Maternal Health Care is a Human Right in Brazil and the U.S.

Midwife visitThe United Nations (UN) has affirmed that maternal health care is an international human right – a right of all women, regardless of their race, ethnicity, income, or citizenship status. In its landmark decision on the case Alyne da Silva Pimentel v. Brazil, the United Nations Committee on the Elimination of Discrimination Against Women established that governments have an obligation to guarantee that all women in their country have access to adequate and timely maternal health care, including emergency services, even if the government outsources health care to private institutions.

The 1979 Convention on the Elimination of All Forms of Discrimination Against Women established that governments must ensure that women receive appropriate prenatal and postnatal services (Article 12), but a maternal death case had never been brought before the UN. In 2007, the Center for Reproductive Rights brought a case against Brazil before the UN committee, and this month this first ever case involving maternal death was decided by an international human rights body. The case involved the 2002 death of a 28-year-old Afro-Brazilian woman who died in her sixth month of pregnancy from preventable complications because of misdiagnosis and delayed treatment. The UN Committee concluded that Brazil had violated the international human rights of women through discriminatory maternal health practices made clear by its history of inequitably distributing maternal health care facilities across regions, a practice that ultimately resulted in Ms. Pimentel’s untimely and preventable death. The decision signals a commitment by the UN to uphold women’s rights to maternal health services and reaffirmed that it is a human right to receive appropriate, adequate, and timely maternal health care.

The case laid bare the stark injustice women and girls face in seeking quality health care in Brazil and around the world. The inequitable distribution of maternal health care facilities in Brazil led to disproportionately low concentrations of adequate maternal health in low-income areas and areas with high concentrations of people of color. Although Brazil’s overall maternal death rate has decreased – recent numbers place it at 58 per 100,000 live births – significant disparities remain along the lines of race, economic status, and region.  

Unfortunately, Brazil is not alone in having starkly disparate maternal death rates based on race. In the United States, African American women, regardless of income, are four times more likely than white women to die of pregnancy-related complications (page 1). This has resulted in an overall maternal death rate for African American women of 26.5 per 100,000 live births (table 34) and rates as high as 83.6 per 100,000 live births in New York City (page 4). Indeed, the U.S. women most likely to die of pregnancy-related complications are low-income women of color.  

Compared to other industrialized countries, however, all women in America have high maternal death rates. With an overall maternal death rate of 12.7 per 100,000 live births (table 34), the United States ranks 50th in the world. This is an embarrassingly low rank for a country that spends the most money on health care in the world and the largest percentage of its health care costs on maternal health. To put this in perspective, a woman in the United States, regardless of race or income, is three times more likely to die in childbirth than a woman in Spain, and five times more likely to die in childbirth than a woman in Greece (page 1).

For the United States, the problem is not necessarily quality of health care, but rather access to it. Federal and state governments have programs in place to serve pregnant women and provide them with appropriate care. Many low-income pregnant women, regardless of race, age, or citizenship status are eligible for Medicaid, which allows women to receive health coverage for pre-natal and post-natal medical treatment. Indeed 42 percent of all births are covered by Medicaid, and no woman in active labor can be turned away from a hospital because of her ability to pay. Many women, however still face barriers to receiving adequate health care under Medicaid, such as transportation concerns, inflexible appointment hours, and difficulty taking time off work. Doctors, too, may be unwilling or unable to take Medicaid because of the low fees and high costs involved (page 5).    

The Patient Protection and Affordable Care Act moves the right to health care forward by requiring insurers to provide some preventive services for women at no cost, such as well-women visits, and expanding Medicaid coverage. These provisions will mean that thousands more pregnant women will receive the health care they need. But estimates indicate that thousands more women will still be in need. Many women who will now qualify for Medicaid will still face barriers in receiving quality maternal care. With the Alyne da Silva Pimentel v. Brazil decision, the UN has reinforced that maternal health care is a fundamental human right. The United States must reaffirm its commitment to women and help lead the way to lower the unacceptably high rate of preventable maternal deaths within its own borders by ending discriminatory practices and ensuring quality maternal health care for all women.

This post was coauthored by Hannah Green.

 

 

Dear Medicaid: Happy 46th Birthday!

 

Coauthored by Rachel Gielau

On July 30th, 1965, President Johnson signed Medicaid into law. Its mission, then and now, is access to quality, affordable health care. For 46 years, Medicaid has been a lifeline to millions of America’s most vulnerable people, including low-income seniors, people with disabilities, children and their parents, and pregnant women. Today, the public health insurance program is the second largest health insurer in the United States, providing quality coverage and peace of mind to one out of five Americans.

Unfortunately, in the midst of the budget battles being fought in Washington Medicaid is under attack. Right-wing proposals like the U.S. House-passed Republican budget plan calls for debilitating cuts that would end the Medicaid program as we know it, slashing the program by about one-third and shifting costs onto states, beneficiaries and providers.

But individuals and families in Illinois depend on Medicaid!

  • For 46 years, Medicaid has been the foundation of health coverage for Illinois’ most vulnerable populations. Today, more than 2.5 million Illinoisans (60 percent are children; 20 percent are elderly, blind, or disabled adults) rely on Medicaid.  
  • Children depend on Medicaid! Almost 1.5 million children, or 43 percent of all kids in Illinois, rely on Medicaid for their well-child doctor visits and other health care needs. For most low-income children, Medicaid is the only source of affordable coverage available. 
  • Medicaid is a lifeline! For more than 559,000 Illinois seniors and people with disabilities Medicaid provides affordable long-term and specialty care. Access to these services helps avoid the use of institutionalized care, keeping costs down and families together.

And we know that Medicaid works!

  • Medicaid makes Illinoisans healthier! Medicaid has been proven to increase access to affordable health care for low-income people, which improves the health and financial stability for families everywhere.
  • Because of Medicaid, low-income children in Illinois are able to get a healthy start in life. Medicaid helps Illinois children be better students and develop healthy living habits early in life. With access to well-child care, our children get the primary care they need to avoid absences from school and prevent costly chronic health conditions later in life.
  • The success of public health insurance programs like Medicaid and the Children’s Health Insurance Program (CHIP—called All Kids in Illinois) has kept uninsured rates for children from spiking due to the economic recession.  
  • Medicaid is more cost-effective than private health insurance! Medicaid spending per enrollee has increased at a slower rate than that of private insurance. Also, Medicaid spends less per enrollee than private insurance does. In fact, “Medicaid costs 27% less for children and 20% less for adults than private insurance.”
  • Medicaid stimulates the economy and supports jobs in Illinois. Every dollar spent on Medicaid in Illinois generates matching federal funds that come back to the state, increasing economic activity and creating jobs. In 2009, Medicaid funding brought an additional $46 billion in business activity, $15.8 billion in wages, and support for 385,742 jobs to local economies in Illinois.
  • While America and Illinois can take pride in Medicaid as it turns 46, the program needs and is getting 21st Century improvements.   Primary care case management, medical homes, electronic medical records, disease management, coordinated care and other initiatives aimed at improving the quality of care for Medicaid patients and controlling costs are all in effect or on the drawing board in Illinois and elsewhere. 

Medicaid just marked its 46th birthday. We think it has improved with age. And as we sing at the end of the birthday song, “Happy birthday to you—and many more.”

 

 

Illinois General Assembly Taking on Immensely Important Task: Creating Competitive Health Insurance Marketplace

Hospital sighnThe stage is set for the Illinois General Assembly to complete one of the most important tasks of its members’ legislative lifetimes: creating the competitive health insurance marketplace (officially called the Illinois Health Benefits Exchange) to begin operations in January 2014.

Recently enacted Illinois Public Act 97-0142 calls for the creation of a 12-member Legislative Study Committee tasked with reporting to the General Assembly and the Governor by September 30, 2011, on implementation and establishment of a centralized marketplace where individuals and small businesses can shop for affordable health insurance, qualify for public subsidies to purchase insurance, or be enrolled in public programs (Medicaid or All Kids). The full General Assembly will take up the Exchange legislation during the fall veto session, which begins October 26. 

The leaders of the General Assembly should immediately appoint members to the Study Committee—legislators who understand that establishing this marketplace is extremely important to millions of Illinois residents (including the 1.7 million currently without insurance) and small businesses.

Once appointed, the Study Committee members need to educate themselves on what the different and better world of health insurance will be like in 2014. For starters, they need to recognize that by 2014 (sooner in some cases) due to insurance market reforms required by the federal Affordable Care Act, all health insurance companies must:

  • offer insurance to all applicants (no rejections  due to health status or pre-existing health conditions),
  • set rates based on applicants’ age, geographic location, and smoking status (no charging women or sick people more),
  • spend most of the premiums they collect on health care, not on administration, and
  • cover preventive health services with no deductible or co-payments, cover care in approved clinical trials, and have no lifetime or annual limits on coverage.

Come 2014, most Americans will be required to have health insurance; that means some 25 million new customers for insurers. The federal government will subsidize the purchase of insurance by people under 400% of the Federal Poverty Level (that’s $43,560 per year for one person and $89,400 for a family of four), and all citizens (and some non-citizens) with incomes under 133% of the Federal Poverty Level will be eligible for Medicaid. Insurers will be able to put their energies into competing by offering the best value and highest quality to customers rather than into avoiding insuring people with health problems, rescinding coverage, or not renewing policies when people file insurance claims.

Study Committee members also need to recognize that the Exchange is about both private health insurance and public health insurance programs. On the private insurance side, the Exchange needs to make it easy for individuals and small businesses to compare health plans, find out if they are eligible for subsidies, and enroll in a health plan that meets their needs. On the public side, the exchange needs to screen people seeking health coverage for eligibility for Illinois public health programs (Medicaid and All Kids), verify their eligibility, and enroll them and reach out to those newly eligible for Medicaid.

Committee members need to understand what the U.S. Department of Health and Human Services (HHS) expects from and offers to the states regarding exchanges, most of which is set out in the newly issued proposed rules announced by HHS head, Kathleen Sebelius, on July 11, 2011.

The Study Committee members also need to get up to speed on the substantial work already done or in progress in Illinois.

First, they need to review the Illinois Health Care Reform Implementation Council Initial Report (March 2011). The Implementation Council, established by Governor Quinn, was comprised of the heads of the several Illinois state agencies responsible for various aspects of federal health reform. In 2010 and early 2011, it held meetings around the state to hear from legislators, medical providers, individuals, and organizations on how to best implement the federal reforms, including the Exchange. The report contains detailed recommendations regarding the Exchange (most importantly, that Illinois establish its own Exchange as a quasi-governmental agency with power to negotiate with insurers and require them to compete on price and quality to sell on the Exchange), with accompanying discussion and summaries of the positions of various interests.

Second, they need to examine carefully Illinois Senate Bill 1729, the Illinois Health Coverage Exchange Act. It was the product of months of Department of Insurance-convened open meetings of five stakeholder working groups (patient and family advocates, employers, insurers, providers, and insurance agents). These groups met separately and then together on the key issues of Exchange governance options, operating models, and financing options. S.B. 1729 was based on all that thoughtful input. Study Committee members should also visit the Illinois Department of Insurance’s website pages on Health Insurance Reform, where they will find much important background information on Exchanges and statutes from other states.

Third, on the public programs side, the Department of Healthcare and Family Services (HFS) is moving ahead in developing the automated processes for screening people for eligibility for Medicaid and All Kids, verifying their eligibility, and enrolling them in the appropriate program via the Exchange. The Study Committee needs to invite HFS Director Julie Hamos to give a detailed briefing on those activities.

Finally, the Study Committee can learn from other states that are going down the same road—some far ahead of Illinois.

The Study Committee should take advantage of all these existing reports and resources and should use its approximately 10 weeks to drill down into the issues, perhaps by inviting recognized experts to meet with it to answer questions members may have and debate various options. And, of course, it should allow the public to describe their needs and express their opinions. 

What it should not do is start from scratch, ignoring the work of the Council, the state agencies, and the input of the hundreds of individuals and organizations who already have participated in good faith in earlier processes.

Its September 30 report should aim to educate the entire General Assembly about the importance of this competitive health insurance marketplace. It should be based on facts and sound economic and policy analysis, should explain the reasons for the policy choices that underlie its recommendations, and should include any substantial conflicting evidence, so that General Assembly members can have a full and fair understanding of the choices they will be making in passing Exchange legislation.

 

Unwise Illinois Policy Proposals Blocked - Little or No Impact on Illinois Budget

Doctor VisitTwo minor features of the Illinois Medicaid Reform law that passed last January required approval from the federal Medicaid agency, Centers for Medicare and Medicaid Services (CMS), before they could be implemented. They were to be effective on July 1, but on June 24, CMS denied permission for Illinois to implement the changes. The proposed changes would have called upon applicants for the program to provide pay stubs for a whole month’s income instead of just one paystub (the current policy), and it would have required cumulative paper evidence of Illinois residence in addition to the applicant’s sworn statement under penalty of perjury (the current policy). Current policy also calls for rigorous electronic monitoring of both income and residence and full authority to demand additional proofs if any questions arise. 

While there is anecdotal evidence that there are instances of beneficiaries receiving Medicaid coverage based on incorrect income or residence information, there was never any evidence that significant savings would be gained by implementing the proposed changes. Indeed, there was never any evidence that savings, if any, would exceed the undeniable cost of administering the new policies. Implementation would have demanded new document-processing capacities, changes in notices and computer settings, and more staff.

In fact, the Illinois General Assembly, perhaps forgetting that it had previously mandated these new staff and operations-intensive Medicaid policies, slashed funding for staff and operations in the recently enacted budget. That budget decision would have made successful implementation of these new policies very difficult, if not impossible. The CMS denial of permission to implement the changes relieves Illinois Medicaid officials of having to launch a futile and distracting attempt to implement with no resources.

For several reasons, the proposed policies are counter to the smart trends in Medicaid policy indicated by research, best practices, experience in the leading states, and policy directions in the reform law. It is not cost-effective to administer the program through staff-heavy, old fashioned welfare bureaucracy. There are excellent electronic tools that accomplish good accountability and fraud prevention. Indeed, this is one of the main reforms in the Illinois Medicaid Reform law and a much more promising direction than the old-fashioned measures that CMS prohibited.

What policies like those CMS prohibited accomplish in terms of “savings” is mostly the denial or delay of coverage to eligible people, through red tape, understaffing, and mistakes. This blocks a major cost-saving theme of both the federal and state reforms–primary care, prevention, and early diagnosis. Those are the types of care facilitated by insurance coverage. Without coverage, people must wait for care until their conditions are acute, and they must go to the emergency room or be hospitalized. That is a bad health outcome, and it costs money. Senator Kirk has been quoted claiming that CMS’s action will cost Illinois $800 million over six years. That is clearly not the case. CMS’s action is likely to save Illinois money.

 Finally, this is not a story of “Washington bureaucrats”. CMS was not making a judgment call, but carrying out the will of Congress. In the health reform law, Congress placed a high value on stability in the Medicaid program during the reform process, and provided that states may not cut back the eligibility and services features of their Medicaid programs during reform (which will see a massive infusion of federal funds for Medicaid in the coming years).

The two provisions that Congress blocked in this instance were very minor details in the Illinois Medicaid reform law. The three major themes of that law–care coordination, long-term care rebalancing, and expansion of information technology to improve and streamline the eligibility process and prevent fraud–are proceeding steadily towards implementation.

 

Study Highlights Importance of Improved Medicaid Program

Child visiting the doctorOn June 17, Dr. Karin Rhodes and her colleague Joanna Bisgaier of the University of Pennsylvania released a report on access to subspecialty doctors by children covered by Medicaid in Cook County, Illinois. The authors also published an article about the study underlying the report in the New England Journal of Medicine

Dr. Rhodes undertook and was paid for the study pursuant to a contract with the Illinois Department of Healthcare and Family Services, the state’s Medicaid agency. The study was part of the department’s compliance with a 2005 consent decree in the case of Memisovski v. Maram, which followed a 2004 federal district court ruling that the state was not in compliance with Medicaid Act requirements that children receive recommended levels of preventive care and treatment of diagnosed conditions, and that they receive care at least to the same extent as children covered by other forms of insurance. 

Following the consent decree in Memisovski, Illiniois has undertaken very significant reforms of the primary and preventive care system for children on Medicaid. It improved the rates paid for office visits to primary care doctors and dentists, and it held the processing time for those services to a reasonable level, even during the recession (when all other state bills were being delayed for many months). It launched a statewide “medical home” initiative designed to match children up with primary care doctors, which has had considerable success. Other strategies to improve primary care have been launched, and the overall effort continues.

The consent decree was less specific with respect to access to specialty care to diagnose conditions or especially to treat diagnosed conditions. It provided that the department undertake a study to examine the extent of access problems, and it left the remedies for any such problems to be determined after the study was completed. However, Illinois was not idle on this front. It enacted a round of rate increases for some pediatric specialists, and it included children in a disease management program for people with chronic illness. 

The study released last Friday, however, shows that there is a very serious problem with access to specialty care for children covered by Medicaid and other public insurance, particularly as compared to children covered by other forms of insurance (mostly employer-based private insurance). Using a “secret shopper” methodology, the investigators posed as parents seeking care for a child, saying in one call that the child’s coverage was Medicaid and in the next call that the same child’s coverage was Blue Cross Blue Shield PPO (which dominates the market in Illinois). The Medicaid-covered children had very significant disadvantages for almost all sub-specialties in both the ability to get an appointment and in the waiting time for the appointment if it was granted. The one exception was psychiatric care, where there was a severe access problem regardless of type of insurance. 

At the time of the original court order and consent decree, Illinois authorities were dealing with an inherited problem resulting from decades of underfunding and neglect of access issues in the state’s Medicaid program. They have been working to comply with the decree and improve the program, in spite of the grinding recession-driven budget crisis in the state. Representatives of the children in the case look forward to working in cooperation with state authorities to find and implement solutions to these newly documented problems with specialty access. 

Meanwhile, the study has resulted in media coverage, and some commentators are attempting to use it to bolster current attempts by conservatives to cut spending on Medicaid or relieve states of the duty to comply with Medicaid’s federal rules guaranteeing children access to all needed care. Medicaid is not “broke”; it is underfunded. The underfunding causes it to fall short on its ability to deliver the kinds of quality health care that, over the long term, would save money by supporting healthier people. And Medicaid is not “broken”; it is falling short of its full potential. It provides plenty of essential health care to millions of children, working adults, people with disabilities and seniors. Cutting them off of Medicaid would hurt them immeasurably. And starving the program of funds would only exacerbate the problems with access and the efforts to expand the health care workforce needed to provide adequate care to all beneficiaries. Just because there are flaws in the program does not mean the program must end for millions of beneficiaries. If we scrapped every governmental program that has flaws that need fixing, where would the armed forces, roads, or schools be? Medicaid is essential, but it can and should improve, especially on this issue of access to needed care.   

 

Affordable Health Insurance Is On Its Way

StethoscopeIn 2014, health insurance marketplace exchanges will be up and running in every state across the United States. As a major part of the Affordable Care Act (ACA), these exchanges will provide an easy and consumer-friendly place for people to find and buy affordable health insurance. Perhaps the best feature of the health insurance exchanges is the federal assistance that will be offered through tax-subsidies and cost-sharing to individuals and families to help pay for insurance premiums and out-of-pocket expenses. People with household incomes less than 400 percent of the federal poverty level, or $74,124 for a family of three, will qualify for the subsidies and out-of-pocket help in the exchanges.

