Texas Today

Week of October 26, 2009

While Aetna and the rest of the insurance industry continue to focus on important health care reform issues, some members of Congress and The White House appear unwilling to stop or even slow the political attacks against insurers. Even as yet another analysis released last week showed real concerns persist that current proposals will worsen, rather than alleviate, rising health care costs, the House Judiciary Committee used its powers last week to try to punish the industry for speaking out (see below). Actually, the industry remains committed to seeing meaningful health care reform passed this year, a view made clear in a Washington Post op-ed authored by the President of America’s Health Insurance Plans. The reactions on the Hill continue to largely side-step the specific cost concerns raised in the past two weeks. But Aetna remains hopeful that the dialogue may yet return to substantive issues before bills are brought to the floor of the House and Senate in the next several weeks.

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To ease the burden of a scheduled 21-percent pay cut for Medicare doctors in 2010, Senate Democrats tried to pass a stand-alone bill that would have wiped out both next year’s cut and all future cuts. Eliminating the cut for one year would cost $10.9 billion — such a provision is in the Finance Committee version of health care reform and would be fully funded. To totally wipe out the fee cuts for all years would cost $245 billion. Without a “pay for” such a bill would add close to a quarter-trillion dollars to the deficit. This is precisely the bill Majority Leader Harry Reid brought forth. Senator Reid needed 60 votes; he got 47 as all Republicans and 13 Democrats voted against cutting off debate. Senate Democrats had hoped to gain physician support for health care reform by providing relief from the cuts. But the results should serve as a “wake-up” call to the Democratic leadership that health reform will not be a walk in the park. The strong vote could also embolden moderate Democrats to band together and make “hard votes” on health care reform as well.

In the House, legislative activity for the week came down to passage in the Judiciary Committee of a bill that Democratic sponsors describe as repeal of the health insurer antitrust immunity known as the McCarran-Ferguson Act. The bill more accurately can be described as codifying various court interpretations of the Act, all of which the industry lives with day in and day out. The bill specifically says health insurers (and MedMal insurers) can’t hide behind McCarran-Ferguson to price-fix, bid-rig or engage in market allocations with competitors. Insurers can’t do that now. Thus, the bill is much more of a vehicle for some in Congress to further demonize a well thought-out piece of legislation with positive policy underpinnings. Whether this item gets added to a health care reform bill or progresses on its own remains to be seen.

The timing for floor debate on health care reform will likely ebb and flow for several weeks, but the current thinking is that this process may take all of 2009 and possibly into 2010 to complete. The House merging process is all but done along with the CBO review of the House bill. The House bill could be released this week, go to the Rules Committee on Thursday/Friday and on to the House floor the first week of November. This schedule requires that everything fall into place and that the Speaker be willing to begin floor debate before the Senate, which seems to be the case. On the Senate side, merging the HELP and Finance Committee bills seems to be picking up speed, particularly with reports of an emerging public plan compromise. But the process will not be finished until later this week, which would bring the bill to the floor the week of November 2 at the earliest. There is a real chance that too many variables will get in the way and neither Chamber will get to the floor until December, which, if true, would translate into a January Conference.

States

COLORADO: The Colorado Health Care Task Force has voted several bills out of committee, including: a prohibition on the use of gender in developing rates for individual policies; a maternity coverage requirement in individual policies; and a requirement that the Department of Insurance develop standardized formats for such things as policy forms and explanations of benefits. Aetna will provide comments.

GEORGIA: Commissioner Oxendine signed the regulation allowing health insurers to utilize health status at renewal when underwriting small groups (2-50). Aetna has worked with the Georgia Association of Health Plans for some time to help enact this regulation. The Commissioner has also scheduled a meeting with health plan representatives to discuss his 2010 legislative agenda, which will include a bill similar to one defeated this year that would have regulated rates for individual policies.

ILLINOIS: The legislature last week completed the first week of a two-week veto session and took on two insurance-related issues. One bill would create external review requirements for all commercial insurance products, rather than just HMOs, effective July 1, 2010. The bill also would establish committees to create a uniform small-employer, group-health status questionnaire and an individual health statement for use beginning January 1, 2011. Lastly, the bill would require insurers to semi-annually prepare and provide the Department of Insurance a statement on aggregate administrative expenses and other information. Surprisingly, Chairman of the Executive Committee Mary Flowers stated that she was not going to allow the bill to be called for a vote until she had an opportunity to question the sponsor. Thus, no vote was taken, even though there was no opposition. It appears the bill will be moved for a vote this week in a different committee. Also, negotiations have begun on an insurance mandate bill for prosthetics and orthotics. The General Assembly has indicated that when they adjourn late this week, they will not return again until January.

