Posts Tagged ‘health insurance reform’

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Health Insurance Reform Update June

Thursday, June 3rd, 2010

Congress has once again left town for a recess, until June 7, allowing two key health benefit items to expire at the end of May. One is the “doc fix,” which is needed to stave off a pending 21 percent cut in Medicare physician reimbursements. Aetna favors a multiple-year change to bring stability and certainty to the Medicare Advantage market. While the House passed a bill to extend the fix for 19 months until the end of 2011, the Senate left town without addressing the issue. Although the current short-term fix lapsed on Monday, CMS has alerted its contractors to “hold” claims for the first 10 days of June in the hopes that the “fix” will be fixed by June 10.

Similarly, the House approved, but the Senate did not, a jobs and extenders bill dealing with other expiring items. However, the House-approved package does not contain an extension of the enhanced Medicaid FMAP formula desired by the states, nor does it include an extension of eligibility for the COBRA 65 percent-subsidy program. It also expired at the end of May.

The issue of whether a non-federal government has the authority to tell an employer how to administer a self-funded health plan has been heading to the U.S. Supreme Court for well over a year. The case comes from California where the 9th Circuit ruled in 2008 in favor of the City of San Francisco by deciding that ERISA was not a barrier to San Francisco’s “play or pay” law.  Since the 4th Circuit had ruled just the opposite a few years before in a Maryland case, the conflicting outcomes makes this case ripe for resolution by the Supreme Court. Late last week, the Solicitor General’s office recommended that the Supreme Court not take up the case because, in part, the new health care reform law may dramatically reduce the number of state or local governments following San Francisco’s lead. The SG’s position is unfortunately influential, but it is not determinative. Aetna prefers that the Court take up the case as the ERISA preemption question presented is so fundamental to the employer-sponsored marketplace. Aetna also believe ERISA preemption would be re-affirmed.

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Health Insurance Reform Capitol Update

Thursday, June 3rd, 2010

House Splits Extenders Bill, No Senate Bill until June
Last week’s Capitol Update discussed the “tax extenders” package that is currently being debated in the House, saying that Democratic leaders hoped to pass it by the Memorial Day recess.

House Democratic leaders made the decision last week to split the American Jobs and Closing Tax Loopholes Act (H.R. 4213) – or “tax extenders” package – into multiple bills that would extend dozens of tax provisions, the Medicare physicians’ payment “fix,” unemployment insurance and COBRA subsidies, after it was made clear that the larger bill could not gain the votes required for passage. The House conducted votes on some measures prior to adjourning for the Memorial Day recess.

Democratic leaders in both chambers had been working to gather support for the bill over the past week, but Blue Dogs and a number of fiscally conservative Democratic senators complained that earlier versions of the bill would have added more than $80 billion to the deficit.

Friday, the House adopted an amended rule (H Res 1403) to govern debate on a bill consisting of the unemployment insurance extension and tax extenders provisions, with revenue offsets that are expected to include international tax and a delayed effective date on carried interest provisions.  Members will then consider a separate bill with a stand-alone physicians’ payment update. A third bill addressing the 65 percent COBRA premium subsidy and Federal Medical Assistance Percentages for Medicaid (FMAP) could be considered by the House in June.

House leaders developed the plan in an effort to reduce the cost of the unemployment insurance and tax extenders legislation to win the support of fiscally conservative Democratic members.

Majority Leader Reid (D-NV) said the tax extenders legislation would be open to amendment when brought before the Senate the week of June 7. His remarks came prior to a series of votes in relation to the supplemental appropriations bill, which were the chamber’s final votes before adjourning for the Memorial Day recess.

Legislation Could Allow Americans to Stay on COBRA Health Coverage Until 2014
Senator Sherrod Brown (D-OH) and Representative Susan Davis (D-CA) have introduced new legislation that aims to “permanently” extend COBRA to help unemployed workers and early retirees purchase health coverage before the major insurance market reforms, such as guaranteed issue and the establishment of health insurance exchanges, are in place in 2014.
The “COBRA Health Benefits Extension Act of 2010” has been referred to the Health, Education, Labor, and Pensions (HELP) Committee in the Senate, and the Education and Labor, Energy and Commerce, and the Ways and Means Committees in the House. Each bill has numerous sponsors; all are Democrats.