Looking ahead to 2014, authors of a recent study released by The Commonwealth Fund set out to see just how affordable health insurance might really be once these insurance marketplace exchanges are up and running. Using survey data, the authors determined how much “room” people have in their budgets, after covering costs of household necessities, to determine whether the federal tax-subsidies and cost-sharing offered in the exchanges will actually create affordable coverage options for most Americans. The results were cause for cautious optimism.

According to the study, an overwhelming majority of individuals and families will be able to find affordable health insurance in the 2014 exchanges. Thanks to those premium tax subsidies and help with out-of-pocket costs, around 90 percent of households will have enough room in their budgets to pay for the health insurance they need. This is promising news for folks struggling with the burden of run-away health care costs and a private insurance market too expensive to enter.

As to the remaining 10 percent who may not be able to find affordable health insurance, the study’s authors point out three major factors worth addressing: out-of-pocket health care costs, family structure, and place of residence.

The authors predict that high out-of-pocket costs will be the most common reason why some people will run out of money to pay for their medical bills. High out-of-pocket costs double and sometimes nearly triple the percentage of households that can’t afford to meet their health care needs. Because of the way the cost-sharing structure is set up in the exchanges, the financial burden of high out-of-pocket costs will hit individuals and families with household incomes from two to three times the federal poverty level the hardest. These are households with $37,060 to $55,590 annual income for a family of three. Unless states address this when creating their exchanges, one in four families in this income range with high out-of-pocket costs will not have enough money left in their budget to cover their health care expenses.

Family structure is also a significant factor in determining affordability of health insurance on the exchanges. When looking at family size, the study reveals that single individuals, compared to childless couples and families, have less room in their budgets to pay for health care. Regardless of income level, single individuals may find themselves unable to pay for their health care more often than childless couples and families in the 2014 exchanges.

Geography plays a role as well. The study’s authors pooled the states into three different categories: high cost of living, middle cost of living, and low cost of living. It turns out that households in higher-cost states have less room in their budgets for health care than households in lower-cost states.  So, for instance, a family of two making $22,068 a year will find health insurance less affordable in a high-cost state like California when compared to a low-cost state like Oklahoma.

States can address all of these factors when setting up their exchanges. They can give exchanges an active role in finding and negotiating health plans with insurance companies so that the coverage options offered are of the highest quality and at the lowest prices. They can create strong conflict-of-interest rules so that the decision-makers in the exchanges have the public interest at heart rather than profit. They can pass laws making the rules for insurance companies inside and outside of the exchanges the same so that the exchange marketplaces can attract enough insurers and consumers to offer competitive and affordable insurance plans. With rules like these in place, most people will be able to find affordable health insurance, giving our families and our children a real chance for healthy futures.

This blog post was coauthored by Rachel Gielau.

 

 

Medicare Improving Fast

Helping Senior Citizen WalkThere is an intense debate over Rep. Paul Ryan’s (R. WI) proposal to scrap Medicare and turn it into a voucher program shifting costs to seniors, a debate that became even more intense when it was passed by the Republican-controlled House of Representatives. The Senate has not passed it, and the President has registered his opposition. The American people are also firmly opposed

But that debate has taken news focus away from the substantial improvements to the Medicare program that have been accomplished in just the last year under the Affordable Care Act, with more improvements soon to come. Costs are lower and care is better for seniors all over the country.

Here is what happened in 2010 and is about to happen in 2011 in Medicare under the Affordable Care Act. The numbers apply to Illinois, but the same impact is happening everywhere in America.

  1. Prescription drugs are more affordable. In 2010, 152,170 Illinois residents hit the Medicare prescription drug “donut hole” and received at $250 rebate check to defray their costs. Across the state, this came to $38 million in savings for seniors. In 2011, everyone in Illinois who hits the donut hole will receive a 50% discount on their brand name and generic prescription drugs. As of March, Illinois Medicare beneficiaries who had triggered into this benefit were getting about $800 a month in savings.
  2. Preventive services are free. In 2010, when this section of the new law had not yet taken effect, Medicare charged co-pays for preventive services like mammograms and other cancer screenings. In 2011 all of the 1.9 million Medicare beneficiaries in Illinois now get all recommended preventive services with no out-of-pocket costs.
  3. The annual checkup is free. In 2010, when this section of the new law had not yet taken effect, Medicare charged a co-payment for the annual checkup. Starting in 2011, Medicare beneficiaries can go to an annual wellness visit with no out-of-pocket cost. As of April 20, 17,508 Illinoisans have had a free wellness visit. 
  4. Premiums are lower. Under the new law, in 2010 Medicare Part B premiums were nearly $8 less per month than projected by the Medicare trustees. In 2011, the premiums are almost $5 less per month than projected by the Medicare trustees. The lower premium translates to $107 million in savings for Illinois Medicare beneficiaries in 2011.
  5. Medicare Advantage. In 2010 and 2011 all beneficiaries still retain the option of joining a Medicare Advantage plan if they so desire.

This is a story typical of many things in the Affordable Care Act. Improvements to the system are constantly rolling out, but the general public remains unaware of them. In part, this is because the subject matter is complex and hard to absorb unless you are directly affected. And in part it is a deliberate strategy of the opponents to keep the focus elsewhere and downplay the accomplishments of the law as they endeavor to repeal it and roll back its benefits. The intense reaction to Rep. Ryan’s proposal shows that at least the people directly affected – seniors who depend on Medicare – are well aware of the increasing quality of their program. 

An earlier version of this blog post inadvertently referred to Rep. Paul Ryan as "Jack" Ryan.  This has been corrected, and we apologize for the mistake.

 

Proposed Rule Would Ensure Access to Medical Care While Preserving States' Flexibility to Set Rates

For decades, the federal Medicaid law has provided that the states, in return for the billions of federal dollars they get for the program, must arrange the program in a way that ensures that Medicaid beneficiaries will be able to gain access to the medical care they need. This includes the issue of the rates that the program will pay to providers of healthcare services (doctors, hospitals, pharmacies, etc). States have great flexibility to set rates, but they must also pay attention to the impact that the rates have on access to care. 
 
In the budget crisis prevailing in virtually every state, many states have begun to look to rate-cutting in their Medicaid programs. The federal Medicaid agency, noticing this trend, has issued proposed regulations reminding states that they continue to be responsible for assuring access to care, and that they must consider this obligation in their rate-setting decisions. As part of their overall assault on Medicaid, Republican governors and members of Congress plan to fight these proposed regulations, claiming (wrongly) that they represent a new federal assault on state "flexibility". 
 
In fact, states have ample flexibility under Medicaid, including the flexibility to cut rates under some circumstances. But they also have a decades-long responsibility to assure access to care. There is nothing new in the proposed regulations--every state knew about this responsibility before it accepted billions of federal Medicaid dollars. What is new is the assertion that governors who accept billions in Medicaid dollars should the have "flexibility" to arrange the program so that people are denied healthcare and end up in more expensive emergency rooms. 
 
The drive for Medicaid "flexibility" is in fact a drive to provide less health care to fewer people. You save money by providing less care--not rocket science, but not good policy either. It is also not much of a rallying cry, hence the paper-thin coat of "flexibility" paint that is being applied to it.   
 

Experts from the National Senior Citizens' Law Center exposed the flimsiness of this argument in a blog for the American Constitution Society yesterday.

Illinois Needs a Competitive Health Insurance Marketplace--SB 1729 Will Establish One

Health Care for AllThe Illinois General Assembly has a lot of contentious, difficult, and time-consuming items on its 2011 agenda—the state budget, pensions, workers compensation to name a few.

But one item—passage of legislation establishing a competitive marketplace for health insurance where everyone will be able to find comprehensive coverage that is affordable—has already been researched and debated and is ready for a quick decision.

SB 1729, the Illinois Health Coverage Exchange Establishment Act of 2011, is the product of months of work by the Illinois Health Care Reform Implementation Council followed by open and robust discussions about the bill’s components and language in stakeholder working groups of patient and family advocates, employers, insurers, providers, and insurance producers convened by the Illinois Department of Insurance. SB 1729 is s sponsored by Senator David Koehler and, as of April 11, 2011, 13 other senators.

SB 1729 creates a marketplace in which individuals and small businesses can shop for high-quality, affordable health plans and individuals and families of modest means can enroll in public programs, such as Medicaid or All Kids, or obtain federal subsidies to purchase private health plans. Under the bill, this marketplace, officially called the Illinois Health Benefits Exchange, will be an independent body, governed by a nine-member board representing health care consumers, providers, small businesses, employees, labor, and insurance producers, who are appointed by the Governor and Attorney General, subject to confirmation by the Senate. Strong conflict-of-interest rules will keep board members focused on the public good, not narrow interests.

The Illinois marketplace needs to be up and running by January 1, 2014, when many of the federal Affordable Care Act insurance reforms (including no denials for pre-existing conditions and premium prices based only on age, geography, and smoking status and not on health condition) and expansions of coverage for lower income individuals go into effect. Illinois needs to have made substantial progress toward establishment of its marketplace by January 1, 2013, or the federal government will run it for Illinois.

SB 1729 will put Illinois on the road to having an effective exchange operational by 2014 and will allow Illinois to receive $150-200 million in federal funds for implementation. A competing bill, HB 1577, was drafted without any public input, lacks a governance plan, totally ignores the public program side of an exchange, makes preemptive decisions on insurance offerings, and delays Illinois’s progress toward establishing a health insurance marketplace that truly serves Illinois’s small businesses, employees, individuals, and families well.

Those interested in the future of affordable, comprehensive health coverage in Illinois should call their state senator and ask him or her to support SB 1729 and even become a sponsor. Call 1.888.616.3322 (AARP’s health line) to reach your senator.

 

Happy Birthday Affordable Care Act

Happy BirthdayAmerica’s health care law, the Affordable Care Act, turns one year old on March 23rd. That’s good news for Illinois’s four-year-olds—and forty-four-year-olds, and lots of other Illinoisans too. That’s because the law imposes consumer protections on the hugely unregulated health insurance industry, and promises to cover over half of the uninsured by allowing states to create insurance marketplaces that provide transparent, comprehensive, affordable health plan choices, makes federal subsidies available to ensure middle-class families won’t break the bank to pay for their plans, and expands Medicaid to low-income adults.

Illinois’s leaders have worked hard to build a track record of success on access to health insurance coverage. Democrats and Republicans have put partisan politics aside and worked together to reform Medicaid and to enact consumer protections in the private insurance industry, such as dependent care coverage for young adults. Now it’s time for our leaders in Springfield to again make some critical decisions—this time about how the Affordable Care Act works in Illinois. And we all have a role in ensuring that the law works for Illinois’s families and individuals.

The Affordable Care Act has already delivered important wins for Illinois’s residents. Illinoisans diagnosed with cancer or other serious conditions can no longer be denied care because of annual or lifetime insurance limits and insurers cannot deny coverage outright for children. Parents can keep their college-age children on their family health insurance policies. And Illinoisans with private insurance can get the screenings and check-ups they need to stay healthy, without the out-of-pocket costs that encourage fix-it care instead of health care.

And the Affordable Care Act can deliver even bigger wins for Illinois in the coming years. It authorizes new insurance marketplaces or “exchanges,” to make private insurance work better. Exchange subsidies can make care more affordable for middle-class families. The law authorizes improvements to Medicaid that can make health care a reality hundreds of thousands more Illinoisans who are uninsured today.

But these gains for Illinois’s families and individuals are not automatic. Our leaders in Springfield will make decisions over the next few years that will have consequences for decades to come. They will decide whether Illinois’s exchange provides adequate access to health care for patients, families, and employers in Illinois in a manner that is in the best interest of such individuals, and they’ll decide whether the exchange offers coverage parents can afford.

They’ll decide whether insurance consumer protections actually work and whether Medicaid reaches more uninsured Illinoisans, or whether these individuals will be left behind. And they’ll make dozens of other decisions that will determine how—or even if—the Affordable Care Act works for Illinois.

Every Illinois resident who cares about access to health care can help our leaders in Springfield make the right choices. Policymakers need to hear that it’s time to embrace Illinois’s long-standing tradition of putting access to health care ahead of partisan politics. They need to hear that the cost of failure is too high. They need to hear that they must keep implementation moving forward, and that making the right choices for Illinoisans is the best way to define success.

The Affordable Care Act’s first birthday is the perfect time to send a strong message to Illinois’s leaders. If we get off the sidelines and into the game today, Illinois will be the big winner.

 

Class Action Challenging Medicare Improvement Standard Moves Patients Closer to a Civil Right to Live at Home

Elderly ManMost of us hope that if we become injured, disabled, or too old to care for ourselves, we will be cared for at home. Many studies suggest that it is more cost-effective to care for people who are disabled and elderly in their homes rather than in nursing homes, and advocates for these populations often discuss an emerging civil right to remain at home. Unfortunately, as a class action filed in the District of Vermont on January 18, 2011, by the Medicare Advocacy Project of Vermont Legal Aid and the Center for Medicare Advocacy makes clear, false hurdles are erected throughout the Medicare system that make it difficult for patients to receive care in their homes.

Under the United States Supreme Court’s 1999 ruling in Olmstead v. L.C., patients in nursing homes and other institutions who can safely and appropriately live in their communities are entitled to do so. Finding appropriate service providers and obtaining Medicare coverage remain challenging for many patients, however, and one of the main impediments standing between patients and living at home is the Medicare improvement standard.

As Gill Deford, Margaret Murphy, and Judith Stein of the Center for Medicare Advocacy discussed in their January-February 2010 Clearinghouse Review: Journal of Law and Policy article, How the “Improvement Standard” Improperly Denies Coverage to Medicare Patients with Chronic Conditions, Medicare beneficiaries with chronic conditions who need skilled care—including home health care—are often improperly denied care because of the myth “that coverage of skilled care requires a beneficiary to be improving.” Under this “phony coverage standard” that appears nowhere in the Medicare statute or its implementing regulations, Medicare recipients suffering from a wide array of physical and mental impairments are denied the nursing care, physical therapy, occupational therapy, and speech therapy that they need to remain stable and avoid further deterioration. This standard is routinely applied to Medicare recipients living in hospitals and nursing homes, as well as those who live independently, even when their doctors make it clear that skilled care is necessary to keep the patients from deteriorating. The problem stems, in large part, from unclear Medicare manual provisions that are sometimes more restrictive than the actual regulations, as well as from ongoing confusion regarding the difference between “skilled care,” which is covered by Medicare, and “custodial care,” which is not.

A new class action, Jimmo v. Sibelius, was filed against the U.S. Secretary of Health and Human Services on January 18 by five individual plaintiffs and five national organizations, including the National Multiple Sclerosis Society and Paralyzed Veterans of America. The plaintiffs brought the suit on behalf of a nationwide class of Medicare beneficiaries who have been or will be harmed by the improvement standard. The suit challenges Medicare’s continued use of the improvement standard to deny benefits to Medicare recipients with chronic conditions. The plaintiffs specifically argue that the improvement standard is not included in Medicare law and regulations and, therefore, should not be a consideration when decisions are made about patients’ benefits. (An amended complaint, adding the Alzheimer’s Association, United Cerebral Palsy, and a sixth individual beneficiary as plaintiffs, was filed on March 3).

Jimmo v. Sibelius follows a recent flurry of legal and regulatory activity around the Medicare improvement standard. First, in the fall of 2010, two federal courts examined and rejected the improvement standard. As Robert Pear wrote in the New York Times, federal judges in Pennsylvania and Vermont held that “skilled care may be reasonable and necessary and covered by Medicare even if the person’s condition is stable and unlikely to improve.” The plaintiff in the Pennsylvania case, Papciak v. Sebelius, resided in a nursing home, where she received skilled nursing care, physical therapy, and occupational therapy following hip replacement surgery. Medicare eventually denied coverage for these services, however, because she had “made only minimal progress in some areas, had regressed in other areas, and had been determined to have met her maximum potential for her physical and occupational therapy.” According to Medicare, plaintiff’s lack of improvement meant that plaintiff was receiving “custodial care,” not “skilled care.” By contrast, in Anderson v. Sebelius, the plaintiff was receiving home health services to stay stable after her second stroke and address a variety of other health problems, including hypertension, slurred speech, and type II diabetes. Medicare ultimately denied her coverage as well, claiming the services did not meet Medicare’s coverage criteria. In both cases, albeit in slightly different language, the judges held that Medicare improperly relied upon whether or not the plaintiffs had the potential to improve when denying them coverage. (Coincidentally, the same judge who issued the Anderson decision will preside over Jimmo.) 

Next, on January 1, 2011, new Medicare regulations promulgated by the Centers for Medicare and Medicaid Services became effective. As the Center for Medicare Advocacy announced, the new rules make it clear that “skilled care does include services that are intended to maintain a person’s condition and that no ‘rules of thumb’ should be used to deny care—including rules that require restoration potential.” The new regulations state that decision-makers should review “accepted standards of clinical practice and . . . consider whether a professional is needed for the service to be safe and effective for the particular beneficiary.” Patients and their advocates should not be overly optimistic about the new regulations, however. As Gill Deford noted in a press release about the Jimmo class action, the new regulations are meaningless if service providers ignore them. Deford said “[w]hile we thank CMS for their recent clarification of Medicare coverage for home health services—including physical therapy, occupational therapy and speech-language pathology services—the clarification does not undo conflicting policies and practices.”

Ironically, as Dr. Nicholas LaRocca of the National Multiple Sclerosis Society stated in the Center for Medicare Advocacy press release about the Jimmo case, Medicare’s denial of benefits for services such as home health care and physical therapy can end up being more expensive for the government than providing appropriate therapeutic care. These types of services “help avert physical and cognitive deterioration or maintain optimal functioning,” Dr. LaRocca said. “This deterioration often leads to more intense, more expensive services, hospitalization or nursing care.”

Hopefully, the Jimmo class action will put an end to the use of the improvement standard and move America’s elderly and disabled one step closer to a civil right to live at home. If you, a family member, or a client has been denied Medicare coverage because your health condition is not improving, you may have been denied coverage unfairly. For information about your Medicare rights, contact the Center for Medicare Advocacy at: improvement@medicareadvocacy.org

 

Extremist Florida Judge Rules Against Affordable Care Act

GavelThe Social Security Act, the Voting Rights Act, the Civil Rights Act and the Minimum Wage Act were all landmark laws that changed our country for the better. They secured essential freedoms for all Americans and improved our quality of life. All were initially struck down by lower court judges unwilling politically or unable intellectually to embrace the fact that our Constitution permits that kind of progress. An activist conservative lower court federal judge in Pensacola, Florida, has now made his contribution to this history.   

U.S. District Judge Roger Vinson ruled this week that the Affordable Care Act’s (ACA’s) provision requiring most Americans to obtain private health insurance, or else face a modest tax penalty, was unconstitutional. He is the only judge who has adjudicated challenges to the law to be so aggressively activist as to strike down the whole law. Unlike the other judges who have ruled the “individual mandate” to be unconstitutional, Judge Vinson went further and held that the individual mandate was so intertwined with the rest of the law that it could not be “severed” from it, and so he invalidated the whole law.