PENNSYLVANIA: Governor Ed Rendell signed spending, revenue and fiscal code bills earlier this month, ending the 101-day budget standoff. But negotiations continue over the unresolved issue of expanding legalized gambling to include table games. Of primary interest, one bill signed into law embraces an extension of the 5.9 percent gross receipts tax on Medicaid MCOs as an alternative to the Administration’s proposed 2 percent health insurance tax as the basis for federal matching Medicaid funds. The final bill also dropped the proposed “trigger provision,” which would have authorized the Department of Public Welfare to abrogate its Medicaid MCO contracts if the Centers for Medicare & Medicaid Services were to disapprove the GRT approach for fund matching.

UTAH: The Health Reform Task Force has drafted two proposals to recommend to the 2010 legislature. The first, under the guise of administrative simplification, would establish procedures to be followed for coordination of benefits for dependents subsequent to a divorce, superseding the provisions in the applicable insurance contract. The second proposal would require the DOI to develop standards for the use and electronic exchange of uniform claim forms, billing and claim codes, eligibility and coverage information and coordination of benefits.

Week of October 19, 2009

Inside-the-Beltway politics were in full swing last week as the insurance industry came under heavy fire from some members of Congress and the media for releasing a PricewaterhouseCoopers report prior to the Senate Finance Committee’s scheduled vote on its health care reform proposal. The report found that the Committee’s reform package would drive up the cost of private insurance coverage for individuals, families and businesses. As a result, the industry was openly accused of trying to scuttle health care reform, even though America’s Health Insurance Plans (AHIP) stated clearly in a press release and a letter to key Senate leaders that the industry was simply fulfilling its responsibility to bring to light serious flaws in the bill. The industry still intends to work toward bipartisan reform. By the time the furor died down, no one had seriously refuted the substance of the report. In fact, just a day later a new report from Oliver Wyman arrived at very similar conclusions. Regardless of these reports, Aetna has consistently warned that meaningful health care reform must address rising costs and that insurance market reforms must be linked with a strong individual coverage requirement to work effectively. Aetna will continue to deliver this message and help others understand how the market works.

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Federal

While there was some drama, the actual outcome of the Senate Finance Committee’s vote to approve its health care reform bill was never really in doubt. By a vote of 14 to 9, the Committee approved the bill with all Democrats and one Republican, Olympia Snowe of Maine, saying yes. The drama was two-fold: a) would Snowe agree or hold her powder dry until the floor debate to improve her ability to bargain for changes; and b) would Ron Wyden (D-OR) and/or Jay Rockefeller (D-WV) vote no or hold their vote to protest the absence of the public plan. Neither possibility materialized, but the “drama” could merely have shifted from the Committee to the Senate floor. The Finance Committee approval of health reform set in motion the next step in the process, as the Senate Democratic leadership began the process of melding the Finance and HELP Committee bills. Majority Leader Harry Reid is working with Finance Chairman Max Baucus, HELP Vice-Chairman Christopher Dodd and Chairman Harkin to hammer out a single bill, and three issues appear the most contentious: the Finance Committee’s weak individual mandate vs. HELP’s stronger one; a HELP public plan vs. the co-op approach from Finance; and the HELP employer mandate vs. no mandate from Finance.There are hundreds of subordinate issues as well, all of which translates into a contentious merging process that will likely delay debate on the floor to late October/early November.

Senate Democrats, led by Senator Stabenow (D-MI), will likely vote this week on a stand-alone bill to eliminate a scheduled 21 percent cut in physician Medicare reimbursement on a permanent basis. The one-year cost of this doctor “fix” in the current Senate Finance Committee bill is $10.9 billion; the permanent fix (buried in the House reform bill) would cost upwards of $250 billion. The idea behind this maneuver is to pull out a costly item from the health reform bill, which is supposed to be deficit-neutral, in order to free up more money to spend on other items or to reduce the total cost of health reform, e.g., the House Democrats want to get their bill under $1 trillion. While most agree that the payment level for physicians should be much more aligned to quality and performance, the debate will likely turn on whether Democrats can shift to the deficit another $250 billion in money for doctors without stirring up the American public.

