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April 20, 2009

Washington Health Policy Week in Review Archive 4674de33-5c4d-4427-a371-afceb3d8ac5f

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Hoyer Works the Refs for Health Overhaul

By Alan K. Ota, CQ Staff

April 17, 2009 -- House Majority Leader Steny H. Hoyer will summon three committee chairmen and other pivotal players to his office this week to plot strategy on a sticky priority: health care.

Hoyer, D-Md., has worked with Speaker Nancy Pelosi, D-Calif., early in the 111th Congress to build consensus on tough issues including health care and the budget. The upcoming meeting represents the first time the majority leader will gather with the chairmen to discuss specifics of their proposals for health care legislation.

The approach is part of the House leadership's early-intervention strategy that could become a template for other thorny legislative issues, such as energy and immigration.

According to Hoyer and other senior House Democrats, party leaders are trying to fashion a legislative proposal for health care with input from the White House, key lawmakers, party factions, and outside stakeholders before they expose it to inevitable critics.

"We are trying to act as a committee of one," said Education and Labor Chairman George Miller, D-Calif., a participant in the health care talks. "It seems to be going well. We've been meeting and talking with one another and with Steny. . . . Steny is good at finding out what it takes to get us over the hump."

Energy and Commerce Chairman Henry A. Waxman, D-Calif., and Ways and Means Chairman Charles B. Rangel, D-N.Y., also are involved in the health care talks. Hoyer is consulting as well with Waxman's predecessor, John D. Dingell, D-Mich.

Miller and Waxman say the approach reflects the leadership's desire to expedite committee and floor action on health care legislation.

The three chairmen began meeting with one another after telling President Obama in a March 11 letter that the House would pursue a unified and "harmonizing approach" to devising a health care overhaul proposal.

Already, they have worked with Hoyer on a provision to expedite the health care overhaul in the House's fiscal 2010 budget resolution (H Con Res 85). The House language, which the Senate may not accept as part of the final version of the budget blueprint, would allow health care legislation to move through the Senate with protection from filibusters.

Hoyer said in an interview that he would help the chairmen and their panels winnow alternatives and draft a bill in consultation with the White House. "Every member is going to be very focused on it and very interested in it," he said. "I'm going to be working with them . . . to make more probable the adoption of their work product. I will talk about what the caucus feels and what I feel."

Lessons of 1994
Miller, co-chairman of the Democratic Steering and Policy Committee, says Hoyer's role as a fixer reflects the leadership's desire to avoid intra-party disputes like those that led to the implosion of President Bill Clinton's health care plan in 1994.

"Back then, you had this big tussle between committees and the White House. . . . Nobody checked their guns at the door," Miller said. "All of us were here then. We thought there was a better way to do this."

Two of Hoyer's advisers—Rep. Chris Van Hollen of Maryland, chairman of the Democratic Congressional Campaign Committee, and Rep. Diana DeGette, D-Colo.—said the majority leader has been working to build similar consensus on energy and immigration proposals.

The three chairmen, who last gathered April 2 in Rangel's hideaway off the House floor, have also met with Phil Schiliro, Obama's top congressional lobbyist and formerly one of Waxman's most influential aides. Nancy-Ann DeParle, head of the White House's Office for Health Reform, also has worked with the group, aides said.

Hoyer's efforts represent a hybrid of the "strong caucus" model that Pelosi instituted two years ago to set the Democratic majority's leadership goals and develop consensus approaches to major legislation.

The strategy shifts power from what was formerly the purview of individual committee chairmen. Pelosi successfully used this approach to win House passage of this year's stimulus package (PL 111-5) and omnibus spending (PL 111-8) packages.

"Collective judgments are better than individual judgments—not in every instance, but over time," Hoyer said.

Added Waxman, "The leaders used to defer to committee chairmen. Now they are more involved in coordinating, making sure we are on schedule and accomplish goals."

