Despite admonitions of the Tea Parties, worried hospitals, physicians and insurers, and angry Republican leaders in Congress, health care reform is here and going forward. There will be a series of clean-up bills, but regulatory changes are already happening, and major environmental shifts are afoot. Nonetheless, there will be controversies and competing interests at every step along the way. Just this week in Washington, some of those tension-laden issues include:

• An awareness that the IRS does not have regulatory authority to enforce mandatory health insurance as proposed in the health care law (PPACA). In 2014, IRS is charged with collecting penalties from income tax returns of those individuals who lack proof of health insurance, starting with $695 or 2.5 percent of income (whichever is higher). The penalties will increase over time, and the government guesstimates that more than 4 million Americans may opt for penalties of up to $1,000 annually by 2016 rather than paying much more for coverage.
  
  The IRS does not have the authority to actually tax or assess penalties for citizens in these regards, but they believe they have the authority to withhold a portion of refunds from taxpayers who decline to pay, and it’s presumed that most of those who opt out will be due to receive a refund.  If the IRS moves to get the authority to actually tax directly, a firestorm will erupt, and I don’t expect that path to be chosen.
  
  
• Health insurers are in near panic mode trying to make sure Congress does not pass a new bill to regulate their ability to increase premiums. The Democrats in Congress believe this could be quite a popular issue with voters in November, and as I noted previously, a bill that would allow HHS to regulate premiums has already been introduced by Congresswoman Schakowsky with support from Sen. Feinstein and others.
  
  Insurers are, however, trying to generate some support and sympathy for their circumstance, and Karen Ignagni, president of America’s Health Insurance Plans announced that the whole industry would implement the coming requirements to stop cancelling insurance for sick people now rather than by 2014 (as a kindly gesture).  Some plans decided to let kids up to age 26 stay on their parents’ plans now, rather than waiting until this fall when they’re required to do so.
  
  The premium regulation bill idea could be harmful to them, but a lot of the panic and hand-wringing by insurers about the current PPACA provisions appears to be unfounded (assuming the new rate regulation bill does not proceed). The National Association of Insurance Commissioners released this week an actuarial study of the impact of medical loss ratio limits and other regulatory provisions of the PPACA on the commercial insurers, and they include that the companies are going to remain profitable and come out “just fine.”
  
  
• The 50 states are facing their first PPACA challenge: States have to let Washington know this week if they plan to participate in the new and required high-risk pools for the uninsured. The high-risk program covers people with pre-existing conditions that are too expensive to insure, and the law provides $5 billion immediately to insure them from now until 2014 when full coverage kicks in. These high risk individuals would then go into the new health insurance exchanges, again run by states (unless they opt out).
  
  States are worried that the program will cost more than $5 billion and will run out of money, shifting the burden to them. Georgia, Nebraska and Secretary Sebelius’ own state of Kansas appear to be refusing to form high risk pools. It’s not clear what the feds can do to make them join up. This looks like an early test to see whether states are going to cooperate with the PPACA or not.
  
  
• Arnold Schwarzenegger meanwhile became the first Republican governor to embrace the PPACA. Maybe Maria made him do it; but he says California will work to implement the law. Kind of amazing.
  
  
• Hospitals are moving swiftly and broadly to employ physicians—not just cardiologists—because they believe new payment systems will kill them if they’re not pretty much in control of their surrounding environment and increasingly integrated.

Keep watching the blog for more coverage of the health care law later this week.

*** Image from Flickr ($owmya). ***

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