FirstNews

Obama Signs 1099 Repeal Bill

2011-04-15T05:40:00.000-07:00

The AP (4/15) reports, "President Barack Obama has signed the first rollback of last year's healthcare law, a bipartisan repeal of a burdensome tax-reporting requirement that's widely unpopular with businesses."

The Washington Post (4/15)reports, "The move marked the first successful effort by Congress to repeal a portion of Obama's signature health-care legislation." Last week, the Senate "voted 87-to-12 to repeal the 1099 provision. The House passed the measure in March on a bipartisan 314-to-112 vote."

The White House announced that the President had signed the bill into law, and said that the measure "repeals the expansion in the Affordable Care Act of requirements for businesses to report information to the Internal Revenue Service on payments for goods of $600 or more annually to other businesses and increases the amount of overpayment subject to repayment of premium assistance tax credits for health insurance coverage purchases through the Exchanges established under the Affordable Care Act."

The High Cost of Health Care

2011-03-10T08:09:00.000-08:00

How much are we spending on healthcare? Before we can look at why insurance premiums are going up, we should take a look at how much the U.S. spends on health care.

In 2007, we spent $2.2 trillion on health care
In 2010, we spent $2.6 trillion on health care
In 2018, we are projected to spend $4.4 trillion on health care.

Health care costs and premiums go hand-in-hand. If cost go up, so do premiums.

Weight Loss, Stress Reduction Top Wellness Concerns

2011-03-09T12:42:00.000-08:00

More than 33% of employees cite weight loss as a primary health concern in 2011, according to a ComPsych Corporation poll, while 23% of employees say stress is their top health issue.

"With more and more individuals slipping into the overweight category, it's no surprise that weight management is a top issue this year," says Dr. Richard A. Chaifetz, chairman and CEO of ComPsych. "Stress levels are also unusually high, given the additional workloads many have taken on during a recovering economy.

"Workplace wellness programs are well-suited to help employees lose weight and also address stress, which can result in improved productivity and lower health and disability costs for the organization.”

States Say Administration Seeking Stay Of Decision Against Healthcare Law

2011-02-24T05:00:00.000-08:00

Politico (2/24) reports, "The 26 states who came out on the winning end of a federal court decision invalidating the healthcare reform law say an Obama administration request for clarification is nothing but 'wishful thinking.'"

Politico says, "The administration has asked US District Judge Roger Vinson to clarify his order invalidating the Affordable Care Act." Yet, "in a brief filed Wednesday night, the states say the administration is effectively seeking a stay of Vinson's order -- and that it hasn't met the standards for one."

The states wrote in their brief, "If the Government was not prepared to comply with the Court's judgment, the proper and respectful course would have been to seek an immediate stay, not an untimely and unorthodox motion to clarify,"

The Hill (2/24) reports in its "Healthwatch" blog. Since Vinson made his "ruling, some states have declared the reform law effectively dead unless an appellate court reverses the decision." Notably, "Florida has returned federal grants for implementation, while Alaska has turned down another."

Survey: What Doctors Want to Tell Patients (And Vice Versa)

2011-02-16T06:56:00.000-08:00

By Katherine Hobson

The March issue of Consumer Reports features the results of two surveys — one, of more than 49,000 of the magazine’s subscribers and another of 660 primary-care physicians.

Some of the key points:

- Physicians’ top complaint about their patients: noncompliance with advice or treatment recommendations. Some 37% said it affected their ability to deliver the best care by “a lot.”

- On the issue of respect and appreciation, 70% of doctors said they were getting less of it from patients than when they started practicing. For patients, meantime, the more they reported being treated respectfully and listened to, the more satisfied they were with their physician.

- Most patients surveyed — 79% — said their doctors were able to help them with pain, discomfort or disability arising out of a condition. But only 37% of physicians said they were very effective at achieving those ends, with another 60% saying they were somewhat effective.

- Doctors said insurance paperwork topped their list of things that interfere with their ability to provide the best possible care. Financial pressure was No. 2.

- Some 80% of physicians said it would be helpful for patients to bring a family member or friend to a visit in order to make sure important information is recorded and retained; only 28% of patients said they did so. And while 89% of doctors said it would help patients to keep an informal record of treatments, tests, procedures, drugs and changes in conditions, 33% of patients reported routinely doing so.

- Patients are big online research fans, with 61% saying they had turned to the internet for information on their medical care. Doctors are not big fans of this kind of research, with nearly half saying it helps very little or not at all, and 8% saying it was very helpful.

High-Risk Pool Enrollment Rises, But Lags Behind Expectations

2011-02-11T05:20:00.000-08:00

The Washington Post (2/11, Goldstein) reports, "More Americans have been signing up for special health plans designed for people with medical problems that caused them to be spurned by the insurance industry, according to new government figures," yet "enrollment continues to lag significantly behind original predictions."

HHS data released on Thursday show that the "number of people who have bought the plans, known as high-risk pools, has increased from slightly fewer than 8,000 nationwide as of early November to nearly 12,500 as of the beginning of this month."

The Hill (2/11, Millman) reports in its "Healthwatch" blog, "The Medicare actuary had originally predicted the new pools...would enroll 375,000 people by the end of 2010, but high enrollment costs have frequently been cited for keeping people away. Asked about the discrepancy last month, Medicare actuary Rick Foster told The Hill the low enrollment is a 'surprise,' given that 'millions' are eligible for the coverage."

Notably, "HHS officials have the said low enrollment is typical for new federal health programs," and Steve Larsen, director of the Center for Consumer Information and Insurance Oversight, said, "We are working every day to get the word out about this program, to find people who have been abandoned by the health insurance industry to get them the coverage they have been denied for so long."

FSBG Note: It's our opinion enrollment is so low due to the fact one has to be uninsured for 6 months in order to qualify. Our question...why?

Obama, GOP Argue About Healthcare Law's Impact On Premiums

2011-01-31T06:32:00.000-08:00

CQ HealthBeat (1/29, Norman) reported that on Friday, while addressing "healthcare advocates at the annual Families USA conference," President Obama said, "This law will lower premiums. It is limiting costs. ... It is reining in the worst abuses of the insurance industry with some of the toughest consumer protections this country has ever known." CQ added, "Estimates from the Business Roundtable, a group of corporate CEOs, are that the overhaul could save large employers $2,000 to $3,000 per family a year, said Obama, statistics used earlier in the week by administration officials at congressional hearings." But, Republicans are disputing these figures, and pointing to studies which show "double-digit premium increases this year in California, Iowa, Connecticut, and Washington."

Politico (1/30, Nather) reported that neither the President nor the GOP "is on totally solid ground. It's a stretch to say, as Obama did in his speech at the Families USA conference Friday morning, that 'this law will lower premiums,'" because while the healthcare law "may make them rise more slowly...pretty much no one expects that premiums will actually go down." For their part, "Republicans are relying on some mixed evidence to claim that the law is already raising people's premiums. In fact, in one of the examples they used to counter Obama's claim, the insurer that's trying to hike its premiums -- Blue Shield of California -- has actually said it's not because of the law."

CQ HealthBeat (1/28, Norman) said that prior to President Obama's speech, HHS "officials released a new report that says families will save on premiums as well as out-of-pocket costs." This "issue is key as congressional debate over whether to repeal the law continues and as lawsuits filed against it move through federal courts. Without some kind of slowing in healthcare costs for both individuals and businesses, it will be difficult for proponents to continue to argue that the law is necessary or that it's the right approach." Notably, "Karen Ignagni, president and CEO of American's Health Insurance Plans, said the document overstated cost savings and ignored other provisions that will increase premiums such as changes in age rating that will impact younger workers."

Getting to the Bottom of Your Health Care Costs

2010-12-17T10:04:00.000-08:00

Did you know: a 10-year study indicates spending for prescription drug use in America is on the rise?

U.S. spending for prescription drugs more than doubled to $234.1 billion over the 10 years covered by a study released by the Centers for Disease Control in September 2010 as part of its National Center for Health Statistics data brief. Among those ages 60 or older, 37% used five or more prescriptions per month.

In 2010, Employers Shifted Healthcare Costs To Workers

2010-09-03T04:57:00.000-07:00

McClatchy (9/3, Pugh) reports, "An annual survey released Thursday finds that workers are paying, on average, about $482 more for job-based family health insurance this year as companies force employees to shoulder more of the burden of healthcare costs." In fact, "employers' contributions to family coverage showed no increase at all in 2010, according to the Employer Health Benefits Survey by the Kaiser Family Foundation and the Health Research & Educational Trust." Adds McClatchy, "Drew Altman, the president and CEO of the Kaiser Family Foundation, said it was the first time he could remember employers moving so boldly to shift health costs to workers."

The Washington Post (9/3, Hilzenrath) reports, "Thirty percent of employers offering health benefits reported that this year, as a result of the economic downturn, they reduced the scope of benefits or increased cost-sharing -- the amounts employees pay for medical services in co-payments, deductibles and the like." The survey "covered public and private employers with three or more workers," and "was conducted by phone from January through May."

Ohio Medicaid Costs Have Almost Doubled In Last 10 Years

2010-08-09T05:32:00.000-07:00

The Columbus Dispatch (8/8) reported, "The cost of Ohio's largest safety-net program has nearly doubled in the past decade. Taxpayers spent $14.7 billion last year to provide health coverage to poor and disabled Ohioans as Medicaid -- the largest and fastest growing segment of state government -- now consumes about 26 percent of the state budget."

Notably, "a recession-fueled surge in enrollment and an aging population with greater healthcare needs also are to blame for Medicaid's strain on Ohio's budget as well as those nationwide. Unfortunately, the surge in demand and jump in costs come at a time when states are dealing with declining revenues."

State AGs Oppose Bid To Dismiss Healthcare Overhaul Lawsuit

2010-08-09T05:27:00.000-07:00

Bloomberg News (8/7) reported, "Attorneys general for 20 states challenging the healthcare law signed by President Barack Obama filed court papers opposing a bid by the US for dismissal of the lawsuit." Bloomberg added, "'The Patient Protection and Affordable Care Act represents an unprecedented intrusion on the sovereignty of the states and the freedom of their citizens,' according to the states' brief filed today with US District Judge Roger Vinson in Pensacola, Florida."

CQ HealthBeat (8/7) reported, "Oral arguments in the suit are set for Sept. 14 in Pensacola, in federal district court in the Northern District of Florida." Notably, "Florida Attorney General Bill McCollum is leading the drive among attorneys general to kill the law's requirement that Americans should be required to obtain health insurance."

The Atlanta Journal-Constitution (8/7) noted, "Requiring Georgians and other Americans to buy health insurance is unconstitutional and would do irreparable damage to the state and others, Georgia and 19 other states claim in their lawsuit seeking to overturn part of the new federal healthcare law." The states argue that requiring Americans to buy health insurance "is unconstitutional and would do irreparable damage to the state and others."

Gov. Sonny Perdue's office estimates the state will have to add 700,000 Georgians to Medicaid rolls. Ultimately, "it could cost the state more than $500 million per year as the federal government's portion declines." In a statement, DOJ spokeswoman Tracy Schmaler said the department will continue "vigorously defending" the law, and added in an email, "We are confident that the healthcare reform statute is constitutional and that we will ultimately prevail."

Getting to the Bottom of Your Health Care Costs

2010-07-23T13:05:00.000-07:00

Did you know there is a high cost to complying with government regulations?

Private health insurers spend more than $339.2 billion annually to comply with government health care regulations, according to Christopher Conover in his publication Health Care Regulation: A $169 Billion Hidden Tax.

While some of this money pays for benefits that we're required to cover like certain screenings and certain prescription drugs, author Conover shares that more than 50%of the money, or $169 billion, is spent on regulatory costs such as filing and reporting requirements.

Insurers Pushing Affordable Plans That Limit Doctor Choice

2010-07-19T06:31:00.000-07:00

The New York Times (7/18) reported, "As the Obama administration begins to" implement "the new national healthcare law, the country's biggest insurers are promoting affordable plans with reduced premiums that require participants to use a narrower selection of doctors or hospitals."

While the plans "are likely to appeal especially to small businesses" that already provide employee coverage but are worried about costs, "large employers, as well, are starting to show some interest, and insurers and consultants expect that, over time, businesses of all sizes will gravitate toward these plans in an effort to cut costs." They say the tradeoff will be that "more Americans will be asked to pay higher prices for the privilege of choosing or keeping their own doctors if they are outside the new networks."

In a Kaiser Health News (7/19) column, New Republic editor Jonathan Cohn says, "This isn't the first time insurers have offered plans with fewer treatment options. It happened most famously in the 1990s, when insurers first introduced the concept of 'managed care' on a wide scale. Consumers didn't like it then, and they might not like it now." Yet, "last time, most people blamed the insurance industry," and "this time, they might blame the government -- in no small part because reform critics will use the occasion to say, 'I told you so.'"

With respect to some Massachusetts businesses dropping employee coverage, the article adds that "every company that offers insurance will [not] keep doing it forever. Over time, some businesses will inevitably decide to drop coverage, just as they do now."

Obama Administration To Announce Free Preventive Services Under Healthcare Law

2010-07-14T05:49:00.000-07:00

The Wall Street Journal (7/14) reports the Obama Administration plans to announce new regulations about which preventive services health insurers must provide to customers free of charge. The regulations fall under the new healthcare law. It is anticipated that cancer and blood pressure screenings, measures to combat obesity, vaccinations, and smoking cessation measures will be provided without co-pays. Yet, in spite of efforts by advocates, birth control is not expected to be among these free services.

CQ HealthBeat (7/13) reported that First Lady Michelle Obama and Dr. Jill Biden will join HHS officials Wednesday, July 14 "to unveil new regulations requiring insurers to eliminate cost-sharing such as copays for preventive services." The rules affect insurers on Sept. 23, and the law "also calls for Medicare to eliminate cost-sharing for preventive services starting in January."

Did You Know...

2010-07-02T12:29:00.000-07:00

...How much the United States spends on health care?

According to the Centers for Medicare and Medicaid Services Office of the Actuary, spending on health care reached $2.2 trillion in 2007. National health care spending has been predicted to reach $2.6 trillion by 2010 and could exceed $4 trillion by 2018.

Health care costs and premiums go hand-in-hand. If costs go up, so do your premiums.

Growing Number Of Physicians Limiting New Medicare Patients

2010-06-21T06:37:00.000-07:00

USA Today reports, "The number of doctors refusing new Medicare patients because of low government payment rates is setting a new high, just six months before millions of Baby Boomers begin enrolling in the government health care program."

Notably, "recent surveys by national and state medical societies have found more doctors limiting Medicare patients, partly because Congress has failed to stop an automatic 21% cut in payments that doctors already regard as too low. The cut went into effect Friday, even as the Senate approved a six-month reprieve."

Senate Passes "Doc Fix" By Unanimous Consent

2010-06-21T06:22:00.000-07:00

The AP reports the Senate, "after a week of partisan wrangling," has passed legislation "to spare doctors a 21 percent cut in Medicare payments looming for months. But the last-ditch effort came too late. Moments after the Senate acted, Medicare announced it would begin processing claims it has already received for June at the lower rate. The reason: the House cannot act on the fix until next week." Medical providers "who bill under Medicare's physician fee schedule will have to resubmit their claims if they want to be made whole, with added paperwork costs both for the providers and for taxpayers."

The New York Times reported, "The $6.4 billion measure would reverse a 21 percent cut in physician payments that was to kick in Friday, raising the possibility that some doctors might begin to turn away those covered by Medicare. The legislation, known on Capitol Hill as the doc fix, was approved without a roll-call vote after leaders of both parties agreed to pull it out of a stalled package of tax changes and safety-net spending."

The Los Angeles Times reported the bill "would postpone the cuts until Nov. 30, while Congress tries to develop a longer-term plan for paying doctors." Politico said it was "a six-month stay on Medicare cuts." The Hill noted that the "doc fix" was passed by unanimous consent, and the Wall Street Journal reported that House will take up the measure when it returns on Monday.

The Cost of Healthcare (Not Necessarily the Cost of Health Insurance)

2010-05-28T12:02:00.000-07:00

This year, there was an increase in cost trend for inpatient and outpatient facilities, and a decrease in cost trend for physician, pharmacy and other services.

o Inpatient and outpatient facility services combined represent 48% of total annual medical costs vs. 47% in 2009.

o The largest dollar increase this year was for inpatient facility care, which increased by $498.

o The 2009 to 2010 hospital inpatient annual rate of increase grew from 7.7% to 9.8%; most of the inpatient annual rate of increase is driven by "average unit costs."

o Although physician costs are the largest component of overall health care costs, their 2010 annual rate of increase is lower than other health care cost components.

There is large variation in health care costs across geographic regions. Costs vary from low to high by more than 35%, with the lower-cost areas generally being in the West and across some parts of the South.

At $10,744, the average employer's share of the cost nationwide for the typical family of four now surpasses $10,000 for the first time.

With reform now in place, some short-term reforms may shift costs further from employees to employers.

Despite passage of federal health reform, the underlying drivers of increasing health care costs are not expected to immediately change.

Lack Of Permanent "Doc Fix" Could Undermine Health Reform

2010-05-27T06:13:00.000-07:00

The AP (5/27, Alonso-Zaldivar) reports, "For the third time this year, Congress is scrambling to stave off a hefty pay cut to doctors treating Medicare patients -- even as the Obama administration mails out a glossy brochure to reassure seniors the health care program is on solid ground."

Notably, the "21.3 percent cut will take effect June 1 unless Congress intervenes in the next few days." The AMA and other physician groups say they want a permanent solution to the problem, and many doctors say they may no longer accept Medicare patients.

The AP points out that this issue "could undermine key goals of President Barack Obama's health care overhaul, which envisions using Medicare to test ideas for improving the quality of care for all Americans."

Federal Government To Bear Large Share of Medicaid Expansion

2010-05-27T06:10:00.000-07:00

The Washington Post (5/27, MacGillis) reports, "The federal government will bear virtually the entire cost of expanding Medicaid under the new health-care law, according to a comprehensive new study by the Kaiser Family Foundation that directly rebuts the loud protests of governors warning about its impact on their strapped state budgets."

Notably, "a disproportionate share of the 16 million people expected to enroll in the expanded Medicaid live in states in the South and West that until now have had very stringent eligibility rules for low-income adults. Governors of many of those states have predicted fiscal calamity for their budgets, and some have cited the Medicaid expansion in the suits they have filed against the new law, saying it violates their states' rights."

Modern Healthcare (5/27, Evans) reports that "the largest gains in coverage and federal spending" will occur "in states with low coverage levels and higher numbers of uninsured, the Kaiser Commission on Medicaid and the Uninsured said in newly released state-by-state estimates." The study also indicated that "Medicaid enrollment would increase by 22.8 million and the number of uninsured would drop by 17.5 million."

Obamacare Will Make Every Day Feel Like April 15th

2010-04-14T10:08:00.000-07:00

By Grace-Marie Turner
The Washington Examiner
April 13, 2010

New taxes on investments, taxes on medical supplies, taxes on drugs and health insurance, and taxes on you if you are just breathing... the list of taxes Americans will face just got a lot longer thanks to ObamaCare.

The health overhaul plan just enacted represents the largest tax hike in U.S. history -- $569 billion over 10 years through a dizzying array of taxes and fees that promise to frustrate taxpayers at every turn. ObamaCare will make every day feel like April 15th.

And despite President Obama’s campaign promise that no one making $250,000 or less would see a tax increase, Congress’ Joint Committee on Taxation confirms that these tax hikes will hit millions of middle- and working-class families who are struggling to make ends meet.

Here are just a few of the most egregious ObamaCare taxes that hard-working Americans will be facing in the $2.6 trillion health overhaul bill:

* “Breath tax”: The infamous “death tax” now has a new sibling: the $17 billion “breath tax.” The new health overhaul law requires everyone in America who breathes to have health insurance by 2014; some will get subsidies, but most will have to pay a fine if they don’t buy the health insurance required by the federal government. Last week, Internal Revenue Commissioner Douglas Shulman said that enforcement of the individual mandate will come by seizing tax refunds and “collection, if need be.”

* Taxes on medical devices: Surgical scissors, wheelchairs, intravenous bags, dental retainers and braces, CT scanners, stretchers, exam room tables, heart stents, pacemakers, surgical gloves, spineboards at every local pool, scales at a doctor’s office or health club, any diagnostic test for any disease or condition -– all will be among the products and procedures subject to ObamaCare’s special $20 billion medical device tax beginning in 2013. This tax will make these medical supplies more expensive, will drive up the cost of health care and health insurance for Americans, will threaten jobs in the medical device industry, and confiscate money needed for new innovative breakthroughs.

* New Tax on Health Insurance Providers: Even though soaring health costs are the problem Americans most wanted government to solve, ObamaCare promises to drive costs even higher by instituting a new $60 billion tax on health insurers. Insurers and health plans can be expected to pass along this tax to policyholders through higher premiums. So starting in 2014, Americans will be forced to buy health insurance, and the federal government will be actively making it more expensive.

* Medicare Payroll Tax: Starting in 2013, ObamaCare increases the Medicare payroll tax for many small business owners and others earning more than $250,000 a year. This tax hike will place yet another burden on small business owners who the country needs to create jobs and lead the economy into recovery. This job-killing payroll tax is estimated to raise $86.8 billion over seven years.

* New Tax on Investment: In addition to the Medicare payroll tax hike, investment income will now be subject to a tax of 3.8% starting in 2013 for those in higher income categories. Even middle-class homeowners who realize a capital gain of $250,000 or more on the sale of their home will be hit by this Medicare tax, which will drain another $123.4 billion out of taxpayers’ pockets and into the government’s coffers over seven years.

* New Drug Tax: ObamaCare’s new tax on brand-name drugs kicks in next year and is estimated to raise $27 billion over nine years. The public can expect to have these costs passed on to them in the form of higher drug prices and higher insurance costs.

Simply put, this health overhaul plan will take at least $569 billion out of the pockets of taxpayers and businesses over the next ten years through new and higher taxes, and will make the problems of soaring health costs even worse. No wonder the more Americans hear about ObamaCare, the less they like it.

CBO: Health Bill Would Force Families to Buy Insurance

2010-03-18T17:37:00.000-07:00

Thursday, March 18, 2010
By Pete Winn, Senior Writer/Editor
CNS News

If Congress passes the Senate health-care plan, according to an analysis by the Congressional Budget Office, American families will be required by federal law to buy a federally approved health insurance plan that will cost a minimum of $12,000 per year--and, on average, will cost $15,000 per year -- whether their employer or the government helps them with the premium or not.