Committee Power Questioned
House Minority Leader John A. Boehner, R-Ohio, who has urged Democrats to focus on the economy, has nonetheless left the door ajar for further talks on health care by naming Rep. Roy Blunt of Missouri as the GOP's point person on the issue.

Hoyer and Blunt enjoy a good working relationship, but the Missouri Republican said that his party would probably oppose any health care plan that includes a government-run insurance option, as Obama has proposed.

Blunt, a former minority whip, said it was too early to say whether Hoyer's efforts would be successful. "It helps sometimes when you go outside the process and get a small group of people involved," Blunt said. "But there are other times when you just need to be sure the committee process is working."

Some watchdog groups are unhappy and are raising concerns that Hoyer may make deals in private that pre-empt committee action. "We need real hearings and real markups, with real questions. I worry that Congress is being made into an office of the White House," said Peter T. Flaherty, president of the National Legal and Policy Center, a conservative think tank.

Hoyer said the chairmen in his health care group will try to produce alternatives, as well as a draft bill, without violating committee prerogatives.

The Senate's "board of directors," a bipartisan group led by Finance Chairman Max Baucus, D-Mont., also has been trying to cut a deal on health care. But unlike the Senate group, Hoyer's group operates as an arm of the Democratic leadership.

For his part, Hoyer sees his approach as expanding the majority leader's traditional role of meeting with committee chairmen to schedule floor action on bills they have fashioned. Hoyer, who has long demonstrated a talent for bringing factions together at the last moment, is now focusing on the front end of the process.

"When addressing big issues, you have to lay groundwork early. You can't wait until an issue is on top of you to gather votes," said Van Hollen.

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CMS Pilot Sweats the Details of Cutting Hospital Readmissions

By John Reichard, CQ HealthBeat Editor

April 14, 2009 -- On a day when President Obama emphasized that rebuilding the nation's economic foundation depends in large measure on lowering health costs, a pilot program announced by the Centers for Medicare and Medicaid Services served as a reminder of how new forms of local cooperation will be required to reach that goal.

Aimed at retooling health care to prevent avoidable and costly readmissions to the hospital, the pilot, known as the Care Transitions Project, "is a new approach for CMS," said Barry M. Straube, the agency's chief medical officer. "Rather than focusing on one global problem and trying to apply a one-size-fits-all solution across the country, Care Transitions experts will look in their own backyards to learn why hospital re-admissions occur locally," Straube said. "Based on this community-level knowledge, Care Transitions teams will design customized solutions that address the underlying local drivers of re-admissions," he said.

The project will run through the summer of 2011 in 14 communities around the country and perhaps yield new tactics for preventing declines in health status leading to readmissions, which if they reach certain levels could lead to Medicare payment reductions under a plan outlined by Obama in his budget proposal.

Eliminating avoidable readmissions involves "focusing on how all of the members of an area's health care team can better work together in the best interests of their shared patient population," said CMS Acting Administrator Charlene Frizzera in a news release Monday. "By promoting seamless transitions from the hospital to home, skilled nursing care, or home health care, this community-wide approach seeks not only to reduce hospital readmissions but to yield sustainable and replicable strategies that achieve high-value health care for Medicare beneficiaries," Frizzera added.

The savings that can be generated are substantial, though only one small piece of the puzzle about how entitlement spending growth can be brought down to sustainable levels. "Our data show that nearly one in five patients who leave the hospital today will be re-admitted within the next month, and that more than three-quarters of these re-admissions are potentially preventable," said Frizzera.

In a blog Monday on the Office of Management and Budget Web site, White House Budget Director Peter R. Orszag cited hospital readmissions as one example of an "aggressive" Obama strategy to start "changing the game" in health care. In his budget proposal, Obama called for "bundled" payments covering not just care provided by the hospital but also by providers following discharge to spur cooperation that ensures patients receive proper treatment once they switch from one health care site to another.

