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Health care reform worries area employers

Employers in Fargo-Moorhead are struggling to comply with the sprawling national health reform law that's taking effect in stages.

The task is complicated by the fact that many provisions in the 2,700-page legislation now must be clarified by new regulations on more than 1,000 points.

Top concerns involve predicting employer costs to provide coverage to employees - or how steep penalties might be for failing to provide adequate coverage.

It's more than a little daunting, but a panel discussion Tuesday provided answers to some of the many questions facing local employers.

The session, which was organized by the Fargo Moorhead Chamber of Commerce, drew 400 people to the Fargo Holiday Inn.

Among the highlights, with presentations by leading local health providers and insurers:

Immediate changes taking effect starting in September include coverage for dependent children until age 26, an end to pre-existing condition exclusions for children and teens, and an end to annual dollar limits or lifetime limits for "essential benefits."

Another immediate change - for health insurance plan years starting in September - includes an end to cost-sharing for specific preventive health services, which employer plans must now cover.

One of the legislation's main accomplishments, speakers agreed, was to expand health coverage by significantly reducing the number of uninsured, now 11 percent in North Dakota and 8.5 percent in Minnesota.

But health reform does little to address spiraling health costs, speakers agreed, which now consume 17 percent of the economy and are on an unsustainable path.

"Really, the bill does very little to address the cost side," said Ross Manson, a health care consultant with Eide Bailly. "The key to the cost side is individuals" taking responsibility for their health.

Costs for employer group coverage could rise from 15 to 30 percent under the reforms, according to preliminary estimates by Blue Cross Blue Shield of North Dakota.

"It's really hard to estimate these things in advance," said Paul von Ebers, president and chief executive officer of the North Dakota Blues, adding projections include a "certain amount of guesswork."

In fact, a common theme of the speakers is the high degree of uncertainty that remains until details are spelled out by regulations.

"This is a work in process in so many ways," said Kevin Pitzer, chief administrative officer of Innovis Health in Fargo.

Under the reforms, health providers will form "accountable care organizations" to deliver a spectrum of health services by combining clinical and hospital services. This is a structure similar to health systems that already are integrated, such as Sanford Health-MeritCare and Innovis.

"We need to be accountable," Pitzer said. "We need to be at the table."

Innovis is striving to bring its costs in line with Medicare reimbursements, which fall behind private insurance payments, as the standard, he added.

"The reimbursement reality tends to point at Medicare," Pitzer said.

Manson, who advises hospitals and others in the health care industry, is among those who worry that penalties will not be steep enough for individuals who fail to buy health insurance as mandated in 2014.

The same problem could occur if large numbers of employees decide to leave their employer health plans in favor of insurance through a marketplace "exchange," von Ebers said.

Lisa Carlson, chief financial officer for Sanford Health-MeritCare, noted that Medicare reimbursements for providers in North Dakota have been increased under the "frontier amendment."

Those payments will be offset by cuts in about five years, but will trim from a higher base, she said. Reforms will provide incentives for providers to improve overall health, not lucrative niches.

"On balance we felt the reform package was good," Carlson said. "Good from the standpoint of the patient."

Patrick Springer is a reporter at the Forum, a Forum Communications Co.