States

COLORADO: The Colorado Division of Insurance adopted amendments revising the state’s early intervention services (EIS) benefit mandate in accordance with newly adopted legislation. Individual and group policies or contracts that include dependent coverage are required to cover EIS delivered by qualified providers to eligible children through age 3. The new law modifies this mandate by requiring, among other things, an increase in the reimbursement rate for EIS by carriers, if the base rate for state-funded EIS increases by more than the cost-of-living adjustment. The amended rule was effective October 1. The DOI also adopted amendments establishing standards for the sale of limited benefit plans by HMOs. This legislation allows HMOs to offer access to basic health care services through limited benefit plans to employer groups that have not offered health coverage to their employees for the previous 12 months and to individuals who have been uninsured for the previous 12 months. HMOs are prohibited from offering limited health benefit plans in Colorado counties with a population of more than 25,000 people.

ILLINOIS: The Department of Insurance (DOI) has taken the position that carriers cannot require, in their contracts, that claims for proceeds on a life insurance policy be made “in writing.” The insurance industry has requested that the DOI reconsider its position. The DOI maintains that the only required documents for a life insurance claim are the insured’s death certificate and a copy of the claim check. The insurance industry believes that this interpretation of the law runs contrary to generally accepted claim procedures that were put in place to confirm that coverage was in force, that a covered loss occurred, and that there are no exclusions or limitations that affect the claim payment. Illinois statute directs a life insurer to settle a death claim within two months of the receipt of due proof of the insured’s death and places no limit on what an insurer may reasonably require during the statutory period to assure proper verification of the insured’s death, as well as verification that claim proceeds are being correctly paid to the proper claimant.

KENTUCKY: Last week the Department of Insurance held a public meeting at which it briefly discussed its proposed 2010 legislative package, approved by the Governor’s office, for the upcoming session. The proposals include updating state laws to incorporate federal changes with respect to mental health parity, Michelle’s law, HIPAA clarifications; updates to the limits under the life and health guaranty model; and uniformity changes to the producer licensing law. Also discussed was the possible elimination of the requirement that insurers offer a standard benefit plan under the Kentucky Access law.

MASSACHUSETTS: The Commonwealth Health Insurance Connector Authority is proposing amendments to the Minimum Credible Coverage (MCC) regulations, with a public hearing on the matter scheduled for Nov. 17. The MCC regulations set the standard for minimum benefits Massachusetts residents must carry in order to be considered insured and avoid penalties. The proposed regulation changes were approved by the Connector Board and filed with the Secretary of State. They would: make prescription drugs one of the categories of services/benefits that are considered “core services” under minimum creditable coverage, thus prohibiting the imposition of dollar caps on its prescription drug benefit; require a health benefit plan covering dependents to provide coverage to all “broad range of medical benefits” as provided to subscribers in order to ensure that maternity benefits are extended to pregnant dependents; and allow employer groups to pair a high-deductible health plan with a Health Reimbursement Arrangement (HRA), as an alternative to a Health Savings Account (HSA). There likely will be some push back on the additions to the MCC standard. However, some version of the amendments is expected to pass. If enacted, the prescription and dependent benefits amendments would be effective in 2011; the HDHP/HRA amendment would take effect on 1/1/2010.

NEW JERSEY: The state has launched a database designed to track autism cases and direct affected families to health care and other services. The New Jersey Autism Registry requires psychiatrists, psychologists, neurologists and medical professionals to register children diagnosed with autism and birth defects such as Down’s Syndrome, cleft palate, and heart or muscular defects. The registry is confidential and will be used to enable officials to better assist New Jersey’s families with autism and other special needs. Access to the database is restricted to medical professionals.

