LEWISTON — Health care reform will affect four core groups of people, a Harvard University economist told a crowd at Bates College on Monday. 

Those groups are:

* Medicaid recipients and the uninsured.

* Individuals and those insured in small groups.

* Those insured in medium and large groups.

* Medicare recipients.


And while most will be better off, he said, there will be potential problems, particularly for Medicare recipients. 

“The bill has a lot of good in it. And there are a lot of issues that will have to be addressed as we implement it,” said Joseph Newhouse, a John D. MacArthur Professor of Health Policy and Management at Harvard University in Massachusetts. 

Invited to Bates by the college’s Economics Department, Newhouse spoke to a packed house of more than 150 students and community members.

He told the group that the uninsured “will unequivocally benefit” from the reform law since they will be able to join an expanded Medicaid program — which is typically used by low-income families — or will get subsidized insurance through a health insurance exchange. But with the federal government paying nearly everything — and state government paying very little — only for those people eligible for the newly expanded Medicaid, he said there may be fights about who qualifies for which program and who will pay for it. And once that’s resolved, he questioned whether there will be enough medical professionals, particularly primary care doctors, to handle the influx.

“How will that all sort out? It’s not at all clear,” he said.

Newhouse said individuals and those insured in small groups — whose insurance costs have skyrocketed over the years — will also be helped by health care reform.


“Not to put too fine a point on it, this is a broken market,” he said.

Because the reform law requires that everyone have health insurance, this group will potentially see a flood of new people and he believes half will qualify for subsidies to help them pay for insurance. But Newhouse said those subsidies will be based on income, and income data — such as federal tax returns — lag. While someone might qualify for a full subsidy one day, a new job or a raise could qualify them for a much smaller subsidy the next day. Since the government wouldn’t have that income data for at least a year or two, some people could find themselves forced to repay a subsidy because their income changed.

“There are going to be a lot of people that owe the government money,” he said. “So it’s a problem.”

Those insured in medium and large groups will see little change to their insurance, Newhouse said. Generally, those people are employed and their employers are large enough that insurance is a typical benefit. Under reform, large employers — those with 50 more workers — will have to pay a fee if they don’t provide insurance.

Medicare recipients — usually those who are elderly or disabled — face the biggest challenge under the reform law, Newhouse said. While the law does a lot of good things for people in this group, including closing the gap in prescription drug coverage otherwise known as the Part D “doughnut hole,” he said reform reduces hospital and other payments, which could lead to some providers not taking Medicare. And some Medicare recipients could view that as a the government breaking its promise to cover them after they’ve paid into the system for decades. 

Still, despite the potential problems, Newhouse said he believes reform is needed. The country, he said, can’t afford to keep the health care system it has now.

“Going forward, something is going to have to change,” he said.

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