Beginning in 2014, the Senate plan would require all individuals to buy health insurance. Anyone who does not obtain insurance through an employer would be forced to buy it out of their own pocket. Families of four that make up to 400 percent of poverty level--currently $88,200 per year--would receive a subsidy from the government to help pay for their premiums. That subsidy would attenuate as their income increased and would disappear when their income reached the 400 percent of poverty level.

Families earning more than $88,200 a year (or whatever 400 percent of the poverty level equals in any given year) would be entirely on their own. Under the Senate bill, employers would not be required to purchase health insurance for their workers, and if they decided not to do so, the maximum penalty they would have to pay would be $750 per year for each worker they did not insure who subsequently received a federal subsidy to buy insurance. The $750 penalty on employers who decided not to insure their workers would be far less than they would pay in premiums for the $12,000 minimum required plan.

According to the CBO analysis, the insurance plans the Senate bill would require families to purchase would cost an average of $15,200 per year in 2016.

“Average premiums among all types of plans in 2016 would be about $5,800 for single policies and about $15,200 for family policies,” CBO Director Douglas W. Elmendorf wrote in a letter to Sen. Olympa Snowe (R-Maine).

But even the bare-bones, minimum coverage required by the individual mandate in the bill--known as the “Bronze” level insurance plans--would cost families an estimated $12,000 to $12,500 a year, Elmendorf told Snowe.

“Overall, CBO estimates that premiums for Bronze plans purchased individually in 2016would probably average between $4,500 and $5,000 for single policies and between $12,000 and $12,500 for family policies,” he wrote.

At “bronze” level, an insurance plan covers only 60 percent of medical services. “Silver” level plans cover 70 percent, and “Gold” level plans cover 85 percent or more.

Elmendorf reiterated the average cost to anyone not covered under an employer policy in a letter to Sen. Evan Bayh (D-Ind.): “Average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single policies and $15,200 for family policies under the proposal, compared with roughly $5,500 for single policies and $13,100 for family policies under current law.

Premiums for specific individuals would differ somewhat on the basis of their age, average spending on health care in their area of the country, and the specific plan they chose, Elmendorf added.

Experts predict that more and more families will be forced off of employer insurance and have to buy their own coverage because employers will be faced with the choice of paying premiums of several thousands of dollars per employee for group insurance or paying a fine of just $750 per employee for not providing coverage.

In Push For Health Reform, Obama To Green-Light Reconciliation Strategy

2010-03-02T05:46:00.000-08:00

In a speech this Wednesday, President Obama is expected to rally Congress to pass healthcare reform bill through the Senate's reconciliation process.

AFP (3/2) notes that "this...would require the House to pass the Senate bill," and "the Senate to vote on a revised version of the legislation after the House has a chance to make changes to it."

The New York Times (3/2) reports the President "will begin" his "climactic push to rally restive Congressional Democrats to pass major healthcare legislation by hammering the argument that the costs of failure will be higher insurance premiums and lost coverage for individuals and businesses." White House Chief of Staff Rahm Emanuel tells the Times "Obama on Wednesday 'will talk about the merits of the legislation, mainly about the costs of doing nothing versus the cost of doing something and what this will accomplish.'"

The Wall Street Journal (3/2) reports that a White House official indicated that Obama will not specifically refer to "reconciliation" in his remarks, even as he endorses the strategy that will include that procedure.

The Journal includes a quote from House Minority Leader John Boehner (R-OH), who says, "Trying to jam their latest job-killing back-room deal through Congress using this procedural trick would be a serious mistake." However, the Journal adds that reconciliation has been utilized in the past to approve healthcare bills -- such as SCHIP and the COBRA law.

Fix Health Care? Ask the Governors

2010-03-01T07:49:00.000-08:00

By Morton M. Kondracke
Roll Call Contributing Writer

In the spirit of bipartisanship supposedly inspiring Thursday’s Blair House health care summit, I thought I’d seek advice from a knowledgeable group unfortunately not represented — the nation’s governors.

So I interviewed two of them — Democrat Phil Bredesen of Tennessee and Republican Mitch Daniels of Indiana.

Coming from completely different views about the ideal health care system, they agreed on this: Instead of trying for comprehensive overhaul this year, Congress and the administration should go “incremental.”

Both Bredesen and Daniels have fostered overhaul in their states and invented programs that work. Bredesen told me that despite their experience managing Medicaid, “the governors have been shunted aside” in the federal overhaul process.

He said he was one of four governors deputized by the National Governors Association to talk with the White House, congressional leaders and staff, but “I had the feeling we were a base to be touched, not that they were listening.” Governors were not included at the televised bipartisan summit that took place across the street from the White House.

Congress and President Obama’s “real mistake,” Bredesen said, was that “they went way too far toward what some activists think is ideal, with a comprehensive set of benefits that is way too expensive.”

He said that current Democratic plans remind him of the TennCare program he inherited in 2003, which was driving his state into bankruptcy and he revamped by cutting benefits and enrollment.

Instead, he said, “You could move forward, the president could get a victory and Republicans could be seen as cooperating on a more limited benefit for a population that everyone agrees is deserving.”

He means offering a basic health insurance package to 20 million workers whose employers do not cover them.

If employers had to contribute 25 percent of the cost, the worker 25 percent and the government 50 percent, the cost would be $430 billion over 10 years, less than half of Obama’s latest proposal.

Bredesen instituted a similar plan in Tennessee, called CoverTN, but has funds to offer insurance to only 23,000 of the state’s 400,000 uninsured workers.

If Bredesen had his way, the nation eventually would have a universal coverage system like France or Germany, where all citizens are covered in a single, non-means-tested system. But, he said, the United States can’t afford that now.

Daniels, as befits a conservative Republican, starts with the opposite view. He favors eliminating employer-based insurance and giving tax breaks to individuals to buy their own policies.

“Which translates into consumer-driven health care. I’m a believer in the idea that until every one is a cost-controller, there won’t be cost control,” he said.

In the present debate, though, he said, “I’d at least hope that both sides could agree on some incremental changes, including portability of policies, buying policies across state lines and medical malpractice reform.”

In Indiana, Daniels has been experimenting with variations on health savings accounts (HSAs) — much favored by the GOP but hated by Democrats — to supplement Medicaid.

The Healthy Indiana Plan offers the uninsured a high-deductible ($1,100) insurance policy that covers up to $300,000 in annual medical expenses and up to $1 million over a lifetime.

Participants pay part of the $1,100 into POWER accounts, an acronym for Personal Wellness and Responsibility, with the state contributing the rest. Money saved can be carried over to the next year.

To answer the Democratic objection that people with HSAs avoid preventive care, such services are free in the Indiana plan and 81 percent use them.

The plan covers only 50,000 of 350,000 potential clients because it’s paid for strictly by an increase in tobacco taxes. Daniels does not want to create an entitlement that will blow a hole in his state’s budget, like the one he inherited and painstakingly closed.

Daniels also has offered the HSAs to state employees and an astounding 70 percent are using them. “They are saving fortunes and we are saving tens of millions,” he said.

Daniels believes that “limited government does not imply inactive or inert government.” To solve the nation’s most dangerous problems — especially the national debt — “I’d be willing to accept the second- or third-best answer as opposed to doing nothing while we go over Niagara Falls.”

He also believes in having “grown-up, adult conversations” with Democrats and wants the GOP to “present a constructive and inclusive program to the country,” enabling it “to govern, not just win the next election.”

Details Emerge On New Health Reform Plans

2010-02-26T11:12:00.000-08:00

By ARTHUR D. POSTAL
National Underwiter
February 19, 2010

WASHINGTON—The White House and congressional Democratic leaders are crafting a new healthcare reform bill that would include limits on medical loss ratios, a tax on so-called Cadillac plans, and cuts in the Medicare Advantage program, according to administration officials and industry sources.

Officials at the Department of Health and Human Services confirmed that medical loss ratio limits would be included in the new proposal, or, as some termed it, “best ideas.”

It remains unclear whether the White House would use the Congressional reconciliation process, which would reduce the votes needed to secure passage in the Senate to 51 but which expires in April, or by some other means, the sources said.

As the bill is being drafted, Obama administration officials vowed to continue their push for healthcare reform legislation. In comments on his blog Thursday, White House communications director Dan Pfeiffer confirmed the administration’s plans.

“We’re going to continue to push for meaningful health insurance reform that gets control of skyrocketing costs, puts an end to insurance company abuses, extends coverage to millions of uninsured Americans, and lowers our deficit,” he said.

Meanwhile, he said, “the insurers are defending their increases on American families by calling for passage of health reform, while running ads to defeat it. Imagine that.”

HHS officials said the new proposal would require health plans to spend a minimum percentage of premiums on medical costs. The also unveiled a study critical of the recent decision by health insurers to sharply increase rates for individuals and small employers.

According to industry analysts, the Senate and House bills currently propose different medical loss ratios. During her Thursday press conference, HHS Secretary Katherine Sebelius would only say that the bill would call for more stringent ratios than California, which has a 70% medical loss ratio in its individual market.

HHS officials also said that the bill being drafted would ban lifetime limits on benefits but does not mention annual limits. It would also ban rescissions and discrimination based on preexisting conditions and would limit premium differences based on age.

In addition, it would reward high quality and efficient care, offer lower premiums (when subsidies are factored in), and seek to create competition among insurers with a health insurance exchange, the administration officials said. But, HHS officials would not specify whether the plan would endorse state or national exchanges.

Industry sources indicated that the plan also would propose cuts in the Medicare Advantage program; tax credits to small businesses to purchase insurance; a reduction in the doughnut hole for Part D, the prescription drug program under Medicare; and a tax on the excess of Cadillac plans’ value.

President Obama's Budget Assumes Health Care Reform

2010-02-05T11:51:00.000-08:00

On Monday, February 1, White House officials released a proposed $3.8 trillion 2011 budget including several measures aimed at improving health care:

· Hiring more fraud detectives to root out waste in Medicare and Medicaid

· Providing $25.5 billion to help state Medicaid programs swelling with enrollment due to unemployment

· Eliminating Congressional earmarks for building hospitals and other facilities, including $10 million for Alaska and $35 million for Mississippi

· Initiating or increasing funds for the following research projects:

o quality improvements for seniors with chronic conditions

o effective medical treatments for the costliest conditions

o expeditious ways to adopt electronic medical records

o medical fields such as genetic medicine that may provide breakthrough treatments.

Further, the budget assumes that some form of health care reform legislation will pass Congress. It includes a "reserve fund for health care reform" totaling $634 billion as a "down payment" for the legislation and also assumes that the reform effort will generate $150 billion in savings over 10 years.

Health Spending Consumed Record Portion of Economy in 2009

2010-02-04T03:51:00.000-08:00

4 Feb 2010
Bertha Coombs
CNBC Reporter

Health care spending in the U.S. surged 5.7 percent to $2.5 trillion in 2009, according to new projections from the Centers for Medicare and Medicaid.

Even as the economy shrank last year, the health care sector's share of economic activity rose more than a full point to 17.3 percent of GDP, up from 16.2 percent in 2008, marking the largest one-year increase in GDP share since the government began keeping track of health spending in 1960.

Government spending on health care has grown nearly three times as fast as health spending by the private sector in 2009, driven by a 10 percent increase in Medicaid spending, as jobless Americans increasingly turned to state aid for health coverage.

Health expenditures by the public sector is projected to have grown 8.7 percent to $1.2 trillion last year, while spending by the private sector is forecast to have risen 3 percent to $1.3 trillion.

"It's consistent with what we would expect during a recession, including one of this size, " says Christophe Truffer, a CMS actuary and one of the authors of the government's annual projections, adding that he expects similar trends this year. "We project health spending will be relatively flat, as we see a projected economic rebound."

While private insurance enrollment shrank by more than one percent in 2009, private health spending continued to grow, after more laid-off workers took up COBRA coverage due to government subsidy of the coverage. Higher spending on drugs and treatment for the H1N1 virus also drove more spending on drugs.

Spending on health care for the elderly continues to be a major driver of higher government health costs. Medicare spending in 2009 grew to $507 billion, a projected increase of 8.1 percent, and down from 8.6 percent in 2008.

Analysts say Medicare spending growth will slow to just 1.5 percent in 2010, if Congress does not overturn the 21 percent physician payment rate cut mandated by current law, and just over 5 percent if the cuts are rescinded.

Between 2010 and 2019, analysts see total health care spending growing at an annual rate of 6.1 percent, continuing to outpace the growth of the economy by about 1.7 points. At that rate, by the end of the decade, national health spending is projected to reach $4.5 trillion, eating up 19.3 percent of GDP.

Yet, that's down slightly from last year's longer-term growth projection. Part of that revision, says Truffer, "is tied to a higher projection of GDP, which is tied to a higher rebound in economic growth than we had projected last year."

The researchers did not account for potential passage of health reform, when looking at their longer term projections. Even with no change, they see government health care spending accounting for more than half of national health care spending by 2012.

© 2010 CNBC.com

Pelosi Pushes $300 Billion 'Fix' to Senate Health Care Bill

2010-01-28T09:06:00.000-08:00

House Speaker Nancy Pelosi is pushing a $300 billion "fix" to the Senate health care bill, saying that her chamber could approve the Senate's package if those changes are made first.

Senior Democratic aides told Fox News that Pelosi has offered up the new package of changes to Senate Democratic leaders, with the hope that they will be able to pass it using a controversial procedural maneuver known as "reconciliation." The maneuver would allow Democrats to pass the measure with just 51 votes, without having to first overcome the normal 60-vote threshold.

Some Democrats are keen on using that process, since the election last week of Republican Scott Brown to the U.S. Senate from Massachusetts broke the Democrats' 60-vote supermajority. However, some Democratic moderates -- notably Arkansas Sen. Blanche Lincoln and Indiana Sen. Evan Bayh -- have balked at using the controversial tactic to ram through health care reform measures.

Pelosi announced last week that she did not have the votes in the House to pass the Senate health care reform bill as is. But Pelosi says that if the Senate, and House, will approve the package of adjustments first, the House can then take up the original Senate bill.

President Obama pledged to press ahead with health care reform in his State of the Union address Wednesday night. He said he would not "walk away" from the issue and urged Congress to stand with him. "Do not walk away from reform. Not now. Not when we are so close," Obama said.

The president urged Congress to take "another look" at the plan on the table, but at the same time offered to hear out new ideas from both parties.

Any move to then drive through a "fix" to the Senate bill using reconciliation is sure to draw fierce protest from Republicans, who want the president to take a fresh approach to the health care bill.

Hoyer Says House May Have Votes for Reconciliation-altered Bill.

2010-01-27T06:10:00.000-08:00

AFP (1/27) reports House Majority Leader Steny Hoyer (D-MD) said "Congress should know by next week how they will proceed on his embattled plan to remake US health care." He said "Democrats were united in wanting to move ahead with the historic overhaul and pass legislation but had no illusions after an early election-year defeat stripped them of their undisputed control of the Senate."

Roll Call notes Rep. Hoyer "outlined the idea" of using budget reconciliation Tuesday, saying "that pursuing a scaled-back version of health care reform is also being considered, and that Democrats are hoping to agree on a path forward by next week." He said that while the House does "not have the votes to pass the Senate's $871 billion measure as is," it "might be able to do so if it is 'corrected' via a reconciliation bill."

The Hill adds in his comments, "Hoyer took a different track than Speaker Nancy Pelosi (D-CA), who said last week there was 'no rush' to figure out how to pass healthcare."

But according to Bloomberg News, Hoyer "cast doubt on the idea of passing a series of smaller measures as an alternative." He said, "It is difficult to take small pieces and attain the objectives you want to accomplish."

Still, "Hoyer outlined what might fit into a stripped-down health care bill, even while cautioning that Democratic leaders are not sold on the idea," CQ Today reports. Among the provisions, Hoyer "mentioned ending the antitrust exemption for health insurers," creating a "limited exchange," and creating small business purchasing pools.

Obama Appears to Call for Smaller, Bipartisan Healthcare Reform Bill

2010-01-21T05:01:00.000-08:00

In the aftermath of the Democratic loss in the Massachusetts Senate race, President Obama, in an interview with George Stephanopoulos on ABC World News appeared to signal a new approach to his healthcare reform agenda.

Rather than trying to push through either the Senate or House bills, Obama said, "I would advise we try to move quickly to coalesce around those elements of the package people agree on."

Stephanopoulos later commented, "Even though he wouldn't say so, what he was really signaling" was "recognizing reality: that the two big bills, the nearly trillion dollar bills, that passed the House and the Senate...are not going to pass this year." But Obama "wants something that everybody can agree on, that's going to be difficult to get."

The AP reports, "No decisions have been made, lawmakers said, but they laid out a new approach that could still include these provisions: limiting the ability of insurance companies to deny coverage to people with medical problems, allowing young adults to stay on their parents' policies, helping small businesses and low-income people pay premiums and changing Medicare to encourage payment for quality care instead of sheer volume of services."

Congress Revisits Health Reform Negotiations

2010-01-20T12:12:00.000-08:00

By ARTHUR D. POSTAL
Published 1/18/2010

Congress officially returns to work Tuesday, and its first order of business will be the sharing to members of the details of the emerging compromise on healthcare reform legislation. The Senate has been in pro forma session since last week, but most members are showing up for the first time this year on Tuesday.

Key negotiators, including Sen. Harry Reid, D-Nev., the Senate majority leader, and Speaker of the House Nancy Pelosi, D-Calif., have indicated that they hope to present a compromise bill sometime this week to the Congressional Budget Office for a final evaluation of its costs.

Among the issues expected to be discussed are compromises on state-vs.-national health exchanges and a deal with labor unions and President Obama on “Cadillac plans.”

According to Rep. Chris Van Hollen, D-Md., a key negotiator, those working on a final bill could include a national marketplace for insurance. This is opposed by all insurance agent industry trade groups, who asked in a letter to healthcare negotiators last week that the states be allowed to regulate healthcare exchanges.

“I believe they're very close on the exchange issue", Van Hollen said. “I would say that there’s going to be uniformity to the exchange and a national component to the exchange.” Details are still being worked out, but it appears the exchange provision will be a hybrid between the Senate’s state-based version and the House’s national approach, he said.

One issue in the Cadillac plan compromise is a provision exempting collectively bargained plans from the excise tax on high-cost insurance plans. Under the compromise, healthcare plans negotiated through collective bargaining would be exempt from the tax until 2017, which is designed to allow both employers and employees to make a transition to the new system.

The compromise also would raise the level at which plans would be taxed to $24,000 for a family and $8,900 for singles and exempting dental and vision costs from these amounts. The compromise also would raise the thresholds for retirees 55 and older and for workers in high-risk professions, such as police and firefighters.

It would also raise the tax threshold for plans in certain high-cost states as well as plans with high numbers of women and older workers that require more expensive plans, allowing for more gender, age and geographic equity in health care.

Snowe Called a Possible 60th Senate Health Reform Vote

2010-01-20T05:38:00.000-08:00

CQ HealthBeat (1/20, Reichard) reports on the possibility of Sen. Olympia Snowe (R-ME) voting for a final healthcare reform bill. Sen. Snowe "has worked long and hard on healthcare overhaul issues, and she cast a 'yes' vote on overhaul legislation in the Senate Finance Committee on grounds that the status quo is no longer tenable."

On Tuesday, White House Press Secretary Robert Gibbs said "President Obama is pursuing Snowe's vote to get the measure across the finish line. 'The president continues to work hard' toward that end, Gibbs said."

According to CQ, Democrats "seem likely to keep pursuing Snowe, however futile the effort might be."

With Brown Win, Healthcare Obstacles Mount

2010-01-20T05:35:00.000-08:00

January 20, 2010

Media reports and analyses are describing Scott Brown's upset win in the Massachusetts Senate race as a very serious blow to the President's healthcare reform agenda.

The healthcare push, the AP (1/20, Alonso-Zaldivar) reports, is "not dead," but was sent "to the emergency room in fragile condition." While Democratic leaders are exploring avenues to push a bill through, media reports cast those efforts very much as an uphill battle.

So much so that the New York Times (1/20, A13, Hulse) reports that "House Democrats appeared to rule out the idea of quickly approving a Senate-passed healthcare measure and sending it to President Obama." In fact, DCCC chairman Chris Van Hollen (D-MD) took a clear shot at the Senate measure last night, saying, "Healthcare was also part of the debate, and the people of Massachusetts were right to be upset about provisions in the Senate bill like the Nebraska purchase and other special deals."

The Washington Post (1/20, Murray, Montgomery) likewise, reports that "the White House and Democratic leaders in Congress spent Tuesday searching for ways to keep their hard-fought healthcare overhaul alive," but "no workable Plan B emerged."

In another possible area of contention, were the House to vote on the Senate bill, the Washington Times (1/20, Haberkorn) reports that "Rep. Ahn 'Joseph' Cao of Louisiana, the only Republican to vote for the bill in November, won't support it again if the House's strict abortion restrictions are not preserved, his spokeswoman said Tuesday." Cao's "defection would...slice Democrats' vote margin even further. The health bill passed 220-215, just two more than the 218 required for passage."

Health Reform Negotiations

2010-01-15T11:08:00.000-08:00

Friday, January 15, 2010

After a series of meetings this week between President Barack Obama and Congressional leaders to negotiate the merging of the proposed Senate and House versions of health care reform, it appears a final bill is starting to take shape.

Following a full day of negotiations on Wednesday , President Obama, Speaker of the House Nancy Pelosi, (D-CA) and Senate Majority Leader Harry Reid, (D-NV), issued a joint statement indicating that they had made "significant progress in bridging the remaining gaps between the two health insurance reform bills" and are "encouraged and energized." Further, House Ways and Means Committee Chairman Charles Rangel, (D-NY), indicated that negotiators hoped to reach agreement on the core of the legislation by Friday so that the bill could be sent to the Congressional Budget Office (CBO) for scoring.

News media reports indicate the negotiators are considering:

* Combining the national insurance exchange (suggested by the House) and the state-based insurance exchanges (proposed by the Senate). President Obama has indicated his support for a nationwide insurance exchange;

*Expanding the Medicare payroll tax to include some investment earnings in addition to wages

*Abandoning an income tax increase on high-income earners proposed by the House

*Removing an employer mandate on large businesses

*Including additional federal money to help states pay for the expansion of the federal-state Medicaid insurance program for the poor. This revision evolved in reaction to fall-out from the deal made by Senators with Sen. Ben Nelson, (D-NE), to provide additional funding to Nebraska to cover the Medicaid expansion. Sen. Nelson and other lawmakers and governors are pushing for the federal government to pay for the Medicaid expansion in all states.

