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New health care law seen as challenge, opportunity

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By JAMES E. CASTO
For The State Journal

HUNTINGTON — "The Affordable Care Act has a number of noteworthy flaws, but these will be addressed over time," Delegate Don Perdue, D-Wayne, told a luncheon.

A retired pharmacist, Perdue has served as chairman of the House Committee on Health and Human Resources for the past 12 years. Noting the widespread opposition to the ACA, sometimes called "Obamacare," he said: "Simply insisting that it will not work flies in the face of history, given the fact that a very similar approach in Massachusetts is working."

Perdue was one of three speakers offering their views on the new health care law at the Oct. 16 luncheon. He was joined by Dr. James Becker, medical director for both West Virginia's Medicaid program and state insurance commissioner, along with Joseph M. Letnaunchyn, president and CEO of the West Virginia Hospital Association.

Chamber President Cathy Burns said the luncheon discussion was convened to provide important information about the new law and its impact, especially on businesses. "We hear health care questions from our members every day," Burns said.

Like Perdue, Becker voiced optimism that the current problems regarding the new law's startup will be resolved. He compared Obamacare and the accompanying expansion of health insurance coverage to the reform effort that tamed West Virginia's problems with workers compensation.

In 2003, West Virginia was faced with an unfunded liability in its workers comp program that threatened to bankrupt the state. 

"Estimates put that unfunded liability at between $3.2 billion and $4.2 billion," Becker said. "We had to figure out a way to control that." 

The response was a total reworking of workers comp that moved it from a state-run system to privatization.

"Today we have more than 175 private carriers writing workers comp and the unfounded liability has dropped to well below $1 billion," Becker said. "At the same time, the rates have dropped. When you have a plan and you stick to the plan, you can really change things." 

Perdue peppered his remarks with statistics:

  • "As of Oct. 1, there were 246,000 uninsured West Virginians. It's predicted that by 2016 that number will be reduced by 70 percent." But making that happen isn't going to be easy, he said.
  • Uncompensated care — sometimes called charity care — is projected to be around $300 million in West Virginia this year, "and that's going to be reduced dramatically over time."
  • Experts suggest that Medicaid expansion "will create more than 6,000 new jobs in West Virginia by 2016," and "save West Virginia businesses $6 million in penalties they will not have to pay."
  • Over the next 10 years, Perdue said, West Virginia will contribute $375 million as its share of the Medicaid expansion, but it will collect $5.2 billion from the federal government. "In other words, we will get $13.85 from the feds for every dollar we spend in state money," he said.
  • "These numbers create the possibility of logical and meaningful discussion, something we haven't had enough of to date," Perdue said. 

Letnaunchyn pointed out that 2,600-page law has about a thousand places where detailed regulations, pilot programs and demonstrations will have to be forthcoming. 

"We have a new law but little direction in how things are going to be implemented," he said. 

He noted that half of the ACA's costs are to be funded through taxes and fees and the other half through reductions in provider payments to hospitals and physicians.

Already hard hit by uncompensated care and provider cuts, West Virginia's hospitals are tightening their belts, he said, "but they're running out of notches. So you're going to see more hospitals struggling financially."  

Sen. Evan Jenkins, R-Cabell, moderated the discussion. Jenkins is the executive director of the West Virginia State Medical Association and has been a key player in the enactment of a number of health care measures in the Legislature. The luncheon's sponsors included BrickStreet Insurance, Appalachian Power, HIMG Regional Medical Center and Marshall Health.

In a related event, "Why Employers Should Care About Affordable Care: What You Need to Know Now" will be the topic of a free information seminar for Huntington Chamber members from 8:30-10 a.m. Nov. 8. in the Community Room at HIMG, 5170 U.S. Route 60 East. The seminar's presenter will be Jamie Leary of Steptoe & Johnson PLLC, who counsels corporate clients on employee benefits issues.