Road Blocks for the Health Care Reform

Road Blocks for the Health Care Reform in Politics and Legislation

House and Senate Democrats have been working hard the past few days to put together a final health care bill and unite their caucus. But many Democrats are still on the fence frustrated with the lack details on the contents of the final bill and its cost.

The Congressional Budget Office (CBO) has not had time to estimate the comprehensive cost of this new bill, so it seems like most lawmakers are kind of in a holding pattern.

Speaker of the House Nancy Pelosi said the House will soon approve the Senate bill and the additional package of changes, reported The New York Times. But House Democrats were promised an estimate from the CBO before they voted, so it’s hard to gauge what will happen.

There’s another issue with the bill: abortion. Many Democrats are still not happy with the abortion language and have been threateningly to vote against it for weeks. Though, rumors are that these House members are bluffing.

Yet another controversial provision in the bill is a student loan program, which would give the government power to make loans to students instead of guaranteeing loans from private companies.  This piece of the reform bill would likely add to the deficit and fuel opposition to its already massive cost.

The road blocks keep mounting every day for the Democrats and their health care and health insurance bill.

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Can the Government and Health Insurance Companies Get Along?

Can the Government and Health Insurance Companies Get Along? in Politics and Legislation

In the past few weeks, health insurance companies have been quite a “punching bag” for proponents of sweeping health insurance reform. For just an example, Secretary of Health and Human Services Kathleen Sebelius spoke at a conference in front of the insurance organization, America’s Health Insurance Plans (AHIP).

According to Politico, Secretary Sebelius spent most of her 20 minute speech accounting stories of Americans who lost their coverage because of rising health insurance costs. 

As a result, insurance companies have shot back at the bill. Many insurers are now actively campaigning against health reform.

Really, the Obama Administration put itself in this position. Last year, AHIP was one of the first groups to pitch in support for health insurance reform.But as lawmakers began depicting insurance companies as the villain, insurers began lining up against the legislation.

“There has been a relentless attack on the men and women who work in our industry.  But the politics as usual in Washington won’t address the underlying affordability issues, so we have to move beyond the politics of vilification and get to the process of problem solving,” said AHIP president Karen Ignagni at the conference.

Ignagni argued that there should be more focus on driving down the cost of health care rather than pointing fingers.

So can we all really get along? Maybe not in politics.

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President Obama Calling on Bounty Hunters to Fight Health Care Fraud

President Obama Calling on Bounty Hunters to Fight Health Care Fraud in Politics and Legislation

President Barack Obama has recently announced that the government will use high-tech bounty hunters to help fight health care fraud across the United States. The president has been campaigning this week to help push his health insurance reform bill through Washington and gain the support of wavering Democrats.

These fraud fighters aren’t actually bounty hunters, though — they’re private auditors. And instead of leather jackets and bullet proof vests, the auditors will use computer programs to scan Medicare and Medicaid billing information to look for patterns.

President Obama said that a similar pilot program between 2005 and 2008 in California, New York and Texas helped save around $900 million. The president estimates that using additional private auditors will recoup $2 billion over the next three years.

According to The Huffington Post, the details of this plan were released hours after major businesses started a multi-million dollar campaign against  health insurance reform. Many businesses against President Obama’s current proposal are beginning to run TV ads aimed at conservative Democrats and the public. The television ads will first air nationwide and then shift to states with wavering Democrats. 

This bounty hunter approach could be successful and will hopefully rein in health insurance fraud.

We have to admit, we were disappointed real bounty hunters weren’t in the picture. President Obama and Dog the Bounty Hunter would have made a great team.

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Vermont Lawmakers Want to Ban Hospital Advertising

Vermont Lawmakers Want to Ban Hospital Advertising in Politics and Legislation

Vermont House Health Care Committee Chairman Steve Maier is proposing legislation that would not allow hospitals to allocate funds for advertising or marketing in the future. Maier believes that advertising is actually increasing health care costs for consumers.

According to the Burlington Free Press, Maier cited non-profit hospitals, which he argues should not have to compete and thus has no need to advertise. Still, non-profits still needs to attract patients to stay in business.

Opponents to the proposal also see problems with what constitutes advertising and marketing, unintended consequences of banning advertising and if the ban restricts hospitals’ right to freedom of speech. 

