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July 6, 2010

Washington Health Policy Week in Review Archive 91e0ba42-0a01-4e6f-a115-bd879c0c7bd4

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Web Site Launched to Help Consumers Find Plans—But May Quickly Become Focal Point of New Law

By John Reichard, CQ HealthBeat Editor

July 1, 2010 -- The federal government went live Thursday morning with a much ballyhooed Web site that helps consumers find health insurance options and explains benefits under the new health care overhaul law. Critics may see it as a propaganda tool and a symbol of federal encroachment, while supporters will see it as a way people can learn about and take advantage of available benefits under the law.

Either way, the site is likely to receive heavy use and quickly become a focal point for changing information about the law. It's name——will probably stick in the craw of those who are uneasy about a higher government profile in health care.

The descriptor accompanying the name of the site—"taking health care into your own hands"—won't appease those who see Uncle Sam turning into Doctor Sam. A section on "strengthening Medicare" will anger those who say half a trillion dollars in cuts over 10 years doesn't exactly strengthen the program.

And there are reminders on the site that it is run by the federal government.

On the other hand, the site does offer a fast way to learn about coverage options. "People need to see what choices are offered, what options cost, and how coverage works in practice," said Karen Pollitz, Deputy Director for Consumer Support at the HHS Office of Consumer Information and Insurance Oversight. The site offers some price information but more data will come this fall to compare prices and quality of plans.

Say, for example, you are a young Maryland resident about to turn 25 and your parents' federal coverage is no longer available to you. By typing in your ZIP code in Montgomery County, you learn that 11 plans are available to you in the individual market.

If you click on one—say "Kaiser Foundation Health Plan"—you learn there are 13 different Kaiser plan options with premiums ranging from $60 to $222 per month. Phone numbers are listed for those who want to get more information, or one can apply online.

The site also has easy-to-use features offering details about the new law, including a summary of its provisions. A four-minute video tour explains what the site offers and how to use it. Among the features for understanding the law is an interactive timeline with brief summaries of provisions as one moves through the implementation calendar.

Wonky Washington types can also use the single searchable tab that offers actual text of both public laws that make up the overhaul legislation.

One of the first uses of the site will be to learn about the new state-based programs for people who have been unable to get private coverage for six months or more because of pre-existing medical conditions. In the case of Maryland, for example, one learns that premiums cost from $141 to $328 per month with a plan deductible of $1,500. The site gives an e-mail address to request an application.

HHS has wasted no time lining up favorable reviews. Consumers Union, the publisher of Consumer Reports, said in a statement that "for the first time, no matter where you live, you can go to one place and compare health plans available in your area. The site is nicely designed. It's easy to find information. It tries to avoid the complicated language that you usually get when you're shopping for a health plan."

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HHS Estimates 200,000 to Gain Coverage Via 'Pre-Existing Condition Insurance Plan'

By John Reichard, CQ HealthBeat Editor

July 1, 2010 -- Americans who have been uninsured for at least six months and have been unable to obtain private health coverage because of a pre-existing health condition can now apply for benefits through a new program created by the health care overhaul law, the department of Health and Human Services announced Thursday.

Twenty-one states opted to have the federal government run the "Pre-Existing Condition Insurance Plan" for them on a state basis rather than running it themselves, Richard Popper, deputy director of the Office of Insurance Information and Oversight at HHS, noted in a press briefing Wednesday. The program will differ from state to state even though it is under federal control, Popper said.

People in the 21 states can now apply for coverage and can obtain the application to do so at the new insurance consumer website that launched Thursday. Their coverage "will start August 1st, 2010, if we receive their application by July 15th," Popper said.

Application details and coverage dates will vary in the other 29 states and the District of Columbia, which chose to run their own programs drawing on the total of $5 billion in federal funding to be made available for the entire national effort. "However, a majority of the states will begin providing applications and enrollment starting in July as well," he said. Their information also will be available on the website. Coverage will be available in all states by the end of summer.

Premiums for the coverage will vary from $140 to $900 per month, said Popper. Premiums will differ according to age. Benefits will vary among the states running their own plans, he said. And while the benefit structure will be the same in the states in which the federal government is in charge, "the premiums differ by state," he said.

The program is modeled after the Children's Health Insurance Program in that states have flexibility to tinker with premiums and benefits to meet the needs of their own marketplaces, Popper said.

Many analysts predict the $5 billion will run out well before the program ends in December 2012. But Popper said that the HHS secretary has the power "after a year or two" to shift allocations from states with low take-up rates to states with strong demand. "Along with that we can work with the states to adjust their benefit structure, the deductibles, the co-pays, the overall plan structure" to "help the plan make it to 2014 when it will no longer be needed," Popper said.