The Justice Department immediately announced that it plans to appeal the decision to the U.S. Court of Appeals for the 11th Circuit. The score in the cases now stands as follows: 13 challenges have been filed in federal courts since March 23, 2010; ten suits have upheld the law, and three rulings have found all or part of the ACA unconstitutional. So far, judges appointed by Republican presidents have ruled consistently against the ACA, while Democratic judicial appointees have ruled for it. And in the most recent case, all but one of the state officials who filed suit are Republican. 

At the heart of these lawsuits is the individual responsibility provision. This part of the ACA says that most individuals who can afford it will be required to obtain basic health insurance coverage or else pay a fee to help offset the cost of providing medical care to uninsured individuals. If affordable coverage is not available to an individual, he or she will be eligible for an exemption. The individual responsibility provision is an extremely important tool to help ensure that healthy people have health insurance policies, too; otherwise, only the sick or old may choose to have coverage, which would drive up costs for consumers and insurers alike. Every insured family pays an average of $1,000 more a year in premiums to cover the care of those who have no insurance, and the cost of uncompensated care was an estimated $43 billion in 2008.

Like the Virginia judge, Judge Vinson did not issue an injunction against the ACA’s implementation. Indeed, Judge Vinson rejected a constitutional challenge to the part of the ACA that will expand Medicaid in 2014 to individuals with household incomes under 133 percent of the poverty level. The plaintiff state officials had argued that this expansion unlawfully imposes on their sovereignty; however the Judge Vincent held that there is no infringement because a state can choose whether to participate in the Medicaid program.

Nevertheless, Judge Vinson’s ruling invalidating the whole law (as “un-severable” from the individual mandate provision) means that the 26 state officials who are plaintiffs in the case are in an ambiguous position as to whether they will continue implementation activities in their states. They might gamble on the ruling of this fringe judge holding up on appeal. Wisconsin’s governor, a highly partisan Republican, has said he will stop implementing the law. That is unfortunate for the people who live in Wisconsin and in any other state where a governor decides to exalt his or her ideology over the needs of the citizens that are being addressed by the ACA.

Americans—including lots of them who live in Wisconsin—cannot afford to lose the benefits already flowing from provisions of the Affordable Care Act that have nothing to do with the individual mandate, including discounts for seniors struggling with the cost of lifesaving prescriptions, tax credits for small businesses struggling to provide coverage for employees, protections for children who have pre-existing conditions, and coverage for young adults up to age 26.

In the midst of our nation’s jobs crisis, Americans are counting on the Affordable Care Act to put them back in control of their own healthcare, stop insurance company abuses, and lower escalating healthcare costs. Judge Vinson and at least some of the state officials in the case have other priorities.

 

Progress Made with Illinois Medicaid Reforms, But Policy Concerns Remain

Kid playing doctorIllinois’s legislators were hard at work this winter discussing ways to make changes to Illinois’s Medicaid program that would result in short-term savings. Members of Illinois House and Senate’s Special Committees on Medicaid Reform held hearings where representatives from the Governor’s office, the Illinois Department of Healthcare and Family Services (HFS), advocates, providers, and others offered ideas on how to save money by reforming the Medicaid program. Afterwards, the Governor’s office, HFS, and co-chairs of these committees drafted amendment 2 of H.B. 5420, which passed with bipartisan support and was signed into law January 25, 2011. The reforms contained in the new law are expected to save the state hundreds of millions of dollars. Some of these reforms are discussed below.

A few provisions of the new law make changes to the All Kids children’s health insurance program. Starting July 1, 2011, children in households with incomes over 300% of the poverty level (about $66,150/year for a family of four) will no longer be eligible for All Kids. If these children are already enrolled, they will be allowed to stay in the program for one year. Also, starting July 1, 2011, new applicants to the All Kids program will need to provide proof of one-month of income and to verify their Illinois residency. Enrollees in the All Kids and FamilyCare programs will need to recertify their coverage with HFS—to verify income and other eligibility information—in order to stay in the program. HFS will notify current enrollees of these changes within 90 days of the bill becoming law. These provisions changing the All Kids program may not align with national health reform, and it is not yet clear whether they will be approved by federal authorities, since they may implicate the maintenance of effort provision in that law, which applies to procedural changes. 

The new law also requires HFS to conduct an analysis of how All Kids determines eligibility and to submit reports in 2011 and 2012. The law also institutes a two-year moratorium on medical assistance program expansions beyond anything in place on January 1, 2011, with the exception of anything that would jeopardize the federal Medicaid match if it wasn’t implemented. Further, the law extends the sunset date of the bipartisan Covering All Kids Health Insurance Act —which authorized coverage for undocumented children and for those in households with incomes greater than 200% of the poverty level—by five years to July 1, 2016. The extension of the sunset is immensely important to promote the health and well being of Illinois’s children and will help Illinois to maintain its position as a national leader in covering kids.

Other provisions in the new law will improve upon Illinois’s existing information technology infrastructure to allow for data sharing among government agencies. For instance, these provisions will allow HFS and the Department of Human Services (DHS) to access records of other governmental agencies, such as the Social Security Administration, Illinois Secretary of State, Illinois Department of Insurance, and the Illinois Department of Employment Security, to verify eligibility information. These steps will help build a foundation for the enormous information technology infrastructure requirements necessary for the successful working of a state-based health insurance exchange marketplace. The eventual goal is a streamlined and simplified Eligibility, Verification, and Enrollment (EVE) electronic data-sharing system that will fully comply with the Affordable Care Act.

The new law also provides that by 2015, at least half of all Medicaid enrollees will be in a care coordination program—an integrated delivery system with providers that furnish or arrange for the majority of care, including primary care and referrals from those providers, hospital services, dental services, etc. Illinois Health Connect—Illinois’s existing primary care case management (PCCM) program—does not, in its current form, qualify. However, it may qualify at a later date if the PCCM program makes changes that define its services more comprehensively and assumes more risk on behalf of its enrollees. HFS will be required to report to the General Assembly from April 2012 until April 2016 on the progress and implementation of the coordinated care program initiatives.

Medicaid is the primary payer for long-term care, which covers a variety of services needed by people to live independently in the community, such as home health and personal care, as well as services provided in institutional settings, such as nursing homes. The new law makes changes to Illinois’s existing long-term care system to allow for the state to shift Medicaid long‐term services budgets to noninstitutional, community-based settings. The law provides the governor with the authority to redesignate a portion of funds set aside for institutional services to be transferred to community-based, long-term care programs. This reform represents an opportunity for Illinois to address the long‐term care needs of low‐income individuals with chronic and disabling conditions. The law’s provisions affecting long-term care rebalancing, enhancing care coordination delivery systems, and EVE can all be implemented in a way that aligns with parts of the national health reform law, and that they should be done that way.

The law will also make many changes to the way government monitors and enforces Medicaid fraud. It provides for a civil remedy to combat Medicaid fraud, which includes a financial penalty of up to $2,000 for each fraudulent claim for benefits or payments. Illinois will also be repaid 5% interest per annum on the value of benefits fraudulently received.  HFS’s Inspector General’s office will be required to report to the General Assembly 12 months after the law’s effective date on the number of fraud cases identified and pursued and the fines assessed and collected.

In sum, the new law makes progress in necessary areas, especially in implementing national health reform, but may not be best policy in others. The Shriver Center is supportive of many of the measures in the law, including the ones that have the most potential to reduce health care costs in constructive ways, such as long-term care rebalancing. We regret the changes to the All Kids program narrowing eligibility and increasing red tape. We urge the General Assembly to fully fund the staff needed to competently manage the increased bureaucracy. We are hopeful that when EVE is fully implemented, the red tape can be removed.

 

The Affordable Care Act Is Working! Turning Back the Clock Would Hurt Millions of Americans

Health Care for AllThe House of Representatives is going to vote on H.R. 2 and H. Res. 9, which would repeal the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively referred to as “the Affordable Care Act”). These two laws are already providing critically important benefits and protections for individuals and families across the country. Turning back the clock by repealing these vitally important laws would harm millions of Americans, and would once again allow insurance companies to put profits first

Repeal would allow unfair and discriminatory insurance practices to continue. Repeal would eliminate important measures that hold insurance companies accountable. Repeal would once again impose lifetime or annual dollar limits on covered services, or rescind insurance coverage when an individual gets sick. Repeal would allow insurers to deny women coverage if they’ve had a Cesarean section, breast or cervical cancer, or received medical treatment for domestic or sexual violence.

Repeal would allow insurance companies to continue to deny coverage to those with pre-existing conditions. Members of Congress are guaranteed access to health coverage even if they or family members have a pre-existing condition. The Affordable Care Act provides this protection for America's families. The ACA is already working to provide children with pre-existing conditions the coverage they need to grow up healthy. The repeal bill would take this right away from America's families--as many as 129 million Americans under age 65--while members of Congress keep it for themselves.

Repeal would make obtaining insurance more difficult and more expensive. The new law would give individuals and families the ability to find more affordable insurance options through the new exchanges to be established in 2014. Repeal would eliminate those opportunities for an estimated 54 million Americans, including the 15.9 million who are expected to enroll in Medicaid by 2019, and the families who would be eligible for tax credit subsidies to help with the cost of premiums and out-of-pocket costs. Members of Congress receive subsidies of almost three-quarters of their health insurance premiums--all paid by taxpayers. 

Repeal will make finding comprehensive health insurance more difficult. Too many Americans struggle to find health insurance that covers important health care services they need, like maternity and mental health care as well as prescription drugs. Repeal of the Affordable Care Act will eliminate the requirement that all plans sold to individuals and small employers cover these critically essential health benefits. Under repeal, adults would also lose free access to recommended preventive screenings. 

Repeal will eliminate critical tax credits for small employers, making it harder for them to provide insurance coverage for their employees. The Affordable Care Act provides critical tax credits to small employers that help them provide health insurance to their employees. And, the ACA will offer small employers new options to find affordable coverage when the exchanges are operational in 2014. 

Repeal will eliminate many additional provisions providing important benefits to families, including extending dependent coverage to children up to age 26 and prohibiting insurers from requiring pre-authorization for emergency room care or for women to get a referral to see their ob/gyn.

The Affordable Care Act is working! The law preserves what works while giving Americans the freedom to change jobs and the security of knowing they won't lose their homes because someone in the family got sick. Repeal will turn back the clock on important progress and cause real harm to real families struggling everyday to ensure comprehensive affordable health care coverage. Repeal would destroy 250,000 to 400,000 jobs annually over the next decade by reducing the share of workers who start new businesses, move to new jobs, or otherwise invest in themselves and the economy. And the Congressional Budget Office’s preliminary analysis of the effects of the bill estimated that repeal would increase the deficit by $230 billion from 2012 to 2021. 

Call your congressperson today to urge them to vote against repeal! Call toll free: 1-866-922-4970

 

Illinois Wins Millions in Federal Performance Bonus to Reward Cutting Red Tape in Connecting Children to Health Care

This week, Illinois received national recognition from the U.S. Department of Health and Human Services for the exceptional strides it has made in covering children. As part of this recognition, Illinois was rewarded a $15 million performance bonus. Illinois is one of the top 15 states in the country at cutting government waste and making taxpayer dollars go further to protect the health of Illinois children.

Research shows that the best results for children’s health and for the most efficient use of public funds are accomplished by quickly connecting children to preventive health care and then making sure that care is not interrupted. The Illinois performance bonus is a tribute to the public servants in our state who work every day to make the Illinois All Kids program function in this smart and effective way for Illinois children. In so doing, they make government work better and more efficiently for all Illinoisans.  

All Kids has had bi-partisan support from its beginning in Illinois, including the minimizing of bureaucratic red tape. Until now, leaders on both sides of the aisle have been committed to the effort to help families get the best kind of health care for their children, through coverage, quick connection to preventive care, and continuity of care. This is not only the best way to achieve good health outcomes for the children and to accomplish short- and long-term savings on their health care, but it has now also generated two years of federal performance bonuses (Illinois received $9 million last year). 

We urge Illinois leaders to continue this successful course for All Kids use these well-deserved performance bonus funds to maintain this commitment and sustain this progress in securing Illinois children’s health. This is especially important during challenging economic times as families need the security of knowing that programs like All Kids are there for their children.

Andrea Kovach coauthored this article.

 

 

Three Studies Indicate That Health Reform Will Reduce State Budgets

States can relax a little about the impact health care reform will have on their budgets, particularly the large expansion of Medicaid. States have been made skittish about their state budgets because of structural deficits and recession-driven shortfalls. Thus, even the fact that the Medicaid expansion will be 100% federally funded for the first few years, and ultimately 90% federally funded from 2020 onward, has not been completely comforting. The states are nervous about predictions that some analysts have made that the implementation of national health reform will add difficult levels of new spending to their budgets. This has the potential to dampen states’ willingness and confidence to embark on aggressive implementation efforts. 

But the predictions of dire impact on state budgets are not accurate. At least three studies now estimate that health care reform will have a positive impact on state budgets, reducing spending in an array of areas to more than offset the marginal increase in state funds spent on Medicaid.

First, there is a very recent report issued by the Urban Institute (commissioned by First Focus), “Net Effect of the Affordable Care Act on State Budgets.” The report compares the increased costs states will experience due to the expansion of Medicaid coverage for low-income adults in 2014 with the savings states will realize from the law. The report takes into account savings that will come when states move people currently covered by Medicaid at income levels above 133% of the poverty level into the private insurance exchange, where the subsidies for premiums and co-pays are entirely federally financed. In Illinois, the FamilyCare program currently covers adults up to 185% of the poverty level with a 50% federal match. The Urban Institute’s report also takes into account the savings states will realize when new Medicaid beneficiaries no longer use uncompensated health care (mostly emergency room care) and state-funded mental health services.

The study does not take into account significant scheduled increases in the federal matching rate for Children’s Health Insurance or a variety of other health care cost savings that will be brought about under the reform law, but nevertheless it finds that state savings under the Affordable Care Act will exceed state costs by between $40.6 and $131.9 billion during 2014-19.

The Urban Institute study is consistent with earlier findings by the Council of Economic Advisers (CEA) and the Lewin Group that, on balance, states will realize significant net budgetary gains from the legislation. The contrary analyses, among other flaws, recognize or describe only state costs and not potential state gains.

The CEA report profiled 16 states, finding that each would experience net fiscal gains from the Affordable Care Act, totaling between $3 billion and $4 billion a year for all 16 states combined. The states were Arkansas, California, Florida, Idaho, Indiana, Iowa, Maine, Michigan, Minnesota, Nebraska, Montana, North Carolina, Oregon, Pennsylvania, Vermont and Wyoming.

The Lewin report found that, on balance, the Affordable Care Act will save states $106.8 billion during 2010-19, including $100.6 billion in 2014-19.

 

Americans Want Health Care Reform to Go Forward

StethoscopeSome people are spinning hard about the outcome of the recent mid-term elections. They are trying to say that the changes in Congress were a “mandate” to repeal health care reform. As usual, most of those spinners have little to say about how to resolve health care issues--for them health care is an ideological or political issue, not an issue of importance in everyday lives. It is a tactical issue in the beltway game, a ploy in the never-ending struggle for power and for special interest money.

But out here, when the issue is reduced to kitchen-table reality, people don’t think ideologically or politically. They think about their own health care, their families’ health care, and their own financial circumstances. 

Here are some numbers about health coverage and the election. 

Even on the ideological level on which they choose to operate, the spinners are wrong. The election result was driven by concern about the economy and jobs, not health care. According to a CNN exit poll, only 19% of voters named health care reform as their top concern--a distant second to the 61% of voters most concerned with the economy.

On the big abstract ideological question about support for the health reform law, the voters split down the middle: 48% say they support repeal and 47% say they want the reform law to stay the same or be expanded. Some mandate. 

Polls consistently confirm that, when the public hears truthful facts (as opposed to the other kind of “facts”) about the health reform law, they want the benefits and support health reform. The specifics of health care reform already help people in ways that matter deeply to them. Undoing health care reform would mean:

  • People would continue to be denied coverage or charged more for it due to pre-existing conditions.
  • People diagnosed with the particular pre-existing condition of being female would continue to be discriminated against in the cost of their coverage. The spinners would continue that outrageous discrimination. 
  • People would continue to have coverage dropped when they get sick.
  • People would continue to have lifetime caps on their insurance coverage.
  • Small businesses would continue to have to pay higher rates for health insurance than big corporations.
  • There will be no smart investment in prevention as the focus of our healthcare system--clearly the way to get both lower cost and better patient outcomes.
  • People would lose the comfort of knowing that, no matter what happens to their job, their health, or their family, there will always be access to affordable, decent coverage.  
  • Entrepreneurs would continue to experience the drag on their creativity and chances for success caused by the health coverage problems. And health coverage issues would continue to prevent would-be entrepreneurs from even getting started, stuck in their current jobs in order to retain insurance.

The post-election spinners stay far away from these real problems. The new law leaves the private insurance sector in place (a single-payer system would have ended it), but imposes fair boundaries on it. The spinners, scrupulously avoiding anything specific about how to address health coverage issues, instead simply call the new law names: “takeover,” “socialism.” But calling something a name is not the same as talking about it honestly--indeed, it’s a time-honored way to stifle full discussion. The health reform law is in fact a very promising public-private effort to address a problem that plagues American households everywhere. The spinners are wrong about the importance to real people of health care reform. When the focus is on the actual health coverage problems that plague American households, most Americans want their federal and state officials to get on with implementation--and do a good job of it.

 

Not Anymore! Consumers Can Have a Voice in Health Insurance Rates

StethoscopeMany Illinois consumers might be surprised to learn that health insurance rates are regulated (or not) on the state level. This was the case before the federal health reform law was passed earlier this year and, by and large, remains the case. Federal rate regulation was included in some early drafts of the law, but not in the final version. 

Over the next few years, Illinois consumers will benefit from many reforms enacted in the federal law that will bring to an end to some of the unfairness and excessive cost of the until-now unregulated Illinois insurance market. Illinois is the national leader in the number of rescissions—or retroactive cancellations of an insurance policy. Illinois companies can and do charge identically situated women more than men--as much as 57% more. Illinois law allows for individuals and families to be denied health insurance for any reason other than “race, color, religion or national origin.” Case in point: a widow was denied health insurance for herself and her three children because she attended grief counseling to help cope with her young husband’s death. Apparently grief is a pre-existing condition. All of these practices have changed or will change soon under the reform law.

The unchecked state health insurance market in Illinois will not change with respect to rates, however. Insurance companies have been able to increase health insurance premiums with little oversight, transparency, or public accountability because current Illinois law does not restrict health insurance rate increases. In contrast, residents of over half the states and the District of Columbia are protected, because their states have the statutory authority to reject a proposed increase that is excessive, lacks justification, or exceeds certain standards. 

This lack of authority has contributed to unfettered and unjustified premium increases. Health insurance premiums have doubled on average over the last decade, much faster than wages and inflation, putting coverage out of reach for millions of consumers and business owners.  Next year, Chicago workers can expect to pay 12.4 percent more in health insurance premiums and out-of-pocket costs for their health insurance, according to a recent study. And for Chicago employers, the average cost per worker will rise 8.7 percent, including employee contributions to premiums—the highest increase since 2006 and about the same as the national average of 8.8 percent. And if a small employer in Illinois has even just one injured or sick employee, the business can experience rate increases of greater than 50 percent when it’s time to renew. 