Further, in a private meeting at the White House on Monday and a subsequent meeting on Wednesday, President Obama indicated to union leaders that while he is committed to including an excise tax on high-cost insurance plans in the final reform package, he is open to amending the proposal. The excise tax has generated significant criticism from unions and other House Democrats. Union leaders believe that the proposed tax on family insurance plans worth more than $23,000 would hurt too many union workers. In addition, 190 of the 256 House members object to the tax. House and Senate negotiators are considering raising the threshold for the tax and exempting certain industries.

President Obama also signaled support for the House's proposed repeal of the insurance industry's federal antitrust exemption.

Health Bill Fight May Delay State Of The Union Address

2010-01-11T14:17:00.000-08:00

By ARTHUR D. POSTAL
National Underwriter
January 11, 2010

WASHINGTON BUREAU -- The White House is waiting to set a firm date for the annual State of the Union address, in the hope that President Obama will be able to talk about congressional passage of a major health care reform bill.

Robert Gibbs, the president’s spokesman, assured the nation Friday during a press briefing that the speech would not be broadcast Feb. 2, when ABC is set to start the final season of the series “Lost.”

But, when asked about what the date of the address would be, Gibbs said only that, “We’ll announce something soon.”

Gibbs made his comments as presidential advisers and Democrats from the House and Senate continued to work on reconciling differences between the House and Senate versions of the bill.

The conventional wisdom is that the final bill will cost about as much as H.R. 3962, the House bill -- $1.5 trillion -- but would rely on the taxes proposed in the Senate Bill 3950. The Senate bill includes features such as a Medicare payroll tax that would be imposed on high-income workers.

The Senate bill also includes a “Cadillac plan tax,” or 40% excise tax on insurers that sell high-value health benefits packages. The Senate Cadillac plan tax benefits package value threshold for most active workers would be $8,500 for individuals and $23,000 for families. The threshold would be higher for retirees and for employees in high-risk fields, such as law enforcement.

Union leaders have been waging an all-out campaign against the tax. “Instead of taxing the rich," as the House bill does, "the Senate bill taxes the middle class by taxing workers' health plans," Richard Trumka, president of the AFL-CIO, Washington, said today at the National Press Club. Democrats in the House are supporting the unions.

In related news, Richard Foster, the chief actuary of the Centers for Medicare and Medicaid Services, has estimated that, if H.R. 3950, the Senate’s Patient Protection and Affordable Care Act were implemented as written, the number of individuals with employer-sponsored health coverage might be about 161 million in 2019.

If current law prevails, the number of individuals with employer-sponsored coverage might be about 166 million, Foster estimates.

This Week in Health Reform: January 8, 2010

2010-01-09T07:49:00.000-08:00

While still technically in recess, members of Congress returned to Washington D.C. this week to get a jump start on reconciling the health care reform bills passed by the House and Senate last year.

On Tuesday, Democratic leaders began conversations regarding the final package, pledging to overcome differences and aiming to have a bill on President's desk by the time of his State of the Union address. Members of the news media, however, have highlighted the difficult negotiations ahead given some major differences in the proposed packages and the time pressure being imposed by President Obama.

House and Senate Negotiations:

Senate Passes Reform Bill: At 7:05 a.m. on Christmas Eve, Senate Majority Leader Harry Reid, D-Nev., along with 59 other Senate members voted to pass reform legislation that would expand health coverage to approximately 31 million people at a cost of $871 billion over 10 years, according to the Congressional Budget Office (CBO). The bill passed on party-lines (60-39), without a single Republican vote. Republicans believe the bill would impose many regulatory and financial burdens on taxpayers and businesses, and would swell government debt.

Reconciliation Poses Difficult Road Ahead: Before lawmakers can present a final health care reform bill to President Obama, the approved Senate bill needs to be merged with the House version passed in Nov. 2009, which extends coverage to 36 million Americans for a cost of about $1 trillion. However, the bills have some major differences that will need to be addressed as lawmakers shape the final package, including:

* Insurance Market Reform and Exchanges -- Both bills would bar insurers from denying coverage to those with pre-existing conditions and from dropping coverage for those who get sick. They both would also create insurance exchanges that would allow small businesses and individuals to shop for insurance. However, the Senate bill would create state-based exchanges, whereas the House bill would create a national exchange with an option for states to run their own programs if they meet certain requirements.

* The Government-run Plan -- A government-run plan was a central component to the House bill. The Senate bill would instead direct the U.S. Office of Personnel Management to contract with private insurance companies to offer policies on the exchanges. Despite much commotion over the need to include the public option, House leaders conceded Tuesday that they may be willing to agree to a bill without a public option if other parts of the bill fulfill the same goals, and they hope to expand available subsidies.

* Reform Financing -- With a price tag of approximately $1 trillion, Members of the House would pay for the reform effort through a 5.4 percent surtax on individuals making more than $500,000 a year and couples making more than $1 million and by imposing a 2.5 percent excise tax on medical devices. Members of the Senate, on the other hand, plan to pay for their $871 billion plan through a 40 percent excise tax on high-cost health insurance plans; an increase in payroll taxes for Medicare on individuals making more than $200,000 a year and couples making more than $250,000 per year; fees on insurers, medical device manufacturers and drug companies; and, a 10 percent tax on indoor tanning. On Wednesday, President Obama expressed his preference for the insurance tax contained in the Senate bill, however this provision is strongly opposed by labor unions.

* Coverage Mandates -- Both bills require that individuals obtain health insurance and would impose a penalty on those who do not. The House bill also includes an employer mandate for companies with payrolls above $750,000. The Senate bill, however, does not include this mandate and would require companies with more than 50 employees to pay a fine if employees obtain federally subsidized coverage on the insurance exchange.

* Medicaid Expansion -- Both bills expand Medicaid. The Senate bill makes Medicaid available to those with incomes up to 133 percent of the poverty level, whereas the House allows for coverage for those with incomes up to 150 percent of the poverty level.

* Abortion -- Both bills bar the use of federal funds for abortions; however, the House bill includes stricter language requiring anyone seeking abortion coverage to buy separate insurance riders. The Senate bill would allow states to choose whether or not to include plans with abortion coverage in the insurance exchange and would require those with abortion coverage to write a separate check for this insurance.

Senate OKs Health Bill Amendment, Limits Debate On Full Bill

2009-12-22T08:30:00.000-08:00

By ALLISON BELL
Life & Health Magazine
12/22/2009

Members of the Senate today voted 60-39 both to approve a major manager's amendment to H.R. 3590, the Senate health bill, and to protect the bill from a filibuster.

The 383-page Reid-Baucus-Dodd-Harkin amendment, Senate Amendment 3276, was unveiled Saturday. It would make many major changes to the underlying Patient Protection and Affordable Care Act bill, such as replacing a proposed public health plan to be run by the U.S. Department of Health and Human Services with a system of regional plans to be provided by private companies but administered by the U.S. Office of Personnel Management.

The PPACA bill amendment also would cut Medicare physician reimbursement rates 21% in 2010, rather than increasing reimbursement rates 0.5%; restructure a proposed system for imposing annual fees on health insurers; increase a proposed hospital insurance payroll tax on high-income workers; encourage states to establish medical malpractice dispute resolution pilot programs; index a proposed $2,500 annual cap on flexible spending account contributions for inflation; and require the HHS secretary to study whether self-insured health plans achieve any cost savings through efficiency or by skimping on benefits.

The vote on protecting the full PPACA bill from a filibuster, or endless round of debate by opponents, was really a vote for cloture for Substitute Amendment 2786 to H.R. 3590.

Senate Majority Harry Reid, D-Nev., used an existing House bill, H.R. 3590, which originally was intended to create a tax break for members of the armed forces who were buying homes, as a vehicle for introducing the PPACA bill. Technically, the PPACA bill is an amendment to H.R. 3590.

After the party-line votes on the manager's amendment and cloture, Reid urged members of the Senate to think about the spirit of Christmas over the next few days and set any personal animosity aside.

"To quote Rodney King, 'Let's all try to get along,'" Reid urged.

Senate Minority Leader Mitch McConnell, R-Ky., said he gets along well with Reid, that there is no personal animosity as a result of the health bill debate, and that he expects to work out a deal to provide certainty about when work on H.R. 3590 will end.

Senate Democratic leaders now are suggesting that the Senate may hold the final vote on H.R. 3590 at 7 p.m. Thursday, on Christmas Eve. Members of the Senate today voted 60-39 both to approve a major manager's amendment to H.R. 3590, the Senate health bill, and to protect the bill from a filibuster.

Senate Democratic leaders now are suggesting that the Senate may hold the final vote on H.R. 3590 at 7 p.m. Thursday, on Christmas Eve.

Health Reform Update

2009-12-14T05:22:00.000-08:00

December 14, 2009
NAHU News

Media coverage of the Sunday talk shows note Senate Majority Leader Harry Reid (D-NV) faces a difficult task in cobbling together a 60-vote majority to advance the healthcare legislation. The newest challenge came as Sen. Joe Lieberman (I-CT) announced he would not support a compromise Medicare buy-in provision, which several media reports suggested contradicted Lieberman's commitment to Senate leaders during the previous week.

The Washington Post (12/14, Murray) reports that the "next 48 hours will be critical to the fate of healthcare reform in the Senate, as Democratic leaders struggle to settle disputes that stand in the way of holding a final vote this year on the massive package." By mid-week, Senate Majority Leader Reid "must begin the process of ending debate on the $848 billion bill or risk missing his deadline of final passage by Christmas, pushing the contentious healthcare debate into early 2010." Most of the "undecided lawmakers have refused to commit until the Congressional Budget Office delivers a cost analysis on the coverage alternatives offered last week by a group of five liberal and five conservative Democrats to replace the government insurance option originally included in the legislation."

Lieberman threatens to oppose bill if it includes Medicare buy-in. The AP (12/14, Woodward) reports that Sen. Joseph Lieberman (I-CT), "whose vote is critical to the bill's prospects, threatened Sunday to join Republicans in opposing healthcare legislation if it permits uninsured individuals as young to 55 to purchase Medicare coverage." The Senator "expressed his opposition twice during the day: first in an interview with CBS, and more strongly later, according to Democratic officials, in a private meeting with" Majority Leader Reid. Democratic aides, "speaking on condition of anonymity, said Lieberman later told Reid he would support a Republican-led filibuster against the bill if it contained the Medicare provision or permitted the government to sell insurance in competition with private companies."

The New York Times (12/14, Pear, Herszenhorn) reports Lieberman's statement was a "surprise setback for Democratic leaders," and "supporters had said earlier that they thought they had secured Mr. Lieberman's agreement to go along with a compromise they worked out to overcome an impasse within the Democratic Party." Senate Democratic leaders, "including Mr. Reid and Senator Charles E. Schumer of New York, said they had been mindful of Mr. Lieberman's concerns in the last 10 days and were surprised when he assailed major provisions of the bill on television Sunday." A Senate Democratic aide, "perplexed by Mr. Lieberman's stance, said, 'It was a total flip-flop, and leaves us in a predicament as to what to do.'"

The Wall Street Journal (12/14, Williamson, Hitt) reports that in addition to Lieberman, Sen. Ben Nelson (D-NE) also expressed concerns about the Medicare buy-in proposal, noting that he called it "the forerunner of single-payer, the ultimate single-payer plan, maybe even more directly than the public option." The Washington Times (12/14, Lobianco) and The Hill (12/14, Zimmermann) also cover the story.

McCaskill to vote against bill if CBO score shows costs up. Politico (12/14) reports Sen. Clare McCaskill (D-MO) "says she'd 'absolutely' vote against healthcare overhaul legislation if it raises costs and the deficit." On Fox News Sunday, McCaskill said, "My statement all along is it has to slow down the increase in healthcare costs over time, and that is bending the cost curve and secondly that it has to be deficit neutral."

McConnell says Democrats in "serious trouble" on healthcare. The AP (12/14) reports Senate Minority Leader Mitch McConnell (R-KY) "says it's a stretch to think the Senate can finish its massive healthcare legislation before Christmas." On CBS' Face the Nation, McConnell said Democrats "are grappling with internal divisions and negative public opinion about the overhaul taking shape," and added "they're in serious trouble on this."

2010: The Year of the Health Savings Account

2009-12-07T07:49:00.000-08:00

November 26, 2009
By Robert Hopper, Ph.D.

If you were the CEO of a large corporation and knew premiums would continue to rise, what actions would you take to prepare for the future? An October 23, 2009 report in the Consumer Driven Market Report, a subscription insurance newsletter, provides some insights.

"The huge Blue Cross Blue Shield of Florida will offer only an HSA product to employees next year in the latest sign that larger employers, government workers and unions will be a major source of total replacement offerings in 2010." Total replacement means that companies eliminate traditional HMO and PPO plans and replaces those plans with an HSA-qualified health plan.

Stop and consider the implications of this quote. Who knows more about insurance than insurance companies? And why are they switching totally to HSA-based plans? The answer is simple. Like all businesses they are looking for ways to control their health care costs while still attracting and retaining the best and brightest employees. They think HSAs are the solution.

The above-mentioned report also noted that General Motors just announced it would only offer HSA-based plans to its salaried employees. That's big news. When GM declared bankruptcy, the American taxpayer -- you and me -- bailed them out. Now we expect GM to be smart about controlling health care costs and they respond by choosing HSA-based plans.

Here's an interesting parallel. Instead of traditional health plans, GM will offer its employees a hybrid health plan that couples an affordable high deductible health plan for large and unexpected medical bills with a tax-efficient health savings account for the routine and expected medical expenses. Similarly, GM will offer the American public new hybrid cars that couple a gasoline engine for highway driving, and electric motor for stop-and-go city driving. Hybrids will play a big role in the future.

"Cancer of Fraud" Permeates U.S. Healthcare System

2009-11-25T08:52:00.000-08:00

Nov 25, 10:43 AM EST

MIAMI (Reuters) - It's a crime so profitable that even dead people are in on the act.

A U.S. Senate committee revealed last year that public health insurer Medicare had paid as much as $92 million from 2000 to 2007 for medical services or equipment ordered or prescribed by doctors who were dead at the time.

Many had died more than five years before the date when they supposedly ordered or authorized the service.

Healthcare fraud said to cost U.S. taxpayers hundreds of billions of dollars a year has garnered increased attention amid the congressional debate about overhauling the U.S. healthcare system -- especially since President Barack Obama wants to cover some of the cost of reforms by fighting abuse.

Yet interviews with several law enforcement and healthcare experts indicate the president may be disappointed.

Some fear the focus on fraud may come as too little, too late after years of government complacency and inaction.

Experts like the FBI's John Gillies say the problem has been getting worse all the time, as mob figures and violent criminals are lured by fabulously easy money and relatively light prison sentences into fraud targeting Medicare, the federal health insurer for more than 43 million elderly and disabled Americans.

"There are so many schemes involved. Take any aspect of the healthcare industry and there's a fraud going on in there right now," Gillies, special agent in charge of the FBI Miami Division, told Reuters in a recent interview.

GROUND ZERO FOR FRAUD

Florida has long been known for its unsavory association with cocaine cartels, political shenanigans and swampland real estate deals.

Gillies says the state is also now "ground zero for healthcare fraud" since so many elderly Americans have retired to end their days in its famous sunshine.

Hardly a week goes by without authorities in Florida reporting another arrest, indictment or conviction for Medicare fraud, which has replaced the drug trade as the crime of choice among many criminals.

The cases often involve multimillion-dollar schemes featuring bogus suppliers of wheelchairs, or other so-called durable medical equipment devices, and sham infusion therapies for the treatment of HIV and AIDs patients.

One case filed recently in South Florida included the indictment of 11 members of New York's Bonanno crime family, and prosecutors say the crimes are becoming more elaborate, involving kickbacks, stolen identities and manipulative billing practices.

"When we shut down one scheme they just move onto the next scheme," said Gillies, referring to fraudsters perpetrating one of the most lucrative financial crimes in America today.

"I do not see it slowing down any time soon," he said.

The FBI estimates that fraud accounts for 3 percent to 10 percent of U.S. healthcare expenditure per year, and Gillies said it could easily cost about $200 billion annually.

That is broadly in line with a Thomson Reuters report released on October 26. The report said that in 2007, when the United States spent nearly $2.3 trillion on healthcare and both public and private insurers processed more than 4 billion health insurance claims, fraud was estimated to reach as much as 10 percent of annual healthcare spending.

At that rate, due largely to fraudulent Medicare claims, kickbacks for referrals for unnecessary services and other scams, the losses in 2007 would have been more than $220 billion.

The National Healthcare Anti-Fraud Association, an organization of about 100 private insurers and public agencies, estimates that some $60 billion, or about 3 percent of total annual healthcare spending, is lost to fraud. But the Thomson Reuters report said that figure is considered conservative.

Ohio 10th Fattest State, According to Obesity Report

2009-11-22T07:26:00.000-08:00

Journal-News
Tiffany Y. Latta, Staff Writer
November 22, 2009

Ohio is tied with Arkansas with 28.6% of adults obese, joining a top 10 list that included three states that border Ohio — West Virginia, Michigan and Kentucky.

The annual report, “F as in Fat: How Obesity Policies Are Failing in America” by Trust for America’s Health and the Robert Wood Johnson Foundation, ranked Ohio 17th fattest last year.

The report this year also says Ohio’s youth are among the nation’s fattest as well. The foundation ranked Ohio 15th in the nation with 33.3 percent of youth ages 10 to 17 overweight.

“Our health care costs have grown along with our waistlines,’’ said Jeff Levi, executive director of Trust for America’s Health. “The obesity epidemic is a big contributor to the skyrocketing health care costs in the United States. How are we going to compete with the rest of the world if our economy and work force are weighed down by bad health?”

Adult obesity rates increased in Ohio and in almost half the states in the nation and didn’t decrease in a single state in the past year, according to the report.

Expanding waistlines are predicted to get worse in the next year due to the economic downturn. Dr. Brad Watkins of Cincinnati Weight Loss Center in West Chester Twp. said emotional eating and depression are major factors in obese patients. “Obesity is a very intensely complicated disease. It’s not simple,” he said.

Watkins said doctors need to discuss fitness and nutrition education and address emotional issues, such as depression, sexual abuse and other factors that can lead to obesity.

The Office of Healthy Ohio released an obesity prevention plan earlier this year. The plan has three goals: 1) improve physical activity options and opportunities; 2) improve nutrition and access to healthy food choices and limit access to unhealthy food and beverage choices; and 3)improve the coordination of policy and resources directed to the prevention and reduction of obesity especially among those populations most at risk.

“This plan is a road map to use in our efforts to make Ohio the state of living well,” said Ohio Department of Health Director Dr. Alvin D. Jackson. “It took us a long time to get to this unhealthy state, and it will take time and effort to reverse these troubling trends. Doing nothing is not an option.”

This Week in Health Reform: November 20, 2009

2009-11-20T11:44:00.000-08:00

This week focused on the unveiling of Senate Majority Leader Harry Reid's (D-NV) proposed health care reform legislation.

House and Senate Negotiations

Senate Majority Leader Harry Reid unveiled his version of health care reform legislation on Wednesday night after receiving cost estimates from the Congressional Budget Office (CBO). With a price tag of $849 billion over ten years, the bill will reduce the deficit by $127 billion over a decade and cut Medicare spending by $500 billion, while increasing taxes by $500 billion. In addition, the bill will:

* Provide coverage for 31 million Americans who currently lack health insurance,
accounting for 94 percent of eligible Americans

* Offer a government-run option of which states can opt out

* Expand Medicaid

* Require most Americans to carry health insurance, providing subsidies for those
who cannot afford it and imposing weak penalties for violations

* Bar insurance companies from denying coverage based on pre-existing conditions or
dropping coverage for those who become sick

* Impose penalties on medium and large sized employers for not providing health
insurance to employees

* Increase the Medicare payroll tax on higher-income workers

* Imposes fees totaling $101.9 billion on insurance companies, drug makers, and
medical device manufacturers over ten years

* Impose a tax on high-cost health insurance plans provided by employers to their
employees.

While Democrats remain committed to passing the legislation, it is not certain that Reid has the 60 votes needed to bring the measure to the floor for debate. Several moderate democrats, including Sens. Mary L. Landrieu of Louisiana, Blanche Lincoln of Arkansas and Ben Nelson of Nebraska have expressed concerns over the inclusion of a government-run plan. Sen. Sherrod Brown (D-OH), however, expressed in a meeting Monday night with Reid that liberal lawmakers had conceded enough ground on the government-run plan and that he should push forward with the bill.

Members of the Senate will convene on Saturday for a rare weekend session to hold a procedural vote, deciding whether or not to bring the legislation to the Senate floor for debate.

Immigration and Abortion Remain Central to the Debate

Access to care for illegal immigrants will continue to be contentious as lawmakers work to reconcile the health care legislation passed by the House and pending in the Senate. Under the bill approved by the House, illegal immigrants would not be barred from using their own money in the newly-created insurance exchanges. White House officials and members of the Senate Finance Committee, however, pledged that undocumented workers be barred not only from receiving subsidies but also from buying insurance through federally sponsored exchanges - even with their own money.

As Senate Majority Leader Harry Reid works to finalize the legislation, he will also need to address the question of federal funding for abortions, an issue that has proved starkly divisive. Because of pressure from the Catholic Church and anti-abortion groups, the House-approved bill restricts the use of taxpayer funds for abortions, a decision that has sparked a heated debate among pro-choice and pro-life advocacy organizations. In contrast, the Senate's proposed bill would allow the use of federal funds for abortion in cases of rape and incest, requiring insurers that cover elective abortions to segregate money from Americans who get government subsidies.

Public Opinion

A new Washington Post-ABC News poll shows that Americans are deeply divided over the current health care proposals and that the majority believes costs will rise. 48% say they support the proposed changes to overhaul the health care system, whereas 49%are opposed. In addition, 52% say an altered system would probably make their own care more expensive, and 56% see the overall cost of health care in the country going up as a result of the reform.

Furthermore, a recent Associated Press (AP) poll shows that Americans are split (43 percent opposed; 41 percent support) over the health care plans being discussed in Congress. The AP poll also suggests that the public is becoming more attuned to the details of the proposals, including the cost implications and the public option. And, according to a Quinnipiac University poll released Thursday, 53 percent of voters disapprove of President Barack Obama's handling of health care reform.

However, a new CBS News poll shows that only one in four Americans prefer to have no health care legislation at all, while 51 percent support a bill with a public option.