Popper also suggested that take-up rates may be lower than some people think because a significant number of people who are uninsured because of pre-existing conditions have low incomes and won't be able to afford the premiums. Popper and Jay Angoff, the director of the Office of Insurance Information and Oversight, repeatedly emphasized that the program is a temporary one and that in 2014 everyone will be able to get coverage that does not vary premiums based on their health status.

Republican Sen. Michael B. Enzi of Wyoming, however, says the program is vastly underfunded, citing an estimate by the Congressional Budget Office that an additional $5 billion to $10 billion in funding is required to meet the likely demand if enrollment is not limited.

"The number of people who may be eligible for the program is in the millions—much greater than the estimates of participation—but CBO focused its analysis on those people who would be likely to enroll and has not estimated the total size of the eligible population," CBO Director Douglas Elmendorf said in estimating the cost.

The HHS officials resisted talk of enrollment caps. But only 200,000 Americans will be covered at any one time, said Popper, using the same enrollment estimate as that of CBO. But because some people will leave the program he estimated that some 350,000 people will benefit overall.

The states that decided to let HHS run their plan are: Alabama, Arizona, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia and Wyoming.

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Governors Warn of a 'Double-Dip' Recession Without Medicaid Funds

By Jane Norman, CQ HealthBeat Associate Editor

June 30, 2010 -- A bipartisan group of governors at a Washington news conference Wednesday renewed their plea to Congress to approve special Medicaid funds for their states, warning that layoffs, service cutbacks and a 'double-dip' recession will ensue unless the federal money is plugged into state budgets.

"The consequences on the ground across the country will be devastating," said Michigan Gov. Jennifer M. Granholm, a Democrat. She said that her state—with its 13.7 percent unemployment rate—cannot bear the cutoff of Medicaid money combined with an end to extended federal unemployment benefits.

"Inaction, I think—and economists across the nation agree—will force this nation into a double-dip recession," she said. "Our plea is to beg Congress, particularly the Senate, to find the votes to be able extend these emergency measures."

Democratic Gov. Edward G. Rendell of Pennsylvania said action is needed within the next two weeks because most state budgets for the new fiscal year begin July 1. While Rendell said funding is needed to the "greatest degree possible," he indicated a compromise scaling back the Medicaid funds may be the best hope for cash-strapped states.

"Could we live with that? It would be hard, because every increment means pain, every increment means job losses, none of them makes sense to us," said Rendell. "But sure, I think the key is, there would be action."

The governors did not endorse a specific bill or offsets, though 47 governors signed a letter in February agreeing on the need for the Medicaid funds.

The special federal Medicaid money, matched by state funds, is part of a package of tax breaks and social spending (HR 4213) that has gotten waylaid by objections from the GOP over additional deficit spending. Unhappy Senate Democrats say Republicans only want to kill the measure; Democrats also have, without success, sought the support of moderates in their own party and among Republicans.

The original proposal was for an additional $24.2 billion in Medicaid money, though Democrats have proposed scaling that back.

The temporary increase in federal Medicaid matching funds for states would be a continuation of aid that began with the 2009 economic stimulus, and it would extend through June 2011. Three-fifths of states already have included the anticipated money in their 2011 budgets after the House and Senate approved it, though in separate bills, and the Obama administration gave its support.

Democratic governors have been most prominent at past press events urging passage of the Medicaid funds, but this gathering was marked by the participation of Republicans Arnold Schwarzenegger of California and M. Jodi Rell of Connecticut. Rendell said the event also had the backing of Republicans Sonny Perdue of Georgia, Jan Brewer of Arizona and Chris Christie of New Jersey, though they weren't present.

Schwarzenegger, speaking via a video feed from California, said that "the importance of this extension can't be overstated" and that California already is facing a $20 billion deficit this year. "The cuts I have proposed to close the gap are absolutely devastating. They break my heart," he said.

If the federal money vanishes, the state will face an additional $1.8 billion in reductions, he said. "I urge Congress—Democrats and Republicans—to do the right thing," said Schwarzenegger.

"We are absolutely counting on these funds," said Rell, whose state would get $266 million in extended Medicaid funds if Congress approves. "We have cut in every possible place that we can."

Aides to Senate Finance Chairman Max Baucus said he's attempted for months to push through the extended Medicaid funds and just last week was blocked repeatedly on the Senate floor. Nonetheless, Baucus remains committed to seeing the funds approved, aides said.

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Berwick: Out of Step on Health Care? Or at the Cutting Edge?