“Passage of the historic health reform bill was the first of many steps we’ll take so that middle-class families who work hard and play by the rules can still get ahead. But until those provisions take effect, we must ensure that Americans have access to health insurance,” Brown said.  “Unemployed workers and early retirees should have the option of purchasing health coverage through COBRA.”

“Losing a job that has health insurance coverage while treating an illness at the same time is a frightening prospect for so many people and their families. We need to give people a bridge between coverage,” Davis said.
For more information about the legislation, visit these Senate and House websites.

House Republicans Release Legislation to Repeal Health Care Reform Law
On May 27, seven Republican Members of Congress introduced the “Reform Americans Can Afford Act,” a bill that proposes to repeal the current Patient Protection and Affordable Care Act of 2010 and replace it with reforms addressing the interstate sale of health insurance, coverage for persons with pre-existing conditions, medical malpractice reforms and other issues.

Also, the “House GOP Health Care Solutions Group” sponsored a public forum to highlight concerns about the impact the health reform law will have on taxpayers, employers and the physician-patient relationship.

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Health Insurance Reform Legislative Update

Thursday, June 3rd, 2010

HCSC President and CEO Meets with HHS Secretary Sebelius
On May 27, Pat Hemingway Hall, President and CEO of Health Care Service Corporation (HCSC), which operates Blue Cross and Blue Shield divisions in Illinois, New Mexico, Oklahoma and Texas, joined executives from Cigna, WellPoint and the Blue Cross and Blue Shield Association in meeting with Health and Human Services (HHS) Secretary Kathleen Sebelius to discuss the implementation of the Patient Protection and Affordable Care Act of 2010 (PPACA).

Ms. Hemingway Hall was able to share the company’s views on implementing some of the provisions of this sweeping and complex law, and she reported that there was a spirit of cooperation and good dialogue around key issues.

In a press conference after the meeting, the Secretary stated that federal officials are reaching out to self-insured plans to encourage them to permit young adults to remain on their parents’ policy this year. She also said that she has spoken with state governments, large universities, and large employers about the issue and that approximately 65 employers have already agreed to cooperate. HCSC implemented this provision on May 1, for its individual, small and large group fully insured customers.

Secretary Sebelius also said that the National Association of Insurance Commissioners will provide HHS with their medical loss ratio (MLR) recommendations by the end of June. She noted that conversations are ongoing about what types of health plan activities should be included as medical expenses under MLR. During the meeting with the Secretary, Ms. Hemingway Hall cited HCSC’s efforts to reduce hospital acquired infections as an example of activities that should be considered as quality improvements when calculating MLR. Later, Secretary Sebelius noted that example in her press conference.

Premium Subsidies Lapse during Congressional Recess
Federal COBRA and state continuation premium subsidies began lapsing June 1, at least temporarily, because the Senate adjourned for its Memorial Day break last week without taking action on any short-term extension of the subsidies. Without the extension, workers laid off after May 31 will not be eligible for the subsidy.

The bill under consideration would provide the 15-month, 65 percent COBRA premium subsidy through Nov. 30, 2010. If passed, the bill could be applied retroactively so there is no break in eligibility of newly terminated employees.

The House and Senate will return from recess the week of June 7, and will likely take up the issue again.

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Health Insurance Reform Provisions

Thursday, May 27th, 2010

Health Provisions in the Tax Extenders Legislation
Chairmen of the House and Senate tax-writing committees, House Ways and Means Committee Chairman Sander Levin (D-MI) and Senate Finance Committee Chairman Max Baucus (D-MT), introduced the “The American Jobs and Closing Tax Loopholes Act of 2010″ (H.R. 4213 amended) on May 20. This longer-term tax and benefits extension package includes a four-year Medicare “doc fix” that further delays physician payment cuts, and extends the COBRA premium subsidy increase through Dec. 31, 2010.

Congressional leaders are focused on passing the bill before the Memorial Day recess, which is scheduled to begin May 28. At this time, it is not clear whether congressional leaders have the votes needed to win passage of the newly released extenders bill in both chambers. A number of fiscally conservative Democrats and Republicans are reportedly concerned about the overall cost of the package, which is still being scored by the Congressional Budget Office (CBO) and is expected to have a price tag of approximately $200 billion over ten years.