Analysts say that among the problems that occur is failure to properly communicate to the patient which medications they should keep taking, which ones they should stop, and what new drugs to take; and the importance of making a doctor's appointment after discharge to keep tabs on the patient's condition. Orszag noted data from a recent New England Journal of Medicine study suggesting what he called an "alarming lack of physician follow up visits," with about half of patients re-admitted within 30 days having no bill for an outpatient visit between the time they were discharged and the time they were re-admitted.

The Obama budget proposal says that "hospitals with high rates of readmission will be paid less if patients are re-admitted to the hospital" within 30 days. "This combination of incentives and penalties should lead to better care after a hospital stay and result in fewer readmissions—saving roughly $36 billion of wasted money over 10 years."

CMS spokesman Peter Ashkenaz said the pilot recognizes that hospital readmission rates "are a problem of the entire community of providers, not just the acute care hospital. Medical evidence shows that the patient's success after discharge is a function of how well the entire care team communicates and engages the patient. This can include a home health agency, a nursing home, a primary care physician, a pharmacist, or anyone else in the community."

The pilot program was on the drawing board for many months before Obama took office. It involves having "quality improvement organizations"—entities that contract with Medicare to improve care—work with local providers to retool the way they deliver care.

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Head Scratcher in Overhaul Debate: What the Heck's a 'Public Plan'?

April 16, 2009 -- If winning bipartisan support is essential to the passage of health overhaul legislation, the White House must reach some accommodation between Democrats and Republicans on the hotly debated issue of what role if any a new "public plan" should play in covering the uninsured.

Backers, including President Obama, of the concept say a government-sponsored insurance plan should be available as an alternative to private plans to enroll the uninsured. They say a government plan will help keep costs down and goad private insurers into providing more efficient care in order to compete.

But in its search to find common ground, the White House isn't committing to a specific definition yet of what a public plan is—suggesting it may be open to having private sector elements in a public plan to attract some Republican support, while hoping to avoid defections by those liberal Democrats who ardently believe that direct government funding of health care is the only long-term solution to controlling costs and providing universal coverage.

But in keeping its options open, the Obama administration is clearly encountering confusion about the concept, which is likely to keep the public plan issue firmly on the front burner of the debate for some time.

In an appearance Wednesday at a forum sponsored by the Kaiser Family Foundation, White House Office of Health Reform Director Nancy Ann DeParle was peppered with questions about the public plan, which appears to be anathema to most Republicans and which even relatively moderate members of the party view with suspicion. The Senate Finance Committee's top Republican, Charles E. Grassley of Iowa, known for bipartisan legislating, warned at an April 9 forum in Mason City, Iowa, that Democrats should not include a public plan in their health overhaul proposals. Grassley said that if a public plan is offered, employers, especially small businesses, would end their coverage and tell employees to join a public plan. "Eventually such a plan would overtake the entire market. It would become de facto single payer," said Grassley.

But DeParle suggested at the Kaiser event that compromise is possible if lawmakers take a broad view of the public plan concept and its twin goals of lowering costs and keeping private plans on their toes.

She said that members of Congress she's met with who are skeptical about the public plan idea "aren't so clear about what it is," and that "when you actually start talking to them about what it might look like, you realize that you're talking about two different things. So I'm actually very hopeful that we'll be able to reach an agreement on that."

DeParle said that "Medicare is obviously a model of a public plan." But there are also "state employee plans out there that some people would regard as public plans. They're sponsored by the government, but they have lower administrative costs and they tend to be less expensive, but they're often operated by private plans."

DeParle said her definition is "something that's sponsored by the government and therefore has very low, almost non-existent administrative costs compared to the others, it doesn't have the need to have brokers out selling, it wouldn't have the need to have a lot of costs and profits the way private plans do."

DeParle said the plan "could have payment rates that are the same as Medicare." But she noted that bothers some members of Congress because they say that "if the payment rates are Medicare rates it would shift costs to the private sector" because they think Medicare rates are too low. But "you don't have to use Medicare prices, you can use something else," she said.