By John Reichard, CQ HealthBeat Editor

June 30, 2010 -- Republicans have been making the case that the Obama administration is out of step with the American people on health care—not just in pursuing enactment of the health care law earlier this year, but more recently in nominating Harvard quality improvement expert Donald M. Berwick to run Medicare and Medicaid. But the administration may be making progress in countering the GOP's assertions.

In the case of Berwick, Republicans link him to rationing and promise a vigorous fight over his confirmation. Senate Finance Committee Chairman Max Baucus is treating the charges carefully; he strongly backs Berwick, but is wary of giving Republicans a platform for their arguments and is in no hurry to schedule a confirmation hearing.

The delay might suggest trouble for Berwick. On the other hand, it has created an opportunity for a wide swath of the health care community to speak up on his behalf. Many provider groups already have defended him. And now about 90 groups—including major consumer organizations, health plans with strong reputations for well organized care, and business groups known for innovation in promoting quality and efficiency of care—have sent a letter to Baucus, D-Mont., endorsing Berwick.

Some, such as the AFL-CIO and Families USA are natural allies of the administration, but others do not fall into that category. They include Wal-Mart Stores Inc. and employer coalitions such as the Business Health Care Action Group in Minnesota and the Pacific Business Group on Health in California. Still other groups represent patients that might be particularly vulnerable in a system of rationing, such as the Alzheimer's Association and the American Association of People with Disabilities.

Berwick is "one of the nation's leading authorities on health care quality and improvement," the letter says. "He has dedicated his professional career to closing what the Institute of Medicine has called the 'quality chasm;' that is, the enormous gap between the health care we have and the health care we should have."

The letter notes the Berwick-led "100,000 Lives Campaign" to reduce deaths in the hospital from medical mistakes and his "Protecting 5 Million Lives" campaign to reduce harm from surgical complications, MRSA infections and other factors.

"Unfortunately, some of Dr. Berwick's speeches and writings have been quoted in ways that misrepresent his beliefs," the letter adds, by suggesting he backs rationing and a government takeover of health care decisions. But Berwick's "commitment to patient care is about putting control of health care decisions in the hands of informed patients and their families," the letter says. "The time for distractions and misleading rhetoric has passed. We urge you to confirm Dr. Berwick," it concludes.

Health plans include the Alliance of Community Health Plans, Fallon Community Health Plan, Group Health Cooperative of Puget Sound, and Kaiser. Signatures from the consumer advocacy side include Consumers Union, the Medicare Rights Center, and the National Health Law Program.

The administration also got a piece of good news Wednesday in the form of a new poll by the Kaiser Family Foundation that said favorable views of the health care overhaul law increased seven percentage points over the past month to 48 percent.

The poll showed strong support for such elements of the overhaul as creating health insurance exchanges, giving tax credits to small business to buy coverage, and even giving subsidies to individuals to buy coverage.

On the other hand, the results mean that not even half of the public regards the law favorably. And one element of the law, and perhaps its most important provision —the mandate that individuals buy coverage —remains highly unpopular. The mandate is viewed favorably by only 34 percent of Americans, the poll found.

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Board Named to Review Grants for Nonprofit Health Care Co-ops

By John Reichard, CQ HealthBeat Editor

June 28, 2010 -- If they build a board, will the co-ops come?

"Consumer-operated and oriented plans" were the hot topic at one point of last summer's health overhaul debate—promoted by moderate Democrats such as Sen. Kent Conrad of North Dakota as a less divisive alternative to for-profit care than the "public plan" strongly opposed by hospitals and insurers.

But while the co-op idea may have won grudging acceptance as a compromise, marketplace analysts wondered whether new co-ops would actually form.

Skepticism aside, that process has now begun, with the June 23 hiring of an advisory board filled with old hands in the insurance marketplace. Those hired are no strangers to trying to spur the availability of better-organized, more-affordable care—a key goal of the co-op language.

Under the health care overhaul law, the department of Health and Human Services will have $6 billion to hand out in grants and start-up loans to foster the creation of at least one consumer-oriented nonprofit health plan in each state. If revenues of the plans exceed their expenses, the surplus must go to lower premiums, improve benefits or improve quality.

The money must be given out by July 1, 2013. Loans can be issued to help pay start-up costs and grants can be provided to help meet solvency requirements for health plans. The new board will advise HHS on the issuance of the loans and grants.

The idea is to create consumer-run plans, a type of plan that largely does not exist now in most parts of the country. Board members must not have a "significant interest" in the insurance industry, the Government Accountability Office said in announcing the appointments.