Cheryl Hanna, a constitutional law professor at Vermont Law School, feels the proposal violates basic constitutional rights. She points out that the law requires a “compelling reason and narrow focus“ of why hospitals should not advertise and Maier’s proposal might not be enough.  On the other hand, if the legislation can prove that banning advertising would reduce health care costs, then it complies.

The article also points out that some of Vermont’s hospitals advertise because the hospitals hold health-care lectures and programs that are available to the public. Without advertising, residents would be unaware of programs that they could take advantage of and use. Other health care providers are small and need to advertise as a way to compete against larger, well-known hospitals.

And of course, many economists argue that advertising drives competition, promotes awareness of effective programs and actually reduces costs. 

It sounds like Vermont still needs more evidence the bill will result in lower health insurance and health care costs for consumers.

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More Insurance Commissioners Speak Out Over Health Insurance Rate Authority

More Insurance Commissioners Speak Out Over Health Insurance Rate Authority in Politics and Legislation

As President Obama campaigns across the country for health insurance reform, state officials are speaking out against one of the newest additions to the bill: the Health Insurance Rate Authority. President Obama wants to create this agency to give the federal government power to review and regulate health insurance premiums. 

More specifically, the Health Insurance Rate Authority would allows the federal government to block “excessive” rates increases. 

But many state officials think that a new agency is not the answer to the problem. Also, many state officials wonder how this new authority will affect current state insurance regulation practices. According to The New York Times, 27 states already have “prior approval” regulations and 12 other states require insurance companies to file rate increases with regulators. 

Sandy Praeger, the insurance commissioner from Kansas, was one of the insurance commissioners who met with President Obama last week.  She told the president, “You are not necessarily helping the consumer if you keep rates artificially low.  What’s worse for the consumer: having a premium increase or having to pay the full amount of a medical expense because the company is out of business?”

Insurance commissioners also believe that it is nearly impossible to keep premiums low before controlling health care costs. Many commissioners simply do not believe the reform bills in Congress will drive down costs and the only affect would be insurers going out of business.

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Florida Candidates for Governor Spar Over Medicaid Fraud

Florida Candidates for Governor Spar Over Medicaid Fraud in Politics and Legislation

Florida Chief Financial Officer Alex Sink and Attorney General Bill McCollum are both running for governor in the Sunshine State. So where are these two starting the finger pointing and mudslinging? Medicaid fraud, of course.

Sink recently attacked McCollum for the statistically poor job the state has done at reining in Medicaid fraud since he took office as the Attorney General. Florida spends over $3.2 billion in Medicaid fraud every year.

When McCollum was appointed, the number of fraud cases opened actually dropped by 355 since 2004. There were 372 fraud cases in 2008 and 2009, compared to 727 in 2004 and 2005.

McCollum now is deflecting the blame to the federal government.

According to the Miami Herald, McCollum sent two letters in the past year to U.S. Health and Human Services Secretary Kathleen Sebelius requesting Florida be waived from a federal rule that doesn’t allow states to screen Medicaid claims to look for patterns of fraud.

McCollum is arguing that the law is obstructing his department from making any headway on Medicaid fraud. His request was granted late last year, but won’t become effective until the end of this year.

Sink jumped on McCollum’s excuse pointing out that other states have overcome the federal rules in the past few years. To help fight fraud, Sink proposed the creation of a Medicaid fraud inspector general and sending bills to Medicaid recipients so they can report overbilling.

Medicaid costs in Florida will reach $19 billion in 2010 and provide health insurance services to 2.8 million residents-roughly 14 percent of the state’s population. 

If you thought health care issues were used as political leverage only on the federal level, you’d be mistaken.

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CEO of Blue Cross Blue Shield of Michigan: Pass an Individual Mandate

CEO of Blue Cross Blue Shield of Michigan: Pass an Individual Mandate in Politics and Legislation

Things in Michigan seem to keep getting worse. The state economy is mightily struggling, leading to major cutbacks all across the board — affecting just about everyone from steel workers to school teachers.

And health insurance rates keep going up, too.

Daniel J. Loepp, president and CEO of Blue Cross Blue Shield of Michigan, recently sent a letter to The Detroit News offering interesting insight to the current premium increases in the state.

Loepp argues that Blue Cross Blue Shield of Michigan is a nonprofit insurance company that cannot reject anyone in the state for having a pre-existing condition. The state’s largest health insurer also cannot charge premiums based on age, gender or health status-meaning every consumer pays the same premium. 