Further, a recent report from the Illinois Department of Insurance revealed that Illinois families and individuals have experienced striking base rate increases in their health insurance coverage, often greater than 30 percent since at least January 2005. How can these unchecked rate increases be stopped? Rate approval authority, through the Department of Insurance, has the potential to improve the performance, transparency and accountability of the health insurance market for employers and families. Illinois families trying to obtain financial security and peace of mind in their purchase of health insurance are entitled to have reasonable and fair premiums.

While federal regulation of health insurance rates was not part of the national health reform law, that law does provide a strong foundation for Illinois to start passing necessary insurance reforms at the state level for the almost seven out of ten Illinoisans (69%) who have private insurance policies. The Affordable Care Act provided Illinois a one million dollar grant to help Illinois set up a system of review and public information about rate increases, requiring the companies at least to publicly reveal their justifications for rate increases. Beyond improving public information, however, national reform did not give Illinois the power to deny or reduce rate increases (like it does for public utilities); only Illinois can do that. 

The Illinois Department of Insurance intends to pursue rate review authority, and consumers can and should help in this effort to put the breaks on unfair health insurance premium increases. Illinois consumers of health insurance, be they individuals and families buying their own coverage, employers buying coverage for their employees, or people covered through their work policies, need to start speaking up about the need for rate review authority in Illinois. They should tell their representatives in the Illinois House and Senate to pass strong rate review legislation now. And they also should speak out to the other interests involved here--their insurance brokers and the insurance companies, too. The message to all is the same: the time for rate review is now.

 

Health Care Reform Is Here!

Child Playing DoctorIt’s finally here.

Families across the country can breathe a sigh of relief now that we have reached a major milestone of the new health care law. Starting today, many of the provisions of the new health reform law go into effect! Because of the new law, families will no longer have to worry about their children being denied coverage because of a pre-existing condition (and starting in 2014, no one will have that worry), being dropped from insurance, or facing bankruptcy because of reaching the “lifetime limit” on insurance coverage and still needing expensive health care. Health plans don't have to implement the provisions until their next annual renewal date (so for plans that begin their coverage year on Jan. 1, 2011, that's when the changes will start). Thanks to the Affordable Care Act, the law is finally on our side!

However, some people have spread confusion about the new law. That’s why it’s so important that all of us to get the facts out about our new health care rights under this new law. We need to make sure our families, friends and neighbors understand how the new law will help them.

Take a look at the health care changes going into effect on September 23, 2010, and then send them along to your friends and family:

And if you want more information, visit Healthcare.gov or Families USA's summary of the new health reform law.

No More Getting Dropped After You Get Sick:  You can no longer be cut after the fact.

Free Preventive Care: New health insurance plans must provide preventive services such as mammograms and immunizations without patients paying deductibles or co-payments.

Expanded Coverage to Young Adults:  Young adults can stay on their parents’ health plan until age 26. See Young Invincible website for more information.

Immediate Access for Children, Even If They Have Pre-Existing Conditions: Children under 19 can no longer be rejected from health care plans due to pre-existing conditions or have their health condition be uncovered. New plans cannot exclude children from coverage for a pre-existing condition. And in 2014, adults cannot be denied coverage due to a pre-existing condition. (Uninsured adults with a pre-existing condition may qualify for Illinois’ Pre-existing Condition Insurance Plan (IPXP).)

No More “Lifetime Limits”:  Insurers can no longer stop your benefits because you have “maxed out.”

Tax Credits for Small Businesses Providing Coverage to Workers:  Already effective, qualified small businesses get tax credit for up to 35% of their premiums for covering their workers.

Medicare Prescription Drugs Rebates for Seniors: Medicare Part D enrollees who hit the Medicare prescription drug benefit gap in 2010 will automatically receive a $250 rebate check.

Direct access to OB/GYNs: The new health reform law provides direct access to in-network OB/GYNs for women in health plans that require them to designate primary care providers. This means that, if you are a female, you can see an OB/GYN without prior authorization from the health plan or referral from another doctor, such as your primary care provider.

Access to out-of-network emergency room services: The new law prevents health plans from requiring higher copayments or co-insurance) for out-of-network emergency room services. The new law also prohibits health plans from requiring you to get prior approval before seeking emergency room services from a provider or hospital outside your plan’s network.

We need your help to set the record straight about these changes – share them with your friends and family now!

And there is more to come! Here are some other changes coming in the next year:

Insurers Must Spend More of Your Premium Dollars on Medical Care: Starting in January 2011, your health insurer must spend 80 to 85 cents of your premium dollar on actual health care and quality improvement, or you get a rebate.

Cost-savings to Seniors on Medicare: Effective January 1, 2011, seniors who reach the coverage gap will receive a 50-percent discount when buying Medicare Part D covered brand-name prescription drugs. Over the next ten years, seniors will receive additional savings on brand-name and generic drugs until the coverage gap is closed in 2020.

Free Preventive Services for Seniors on Medicare: Effective January 1, 2011, the law provides certain free preventive services, such as annual wellness visits and personalized prevention plans, for seniors on Medicare. 

Reducing Health Disparities: Effective March 2012, to help understand and reduce persistent health disparities, the law requires any ongoing or new federal health program to collect and report racial, ethnic, and language data. The Secretary of Health and Human Services will use this data to help identify and reduce disparities.

Increasing Medicaid Payments for Primary Care Doctors: Effective January 1, 2013, As Medicaid programs and providers prepare to cover more patients in 2014, the Act requires states to pay primary care physicians no less than 100 percent of Medicare payment rates in 2013 and 2014 for primary care services. The increase is fully funded by the federal government.

Increasing Access to Medicaid: Effective January 1, 2014, Americans who earn less than 133 percent of the poverty level (approximately $14,000 for an individual and $29,000 for a family of four) will be eligible to enroll in Medicaid. States will receive 100 percent federal funding for the first three years to support this expanded coverage, phasing to 90 percent federal funding in subsequent years.

Access to Insurance Options, Subsides, and Public Programs on the Exchange: Effective January 1, 2014, Starting in 2014 if your employer doesn’t offer insurance, you will be able to buy insurance directly in an Exchange -- a new transparent and competitive insurance marketplace where individuals and small businesses can buy affordable and qualified health benefit plans.  Exchanges will offer you a choice of health plans that meet certain benefits and cost standards.  Starting in 2014, Members of Congress will be getting their health care insurance through Exchanges, and you will be able buy your insurance through Exchanges too.

Help with Purchasing Private Insurance: If you can’t find affordable, quality coverage, you’ll have new options and help purchasing insurance.  Starting in 2014, people will be able to buy cheaper coverage through the “exchange”—one-stop shopping access point for insurance. Exchanges will also set standards to keep insurers honest and provide value for premium dollars. If you earn up to roughly $88,000 a year (family of four), you’ll be eligible for new premium tax credits to help you afford coverage.

And much, much more!

 

Women Will Benefit from Health Care Reform

Mother at the doctor's officeWomen are the most likely to have the greatest contact with the health care system, as they often coordinate health care for themselves and their families. Yet women face unique barriers to obtaining and paying for health care. Nearly half of all low-income women are uninsured, and those who are insured are less likely to visit the doctor because of unaffordable out-of-pocket costs. However, things are changing for the better. Thanks to health care reform, low-income women now will face dramatically fewer cost barriers to access health care. The newly passed health care reform law, the Patient Protection and Affordable Care Act of 2010, will make health care more affordable, easier to obtain and provide more comprehensive services, ensuring women receive the care they need. 

Starting January 1, 2014, 8.2 million women whose incomes are at or below 133% of the federal poverty level will now be eligible for health coverage through the expansion of the Medicaid program. According to the National Women’s Law Center, up to 154,300 uninsured, low-income women in Illinois will gain health care coverage through the Medicaid expansion.  Another benefit, this coverage will be more comprehensive and include family planning and contraceptive services that are, without a doubt, a plus for women.

Moderate-income women and their families will also reap the benefits from health care reform with the creation of health insurance exchanges. Women with incomes up to 400% of federal poverty level can receive tax-credits that effectively lower out-of-pocket costs and help pay for health insurance coverage. Up to 7 million uninsured women nationwide and 471,000 women in Illinois will benefit from health insurance exchanges and tax-credits.

All women will benefit from the provision that requires all new individual and small business health plans to carry an “essential benefits package”, which provides coverage for essential services such as maternity care, prescription drug coverage, and mental health services.  Because of the difficulty women have finding these services in the individual market, this coverage marks a vital improvement in providing fundamental services women need.

Women stand to gain greatly from health care reform. In fact, women across socioeconomic levels have already started benefiting from health care reform. The National Women’s Law Center and the Commonwealth Fund have done extensive work to make clear what health care reform means for women. For more information on how health care reform benefits all women, read or subscribe to the latest issue of WomanView, entitled “30 Million Women Will Benefit from Health Care Reform.”

Heidy Robertson coauthored this article.

 

Investing in Our Children by Supporting the All Kids Program

Investing in our children is investing in Illinois. When we help children grow and thrive, we are paving the way for our state’s next generation of healthy workers and leaders. Investing in our children means investing in their health through All Kids--Illinois’ nationally renowned health insurance program. Ensuring that every Illinois child has access to health insurance allows children to grow into healthy, productive adults. And we know that our investment is paying off because of the “All Kids Final Report”--a recently released study of the All Kids program. The Covering All Kids Health Insurance Act mandated the study, and it was conducted by the Health Evaluation Collaborative and Institute for Health Research and Policy at University of Illinois at Chicago School of Public Health. 

The study aimed to measure the progress of the All Kids program in insuring children as well as examine areas for improvement. The study showed that the All Kids program has been hugely successful in helping to cover Illinois’ uninsured children: more than nine out of every ten Illinois children have health insurance coverage—many through the All Kids program or a parent’s workplace. While an overwhelming majority of the children who are eligible for employer-sponsored coverage were enrolled in that coverage, that is not an option afforded to all. Luckily, All Kids is there to catch those kids whose families cannot afford or do not have the choice of employer-sponsored coverage so their families have one less thing to worry about during these difficult economic times.

Since All Kids was first offered, the rate of uninsured children has dropped dramatically. At the beginning of the All Kids program, one out of every five low-income children were uninsured, but today, that number is down to approximately one in twenty low-income children. The majority of this enrollment growth since All Kids became available to all uninsured children is among children who were already eligible before the program was expanded. Children are the least expensive population to insure, and the investment now in their health will pay back in dividends later. Research shows that individuals with access to health care as children are less likely to have chronic health problems as adults.  

The recently released study also showed that children in All Kids were significantly more likely to have received an annual check-up and to have seen a dentist in the last 12 months than uninsured children, which means that they received necessary vaccinations and illnesses could be caught early to allow for more time in the classroom. Parents of All Kids’ enrollees were also more likely to report that their child had a “medical home” than both parents of uninsured children and privately insured children, which means that the state of Illinois has been successful in connecting All Kids’ enrollees to a provider who knows the child's health history and can provide health care on a regular basis. These investments are crucial to ensure Illinois kids are ready to learn and on the right track to become healthy, productive young adults.

The study also highlighted areas for improvement, including connecting All Kids’ enrollees to the care they need. We need to ensure that All Kids enrollees can get appointments with specialty doctors when they need them and that providers and clinics offer expanded hours for working parents to take their children to their primary care provider. Overall, the study findings show that there is much to be proud of with the All Kids program: It is leading the way in covering kids, which benefits our entire state. Every child should be able to count on access to affordable, quality health insurance and care, and supporting the All Kids’ program isn’t just the right thing to do. It’s one of the best investments we can make as a state.

This article was co-authored by Kathy Chan, Associate Director, Illinois Maternal and Child Health Coalition.
 

Putting Children's Health First

Healthy schoolkidEvery time you see a healthy, happy child this fall, there’s a good chance we’ve got Congress to thank for it. If you’ve never heard of the Federal Medical Assistance Percentage (FMAP), doesn’t worry – almost no one has. But FMAP – the share of Medicaid costs covered by the federal government – is a lifeline for the 1.6 Illinois children who depend upon Medicaid for the health care they need to grow and thrive. FMAP helps seniors, people with disabilities, and parents stay healthy, too. This week, as part of its response to the recession, Congress extended a temporary FMAP increase that will provide $545 million dollars to help Illinois avoid drastic cuts that would have put children’s health at risk and cost state employees and local health care providers their jobs. And these funds will generate additional economic activity in Illinois. Every $1 million in federal funds generates $1.7 million in business activity on average, 17.1 new jobs, and $600,000 in wages and salaries.

Keeping kids covered is a win for our state. Kids get the checkups and preventive care they need to stay healthy, so they miss less school and so problems like nearsightedness and hearing trouble don’t hold them back. Parents get the peace of mind of knowing that a playground mishap or flu outbreak won’t drive the family deeper into debt. And we all get more value from every health dollar, by focusing on prevention instead of letting today’s minor problems become tomorrow’s costly burdens.

Among our leaders in Washington, Senators Durbin and Burris along with the entire Democratic Congressional delegation voted to keep Illinois kids healthy by keeping FMAP strong. Every late summer picnic, every high school football game, and every afternoon at the park – everywhere we see happy, healthy kids is a reminder to thank our leaders for standing up for families struggling through the recession and putting the health of Illinois children first.

Back-to-School Is a Great Time to Enroll Children in All Kids

Back to SchoolIn the next several weeks kids throughout the state will head back to school. As summer vacation comes to a close, annual vaccinations and check-ups are often on the back-to-school to-do list of Illinois families. But for the estimated 148,000 uninsured children in Illinois, accessing these services can be a challenge. Fortunately, in Illinois this is a problem we can solve. In Illinois every uninsured child qualifies for Illinois’ public health insurance program: All Kids. For kids whose families cannot afford or do not have the choice of employer-sponsored coverage, All Kids is there to catch them so their families have one less thing to worry about during these difficult economic times.

Health insurance coverage allows children to get the care they need so they can spend more days in the classroom. Healthy children can grow and thrive. And children who have access to care now are much more likely to grow into healthy, productive adults. In fact, a recent study found that children enrolled in All Kids were significantly more likely to have had a well-child visit in the last year than uninsured children. And parents of children enrolled in All Kids were significantly more likely to report that their children had a usual source of care than did parents of uninsured children. Enrolling every uninsured child in All Kids health insurance can ensure that children have access to care so they are ready for the first day of school, have eyeglasses so they can see the chalkboard, dental exams so they are not distracted by a toothache, and medications for childhood illnesses like asthma so they can run and play.

Check out the Shriver Center’s All Kids Enrollment Event Toolkit for resources and best practices for enrolling eligible children in All Kids. And be sure to take a look at the new resources from Cover the Uninsured on back-to-school efforts. Parents can enroll their children in All Kids online or find an All Kids Application Agent in their area who can assist with the application process. 

This article was coauthored by Carrie Gilbert.

 

 

Questions About the Illinois Auditor General's Program Audit of the Covering All Kids Health Insurance Program

Kid and DoctorThis May, the Illinois Auditor General released an audit of the Covering All Kids Insurance Act expansion population of the All Kids program, Illinois’ comprehensive and affordable health insurance program for all uninsured children, which benefited over 1.67 million kids in 2009 and has garnered bi-partisan support in the state General Assembly over the last several years. The Sargent Shriver National Center on Poverty Law recently released a brief examining the scope of the audit and the conclusions made by the Auditor General. Instead of providing helpful information to Illinois legislators and citizens on the program’s expenditures of money and awards of contracts, as directed by the law authorizing the audit, it overreaches into policy issues beyond its legislative authority and unwisely recommends changes to the All Kids program that, if implemented, would contradict health policy experts and jeopardize billions of federal Medicaid match dollars. 

The legislative purpose of the audit was to monitor expenditures of money and awards of contracts under the program, not to evaluate public policy. However, the Auditor General chose to focus the overwhelming majority of his attention on the public policy behind the Covering All Kids Insurance Act (to cover all children) and the carefully researched administrative policies regarding enrollment and retention in the program that have been adopted by the Department of Healthcare and Family Services (DHFS). It is unclear why the Auditor General assumes that the General Assembly was inviting an audit of its own public policy choices, and by doing so, second guesses the implementation choices made by DHFS experts on these matters. Moreover, the requirement of an annual audit for a subset of a state Medicaid program is unusual, administratively costly, and not supported by any data or legislative finding. The Covering All Kids Insurance Act—which provides coverage to less than 6% of the total All Kids population—was unjustifiably singled out for this scrutiny.

The Auditor General’s critique of Illinois’ use of passive renewal and 12-month continuous eligibility, and his other recommended changes to the enrollment procedures contradict national health policy experts and federal health leaders. If implemented, these recommendations could result in eligible kids being dropped from coverage, leaving them less likely to receive treatment for chronic conditions such as diabetes and asthma, and more likely to have poorer health, greater rates of avoidable hospitalizations, higher mortality rates, delays in necessary care, and unfilled prescriptions. At the same time, many of these recommendations, if implemented, could jeopardize federal Medicaid match money under the maintenance of efforts requirements of the stimulus law and federal health reform--at a loss of billions of dollars for Illinois.

The audit spends much time complaining about the lack of documentation in case files differentiating the types of immigrant children covered by the program, because, according to the audit, the correct documentation would entitle the state to federal matching funds that Illinois would otherwise forego. However, the difference in documentation among immigrant children did not become relevant to federal financing until Congress passed CHIPRA in January 2009 allowing federal matching funds for certain immigrant children for the first time. The Auditor General paid insufficient attention to the fact that DHFS can retroactively obtain the documentation needed to maximize and claim these federal funds for the time period in question. Similarly, the Auditor General failed to mention that the expansion population of the Covering All Kids Insurance Act has been entirely paid for by offsetting spending reductions elsewhere in the state’s medical assistance programs, as intended by the General Assembly when it passed the law.

Hard working Illinois families know far too well today’s economic reality and the importance of their children’s health insurance. We owe Illinois families a complete, accurate picture of the All Kids program, including a thoughtful real-world analysis of how over 1.6 million Illinois children and their families would be affected by implementation of the auditor’s recommendations. The full brief on the All Kids program is available on the Shriver Center's website.

 

How Does Health Care Reform Help Older Americans?

Senior CitizensThroughout the debate on health care reform, the focus on changes for older Americans was largely prescription drugs and closing the drug coverage "doughnut hole." These changes are extremely important for many senior citizens who hit their drug coverage limit and are forced to pay high out-of-pocket costs. In fact, there is a $250 payment to seniors who reach the doughnut hole--a down payment until the eventual full elimination of the doughnut hole that will happen later this year.

However, the new law also includes several other provisions that will greatly assist older Americans, particularly low-income senior citizens, which the National Senior Citizens Law Center details in several recent reports.

  • For older Americans who rely on long-term services, the new law will create financial incentives for states to shift Medicaid spending toward community-based services, including a six-percentage point increase in federal Medicaid reimbursement for community-based care initiatives.
  • The law establishes several pilot programs to study and improve coordination of care for Americans who receive coverage through both Medicare and Medicaid, otherwise known as "dual eligibles."
  • The law strengthens medical assistance programs to ensure beneficiaries promptly receive covered services.
  • The law eliminated co-payments for prescription drugs for individuals receiving long-term care services in the home and in an institutional setting. Under current law, individuals living in an institutional setting do not have co-payments, while those receiving services in the home do have co-payments.
  • For Americans who are too young to qualify for Medicare but who retire early, a temporary "reinsurance" program will reduce the cost burden on employers.