NEW YORK: Governor David Paterson last week proposed a new two-year, $5 billion deficit-reduction package (DRP) that will fill the $3 billion (and growing) gap in the 2009-2010 spending plan and have a recurring impact of $2 billion in 2010-11. The new proposal does not include new taxes or assessments, a reflection of the extraordinarily high taxes already imposed on health plans in the main ‘09-’10 budget. The Governor’s new DRP focuses on across-the-board Medicaid cuts, a $14.7 million cut in the managed long-term care program, a $14 million reduction in the Child Health Plus program, and a $7 million reduction in section 332 assessment sub-allocation, which includes both the Healthy New York and Timothy’s Law programs. The budget announcement was sharply criticized by the hospital industry and hospital workers’ union SEIU/1199. Assembly Democrats have already scheduled two hearings on the Governor’s proposed DRP for Wednesday, October 21st, in Albany and Friday, October 23rd in Syracuse.

OREGON: The state Insurance Department has issued a second bulletin regarding legislation that established a premium assessment on health insurers. The primary purpose of the new bulletin is to provide information about the approved manner of calculating premium increases to offset the cost of the new assessment. The bulletin states that the law limits the amount carriers are allowed to increase premiums, as a result of the assessment, to one percent. The amount derived from dividing premiums by .99 is greater than one percent and is therefore illegal. Any insurers that calculated the increase in the .99 manner and have already collected premiums are required to issue refunds.

TEXAS: The Department of Insurance held a stakeholder meeting last week to discuss implementation of the new “Healthy Texas” program, legislation that passed in May. The program is modeled after Healthy New York and will offer state re-insurance for up to 80 percent of the claims corridor of $5,000-$75,000 for an insurance product, which can be sold only to small groups that have been uninsured for at least a year and have at least 30 percent of their employees’ salaries at a maximum of 300 percent of the federal poverty level. The employer must agree to pay at least 50 percent of the premiums, and at least 60 percent of the employees must enroll. The legislature provided $17.5 million dollars annually to fund the program for the next 2 years. TDI and the Texas HHSC have been awarded almost $5 million a year for the next five years in HRSA grant money to assist with costs of actuarial contracts, marketing contracts and additional staff to help fully implement the program. They have posted informal rules to implement the program and plan to adopt a formal rule by the end of 2009. They would like to see members enrolled in qualifying plans by June 1, 2010, at the latest. Aetna has been involved with the drafting of legislation for this program from the beginning and will continue to be involved throughout the rulemaking process.

WASHINGTON: The state Office of the Insurance Commissioner has released its legislative agenda for 2010. The OIC proposals include; 1) new and extended grace periods for individuals to take up conversion coverage — 31 days after a person has received notice of termination of coverage; 2) a revised definition of emergency services and the elimination of a requirement that the covered health care services are provided in a hospital emergency department; and 3) a health care reform proposal that would cover catastrophic medical costs over $10,000 per year and limited preventive care for all state residents. The catastrophic health plan was also proposed in 2009 but failed to gather much attention in the legislature.

October 21, 2009

The Week in Health Care Reform

Federal Legislative Overview
Senate
On Tuesday, October 13 the Senate Finance Committee approved Chairman Max Baucus’ amended “America’s Healthy Future Act” by a vote of 14-9. Olympia Snowe (R-ME) was the only Republican who joined all 13 Democrats in supporting the bill. After the vote Snowe stated, “Is this bill all that I want? Far from it. Is it all that it could be? No. But when history calls, history calls. And I happen to think the consequences of inaction dictate the urgency of Congress to take every opportunity to demonstrate its capacity to solve the monumental issues of our time.” She went on to say, “My vote today is my vote today, it doesn’t forecast what my vote will be tomorrow,” quelling any predictions for what her vote will be on the Senate floor.

The legislation has now moved to Majority Leader Harry Reid’s (D-NV) office, who will work hand-in-hand with key Democratic leadership in the Senate, as well as the White House, to craft a single bill. This process will likely take weeks and we do not expect it to reach the Senate floor until November.

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House
Speaker Nancy Pelosi (D-CA) continued to say this week that the merged bill in the House of Representatives will have a “robust” public plan – meaning that provider reimbursement rates will be tied to Medicare. This is the opposite of the agreement made in Henry Waxman’s (D-CA) Energy & Commerce Committee with Blue Dog Democrats, in which payment rates would be negotiated.