In addition, the Michigan Insurance Commissioner regulates Blue Cross Blue Shield of Michigan’s rates. Their finances are transparent for anyone to view because they self-limit their margins. Finally, Blue Cross has only earned one-tenth of 1 percent margin for the last 20 years.

In addition to all of this, Blue Cross Blue Shield of Michigan promotes access to health care by donating $15 million annually for the Michigan’s Child program that provides health care services to children in low-income families. 

Still, Blue Cross Blue Shield of Michigan is under heavy fire for raising premiums.

Loepp says because BCBS of Michigan is an “insurer-of-last-resort,” they get an insurance pool of sicker and older consumers while deterring young and healthy individuals.

Michigan has also faced record levels of high unemployment which has shifted many people from employer-based coverage to the individual market. And those who cannot get coverage anywhere else turn to Blue Cross Blue Shield of Michigan.

So, that’s why the BCBS of Michigan chief favors health reform and an individual mandate requiring everyone to obtain health insurance.

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President Obama Ready to Pass Health Insurance Reform with Majority Vote

President Obama Ready to Pass Health Insurance Reform with Majority Vote in Politics and Legislation

President Obama is urging Washington lawmakers to pass health care reform in the “final push” for health care reform legislation. Mr. Obama held a press-conference to tell the American public how he plans to move forward with reform. The president also stated that the debate couldn’t go on any longer.

The speech comes after Mr. Obama sent a letter to Congressional leaders outlining four Republican ideas that will be likely included in a final health care bill proposal.

So how will the bill get passed? Well, President Obama has refused to use the word “reconciliation” when describing how the bill will be passed, but did indicate this new version of the Senate bill will only require a simple majority vote. The president said today that his new proposal should receive an up-or-down vote in the next few weeks. 

When questioned on the politics of such a vote, President Obama says that procedure of how a bill gets passed does not make the difference.

“No matter which approach you favor, I believe the United States Congress owes the American people a final vote on health care reform,” stated the president. 

Also, the Congressional Budget Office (CBO) has not had a chance to estimate President Obama’s proposal from last week or estimate the new additions to the bill from yesterday. The estimate could change the minds of some, which could either hinder or help this final push. 

The New York Times also noted that President Obama’s speech wasn’t really trying to earn Republican votes but for Democrats still sitting on the fence.

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President Writes Letter to Congressional Leaders about Health Insurance Reform

President Writes Letter to Congressional Leaders about Health Insurance Reform in Politics and Legislation

After last week’s much-anticipated Health Care Summit, we’ve all been waiting for President Obama to announce how he plans to move forward with health reform.

So in response, the president recently sent a letter to Speaker of the House Nancy Pelosi, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell and House Republican Leader John Boehner summarizing what he believes should be changed about the current bills.

In the letter, President Obama says that the Republicans and Democrats have many similar ideas about health reform. The president also indicated that there were four main Republican ideas that should be adopted into the current health reform bills.

They include:

1. Undercover investigations of care providers who receive federal reimbursements for programs such as Medicaid and Medicare to fight fraud.
2. Federal funding for state-sponsored demonstrations of alternative health reform proposals.
3. Increasing Medicaid reimbursements for doctors.
4. Ensuring consumer-directed high-deductible health insurance plans compatible with Health Savings Accounts are included in a future insurance exchange.

President Obama said that these ideas have been brought to him not only at the summit last Thursday but over the course of the past year. 

In addition to these Republican ideas, the president also indicated he wants to remove highly controversial parts of the bill such as the Cornhusker Deal for Nebraska and Medicare Advantage payment reductions.

The president was also explicit when describing the biggest disagreement between the Democrats and Republicans. He wrote that fundamental disagreements will remain on what role the health insurance industry should play in the reform effort.

That’s probably why there’s talk about using the process of reconciliation to pass a health care bill.  But naturally, Republicans and conservative Democrats are steadfast against that approach. Still, it could be the ultimate trump card for the Democrats and the president.

The president’s letter is a good short read with a list of things we can all agree on: “[P]iecemeal reform is not the best way to effectively reduce premiums, end the exclusion of people with pre-existing conditions or offer Americans the security of knowing that they will never lose coverage, even if they lose or change jobs.”

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Iowa Senate Votes to Change Current Health Insurance System

Iowa Senate Votes to Change Current Health Insurance System in Politics and Legislation

Iowa Senators voted to improve the IowaCare program by expanding coverage to residents outside of Iowa City and Des Moines. The bill will allow newly-eligible residents to receive routine care at safety-net clinics and emergency care at local hospitals.

