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Five Health Insurance Predictions for 2009

Les Masterson, for HealthLeaders Media, January 7, 2009

A new president and Congress promise to make wholesale changes in healthcare, and those changes are causing both excitement and trepidation for the health insurance industry.

I've got some good news or bad news depending on where you stand on the issue of healthcare reform: Major changes will not happen this year. Sure, Congress will cover more children and cut Medicare Advantage payments to private insurers, but 2009 will be a year of minor reforms, and plenty of debate and discussion rather than action.

Now that I have depressed some of you, here are my five predictions for 2009:

Healthcare reforms: Think incremental

Don't believe the talking heads who predict major healthcare reforms this year. The election of Barack Obama has pundits gushing about the possibilities as they believe this wave of positivity will result in major healthcare reform in 2009.

Another reason that pundits point to major changes in healthcare is that Senator Ted Kennedy has brought together a number of stakeholders in hopes of producing legislation that could cap off a Senate career that has lasted nearly half a century.

Those are definitely two positives for those who want major reforms, but it's naïve to expect major changes this year.

Yes, there is a fresh wind blowing in Washington and overwhelming support for healthcare reforms, but there is still the issue of what is the best system. Is it a single-payer system, a public insurance option coupled with the employer-based system, Medicare for all, or the individual market?

Nearly everyone agrees that healthcare costs are out of control and not enough Americans have health insurance. The issue is how to create a system that can tackle those two issues, as well as the plethora of other healthcare concerns, such as quality care, physician payment reform, and the primary care shortage.

That said, the number of groups presenting their own reform plans is impressive. Stakeholders are playing nice now, but those good feelings will melt away once a concrete plan is presented.

Healthcare makes up about 14% of the nation's economy. It should take longer than a year to create a solution to the problem.

There is some good news for reform-minded people though. Expect states to continue to implement their own reforms this year and major healthcare legislation from Washington in 2010 when the House of Representatives and one-third of the Senate run for re-election.

Legislators will pass a bill in 2010 that is politically viable and not one that will go as far as many hoped.

More children will get insurance in 2009

Though major healthcare reforms will not happen this year, Obama and the Democrats will expand health insurance to more children.

Within Obama's first 100 days, Congress will renew the State Children's Health Insurance Program (SCHIP) and lower income thresholds that will allow states to provide coverage to more children.

Sometime in 2009 (either as part of the SCHIP renewal or in separate legislation) the Democrats will provide health insurance for most children whose parents or guardians do not have insurance through their employers.

Supporting an initiative like health insurance for children is politically popular and will happen this year.

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