Interestingly enough, Rep. Mike Ross (D-AR), the leader of the Blue Dogs’ Health Care Task Force, who was vehemently against a public health insurance option during reform debates in July, came out this week saying that he supported the idea of opening Medicare to those under 65 without insurance. He later backpedalled and said, “I do not endorse this idea, as it was just one of many ideas we, as legislators, have brought up and discussed in the numerous, ongoing negotiations and discussions we have had on healthcare reform over the past several months.” Ross has changed his mind numerous times during this debate. After he negotiated the deal in the Energy & Commerce Committee in July he faced significant opposition from conservative constituents during the August recess. He then returned from recess stating that he couldn’t support a public option. Ross’ statements show how difficult the push and pull will be in the upcoming weeks over key provisions in the health care reform bills.

The supreme court as come to the defense of the citizens of Texas. on the subject of phone harassment, in has been found that the the statues on this matter was unconstitutionally vague. it did not allow an intelligent person to know when they had crossed the line between right and wrong. the state laws have been shot down and defaced. pray we get better laws on this matter. If you have been charged with this crime after 6-24-09 go to west law (web sit) at your local courthouse look up Stewart v state appellate

Oct. 16, 2009

This Week in Health Care Reform

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.

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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.

On Wednesday, another study conducted by Oliver Wyman Inc. and sponsored by the Blue Cross Blue Shield Association indicated that the proposed legislation would raise premiums 50% for individual and 19% for small group policies. Premium increases would likely be a result of a weak individual insurance mandate over the next five years.

Looking Ahead

Following the Senate Finance Committee vote, health care reform legislation negotiations will continue behind closed doors. Sen. Reid will merge the Senate Finance and the HELP Committee bills. He has indicated that the full Senate will begin debating the merged legislation the week of October 26.

House leaders are expected to vote the first week of November.

Week of October 12 , 2009

A new report from PricewaterhouseCoopers made headlines this week in pointing out that the Senate Finance Committee’s health care reform proposal, as currently outlined (approved by a 14-9 margin on October 13), would increase the cost of private insurance coverage for individuals, families and businesses above what these costs would be in the absence of reform. Specifically, the report says that four provisions could significantly increase costs: a weak coverage requirement coupled with insurance market reforms, a new tax on high-cost health plans, cost shifting as a result of Medicare cuts and new taxes on several health care sectors. While the Committee is scheduled to vote on its reform package this week, the new report demonstrates much work remains to be done before any bill can appease growing cost concerns and claim broad consensus.

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Federal

The Senate Finance Committee’s health care reform efforts were buoyed last week by news from the Congressional Budget Office, in the form of a preliminary analysis that found the Committee’s health reform mark-up would reduce the number of uninsured nationally by about 29 million while reducing the federal budget deficit by about $81 billion over the 2010-2019 period. The projected budget impact made many Democrats jubilant, since the President has made it a condition that no reform bill add to the deficit if it is to get his signature. But the initial euphoria over the score started to evaporate within 24 hours as Republicans and some Democrats have questioned the numbers. Aside from the numerous political issues still in play, the CBO identified some significant caveats to its analysis that were not widely reported. The CBO analysis points out that once the reform proposal is converted into actual legislative language, significant changes could be necessary to its estimates. Also, federal spending that would be funded by future appropriations, such as implementation costs for Medicare operations, is not reflected in the estimates. The Senate Finance Committee approved the bill this week, but the legislative path ahead will not be easy.

A glimpse into one of hundreds of subordinate issues connected to health care reform points out how difficult it will be to actually enact legislation. Late last week, Aetna participated (as the only invited insurer) in a discussion among a cross-section of key players in the health care debate: the trial bar, employers, unions, and an insurer. The convening authority was the senior staff from all three key House Committees. The issue is whether the House bill should include a trial bar-supported provision to deny insurers (and union plans) the right to recover, from the insured, health care payments when the insured member has already received payment for the very same expense from a court award or settlement. The staff and the trial bar want this provision, while insurers, employers and the unions strongly oppose any change. The discussion pointed out (a) how a bill this big will surface myriad subordinate issues that will cut numerous ways and force strange bedfellow allies while pushing traditional friends far apart, and (b) how difficult it will be for Congressional leadership to cobble together a passable piece of legislation.

States

CALIFORNIA: Governor Arnold Schwarzenegger has signed legislation prohibiting the use of gender as a rating factor in the individual market but vetoed all new mandated coverage requirements, including a measure that would have required all individual policies to include full maternity coverage. The governor has not yet released his decision on the two rescission bills that were on his desk, although he vetoed similar legislation last year.