In addition to expanding the reach of the program, an “information exchange” will be set up that seems very similar to the Democratic health reform bill that is currently stalled in Washington. This exchange gives Iowa residents access information about health insurance policies and the quality of care on hospitals on the Internet. 

IowaCare now services 35,000 uninsured adults who earn less than 200 percent of the federal poverty level which equates to $22,000 for a single person according to the Des Moines Register. IowaCare was established for uninsured adults who are too young for Medicare but don’t qualify for Medicaid.

One provision of the bill would have increased the income limit to 300 percent of the FPL, making an additional 100,000 uninsured adults eligible for coverage. The Senate voted the provision out of the bill in a vote of 28 to 22.

Iowa Legislature felt that residents already have some of the lowest health insurance costs across the nation. Instead, Senator Tom Rielly proposed that the state should find ways to help struggling Iowans pay their private health insurance premiums rather than expand the state-government program.

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Why Health Insurance Rates are High in Massachusetts

Why Health Insurance Rates are High in Massachusetts in Politics and Legislation

If you’re a proponent of universal health insurance, Massachusetts is the pioneer and model for health reform. Just about every resident in the state has coverage and health plans are readily accessible.

The only problem is that the state has the highest average insurance premiums in the United States. Health care spending is 27 percent higher in Massachusetts than the national average and costs keep growing. 

The theory of the universal health insurance system, of course, is to bend the cost curve of health insurance.  Yet in practice, the new Massachusetts system has resulted in annual 30 percent increases in the individual health insurance market.

The most surprising fact may be that the medical loss ratio in Massachusetts for individual policies is 112 percent — meaning insurance companies pay $1.12 in benefits for every $1 in premiums, wrote an opinion piece the Wall Street Journal. That means insurance companies are faced with the undesirable choice of passing that cost to consumers or going out of business.

On the flip side, insurance coverage in Massachusetts is generally much better than it is around the nation. For example, average insurance deductibles are 28 percent lower in Massachusetts than in the rest of the United States. 

To help fight the seemingly out-of-control spending, Governor Deval Patrick wants to give state regulators the ability to cap rates of hospitals, physician groups and specialty providers. 

But it very possibly may be a fruitless effort. in the 1970s and 1980s, 30 states tried doing the same thing with every state except Maryland rejecting the idea outright because it did not control health care costs. 

So is Massachusetts a model of health care and health insurance reform success or massive failure? Certainly depends on how you look at it all.

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Missouri Passes Bill to Hasten Health Insurance Claims

Missouri Passes Bill to Hasten Health Insurance Claims in Politics and Legislation

The Missouri House and Senate passed legislation yesterday that will increase the rate at which health insurance companies pay hospitals. There are now time requirements for health service providers to send health insurance companies information on claims. The new legislation also sets time requirements for insurers to pay physicians and hospitals.

In addition, both the House and Senate bills will enact financial penalties for insurance companies that do not make claim payments within 45 days and will ban companies from suspending payments on claims.  In return, claims will include specific definitions of what information is necessary for health care providers to submit to insurance companies to receive their payment.

The bill is a result of the administrative headaches between health care providers and health insurance companies in Missouri. Hospitals and medical clinics have complained of large gaps in time from when services are provided until they receive payment. But health insurance companies counter that the process would be accelerated if health care providers ensured all claims were valid, properly submitted and contained all of the required information.

Truly then, the bill is a beautiful thing.

According to the Associated Press and the Kansas City Star, Missouri’s Department of Insurance, Financial Institutions & Professional Registration released a report last month finding over $500 million in outstanding claims at 69 Missouri hospitals. A quarter of those claims were 90 days old.

The report has spurred bipartisan action among politicians and the bill received absolutely zero opposition. Sometimes, everything just works out in the world of politics. (Insert sarcastic grin.)  

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Massachusetts Sued for Excluding Immigrants from State-Sponsored Health Insurance Coverage

Massachusetts Sued for Excluding Immigrants from State-Sponsored Health Insurance Coverage in Politics and Legislation

A lawsuit was filed yesterday against Massachusetts Legislature for excluding legal immigrants from state-subsidized health insurance coverage. In total, coverage was cut for 26,000 legal immigrants from Commonwealth Care, the state’s Medicaid program, which eliminated $130 million in funding last year.