Other Democrats also have floated the idea of state employee plans as models of a public program. At a April 2 hearing by the Senate Finance Committee to consider her nomination to become HHS secretary, Kansas Gov. Kathleen Sebelius said "thirty plus states in the country, including Kansas, has a public plan side by side with private market plans" in their state employee program. "They have an opportunity to take a look at which is best suited to themselves and their families. And there has been no destruction of the marketplace."

Sen. Charles E. Schumer, D-N.Y., who questioned Sebelius at the hearing about the public plan option, said, "it's not going to be enough to have private plans providing health insurance." But "even within those of us who believe in a public plan option, there's a great deal of discussion of how it ought to be structured," he said. Along those lines, Schumer expressed interest in the idea of "a new hybrid, perhaps even run by a private insurer."

But could the hybrid have enough private sector elements to attract Republican support? Asked at the Kaiser forum whether a government-organized exchange offering only private-plan choices might meet the definition of a public program President Obama could live with, DeParle said, "that idea hasn't come up yet." She added that "I think that what was contemplated was one that would be a government-sponsored plan."

DeParle suggested that philosophical objections that government should not have a role in offering an alternative to private plans may not be possible to overcome, in contrast to policy disagreements over how a public plan should function. But she said Obama's focus is on the public plan option as a means to an end—or rather, two ends.

"The reason it's included is because he wanted a mechanism to lower cost and to keep the private sector honest, by having a competitive public plan in there." Obama has said that if there are other ways of accomplishing those goals, he would be open to hearing them, DeParle noted.

But for some lawmakers the government option may not be a means to an end, but an end in and of itself. Richard Curtis, president of the Institute for Health Policy Solutions, said in an interview Thursday that the public plan has become such a focus of the debate that "it's going to be important to find some middle ground here if reform is to succeed."

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MEDPAC Probes Effectiveness of Accountable Care Organizations

By Jane Norman, CQ HealthBeat Associate Editor

April 13, 2009 -- Washington just can't get enough of accountable care organizations (ACOs). Members of Congress are talking about them as a way to save money and increase quality in the U.S. health care system, and the Medicare Payment Advisory Commission (MedPAC) again probed the concept as it relates to Medicare at its April 9 meeting.

The discussion of ACOs was so absorbing and provoked so many questions that the commission had to cut back on the length of two later presentations from MedPAC staff members. While there were no votes or decisions, MedPAC Chairman Glenn M. Hackbarth urged commissioners to "strive for concreteness" in their deliberations because of the interest in Congress in ACOs. He said there is a "growing belief that more organization in the delivery of care is an important step."

The commission is a closely watched independent agency that advises Congress on highly complex and technical issues surrounding the Medicare program, with 17 members each appointed to three-year terms.

An ACO would be a group of providers held responsible for the quality and cost of health care for a population of Medicare beneficiaries, according to MedPAC staff members who prepared a presentation on the concept that followed up on another at the March 12 meeting. An ACO would be a combination of one or more hospitals, primary care physicians and possibly specialists, and would be accountable for total Medicare spending and quality of care for the Medicare patients served. Bonuses and penalties could be tied to overall Medicare spending and quality measures.

ACOs could be useful for Medicare because the 44-year-old program needs mechanisms for controlling cost growth and improving quality, with current spending growth unsustainable, said MedPAC staff members who detailed two models to be debated. One was an ACO made up of volunteering providers and the second was a voluntary ACO paired up with a Medigap SELECT supplemental plan that would be bought by beneficiaries. In the second model, beneficiaries would save money by using providers who are in the ACO.

Commissioners questioned how ACOs would work in rural areas, how those who don't often use their Medicare benefits would be signed up, whether specialists must be involved because of their costly services, if an "opt-out" option could be devised, how the incentives would work effectively—and how or why providers could be enticed into the ACO.

Commissioner Ronald D. Castellanos, a Florida urologist, said anxious providers recognize a need to change Medicare fee-for-service incentives and some inquiries into ACOs have been made in his area. "But then the doctors in my community look at me and say, 'Why do you want to do this? Why do you want to move away from what we call a very robust, perhaps overly funded in some respects, less-risk program to go into something like this?' They say what's the incentive that I have just to improve quality and resource use?