KENTUCKY: The Interim Joint Committee on Banking and Insurance is reviewing continuity of care issues related to a contract dispute between Anthem and Norton Healthcare that resulted in the filing of new legislation. The bill would require contracting agreements between a managed care plan and a hospital to be for a term of not less than three years, with at least six months notice by the acute-care hospital to the managed care plan and the Insurance Department when terminating or not renewing a contractual agreement. The managed care plan and the hospital must develop procedures for a covered person’s access to care under continuity of care requirements established by law. The bill also would require mediation or binding arbitration in any dispute between the managed care plan and the hospital regarding a covered person’s access to care under the continuity of care provisions.

MINNESOTA: The Neighborhood Health Care Network has received $832,768 federal funding in to expand and upgrade electronic health records systems in community health clinics that serve economically and ethnically diverse populations in the Minneapolis-St. Paul metropolitan area. The award will support the implementation of a shared Electronic Health Records (EHR) system with three member clinics: Freemont, Indian Health Board and West Side. Prior funding for this project from the Minnesota Department of Health and the Healthier Minnesota Community Clinic Fund enabled the early phases. The new funding will help support clinic-specific costs associated with “going live” in the months ahead. Network membership includes 14 independent, non-profit community health centers with clinic locations in Minneapolis, St. Paul and Stillwater.

October 14, 2009

The Week in Health Reform

Federal Legislative Overview

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Senate
The long-awaited cost estimate of the Senate Finance Committee’s health care reform proposal, “America’s Healthy Future Act,” was released this week by the Congressional Budget Office (CBO).

The CBO concluded that the proposal would cost $829 billion over 10 years – an increase from the previous $738 billion estimate of the revised Chairman’s Mark – and would cover 94 percent of Americans. A more detailed overview of the CBO cost estimate is discussed in the next section of this article.

The Senate Finance Committee waited to vote on its health care reform proposal until the CBO completed its work. On Tuesday October 13, the Finance Committee voted 14 to 9 to approve the legislation. Senator Olympia Snowe (R-ME) was the only Republican who voted in support of the measure. This now paves the way for Democratic leadership to begin merging the Senate Finance legislation with the Senate HELP bill (S 1679). Senators Max Baucus (D-MT), Christopher Dodd (D-CT) and Majority Leader Harry Reid (D-NV) will lead those efforts, working alongside the White House. The blended legislation could potentially be on the Senate floor the week of October 19.

House
House Speaker Pelosi and other Democratic leaders in the House of Representatives continue to meld its three pieces of health care reform legislation into one bill, while aiming to cut its total cost by another $200 billion. Although Pelosi has publicly stated that she will not consider a “trigger option” for the public plan, nor health care cooperatives, she has seemingly become a bit more open to the idea of the creation of a public plan that would be allowed to negotiate provider reimbursement rates, an idea that has more commonly belonged to conservative Democrats in this debate.

This past week, more than 150 House Democrats wrote a letter to Pelosi (D-CA) urging her “to reject proposals to enact an excise tax on high-cost insurance plans that could be potentially passed on to middle-class families.” This letter was in reference to the Senate Finance Committee’s health care reform proposal that includes a 40 percent excise tax on insurers that exceed certain cost thresholds, also known as a tax on “Cadillac plans”. Beginning in 2013, the threshold for individual plans will be $8,000 and $21,000 for family coverage. It is clear that more than half of House Democrats recognize that insurers will be forced to pass on these proposed new taxes to consumers – undermining the shared goal of ensuring affordable health coverage for all Americans.

Overview: CBO Score of Senate Finance Committee Proposal
As briefly mentioned above, the CBO has issue its preliminary analysis of the Senate Finance Committee’s “America’s Healthy Future Act.” CBO estimates that under this legislation, the percentage of legal nonelderly residents covered by health insurance would increase from 83 percent today to about 94 percent by 2019. CBO further estimates that:

* The bill’s coverage provisions would cost $829 billion over ten years. This includes $345 billion in increased spending in Medicaid and CHIP, $461 billion for premium subsidies provided through the exchange and related spending, and $23 billion for small employer tax credits.