Financial Reform Legislation Clears Senate without Feinstein, Leahy Amendments

By a vote of 59 to 39 on May 20, the Senate approved the “Restoring American Financial Stability Act,” S.3217. Four Republicans broke with their party to vote in favor of the bill: Maine Senators Susan Collins and Olympia Snowe, Senator Scott Brown (MA) and Ranking Member on the Finance Committee Charles Grassley (IA). Two Democrats, Senators Russ Feingold (WI) and Maria Cantwell (WA), opposed the measure, saying that the bill’s provisions did not clamp down hard enough on Wall Street.

The legislation did not include two amendments relevant to health insurers:

  • A measure by Senator Dianne Feinstein (D-CA) to create a federal authority to review health insurance rates; and
  • An amendment offered by Senator Patrick Leahy (D-VT) that would have amended the “McCarran-Ferguson Act” to state that it does not prevent the application of federal anti-trust laws to the “business of health insurance.”

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CBO Adds Billions of Dollars for Discretionary Spending Cost Estimate

Thursday, May 20th, 2010

On May 11, the Congressional Budget Office (CBO) released a report with additional information about the potential effects of the new health insurance reform law, the Patient Protection and Affordable Care Act (PPACA), on discretionary spending that the CBO initially provided on March 13, prior to the legislation being passed.

The updated analysis adds a minimum of $115 billion over 10 years – more than twice the initial estimate released before President Barack Obama signed the bill into law. This new estimate brings the cost of the new law to well over $1 trillion.

CBO Director Douglas Elmendorf stated that while the CBO does not have a comprehensive estimate of all the potential discretionary costs, they provided information on the major components broken down into three general categories:

  • Costs incurred by federal agencies to implement the new policies
  • Explicit authorizations for grant and program spending for one or more years
  • Explicit authorizations for grant and program spending for which no specific funding levels are specified

Minority Leader John Boehner (R-OH) immediately released a statement admonishing the Administration, saying that the new estimate “provides ample cause for alarm,” and nearly wipes out “the purported deficit reduction in the law.”

A Senate Finance Committee Democratic aide said, “The bulk of discretionary spending referenced in the report is for programs – like the Indian Health Service, the National Health Service Corps and Federally Qualified Health Centers – that were not created under health care reform and would have been funded through the appropriations process, like they have for decades, with or without health care reform.”

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Health Insurance Reform Update for May

Wednesday, May 19th, 2010

As the comment period ended with respect to medical loss ratio (MLR) regulations, a flurry of letters were sent last week to both the National Association of Insurance Commissioners and the U.S. Department of Health and Human Services. In addition to Aetna health insurance and other insurers, several employer groups have written with comments and concerns, including the American Benefits Council, the National Coalition on Benefits and the National Retail Federation. In all cases, the comments point out that it’s important to assure that positive, quality-oriented elements of health care, such as health information technology, disease management and wellness programs, fraud and abuse regimens, all should count as quality measures when calculating a company’s MLR. The National Retail Federation in particular noted the need for a national MLR for large employer business, a position well embraced by Aetna.

In the never-ending roll-out of proposed health care reform regulations, the Administration last week published yet another set of Interim Final Regulations. This set deals with coverage for dependent children up to age 26 pursuant to the requirement that insurers and group plans allow kids to stay on their parents’ policies or coverage until age 26.  Comments are due by August 11, but the rule is effective July 12, 2010. Many insurers have already announced that they will implement this provision early (e.g., May 31 for Aetna) to cover graduating college students who may have otherwise faced the summer without insurance. Whether self-funded employers follow suit is not as clear. Also, with the temporary fix of Medicare physician reimbursement rates set to run out the end of May, the House is expected to take up a more lasting fix sometime this week. If the House proceeds as expected it will attempt to install a five-year suspension of any physician rate cuts. Aetna supports the change, as it will give this market predictability.

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Health Insurance Overhaul Law Costs More

Tuesday, May 18th, 2010

The new health insurance law will add at least $115 billion more to government health care spending over the next 10 years, according to the CBO. If all additional spending called for in the legislation is approved, it would push the cost of the overhaul above $1 trillion. The added spending includes administrative costs to federal agencies carrying out the law, community health centers, and Indian health care.

“If Congress were to approve all of this new discretionary funding authorized in the health care bill, almost all of the administration’s highly touted savings would be made null and void,” said Jennifer Hing.

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Health Insurance Reform State High Risk Pools

Friday, May 7th, 2010

In the new health insurance reform law the states are permitted to create their own high risk pools, expand existing pools, or allow the federal government to create and administer the pools for them.

The following states will operate their own pools:
Alaska, Arkansas, California, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Vermont, Washington, West Virginia, Wisconsin, and District of Columbia.