"I kind of tell them maybe it's going to be done to us unless we are part of the solution."

Replied Hackbarth: "I think that you gave them the right answer because it's going to happen to you regardless. You can either organize and try and deal with the problems, or you can get squeezed another way, in an unorganized system."

Hackbarth at the conclusion of the meeting outlined what he called "ACO design principles," the first of which was that such organizations can't be the only solution to Medicare's many problems. "I just don't think we are confident in this particular basket that we want to put all of our eggs in it. There is just too much uncertainty about how it will develop. That's my view," said Hackbarth.

Participation in such organizations must be voluntary for providers, he said. "We're talking about forging new relationships among actors, relationships that have evolved this way over decades," he said. "To say that everybody is going to do a certain thing quickly is unrealistic in that context." Definitions or forms of ACOs should be flexible, and no individual physician should be required to participate, he said. "I think you want people in who want to participate in this task," and groups eventually could even involve private insurers, Hackbarth said.

Beneficiaries should not be locked in to ACOs, he said, since if they want that kind of a closed system they can choose Medicare Advantage, the managed care component of Medicare. ACOs also could be used to address equity issues, including inequities for providers who are seeking more efficiency yet are penalized for those efforts, said Hackbarth. Another issue that might be addressed within the structure of an ACO is regional inequity in payments, another hot button within Medicare.

The discussion of ACOs has been going on for some time but stepped up following a January analysis by Dartmouth College researcher Elliott S. Fisher. His co-author included Mark McClellan, former administrator of the Centers for Medicare and Medicaid Services who's now director of the Engleberg Center for Health Care Reform at the Brookings Institution, and John M. Bertko, a former executive with insurer Humana, Inc.

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Administration Official Expresses Optimism for Health Care Overhaul this Year

By Drew Armstrong, CQ Staff

April 15, 2009 -- The Obama administration's head of its health care overhaul said Wednesday that she was optimistic it would become law this year.

"We're making a lot of progress in realizing the president's goal of getting health care reform enacted this year," said Nancy-Ann DeParle, the head of the White House's Office for Health Reform.

At a breakfast with reporters hosted by the Kaiser Family Foundation, DeParle painted a rosy picture of Democrats' work, saying that the divisions between lobby groups and any arguments in Congress were, so far, manageable.

"All the groups who were on different sides of the table 15 years ago are now at the same table, working together and talking about how we can reach these goals," DeParle said, specifically mentioning labor and business groups, as well as health care providers like hospitals. "No one wants the status quo. They don't start off talking about their position, they talk about how do we get everyone covered, how do we lower costs for businesses and families," she said.

DeParle said that in her first month on the job, she has met with around 40 members of Congress to discuss the administration's overhaul plans. Most of her time is spent meeting with members of Congress and their staff, she said, and she is also meeting extensively with the lobby groups.

Before taking the White House position, DeParle was administrator of what is now the Centers for Medicare and Medicaid Services in the Clinton administration. She also worked at the Office of Management and Budget. More recently, she worked for a private equity firm in New York, managing the firm's health care portfolio.

Introducing DeParle, Kaiser CEO and President Drew Altman held up a chart showing failed health care overhaul tries since 1950—from President Eisenhower's effort to President Clinton's failed try in 1993 and 1994. Altman half-jokingly warned DeParle that if the White House does not succeed in achieving a health care overhaul this time around, history would seem to dictate another 20-year wait before another attempt.

But at least in comparison to the Clinton attempt, DeParle said things were going well.

"Unlike the effort 15 years ago, Congress has put its money where its mouth is," DeParle said, referring to the legislature's decision to include a health care overhaul in its budget resolution and the efforts by key committee chairmen to get a head start on writing a bill.

And Congress does appear to be moving forward on schedule. On Tuesday, the Senate Finance Committee announced three "round tables" that will serve as informal committee hearings on health legislation.