* These costs would be offset by increased tax revenues and spending reductions in other areas, resulting in a net reduction in the federal budget deficit that is estimated to be approximately $81 billion over ten years. The bill’s offsets include: $201 billion from the high-cost health plan tax; $117 billion from changes to Medicare Advantage payments; $106 billion from changes to Medicare hospital payments; $23 billion from penalty payments by employers; and $4 billion from penalty payments by individuals.

Oct. 9, 2009

This Week in Health Care Reform

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.

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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:

*
Reduce penalties on those who do not obtain insurance;
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Modify the proposed tax on high-cost insurance policies;
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Prevent health insurance companies from taking tax deductions for compensation in excess of $500,000; and
*
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.

Week of October 5, 2009

The Senate Finance Committee essentially wrapped up its work on a health care reform bill last week, though additional changes are still possible as the bill is put to a vote of the full Committee later this week. A number of changes made to the bill at the 11th hour last week already are generating concerns about the direction of the legislation. For example, one amendment approved by the Committee would result in a significant weakening of the individual coverage requirement (see below). This requirement is the cornerstone on which a host of insurance market reforms are supported. The bill also would levy significant new fees and taxes on different sectors of the health care system, such as health insurance, without adequately tackling the true drivers of health care costs. Clearly the rubber is now meeting the road as health care reform moves toward floor debate in the House and Senate. Aetna will monitor events closely and weigh in on issues of substance. While this summer’s town hall meetings were an important part of the process, there will be no more important time for all Americans to stay informed and be involved than in the weeks ahead.

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Federal

The Senate Finance Committee last week finished slogging through dozens of amendments, paving the way for a vote on the finished bill sometime this week after the Congressional Budget Office provides a cost estimate. While many amendments were rejected, the panel did approve at the last minute some significant changes to the bill introduced by Chairman Max Baucus (D-MT) in mid-September. One amendment adopted would weaken the individual coverage requirement by delaying and reducing penalties attached to the requirement. The maximum penalty for a family of four would start at $200 in 2014 and rise to $750 in 2017. Also, an estimated 2 million people who would face financial difficulties would be exempt from buying even the cheapest insurance available — those who would have to pay more than 8 percent (a change from 10 percent) of their adjusted gross income for the cheapest plan would be exempt. The Committee rejected amendments for a public plan option, but it did include a mini-public plan option for those under 200 percent of the federal poverty level. To help pay for the legislation, new fees and taxes would be levied on insurance companies, drug makers, medical device manufacturers, and some families. Senate leaders already have begun looking at ways to blend together the Senate Finance Committee bill and a competing Senate HELP Committee bill so that floor debate can begin later in October.

States

INDIANA: Hearings resumed last week on the Health Provider Patient Limit Study supported by the Indiana Medical Association. The Health Finance Commission is required to study: 1) health plan provider contract provisions that would require a contracted provider to mandatorily accept more than a certain number of patients (open access clause); and 2) whether an insurer should be required to directly reimburse an out-of- network health care provider (assignment of benefits). Arguments were presented on both sides of these issues. In addition, HEA 1300 requires the Indiana Department of Insurance (DOI) to collect information regarding the costs of initiation and operation for recognizing assignment of benefits and report to the Health Finance Commission on its actuarial findings. The data has been collected by DOI, which will present its final findings on assignment at the October 19 Health Finance Commission meeting. A final report from the Health Finance Commission is due to the Legislative Council by November 1.

TEXAS Health Insurance : The Department of Insurance has prepared a working draft of rules concerning physician ranking requirements and notice requirements that would limit health plans’ ability to publish physician rankings. These draft rules would implement the provisions of legislation recently passed establishing standards for the use of physician ranking systems by health plans. The legislation outlines a process to be used by the TDI in determining nationally accepted standards for provider rankings. The standards used must be disclosed to each affected provider, as well as the details of a process that may be used to dispute the rankings. The measure also prohibits physicians from taking action that would prevent a patient from participating in an evaluation of the physician’s performance. Aetna worked throughout the session with the bill’s authors to ensure that the final version tracked the patient charter and national best practices. Aetna will continue to work with TDI in the crafting of its final rules.

WASHINGTON: Aetna is working with the state and other industry stakeholders to determine the feasibility of maintaining the state’s Universal Vaccine Program for children. Due to budget cuts, the state is scaling back the vaccine program next spring to cover only low-income children. Currently, the program is available for all vaccinations for any child residing in the state, even those with private insurance. Due to the state’s purchasing power and its ability to distribute vaccine effectively, there are multiple benefits to the state continuing the program.