CMS Report Indicates Costs Would Rise Under House Bill

According to a report issued by Richard Foster, the chief actuary at the Centers for Medicare and Medicaid (CMS), overall spending on health care would rise as a result of the legislation approved by the House. Specifically, the measure to reduce more than $500 billion from future Medicare spending would sharply reduce benefits for some seniors and may jeopardize access to care for millions of others.

Drug Makers Increase Price, Anticipating Health Reform

The media has reported that the drug industry has been raising prices at its fastest rate in years, in anticipation of the costs associated with health care reform. These costs include the $80 billion in fees over the next decade that the industry agreed to in order to help pay for coverage of the uninsured.On Wednesday, Democrats in Congress asked for two separate investigations of drug industry pricing.

Economists Endorse Health Care Reform Bill: Twenty-three high profile economists from universities and think tanks sent a letter to President Obama on Tuesday to support four important elements of health reform legislation critical to its success: deficit neutrality, an excise tax on high-cost insurance plans, an independent Medicare commission, and delivery system reforms.

Looking Ahead

The Senate will convene on Saturday for a procedural vote, deciding whether or not to bring the legislation to the Senate floor for debate. Debate could continue throughout the weekend.

Senator Calls for Investigation Into Report That Drugmakers Sharply Raised Costs

2009-11-19T04:54:00.000-08:00

Fox News
November 19, 2009

Democratic Sen. Bill Nelson of Florida is urging the Department of Health and Human Services inspector general to investigate reports that prescription drug makers are raising prices ahead of Congress' sweeping health care overhaul.

Sen. Nelson is urging the inspector general of the Department of Health and Human Services to investigate reports that prescription drug makers are raising prices ahead of Congress' sweeping health care reform bill.

In a letter sent to Health inspector Daniel R. Levinson on Wednesday, Nelson said he is proposing an amendment that would force the country's biggest pharmaceutical companies to offset more of the costs.

Nelson cited a recent AARP study that found that drugmakers have dramatically upped the cost on commonly used brand-name drugs. "I want to know if there's a back-door move under way by the drugmakers to recover some of the concessions they've promised for health care reform," Nelson said.

The analysis by AARP's Public Policy Institute released Monday found that the price of many prescription drugs used by Medicare beneficiaries rose by 9.3 percent from October 2008 to September 2009 -- a rate that's higher than usual when compared to previous years.

The study reported that prices increased for 96 percent of brand-name drugs over the last year -- despite a negative general inflation rate.

"This report confirms what most older Americans already know: drugmakers are raising their prices and enjoying windfall profits, even as the rest of the economy is suffering," AARP Executive Vice President John Rother said in a press release Monday.
"The pharmaceutical industry should be embarrassed when it sees its own price increases put side by side with the general inflation rate. Even as the cost of most goods and services drops, a person taking just one brand-name drug now pays $200 more per year than a year ago," said Rother.

Nelson called the increase "troubling" and is pressing Levinson to fully investigate AARP's findings. "As you know, President Obama reached an agreement with the Pharmaceutical Research and Manufacturers of America, which pledged $80 billion in support of health reform efforts," Nelson wrote in his letter to Levinson. "A significant portion of this support was in the form of rebates to the Medicaid program and discounts offered to seniors in the Medicare Part D coverage gap," he wrote.

House Releases Merged Health Reform Bill

2009-11-06T08:33:00.000-08:00

On October 29th , leadership in the House of Representatives released a bill entitled the “Affordable Health Care for America Act” that merges legislation passed in July by the three House committees (Education and Labor, Energy and Commerce, and Ways and Means) with jurisdiction over health reform. The CBO estimates that this bill will cost $894 billion over ten years and cover 36 million of the 54 million uninsured. To pay for the cost of the bill, the Committee places a 5.4% surcharge on adjusted gross income above $1 million for married couples and $500,000 for singles, reduces provider payment rates under Medicare, reduces spending for the Medicare Advantage program, obtains prescription drug rebates and discounts for Medicaid and Medicare Part D from pharmaceutical companies, places a 2.5% sales tax on medical devices, and makes changes to HSA and FSA rules. House leadership has stated that floor debate on the bill will likely start later this week or early next week. Details of the House bill include:

· Insurance Market Rules Effective in 2010: Several insurance market rules take effect in 2010, including government review of health plan premiums and a requirement that 85% of premiums be spent on medical care, prohibition of lifetime benefit limits for individual and group plans, a requirement that health plans cover children as dependents through the age of 26, and prohibition of coverage cancellation or rescission except in cases of fraud. Prior to the implementation of new market rules and the Exchange in 2013, the House bill also establishes interim provisions between 2010 and 2013 that extend COBRA eligibility, shorten the pre-existing condition “look back” period to one month and the benefit exclusion period to three months, and establish high risk pool provisions for individuals who can not obtain coverage due to health status or a pre-existing condition.

· Insurance Market Rules Effective in 2013: Beginning in 2013, the House bill makes additional insurance market changes that require guarantee issue and renewal of coverage, prohibit pre-existing condition exclusions and premium variation based on health status, and allow premium variation only for age, family size, and geographic area. The new market rules apply to all health plans inside and outside the Exchange. Starting in 2015, states could pass legislation to form “Health Care Choice Compacts” to allow the purchase of individual insurance across state lines.

· Public Plan and CO-OPs: The House bill establishes a national public plan in 2013 to compete with private insurers in the Exchange. Provider rates for the public plan would be negotiated and providers are presumed to participate unless they opt-out. The House bill also provides start-up funding to states to establish not-for-profit member-governed cooperative health plans (CO-OPs) to compete with private insurers and the public plan in the Exchange. CO-OPs and the public plan must comply with the same rules as other plans in the Exchange. States are not required to establish CO-OPs.

· Exchange: A national health insurance “Exchange” is established in 2013 and would be operated by a new federal agency, the “Health Choices Administration (HCA).” The Exchange is designed to serve as a facilitator of comparison shopping, enrollment, and subsidy administration, a regulator of plan standards and rules, and a negotiator of premiums and contracts with health plans. All individuals who purchase coverage outside the group market or whose premiums are more than 12% of income (and are not eligible for Medicare or Medicaid) are eligible to purchase coverage through the Exchange. Participation in the Exchange is voluntary, but no individual market exists outside the Exchange except for “grandfathered plans.” Employers can purchase coverage through the Exchange if they have up to 25 employees in 2013, up to 50 employees in 2014, and up to 100 employees in 2015 (with the potential to open participation to all groups starting in 2015).

· Benefit Plans: In 2013, individuals have a choice of four plan types including “Basic” (70% actuarial value), “Standard” (85% actuarial value), “Premium” (95% actuarial value), and “Premium Plus” (value over 95%). A new independent “Benefits Advisory Committee” is created to define and update the requirements for the minimum benefit plan or “Basic Plan.” Plans are prohibited from having annual or lifetime benefit limits or establishing cost sharing above $5,000 individual/$10,000 family. Plans are required to cover a list of specified mandated benefits, but states may establish additional benefit rules. Individuals may keep their current coverage (“grandfathered plans”) instead of enrolling in one of the four new plans, as long as no change is made in cost-sharing, contract terms, or benefit levels. Employers are required to at least meet the requirements of the “Basic Plan” by 2018.

· Coverage Mandates, Penalties, and Subsidies: Beginning in 2013, individuals are required to have health insurance coverage that is either a “grandfathered plan,” a government plan (Medicaid, Medicare, and the like), an employer-based plan (until 2018), or an individual or group plan that meets or exceeds the qualifications of the federally-defined minimum benefit plan (“Basic Plan”), or pay a 2.5% of income tax penalty. Waivers are allowed for Native Americans, those with religious objections, dependents, and individuals with a financial hardship defined as premiums over 12% of income. Individuals up to 400% of the federal poverty level ($88,000 for a family of four) are eligible for sliding scale premium and cost-sharing subsidies. In 2013, employers with an annual payroll over $500,000 are required to offer health insurance coverage to their employees or pay an 8% of payroll tax penalty. Employers must pay 72.5% for single and 65% for family coverage of the lowest cost qualified plan to avoid the penalty. Employers are also subject to the penalty for employees in the Exchange obtaining subsidies if the cost of employer-based coverage is higher than 12% of the employee’s income. Employers with an average wage below $40,000 and 25 or fewer employees are eligible for up to a 50% premium credit for two years.

· Medicaid and the Children’s Health Insurance Program (CHIP): Medicaid eligibility is expanded to 150% of the federal poverty level for all individuals in 2013 with full federal funding of the expansion in 2013 and 2014 and 91% federal funding to states starting in 2015. States are required to maintain existing Medicaid eligibility; states are also required to maintain CHIP eligibility, but only until 2013 when CHIP beneficiaries will get coverage through the Exchange. The bill also extends enhanced federal Medicaid funding from the stimulus bill (ARRA) to states until June 2011.

· Medicare: The House bill reduces payments for Medicare Advantage to 100% of Medicare fee-for-service spending by 2013 and establishes quality bonuses for plans with high quality scores in markets with low Medicare fee-for-service spending and high Medicare Advantage enrollment. By 2019, the “donut hole” or coverage gap under Part D is eliminated. Pharmaceutical manufacturers are to provide a 50% discount for brand name drugs purchased in the “donut hole” and HHS is required to negotiate directly with manufacturers for Part D drug pricing. The income subsidy exclusion for employers who maintain prescription drug plans for Part D eligible retirees is eliminated. The House bill also creates pilot programs for coordinated care delivery models, establishes a new “Center for Medicare and Medicaid Innovation” to test and implement new provider payment methods, and changes payment incentives to reduce hospital readmissions. Annual provider payment updates are reduced for Medicare Part A and Part B and the Institute of Medicine is instructed to study geographic variation in payment rates and recommend changes.

Tax on Wealthy Not Tied to Inflation

2009-10-30T04:47:00.000-07:00

CQ Today (10/30, Rubin) reports that since the income levels at which more wealthy earners would be taxed to pay for healthcare reform is not indexed for inflation in the House bill, "more and more people each year would face a tax that is being sold as a levy on millionaires".

"It's a significant change in approach that will help align revenues and costs in the latest version of the bill, but it will invite criticism and comparisons to the alternative minimum tax, which has affected far more people than it was supposed to."

Employer-based Insurance under Health Reform will mean Higher Costs in Short Term

2009-10-27T05:44:00.000-07:00

Time (10/27, Pickert) reports that the employer-based system has become equally or more unsustainable than the overall "US healthcare system." Employee contributions to those premiums "went up 128 percent" from 1999 to 2009; and surveys indicate about "40 percent of employers will shift" even more costs onto employees in 2010.

Health reform proposals will do "little to change" that, although an "excise tax" on "Cadillac" policies will help in the long-term, as will several things more employers are now doing. These include replacing co-pays with "co-insurance" in which patients a percent "of the actual cost"; offering "wellness programs," which focus on getting high health-cost "workers to lose weight or quit smoking"; and conducting "dependent audits."

Still, it will take a long time before these programs begin "slowing costs" meaning that "under the reform proposals," employees face increasingly "higher costs" coupled with "fewer benefits" and choices.

Senator Reid: Senate Bill will include Public Option with State Opt-out

2009-10-27T05:37:00.000-07:00

The CBS Evening News (10/26, Cordes) reported, "For months, the public option was declared dead in the Senate," but on Monday, Senate Majority Leader Harry Reid (D-NV) "announced that the contentious government plan would be the cornerstone of the new Senate healthcare reform bill." Sen. Reid said, "The public option can achieve the goal of bringing meaningful reform to our broken system."

NBC Nightly News (10/26, O'Donnell) reported, "Leaders of both parties had predicted that a public option was dead. But tonight it is back, and Senate Majority Leader Harry Reid is taking a risk." But "for more liberal Democrats, this kind of public option or any kind of public option is considered a victory."

On ABC World News (10/26, Gibson), George Stephanopoulos said Reid "still may not have the votes to get this to the Senate floor. But what the Senate leader saw is that he would have a lot more trouble with the majority of Democrats if he didn't include the public option in the bill than if he did."

USA Today (10/27, Fritze) reports the "latest iteration of the public option would give millions of Americans who are not covered through their employer the option to buy insurance run by the government. States would have until 2014 to decide whether to withdraw from the public program, which Reid says would drive down rates."

According to Bloomberg News (10/27, Litvan, Rowley), Reid "said the so-called public option with the opt-out provision is the 'fairest way to go' to ensure competition for private insurers."

The New York Times (10/27, A1, Pear, Herszenhorn) reports in a front page story that Reid "sided with his party's liberals," but the announcement "set the stage for a test of Democratic party unity. With Republicans united for now in opposition to any bill including a public option, Mr. Reid needs support from all members of his caucus -- 58 Democrats and two independents -- to take up the legislation. Aides said Monday that he appeared to be short of that goal, lacking firm commitments from several members of the caucus."

The Los Angeles Times (10/27, Levey) reports the "'opt-out' compromise is still two votes shy of the 60 Reid needs to overcome a Republican filibuster, according to a senior Democratic aide on Capitol Hill who requested anonymity when discussing the plan."

The Washington Times (10/27, Haberkorn) reports that Sen. Olympia Snowe (R-ME) "said she was 'deeply disappointed' with Mr. Reid's decision and would not support the bill."

The Hill (10/27, Young) likewise reports Reid's decision "could cost him the support of" Sen. Snowe, "the only Republican to support a healthcare bill in Congress this year." With or "without Snowe, Reid said he's going ahead with the opt-out public option, though he voiced hope that Snowe could still be convinced."

October 16: This Week in Health Care Reform

2009-10-16T12:14:00.000-07:00

This week, Senate Finance Committee members voted on the committee's health care reform bill, and the conversation shifted to how to reconcile the bill with pending legislation from the House.

Senate Negotiations

Senate Finance Committee Passes Bill: On Tuesday, after months of negotiations, the Senate Finance Committee passed its $829 billion health care reform package with a 14-9 vote. One Republican, Sen. Olympia Snowe (R-ME) voted with Democrats on the committee. The proposal would expand coverage to 29 million uninsured Americans while reducing deficits by $81 billion over 10 years. The bill includes insurance market reforms, an individual mandate to purchase coverage that appears reduced when compared with prior versions, an expansion of Medicaid, a cut in future Medicare spending, new fees and taxes on employers, and billions in new fees on health insurance and other sectors of the health care industry. The bill also includes seed funding for state cooperative plans and subsidies for other state coverage programs.

Shortly after the vote, labor unions and large business organizations requested changes to the Finance Committee bill primarily because it omitted a public option . The swift feedback from interest groups underscores the difficult road ahead for Senate Majority Leader Harry Reid (D-NV), who will work to merge the Finance Committee bill with the Senate Health, Education, Labor and Pensions (HELP) bill passed last summer. Unions and lawmakers such as Sens. Chuck Schumer (D-NY) and Jay Rockefeller (D-WV) have criticized the legislation for not including a public option . At the same time, insurance companies, medical device makers and others in the health care industry are voicing strong concerns about the increased premium costs of the proposed legislation.

House Activities

Legislators Look to Reconcile Health Care Measures: House leaders indicated that negotiators have trimmed costs for its proposed health care reform bill to President Barack Obama's goal of $900 billion, down from $1.2 trillion. Aides said the final bill will include slightly lower subsidies for copayments and deductibles for people who buy coverage through the new insurance exchanges that be would established for those who can't access affordable employer coverage. A provision preventing doctors who see Medicare patients from having their fees cut was excluded, while a surcharge tax on incomes of individuals ($500,000 or more) and families ($1 million or more) was included. House members will consider including more low income families in Medicaid instead of the insurance exchange market, and adopting tax increases featured in the Senate Finance Committee bill, including a profit tax on health insurers. They have, however, rejected the tax on "Cadillac" plans.

Additional Activities

Insurance Industry Study Indicates Higher Costs: On Sunday, the insurance industry trade association, America's Health Insurance Plans, released a study indicating that the proposed Finance Committee legislation would raise the price of a typical policy. The study, completed by PricewaterhouseCoopers, projected that family premiums could be $4,000 higher and individual premiums could be $1,500 higher in 2019. The report details that a weak individual mandate, measures preventing insurers from barring people with pre-existing conditions, taxes on high-cost health care plans and new taxes on some health care industry sectors will rapidly raise costs.

Employers Uneasy About Higher Taxes in Health Care Bill

2009-10-14T12:42:00.000-07:00

Employee Benefits News
By Lydell C. Bridgeford and Elizabeth Galentine
October 14, 2009

Health care reform received a major boost yesterday when the Senate Finance Committee voted 14-9 in favor of the “America's Healthy Future Act of 2009.” Yet industry watchers of employee benefits still remain concerned over the measure, citing its costs and workability.

“As the Senate — and the full Congress — continue the legislative process, we believe the Senate Finance Committee bill provides the most promising framework for achieving much-need health reform while preserving high-quality employer-sponsored coverage on which more than 160 million Americans depend,” says James Klein, president of the American Benefits Council.

Still, “more work is needed to ensure the highest possible number of individuals obtain health coverage so that sustainable health insurance reform can be achieved. In particular, weak enforcement of the individual mandate will likely cause many healthy people to refrain from buying coverage until they are sick," adds Klein, whose organization represents private-sector employers.

The group hopes that Congress will reconsider provisions in the bill that will result in a complicated and costly excise tax on high cost plans, extensive new fees on health insurers and new taxes on prescription drug coverage for retirees. “These costs are all likely to eventually be passed along to employers and employees and would certainly make health care more costly,” explains Klein, adding that ABC has created a list of priority employer issues for lawmakers to consider during the health care debate.

Another employer group that is not too ecstatic about the 10-year, $829 billion health care proposal approved by the Senate Finance Committee is the U.S. Chamber of Commerce. “One of the primary goals of health care reform is the overriding need to reduce ever-escalating costs for both consumers and employers. The Senate Finance bill increases premiums, raises taxes, and creates a new entitlement that will add to the nation's growing debt, says Bruce Josten, executive vice president of government affairs at the U.S. Chamber of Commerce, a trade association that represents the interests of American businesses.

Debating Premiums

To complicate matters, PricewaterhouseCoopers recently issued a report stating that health insurance premiums will rise even more rapidly if “America’s Healthy Future Act of 2009” becomes law.

PwC accountants calculate that the legislation would add $600 to a single person’s premiums and $1,700 a year to the cost of family coverage by the time most provisions are in effect in 2013. While Chairman Max Baucus (D-Mont.) questioned the credibility of a report commissioned by America’s Health Insurance Plans — “It’s a heath insurance company hatchet job,” Committee spokesman Scott Mulhauser told the news organization AP.

“I don’t think it does much for health care reform other than extend health insurance coverage to most of the uninsured with no reform for the drivers of cost, namely us,” says Tom Schuetz, co-president of Iowa’s Group Services.

Coupled with restrictions in the Genetic Information Nondiscrimination Act of 2008 that prohibit adverse use of genetic information in determining health care coverage, “it’s no wonder we aren’t able to address the root causes of our out of control health care costs,” adds Schuetz. He also pointed to the difference between the original projected costs for Medicare and its actual costs today as a warning.

For reform efforts to succeed, premiums must be affordable and people must be able to keep their existing private coverage, but changes made to the Finance Committee bill during markup would interfere with these goals, says Peter Stein, vice president of congressional affairs with the National Association of Health Underwriters.

“The weakening of the individual mandate, tens of billions of dollars in new insurer fees and taxes, tight limits on age rating, and high minimum benefit levels will make private health insurance unaffordable for many Americans. By some estimates, these provisions combined could double premiums for the youngest third of our population coming into a reformed insurance marketplace,” he says.

“Without an effective and enforceable insurance mandate and an influx of younger, healthier people, the bill would essentially create a marketplace where people can wait to buy coverage until they get sick. And this will cause premiums to increase significantly for everyone.”

The National Association of Insurance and Financial Advisors also takes issue with a number of provisions in the bill, including the individual mandate. The Baucus bill originally called for non-participation penalties between $750 and $3,800, depending on income level. That was reduced to $750 per adult in a household during committee markup. Such weak mandates “could devastate affordable insurance,” says Diane Boyle, executive vice president, AHIA-NAIFA Health & Employee Benefits. “If people can carry insurance only when they’re sick or injured, the price of insurance will skyrocket for everyone. This is a very difficult problem that Congress must resolve,” she adds.

Health Plan Members Pleased with Their HSAs

2009-10-12T08:43:00.000-07:00

John Commins
HealthLeaders Media
September 25, 2009

Most employers and account holders using health savings accounts and HSA-qualified health plans are satisfied with their coverage, spend less, and are more engaged in managing health benefits, two HSA industry-sponsored surveys indicate.

The surveys, conducted last spring, examined employer and account holder selection and use of HSAs as well as health plan participation, behaviors related to plan usage, and satisfaction with product features.

The surveys, sponsored by HSA administrators ACS and subsidiary Buck Consultants, found that:

84% of account holders say their HSA-qualified plans are affordable.

72% of account holders say they pay the same or less than a traditional type of health plan.

50% of account holders say they more closely monitor their healthcare costs

48% read their medical bills more closely than when they did not have an HSA

46% have a better understanding of where their money goes

40% more closely evaluate costs before electing medical services.

81% of account holders said the ability to personally control healthcare costs is an important factor that caused them to select an HSA.

96% of employers claimed that HSAs allow the company to continue offering group-sponsored health insurance.

Democratic Healthcare Reforms Would Take Three Years to Implement

2009-10-12T06:37:00.000-07:00

USA Today (10/12) reports that Democrats have sought "legislation that provides healthcare access for all Americans" for the last sixty years, but "they'll have to wait three more if President Obama gets a bill to sign this year."

Under Democratic bills "being considered, federal tax credits to help make health insurance affordable for millions of low- and middle-income households won't start until 2013. Medicare cuts and a sizable chunk of the tax increases to pay for the changes kick in immediately."

Obama Administration officials "and Democratic lawmakers say the reason for the three-year wait is the time it's going to take to set up insurance marketplaces, write consumer protection rules and reconfigure the bureaucracy to carry out the legislation."

Some Democrats concerned by three-year delay. The AP (10/10, Alonso-Zaldivar) reported that under Democratic healthcare reform proposals, "federal tax credits to help make health insurance affordable for millions of low- and middle-income households won't start flowing until 2013 -- after the next presidential election. But Medicare cuts and a sizable chunk of the tax increases to pay for the overhaul kick in immediately."

The "eat-your-vegetables-first approach is causing heartburn for some Democrats. Three years is a long time to wait for dessert, and opponents could capitalize on misgivings about the complex legislation to undo what would be a signature achievement for Obama."

