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Posted July 14, 2009 | Copyright © The Northern Virginia Daily
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Legislation packs drastic changes to health care system

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Local businesses, providers suggest slower pace for bill

By Garren Shipley -- gshipley@nvdaily.com

Washington wants to redraw the entire U.S. health care system as soon as possible.

But some business owners and health care providers in the Shenandoah Valley are counseling caution.

President Obama has made a major overhaul of health care in the U.S. a centerpiece of his administration. Just over 1 million Virginians, 14.2 percent, had no health insurance in 2007, according to the Kaiser Family Foundation.

Legislation working its way through Congress aims to reduce that number, but both a House and Senate plan would involve major rewrites of the system.

"I agree that reform is needed," said Craig Lewis, the chief financial officer of Valley Health System. "We're willing to help the president and his administration make changes, but let's do it reasonably, rationally."

Both the House and Senate versions of the bill contain an "individual mandate" -- a requirement that everyone in the U.S. participate in some form of health insurance.

One draft of the House bill requires taxpayers to include proof of health insurance when they file their annual tax returns.

Those who do not opt to purchase a qualifying health insurance plan would pay a penalty of 2 percent of their adjusted gross income each year.

Federal officials also would set a floor for what qualifying health plans should cover. The early Senate draft of the bill requires, among other things, hospitalization, maternity and newborn care, mental health and substance abuse treatment, prescription drugs, lab work, rehabilitative services and devices, preventive services and pediatric services, including dental and vision care.

At least one version of the bill would require employers to offer insurance and pay at least 60 percent of the total cost. That has some business owners concerned.

"If I'm mandated that I have to go into what they've got mandated on the radar screen right now, I'll go out of business," said Nancy Barnett, the co-owner of Industrial Maintenance Solutions near Edinburg.

Barnett made her case to Republican Lt. Gov. Bill Bolling during a campaign stop at her business on Friday.

Mandated benefits are a significant driver of insurance costs, particularly in Virginia, Bolling said.

"The last estimate I saw was that state government-mandated benefits add 41 percent to the cost of coverage," he said.

The bills also would make drastic, sweeping changes to how private health insurance could do business.

Both individual and group plans could no longer exclude people from coverage based on their current health, health history or claim history.

Policies also would be barred from placing lifetime limits on benefits. Family policies would be mandated to continue coverage for dependent children all the way up to age 26.

Insurance companies also would be barred from dropping coverage, and would be required to renew policies when they expire.

The Senate's version of the bill also includes a provision designed to enhance hospital safety that effectively gives the federal government control over how they do business.

Facilities that don't implement "mechanisms to improve health care quality" required by the secretary of health and human services would be banned from doing business with qualifying insurance programs.

Threatening to cut off business from an entire class of patients is a drastic threat indeed, according to Lewis.

Government already is the biggest single customer Valley Health serves, according to Lewis.

Some 48 percent of patients are covered by Medicare, while another 7 percent are on Medicaid. Only 36 percent of patients have some form of commercial health insurance.

Some 8 percent pay for care out of their own pocket or make other arrangements.

The system does need to be changed, Lewis said, but it is so complex that making major changes must be done slowly -- something that isn't happening now.

"We've got to take our time and do it well," he said.

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