The following states will allow the federal government to create and manage the pools:
Alabama, Delaware, Georgia, Hawaii, Idaho, Indiana, Louisiana, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia, and Wyoming.

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Health Insurance Reform May Update

Tuesday, May 4th, 2010

While the underlying cost of health insurance services remains an under-reported issue, there are signs that this may be changing. The California legislature, for example, is beginning to turn its attention to rising hospital and provider costs, and not just the rising cost of premiums. Just in time, the U.S. Justice Department announced last week that California’s largest health care purchasers can proceed with an extensive study of the costs of care at more than 300 hospitals statewide. The California Hospital Association tried to block the project claiming antitrust concerns, but the Justice Department rejected the claim. Only by addressing costs throughout the health care system will the nation begin to slow the overall cost of health care and truly deliver on the promise of health care reform. Transparency remains a very important part of the equation.

Federal
In January, the U.S. Supreme Court ruled in the Citizens United case that the First Amendment protects the right of corporations, as citizens, to spend corporate funds on political advertising advocating the election or defeat of a particular candidate. In an effort to stave off an anticipated onslaught of corporate money infusion in this year’s elections, the Democratic majority introduced legislation last week to curb any such corporate activity. The core component of the legislation would require corporations (and unions) in the name of transparency to disclose their spending on political advertisement. This legislation is very likely to be a key subject of debate for the rest of the legislative year as Democrats seek to rally consumers and other groups in favor of the bill, and Republicans use the measure as a rallying cry against what they view as an infringement on the First Amendment.  It is not at all clear, at this stage, whether this bill has legs or whether corporations will even take advantage of the Supreme Court’s ruling. What is clear is that the issue will further drive a wedge between the two parties.

In response to WellPoint’s proposed rate increase in the California individual health insurance market in January (now rescinded), Senator Dianne Feinstein (D-CA) had proposed legislation to establish a Federal Rate Authority to both review “potentially unreasonable” increases in health insurance rates (in conjunction with the states) and to endow the federal government with new regulatory powers with respect to the Authority’s findings. Although this provision was not included in health care reform, Senator Feinstein now is poised to offer her bill as an amendment to other legislation moving through the Senate — starting with the financial regulatory reform measure currently before the Senate. The Feinstein proposal would further erode the traditional role of the states with respect to insurance matters and was opposed by Aetna and the insurance industry. Aetna will oppose this new tactic as well.

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Health Insurance Reform Update April

Wednesday, April 21st, 2010

The Senate reconvened on April 12, following its two-week recess.  That day, by a vote of 60 to 34, the Senate approved a cloture motion paving the way for Senate floor action on H.R. 4851, the “Continuing Extension Act.”  This bill, which the House approved on March 17, includes a temporary extension – through April 30 – of the Medicare physician payment fix and the eligibility period for premium assistance for COBRA and state continuation coverage.

The Senate passed the legislation by a vote of 59-38, on April 15. Three Republicans supported the bill, Sen. George Voinovich (OH) and Maine Senators Olympia Snowe and Susan Collins and three Democrats did not vote – Evan Bayh (Indiana health insurance), Bill Nelson (Florida health insurance) and Mark Warner (Virginia health insurance).  An amendment to the legislation offered by Senator Max Baucus (D – MT), which was passed by a voice vote, would extend most of the benefits for another month – until the end of May – so as to avoid a repeat battle over this legislation two weeks from now.  President Obama signed the bill into law Thursday night, April 15th.

Under previous law, these legislative provisions expired on March 31, so this bill offers the retroactive benefits to those people laid off between April 1, and when the bill becomes law. It would guarantee that people who enroll for the subsidy by the end of April will get the entire 15 months of federally subsidized health premiums.

It should be noted that Congressional leaders are also focused on passing a longer-term benefit extensions bill, H.R. 4213.  The longer-term options being considered include a Senate bill that would extend the subsidy through the end of the year. A House bill also offers a longer extension, but the two bills would have to be reconciled, prior to becoming law.

Consideration of the annual budget resolution will be another high priority during the next several weeks, beginning with markups in the Senate and House Budget Committees.  One of the key issues the committees will consider is whether to adopt language allowing the budget reconciliation process to be used to advance any major legislative priorities later this year.

The next stretch of the 2010 legislative session will run for seven weeks before Congress recesses again around Memorial Day.

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