According to the National Senior Citizen Law Center, the most significant new provision in the new law is the extension of coverage for 32 million Americans, which includes millions of people aged 50-64, through a Medicaid expansion, new state-based Exchanges with subsidies for low- and middle-income Americans, and regulation of the worst practices of insurance companies. Finally, millions of low-income older Americans will have access to the care that they need, and important improvements will be made to programs that contribute to the health and well-being of older Americans.

Check out the NSCLC reports for details on how reform benefits older Americans!

Carrie Gilbert co-authored this post.

 

Let's Get Health Coverage for All Kids in Illinois

The United States Department of Health and Human Services and the states have already begun to implement the health reform law, which will finally provide health insurance coverage to low-income childless adults and individuals with preexisting conditions. Ultimately, health reform will insure an additional 32 million people. In Illinois, we do not need to wait to cover all uninsured children. Thanks to Illinois' All Kids program, we have the opportunity to provide kids with the health coverage and care they need right now. Illinois has led the way in health coverage for children, and was the first state in the country to offer comprehensive, affordable coverage to every uninsured child.

Happy children

Kids who have health insurance are more likely to receive the preventive care, treatment for chronic conditions and vaccines that they need. Children with health insurance are generally healthier throughout their childhood and adolescence. Good health in childhood has been linked to a more productive and lucrative adulthood. 2008 Census data revealed the lowest uninsured rates for children in over 20 years, largely because public programs like All Kids serve as a vital safety net for children whose families lose or cannot afford health coverage.

While Illinois has made immense progress in the effort to cover uninsured children since the inception of All Kids, there are still approximately 235,400 uninsured Illinois children. Because of the All Kids program, however, this is a problem we can solve: we must find and enroll these uninsured kids. One of the best ways to find and enroll uninsured kids is to host a one-day enrollment event in your community. An enrollment event provides families with answers to their questions about the All Kids program as well as the resources and support they need to enroll their kids. The Shriver Center has assembled a toolkit with information, sample materials, and support and advice for hosting a successful enrollment event that you can check out here. Now is the time to enroll Illinois kids in health coverage in provide them with the access to health care they deserve.

This post was coauthored by Carrie Gilbert.

It's Safe to Start Dreaming Again

For any Illinoisan who may have put aside their dream of starting a small business for fear of losing or not being able to afford health insurance coverage, it’s safe to start dreaming again. Illinois small businesses are getting some financial relief from the recently enacted health insurance reform signed into law by President Obama on March 23, 2010. This will be of great help as small businesses’ health care costs have grown 129% since 2000. Luckily, President Obama had small business owners in mind when he signed the health insurance reform bill into law. He said, “I’m signing it for Ryan Smith, who’s here today. He runs a small business with five employees. He’s trying to do the right thing, paying half the cost of coverage for his workers. This bill will help him afford that coverage.”  And the thousands of Ryan Smiths in Illinois will see many benefits from the new law. Here are some of the main benefits:

Right away many Illinois small businesses—and an estimated 3.6 million total small businesses nationwidewill get a tax cut this year to help them pay for health insurance for their employees. This tax credit starts at up to 35% of the money the small business owner spends on premiums for employees and increases over time, eventually reaching 50% when the Insurance Exchanges go into effect in 2014. Nonprofit organizations also qualify, starting at 25% and increasing to 35% of the employer contribution. In this way, small business owners who choose to provide health insurance to their employees will be able to do so more affordably and can stop worrying about rate hikes. 

By 2014, small business owners will also have access to the new Small Business Health Options Program (SHOP) Exchanges so they can find the best deal through a simple and efficient process. Funding will be given to the states through January 1, 2015 to establish these Exchanges within one year of enactment. In the Exchange, small businesses with up to 100 employees (states can limit to 50 employees) can purchase qualified coverage. 

This Exchange will greatly assist small businesses, which have been paying up to 18 percent more than large companies for the same health insurance policy. The independent and non-partisan Congressional Budget Office found that premiums for small businesses will go down. The larger pool leads to more insurer competition and lower administration costs, thereby increasing affordable insurance options. And the larger pooling structure will protect small businesses from sudden, arbitrary rate hikes because a worker gets sick. For those small business employees and self-employed who are currently excluded from coverage due to a pre-existing condition (and who have been uninsured for at least six months), right away there will be a temporary high risk pool established to guarantee coverage.

Small business owners will benefit greatly from the new law. With dollars freeing up due to the tax credit, new competitive insurance marketplace and other health cost savings, small business owners will be able to reinvest in and grow their organizations, offer increased salaries to employees, hire new employees and retain quality employees.  

Historic Social Change

I'm not a health care expert, just a spectator like most of America. It's been said that watching legislation being made is like watching sausage being made. Thanks to the 24-hour news cycle, blogs, etc., we've all just been treated to 14 months of the stomach-turning process of watching legislation being made. This may account for the less-than-jubilant reaction to the enactment of health care reform into law.

Make no mistake, however. This is real, lasting, fundamental, historic social change, on a par with the creation of Social Security in the 1930s and Medicare in the 1960s. It ends the national shame of more than 40 million people without health insurance. It creates a system where everyone must play and everyone has a stake.

Health care reform is not a traditional safety net program. You don't get a card. But we live in a much more complicated world than we did in the 1930s or the 1960s. This reform had to be a accomplished within the confines and constraints of two of the most powerful industries in America--the pharmaceutical industry and the insurance industry. Health care reform succeeded because it builds on the existing health care structure to accomplish at least nine extraordinary goals:

  1. First and foremost, it creates a system of subsidies that will allow all people--adults, children, working, not working--to access affordable health insurance.
     
  2. It will protect people from financial ruin if they contract a disabling disease.
     
  3. It will prevent insurance companies from canceling insurance policies when the policyholder gets sick.
     
  4. It will provide workers with job mobility since insurance companies will no longer be permitted to deny coverage based on a preexisting condition.
     
  5. It will make insurance affordable for middle-income people through a system of subsidies.
     
  6. It will provide very low-income single adults with access to Medicaid.
     
  7. It will make it affordable for small businesses to provide health insurance to their workers.
     
  8. The doughnut hole will be eliminated and seniors will be able to afford their prescriptions.
     
  9. Young adults--an age group that is particularly likely to be uninsured--will be able to remain on their parents' insurance policies until they turn 26.

 

Healthcare -- A Lot Happens Right Away

Many Americans will feel the effect of health reform this year, as significant changes start to go into effect. During 2010:

Child with Doctor

  • Children will not be denied coverage due to a preexisting condition.
     
  • Young adults will be able to stay on their parents' health plans to age 26.
     
  • Insurance companies will be prohibited from revoking coverage when people become ill, and from setting lifetime limits on benefits.
     
  • Small businesses will be eligible for new tax credits to offset their premium costs.
     
  • People with preexisting conditions will be eligible for subsidized coverage through a national, high-risk pool.
     
  • New limits will be set for the percent of premiums that insurers can spend on nonmedical costs, e.g., administrative or profit, and, beginning in 2011, carriers that exceed those limits will be required to offer rebates to enrollees.
     
  • Medicare will provide $250 rebates to beneficiaries to help with prescription drug costs (with greater help coming in future years).
     
  • Medicare will eliminate cost-sharing for preventive services in Medicare and private plans so they are free.

Much more follows in later years.

Congress Makes History

On March 21, the House of Representatives passed historic health insurance reform legislation. The House passed the reform bill previously passed by the Senate, which now becomes law upon the President’s signature (expected as early as March 23).  The House also passed a package of changes to the Senate bill that have been negotiated with the Senate, and which the Senate is expected to pass very soon (using the “reconciliation” procedure that requires a simple majority vote).

The package of reforms is a major step forward to provide Americans more security, more choices, and better cost control for their health care.  See the impact in your legislative district.

This is the end of the worst practices of the insurance industry—no more denials due to pre-existing conditions or dropping coverage for people who get sick, or hidden ceilings on your coverage.

We will all get the same insurance choices that Members of Congress have. What is good for them will be good for everyone.

We have kept what is good in our health system and added oversight of insurance practices, control of insurance rate increases, choice of plan and doctor, more competition, and expanded prevention.

Medicare will be strengthened—reform will cut waste and fraud in Medicare, improve solvency and close the gap in prescription drug coverage for seniors.

There will be access to affordable health care for 3.6 million small businesses and 32 million Americans who have been left out – until now.

The first order of business is to thank your House member, if he or she voted “yes”. 
Here is the roll call.  This is VERY important – these are leaders who deserve thanks and support.

"Let's Make a Deal" Reruns

Remember the show, Let’s Make a Deal, with Monty Hall? Well, it's back--sort of. For more than a year, Congress has been saying that it’s close to making a deal on legislation to overhaul America’s health care and financial systems. 

The original Let’s Make a Deal show was based on the show’s host, Monty Hall, offering deals to members of the audience. The contestants usually had to weigh the possibility of an offer being for a valuable prize, or an undesirable item. In its simplest format, a contestant was given a prize of medium value (such as a television set), and the host offered the contestant the opportunity to trade for another prize. However, the offered prize was unknown. It might be concealed on the stage behind one of three curtains, or behind "boxes" onstage, or within smaller boxes brought out to the audience.

Congress seems to have brought this classic TV game show back. “We’re close to a deal,” on health care legislation. “We’re close to a deal,” on financial reform legislation. 

Health Care Reform

The need across the country for health insurance reform has not abated. Americans agree that the nation's health insurance system is broken, but Congress still hasn’t sent a bill to President Obama to fix it. The current deal on the table is for the House to pass the Senate’s bill and then for both chambers to pass a budget reconciliation bill that resolves their differences. The proposed deal would ban insurance companies forever from denying coverage to children with preexisting conditions and from dropping coverage when an individual becomes sick. Insurance companies would no longer be able to randomly hike premiums or to impose lifetime or annual limits on the amount of care someone can receive. All new insurance plans would be required to offer free preventive care so that illnesses may be caught early. Young adults will be able to stay on their parents’ insurance policies until they are 26 years old. Uninsured individuals and small business owners would have the same kind of choice of private health insurance that members of Congress get for themselves. And individuals who do not have insurance coverage through a large group could be part of a bargaining pool that negotiates lower rates. Also, if an individual is ineligible for Medicaid but still can’t afford the insurance offered through the pool, she or he would receive a tax credit to assist with this cost. Finally, this deal would provide a new, independent appeals process if a claim has been unfairly denied.

It’s time for Congress to take the deal and make health insurance available and affordable for all.

Financial Regulation Reform

After the catastrophic financial crisis, President Obama called for the creation of an independent Consumer Financial Protection Agency, which would have as its sole mission the protection of consumers. It would create and enforce clear rules to ensure fairness of credit card terms and conditions, overdraft loan programs, payday and car title loans, and mortgages. In the fall, the House of Representatives passed legislation creating such a new Consumer Financial Protection Agency, which would provide the type of consumer protections that should have been in place all along. The Senate, however, has been debating the issue for months.

Specifically, Senate Republicans and the financial-services industry have opposed the creation of such an entity. Instead they would prefer that the Federal Reserve continue to be responsible for consumer protection as part of its regulation of nationally chartered banks. The central bank has always been responsible for the health of the nation's largest banks and the safety of American borrowers; however, its failures in both roles have been well documented. For years, the Federal Reserve primarily focused on monetary policy over bank supervision and often made consumer protection an afterthought. As a result, millions of American families have been left unprotected and financially unstable.

Additionally, the Federal Reserve only regulates banks, which would mean that the so-called shadow banking system of payday lenders, debt collectors, and loan originators and servicers would remain unregulated. The power of these entities has been demonstrated by the huge role they had in the current economic crisis. Allowing them to continue their predatory practices without being regulated would not be a deal on reform but rather a continuation of the status quo. Lawmakers have repeatedly said that they are close to a deal on this very divisive issue. Yet, proposals to let the Federal Reserve remain the primary regulator of consumer protection laws, is not a deal, it’s just the status quo. 

Well Monty, Where’s the Deal?

Congress seems to be weighing the possibility of whether reforming health care and financial systems will ultimately be valuable prizes, or undesirable items. Yet, rather than holding onto its existing undesirable prizes, Congress should choose Door #1, quality, affordable health insurance reform NOW and a dedicated agency to monitor and rein in the reckless behavior of financial institutions. 

Well Congress, where’s the deal?
 

The Health Insurance Reform Finish Line:

Co-authored by Carrie Gilbert

Over the last several weeks, we have looked at the different proposals coming through Congress to achieve comprehensive health insurance reform. Congress is now modifying two versions – one in each – the House and the Senate. We have come quite a long way since the beginning of this series, however before health reform is signed into law, there are several more important steps. The Senate has officially begun debate. In order, to take a final vote and pass health reform, they will need 60 votes to end debate on the floor. Then they need a simple majority to pass it out of the Senate. Once each house has a passed a version, it will go to conference committee so that the differences can be resolved and a final bill written.   Your Senators and Representatives will need to hear from you every step of the way. Reassure those that support health reform that they are doing the right thing and let the fence-sitters and naysayers know that as their constituent you would like to see them support health reform. Here is the number to call 1-800-828-0498 to let your representatives know how you feel. 

Here is our final installment of the homestretch series: The Finish Line.  We wrap up the previous issues we have looked at and offer insight into unresolved issues.   

Children’s coverage:

House bill
H.R. 3692 would ultimately dissolve the Children’s Health Insurance Program (CHIP) as of December 31, 2013. Children below 150% of the federal poverty level (FPL) would then move into Medicaid and those above would be moved into the new Health Insurance Exchange or employer-based insurance.   While CHIP is still in place, HR 3692 eliminates waiting periods for children who were previously covered by employer sponsored insurance.  By the end of 2011, the Secretary of HHS will have to conduct a study for what the Exchange will look like and make recommendations to Congress for improving the Exchange for children’s coverage.

Senate bill
H.R. 3590 maintains CHIP for children above 133% FPL through
2019. However, it does not allocate funding past its current renewal date of September 30, 2013. If Congress does not fund CHIP after 2013 then families may enroll in the Exchange and may qualify for subsidies. 

Thoughts
Some advocates fear that moving children out of CHIP without first ensuring that the Exchange is comparable in price and benefits, would harm families and children. They fear that CHIP goes well beyond what private plans in the Exchange would offer in terms of benefits and covered
services. However, others argue that moving entire families into the Exchange would simplify the process and increase the likelihood that children get coverage. Studies have found that when the parents are covered, the children are more likely to be covered and receive necessary benefits. Additionally, there would be an “essential benefits package” requirement in the Exchange that would serve as a benefits floor for private plans. Finally, in the Exchange all families up to 400% FPL would qualify for subsidies, whereas one state has CHIP eligibility to 400% FPL, thereby covering more families. On the Senate side, Senator Bob Casey (D-PA) introduced an amendment to protect and ensure health care coverage for low-income children, including continued full funding for CHIP through 2019. 

Medicaid Expansion:
House bill
The House bill expands Medicaid to 150% FPL in January 2013 with 100% federal financing for 2 years and 91% federal financing beginning in year 2015 for new eligibles (such as childless adults) and some current eligibles covered by a waiver. States with Medicaid levels above 150% will be required to maintain their current levels. The House bill’s additional funding is geared towards helping states transition to the expanded Medicaid program.   Additionally, the House bill would increase Medicaid payment rates to primary care providers to 100% of Medicare rates by 2012. 

Senate bill
The senate bill expands Medicaid to 133% FPL and includes childless adults. The bill requires that the expansion occurs by 2014, but states could begin expanding as early as
2011. Some individuals who qualify for Medicaid could also receive subsidies in the Exchange, although people below 100% FPL could only receive subsidies if they do not qualify for Medicaid. 

Thoughts
Health Affairsdid a study about a year ago, which found that average medical expenses are lower per person under public programs than under private insurance. When controlling for demographics and income, the medical expenditures for the same adult would be 26% higher under private insurance than Medicaid. Additionally, out-of-pocket costs are vastly higher under private insurance than under Medicaid. A Medicaid enrollee would spend 6 to 7 times more on out-of-pocket costs under private insurance than under Medicaid. The CBO estimates that Medicaid expansion to 150% FPL will cover 15 million people. This is not to say that we should balk at the Senate’s Medicaid expansion to 133%, and both bills expand Medicaid to previously ineligible childless adults, which finally addresses a longstanding gap in public coverage for those who often do not qualify or cannot afford private insurance. 

Affordability:

House bill
HR 3692 requires all individuals to purchase coverage, but provides tax credits to individuals and families with incomes above Medicaid eligibility but below 400% FPL. A family of four headed by a 45-year-old making $44,000 a year would pay roughly $2,400 in premiums, or $200 a month, according to the Kaiser Family Foundation. The tax credits are awarded on a sliding scale based on income to limit premium contributions to an affordable percentage of income, starting at 1.5% of income for 133% FPL to 12% of income for 400% FPL. The House bill requires employers to provide health insurance or pay a tax on their total payroll. However, for businesses with annual payrolls less than $750,000 the tax is assessed on a sliding scale, and businesses with annual payrolls under $500,000 are exempt from the tax entirely. 

Senate bill
Similarly, in the Senate bill individuals will receive affordability credits to pay for premiums. The credits would start at 4% of income for households at 134% of FPL and increase to 9.8% of income for households at 300%-400% FPL. The Senate bill also includes employer mandates and penalties, but exempts employers with 50 or fewer employees.

Thoughts
The Senate bill is more affordable for households between 250-400% FPL, but the House bill is more affordable for households under 250% of FPL. In the case of those at the bottom of the subsidy scale, under the Senate bill they could end up paying at least twice as much as what they would pay under the House bill. However, a recent analysis by MIT economist, Jonathan Gruber, found that the Senate bill makes health insurance for individuals purchasing in non-group market much more affordable. The same plan that would cost $5500 without reform would cost $4600 with reform. Gruber also found that the House bill would deliver a savings ranging from $200 for individuals to $500 for families, even without subsidies. The nonpartisan CBO and the Joint Committee on Taxation analysis of how the Senate bill might affect health insurance premiums concluded that the Senate bill will reduce premium costs for 57% of Americans who will receive subsidies by as much as 59%, and rates in large group market by as much as 3%.   Rates may rise for individuals who have to purchase coverage on their own but do not qualify for subsidies, but this is mostly because the plans offered in the Exchange will be better plans than those currently offered and therefore slightly more expensive. 

Public Option
House bill:
HR 3692 creates a National Health Insurance Exchange, where individuals and employers (employers would be phased-in beginning with the smallest employers) can purchase plans that meet certain qualifications in order to be considered an adequate plan. A public option would be included in the Exchange. The public option would follow the same insurance industry guidelines as private plans. The public option would negotiate rates with providers so that they are not below Medicare rates but not above the average rates for comparable private plans. 

Senate bill:
HR 3590 creates a state-based Exchange for individuals and businesses with fewer than 100 employees. States can allow bigger businesses to buy insurance in the Exchange beginning in 2017. The Exchange would include a public option, which must comply with insurance industry regulations for private plans. The Senate bill permits states to choose not to offer the public option, but they would have to pass legislation to do so. The Senate bill would also create a program to foster the development of CO-OPS or non-profit health insurance companies. 