An April 21 Finance Committee session will focus on reforming the delivery system, including how Medicare pays for services. A second session on May 5 will deal with expanding insurance coverage and access, and a final session on May 14 with deal with how to pay for an overhaul.

DeParle said that the efforts in the Senate, and statements by several key House committee chairmen that they would work together on the legislation, boded well.

"It's been, so far, a remarkably harmonious process," DeParle said.

DeParle said that she was making progress with lawmakers on one early issue that has emerged as a difficult point—whether or not to include a government-run insurance option as part of an overhaul. Republicans by and large oppose doing so, arguing that it will run private insurers out of business, while most Democrats support it.

"You have to sort of get the idea on the same page," DeParle said. "When you actually start talking about what it might look like, you realize you're talking about two different things," she said of her discussions with opponents of a public plan. Advocates of a public plan have increasingly talked about including safeguards to make sure such a plan would not compete with private insurers unfairly or simply dictate prices and take over the market.

She reiterated Obama's stance that an overhaul would have to be paid for over 10 years, but said the administration might have problems with any changes to the tax system—a cap on the employer exclusion for health care premiums, for example—that would have repercussions for people who already get health care coverage through their jobs.

DeParle said that Obama "has serious concerns about any kind of financing that's built on dealing with that tax exclusion or somehow undermining it. He's very skeptical of those plans and he's been clear about that."

Finance Committee Chairman Max Baucus, D-Mont., has several times mentioned using changes to the tax code—which could generate several hundred billion dollars by putting a cap on the tax exclusion for more expensive plans—to finance an overhaul.

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Two Senate Panels Confirm Plan to Move Separate Health Bills

By Drew Armstrong, CQ Staff

April 15, 2009 -- The Senate Finance Committee and Health, Education, Labor and Pensions Committee have solidified their plans to move separate health care overhaul bills that will eventually be combined on the floor, likely after markups that are targeted for early summer.

Aides to both committees confirmed the plans Wednesday.

"This has sort of always been the plan," said an aide to Finance Committee Chairman Max Baucus, D-Mont. "We're talking to each other to ensure that the two committee products can be merged on the floor," said the aide.

The two committees are working closely together to coordinate the separate pieces of legislation, according to aides, especially with respect to jurisdictional issues.

"Chairman Kennedy believes strongly that having one legislative approach is the best way to guarantee quality and affordable healthcare for the American people," said Anthony Coley, spokesman for HELP panel Chairman Edward M. Kennedy, D-Mass. "He and Chairman Baucus are working very closely together. They have established a joint process that will culminate in complementary legislation on the floor by early summer."

Baucus and Kennedy each have working groups where committee staff meet regularly with industry and lobby organizations. Aides to the two committees also meet with each other every other Friday to discuss their health care overhaul efforts.

The Finance Committee is expected to mark up a bill in June, with the goal of floor action soon after. The HELP Committee has set a markup for around that time, but an aide would not reveal the exact date.

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Consumer Reports Highlights Pitfalls of Individual Health Insurance Plans

By Melissa Attias, CQ Staff

April 13, 2009 -- Many people are unaware that their health insurance plans will not adequately cover their expenses and could leave them in substantial medical debt if they fall seriously ill, according to the May 2009 issue of Consumer Reports.

The report says the most problematic insurance plans are individual plans that people can secure on their own if they are self-employed or lose their job-based coverage. An estimated 14,000 Americans lose their employer-based coverage every day, the report says, forcing many of them to consider individual insurance plans.

"Individual insurance has become a nightmare for consumers," Nancy Metcalf, senior program editor at Consumer Reports, said in a news release. "It's expensive and difficult to get for people who have a less-than-perfect medical history. And people who do purchase a policy often don't understand what they've bought until it's too late and they're faced with hospital bills that their plan won't pay."