This Week in Health Care Reform - October 9, 2009

2009-10-09T12:50:00.000-07:00

This week, legislators from the Senate Finance Committee waited for the Congressional Budget Office (CBO) to provide a cost estimate for the revised health care reform bill before bringing the legislation to a committee vote, now expected to take place next week.

Senate Negotiations

CBO Provides Revised Cost Estimate: On Wednesday, the CBO estimated that the revised Senate Finance Committee bill would cost $829 billion over the next 10 years, reducing the budget deficit by $81 billion over the same time period. The CBO also projected that the health reform legislation would expand health care coverage to 94% of Americans by 2019 . This estimate provides a significant political boost to the Finance Committee bill, as it is the only proposed health care reform legislation that meets President Barack Obama's guidelines, which include having a price tag of $900 billion or less over 10 years, vastly expanding coverage and not adding to the budget deficit. However, the CBO's estimate did not include the impact of the legislation on premiums.

Senate Finance Committee Finalizes Bill

Last Friday, the Senate Finance Committee wrapped up days of negotiations and finalized its bill to overhaul the U.S. health care system. In the last days of committee negotiations, lawmakers voted to:

1) Reduce penalties on those who do not obtain insurance;

2) Modify the proposed tax on high-cost insurance policies;

3) Prevent health insurance companies from taking tax deductions for compensation in excess of $500,000; and

4) Create a government plan to offer a state option operated by private insurers.
The committee originally planned to vote on the bill this week. However, the vote was delayed to give the CBO time to assess the cost of the revised package and to give the committee time to review the legislation before the vote.

Sen. Max Baucus (D-MT) has indicated he has the necessary votes to bring his bill across the committee finish line. Yet, it is still unclear whether or not he will achieve bipartisan support of the bill. In addition, at least two Democrats , Sens. Ron Wyden (D-OR) and John D. Rockefeller IV (D-WV) have refused to support the bill in its current form.

Joint Committee on Taxation Reports Increase in Industry Fees: On Tuesday, the Joint Committee on Taxation indicated that the revised bill coming out of the Senate Finance Committee would raise $121 billion from fees on drug companies, health insurers and medical device manufacturers, up from the original $92 billion previously reported. The increase in tax revenue stems from restrictions prohibiting companies from deducting the proposed industry fees from their corporate taxes. The new estimate has fueled increased Republican opposition to the reform legislation.

Senators Call for 72-Hour Window for Public Review: On Tuesday, a group of six moderate Democratic senators and one independent senator sent a letter to Senate Majority Leader Harry Reid (D-NV). The letter called for a 72-hour period for public review of the upcoming combined Senate health care reform legislation, along with the complete budget score from the CBO, prior to a full Senate vote.

House Activities

House Democrats Reject Taxing "Cadillac" Plans: On Wednesday, 154 House Democrats signed a letter addressed to Speaker of the House Nancy Pelosi (D-CA) denouncing a plan to pay for health care reform by taxing high-end health insurance plans, known as "Cadillac" plans. The letter urged the Speaker to reject proposals with a tax on Cadillac plans because it could potentially place a heavy burden on the middle class. This letter is in contrast with legislation moving through the Senate Finance Committee that includes a tax on insurers who offer these high-end plans. Speaker Pelosi has indicated she is considering adding a tax on health insurance to the House bill.

Public Opinion

Poll Shows Increased Public Support: The latest Associated Press-GfK poll has found that public support for President Obama's health care reform initiative has increased, split evenly between those who support reform (40%) and those who do not (40%). In September, 34% of the public supported Congressional proposals and 49% opposed them.

Additional Activities

President Obama Pitches Health Care Reform to Doctors: President Obama addressed approximately 150 doctors from across all 50 states on the White House lawn to win their support for health care reform. Many doctors oppose reform efforts, particularly due to potential cuts in Medicare and lack of protection from "abusive" malpractice lawsuits.

Looking Ahead

Following the Senate Finance Committee vote expected next week, Sen. Reid will work to merge the Senate Finance Committee bill with the other proposed legislation from the Senate Health, Education, Labor and Pensions Committee. He expects that the debate before the full Senate will begin after Columbus Day (October 12). House Speaker Pelosi expects to have merged the three proposed bills coming out of the House and to begin full House voting by mid-October.

JCT: Baucus Bill To Cost Insureds, Insurers Billions

2009-10-09T11:04:00.000-07:00

A proposed 40% excise tax on “Cadillac health plans” could cost employers about $46 billion per year by 2019, and health insurers could be paying $6.1 billion in federal “annual fees” in 2019.

Analysts at the Joint Committee on Taxation have included those projections in an analysis of the “revenue provisions” in the America’s Healthy Future Act bill draft.

Senate Finance Committee Chairman Max Baucus, D-Mont., sent the bill to the Congressional Budget Office and the JCT Friday, and CBO analysts published their “score” of the bill Wednesday. The CBO analysts said implementing the bill precisely as written would lead to a total of $829 billion in new spending from 2010 to 2019 but, thanks to a variety of cost-cutting and revenue-raising provisions, would cut the federal budget deficit by $81 billion over that period.

The JCT now has provided more detailed estimates of the effects of the AHFA bill draft on some types of products and tax breaks of interest to insurers.

The JCT is a nonpartisan congressional committee that advises Congress on tax legislation. All revenue provisions in the AHFA bill draft combined could raise about $11 billion in revenue in 2010 and about $13 billion in 2011, and that total would increase to about $104 billion in 2019, JCT analysts predict.

The provisions could raise about $381 billion from 2010 to 2019, the analysts report.
The AHFA bill draft would impose a 40% excise tax on individual health coverage with a value greater than $8,000 and family coverage with a value greater than $21,000 starting in 2013. The excise tax revenue would start at $9.5 billion in 2013 and total $201 billion from 2013 to 2019, the JCT analysts estimate.

The AHFA bill also would require health insurers to pay annual fees. The fee would start at $5.5 billion in 2010, increase to $6.1 billion per year in 2011, then hold steady at $6.1 billion per year. That provision could raise about $60 billion over the 10-year period analyzed, the JCT analysts say.

Other JCT analyst forecasts:

- Capping health flexible spending account contributions at $2,500 per year could raise $600 million in 2011, with revenue increasing to $1.9 billion in 2019, for a total of $15 billion in revenue raised from 2011 to 2019.

- Conforming “the definition of medical expenses for health flexible spending arrangements to the definition of the itemized deduction for medical expenses (excluding over-the-counter medicines prescribed by a physician)” would raise $5.4 billion from 2010 to 2019.

- Increasing the penalty for nonqualified health savings account distributions to 20% would raise $1.3 billion from 2013 to 2019.

- Capping the deductibility of health insurer compensation at $500,000 per year might raise about $100 million per year starting in 2013, and a total of $600 million from 2013 to 2019.

A proposed 40% excise tax on “Cadillac health plans” could cost employers about $46 billion per year by 2019, and health insurers could be paying $6.1 billion in federal “annual fees” in 2019.

Analysts at the Joint Committee on Taxation have included those projections in an analysis of the “revenue provisions” in the America’s Healthy Future Act bill draft.

Senate Finance Committee Chairman Max Baucus, D-Mont., sent the bill to the Congressional Budget Office and the JCT Friday, and CBO analysts published their “score” of the bill Wednesday. The CBO analysts said implementing the bill precisely as written would lead to a total of $829 billion in new spending from 2010 to 2019 but, thanks to a variety of cost-cutting and revenue-raising provisions, would cut the federal budget deficit by $81 billion over that period.

The JCT now has provided more detailed estimates of the effects of the AHFA bill draft on some types of products and tax breaks of interest to insurers.

The JCT is a nonpartisan congressional committee that advises Congress on tax legislation.

All revenue provisions in the AHFA bill draft combined could raise about $11 billion in revenue in 2010 and about $13 billion in 2011, and that total would increase to about $104 billion in 2019, JCT analysts predict.

The provisions could raise about $381 billion from 2010 to 2019, the analysts report.

The AHFA bill draft would impose a 40% excise tax on individual health coverage with a value greater than $8,000 and family coverage with a value greater than $21,000 starting in 2013. The excise tax revenue would start at $9.5 billion in 2013 and total $201 billion from 2013 to 2019, the JCT analysts estimate.

The AHFA bill also would require health insurers to pay annual fees. The fee would start at $5.5 billion in 2010, increase to $6.1 billion per year in 2011, then hold steady at $6.1 billion per year. That provision could raise about $60 billion over the 10-year period analyzed, the JCT analysts say.

Other JCT analyst forecasts:

- Capping health flexible spending account contributions at $2,500 per year could raise $600 million in 2011, with revenue increasing to $1.9 billion in 2019, for a total of $15 billion in revenue raised from 2011 to 2019.

- Conforming “the definition of medical expenses for health flexible spending arrangements to the definition of the itemized deduction for medical expenses (excluding over-the-counter medicines prescribed by a physician)” would raise $5.4 billion from 2010 to 2019.

- Increasing the penalty for nonqualified health savings account distributions to 20% would raise $1.3 billion from 2013 to 2019.

- Capping the deductibility of health insurer compensation at $500,000 per year might raise about $100 million per year starting in 2013, and a total of $600 million from 2013 to 2019.

Lowering Readmission Rates Could Lower Healthcare Costs

2009-10-09T06:22:00.000-07:00

The Indianapolis Star (10/9, Groppe) reports, "One in five Medicare patients returns to the hospital within a month of being discharged, according to the Centers for Medicare and Medicaid Services, which released hospitals' readmission rates this summer."

HHS Secretary Kathleen Sebelius said, "The President and Congress have both identified the reduction of readmissions as a target area for health reform. ... When we reduce readmissions, we improve the quality of care patients receive and cut healthcare costs."

CMS' chief of clinical standards and quality Barry Straube pointed out that "heart attack, heart failure and pneumonia patients shuttling back and forth to hospitals account for 46 percent of hospital admissions and cost Medicare roughly $17 billion a year." Current health overhaul legislation in the House and Senate hopes to lower these rates by reducing Medicare payments to hospitals with high readmission rates.

Pelosi Asks for CBO Scoring of Three Public Option Variations

2009-10-09T06:20:00.000-07:00

Roll Call (10/9, Newmyer) reports, "Speaker Nancy Pelosi (D-CA) is signaling she is flexible on the final form of a public insurance option in the healthcare overhaul and is seeking budget scores on both the preferred liberal and moderate approaches before making a final call." Speaker Pelosi said that she supports "a robust public plan tied to Medicare rates," but "many moderates prefer a plan with negotiated rates."

So, she asked the CBO "to score three variations of a public insurance option," CQ Today (10/8, Epstein) noted. The "robust" version, "which would save an estimated $110 billion over 10 years, and two variations of a public plan based on negotiated rates with healthcare providers. She said the estimate of savings for such plans is $25 billion over 10 years." Still, "those numbers are not official CBO scores yet; a formal analysis will take several days."

House Democrats Eye Windfall Profits Tax on Insurance Industry

2009-10-09T06:17:00.000-07:00

The Hill (10/9, Allen) reports that House Democrats "are floating the idea of a windfall-profits tax on the private health insurance industry as a way to finance their healthcare overhaul, and to drum up support among members of a divided caucus."

House Speaker Nancy Pelosi (D-CA) "called the windfall profits tax idea 'very preliminary,' saying she's asked House Ways and Means Chairman Charles Rangel (D-NY) to look at how much the tax could raise." The Hill adds that the "idea was brought up in a leadership meeting on Wednesday night and brought before the entire caucus on Thursday morning, according to Rep. Gerry Connolly (D-VA)."

The Washington Times (10/9, Haberkorn, Rowland) notes, "Lawmakers declined to discuss any additional details of the tax, such as how much it would raise or at what rate it would be collected." But Rep. Connolly said "the idea was popular with rank-and-file Democrats at a caucus meeting on Thursday." The Wall Street Journal (10/9, Vaughan) reports that Rep. Connolly also said the notion of a tax on expensive "Cadillac" insurance plans was a non-starter in the House.

Baucus Puts Bill In Play

2009-09-16T09:07:00.000-07:00

By ALLISON BELL
National Underwriter
September 16, 2009

Senate Finance Committee Chairman Max Baucus has released the eagerly awaited text of his version of the health reform bill.

The “chairman’s mark” – the America’s Healthy Future Act bill – would bar insurers from discriminating against people based on health status, denying coverage because of pre-existing conditions, or imposing annual caps or lifetime limits on coverage, according to Baucus, D-Mont.

Implementing the bill would cost about $856 billion over 10 years, but it would not add to the federal budget deficit, Baucus says.

In addition to promising to save money by fighting fraud and making the health care system more efficient, Baucus seeks to pay for some program costs by imposing a $2,000 annual cap on an individual's flexible spending account contributions, and, starting in 2013, levying "a non-deductible excise tax of 35% on insurance companies and plan administrators for any health insurance plan that is above the threshold of $8,000 for singles and $21,000 for family plans," according a summary provided by Baucus. "The tax would apply to the amount of the premium in excess of the threshold. The tax would apply to self-insured plans and plans sold in the group market, but not to plans sold in the individual market. The threshold would be indexed for inflation, and a transition rule would increase the threshold for the 17 highest cost states for the first 3 years."

The Finance Committee will begin voting on the bill next week, Baucus says. The committee expects to consider the bill during an open executive session Sept. 22.

“We worked to build a balanced, common-sense package that ensures quality, affordable coverage and doesn’t add a dime to the deficit,” Baucus says in a statement. “Now we can finally pass legislation that will rein in health care costs and deliver quality, affordable care to the American people.”

In addition to banning medical underwriting, the bill would create health care affordability tax credits to help low and middle income families buy private health coverage.

The bill also would create new health coverage tax credits for small businesses, and it would create Web-based coverage purchasing exchanges.

Rather than creating a government-run “public option” plan, the bill would “give consumers the choice of non-profit, consumer owned and oriented plans (CO-OP),” Baucus says.

Most individuals would have to own health coverage. Employers would not have to offer coverage, but many employers who did not offer it would have to reimburse the government for part of the cost of providing the health care affordability tax credit.

The bill would standardize Medicaid coverage for everyone earning less than 133% of the federal poverty level.

Other provisions would:

- Allow plans to vary coverage rates based on an insured's age, tobacco use and family composition.

- Encourage all of a patient’s doctors to coordinate care and reduce duplication and waste.

- Create incentives for health care providers to use electronic medical records and other health information technology.

- “Increase health care research so doctors know what care works best for which patients.”

- Cover the cost of annual “wellness visits” for Medicare participants and their doctors.

- Eliminate out-of-pocket costs for screening and prevention services for Medicare enrollees.

- Create incentives in Medicare and Medicaid for enrollees who participate in healthy lifestyle programs.

- Increase federal Medicaid funding for states that cover recommended preventive services and immunizations for enrollees at no extra cost.

- Provide free tobacco cessation services for pregnant women who are enrolled in Medicaid.

Obama Says Loss of Insurance Can Happen to Anyone

2009-09-14T05:47:00.000-07:00

The Los Angeles Times (9/13, Nicholas) reported, "Coming off a major speech that appeared to revive prospects for his healthcare plan, President Obama [Sunday] is making the case that even Americans who have health insurance need to worry about losing it." In his weekly address, Obama "cited a study by the Treasury Department to convince families who enjoy health insurance coverage that it's squarely in their interest to embrace the overhaul he has placed atop his domestic agenda."

CNN's Newsroom (9/12, Nguyen) reported, "The President is using new figures from the Treasury Department to bolster his case, warning America, more of your friends and neighbors are uninsured than you think. But he is also assuring the public in his weekly address that reform won't add to the deficit." President Obama said, "And as I have said over and over again, I will not sign a plan that adds one dime to our deficits, period. This plan will be paid for. The middle class will realize greater security, not higher taxes. And if we can successfully slow the growth of healthcare costs by just 0.1 percent each year, it will actually reduce the deficit by $4 trillion over the long term. Affordable quality care within the reach of tens of millions of Americans who don't have it today; stability and security for the hundreds of millions who do. That's the reform we seek."

The Hill (9/12, Romm) reports the President said "about half of all Americans under 65 will go without health insurance coverage for some period of time during the next 10 years."

In Congressional Speech, Obama Must Get Specific

2009-09-09T08:03:00.000-07:00

Employee Benefits News
September 6, 2009

In a speech before a joint session of Congress tonight, President Barack Obama will attempt to take back the wheel of the health reform debate, which veered off Democrats’ preferred course in August after heated town hall meetings and comments from key Republicans who suggested they were backing away from the negotiating table.

For months, critics have been calling for the president to put forth some firm details on his vision of health reform. Even Sen. Chris Dodd (D-Conn.), who led the Health, Education, Labor and Pensions Committee in Sen. Edward Kennedy’s absence, said he’d welcome more word from the White House. EBA asked our health reform panelists, now that the president is stepping up to the pulpit, is it too little, too late?

“I would never underestimate the ability of this administration to change peoples’ minds,” says Group Services’ Tom Schuetz, adding that “enough of the American public is now very skeptical, and that makes it a much tougher task.”

Cyndy Nayer, president of the Center for Health Value Innovation, says “it's never too late to do the right thing, which is to tell the country the kind of legislative bill he wants to sign.”

Convinced that shouting over thousands of pages of legislation and making multiple amendments isn’t going to solve anything, Nayer wants to hear the president state three things that he would like on his desk by a specific date. “The country needs a vision for better health,” she says. “Think of it this way: John Kennedy didn't say we were going to build the best technology to go to the moon, he said we were going to the moon. My vision, and my request to the president, is to simply say, ‘We will be the healthiest country on the planet, both clinically and economically, by 2015.’ Now that's a goal with defined deliverables.”

Obama must squarely address the issue of cost control, rather than just seek to reduce the number of uninsured Americans, says Thomas Parry, president of the Integrated Benefits Institute. “The untapped opportunity in the health care debate is to link better health, health care cost reduction and improved workforce productivity. This strategy not only will deal with a fundamental root cause of health care costs, but will also link health care reform to economic recovery.”

This can be done through reform provisions that encourage employers to play a greater role in preventative care. “IBI’s research shows employers know this approach is in their interest,” adds Parry, “and they can then use their leverage as payers with health insurers and providers to insist on more effective treatment and focused prevention initiatives.”

The fact that the president is making the speech shows that he knows he needs to lay out a stronger position on the issue and that things may not be heading in his desired direction, says Adam Bruckman, president and CEO of Digital Insurance. “It says that maybe there’s an acknowledgement that things are off track a little bit and maybe he’s losing the battle on health care reform,” Bruckman says. “But, he’s very good and very persuasive, and I think it’ll be interesting to see if he’s able to change the direction by addressing Congress.”

WellPoint CEO: Federal Inefficiencies, Not Insurers, Drive up Healthcare Costs

2009-09-02T05:57:00.000-07:00

The AP (9/2) reports WellPoint CEO Angela Braly said in speech at the Economic Club of Indiana that by focusing on the insurance industry, those backing health reform are missing "a much bigger target" to lower costs.

"Three cents of every health insurance premium dollar collected go toward insurer profits, while 87 cents go toward medical care," Braly said. And even if insurer's profits are "completely eliminated," the savings will only "pay for two days of healthcare in America."

Braly pointed out that Medicare spending "totaled $468 billion last year" and cited a study, which found that Medicare patients receive "evidence-based medicine, only about half the time. ... This inefficiency, she said, drives up costs and forms the 'crux of the problem.'"

Braly added that she objects to the public option because its low reimbursement rates "would shift costs to private insurers," and families covered by private insurance "already pay about $2,500 per year" to make up for such care "provided by Medicare and Medicaid."

AFL-CIO's Trumka Warns Democrats Against Abandoning a Public Option

2009-09-01T06:47:00.000-07:00

The AP (9/1, Hananel) reports Richard Trumka, the AFL-CIO's secretary-treasurer who is "expected to become the AFL-CIO's next president," said "lawmakers would pay a political price if they abandon a government-run option in any healthcare overhaul."

Speaking at the Center for American Progress, Trumka said, "We need to be a labor movement that stands by our friends, punishes its enemies and challenges those who, well, can't seem to decide which side they're on."

Trumka "singled out lawmakers 'who say they are all for healthcare reform, but refuse to stand up for a public system that puts people before profits. ... I think they need to understand you can have a bill that guarantees quality, affordable healthcare for every American, or you can have a bill the Republicans will vote for,' Trumka said. 'But you can't have both.'"

According to the New York Times (8/31, Greenhouse) "the federation has long backed universal health coverage and is eager for Mr. Obama and Congress to include a government-run health option that would compete with private insurers, as a way to press the industry to reduce costs and premiums."

This Week in Healthcare Reform: August 28, 2009

2009-08-28T13:00:00.000-07:00

This week, Sen. Ted Kennedy, longtime champion of universal health coverage, died at age 77. It remains to be seen how his death will affect the debate over health care reform as Democrats continue efforts without his guidance. Sen. Kennedy was involved in nearly every piece of health care legislation that moved through Congress during his eight-term Senate tenure. In a statement, House Speaker Nancy Pelosi (D-CA) said, "Ted Kennedy's dream of quality health care for all Americans will be made real this year because of his leadership and his inspiration."

Health Reform Activities

Obama Pledges Health Care Reform

This week, after much infighting over the fate of the public option, President Obama reaffirmed his commitment to health care reform legislation, suggesting that he would be willing to bypass the GOP. As Democrats consider a wide range of strategies for getting a health reform bill passed, other key senators called for the President to move more slowly as concerns over the growing deficit and the economic recession remain.

Republicans Launch Senior Health Care Bill of Rights

On Monday, the Republican National Committee introduced a "seniors' health care bill of rights," which outlines six principles for health care reform. Examples of the principles include protecting Medicare, prohibiting rationing of health care based on age, and making sure the government does not come between seniors and their physicians.

Democrats Launch National Grassroots Offensive

In an effort to show lawmakers that a majority of Americans still support an overhaul of the health care system amidst growing public concern, the Democratic National Committee's grassroots arm launched a national campaign effort Wednesday. The Democratic Organizing for America, in partnership with the organization Health Care for America Now, expects to hold more than 500 events across the country by early September, when lawmakers return to Washington.

New Divides Emerge in the Senate

Aides have indicated that as Senate Finance Committee negotiators work to trim costs of their bill, new divisions are emerging between Republican and Democratic Senators over proposals to reduce the size of insurance tax credits to families and scale-back insurance coverage mandates. The committees, also known as the Gang of Six, rejected imposing deadlines on their efforts to reach bipartisanship legislation and agreed to talk again September 4th.