Thoughts:  
According to the CBO, the House bill’s public option would enroll less than 2% of the population (about 6 million customers over the next 10 years) and probably have higher premiums than private plans. The Senate’s bill would attract about 4 million customers. Nevertheless, the
public option has become a heated topic. If Senator Reid can find a public option compromise that pleases all 60 democratic votes, then he can close debate and move toward the final vote. Republicans want six weeks of debate, but as soon as Democrats come to an agreement on the public option they can shut down the debate and avoid the Republican arsenal of stalling and bill-killing tactics. Finding this magical compromise is much easier said than done. Senator Joe Lieberman (I-CT) and other conservative Democrats, most notably Ben Nelson (D-NE), Mary Landrieu (D-LA) and Blanche Lincoln (D-AR) have voiced opposition to the opt-out public option. Landrieu has said that she would support the “trigger” option, which would activate the public option if the private industry does expand coverage fast enough.   Sen. Olympia Snow (R-VT), the only Senate Republican to vote for health reform this year, has also voiced support for the “trigger”. Sen. Nelson supports an opt-in option for states, while Lieberman and Lincoln are going to be much harder to bring to the table on the public option. Meanwhile, Democrats on both the House and Senate side can be lost if there is not a public option. However, a potential compromise is beginning to emerge from negotiations between five liberal and five moderate Democratic Senators. The compromise would remove the public option and replace it with a network of non-profit health insurance plans, which the Office of Personnel Management would administer. The Office of Personnel Management currently administers the Federal Employee Benefits Program. In exchange for removing the public option, moderate Democrats would agree to expanded Medicare and Medicaid.  Getting the 60 votes necessary to close debate involve negotiation on several issues, but the public option balancing act may be the single most important issue for getting to 60. 

Insurance Market Reforms
House bill:
HR 3692 would require private insurers within the Exchange to guarantee coverage regardless of the policyholder’s health and renew the coverage each year, and insurance companies could not rescind a policyholder’s plan. Insurance companies would be required to issue plans despite pre-existing conditions. Variation in premium rates would be illegal based on gender and geography. Premiums can vary based on age but limited to a ratio of 2 to 1. Insurance companies could not impose annual or lifetime caps for medical care.  

Senate bill
The Senate bill also guarantees issue and renewability. As in the House legislation, companies could not rescind coverage or refuse coverage based on a pre-existing condition. Premium variation is allowed based only on age and tobacco use within ratios of 3 to 1 and 1.5 to 1 respectively. 

Thoughts
Insurance market reforms are some of the most needed and least debated aspects of health reform. Countless people have been denied coverage or had their coverage rescinded due to pre-existing conditions or post claims underwriting and rescission practices. These insurance reform changes are significant change to current insurance company business practices. However, even if one issue causes health reform to fail then even these widely agreed upon changes will get thrown out. These changes would mean significant improvements in care for lots of Americans who currently struggle to find adequate coverage.    However, since insurance companies currently charge the young and healthy much less than middle-age people who are more likely to get sick, the young may pay more under both bills than they currently do, if their income is too high for them to qualify for public coverage or subsidies. 

Impact on the deficits and paying for reform:
House bill:
The House bill uses a combination of penalties for lack of coverage, taxes on wealthy Americans and changes to Medicare payment to pay for reform. It is expected to reduce deficit by $109 billion over ten years. 

Senate bill:
The Senate bill uses a combination of taxes on high cost insurance plans, increases to the Medicare payroll tax and a 5% tax on non-medically necessary cosmetic surgery. The Senate bill is expected to reduce the deficit by $130 billion over the first ten years and by more than half a trillion dollars in the following decade. 

Thoughts:
Both bills offer positive elements to craft an affordable bill that curbs the cost of health insurance over time. The tax on wealthy individuals will raise considerable revenue, while the tax on high-cost insurance plans will slow health care growth over time. 

Other Hot Issues:

Abortion: Federal funding for abortions became a contentious issue at the last minute in the House debate. The House passed their bill with language which makes it illegal for the public plan to cover elective abortions, and for individuals receiving subsidies to purchase plans which cover elective abortions. The Senate bill, on the other hand, allows individuals who receive federal subsidies to purchase plans which cover abortions, but insurance companies would have to segregate federal funds to ensure that only the policyholder’s money is used to pay for the procedure. It is expected that early this week Senator Bill Nelson (D-NE) will introduce an amendment to make the language in the Senate bill more like that in the House bill. Some House Democrats have said that while they voted for the amendment once, they will not do it again, and their votes could be lost if the language remains as restrictive as it now is. Speaker Pelosi has stated, however, that health reform will not fail on account of the abortion debate. 

Immigration: The House bill allows undocumented immigrants to buy insurance in the Exchange; however they would have to use their own money to do so. The Senate bill, on the other hand, restricts access to the Exchange completely. Some Congressional Democrats, in particular the Hispanic Caucus, are disappointed with the language regarding immigrants, particularly in the Senate bill. 

Homestretch 6: Paying for it and the impact on the deficit

Co-Authored by Carrie Gilbert

[This is the sixth in a series of six articles summarizing the leading categories of issues at stake in the final stages -- the homestretch -- of the debate on national health insurance and health care reform.]

Last week the Senate released their combined bill which has been sent to the floor for debate. Many of the basic principles of the Senate and House bills are similar; however there are still major differences, including the method for paying for reform. For our final installment in our homestretch series we will compare these two proposals on how they will pay for reform and their impact on the budget deficit. 

Covering millions of previously uninsured Americans obviously has an upfront cost; however given the current state of our broken health insurance system, the proposed reforms will actually reduce the deficit. Both bills have received deficit neutral scores from the Congressional Budget Office (CBO), despite having different methods for reducing the budget.

The House bill, called the Affordable Health Care for America Act or HR 3962, proposes a combination of mandate penalties, reforms to Medicare and Medicaid and a tax on wealthy individuals to raise revenue to pay for reform.   The House bill is projected to save $426 billion over ten years by reforming Medicare and Medicaid. The federal government currently pays about $1,100 more per person to cover the same beneficiaries through Medicare Advantage, private Medicare plans, than through traditional Medicare. HR 3962 will reduce overpayments to Medicare Advantage plans.   Overall, the bill attempts to reduce fraud and waste in both the Medicaid and Medicare systems. 

In addition to extensive reforms to Medicare and Medicaid, H.R. 3962 includes a 5.4% surcharge on couples with incomes over $1 million, which would affect less than 1% of taxpayers, and amount to a moderate tax burden for these households. Some people fear that this new tax would harm small businesses that file taxes as individuals. However, the Tax Policy Center calculates that just 1.6% of taxpayers in this group would face the surcharge, and that many in this group are actually wealthy investors and not true small business owners. Ultimately, only 0.6% of taxpayers who derive more than half of their income from business sources would face this surcharge

The newly released Senate bill, The Patient Protection and Affordable Care Act or HR 3590, may slow the growth of health care costs over time by, for instance, imposing an excise tax on high-cost health insurance plans, decreasing overpayments that private insurers receive through Medicare Advantage, and reducing the cost of prescription drugs in Medicaid.   The new tax on high-priced health insurance policies (or Cadillac plans with yearly premiums of $8,500 for individuals and $23,000 for families) applies to self-insured plans and plans sold in the group market, and not to plans sold in the individual market (except for coverage eligible for the deduction for self-employed individuals). HR 3590 would also increase the Medicare payroll tax from 1.45 to 1.95% on individuals earning $200,000 per year and couples earning $250,000 per year. Both of these new taxes will yield considerable revenue.   

HR 3590 imposes many fees to pay for the bill, including on pharmaceutical manufacturers, medical device manufacturers and the health insurance sector. Many of these fees do not apply to companies whose sales are below $5 million and the fees are allocated across the industry based on market share. Moreover, HR 3590 mandates that non-profit Blue Cross Blue Shield (BCBS) organizations have a medical loss ratio of 85% or higher to receive the special tax benefits provided to them. This means that they have to spend at least 85% of profits on their beneficiaries’ medical care. 

Ultimately, the House bill will reduce deficits by $109 billion over the next ten years. The Senate bill will reduce deficits by $130 billion over the next ten years, and by about one-quarter of one percent of GDP in the decade thereafter, which amounts to about $55 billion in 2020 and several hundred billion dollars over the 2020-2029 period. The bill finances its expanded health coverage by redirecting existing spending and tax subsidies from less productive uses elsewhere in the health sector. Therefore, the Center for Budget and Policy Priorities’  and CBO report that the Senate Bill extends health coverage to 31 million more Americans, while keeping the total federal cost for all health care spending and tax subsidies in the decade after 2019 essentially where it would be under current law. Additionally, a group of economists sent a letter to President Obama last month advocating for many of the reforms in the Senate bill as a way to stem the costs of the health care industry. 

This does not mean that the Senate bill is the better bill. There are provisions in both bills which are worth preserving the in the final bill. Over the next several weeks, as the Senate works to pass their version of the bill and then the two bills go to conference committee, there will be several opportunities for improving the bills and producing a superior final bill. Both bills contain key provisions for slowing the growth of health care costs and paying to insure more Americans. As always, the ultimate goal is affordable quality health insurance for all Americans.

Homestretch 5: Health insurance market reform

[This is the fifth in a series of six articles summarizing the leading categories of issues at stake in the final stages -- the homestretch -- of the debate on national health insurance and health care reform.]

 A recent Congressional Report initiated by Senator Jay Rockefeller found that while the insurance industry has long claimed that 87% of premium dollars go to pay for medical care, in fact, the average is 82% for the top six insurers. This five point difference equates to billions of dollars not being spent on hardworking families’ medical care. And these findings underscore the need for meaningful reform of the insurance industry. The three bills in Congress (H.R. 3962, Senate HELP and Senate Finance) include major reform to the private health insurance companies. These reforms will vastly change the way in which companies decide who qualifies for insurance and who does not. In a historic vote this past weekend, the House passed H.R. 3962, including many changes to the health insurance market.   Senator majority leader Harry Reid (D-NV) has combined the two Senate proposals and sent a couple of different versions to the Congressional Budget Office (CBO) for consideration. He is waiting on the report from the CBO before releasing a final Senate bill, which will be the version sent to the Senate floor for debate. Until the final Senate bill is released we will offer comparison and analysis on the two Senate bills (HELP and Finance).

The three bills provide for significant reform to the health insurance industry, which would greatly expand access to health insurance. As discussed in Homestretch part 4, all three proposals create a health insurance Exchange, which would regulate the individual and small group insurance plans available in the Exchange.   Benefit plans in the Exchange would be standardized. Plans would vary on the level of cost-sharing of co-pays and deductibles. Private insurance companies participating in the Exchange could not deny coverage based on pre-existing conditions. Additionally, premiums could not vary because of gender or pre-existing conditions. 

The only characteristics that are permitted to factor into premiums are age, tobacco use, family composition and geography. The three proposals set ratios for premium variation based on age and tobacco use. The Senate Finance bill limits age variation to a 4 to 1 ratio and tobacco use to a 1.5 to 1 ratio. For example, a company can only charge its oldest customers four times that of its youngest customers.   The Senate HELP bill limits age variation to a 2 to 1 ratio and tobacco use to a 1.5 to 1 ratio. H.R. 3962 limits age variation to a 2 to 1 ratio, but does not allow insurance companies to vary premiums based on tobacco use.   The insurance companies indicated they will fight the limiting ratios, because they argue that they will raise costs to younger and healthier individuals

The Exchange contained in the three bills would also require that insurance companies issue insurance to a consumer regardless of their health status. Additionally, an insurance company could not sell a consumer a plan that explicitly does not cover their pre-existing medical condition. Companies would have to guarantee that they will renew an individual’s policy each year.   Additionally, each proposal sets limits for annual out-of-pocket costs to policy holders.   Insurance companies would not be able to limit the amount of claims a policy holder makes either annually or in a lifetime. In other words, an insurance company could not suddenly tell a policyholder that they will no longer cover that policyholder’s claims. 

Senator Rockefeller faced significant difficulties in getting the insurance companies to voluntarily divulge what portion of the premiums goes to medical care versus profit, administration, etc. This would change under all proposals. Both of the Senate proposals require insurance companies to report how much of the revenue from premiums goes toward paying for medical services. The House proposal requires that the Secretary of Health and Human Services sets a minimum percentage of revenue that must pay for medical services.   If the companies do not meet this minimum then they must provide rebates to their customers. 

The aforementioned reform is quite similar among the three proposals, but to whom they would apply differs. Senate Finance would apply these changes to the individual and small group market (businesses with fewer than 50 employees). Senate HELP and the House bill would apply reforms to all private insurance markets, including businesses of all sizes. And the Senate Finance bill would, however, require that all new policies, both inside and outside of the Exchange, meet the standards of one of four benefit levels set forth in the proposal. 

These reforms will offer greater consumer protections and decrease insurance companies’ discriminatory practices. Some of these measures may face fierce debate an opposition in the coming weeks as the Senate sends a final bill to the floor for debate and final bill is composed for President Obama’s consideration.   These reforms will mean containing costs, creating choices, upgrading care and ultimately covering all

Homestretch 4 - The Exchange, public option and CO-OPs

[This is the fourth in a series of six articles summarizing the leading categories of issues at stake in the final stages -- the homestretch -- of the debate on national health insurance and health care reform.]

The
55% of Americans who favor a government insurance plan and health reform advocates are rejoicing over yesterday’s news from Senate Majority Leader Harry Reid (D, NV). Yesterday, Reid stated that the bill he intends to send to the Senate floor next month will include a "public option" – a federal government created insurance plan offered to Americans who do not get medical coverage through their employers -- with the condition that states could opt out of the program. Reid’s move is being hailed as a bold and vital move by health reform supporters throughout the country and a major milestone for health insurance reform as it moves forward in both houses. This is not to say that Reid’s model of the public option is a definite or that amendments will not attempt to eliminate or alter the public option in the Senate bill.  

Majority Leader Reid and House Speaker Nancy Pelosi (D-San Francisco) are advancing separate healthcare bills, each containing different provisions for the public option. House Democrats may have the support to pass a bill that would create a nationwide government plan without any option for states not to offer the plan; however Speaker Pelosi has stated that the opt-out alternative could be included in a reconciled bill. Both the Senate bill and the House bill will need to be reconciled later this year before final legislation could be sent to the White House for President Obama's signature.

All three of the current versions of the bill in Congress (Senate HELP, Senate Finance and the House Tri-committee bill--H.R. 3200) include a health insurance Exchange, which would serve as the marketplace for qualified plans that follow new insurance provisions. The Exchange would create a competitive marketplace that offered choices of plans, which would have to follow a common set of regulations. The Exchange has several advantages including choice, price competition and portability if you choose to change jobs. In all three proposals, the Exchange would be a place where individuals without access to employer-sponsored coverage could purchase insurance. Small employers could also purchase plans for their employees through the Exchange. In both the Senate Finance bill and H.R. 3200, eligibility for employers would be phased in starting with smaller employers. 

Conservative Democrats and some Republicans supported a Consumer Operated and Oriented Plan (CO-OPs) program. The Senate Finance bill included a CO-OP program, which would encourage the creation of non-profit health insurance companies run by the members. Members would be required to use the profits to lower premiums, improve benefits or improve the quality of the care consumers receive. In order to be included in the Exchange, CO-OPs would have to follow the same regulations as the private plans. Many health reform advocates maintain that CO-OPs have failed in the past and will fail this time too. Additionally, the Congressional Budget Office does not find significant savings in the CO-OP model, whereas it does with the public option planSenate Finance Committee Chairman Baucus has said that he chose to include the CO-OP over the public option in the Finance bill because he felt it would garner greater support, but he is still open to the public option


Despite the disagreement among policy makers regarding the potential success of CO-OPs, much of the debate has now turned to the
public option.  With Reid’s announcement, the question seems to have become not if there will be a public option, but what form the public option will take. Reid’s opt-out model allows states to withdraw from the public plan in 2014, a year after the public plan goes into effect. Senator Olympia Snowe (R-ME), the only Republican on the Senate Finance committee to vote for the Finance committee version of the bill, supports the “trigger” model of the public option. The trigger would only put a public option into effect in states that do not meet standards of affordability. Snowe stated yesterday that she was disappointed with Reid’s decision to go with the opt-out model over the trigger model.   

The Insurance industry has released a report which argues that the public option will raise costs to those people with private insurance plans, in order to offset the reduced cost of the public plan. In fact, public health insurance actually costs less than private insurance. However, the public option as proposed by Reid would be offered through the Exchange, which would only be available to those individuals without employer sponsored insurance. And only a fraction of people would choose the public option, according to the Congressional Budget Office. Moreover, the Exchange would serve as a regulator of benefit plans, and Reid’s proposal also requires the government plan to negotiate provider rates, instead of relying on Medicare rates, which are often lower than private reimbursement rates. 

Congress must produce a bill that creates competition in the health insurance market, in order to successfully lower costs and provide quality choices to consumers. A majority of Americans, policy makers and advocates see the public option as the best way of doing this. H.R. 3200 and Reid’s proposal can achieve this but we cannot lose focus on the overall goal of passing health insurance reform this year. If an opt-out or trigger can create competition while lowering costs and providing quality care, then they should be considered to keep the momentum going. The ultimate goal is quality affordable health insurance for all Americans.

Homestretch Part 3: Affordability Measures

[This is the third in a series of six articles summarizing the leading categories of issues at stake in the final stages -- the homestretch -- of the debate on national health insurance and health care reform.]

Health insurance reform is crucial for the success and prosperity of American families. However it will only succeed if there are affordability measures in place for families, individuals and small business owners.   Congress now has three bills that have passed out of committee and must be reconciled to create the final bill. The key will be to take the best elements of each bill to ensure Americans adequate and affordable health insurance.   In all three bills, almost all individuals are required to carry health insurance. The goal of the individual mandate is to encourage the use of primary care providers and preventive care, while reducing the use of emergency rooms for non-emergency care. This could prove problematic for individuals who do not qualify for subsidies but cannot find an affordable plan, and for low-income individuals. However, with adequate subsidies and affordability measures, Congress can ensure that health insurance is affordable for everyone.

Individual and Employer mandate
All three bills require that almost all individuals have health insurance and those who do not will be required to pay a penalty. However, each of the bills has a different method of penalizing certain individuals. Both Senate bills (Health, Education, Labor and Pensions (HELP) and Finance) impose a tax penalty of $750 per individual per year and per adult per year, respectively. The Senate HELP bill exempts people whose incomes are below 150% of the Federal Poverty Level (FPL), people without coverage for fewer than 90 days, members of Indian tribes, and residents of states without an Exchange in place. The Senate Finance Committee exempts certain individuals as well, including, individuals with incomes below 133% FPL, individuals with religious objections, individuals who can prove financial hardship, American Indians, and if the lowest cost plan exceeds 8% of an individual’s income. 

The House Tri-Committee bill (H.R. 3200) imposes a penalty of 2.5% of income up to the cost of the Exchange’s national average premium. The House bill exempts dependents, individuals with religious objections or financial hardship. 