For their investigation, Consumer Reports interviewed insurance experts, regulators and people who purchased individual plans and hired a national expert to help evaluate health plan policies. The results show that in many states, people with modest incomes may not have any good options for individual coverage. Plans with affordable premiums may leave individuals in substantial medical debt if they fall seriously ill, the report says, while those with adequate coverage have unaffordable premiums.

To exemplify the problem of underinsurance, the report describes the situation of Janice and Gary Clausen of Audubon, Iowa. When Janice lost her accounting job and job-based coverage in 2004, the report says the Clausens purchased a United Healthcare limited benefit plan through AARP that cost about $500 a month and covered up to $50,000 a year. After Gary was diagnosed with colon cancer, however, his 14-month treatment cost more than $200,000 and launched the couple into medical debt, according to Consumer Reports.

AARP spokesman Adam Sohn says the sales and marketing of these fixed benefit indemnity plans have been suspended since November of last year, after Sen. Charles E. Grassley, R-Iowa, sent a letter questioning the marketing practices. AARP also is undergoing an internal review of the plans, Sohn said, and encourages members with insurance questions to call AARP for help.

"We want to make sure they have recourse and places to go to get the information that they need," Sohn said.

The Consumer Reports investigation found that both large and small insurers offer insurance plans with substantial coverage gaps. In addition, the report says the majority of states do not require regulators to assess plans' overall coverage. It is especially difficult for individuals to figure out what a policy does and does not cover because coverage gap disclosure requirements are weak or inexistent, the report says.

Bipartisan legislation (HR 1253) sponsored by Rep. Michael C. Burgess, R-Texas, would address weak disclosure requirements by requiring health insurance companies to notify individuals and employers about health benefit exclusions or limitations at the point of sale. The bill passed the House on March 31.

"Individuals have the right to know what actions will and will not be covered by their health insurance plan," Burgess said in a news release.

"We're not telling insurance companies that they have to cover everything, we're just telling them that if you don't, you have to tell," said Lauren Bean, communications director for Burgess.

To ensure individuals are purchasing legitimate health care, Consumer Reports offers four pieces of advice for those selecting a health care plan. First, the report says individuals should try to find a plan with comprehensive coverage. More specifically, the plan should not have caps on specific coverages, especially hospital coverage, outpatient treatment, doctor visits, drugs, and diagnostic and imaging tests, and unlimited lifetime coverage maximums are best. Ideally, the plan also would have a single deductible for everything and pay for 100 percent of all expenses once out-of-pocket spending reaches a certain amount, the report says.

The report also advises individuals to consider tradeoffs carefully when they need to lower their health premiums. It is better to select a higher deductible and a higher out-of-pocket limit rather than fixed dollar limits on services, according to the report.

In addition, individuals should research the company and search for complaint information online before they select a plan, the report says. Finally, the report recommends that individuals ask for an advance copy of the actual policy, read the small print before they enroll and ask for written responses to any questions so they can complain if the information turns out to be wrong.

The Consumer Reports report also includes seven clues that are often characteristic of inadequate insurance plans. For one, the report says policies with coverage limits of $25,000 or even $100,000 are not adequate because health care is so costly. The report includes a table listing the treatment costs of many conditions, beginning with the $285,946 cost of late-stage colon cancer.

In addition, the report says that "random gotchas" usually mean that a plan is inadequate. In the Clausens plan, for example, the policy only started covering hospital care on the second day, according to the report. While at first glance the statement seems harmless, the report says the first day in the hospital is almost always the most expensive because individuals must pay for surgery and emergency room diagnostic tests and treatments.

Many of the irregularities of health care insurance stem from the fact that the states, not the federal government, regulate insurance, the report says. According to Consumer Reports, most states do not have a standard definition of what comprises health insurance, with the prominent exceptions of New York and Massachusetts.

To correct this, the report says lawmakers should define all key health care terms, such as "out-of-pocket" and "annual deductible" by law. The report also recommends that health care plans have a uniform set of benefits, be made available in full for anyone who wants to examine them, include a plan coverage summary that says what is and is not covered and disclose out-of-pocket costs for a standard range of serious problems.

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