$1.2 Billion Allocated for Electronic Medical Records

Last week, Obama Administration officials announced that $1.2 billion in federal grants will be available for electronic health record systems. This is the first in a wave of funds allocated by the American Recovery and Reinvestment Act of 2009 to create record-sharing networks. The grant is part of the $36 billion originally included within the stimulus legislation to encourage adoption of electronic medical records by hospitals and doctors.

Looking Ahead

Lawmakers are slated to return to Washington on September 8th.

Popular Insurance Fixes Could Serve as Basis for Incremental Bipartisan Reform

2009-08-28T05:43:00.000-07:00

The Los Angeles Times (8/28, Hook) notes the "surprising fact" many Congressional Democrats and Republicans "actually agree on a bundle of proposals," including "such popular ideas as barring insurance companies from denying coverage to people with preexisting injuries and illnesses, cutting insurance coverage off when a policyholder gets sick, and imposing a lifetime cap on benefits.

The 'reforms are quite possibly the least controversial of all the issues in health reform -- and among the most important,' said Drew Altman, president of the Henry J. Kaiser Family Foundation, a nonpartisan research group."

According to the Times, "Lawmakers from both parties are increasingly eyeing the areas of agreement as a possible fallback if Obama's more ambitious approach collapses. ... 'There is no reason we have to do it all now, but we do have to get it started,' Sen. Joe Lieberman (ID-CT), who is generally supportive of Obama, said in a recent television interview. 'I'm afraid we've got to think about putting a lot of that off until the economy's out of recession.'"

White House Considers Two-bill Option to Pass Health Reform

2009-08-26T06:13:00.001-07:00

Employee Benefits News
August 25, 2009

In their search for an endgame to the health reform debate, the Obama administration is examining new ways to at least get a comprehensive bill through the Senate. Media reports indicate that one strategy on the table is to split reform initiatives into two bills – one containing the least-contentious provisions that would pass the chamber with a standard 60-vote majority, and another full of hot-button issues, such as a government-run option, that would move through a filibuster-proof “reconciliation” process.

It’s a “risky political proposition,” says Groom Law Group’s Bill Sweetnam, and may not even be possible, as measures passed through reconciliation must relate to mandatory spending or revenue programs. Additionally, such an action would put moderate Democrats between a rock and a hard place.

“Since the well has been poisoned by splitting the bill, no Republicans will vote for either bill, so all Democrats will have to vote for the second bill or at least vote for cloture to allow there to be a vote on the second bill,” says Sweetnam. “These moderate Democrats will have a recorded vote for health care reform, and their Republican opponents will use that against them -- regardless of whether they voted for the bill with the hot-button issues.”

Cyndy Nayer, president of the Center for Health Value Innovation, offers another perspective. “This may be the most efficient way to get some sort of health care change moving,” she says. “Sometimes, even if the job is big, you have to start with small shovels.”

However, appearing on CBS’s “Face the Nation” over the weekend, Sen. Kent Conrad (D-N.D.) expressed doubt that splitting the legislation would be feasible. “I think it's very unlikely for that to work,” he said. “When you look at the legislative agenda, it's very difficult to see how you put two packages through and coordinate them well.”

Although he now thinks that “anything is possible” with the 111th Congress, it’s the larger issue of abandoning a bipartisan approach that has Tom Schuetz, co-president of Iowa’s Group Services concerned.

“Don’t you think the American public is asking for bipartisan support and a more detailed explanation of exactly what issues the health reform legislation is supposed to address? I think that’s the crux of all of the unrest,” he says. “A perception that Congress is not willing to share details and rushing to a conclusion for political reasons has always created problems.”

Key Lawmakers Urge Obama To Scale Down Healthcare Reform Plans

2009-08-24T05:54:00.000-07:00

Media reports on the healthcare debate continue to paint a grim picture of the President's reform push. The White House is being cast as beset by conflicting agendas in the House and Senate, and comments Sunday by Sen. Joe Lieberman (D-CT) are being interpreted as a signal that Senate moderates may in the end not be on the President's side.

A senator "counted on by Democrats in the healthcare debate showed signs of wavering," says the AP (8/24, Daniel). ABC World News (8/23, Harris), the only network newscast that aired Sunday, reported that the goal of "universal health coverage...seems as allusive as ever."

ABC's Cochran added that on the issue of bipartisanship "the President appears to have intentionally sent conflicting signals. Fearful of losing liberals in the House, the White House says he wants an option for government-run insurance. Fearful of losing moderates in the Senate, the President signals he is willing to consider other options."

USA Today (8/24, Fritze) says that "lawmakers said Sunday...Obama must scale back ambitious plans to overhaul healthcare because ballooning budget deficits are undermining support for more comprehensive and costly legislation." USA Today adds "even Democrats in Congress said that whatever healthcare bill emerges this fall will have to cost less than the $1 trillion price tag contemplated earlier this year." Sen. Kent Conrad (D-ND) said on CBS, "It's going to have to be significantly less than what we've heard talked about. ... We've got to have the deficit reduced as a result of this effort. That is absolutely imperative."

Asked on CNN's State of the Union (8/23, King), "Is it time for the President to hit the reset button" and back a more modest reform package, Sen. Lieberman answered, "In a word, yes. I give the President tremendous credit for taking on the healthcare problem," but "he took it on at a very difficult time that was not of his making. In other words, we're in a recession." Later, Lieberman added, "I think it's a real mistake to try to jam through the total healthcare reform plan that the public is either opposed to or of very, very passionate mixed minds about. It's just not good for the system, frankly, it won't be good for the Obama presidency."

The New York Times (8/24, Berger, Henry) reports that "Lieberman's comments could further complicate Democratic efforts to get a healthcare overhaul passed in Congress. They had been depending on the independent senator to support their efforts, even though he often aligns with Republicans."

This Week in Health Reform: August 21

2009-08-21T12:58:00.000-07:00

The survival of the public plan as the cornerstone of health care reform became the central focus this week as Democrats debated the importance of its inclusion in the final bill. Media reports this morning indicate that suggestions of dividing the bill into manageable parts instead of passing a large health reform package have begun rumbling.

Health Care Reform Activities

Public Option, or Not?: White House Press Secretary Robert Gibbs went on defense this week, insisting that the Administration had not taken the public option off the table following remarks on Sunday from Health and Human Services Secretary Kathleen Sebelius that a public option was "not essential" to reform. White House officials have since been working to calm a swell of criticism from liberals. A group of House liberals sent a sharply worded letter to Sebelius on Monday in which they called backing off a public option a "grave error."

Cooperatives Pushed as Public Plan Alternative: In response to what seemed to be a concession from White House officials on the public option, key senators are taking another look at Sen. Conrad's (D-ND) proposal for member-owned, nonprofit cooperatives. However, GOP leaders have expressed concern over the option. Sen. Kyl (R-AZ) dismissed cooperatives, calling the proposal a "Trojan horse."

Democrats Focus on Insurance Reforms: President Obama stepped up his attacks on the insurance industry in his recent town hall meetings and on his weekly radio address. He promised reforms that would prevent firms from capping coverage or charging "outrageous" fees. President Obama also indicated that people currently with health insurance coverage would be amongst the biggest beneficiaries of his health care reform.

Opinion Polls

Poll Shows Slim Majority Still Favors Health Care Reform: The margin between those who support health care reform and those against it has narrowed in recent months given rising concerns about the reform measures. An August poll shows that 53 percent of the public believes that tackling health reform is more important than ever, compared to 42 percent who say we cannot afford to take on health care reform right now.

Looking Ahead

White House officials and key lawmakers continue to negotiate over August recess in an attempt to prepare a final bill for passage this fall.

Lawmakers are slated to return to Washington September 8th.

Study Indicates Illegal Immigration Will Make Lowering Health Costs Harder

2009-08-20T06:14:00.000-07:00

CongressDaily (8/19, Hunt) reported, "Illegal immigration will make lowering healthcare costs harder," according to a study conducted by the Center for Immigration Studies.

The analysis was based on "data from the 2008 Current Population Survey, which is conducted by the Census Bureau." The study said "immigrants -- legal and illegal -- are almost three times as likely to be uninsured than native-born Americans."

Steven Camarota, the director of research for the Center for Immigration Studies, noted "the majority of immigrants have not finished high school...which means most have low-income jobs that do not provide health insurance, and the low wages mean workers are unable to afford it. Camarota estimated the cost of insuring all immigrants could cost the government $1.5 trillion over the next 10 years."

Meanwhile, "Latino advocacy groups dismissed the study," stating it is "just the latest example in a campaign to erode efforts to ensure that quality, affordable healthcare is available to American families and workers."

Senate Democrats May Split Healthcare Bill to Ensure Passage

2009-08-20T06:12:00.000-07:00

The Wall Street Journal (8/20, Weisman, Bendavid) reports in a front page story that the White House and Senate Democratic leaders have revised their strategy for passing healthcare reform legislation.

Under the new plan, Senate Democrats would split the measure into two parts; the first part, for which some Republican support is expected, would cover new insurance industry regulations. Democrats would pass the second part, which could include provision for a public option or other expensive proposals, under the budget reconciliation procedure, which would only require 51 votes.

COBRA Enrollment Doubled Since Program Expansion

2009-08-19T06:17:00.000-07:00

Bloomberg News (8/19, Collins) reports COBRA enrollments "have doubled" since the start of the expanded program in February, according to a survey by Hewitt. The analysis of "200 US companies, each with more than 15,000 employees," found that "industrial manufacturing companies, such as those that produce construction equipment, showed the largest increase.

COBRA enrollments rose to 59 percent from March 2009 to June 2009, up from 7 percent in the period before the subsidy." Some insurers "said they have seen an increase in costs in COBRA-related claims this year, 'mainly because of the recession and resulting job losses,'" according to Aetna spokesperson Fred Laberge, who added, "We believe COBRA members tend to use more services while they still have coverage."

Notably, Congress is presently "considering health reform, which could change how unemployed workers obtain health insurance."

Obama Defends Reform Plan

2009-08-17T06:44:00.000-07:00

In a New York Times (8/16) op-ed, President Barack Obama outlined "four main ways the reform we're proposing will provide more stability and security to every American.

First, if you don't have health insurance, you will have a choice of high-quality, affordable coverage for yourself and your family -- coverage that will stay with you whether you move, change your job, or lose your job."

Secondly, Obama argues that "reform will finally bring skyrocketing healthcare costs under control, which will mean real savings for families, businesses and our government.

Third, by making Medicare more efficient, we'll be able to ensure that more tax dollars go directly to caring for seniors instead of enriching insurance companies."

Reform will also "provide every American with some basic consumer protections that will finally hold insurance companies accountable" by disallowing them from denying coverage based on a "pre-existing illness or condition. Insurance companies will also be required "to cover routine checkups, preventive care, and screening tests."

Obama warns "the cynics and the naysayers will continue to exploit fear and concerns for political gain. But for all the scare tactics out there, what's truly scary -- truly risky -- is the prospect of doing nothing."

White House Involved in Healthcare Negotiations

2009-08-13T06:24:00.000-07:00

Behind the scenes, the White House is actively involved in healthcare negotiations.

The New York Times (8/13,Kirkpatrick) reports on its front page that, while President Obama "has consistently presented himself as aloof from the legislative fray" in the healthcare reform debate, "merely offering broad principles," the President and his advisers "have been quite active" behind the scenes, "sometimes negotiating deals with a degree of cold-eyed political realism potentially at odds with the president's rhetoric."

The White House has negotiated deals through the Senate Finance Committee, leading some to conclude the Administration "was tacitly signaling as early as last spring that it might end up accepting something more modest than the government insurer the president has said he prefers."

White House Chief of Staff Rahm Emanuel "disputed that the administration had elevated the work of the Senate finance panel above the four other committees that have all approved strong government insurers," but "acknowledged the political realities that have made the Finance Committee's still-unfinished cooperative plan a center of attention." Emanuel said, "We have heard from both chambers that the House sees a public plan as essential for the final product, and the Senate believes it cannot pass it as constructed and a co-op is what they can do. We are cognizant of that fact."

In a Washington Post (8/13) op-ed, Paul Begala writes, "I think my fellow progressives ought to give Max Baucus and other members of the Senate Finance Committee a little breathing room as they labor to produce a healthcare bill that can garner enough votes to pass the Senate. Progressive politics is, in my view, a movement, not a monument. We cannot achieve perfection in this life, and if that is our goal we will always be frustrated."

Concerns Over Loss of Private Insurance Said to be Unfounded

2009-08-12T10:02:00.000-07:00

ABC World News (8/11, Gibson) reported, "Opponents of healthcare reform insist the proposed changes would put private insurance companies out of business. That's false."

Drew Altman, The Kaiser Family Foundation, said, "So, if anything, this expands private health insurance options for people." ABC continued, "But at contentious town-hall meetings across the country, the issue keeps coming up. ... This is really a crucial question, because polls show that most Americans are perfectly happy with their own doctor, and they're wary that any reform might force them to make a change. The President has been unequivocal."

President Obama said, "If you've got health insurance, you keep your plan. You keep your doctor. I don't want to take it over." However, according to ABC, the CBO "estimated nine million people who currently have insurance through their jobs would end up changing their insurance plans, but not necessarily changing doctors."

This Week in Health Reform: August 6

2009-08-10T06:24:00.000-07:00

The debate over health care intensified this week as House members returned to their districts and the Senate prepared to adjourn for the remainder of August. Many House members held town hall meetings with constituents this week which have added additional fuel to the health care debate.

Public Plan

House Committee on Energy and Commerce Completes Markup: After weeks of negotiation, the House Energy and Commerce Committee was the last of three House committees to complete work on sweeping health care reform legislation. The committee reported out the bill on a vote of 31-28. All Republicans and five Democrats voted against the bill. This move clears the way for the legislation to go to the House floor.

Alternative Plans

Senate Finance Committee Delays Until September: Senate Finance Committee members confirmed that they would not complete a draft bill before the August recess and that negotiations would continue into September. After a meeting with President Obama Tuesday, Senate Finance Committee Chairman Sen. Baucus (D-MT) has agreed to a mid-September deadline for a bipartisan bill. President Obama pressured Senate Democrats to move forward with health care reform if a bipartisan bill cannot be reached; he vowed Wednesday to get a reform bill through Congress this year even without Republican support. President Obama will meet with six negotiators from the Committee Thursday at the White House to discuss the bipartisan effort.

Financing the Plan

Obama Renews Pledge to Not Raise Middle Class Taxes but Remains Open to Taxing Health Insurance: White House officials scrambled to retract statements made by top economic advisors last Sunday, indicating that a tax increase on the middle class is an option to pay for health care reform. However, President Obama remains open to a proposal to tax health insurance.

Additional Activities

Democrats Criticize Insurance Industry: Democrats increased criticism aimed at the insurance industry. House Speaker Nancy Pelosi attacked insurers stating that its profits were "immoral." America's Health Insurance Plans president, Karen Ignagni, quickly fired back that those in the health insurance industry "do not deserve to be demonized or vilified as part of a campaign to distract attention away from the sinking support for a government-run program."

Debate Moves Outside the Capitol

The health care debate has moved outside the Beltway. With tactics ranging from town hall meetings and other grassroots efforts to advertising. Groups on both sides of the issue are mobilizing their constituencies to participate in local events and make direct contact with members of Congress in a battle over public opinion.

Administration officials and Democratic members of Congress are in the process of conducting town hall meetings across the country. In recent days however, the meetings in Pennsylvania, Wisconsin and Texas have spurred protests over details of the reform proposals. Democrats are accusing Republicans of organizing these "angry mobs," while Republicans indicate that the protests are signs of opposition.

More than $52 million has been spent this year nationwide on health care reform-related advertising, according to the Campaign Media Analysis Group. But as legislators return home for the August recess, and the target audience for these ads shifts from inside to outside the Beltway, the ads previously running on national cable news will now run on more local markets across the country.

Public Polls Show Rising Concern

As details of a potential health care overhaul take shape, public opinion polls show increasing apprehension. A New York Times/CBS poll showed 69 percent of Americans are concerned their care would suffer if they were on a government-run plan. Wall Street Journal/NBC News poll showed 42 percent of those surveyed in July thought Obama's health care plan was a bad idea. This figure rose from 32 percent in June.

Looking Ahead

Senators will adjourn for August recess Friday taking the health care debate back to their home states. The health care messaging battle will continue to heat up as Democrats work to gain support from the American public and Republicans continue to voice concerns.

Co-ops = Public Option = Single Payer

2009-08-04T16:07:00.000-07:00

Knowing Americans would reject the idea of a " single payer" government health care system, Democrats began calling their plan a "public option." Now that Americans have rejected that idea too, Democrats are peddling another proposal called health care "cooperatives."

Unfortunately, these federally-backed co-ops are nothing more than a public option by another name. Washington will set up and subsidize them so private health plans are squeezed out of the marketplace. Then, like Fannie Mae and Freddie Mac, the costs will catch up with these government-sponsored entities and Congress will tell us they are "too big to fail" and must be nationalized.

Some Democrats are willing to admit that co-ops are the same as a public option. Senate Majority Leader Harry Reid (D-NV) said earlier this month, "We're going to have some type of public option, call it 'co-op,' call it what you want."

Some Democrats are also willing to admit the public option is the same as a single payer system. Congressman Barney Frank (D-MA) said this week, " I think if we get a good public option it could lead to single payer, and that's the best way to reach single payer."

It's becoming clear - no matter what name Democrats put on it, all of their ideas lead to a government takeover of our health care system.

Top Economist: Despite Obama's Promise, Higher Taxes Needed for Health-Care Reform

2009-08-04T08:08:00.000-07:00

Aug 4, 2009
by Peter Gorenstein
Healthcare Information, Newsmakers

After Tim Geithner and Larry Summers opened the door to higher taxes to fight rising deficits and fund health-care reform on Sunday, White House press secretary Robert Gibbs scrambled to clear up the situation on Monday: "I don't think any economist would believe, in the environment we're in, that raising taxes on middle-class families would make any sense."

In other words, the White House is trying to stick to Obama's campaign pledge that 95% of Americans "will not see their taxes increased by a single dime."

Maybe that's good politics, but Nobel Prize-winning economist Joseph Stiglitz says it's bad policy: raising taxes once the recovery is well underway may help solve our long-term problems, he tells Tech Ticker.

"If we get a more balanced view of our balance sheet we’ll realize that if we spend our money well then these great extra expenditures are going to actually make our economy more productive in the future," he says. Spending on technology, education and infrastructure "will generate revenues that will allow us in the future to pay back any borrowing or lower taxes."

Besides, when it comes to health-care reform the Columbia economics professor claims we’re already paying a virtual tax. "Right now we’re often paying for it in hidden charges so it’s like a tax but it’s a hidden tax,” he says in reference to the costs associated with paying for 50 million uninsured Americans.

Bottom line: Stiglitz says like so many of our issues, the health-care problem is not going away: "If we don’t do [reform] today, the problems will fester, they’re going to get worse and worse and in 15 or 20 years we still have a very big problem and will be even more difficult to make the adjustments."

This Week in Health Reform: July 30

2009-07-31T12:36:00.000-07:00

After weeks of logjam on Capitol Hill, lawmakers in both the House and the Senate have reported progress in their respective negotiations this week, clearing way for a possible vote on sweeping health care reform legislation after the August recess.

Public Plan:

House Democrats Reach Compromise: After weeks of infighting, House Democrats on the Energy and Commerce Committee came to an agreement on Wednesday that would shave $100 billion off the House bill's original price tag of at least $1 trillion. The Energy and Commerce Committee resumed marking up the legislation Thursday, but the full House will not vote until after the August recess.

Congressional Budget Office (CBO) on House Plan: The CBO helped the House Democrats' case for a public option when it reported that under the proposed legislation most people would still choose employer-based coverage rather than a government-run option. The CBO stated that, given the individual mandate, more employees would sign up for coverage through their employers. However, the latest analysis also stated that the proposal would still increase budget deficits.

Senate May Choose Co-Op Over Public Option: Senate Finance Committee negotiators indicated that they were close to reaching a bipartisan deal that would include a co-op modeled public plan. The proposal being discussed would include a tax on insurers and would use non-profit cooperatives to compete with private insurers. The proposal would also not include an employer mandate.

Alternative Plans:

House Republicans Unveil $700B Plan: On Wednesday, House Republicans unveiled a $700 billion health care plan that would offer tax deductions and credits to assist individuals in purchasing insurance, as well as take on medical malpractice. According to House Republicans, the proposed plan would be fully paid for, but CBO has yet to officially assess the cost of the legislation.

Financing the Plan:

New CBO Score on Senate Bill: The Senate Finance Committee got a boost when the CBO estimated the latest version of the Committee's health reform bill would cost less than $900 billion. The bill would cover 95 percent of Americans by 2015 and would be fully paid for in the first 10 years, according to Finance Chairman Max Baucus (D-MT).

Tax on "Cadillac Plans" Gains Momentum: The Senate Finance Committee's option to tax insurers on high value "Cadillac plans" has attracted support in the Senate, and it seems senior House Democrats are warming to the financing proposal. A spokesperson for America's Health Insurance Plans voiced opposition to the plan and many assert that a tax on insurers will ultimately be passed down to consumers.

CBO Rates Independent Panel: CBO reported this week that the proposed AARP has had to walk a careful line in endorsing the House bill and earlier this week expressed disappointment in the lack of progress in the Senate, saying that Senators
have "failed to act." Polls show that senior citizens are more skeptical about health-care reform than any other age group.

Looking Ahead:

House lawmakers plan to conclude work on Friday and break for a month-long recess returning to their districts to further discuss health reform efforts. The Senate will recess on the 7th of August.

Healthcare Reform and Illegal Immigrants

2009-07-31T06:38:00.000-07:00

FoxNews
July 31, 2009

Health care reform could end up bailing out employers who hire illegal immigrants and skimp on their health benefits. Under the legislation being considered on Capitol Hill, undocumented workers would technically not be covered. House Speaker Nancy Pelosi said as much in an interview Sunday.

"No, illegal immigrants are not covered by this plan," she said.

But the reality, immigration analysts say, is that the legislation is missing any mechanism to keep illegals out of the system. And if they exploit that loophole, taxpayers could be on the hook for billions to cover health care costs their employers do not.

Already, illegal immigrants account for $10.7 billion in state and federal health care spending, according to preliminary numbers from The Federation for American Immigration Reform.

Special projects director Jack Martin said that amount, which derives in large part from emergency room visits and births, would only rise unless the health care proposals on the Hill are changed.

"The bill in its current form is going to be tempting to illegal immigrants who are not yet receiving medical benefits," Martin said. "We would expect that the cost would increase."

Scare Tactics?