The suit claims excluding legal immigrants is unconstitutional and a violation of rights.

According to The Boston Globe, those who were cut from coverage were instead given stripped-down health insurance plans with higher copayments for medications and treatments.

Since the law was passed, 8,000 more legal immigrants have become eligible for Commonwealth Care but have been denied coverage. Massachusetts Legislature capped enrollment in the health care system last year and will not allow any more immigrants into the program. 

Massachusetts’ lawmakers say they didn’t want to cut immigrants coverage, but cited cost as the biggest issue. According to the article, the federal government provides much less Medicaid funding for legal immigrants than U.S. citizens. 

The only problem with the suit is that it’s still questionable whether immigrants can legally sue the state Legislature at all.

We’ll have to see how this all plays out. Interesting stuff.  

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Philosophical Differences in the Health Care Summit

Philosophical Differences in the Health Care Summit in Politics and Legislation

Surprisingly and refreshingly, Republicans and Democrats agreed on many important issues during the health care summit. Not surprisingly, the most controversial issues have yet to be resolved. In particular, regulation and coverage are the two biggest differences that remain after the day of debate.

Really, it all comes down to the ideological differences. Democrats want the government to regulate insurance companies and set guidelines for health insurance across the country. They believe that every American has the right to health insurance coverage and plans to expand coverage to every citizen.

On the other hand, Republicans do not believe that the government should control the insurance industry. In addition, the Republican Party believes that federal public health insurance programs, such as Medicaid and the Children’s Health Insurance Program, should not be expanded. 

But what was clearly established today is that both parties believe that there should be insurance market reforms in one way or another. It’s just that the Democrats prefer stricter reforms and baselines than the Republicans. 

Now on to today’s summit…

Small differences remained on allowing small businesses and individuals to enter an exchange or a pool. This would allow insurers to spread out the risk of insuring individuals and small businesses and keep health costs down.

There was some agreement on purchasing health insurance across state lines. But President Obama added that providing baseline protections for consumers would be necessary. Obama used the example of when credit cards could be bought from any state, credit card companies moved to states that had fewer protections.  Without proper regulation, argued President Obama, this same thing would also happen in the insurance industry.  

Another controversial issue discussed was medical malpractice caps, also known as tort reform. President Obama reiterated that Health and Human Services Secretary Kathleen Sebelius is currently working with states and giving states incentives to figure out a way to reduce medical malpractice lawsuits. The president said he was interested in hearing different strategies of cutting malpractice costs. 

We did think it was interesting that the Democrats never renounced using the procedure tactic known as budget reconciliation to pass health care reform with a simple majority. Democrats also rejected the idea of starting over on health reform, which is something Republican leaders are calling for.

Regardless of these differences, President Obama did seem very pleased at the end of the summit. The president even said the summit demonstrated how much the two parties were in agreement. 

What will actually come of the this health care summit will continue to unfold in the next few weeks.

If you’d like to read more about what we thought about the summit, check out our GoHealthInsurance Twitter page.

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Ending Insurer Antitrust Exemption May Not Reduce Health Care Costs

Ending Insurer Antitrust Exemption May Not Reduce Health Care Costs in Politics and Legislation

The House overwhelmingly passed a bill last night that will repeal the McCarran-Ferguson Act. The bill removes health insurance companies from being exempt to competition laws. It strikes an important political victory in the House for showing a glimmer of bipartisanship right before the Health Care Summit.

Lawmakers hope that dropping the McCarran-Ferguson Act will lower premiums in insurance markets by increasing competition and offering consumers more choices. 

Whether repealing this act will actually reduce health insurance costs is highly debatable. 

Karen Ignagni, President and CEO of AHIP said, “The rhetoric surrounding repeal of McCarran-Ferguson does not match the reality of the situation. Health insurance is one of the most regulated industries in America at both the federal and the state levels. The Act is extremely limited in scope and has nothing to do with competition within the health insurance industry…the real focus should be on addressing the rising cost of medical care, which is putting an unsustainable burden on families, employers, and the federal budget.”

The Congressional Budget Office determined that repealing the anti-trust exemption law would not make a significant impact on the federal budget or on health insurance premiums last year. 

Time will tell if repealing the law will decrease health insurance costs for consumers and increase competition. However, with the amount that health insurance companies are already regulated, there may not be a significant change.

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