A $5 Billion Question Mark

Human resource departments are not the only ones with questions about the bill. "There's uncertainty even about what's in the bill," says Mark Pauly, a Wharton professor of health care systems, business and public policy. This is because the reform calls for a number of changes but doesn't explain exactly how those changes will be made. The legislation reportedly falls back on the phrase, "The secretary shall," more than a thousand times, Pauly points out, "which means they turned it over to [The U.S. Department of Health and Human Services] to figure out how to do this."

Loose ends include details of the high-risk pool option, which the government is supposed to create within 90 days of the bill's passage. "Nobody knows how that's going to work," Pauly says. "The only thing we know is that they're going to put $5 billion into it. What the coverage will be and what the subsidy will be is up in the air."

State-run health exchanges are also a big question mark, notes David T. Grande, a senior fellow at the Leonard David Institute of Health Economics at the University of Pennsylvania. "Each state will be responsible for setting up its own health insurance exchange," Grande says. That could translate into some state exchanges working better than others. "If you do this 50 times, some states will do this very well, and some might not do this very well."

Cost containment is another big issue, says Pauly. A number of measures in the bill supposedly slow down the rate of growth in health care costs, but Pauly is skeptical that all of them will work. "My slogan on this is that if there were an FDA [Food and Drug Administration] of cost containment, none of these measures would be considered safe and effective," he quips. Pauly agrees with some of the measures – such as trying to reduce the rate of readmission to hospitals by letting nurses counsel patients, or requiring checklists in hospitals that remind workers to wash their hands and sterilize equipment. Other measures look less promising, at least in terms of cost, he says. For example, the reform encourages more preventative care, which is good for patient health but does not necessarily improve the bottom line. While studies have shown that preventative care saves lives, "it doesn't save money," Pauly notes.

The bill's emphasis on "community rating" is another component that could backfire. Community rating is when insurance companies offer the same premium to everyone in the community, regardless of age or health. Politicians often claim that community rating will lower the costs to high-risk individuals, Pauly says, but they often leave out the flip side of the equation -- that insurance companies will probably respond by raising premiums for everyone else. "Community rating will not lower total cost since it just averages the costs of different risks," says Pauly. "Compared to basing premiums on risk, community rating lowers them for high risks and raises them for the more numerous lower risks." The result could be that people in the low risk groups might decide to stop buying insurance altogether, since the penalty for not signing up would be less than the increased premiums. "From an insurance point of view, the theory is, I might as well wait until I get sick."

The reform's approach to undocumented immigrants could also cause unintended cost increases, according to Grande. Specifically, the legislation prevents undocumented immigrants from buying insurance in state-run exchanges. "That seems a bit punitive and counterproductive if the idea is to not use tax dollars to pay for care for undocumented immigrants," Grande says, "because they will show up in hospital emergency rooms."