2009-07-31T06:28:00.000-07:00

Gracie Marie Turner
The Galen Institute
July 30, 2009

A plethora of polls hit the news this morning, showing that the American people are increasingly worried about President Obama's health reform plan, fearing that their health costs will rise and the quality of their care will get worse if the plan goes into effect.

The president spent much of his time during his speeches yesterday answering what he described as cynical scare tactics by critics. "These folks need to stop scaring everybody," he said.

With all due respect, Mr. President, I think you are the one doing the scaring. It began during the ABC News broadcast at the White House last month:

In response to a question from a woman whose 105-year-old mother received a pacemaker at age 100, Mr. Obama said families need better information so they don't unthinkingly approve "additional tests or additional drugs that the evidence shows is not necessarily going to improve care."

Then he added: "Maybe you're better off not having the surgery, but taking the painkiller."

Yikes!

Then during his prime-time news conference last week, Mr. Obama angered doctors when he said: ". . . you come in and you've got a bad sore throat, or your child has a bad sore throat or has repeated sore throats, the doctor may look at the reimbursement system and say to himself, you know what, I make a lot more money if I take this kid's tonsils out."

Not good.

The president further fueled fears when he talked last week about "a blue pill and a red pill" and suggested that the blue pill is the better choice if it is "half the price of the red pill."

And many of those turning out at tea parties and holding up protest signs around the country are seniors, worried about the hundreds of billions of dollars in Medicare "savings" going to fund the health reform plan.

Time Magazine has a new cover story showing Mr. Obama in a doctor's smock. One thing people don't want is politicians making decisions about what health care they get, but that is the message he is sending.

The American people know best what's right for them, and they don't want government dictating their choices. The centralized reform plans making their way through Congress would do just that rather than realigning incentives so people can make more decisions for themselves. The remarkable thing is how quickly the American people are catching on.

It's not that we won't have rationing of health care. Someone has to make choices. The American people are just very frightened about turning this power over to big government.

Senate Panel Bipartisan Compromise May Drop Public Option

2009-07-29T05:50:00.000-07:00

A bipartisan group of Senate negotiators led by Finance Chairman Max Baucus (D-MT) is signaling that a final Senate healthcare reform package may not include a government-run public option.

The news is generally portrayed as a setback for President Obama, who has pushed for a public option. The ongoing negotiations are also portrayed as creating difficulties for the White House, which is seen as caught between conservative Democrats and more liberal lawmakers.

ABC World News (7/28, Karl) reported that "Senate Democrats are now on the verge of a deal that would do away with a central feature of the President's plan, and that's the creation of a government-run insurance program to compete with private insurance companies. They're doing this to break that gridlock and to get a few Republicans to support the deal. But there's a real risk that they're going to lose liberal Democrats in the process."

The AP (7/29, Babington) says "bipartisan Senate negotiators are weakening some of his top priorities, leaving the president with a difficult choice: He can give ground, and implore disappointed liberals to go along with him. Or he can try to ram through a Democratic bill with his wishes intact, infuriating Republicans." Obama's "eventual decision could be a pivotal moment in his presidency."

White House adviser David Axelrod said it's too early for Obama to fully endorse the Senate Finance Committee's bipartisan approach or the liberals' call to stand firm." Axelrod said, "This is the legislative process. ... The important thing is to keep the process moving forward. ... Everyone is going to have to give a little to get there."

The Hill (7/29, Bolton, Young), meanwhile, reports that White House press secretary Robert Gibbs "said the administration would 'certainly take a look at' the co-op idea, but said it was 'a little premature' to talk about reconciling the two conflicting bills." Gibbs added that "Obama is 'comfortable with the path this is going on.'"

McClatchy (7/29, Lightman, Douglas) similarly reports that the idea of a public option, "beloved by...Obama and liberal Democrats," is "losing important political momentum. Democratic leaders of the Senate and the House of Representatives wouldn't guarantee Tuesday that the 'public option' would be in the final version of the legislation. Neither chamber's leaders would rule out backing alternative co-ops -- member-run healthcare consortiums comparable to credit unions -- instead, an alternative that's popular with moderates but not with liberals."

The Los Angeles Times (7/29, Levey, Hook) notes that Senate Democrats "are moving toward a showdown" over the public option. Many Democrats "have indicated they would settle for nothing less" than a public option, but the Finance negotiators are "leaning toward cooperatives, saying that alternative could offer customers more choice without enlarging the government's role in the healthcare market."

This Week in Health Reform: July 24

2009-07-24T14:34:00.000-07:00

The Health Action Netowrk
July 24, 2009

Under pressure from both Democrats and Republicans, President Obama seems to be softening his stance on the August recess deadline by stating, "Let's fight our way through the politics of the moment. Let's pass reform by the end of this year." In a news conference Wednesday President Obama worked to reassure an increasingly wary public that health reform will not jeopardize the care most citizens currently receive and urged support for reform efforts.

Public Plan:

2 of 3 House Committees Pass Bill: Last week, two of the three House committees completed markup: The House Education and Labor Committee voted 26-22 and the House Ways and Means Committee voted 23-18 to send the measure to the floor. However, the markup has stalled in the Energy and Commerce Committee where conservative Blue Dogs Dog democrats are insisting on more cost savings in the legislation. President Obama met with the Blue Dogs on Tuesday to negotiate for their support on the House bill.

Alternative Plans:

Senate Finance Committee Negotiations Continue: The Senate Finance Committee continues to work on developing bipartisan legislation that can withstand scrutiny, through closed door meetings aimed at resolving potential controversies. Sen. Charles E. Grassley (R-IA) commented, "The Finance Committee is the only place left where a bipartisan bill that also gets on top of the spiraling health care costs can be achieved..." Sen. Orrin Hatch (R-UT), however, withdrew from the bipartisan Senate group, citing concerns about high costs of the bill and the push towards a single-payer system.

Financing the Plan:

Kerry Proposes Tax on Insurers:
White House officials indicated their openness to proposals like that of Sen. John Kerry's (D-MA) proposal to tax insurers. The Senator proposed an excise tax on employers and plan that provide very generous health policies, also known as "cadillac plans." Sen. Kerry believes the tax would pressure insurance companies to reduce the cost of health plans, lower premiums, and reduce the overall cost of health care.

White House Proposes Independent Panel:
The White House officials gained support from Blue Dogs for their plan to create an independent body to oversee Medicare reimbursement rates. The Blue Dogs indicated that they had won agreement from House Energy and Commerce Committee Chairman Rep. Waxman (D-CA) on this measure.

Pelosi Indicates Flexibility on Tax:
The House Democrats' proposal to create a new tax on the wealthiest of Americans continues to draw criticism among Republicans and some Democrats. In responding to the concern, House Speaker Nancy Pelosi indicated that she was open to reducing the proposed tax increase on wealthy Americans by finding additional savings in the current system. Reporters indicate that her admission that the surtax could create excess revenue may complicate Democratic negotiations. Pelosi left the door open to using tax money to pay down the deficit.

White House Supports Millionaire's Tax:
In a news conference Wednesday, President Obama gave his support to the House Committees' plan to impose a surtax on families making over $1 million a year. The President, however, reiterated that he will not support any bill that funds reform through a tax on middle-class families.

CBO Injects Financing Concerns:
Last week the Congressional Budget Office (CBO) reported that the House bill would increase the federal deficit by $239 billion over the next 10 years. CBO Director Douglas Elmendorf stated that both the bills crafted by House leaders and the Senate health committee will not rein in skyrocketing costs, but rather add to them.

Additional Activities:

Inconsistencies: Wednesday's prime time news conference revealed some inconsistencies between President Obama's claims and how legislation is taking shape:

• Government will not be involved in health care decisions: Obama laid out principles of reform that show government making key decisions in health care.

• People will not lose their health care plans: Debate exists as to whether private insurers would be able to stay in business if a public option was introduced. Such a new market force may influence consumer choice.

• Health care reform will be budget neutral: While Obama indicates he will not support legislation that adds costs; budget experts warn that current proposed legislation uses accounting gimmicks to mask the true costs.
Senate Asks for More Time:
In a letter sent on Friday of last week, six bipartisan Senators requested more time for the Senate to pass legislation citing comments from CBO Director Doug Elmendorf that the House and Senate health committee bills would not significantly reduce costs.

House Democrats Show Concern:
Rep. Jared Polis (D-CO) and 20 other freshman Democrats sent a letter to House Speaker Nancy Pelosi (D-CA) voicing extreme concern over the proposed House way of paying for health reform, citing negative impact on small business.

Opposition Rises from State Medical Societies:
In stark contrast to the American Medical Associations (AMA) support of the House bill announced last week, six state medical societies, including doctors in Alabama, Delaware, Georgia, Kansas, New Jersey and South Carolina, and two former AMA presidents sent a letter to Rep. Waxman opposing a government-run health plan and insurance mandates for individuals and employers.

Looking Ahead:

It is unclear when the House Energy and Commerce Committee will resume its markup, which has been delayed due to negotiations with the Blue Dog Coalition. The Committee canceled its health care markup session again Thursday, dimming hopes of completing its work before the August recess.

Senate Finance Chairman Max Baucus (D-MT) would not commit to a completed proposal this week. Senate Democrat leaders announced Thursday that a vote on health reform legislation before August recess will not be possible. Senate Majority Leader Harry Reid (D-NV) said, "It's better to have a product based on quality and thoughtfulness rather than try to jam something through."

Senate, Obama Back Off Healthcare Reform August Deadline

2009-07-24T05:54:00.000-07:00

The Wall Street Journal (7/24, Adamy, Weisman) reports "the Senate's top Democrat on Thursday conceded that the chamber won't pass a health overhaul by August, giving the White House another setback as it presses its ambitious health agenda."

Senate Majority Leader Harry Reid (D-NV) "said senators will press ahead with a bipartisan bill until they go on break in two weeks, and pick up when they return from the month long recess in September."

The CBS Evening News (7/23, Reid) said that Obama "finally conceded that Congress won't meet his demand of passing healthcare reform bills before the August recess." Obama was shown saying, "That's OK. I just want people to keep on working." The President "appeared to take it in stride, a dramatic change from just days ago when he was still insisting on his deadline."

The Los Angeles Times (7/24, Parsons) similarly reports that President Obama said that "he can live with a new timeline as long as it doesn't mean that work on Capitol Hill skids to a halt." Obama "said he still wanted to reform healthcare by the end of the year -- a reasonable goal, he said, even though Senate leaders now say they won't vote before their August recess."

Still, Bloomberg News (7/24, Rowley) reports that after about a 90-minute meeting with Senate Democrats, HHS Secretary Kathleen Sebelius told reporters, "This isn't about playing 'Beat the Clock.' ... There's an urgency to health reform that deals with each and every American's life."

Stories on the President's remarks on healthcare, during a visit to Shaker, OH, tend to cast his criticism of Republicans for stalling his reform plans (an issue he also raised during his Wednesday night press conference) as inaccurate. Instead, media analysts generally agree that it is Obama's fellow Democrats who are slowing Obama's healthcare reform timetable.

The AP (7/23, Babington), for example, reports that Obama "took a few swipes at Republican critics. But his biggest obstacles are fellow Democrats who control the House and Senate and are moving slowly on his call for widespread changes to US healthcare."

Centrist Dem Leader: Has Committee Votes To Block Health Bill

2009-07-16T10:45:00.000-07:00

By Martin Vaughan
DOW JONES NEWSWIRES

WASHINGTON - U.S. Rep. Mike Ross, D-Ark., a leader of fiscally conservative House Democrats, said Wednesday a House plan to overhaul the U.S. health-care system is losing support and will be stuck in committee without changes.

"Last time I checked, it takes seven Democrats to stop a bill in the Energy and Commerce Committee," Ross told reporters after a House vote. "We had seven against it last Friday; we have 10 today."

Three House committees are slated to begin considering the $1 trillion-plus bill this week, but the Energy and Commerce looms as the biggest challenge. That's because it counts among its 36 Democratic members seven members of the Blue Dog Coalition, a fiscally conservative bloc that is opposing the House Democrats' effort.

Ross said the bill, introduced Wednesday by House Democratic leaders, doesn't include provisions adequate to curb rising health care costs, including what the government spends on healthcare.

"The current bill would have to be substantially amended before we could consider supporting it," Ross said.

The Energy and Commerce panel is scheduled to meet Thursday afternoon to kick off its review of the legislation, but its session is expected to stretch into late next week.

Ross said Blue Dogs have been meeting every day to craft amendments that will be offered during that meeting, but offered no details on what those amendments are. He said those amendments could number in the dozens.

Ross said he expects Blue Dogs will meet with the panel's chairman, Rep. Henry Waxman, D-Calif., soon to discuss their specific proposed changes.

House Democrats Reveal Health Overhaul Plan

2009-07-15T05:50:00.000-07:00

ABC World News (7/14, Gibson) reported Tuesday, "House Democrats unveiled their sweeping plan for healthcare reform. The 1,000-page proposal was quickly endorsed by President Obama, who wants Congress to pass legislation before the August recess. The House bill would significantly raise taxes on high income Americans."

The CBS Evening News (7/14, Couric) reported, "Healthcare in this country is expected to cost more than $2.5 trillion this year alone, or nearly 18 percent of the national economy. House Democrats rolled out a plan today as the President made a push to get something passed."

CBS' Reid added, "Major provisions include federal subsidies for low-income Americans to help them buy health insurance. Penalties for large companies that refuse to provide insurance. Penalties for individuals who refuse to buy it. And a government health insurance plan to compete with private ones."

Americans Increasingly Embrace Self-Service

2009-07-14T06:38:00.000-07:00

Bill Kenealy
July 1, 2009

Consumer-directed, or health savings account (HSA)-style plans are becoming increasingly popular, a new survey finds. The study, conducted by Washington-based health insurance association America's Health Insurance Plans (AHIP), says the number of Americans covered under the high-deductible plans increased 31% since last year.

The census found since January of last year, approximately 1.9 million Americans opted for a HSA, bringing the total to some 8 million Americans. Interestingly, while "self-directed" plans are thought to appeal primarily to younger, technologically savvy participants, the study found that greatest percentage of enrollees were between the ages of 50 and 59.

As for geographic distribution, California (854,000), Florida (524,000), Illinois (497,000) and Texas (476,000) were the states with most members enrolled.

The study also found that 30% of those covered by a HSA plan were in the small-group market, 47% were in the large-group market, and the remaining 23% were in the individual market.

AHIP has conducted a periodic census of health insurers since HSAs were first authorized in January 2004.

(c) 2009 Insurance Networking News and SourceMedia, Inc. All Rights Reserved.

Lawmakers Say Chances of Meeting August Deadline for Healthcare Bill Slim

2009-07-13T04:40:00.000-07:00

The AP (7/13, Elliott) reports, "Legislation to overhaul the nation's health systems is unlikely to make it through the House and Senate before the August target set by President Barack Obama and other Democratic leaders, lawmakers said Sunday." Members of both parties said "the Administration's sweeping healthcare proposals are moving forward on Capitol Hill but cautioned against rushing into a spending plan that could costs trillions of dollars over the next decade."

Meantime, HHS Secretary Kathleen Sebelius "said she remains optimistic Congress would send the White House legislation before the year ends." Congressional Democrats "hinted they would not deliver legislation before leaving town for an August recess." The delay "would be a blow to the White House and to Democrats' electoral prospects."

Republicans, meanwhile, "seizing on an issue that affects all Americans and has shown a glimmer for hope for an out-of-power political party, have lambasted the proposals as rash and irresponsible. They also see the issue as a way to win House and Senate seats in the 2010 midterm elections."

House Democrats Seek New Tax On Wealthy To Pay For Health Care

2009-07-10T15:47:00.000-07:00

July 10, 2009
Deirdre Walsh CNN Congressional Producer

WASHINGTON (CNN) — Democrats on the House Ways and Means Committee on Friday proposed a graduated tax on wealthy Americans to pay for health care reform, several Democratic sources told CNN.

The new tax would apply to individuals who make more than $280,000 a year and married couples who make more than $350,000, the sources said.

Individuals making up to $400,000 and couples making up to $500,000 would be assessed a 1 percent tax on their adjusted gross income, they said. A higher rate would apply to individuals making up to $800,000 and for couples making up to $1 million per year, and an even higher rate would apply to individuals and couples with higher incomes.

The rates for the tax on the two higher brackets are still being finalized, according to the sources.

2009-07-10T05:58:00.000-07:00

The AP (7/10, Espo, Werner) reports that the health reform "system suffered yet another setback" in the House Thursday, when the "pivotal" Blue Dog Coalition of "moderate to conservative Democrats" complained to House leaders that "the emerging bill 'lacks a number of elements essential to preserving what works and fixing what is broken.'"

The Washington Times (7/10, Haberkorn) reports that the "core of President Obama's congressional agenda stalled" with the Blue Dogs' statement that they "won't support a bill that's not fully paid for" and their expressing of "doubts over increasing taxes."

Congress Daily (7/10, Edney, Cohn) reports "plans to release a final House overhaul bill today came to a screeching halt as the Blue Dog Coalition raised major concerns."

CQ Today (7/10, Armstrong, Wayne) reports House leaders "tried to stave off an insurrection" by the moderates, but "acknowledged that they would not be able to release a final version of their legislation Friday as planned" because of the Blue Dog opposition.

However, in addition to the Blue Dogs' letter, The Hill (7/10, Soraghan) reports 22 New Democrats and Blue Dogs also sent a letter to House leaders saying they "support a 'robust' government-run health plan, boosting chances of moving healthcare reform with a public insurance plan through the House." Rep. Lois Capps (D-CA) said, "While we may belong to a more moderate branch, we want it known that we support the public option."

Democrats Propose to Raise Taxes on Rich to Fund Health Care Legislation

2009-07-09T07:37:00.000-07:00

AP
Wednesday, July 8, 2009

WASHINGTON -- An income tax surcharge on highly paid Americans emerged as the leading option Wednesday night as House Democrats sought ways to pay for health care legislation that President Obama favors, several officials said.

As discussed in the tax-writing House Ways and Means Committee, the surtax would apply to individuals with adjusted gross income of more than $200,000 and couples over $250,000, they added. In addition, key lawmakers are expected to call for a tax or fee equal to a percentage of a worker's salary on employers who do not offer health benefits.

Rep. Shelley Berkley, D-Nev., a member of the panel, said the proposed surtax on high-income taxpayers appealed to her and others as a way to avoid a "nickel-and-dime" approach involving numerous smaller tax increases. She added that other earlier options had fallen away, including an increase in the payroll tax.

Berkley and others cautioned that no final decisions have been made, either by the tax-writing committee or by the Democratic leadership, which hopes to have legislation drafted by Friday and through the House by month's end.

Aside from Berkley, other officials discussed the private discussions only on condition of anonymity.

The developments stood in contrast to the Senate, where Democrats edged away from their goal of passing ambitious health care legislation by early August amid heightening partisan controversy over tax increases and a proposed new government role in providing insurance to consumers.

"I think the ultimate goal is to have a bill by the end of this year" that is signed into law by the president, Sen. Chuck Schumer, D-N.Y., said in an interview with The Associated Press. He said Democrats would make "every effort to stick to the timetable" that included initial Senate action by August.

Separately, Republicans who met with Senate Majority Leader Harry Reid, D-Nev., said he expressed flexibility on the timetable, indicating he was willing to allow more time before legislation is brought to the floor.

The evident slippage coincided with a formal announcement that the nation's hospitals had agreed to give up $155 billion in projected Medicare and Medicaid payments over the next decade, money than can help defray the cost of the legislation the administration wants.

"Folks, reform is coming. It is on track," Biden said at the White House, urging the Senate to enact legislation by the now-imperiled August goal.

Any failure to meet the goal would be a setback -- but not necessarily a fatal one --for Obama's attempt to win legislation this year that both slows the growth in health care costs and extends coverage to nearly 50 million Americans who now lack it.

Biden Announces Deal With Hospitals to Help Fund Health Care Reform

2009-07-08T09:13:00.000-07:00

AP
Wednesday, July 8, 2009

WASHINGTON -- Vice President Biden has announced a White House deal with the hospitals to help pay for President Obama's overhaul of health care.

Biden made the announcement Wednesday morning at the White House with hospital administrators and Health and Human Services Secretary Kathleen Sebelius.
Biden said "reform is coming."

Biden said the hospitals are ready to give up about $155 billion over 10 years in government payments. The money could then be used to help pay for covering millions of uninsured.

Despite the deal, some Democrats are rebelling over taxing generous health insurance benefits to pay for any overhaul, jeopardizing bipartisan legislation in the Senate and Obama's ambitious timetable.

Hospitals Expected to Agree to $155 Billion in Healthcare Savings

2009-07-07T08:47:00.000-07:00

The Washington Post (7/7, Connolly, Shear) reports hospital groups have agreed "to contribute $155 billion over 10 years toward the cost of insuring the 47 million Americans without health coverage, according to two industry sources."

White House officials and members of the Senate Finance Committee reached the agreement with the American Hospital Association, the Federation of American Hospitals, and the Catholic Health Association. It "is the latest in a series of side deals that aim to reduce the cost of revamping the nation's healthcare system and to neutralize influential industries that have historically opposed such reforms." According to the Post, "With President Obama out of the country, a formal announcement is expected tomorrow from Vice President Biden."

The AP (7/7, Espo) reports "under the emerging agreement, hospitals would accept lower-than-anticipated payments under Medicare and Medicaid, the federal healthcare programs for seniors and the poor." Such an agreement "would give fresh momentum to efforts to write bipartisan legislation on an issue that Obama has placed atop his list of domestic priorities."

Senate HELP Bill Includes Public Option & Insurance Mandate

2009-07-06T05:54:00.000-07:00

The AP (7/3, Alonso-Zaldivar) reported Americans "who refuse to buy affordable medical coverage could be hit with fines of more than $1,000 under a healthcare overhaul bill unveiled Thursday by key Senate Democrats looking to fulfill President Barack Obama's top domestic priority." The Congressional Budget Office "estimated the fines will raise around $36 billion over 10 years. Senate aides said the penalties would be modeled on the approach taken by Massachusetts, which now imposes a fine of about $1,000 a year on individuals who refuse to get coverage."

USA Today (7/3, Fritze) reported leading Democrats on the Senate Health, Education, Labor, and Pensions Committee "unveiled new details of a plan to revamp the nation's healthcare system Thursday, including a public, government-run insurance program and a $750-per-employee annual fee on companies that do not offer health benefits." Sen. Christopher Dodd (D-CT), "a leading architect of the legislation, said the new bill will cost $611 billion over the next decade - lower than an earlier $1 trillion estimate - and that he hoped his committee could have its version completed next week." The HELP legislation "would provide insurance to 15 million who do not have it now, about 30 percent of the uninsured population, the CBO said. Obama and Dodd said once the bill is merged with a separate proposal by the Senate Finance Committee as many 97 percent of uninsured would be covered."

