New Jersey, but the controversial law, facing a U.S. Supreme Court challenge this week, has expanded insurance coverage in small ways and added momentum to changes already under way in the health-care system.
"It has made a difference," said David Simon, executive vice president at Jefferson Health System. "It's been a catalyst for people to start thinking about things, looking at new ways of doing business, accelerating the pace of change in terms of increasing quality and efficiency."
So far, the regional scorecard looks like this:
133,614 young adults up to age 26 in New Jersey and Pennsylvania have gained health coverage under their parents' plans.
7.9 million residents of the two states no longer have lifetime limits on their health plans.
4.3 million people with private insurance have received preventive services with no out-of-pocket expense, according to data from the U.S. Department of Health and Human Services.
Details of major provisions of the health-reform law, such as the establishment of state exchanges to buy insurance and the expansion of Medicaid, are still being worked out, creating uncertainty for health-care providers, insurance companies, and employers.
But early coverage changes are already hitting some employers' bottom lines.
Dietz & Watson Inc., a Philadelphia deli-meats producer, for example, is learning that preventive services are anything but free and that additional coverage for young adults can be costly.
In renewal talks now for the health plan covering 465 workers at its Torresdale Avenue plant, the family-owned company is facing a 21 percent, or $1.3 million, premium increase, benefits coordinator Jacquie Ogle said.
Ogle said that 85 young adults came onto their parents' plans last year. What used to be employee-spouse coverage, for example, turned into family coverage, which will cost $300 a month more, she said.
Supposedly free preventive services are also a big factor in the proposed increase, Ogle said. Eliminating the $225 co-pay for colonoscopies and the $80 co-pay for mammograms does not make the actual cost go away. "It's not free, so it's coming back into the cost of the insurance plans. It's just a vicious cycle," Ogle said.
It's unlikely that all of the proposed increases at Dietz & Watson can be attributed to the health-care law, experts said. It's hard to draw broad conclusions from one company's experience because all groups are different and even the company's industry matters.
Joseph M. DiBella, managing director and executive vice president for employee benefits at insurance brokerage Conner Strong & Buckelew, estimated that, on average, health-insurance reform had added 1 to 1½ percentage points to the increase that companies would otherwise face.
Certain other early-stage programs under the Affordable Care Act have not gained much traction. One, long-term insurance for the elderly, was dropped because it wasn't financially sustainable.
Lack of affordability has also dogged the law's effort to offer insurance for uninsured Americans with preexisting conditions. Starting July 1, 2010, the federal government made $160 million available to Pennsylvania and $141 million to New Jersey to provide such coverage.
So far, just 6,730 Pennsylvanians have enrolled in the program. This month 4,816 are covered, the second highest number in the country behind California, which had about 100 more enrollees. "We're finding the trends are, people get on and then they get off" after they have dealt with a particular problem because they find it hard to pay the premium, said Pennsylvania Department of Insurance spokeswoman Rosanne Placey. That is the case even though Pennsylvania's $283 monthly premium, regardless of the participant's age, is the lowest in the nation,
In New Jersey, where the premium ranges from $245 to $947 per month, 824 people were participating on Jan. 30, said Marshall McKnight, spokesman for the New Jersey Department of Banking and Insurance.
Another early effort to expand coverage was the Small Business Health Care Tax Credit for businesses with fewer than 25 employees and average annual wages under $50,000. The Obama administration estimated in February that 360,000 such employers who provide health insurance to two million workers would benefit from the tax credit in tax year 2011.
But "it is a very complicated, burdensome credit to compute, especially if the company doesn't have an outsourced payroll service that can get you the hours for the employees," said Bob Simpson of Brinker Simpson & Co. L.L.C., an accounting firm in Springfield, Delaware County. Simpson said that of the 150 corporate returns his firm filed, fewer than 10 received the health-care tax credit. The benefit often outweighs the cost of figuring out whether the business qualifies, he said.
The biggest impact of the health-reform law so far in Pennsylvania and New Jersey is probably in the massive amount of preparation for 2014, when Medicaid is expanded - a big worry for hospitals and doctor practices - and health-insurance exchanges begin offering insurance to individuals.
This month the New Jersey Legislature passed a bill to establish a health-insurance exchange, but Gov. Christie has not decided whether the state will operate an exchange, Banking and Insurance Department spokesman McKnight said. If it does not, the federal government will jump in with its own exchange. .
Gov. Corbett said in November that Pennsylvania would operate an exchange, but the state's proposal is unusual, calling for multiple privately run exchanges. "To my knowledge, Pennsylvania is the only state that has proposed a multiple exchange like that," said Joanne Grossi, director of Health and Human Services' Region Three, which includes Pennsylvania.
At Independence Blue Cross, the biggest health insurer in the Philadelphia region, managers still need information about how the exchanges will operate and how products have to be structured for sale on the exchanges. "Those are pretty big things that you have to know," said Scott Post, a vice president who heads IBC's Office of Health Care Reform.
Aside from federally mandated changes, IBC is also expanding efforts to restructure health care in ways that improve quality and reduce costs. IBC and Jefferson Health System, the largest hospital operator in Southeastern Pennsylvania, with 20 percent of admissions, are starting a one-year pilot June 1 to cooperate on reducing preventable readmissions and other costly episodes, Jefferson's Simon said.
In South Jersey, the chief executive of AtlantiCare, which operates hospitals in Atlantic City and Pomona, echoed the idea that the mood set by the Affordable Care Act is pushing hospitals toward a new business model. The executive, David P. Tilton, said AtlantiCare had been exploring ways to reduce costs and improve care for five years by working closely with insurers and patients.
The new law "has helped us accelerate our transformation," Tilton said.