New Health Care Law Starts to Pay Dividends

The legal bees may be busy at the U.S. Supreme Court preparing for March's oral arguments over the legality of the Patient Protection and Affordable Care Act, but there's no question that health care reform so far has been good for the major players of the health care industry.

Notwithstanding a fourth quarter that was less profitable than expected, health insurer WellPoint Inc. said Tuesday that it netted about $2.6 billion in 2011, the first full year since the ACA became law.

A week earlier, UnitedHealth Group Inc., the nation's largest health insurance provider, said it took in more than $100 billion in 2011 and had more than $5.1 billion left in net income.

As the justices assess the ACA's compatibility with the commerce clause of the Constitution, they should note how well the private sector has adapted to the law. They also should credit ordinary Americans' embrace of elements of the law that have been phased in and discount the distortions of ideological zealots at the fringes.

Among the provisions now in effect:

— A prohibition on denying coverage to children based on preexisting medical conditions. The ban becomes applicable to adults in 2014.
— The elimination of lifetime dollar limits on benefits and gradual restrictions on annual limits for some essential services.
— Young adults up to age 26 can be covered under their parents' insurance policies.
— Increased payments to medical professionals in underserved rural communities.
— Grants to help individual states prevent excessive, unjustified premium increases by insurance companies.
— Expanded coverage of preventive services, including the elimination of co-pays and deductibles.
— The gradual elimination of the so-called doughnut-hole gap in coverage for prescription drugs for seniors.
— Requiring insurance companies to spend 80 to 85 percent of premiums on actual medical benefits, with rebates to consumers if the targets are not met.

This year will see the phasing in of provisions aimed at improving the quality of care people receive.

Some elements of the law, for example, provide incentives to expand successful pilot programs that have reduced harm to patients and reduced costs by reducing easily avoided medical mistakes.

Another major thrust of the ACA for 2012 is to identify the most effective treatments and medications for a variety of illnesses and conditions and then develop procedures to ensure that that's what patients receive.

Ineffective treatments don't make sick people better; they just raise costs. The ACA created the Patient-Centered Outcomes Research Institute — an independent, non-profit research organization — to spearhead the effort to develop hard scientific data on what works and what doesn't.

Earlier this week, the institute released a draft plan for choosing research proposals and asked for public comment.

Projected increases in health care costs are the single greatest challenge to America's long-term economic vitality. The ACA is by no means a perfect remedy; we're not sure, for example, how high profits for insurance companies (and exorbitant compensation packages for their executives — United's CEO, Stephen J. Hemsley, had total compensation of $48.8 million in 2010 and $102 million in 2009) contribute to the nation's health. But the ACA is a major step forward — as Americans, health care providers and insurers are discovering.

The Supreme Court weighs competing interests in light of the law and the Constitution, but the justices live in the same America as the rest of us. That counts for something, too.

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