The three bills also include employer mandates which require employers to contribute to their employees’ cost of insurance. An employer mandate is necessary to ensure that costs do not get passed to employees and that employers do not drop employee insurance with the adoption of the Exchange. However, these mandates must be carefully designed as not to impose higher costs on small business owners or discourage the hiring of low-income individuals.

The Senate Finance bill would impose a tax on employers with more than 50 employees that do not offer coverage. They would be taxed for each employee that receives a tax credit through the Exchange. This provision may discourage employers to hire low-income individuals who would be more likely to receive credits in the Exchange. Additionally, the Finance bill would require an employer with more than 200 employees to automatically enroll employees into the employer’s health insurance plan. Employees may choose to receive coverage from another source. 

The Senate HELP bill requires employers to offer health insurance and pay 60% of the premium cost. Under this bill, employers will be subject to a $750 penalty for each full-time employee and $375 for each part-time employee who is uninsured and not offered insurance. The provision exempts employers with 25 or fewer employees. 

H.R. 3200 requires employers to offer coverage and pay at least 72.5% of premium for an individual and 65% of premium for a family. The penalty for not following this requirement is to pay 8% of the employer’s total payroll into the Health Insurance Exchange Trust Fund. Certain employers would receive exemptions from the penalty. For small employers with a payroll of less than $750,000 a year, the penalty would be imposed on a sliding scale instead of the flat assessment rate of 8%. 

Subsidies
The key to successfully mandating health insurance without creating a financial imposition on low and middle income families, is implementing adequate
subsidies for people to buy insurance through the Exchange. The goal of the subsidies is to limit the premium cost to individuals based on a sliding scale. The House bill does the best job of limiting the percentage of an individual’s income that goes toward premiums. However, the Senate HELP bill provides the best subsidies or individuals below 150% FPL. The Senate Finance bill has improved their subsidies substantially; however more could still be done.   It is also important to keep in mind that Medicaid eligible individuals, non-citizens and non-Legal Permanent Residents will not qualify for the subsidies, with the exception of some Medicaid eligible individuals under the Senate Finance bill. Here is a table of the subsidies for income tiers under each bill:

 

Senate Finance Committee

Senate HELP Committee

H.R. 3200**

100%

2%

NA*

NA

133%

3.7%

NA*

NA

150%

4.5%

1%

1.5-3%

200%

7.0%

3.3%

3-5%

250%

9.5%

5.6%

5-7%

300%

12.0%

7.9%

7-9%

350%

12.0%

10.2%

9-10%

400%

12.0%

12.5%

10-11%

 *The HELP bill raises Medicaid eligibility to 150% FPL and excludes Medicaid recipients from receiving subsidies. Both the Senate Finance and H.R. 3200 bills raise the eligibility to 133% FPL. However, under the Senate Finance individuals can choose to enroll in the Exchange and receive subsidies. 

**H.R. 3200 provides for subsidies on a sliding scale within an income bracket and designates an initial subsidy level and a maximum subsidy level for each bracket (i.e. individuals between 133%-150% FPL will receive subsidies that limit their premiums somewhere between 1.5% and 3% of their income.)

Out-of-pocket caps
Under the current health insurance system, a large number of Americans—including those who have health insurance-- pay for many services, treatments and tests out of their pockets, particularly for preventive care. The three health insurance reform bills would set a cap for what individuals and families could pay out-of-pocket in a year. The out-of-pocket caps must be substantial enough that individuals do not face underinsurance if faced with an illness or accident. That is, the caps should be low enough that insurance kicks in before families face financial insecurity and are unable to pay for necessary care. The below
chart depicts the proposed caps included in the three bills as compared to the standards that would protect Americans from underinsurance.  

 

Senate Finance Committee

Senate HELP Committee

H.R. 3200**

Standard that would protect Americans from Underinsurance

133%

16%

N/A*

4%

5%

150%

14%

8%

5%

5%

200%

16%

6%

12%

10%

250%

13%

13%

16%

10%

300%

14%

11%

16%

10%

350%

12%

18%

13%

10%

400%

11%

16%

14%

10%

*The Senate HELP bill expands Medicaid to 150% FPL, so individuals in this income bracket would qualify for Medicaid

**As estimated by House Ways and Means as of July 31, 2009.

There is still much work to be done as the three health insurance reform bills come together, in order to ensure that comprehensive health insurance is truly accessible and affordable for Americans. The groundwork for such a solution is here. As Congress negotiates to create one final bill, they must keep in mind that the mandate and subsidies must complement each other to ensure quality, affordable health insurance choices because this is what Americans need and this is what they demand

Health care advocates throughout the country are urging Americans to call their Senators and ask them to support the affordability provisions in the Senate HELP bill. If you aren’t sure who your Senators are you can find out on Families USA’s website at http://ga3.org/familiesusa/leg-lookup/search.html

Expansion of Public Programs for Low-income Individuals

Without passage this year of health insurance reform containing an expansion for low-income families, states will spend more on their programs for the poor than they currently pay out.  A recent Robert Wood Johnson Foundation report shows that within a decade the number of people without health insurance could increase by more than 30 percent in more than half of the states and in every state, the number of uninsured would increase by at least 10 percent.

Currently, only certain groups of low-income people are eligible for publicly provided health insurance—Medicaid—referred to below as “traditional eligibles.” Left out are approximately 60 million uninsured low-income adults between 18 and 65 who do not qualify for Medicaid, no matter how needy they may be, since that program has always targeted children, their parents (or other adult caretakers), the disabled and those over 65.  In fact, low-income adults below 200% of poverty account for just over half of the non-elderly uninsured. They do not have access to the care that can prevent a treatable problem from becoming an illness requiring hospitalization (and often becoming prematurely disabled or dying) and resulting in expensive bills (where the costs are often shifted onto other payers). 

The expansion of the Medicaid program can ably fill this enormous gap in coverage, and, in fact, is included as a provision in the three main bills aiming to reform the health insurance system. House Resolution 3200 America’s Affordable Health Choices Act (H.R. 3200), the Senate HELP Committee Affordable Health Choices Act (Senate HELP), and the Chairman Max Baucus’ Senate Finance Committee’s Mark (Chairman’s Mark) all seek to expand coverage to low-income adults. Click here to see a table format displaying the specific provisions in two of the bills addressing the expansion of public coverage or read further.

As you will see in the following descriptions of the competing proposals, the House version is more helpful on most issues. The Shriver Center supports the most helpful provision in each case—we favor more comprehensive, more affordable and higher quality coverage.

Expanding Access to Medicaid
H.R. 3200 and the Senate HELP Bill would expand Medicaid to all individuals up to 133% of the federal poverty line (FPL) and 150% FPL, respectively. The Chairman’s Mark concedes to states to make the final decision. States would have the option to expand Medicaid coverage to childless adults with 133% FPL as the minimum eligibility.

Cost Sharing Between the Federal Government and the States for Expanded Medicaid
Medicaid financing is currently shared across state or local governments and federal government following the formula set forth in the federal matching percentage for each state (officially known as the Federal Medical Assistance Percentage, or FMAP).  On average, the federal government pays for 57% of Medicaid costs, but this varies from a floor of 50% to a high of 76% in 2010.  However, states are receiving an enhanced FMAP as a result of the American Recovery and Reinvestment Act (ARRA) to help support Medicaid during the economic downturn, when demand for Medicaid increases and states can least afford to support their programs.

State governors are worried about the cost of Medicaid expansion and the reform proposals address these concerns. H.R. 3200 proposes full federal funding (100% FMAP) for new traditional eligibles between states’ eligibility levels as of June 16, 2009 and 133% FPL and traditional eligibles currently covered by waivers. Under the Chairman’s Mark, states would receive assistance in financing the cost of the Medicaid expansion through a percentage point increase in the FMAP. The percentage point increase in the FMAP for each state would depend on the “neediness” of that state (i.e. low Medicaid enrollment proportional to unemployment rates). By 2019 all states will receive a FMAP increase of 32.3% for the newly eligible (e.g., Illinois’ FMAP would be 82.3%).

Increase in Provider Rates
Currently, provider payment rates vary across states since state Medicaid programs have broad flexibility to set rates. On average, hospital fees are estimated to be 5% below Medicare rates, physician fees 40% below, and managed care rates about 15% below Medicare rates. Average Medicaid fees across the United States for primary care physicians are at 66% of Medicare fees.

H.R. 3200 phases in increases in payments for primary care services in fee-for-service and managed care to Medicare payment rates (80% of Medicare in 2010, 90% in 2011, and 100% in 2012 and after). The cost of the rate increases would be 100% federally financed over a 2009 base. An Energy and Commerce Committee amendment requires states to specify and get approval for the payment rates to be paid under the state’s Medicaid program. The amendment also requires an annual report on Medicaid payment rates and methodologies and an explanation of the process used to allow providers and the public opportunity to review and comments on rates.

The Chairman’s Mark does not specifically address provider rates but would establish a bundled payment demonstration project for up to 8 states for acute and post-acute care. The proposal also would establish a “Global Payments” demonstration project (providers are paid standardized per-patient annual fees designed to cover care for the entire year) for up to 5 states from 2010 to 2012 for large safety-net hospital systems. The Mark further sets forth the establishment of a CMS Innovation Center designed to test, evaluate, and expand in Medicare, Medicaid, and CHIP (Children’s Health Insurance Program) different payment structures and methodologies to foster patient-centered care, improve quality, and slow Medicare costs growth. Finally, the proposal would establish demonstration projects in Medicaid and CHIP to allow pediatric medical providers organized as accountable care organizations to share in cost savings.

Changes to Medicaid’s Benefits
In H.R. 3200, those eligible for Medicaid would continue to receive the traditional Medicaid benefits package (all “medically necessary” services). Under The Chairman’s Mark, all newly-eligible adults would receive a benefit package that meets minimum quality coverage requirements as determined by the new law. These packages are not likely to be as comprehensive as Medicaid.

In the Chairman’s Mark, all newly-eligible adults would receive benefits that meet the minimum requirements (including prescription drugs) as established by the Deficit Reduction Act. The Proposal would require states to offer premium assistance and wrap-around benefits to Medicaid beneficiaries who are offered Employer-Sponsored Insurance if it cost-effective to do so in 2013.

Choice of Medicaid or the Exchange
Some of the health insurance reform proposals would create a Health Insurance Exchange (the Exchange), which has been described as “a new entity intended to create a more organized and competitive market for health insurance by offering a choice of plans, establishing common rules regarding the offering and pricing of insurance, and providing information to help consumers better understand the options available to them.” One goal of an Exchange is to offer enrollees a choice of health insurance plans, and some proposals, including H.R. 3200, include a public plan option to foster competition among plans on the price of coverage and minimize the tendency for the plans to vary benefits in order to attract healthier than average enrollees.

Each of the proposals addresses the overlap of Medicaid and the Exchange a little differently. The Senate HELP proposal stipulates that people eligible for Medicaid would receive health insurance through the state and would, thus, be ineligible for the Exchange. H.R. 3200 would allow newly eligible individuals, the childless adults, to choose coverage through the Exchange, if they were enrolled in health coverage that qualifies under the new quality provisions during the six months before becoming Medicaid eligible.

Specifically, in H.R. 3200, non-traditional (childless adults) Medicaid eligibles may enroll in coverage through the Exchange if they were enrolled in qualified health coverage during the 6 months before becoming Medicaid eligible. States must enter into a “Memorandum of Understanding” with the Exchange to coordinate enrollment of individuals in Exchange-participating health plans and under the state’s Medicaid program. There is a “Medicaid screen and enroll obligation” requiring states to auto-enroll non-traditional Medicaid-eligible individuals in Medicaid if they apply for coverage in the Exchange and are found to be Medicaid eligible. For traditional eligibles, states can opt to use the same auto-enrollment process or use presumptive eligibility and follow Medicaid enrollment procedures. States may be authorized to determine eligibility for affordability credits through the Exchange.

Under the Chairman’s Mark, once the Exchange is fully operational, individuals below 100% FPL would be ineligible for the tax credit. However, beginning in 2014, individuals between 100-133% FPL could choose between Medicaid and tax credits for the Exchange. Senator Baucus recently updated the Chairman’s Mark to accept an amendment by Rep. Rockefeller (D, WV) that allows individuals above 133% FPL who receive only wrap-around Medicaid benefits to be eligible for tax credits through the state Exchange. The Chairman’s Mark also would require states to establish a Medicaid enrollment website to promote seamless enrollment between Medicaid and tax credits through a state exchange. These state Exchanges may contract with state Medicaid agencies to determine eligibility for Medicaid, CHIP, and tax credits for state residents if the contract lowers overall administrative costs and reduces the likelihood of eligibility errors and disruptions in coverage. Lastly, states would not have to maintain current eligibility levels for Medicaid coverage of non-pregnant, non-disabled adults with incomes above 133% FPL until Exchanges are fully operating or Jan. 1, 2014. States could cut back this eligibility as of Jan.1, 2010, if they are facing budget deficits or expect to face deficits in the coming year.

Maintenance of Effort (MOE) by the States
While states generally have flexibility to change optional eligibility levels for their state Medicaid programs, ARRA’s provision of additional funding for states in the form of an enhanced FMAP requires states to maintain eligibility levels and enrollment procedures from July 1, 2008 to be eligible for enhanced funds.

Under H.R. 3200, Medicaid eligibility standards, methodologies, or procedures (including waivers) may not be more restrictive that what was in place as of June 16, 2009. However, an Energy and Commerce Committee amendment provides an exception to the MOE for certain waivers that permit individuals to receive a premium or cost-sharing subsidy for individual or group health insurance coverage.

The Chairman’s Mark would require states to maintain existing Medicaid income eligibility levels for all Medicaid populations. The MOE for coverage above 133% FPL would expire when the state exchange becomes fully operational (expected to be 2013).
 

Homestretch 1: Children's Coverage -- Do No Harm!

[This is the first in a series of six articles summarizing the leading categories of issues at stake in the final stages -- the homestretch -- of the debate on national health insurance and health care reform.]

In a large sense, comprehensive health care reform is a major winner for all children, apart from the provisions that specifically apply to children.  Kids, after all, live in families, and those families live in communities.  If parents are insured and healthy, it helps kids: statistically, if parents are insured then children are enrolled, and if parents go to the doctor, then children go to the doctor.  It also helps children if there is less financial stress in families, a prime factor associated with family violence and disintegration.  And it helps children if they live in communities where people have access to health care and treatment.  It helps children if the overall health system costs less and concentrates more resources on the quality of care according to the most effective treatment methods.  It helps children if they can get insurance as dependents of their parents, regardless of where they live -- currently, many children are in a senseless lottery where their health insurance status depends on how states or employers treat their parents.  And it helps kids to make them insured on their 19th birthday, as if they continue to be important at that age.  Health reform is what awaits them on that birthday. 

But having said that, as we fight for quality affordable health insurance for every American, it is essential to ensure that the gains made to insure millions of children -- including those made earlier this year by this Administration and this Congress -- are not thoughtlessly reversed.  The recently released census data show that the rate of uninsured children is at an all time low, due largely to successful state health insurance programs.  But while the figures are encouraging for uninsured children, the numbers are distressing for their parents and other uninsured adults. The President is right in his approach to this complex national problem -- one of the cornerstones to getting it right is to affirm and even expand what works.  Above all, that should apply to children.  As Congress works through the homestretch, it should include features that guarantee that children's coverage under reform is at least equal to coverage under a good current state SCHIP program, and that we achieve universal coverage for children.  The Administration should make it clear that this is its position, too.

All of the proposals currently alive in the House and Senate essentially phase out the State Children's Health Insurance Program (SCHIP).  They move kids whose parents' income is below 133% of the federal poverty level (FPL) into Medicaid, and those whose parents' income is between 133% and 250% of the FPL into the health insurance Exchange -- which means those families will be purchasing insurance from an array of private insurance choices (and under all versions other than Baucus', the Exchange will also include the option to purchase a public health insurance plan).  The insurance available to cover children under the Exchange could be more costly to many families in the 133% to 250% FPL income range than their current coverage under Medicaid or SCHIP.  This cost increase could affect premiums as well as out of pocket co-pays.  In addition, the scope and quality of the coverage for children could be diluted under Exchange plans as compared to Medicaid or SCHIP.  There are a number of other possible losses for certain children in the Exchange as compared to the current situation in many states.

Several amendments have been added to the House bill that would protect children moving from Medicaid or SCHIP into the Exchange and strengthen SCHIP for those children who remain in the state programs.  An amendment introduced by Representative Diana DeGette (D, CO), would require the Secretary of Health and Human Services to submit a report comparing the coverage a child receives under an average state child health plan to that they would receive under the Exchange.  No child would be permitted to move from a state program into the Exchange until the Secretary has certified that children will receive comparable care under the Exchange to that they were receiving in the state programs.  If the Secretary finds that coverage is worse under the Exchange than under the state programs, changes would need to be made before children could move into the Exchange.
 
Also, the Scott Amendment, named for Rep. Robert C. Scott (D, VA), would require plans in the Exchange to include the full range of early and periodic screening, diagnosis and treatment services provided for under Medicaid through the age of 21.  And three amendments by Rep. Bobby Rush (D, IL) would have ensured that children receive identical coverage through the Exchange that they receive under Medicaid, that cost-sharing and affordability measures under Medicaid would follow children into the Exchange and reduce barriers to enrollment for eligible children. 

In the Senate Finance Committee, amendments to the Baucus mark have been filed that mirror those in the House bill regarding protections for children.  In addition, an amendment from Sen. Rockefeller (D, W.Va) would continue the SCHIP program until at least 2019. 

Those are the battle lines in the coming weeks.  Children will benefit greatly from health reform in general.  On the specifics, let's make sure that we do not roll back the recent progress on coverage and cost and that we guarantee affordable universal coverage and access to care for children.

Down the Homestretch for Health Reform

August was a long month of rowdy town hall meetings and outrageous rumors and attacks aimed at killing comprehensive health reform. But now it’s September. With his powerful speech to a joint session of Congress and vigorous personal advocacy, the President has turned the momentum and refocused the effort to pass a good bill. Polling shows strong, consistent public support. At long last the final one of the five congressional committees with jurisdiction, the Senate Finance Committee, has begun to mark up a bill. Senator Max Baucus of Montana, the committee's chair, released his version of a bill last week (known as "the chairman's mark" and normally accorded much deference by committee members of his own party). The Finance Committee will consider many amendments, and then pass a bill. All the other committees did their work before August.

The process is entering its homestretch. The Senate Finance Committee will complete its work in the next week or two, possibly improving on Baucus' suggested version. Then the Senate will need to reconcile that bill with the one passed by the health committee (called the HELP Committee, which was Sen. Kennedy's committee, now chaired by Sen. Harkin) and then pass it on the floor. The three House committees with jurisdiction have already reconciled their versions into one bill. It needs a floor vote. After both chambers pass bills, there will be a conference to reconcile the two bills, and then the conferenced version will go back to both floors for passage, at which point it will go to the President for signature.

In general, the Baucus proposal provides the "conservative" bookend of the coming debate, and the House and Senate HELP bills, which are similar, provide the other bookend. The Finance Committee, Senate reconciliation, and Senate-House conference are all points at which the whole proposal can be move one direction or another on the many issues within the package. To help understand what is being negotiated and decided, we will publish six blogs that summarize the major categories of issues and where the lines are being drawn on them. We will cover:

·         Children's coverage

·         Low-income coverage under Medicaid

·         Affordability, subsidies and the individual mandate

·         The Exchange and the public option

·         Health insurance reforms and health care cost controls

·         Paying for it and the impact on the deficit

The first one -- "Children's Coverage -- Do no Harm!" is also published today. If these blogs move you to reach out to your delegation in both houses of Congress, you can find the contact information HERE.