Among the 15 people named are two veterans of the California Public Employees' Retirement System (CalPERS), long regarded as one of the country's more innovative health care purchasers: Margaret Stanley has served as health benefits administrator at CalPERS, and Allen Feezor was assistant executive officer for health benefits at CalPERS.

Now retired, Stanley also has served as executive director of the Puget Sound Health Alliance in Seattle, a coalition of employers, hospitals, doctors and insurers that seeks to re-engineer care in line with treatment practices proven to be effective. Feezor most recently served as deputy secretary of the North Carolina Department of Health and Human Services and oversees health care overhaul efforts in the state.

Also named to the board is Rick Curtis, president of the Institute for Health Policy Solutions in Washington and a veteran of many state-based efforts to sharpen competition among insurers based on price and better-coordinated care.

Another pick on the purchasing side brings a somewhat more political flavor to the lineup: Terry Gardiner, a commercial fisherman in Alaska, is the national policy director of Small Business Majority, a small business group that often finds itself on the opposite side of the health care debate as the GOP-oriented National Federation of Independent Business.

Various members are involved in the delivery of care: James Brosseau directs the Altru Diabetes Center in Grand Forks, N.D., and specializes in improving coordination of care to treat diabetes and other chronic diseases; Herbert C. Buchanan is the chief operating officer of the University of Maryland Medical Center; David D. Buck, a professor of family medicine at Baylor College of Medicine, is the founder and president of Healthcare for the Homeless in Houston; family physician David A. Carlyle is co-medical director of the Homeward Hospice in Ames, Iowa.

Michael Pramenko is the president-elect of the Colorado Medical Society.

Other appointees have a consumer focus or are veterans of the efforts to form cooperatives. Patricia K. Haugen is South Dakota coordinator for the National Breast Cancer Coalition in Sioux Falls. William Oemichen is the chief executive officer of Cooperative Network, an association representing 600 cooperatives in Minnesota and Wisconsin involved in agriculture, health care and financial services. Tim Size is the executive director of the Rural Wisconsin Health Cooperative in Sauk City.

Academics and consultants round out the list. Barbara Yondorf is a health policy consultant in Colorado who is on the board of directors of the Colorado Consumer Health Initiative in Denver. Donna C. Novak is an actuary and heads a consulting firm in Sahuarita, Ariz., which specializes in reducing health care costs and assessing the financial health of insurers. And Jon B. Christianson chairs the health policy department at the University of Minnesota School of Public Health and conducts research on health care regulation and finance.

A board is one thing, but the process of lining up doctors, hospitals and other providers to participate in the plan's networks is quite another. Plans also must be able to market effectively and negotiate favorable terms with suppliers of products and services. In a market where the size of a plan often dictates its ability to control costs, co-ops might have a tough time going up against market-savvy insurers.

"There's some very smart people on the co-op advisory board, and it will be interesting to see what they come up with," said Alwyn Cassil, public affairs director for the Center for Studying Health System Change, a Washington research organization.

"But even with $6 billion in government seed money, the barriers to entry in the health insurance market are high, and creating consumer-run, nonprofit insurers from scratch will be difficult," Cassil noted. Running "what amounts to an insurance company isn't as simple as some people would like to believe. It's possible that co-ops could gain traction in some parts of the country on a small scale, but it's hard to see how they would be able to compete successfully against established players like [Blue Cross-Blue Shield plans] in the individual and small-group markets."

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CMS Announces Proposed Payment Rule for Outpatient Care

By CQ Staff

July 2, 2010 -- Certain preventive services should become more affordable for Medicare beneficiaries under a proposed rule announced Friday by the Centers for Medicare and Medicaid Services governing 2011 payments to hospital outpatient departments and ambulatory surgery centers.

Under the proposal, which would put in place changes made by the new health care law, Medicare enrollees would see their out-of-pocket costs go down for preventive services provided in hospital outpatient departments and ambulatory surgical centers, beginning in January 2011.

The new law (PL 111-148, PL 111-152) waives the 20 percent beneficiary co-pay for initial exams when people first enter Medicare, as well as most other preventive services offered by Medicare.

"Preventing diseases that can be prevented, and detecting others at earlier, more treatable stages, are among the keystones for transforming Medicare," said Jonathan Blum, deputy administrator of the Centers for Medicare and Medicaid Services, in a statement.

"By eliminating the beneficiary's out-of-pocket costs for most preventive services, we are removing a barrier to access and paving the way for improved health for seniors and people with disabilities who rely on Medicare for their health coverage," said Blum.

The proposal includes an 0.25 percentage point reduction to the hospital outpatient department inflation update for next year, as required by the overhaul.

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