Oct. 2, 2009

This Week in Health Care Reform

This week, legislators from the Senate Finance Committee continued mark-up of the legislation proposed by Sen. Max Baucus (D-MT).

Senate Negotiations

Senate Finance Committee Negotiates Amendments: After days of negotiations, Sen. Baucus indicated on Wednesday that the Senate Finance Committee now had the necessary votes to pass legislation and that he anticipated finalizing the bill by the end of the week. Lawmakers from the Committee convened this week to continue voting on the hundreds of proposed amendments to the health care reform legislation offered by the senator earlier this month. Committee voting this week included:

* Rejection of two amendments, one from Sen. Jay Rockefeller (D-WV) and one from Sen. Charles Schumer (D-NY), that would have incorporated a public option in the bill.
* Modification of a financing provision that would make it harder to deduct medical expenses on personal tax returns. Lawmakers voted to exempt taxpayers older than 65.
* Rejection of Republican amendments that would have strengthened limits on both abortion coverage and medical coverage for illegal immigrants.
* Adoption of an amendment by Sen. Chuck Grassley (R-IA) and Sen. Jim Bunning (R-KY) requiring federal employees, lawmakers and their aides to buy health insurance from the health insurance exchanges to be created by the legislation in 2013.
* Rejection of an amendment proposed by Republicans to allow individuals to opt out of the bill’s requirement for everyone to have insurance coverage, upholding the bill’s inclusion of an individual mandate.
* Rejection of an amendment proposed by Sen. Bill Nelson (D-FL) to require drugmakers to provide $106 billion in rebates over 10 years. The Committee upheld an agreement made last June with drug manufacturers to provide $80 billion in rebates.
* Rejection of two Republican amendments that would have blocked cuts in the Medicare Advantage program.

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Public Plan

Public Support for Reform Increases: After a summer embattled by contentious town hall meetings and characterized by slipping public support, the latest Kaiser Health Tracking Poll indicates that public support for health care reform is now on the rise. About 57% of Americans now say that tackling health care reform is more important than ever – up from 53% in August. However, 47% of Americans favor taking additional time to craft a bipartisan approach to health care reform, compared to 42% who say Democrats should move faster on their own. In addition, substantial majorities support the individual mandate, the employer mandate and an expansion of programs such as Medicaid and the State Children’s Health Insurance Program.

Small Business Owners Support Health Care Reform: A recent study by Small Business Majority, a California-based advocacy group, found that small businesses in 17 states are struggling to keep up with health care costs and favor health care reform. Of small business owners in Pennsylvania who do not offer health insurance to employees, 87% say they cannot afford to do so; and, of those who do provide health insurance, 71% are struggling to afford it. Across the 17 states surveyed, 67% of small business owners agreed that health care reform is “urgently needed to fix the U.S. economy” – revealing a growing divide between small business and its traditional Washington ally, the Republican Party.

Young Adults Support Health Care Reform: While many young adults acknowledge that they do not fully understand the health care reform proposals and the potential costs that younger generations may bear, the group remains one of the strongest supporters of reform legislation.

House Activities

House Leaders Merge Bills: House Democratic leaders are working to merge the bills from the three House committees: the Energy and Commerce Committee, the Education and Labor Committee and the Ways and Means Committee. While House leaders now hope to have a final bill sometime in October, they are still debating major elements of the legislation, including whether public-option provider reimbursement rates should be based on Medicare rates and how to reduce the overall cost of the reform legislation. Managing the cost of the legislation is a key requirement for President Barack Obama, who has indicated that a viable bill must be deficit-neutral and cost $900 billion or less over 10 years. The Congressional Budget Office (CBO) has estimated that the cost of the current House package stands at more than $1 trillion.

Additional Activities

President Obama Allocates Money for New Medical Research: On Wednesday, President Obama announced the allocation of $5 billion in grants for medical and scientific research, medical supplies and upgrading laboratory capacity. The funds will be drawn from the $787 billion American Recovery and Reinvestment Act of 2009.

Looking Ahead

Sen. Baucus seeks to finalize the Senate Finance Committee bill today. The Committee vote will be delayed until early next week to give the CBO time to assess the cost of the revised legislation.