The Wall Street Journal (7/3, Adamy) noted that, despite the lowered estimate of $611 billion, the "total cost of the healthcare overhaul is likely to increase substantially once a key element to expand insurance coverage is added in." The new plan "gives employers more incentive to provide coverage, and makes it harder for people with employer insurance to get government-subsidized coverage." But the "latest proposal doesn't include provisions for a large number of uninsured Americans whom lawmakers intend to cover by expanding Medicaid, the state-federal health program for the poor."

According to McClatchy (7/3, Lightman), President Obama "quickly embraced the plan, saying it 'reflects many of the principles I've laid out.' Among them: changes that 'will prohibit insurance companies from refusing coverage for people with pre-existing conditions, and the concept of insurance exchanges, where individuals can find affordable coverage if they lose their jobs, move or get sick.'" Still, Obama "stopped short of specifically endorsing the 'fee' on employers."

The Washington Post (7/3, Connolly), The Hill (7/3, Young), the New York Times (7/3, Calmes), the Washington Times (7/3, Haberkorn), CQ HealthBeat (7/3, Wayne, subscription required), and Bloomberg News (7/3, Faler, Dodge) also covered the story.

CMS Proposes Medicare Payment Reforms for Physicians, Hospitals

2009-07-02T05:58:00.001-07:00

The Wall Street Journal (7/2, Zhang) reports, "The Obama administration said Wednesday that it plans to cut Medicare payments for imaging services and specialists, and will use the savings to increase payments to physicians providing primary care."

The proposal would "put specialists' payments for evaluating and managing illnesses on par with those of primary-care physicians starting in January."

The move, "combined with other changes, would boost payments to internists, family physicians, general practitioners and geriatric specialists by six percent to eight percent next year," according to the Centers for Medicare and Medicaid Services.

House Committees Release Draft of Tri-Committee Health Reform Bill

2009-07-01T03:28:00.000-07:00

from United Healthcare
June 30, 2009

As we head into July, the federal debate has become more defined as four of the five Congressional committees with jurisdiction over health reform have released draft health reform. House and Senate leadership hope to pass legislation in their respective chambers before August and get a final compromise bill to the President in October. Key components of the recently released House tri-committee bill include:

National Health Insurance Exchange:

By 2013, a National Health Insurance Exchange is to be established to replace the current individual health insurance market and provide an option for employers and public program enrollees in Medicaid and the Children’s Health Insurance Program (CHIP). States would be allowed to apply to the federal government to establish state or regional exchanges. The Exchange is to establish health plan standards, facilitate the provision of comparative information, enrollment, billing, and other administrative functions, administer coverage subsidies, and respond to consumer grievances.

Public Plan:

No later than 2013, the Department of Health and Human Services is to develop and offer a Public Plan through the Exchange to compete with private insurers. The Public Plan is to comply with the same requirements as other private health plans participating in the Exchange, but provider payments from the Public Plan are to be similar to Medicare rates and providers participating in Medicare would be required to participate in the Public Plan for five years. The federal government would provide start up funding for the Public Plan, but it must become self-sustaining after initial start up.

Insurance Market Reform:

The legislation requires changes to the individual and group markets that prohibit pre-existing condition exclusions, prohibit premium rating based on health status, gender, or occupation and limit rating by age, require guarantee issue and renewal of coverage, require a medical loss ratio of 85 percent, prohibit annual or lifetime benefit limits and limit annual cost sharing, establish a Benefits Advisory Committee to recommend a minimum benefit package and three additional standard benefit plans, and establish a risk spreading mechanism to minimize unequal risk selection in health plans.

Coverage Mandates:

By 2013, all individuals would be required to have health insurance coverage. Those not complying with the mandate are to be assessed a tax up to the cost of the minimum benefit plan. Exceptions to the mandate are granted for religious objection and financial hardship. Employers would be required to provide 72.5 percent for single coverage and 65 percent for family coverage of the lowest cost minimum benefit set plan or pay an eight percent tax on wages. Certain small businesses with payroll below a set level would be exempt.

Coverage Subsidies:

Sliding scale subsidies varying by income would be available through the Exchange for individuals and families with incomes below 400 percent of the federal poverty level ($88,000 for a family of four) so that premiums would not exceed 10 percent of income. Sliding scale subsidies varying by employee income and employer size worth up to 50 percent of premium would be available to employers with less than 25 employees whose average wage is below $40,000.

Medicaid Reform:

The legislation expands Medicaid eligibility for all individuals to 133 percent of the federal poverty level ($14,000 for an individual) and requires an 85 percent medical loss ratio for Medicaid managed care organizations. It also establishes new preventive services benefits, increases payments for primary care, and implements a medical home pilot project to reduce costs and improve outcomes through use of preventive services and care coordination.

Medicare Reform:

The legislation restructures provider payment rates and requires the Department of Health and Human Services to develop new payment methods to promote coordinated care and reward quality and efficiency in areas such as hospital readmissions, post-acute care, imaging, and primary care. The bill reduces payment rates and establishes an 85percent medical loss ratio for Medicare Advantage plans. The legislation also eliminates the coverage gap (donut hole) in Part D by 2023 and reauthorizes Special Needs Plans (SNPs) that integrate care for beneficiaries with coverage through Medicaid and Medicare.

Other Health System Reforms:

The legislation also makes investments in the health care workforce to improve access to primary care, makes investments in prevention and public health programs, establishes national centers for quality improvement and comparative effectiveness research, establishes mechanisms to simplify administrative functions, and enhances efforts to reduce fraud, waste, and abuse.

'Free' Health Care Figures Are A Lot Worse Than Fuzzy

2009-06-29T07:59:00.000-07:00

John Torinus
June 27, 2009
Milwaukee Journal-Sentinel

Can national health care reformers count to 20 with their shoes off? The numbers on the various Democratic reform plans bounce around by hundreds of billions of dollars, and they invariably come nowhere near the real cost. Let's do some simple arithmetic.

As a starting point, let's get a per-head count of what it costs to cover an uninsured person from the latest extension of governmental health care in Wisconsin. The proposed state budget adds a whopping $215 million per biennium from state and federal sources for BadgerCare Plus Core, which will cover 40,000 single adults without children.

That comes to $2,688 per head per year. But Medicaid reimbursement formulas are at work for this population, and it pays about half of what private plans pay. What Medicaid doesn't pay gets shifted to private payers. So put the real number for Core at about $5,000.

That's a pretty representative figure for public plans. The vaunted plan for Wisconsin state employees comes in at about $6,000. It uses what is known as managed competition, a rich plan that gets bids, and therefore competition, from different HMOs but doesn't engender the competition driven by consumers.

By comparison, the best-managed private-sector plans are about $3,500.

GOING NATIONAL

Now, let's extrapolate the $5,000 to the national level. The tally for uninsured tossed around by reformers is 47 million. It's a highly debatable number, but let's assume we cover them all. So, 47 million times $5,000 totals $235 billion a year.

Therein lies President Barack Obama's problem as he attempts to sell universal coverage. He has been saying he can get the job done for $100 billion a year over the next decade, or $1 trillion.

It should come as no surprise, then, that the Congressional Budget Office reported that only 33% of the uninsured could be covered for the kind of money they have been talking about. Maybe they teach rhetoric instead of math at Harvard. At least $2 trillion will be needed. Some analysts put the number at $4 trillion.

The higher estimates derive from elements of proposed national plans that drive up total costs, such as guaranteed coverage despite pre-existing conditions, community ratings that homogenize risks and a broad set of mandated coverages.

ONE GOOD RESULT

The only offset to the positive side of the ledger is that uninsured people, who now get free care in expensive emergency rooms, will be paid for by the proposed government plans. That probably cuts a couple of percentage points.

Cloaked in the fuzzy numbers and highly secret deliberations are the ways and means of paying for the Democrats' grand vision. Don't count on a lot of real cost cuts. Government doesn't do that well. Think $400 toilet seats.

One concept bandied about has been an 8% payroll tax on employers, presumably only private employers. But that number also doesn't square with reality, since most private payers are already in the mid-teens as a percentage of payroll.

If it's a payroll tax only, businesses should get ready for a 20% tax, the eventual number estimated in Healthy Wisconsin, a local version of universal coverage. It could be much more. For comparison sake, Social Security requires a hefty 15% of most payrolls.

ENDANGERED DEDUCTION

Another tax device in the hopper is the elimination of the corporate tax deduction for health coverage of employees.

It's effectively a tax break for employees, so unions with high benefits oppose the elimination. Serigraph's $8,500 in health costs per employee and 40% corporate rate means the government would pick up $3,400 per head. The trade-off: more private companies dropping health coverage. That's an effect that no one can predict.

Then there's the ever-available tax-the-rich avenue, but that's being used for lots of other stuff. In the end, the Democrats will probably just borrow most of the money. Let the next generations pick up the tab.

The great irony in all this messy arithmetic is that consumer-driven health plans have been proven to bring in health care at $3,500 per head. At that price, universal coverage becomes affordable.

The solution is readily available, but Democrats like "free" care.

John Torinus is chairman of Serigraph Inc. of West Bend and a founder of BizStarts Milwaukee, a nonprofit organization dedicated to fostering entrepreneurship in southeastern Wisconsin.

President Will Not Rule Out Taxing Health Benefits to Pay for Reform

2009-06-29T06:19:00.000-07:00

On ABC's This Week (6/28, 10:00am EST), host George Stephanopoulos asked White House political adviser David Axelrod about paying for healthcare reform, specifically whether President Obama would approve a bill that includes taxing employee benefits.

When pressed, Axelrod did not rule out the possibility, saying, "The President had said in the past he doesn't believe taxing healthcare benefits, at any level, is necessarily the best way to go here. He still believes that. But there's a number of formulations. And we'll wait and see. The important thing at this point is to keep the process moving. To keep people at the table." He added, "One of the problems we've had in this town is people draw lines in the sand. And they stop talking to each other. And you don't get anything done. That's not the way the President approaches this."

According to the Washington Post (6/29, Shear), "under repeated questioning from host George Stephanopoulos, Axelrod said the White House is open to 'a lot of different formulations' for paying for healthcare reform."

The AP (6/29, Elliott) notes that "if President Barack Obama compromises on that point, it would reverse a campaign tax promise." Under current draft legislation, "a tax on health benefits would affect only those with pricey health plans. The idea would be to tax as income the portion of health benefits worth more than a specified limit. Officials are considering several options, including one that would set the limit at $17,240 for family coverage and $6,800 for individuals."

"Obama has made healthcare his top domestic priority," Bloomberg News (6/29, Stohr) points out, "and Axelrod said he expects the Senate to take up the issue in the fall, before turning to legislation limiting greenhouse-gas emissions."

The Washington Times (6/29, LoBianco) and The Hill (6/28, Brush) also covered the story.

Senate Finance Committee's Health Bill "Down" to $1 Trillion.

2009-06-26T06:04:00.000-07:00

The Wall Street Journal (6/26, Adamy, Hitt) reports "Senators are trying to whittle the cost of a key health bill by paring proposals to help small businesses and individuals buy health insurance coverage and delaying an expansion of Medicaid."

On Thursday, Senate Finance Committee Chairman Max Baucus (D-MT) said "he's pulled together options for a healthcare package that would have a $1 trillion price tag over a decade, and be fully paid for with spending cuts or tax increases." Congressional aides expect that "the evolving package would cover some 95 percent of Americans who do not now have insurance coverage," though Sen. Baucus did not specify.

"We're getting a lot closer to an agreement," Baucus said, according to the Washington Post (6/26, Murray, Montgomery), noting Finance Committee members "would consider a menu of policy and financing options over the Fourth of July recess, with the goal of producing a deficit-neutral 10-year bill shortly after Congress returns July 6."

To cut costs, Senate Budget Committee Chairman Kent Conrad (D-ND) said the finance panel cut "subsidy levels for uninsured people. He said members had not yet resolved the issue of the 'public option,' a government alternative to private insurance, although he said discussions continued to focus on a member-owned cooperative model."

Despite the progress, "Democrats are nowhere near where they had hoped to be," the New York Times (6/26, Pear) reports. "Democrats had hoped that two Senate committees would approve the legislation by the end of this week." In order to pay for the Finance Committee's bill, Baucus "is likely to include a new tax on some employer-provided health benefits and a requirement for employers to help pay the cost of insurance for some of their low-income workers -- those who enroll in Medicaid or get federal subsidies to help them buy insurance." Moreover, "Medicare cutbacks would provide a third major source of money to help finance coverage of the uninsured." Senators said they would "trim Medicare payments to hospitals and many other healthcare providers."

Still, the Washington Times (6/26, Haberkorn) notes that Baucus said that "the bill hasn't been written." Finance Committee Republicans "doubted the [CBO] scoring, particularly without seeing a draft bill or a plan." Sen. Orrin G. Hatch (R-UT) said, "I'm willing to bet money there's some gimmickry going on, putting some things off so they don't get scored at this point."

And "even Democrats acknowledged that Thursday's announcement fell fall short of a final deal on legislation to meet Obama's goals," the AP (6/26, Werner) reports. Sen. Conrad said, "There's not a final bill that's agreed to. What there is now is a clear path to having a bill that is paid for." The announcement "capped two weeks of tough going for healthcare negotiations on Capitol Hill as price tags as high as $1.6 trillion over 10 years sent senators back to the drawing board and forced deadlines to be repeatedly reset."

According to CNN (6/26), "Finance Committee members were shocked last week when the Congressional Budget Office determined that their reform bill would cost $1.6 trillion. They have slowly whittled down the amount since." Committee members see the $1 trillion price tag as "key to getting a bill passed."

Meanwhile, Bloomberg News (6/26, Litvan, Gaouette) points out that "any Senate legislation would have to be reconciled with a version produced by the House of Representatives." CQ Today (6/25, Armstrong, subscription required), The Politico (6/25, Brown), CongressDaily (6/25, Cohn, subscription required), and Roll Call (6/26, Drucker, subscription required) also cover the Senate Finance Committee's progress.

News You Can Use: Obama Not Quite Ready for ‘Primetime’

2009-06-25T13:10:00.000-07:00

Employee Benefits News
June 25, 2009
By Kelley M. Butler

President Obama last night hosted a townhall meeting at the White House that aired as a one-hour special on ABC’s news show “Primetime Live.” Taking on questions on everything from how to pay doctors to how to pay for reform overall, the president offered few specifics to add to the ongoing debate on overhauling the nation’s health care system.

Throughout the hour-long special, Obama returned often to the need to shift the physician payment structure to encourage more medical students to become primary care doctors rather than specialists. One student who attended the event told the president that she would be $300,000 in debt when she finished her schooling, but still wants to go into primary care. Obama responded the need for incentives like loan forgiveness to ensure more students make similar commitments.

Toward the end of the hour, questioners pressed the president on how to pay for reforms, citing estimates from the Congressional Budget Office that most proposals on the table would cost upward of $1 trillion.

Obama offered sketchy ideas at best, saying 67% of the bill would be footed by reallocating spending in the system, including subsidies to insurers. The remaining 33% would come from “new revenue,” aka, taxes. However, it's noteworthy that without prompting, Obama cited taxing health benefits as a potential way to fund health care reform.

In other reform news, I’m thinking of coining a new saying: Opinions are like health care reform proposals – everybody has one. Among the main opiners, Sen. Christopher Dodd (D-Conn.) said yesterday that the Health, Education, Labor and Pensions Com mittee will extend the markups of its bill through July 4.

Ignorance Reigns on Generics

2009-06-24T05:46:00.000-07:00

Employee Benefits News
June 23, 2009

New research highlights the need for continued education on the value of generic drugs. Prescription Solutions recently surveyed 1,000 adults, age 18 and older. The findings show that many still don’t understand the cost benefits or efficacy of generic alternatives.

* Nearly 33% of those polled either do not know or do not believe that generics have the same active ingredients and effectiveness of brand name drugs.

* Less than 33% correctly indicated that a brand name drug costs 50% to 70% more on average than its generic counterpart.

What’s more, the tightening economy has prompted many to skip or ration needed medication. The survey shows that 27% have either delayed filling, not filled or not taken as directed a prescription drug in order to save money.

There is some promising news, however. While 71% of respondents admitted to being concerned about drug costs, 21% reported talking with their doctor recently about switching to a lower cost alternative.

Prescription Solutions points to industry data showing that generic drugs have helped save $734 billion over the last decade. The new survey shows there is more savings to be had, according to company CEO Jacqueline Kosecoff.

“Using generics helps make health care more affordable without compromising results,” Kosecoff says. “Many Americans erroneously believe that the most expensive drug is always the most effective drug, so by helping to change perceptions, we can help people save money and still get the best treatment available.”

Democratic Reform Plan Promising Public Option Draws Strong Opposition

2009-06-24T05:42:00.000-07:00

Employee Benefits News
June 23, 2009

House Democrats delivered what they’ve been promising in a draft of health care reform legislation released Friday, calling for the creation of a public plan health insurance option that would be available through a health insurance exchange. The bill is co-sponsored by the chairmen of the Ways and Means, Energy and Commerce, and Education and Labor Committees, and would be paid for in part by an 8% payroll fee imposed on employers who do not offer health insurance.

Not surprisingly, the public plan option was immediately a top concern with critics of the legislation. “While the discussion draft addresses many of the critical steps needed to transform our health care system, these important reforms are overshadowed by the proposed creation of a government-run health plan that would jeopardize the coverage of the 160 million people who receive their benefits through their employers today,” said Scott Serota, president and CEO of Blue Cross Blue Shield Association, in a statement released almost simultaneously with the draft.

Lenny Sanicola, benefits practice leader with WorldatWork, says employers agree. “The biggest concern from folks that I’ve talked to that offer group-sponsored plans is the concern about the cost shifting and potential adverse selection,” he says.

Other key provisions of the draft include the elimination of pre-existing condition exclusions, introduction of individual mandates and a requirement that premium variation be limited to age (no more than 2:1), geography and family size.

The prescriptive nature of such benefit design provisions reminds Steve Wojcik, vice president of public policy for the National Business Group on Health, of reform efforts in Massachusetts. “Hopefully there will be a lot more flexibility in terms of what employer coverage qualifies to satisfy the mandate,” he says. “Otherwise, it seems to be counterproductive.”

The bill would also create an independent advisory committee chaired by the Surgeon General that will recommend a basic minimal benefits package for coverage inside the exchange that “over time will become the minimum quality standard for employer plans,” according to the summary.

The National Association of Health Underwriters questions the proficiency of such a committee. “While those entities and individuals have a great deal of medial expertise, they really have no background in the structure of health insurance benefit plan design,” says Jessica Waltman, senior vice president of government affairs.

The legislation’s sponsors say costs will be controlled through an emphasis on prevention and wellness -- including the prohibition of cost-sharing for preventive services in benefit packages, increased access to primary care, delivery and payment system reform, and reforms to Medicare and Medicaid.

However, Republicans are not buying it. “This plan is nothing less than a government takeover of health care, and families and small businesses who are already footing the bill for Washington’s reckless spending binge will not support it,” said House Republican Leader John Boehner (R-Ohio) in a statement. “Raising taxes, rationing care and empowering government bureaucrats — not patients and doctors — to make key medical decisions is not ‘reform.’”

2009-06-23T12:11:00.000-07:00

The Obama administration is now attempting the biggest overhaul of healthcare since Lyndon B. Johnson pushed through Medicare and Medicaid in 1965.

But the health care reform debate is riddled with misleading myths taken as fact, myths that are torquing the debate beyond recognition, from the U.S.’s supposedly poor infant mortality rates, who really gets medical care, the level of uninsureds, who really pays for insurance, who actually can afford insurance and wait times for surgeries.

Most everyone agrees the U.S. health system is broken and the uninsured must get coverage.

But fixing the health system should be based on the facts, not on a statistical faith-based initiative mounted to ram through reform, where the data is either more nuanced on closer look, or the statements made are simply not true.

Myth: “About 46 million Americans lack access to health insurance.”

There is a difference between health care and health insurance, as Fox Business anchor Brian Sullivan points out after researching reports on health care from the Congressional Budget Office, Blue Cross-Blue Shield and Georgetown University.

Everyone has access to health care. They may not have health insurance, but the law mandates everyone who shows up at emergency rooms must be treated, insurance or not, he reports.

About 14 million of the uninsured were eligible for Medicaid and SCHIP 2003, a BlueCross-BlueShield Association study based on 2003 data estimated. These people would be signed up for government insurance if they ever made it to the emergency room, Sullivan says.

A whopping 70% of uninsured children are eligible for Medicaid, SCHIP, or both programs, a 2008 study by the Georgetown University Health Policy Institute shows.

Census figures also show that 18.3 million of the uninsured were under age 34 who may simply not think about the need for insurance, Sullivan reports.

And of those 46 milllion without insurance, an estimated 10 million or so are non-U.S. citizens who may not be eligible, according to statistics from the Census Bureau), Sullivan reports.

Myth: “The uninsured can’t afford to buy coverage.”

Many may be able to afford health insurance, but for whatever reason choose to not buy it. In 2007, an estimated 17.6 million of the uninsured made more than $50,000 per year, and 10 million of those made more than $75,000 a year, says Sally Pipes, author of the book, The Top Ten Myths of American Health Care: A Citizen’s Guide, a book that attempts to dig behind the numbers. According to author Pipes, 38% of the U.S. uninsured population earns more than $50,000 per year.

That means 38% of the uninsured likely make enough to afford health insurance, but for undetermined reasons choose not to buy it.

Myth: “Most of the uninsured do not have health insurance because they are not working and so don’t have access to health benefits through an employer.”

Not so fast–the data is more nuanced and revealing upon closer look. According to the CBO, about half of the uninsured in 2009 fall into one of the following three categories. Some people will be in more than one of those categories at the same time:

*Nearly one out of three, 30%, will be offered, but will decline, coverage from an employer.

*Nearly one out of five, 18%, will be eligible for, but not enrolled in Medicaid; and

*More than one out of seven, 17%, will have family income above 300% of the poverty level (about $65,000 for a family of four);

What is potentially the real number for the poor uninsured? According to a 2003 Blue Cross study, 8.2 million Americans are actually without coverage for the long haul, because they are too poor to purchase health care, but earn too much to qualify for government assistance.

[Source: CBO, "Key Issues in Analyzing Major Health Insurance Proposals," 12/18/08