Why Health Reform Will Happen: Real People Explain Why They're Fed Up Pt. 3

This week the Shriver Center and United Power for Action and Justice collected videos that illustrate the desperate need for quality affordable health insurance choices.  It's not right that hard-working Americans are struggling to afford health insurance.  People shouldn't have to choose between going to see their doctor or paying their bills or saving for retirement.  These three individuals illustrate why our leaders need to make health care more affordable for everyone before our costs rise even higher: A veterinarian feels trapped in one high-cost plan in order to obtain necessary medication for himself and his family.  A self-employed individual ultimately chooses to forgo health insurance when it becomes too expensive.  A woman finds herself falling into debt when a health insurance plan does not deliver on its promises.

Click here to view the stories.

Please share this widely with your friends, family members and colleagues.

To share your own story click here.

Call your legislators today at 1-800-828-0498, and let them know that reform can't wait!   Don't know who your legislators are? Click here and Families USA will help you find them.

Why Health Reform Will Happen: Real People Explain Why They're Fed Up Pt. 2

This week the Shriver Center and United Power for Action and Justice collected stories from small business owners that illustrate that the time is NOW for a system that guarantees access for all to quality affordable health care so small businesses can thrive and propel our economy, job growth and innovation.  The lack of affordable health insurance choices forces many Americans to forgo jobs with small employers that are unable to afford private health insurance and it discourages small business growth, the backbone of the American economy.   Three small business owners discover that affordable, quality insurance that includes preventive health care is unavailable to them and their employees: A small business owner loses employees when he cannot afford to offer the same health insurance benefits that a large corporation can.  A designer settles for insurance that may only cover catastrophes.  An entrepreneur cannot save for retirement because of her astronomical health insurance costs.

Click here to view the stories.

Please share this widely with your friends, family members and colleagues.

To share your own story click here.

Call your legislators today at 1-800-828-0498, and let them know that reform can't wait!   Don't know who your legislators are? Click here and Families USA will help you find them.

Why Health Reform Will Happen: Real People Explain Why They're Fed Up

This week the Shriver Center and United Power for Action and Justice collected stories from three individuals who find they cannot rely on their health insurance during times of transition or hardship.  Families should be able to provide adequate health care for their children and individuals should have the proper access to preventive care.  We cannot afford to wait for affordable and secure health care.  These stories illustrate the need for health reform that provides peace of mind no matter what life might throw your way: A new mother cannot afford to pay for her hospital bills and a new daycare expense.  A family of six worries about paying for essential drugs and regular doctor visits.  A man faces discrimination when applying for individual private insurance.  

Click here to view the stories.

Please share this widely with your friends, family members and colleagues.

To share your own story click here.

Call your legislators today at 1-800-828-0498, and let them know that reform can't wait!   Don't know who your legislators are? Click here and Families USA will help you find them.

The Shriver Center Remembers Senator Kennedy

The Shriver Center Board of Directors and staff are deeply saddened by the passing of Senator Edward M. Kennedy, the "Lion of the Senate", and an inspiration to all who are committed to the achievement of economic and social justice. Senator Kennedy championed access to quality health care, education and civil rights for all people in the United States and around the world. He authored more pieces of major legislation than any other United States senator and recently successfully led efforts to pass the Lilly Ledbetter Fair Pay Act that ensures equal pay for equal work. He will be greatly missed. Our thoughts are with the Kennedy family and the extended family of Kennedy staff and friends across the country.

Upon learning of Senator Kennedy’s passing, several staff members took time to reflect on his role in American history.

 

I would like to express my sadness brought about by the death of Senator Ted Kennedy. I found myself crying this morning and reflecting on the outstanding services the Kennedy family has given to the people who have needed help, and what the family has meant to me. I can recall standing on the cafeteria steps at Jackson State University and being told that President Kennedy had been assassinated, and how for weeks I cried. I vividly remember watching my colleague James Meredith leave Jackson State to attend Old Miss and how President Kennedy was so determined for him to have rights - the same rights as anyone else - that he sent members of the U.S. National Guards to escort him to class. I just want to thank Sen. Kennedy and the Kennedy family for their fight for justice for those who are less fortunate. I wish there was a way I could express myself nationally.             

- Nancy Carey, Administrative Assistant

 

I, too, am sad to hear the news about Senator Kennedy. His family has been a part of my life forever. Coming from a large family, I remember when I was growing up my father used to read the newspaper about the Kennedys and would tell us how we must strive to have a better life. Sen. Kennedy is going to be missed greatly, especially by many African-Americans of my generation.

            - Mae English, Administrative Associate

 

This is very sad news for all of us--and even sadder that he will not be around to help our country achieve real health care reform.

-Wendy Pollack, Director, Women's Law & Policy Project

HMO-style Managed Care is Not the Way to Balance the Budget

As Illinois debates how to fix its disastrous budget, several politicians and interest groups are claiming that the State can save a billion dollars just by moving Medicaid enrollees to HMO-style capitated managed care.  This is recited like a liturgy in church, but rarely accompanied by any meaningful details.  There's a good reason for that -- the people chanting this verse have not learned from the failed experiments of the past, and thus, wisely, they refrain from trying to give details.  It's a political argument, not a real policy idea and not good reform.  For that reason, the debate requires some facts. 

It is first necessary to understand what Illinois is already doing.  Our existing model of primary care case management-disease management (PCCM-DM) for the majority of Medicaid enrollees has been showing impressive results.  Illinois already links 1.7 million of the 2.4 million Medicaid recipients with primary-care doctors' offices that are paid monthly fees to manage the care for each enrollee. The program encourages outreach and preventive health-care services for patients such as screenings, tests, shots and medicines, which helps catch medical problems early and avoids costly emergency room use down the road.  Last year efficient implementation of this care management program saved the state more than $100 million. 

Illinois has an additional program that helps 220,000 Illinoisans with chronic illnesses better manage and coordinate their care and reduce the incidence of costly acute medical crises.  It saved the state an additional $104 million in 2008.  

So, with the existing PCCM-DM system providing good care while capturing significant savings, the advocates for capitated managed care would seem hard pressed to explain what additional savings or care improvements their system might obtain.  They avoid trying to answer that question, and instead fall back on the panicky assertion that Medicaid costs "are not sustainable".  But that claim not only avoids the issues about what we should actually do, it is also misleading.  When you take a look at the larger picture you see that Medicaid growth is not in a vacuum; the entire health care system overall is what is unsustainable.  For instance, in 2007, the U.S. spent $2.2 trillion on health care, an average of $7,421 per person.   And since 1970, health care spending has grown at an average annual rate of 9.6 percent or 2.4 percentage points faster than nominal GDP

Compared to those numbers, Illinois' Medicaid program is actually doing quite well.  There has been an average annual reduction of 3 percent in the program's cost per person over the last four years.    Medicaid billings in Illinois grew slower than the national average at just 4.2 percent from 2008 to 2009 and just 4.4 percent over the last four years.   Medical costs are expected to grow by 7.0 percent in FY 2010-below the projected national average of 7.7 percent. Illinois ranks 42nd among states in per Medicaid beneficiary expenditures (Illinois is at $4,129 per beneficiary; the national average is $4,575).   This is much lower than the three states that have recently implemented broad-based capitated managed care programs of the type being touted for Illinois. In fact, Illinois has worked to minimize the cost of medical care to taxpayers and maximize federal dollars, resulting in needing just $.39 in state general taxes for every $1.00 spent on Illinois Medicaid programs.

So, the current Medicaid system in Illinois already captures managed care savings, already spends less per covered person than most other states, including those with capitated managed care programs, and already captures substantial federal funds for the lion's share of the costs.  What additional benefit would be derived from switching to capitated managed care?  

HMO-style managed care pays a doctor a flat rate each month for each patient, regardless of how much care is provided (that is called "capitation").  The health care provider assumes all of the risk for all of the health care provided.  Historically, and logically, this model of care has resulted in difficult problems for patients to access needed care, preventive care, and specialty care.  It is a bottom line-focused business that has to include a margin to pay its senior executives and produce profits for shareholders.  The model itself raises concerns about its ability to produce savings to the state below its already-low per person Medicaid expenditures, plus profits, without compromising care.

To be clear, we are interested in any and all efficiencies in Medicaid, including those that might flow from a capitated managed care model, but they must be done in a way that realizes savings without compromising care and patient outcomes. 

Adding to the concerns evident from the model itself, there have been misadventures around the country.   California experimented with requiring its Medicaid population to move to capitated managed care in an effort to control costs.  In the end, it was found that despite a dramatic increase in Medicaid capitated managed care enrollment there was neither a significant reduction in spending nor improved health outcomes, and a study concluded that this policy actually, "reduced the efficiency of the Medicaid program in California...In fact, Medicaid spending appeared to increase by almost 20 percent following the shift to managed care and persisted long after the mandates first took effect."   

Nor can Illinois ignore its own recent history: The Illinois case of Memisovski v.Maram revealed that well child care at Medicaid HMOs in Cook County was well below that provided in fee for service, and it revealed that the HMOs could not account for the amount of care being provided. Further, Amerigroup, one of the managed care organizations with which Illinois once contracted, defrauded Medicaid by enrolling recipients in a discriminatory way, systematically avoiding pregnant women and people with disabilities.  This history places a burden of proof on the proponents of capitated managed care to show that it will not endanger patients in a failed attempt to save money.  The baldly political invocation of the capitated managed care idea in the current state budget debates does not meet this burden - it doesn't even try.

Perhaps the state can devise and implement an integrated, well-coordinated capitated managed care program that resolves these concerns.  The Quinn Administration is planning a pilot program, and we hope it is done with this kind of care.  But if it is meant magically to produce $1 billion dollars in quick savings, then it will fail.  The only way to get a billion dollars, if you're not just cutting care, is to reform the whole healthcare system.  They're doing that in Washington.

Real People Demand Health Reform

Why Health Reform Will Happen: Real People Explain Why They're Fed Up

This week, the Shriver Center and United Power for Action and Justice have collected stories that illustrate the damaging effects of the health care crisis on small business owners. Small business owners struggle to provide affordable insurance for themselves and their employees. Strong small businesses are key to the United States' economic health. Encouraging small business growth and strength means reforming the health care system to ensure affordable, quality care choices. Below, three individuals share their stories: A small business owner faces staggering premiums. A self-employed consultant struggles to find a policy to cover a child's eye condition. And a non-profit organization CEO grapples with trying to adequately cover his employees in an uncontrollable health insurance system.

Click here to see real people tell their stories.

Please share this widely with your friends, family members and colleagues

To share your own story click here.

Call your legislators today at 1-800-828-0498, and let them know that reform can't wait! Don't know who your legislators are? Click here.

Health Care Reform: A Lifeline for Small Businesses

“The high cost of health care is killing us.” So testified John Arensmeyer, the founder and CEO of the Small Business Majority, before a congressional committee regarding its health care reform draft proposal. The Small Business Majority (SBM) is a nonprofit, nonpartisan organization representing 27 million Americans who are self-employed or business owners of less than 100 employees. SBM is supporting comprehensive health care reform efforts that control the skyrocketing cost of health care to make coverage affordable and improve the competitiveness of small businesses.   A significant portion of the SBM membership is uninsured: of the 45 million uninsured Americans in 2007, almost 23 million were small business owners, employees or their dependents.

At the hearing, Arensmeyer testified that the crushing cost of health care was reported to be the biggest overall problem by 78% of small businesses responding to a Robert Wood Johnson Foundation survey-outranking even fuel and energy costs and the weak economy. A telephone survey of small business owners in 16 states furtherrevealed that 72% are struggling to afford health insurance and 69% say reform is necessary to save the economy. The results are not partisan; 68% of respondents identified as Republican or independent. 

“Health care reform is not an ideological issue—it’s an economic one,” said Arensmayer. Small businesses are the economic engine of our country; when they struggle, our entire economy struggles. Health insurance companies charge the self-employed and small businesses much higher rates than larger companies. Consequently, small businesses are forced to either drop coverage for their employees, charge employees a higher share of the premiums or dramatically scale back health care coverage. 

“It’s common to hear about double-digit premium increases each year, eating into profits and sometimes forcing staff reductions,” Arensmeyer testified. He called for:

  • guaranteed availability of coverage
  •  no exclusions for preexisting health conditions
  •  health insurance rating rules that prohibit adjustments for health status
  •  a cap on premiums and out-of-pocket spending
  •  marketplace transparency
  •  affordability credits to ensure that small business employees can actually participate without financial hardship

Health care costs are growing faster than the overall economy and without comprehensive health care reform, small businesses will pay nearly $2.4 trillion dollars over the next 10 years in healthcare costs for their workers, according to MIT economist Dr. Jonathan Gruber. Further, without reform, 178,000 small business jobs are estimated to be lost by 2018 as a result of healthcare costs.

Comprehensive health care reform is essential for the health of American small business, which is essential for the American economy and is a cornerstone of the American notion of opportunity and growth. We all need a health care system that controls costs, restores a sense of control and choice, and gets out of the way of individual enterprise.

 

Medicaid Savings: Good Idea, But Illinoisans Missing the Main Opportunity

States across the country are wrestling with budget crises.  In that context attention always turns to Medicaid, just because it is a large budget line, and it is therefore an attractive mark for anti-tax advocates who do not really have viable alternatives to taxes but like to speak vaguely about cutting spending.  The Illinois budget mess offers a lesson in why these folks have the germ of a good idea but are missing the most promising way to achieve it.

Most knowledgeable people concede that there is no way out of the huge Illinois budget deficit but to raise revenues.  Of course, many of those same people do not support raising the necessary revenues.  The opponents disingenuously cry out that Illinois must never increase revenues until it has made “cuts” to the spending side.  Tellingly, they have been unwilling or unable to specify exactly where they would cut the billions needed to balance the budget without increased revenues.  Accountability is not their strong suit.

But there is nevertheless an interesting modest overlap between this “cuts” position of the opponents of revenue increases, and the position of the proponents. Led by the Governor, the proponents are committed to making reductions in state spending, as part of the overall budget package that includes the revenue increases.  Greater efficiency is always a good and desired goal, and it is even more important in such difficult times. Moreover, revenue increases are more palatable, more fair, if state government is making efficiency improvements at the same time.  

So both sides are focusing on ideas for cuts.  One of the centers of attention for this kind of brainstorming is all of the state’s publicly supported health care coverages, popularly lumped together under the term “Medicaid”.  The programs cover children, low income working parents, people with disabilities, and the elderly. The opponents of revenues, citing old and sloppily done consultants’ reports, say that Illinois could be saving $1 billion or more on Medicaid, mostly by imposing hardcore HMO-style managed care, insisting that people use generic instead of costly brand name drugs, and caring for more people in the community instead of nursing homes. The proponents of revenues, citing actual experience in Illinois that shows the state is already realizing significant savings from care management, generic drugs, and community based care, say that they are willing to try any reasonable new ideas, but estimate savings in the tens of millions. The fact is that Illinois is already among the lowest in per person Medicaid expenditures.

Both sides are missing the most likely source of significant Medicaid savings that will neither limit coverage nor impair care. It is not a Springfield initiative, but a Washington DC initiative that will get this done. As should be obvious, Medicaid is just one part of the larger health care system, most of which is in the private sector. Medicaid suffers from the same system-wide phenomena that are driving the dizzying upward spiral of health care costs for all of us – profiteering across the board, inefficiencies, lack of focus on prevention, loss of consumer choice and control, and so forth. It is this increase in cost, decrease in control, and loss of peace of mind that is driving the anger in the American people that in turn is driving the move towards comprehensive reform being led by President Obama. 

These problems in the larger health care system fuel the trend in Medicaid spending. Thankfully, every year Medicaid spending (known as Medicaid “liabilities”) grows at a rate that is smaller than the overall consumer price index for medical related goods and services. Medicaid is a more efficient system. Yet Medicaid costs are necessarily directly related to the larger health system market. When health care costs go up generally, they also go up for Medicaid.

All those folks in Springfield looking for ways to spend less on Medicaid should realize that they are looking in the wrong town. The action on this is in Washington, where the battle over comprehensive reform is playing out right now. Just a couple of days ago, President Obama asked Congress to produce ideas for overall health system reforms to bring down the cost of care, or at least the rate of growth of the cost of care. He noted that in so doing, they would also be helping to produce $200-300 billion in savings for Medicare and Medicaid. 

For those truly interested in controlling the growth in Medicaid spending, the most promising course is to help make sure that the drive for national comprehensive health care reform is successful this year.  Meanwhile, the Springfield folks should tend to the knitting and vote for the revenues needed to fund state government.

 

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Status Check: Health Care Reform in Congress

What’s the state of health care reform now that Congress has begun seriously grappling with the topic? Are we likely to see a comprehensive health care reform bill this year, as promised? Key developments in the past few weeks offer some encouraging signs.

There are five Congressional committees that will be involved in drafting health care reform legislation (three in the House, two in the Senate), and consensus among them will be vital for passage of any major bill. The House committees involved - Ways and Means, Education and Labor, and Energy and Commerce – have announced that they will propose a single bill, although probably not until mid-July (a leaked Energy and Commerce Committee PDF offers some hints as to what that bill might look like). 

Things get more complicated on the Senate side. The two important Senate committees – Finance and Health, Education, Labor and Pensions (HELP) – have a shorter timeline, promising bills by the end of June. That deadline is likely to be met, but probably because the two committees are drafting legislation independent of one another. Senator Kennedy (chairman of the HELP Committee) and Senator Baucus (chairman of the Finance Committee) have released a joint letter stating their intention to create legislation that can be “quickly merged into one bill” (which will be necessary before the Senate can vote on it) but so far the two committees have their differences. 

On the Finance side, Chairman Baucus and Senator Grassley (the highest-ranking Republican) are committed to bipartisan reform, and the committee’s recently-released report outlines proposals that may not be as aggressive as some advocates would prefer. The public plan option (guaranteeing a government-run plan as an affordable option for all Americans, at all times) is mentioned but not required in the outline, while many advocates are convinced such a plan is necessary to keep private insurance honest and efficient. And there’s not a lot of talk about protecting low-income consumers from big out-of-pocket costs like deductibles and premiums. On the other hand, Senator Kennedy’s plan will likely include stronger safety-net provisions and the requirement of a public plan, along with a requirement that all employers either offer their employees insurance or pay into funds that help cover the uninsured. 

Furthermore, Senator Baucus has come out in opposition to passing reform through a procedure called budget reconciliation. Reconciliation would make the health care legislation filibuster-proof, allowing it to pass without any Republican votes at all. Many high-ranking Democrats favor using this procedure if necessary, while Senator Baucus wants to keep it bipartisan by coming to an agreement with at least some Republicans. The fact, though, that affirmations of support and good-faith effort have been made in writing by all committee chairmen, and the degree to which all stakeholders have been involved in the legislative process so far, are good signs. The legislation for health care reform will be drafted and proposed this year, perhaps by August. At that point it is up to us, advocates and consumers alike, to make sure it passes.