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Washington Health Policy Week in Review

Washington Health Policy Week in Review Archive 5af45e28-7505-433c-a5e0-43ba9b3dccc3

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AHRQ Releases New Data on the Uninsured

AUGUST 11, 2005 -- More than one in three Hispanics is uninsured and one-quarter have only public health insurance, according to new government data.

Hispanics, who make up 15 percent of the U.S. population, comprise about 29 percent of the uninsured and constitute 36 percent of all uninsured children under age 18, according to federal data the Agency for Healthcare Research and Quality (AHRQ) released Aug. 9. The agency analyzed data from the 2004 Medical Expenditure Panel Survey, including detailed breakdowns by subpopulation groups, to help policymakers and others understand health insurance status in detail.

Data also indicated that white non-Hispanics made up 65 percent of the population but less than 50 percent of the uninsured in 2004. About one in seven whites was uninsured and 10 percent had only public insurance, AHRQ reported. In addition, black non-Hispanics made up almost 13 percent of the population and almost 15 percent of the uninsured. About one in five blacks was uninsured and 28 percent had only public insurance.

"These results confirm the urgency of identifying effective policies to expand access to care for all American, particularly Hispanics," AHRQ Director Carolyn M. Clancy said in a release.

Additional data from the first part of 2004 show that for the population under age 65, 19 percent or 48 million were estimated to be without health insurance. For children under age 18, nearly 12 percent or 8.5 million were uninsured—a figure significantly lower than estimates from the previous decade.

The decline in uninsured children was mostly due to public insurance expansions aimed at them, including Medicaid and the State Children's Health Insurance Program, AHRQ officials said.

The figures also show that young adults aged 19–24 were at greatest risk of being uninsured, with 35 percent having no insurance coverage for the first part of 2004. Furthermore, the lack of coverage was worst of young Hispanic adults, with 56 percent uninsured.

Other data from the survey show that roughly 64 percent of American workers in large, private-sector companies—defined as 50 or more workers—were enrolled in health insurance plans offered by their employers in 2003 but enrollment rates varied substantially by type of industry.

The mining and manufacturing industry had the highest enrollment rate at 82 percent, while the lowest rate was recorded at 41 percent from employees in the "other service industries" category that included hotel and restaurant workers, sanitation workers, and laundry employees.

Other industries recording high enrollment rates included wholesale trade (79 percent), financial services and real estate (77 percent), and transportation (72 percent).

The average employee contributions toward premiums were $627 for single coverage and $2,242 for a family of four, also varying by type of industry, AHRQ stated in a news release.

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Health Care Costs Are Causing More Personal Debt, Study Says

AUGUST 10, 2005 -- Insured and uninsured Americans alike are increasingly burdened by soaring health care costs and are going into debt because of high medical bills, according to a report released Wednesday.

Issued by The Commonwealth Fund, the report indicated that an estimated 77 million adults struggle with medical bills, have recent or accrued medical debt—or are dealing with both.

Of those reporting problems with medical bills or debt, 63 percent said they decided to forgo necessary treatment out of cost concerns, the study found.

For respondents with health insurance, the study revealed that those with less comprehensive coverage were more likely to face financial problems.

For example, the report indicated that 48 percent of insured working-age adults whose insurance did not include prescription drug coverage reported financial problems associated with medical bills. In contrast, 33 percent of respondents whose insurance included prescription drug coverage did the same.

The report also highlighted that women and African Americans are at a particularly high risk of experiencing financial problems related to medical bills.

While 39 percent of working-age women respondents reported problems with medical bills, only 25 percent of their male counterparts did the same.

Meanwhile, 52 percent of African-American working-age adults experienced problems related to health care costs, the study found.

With only 14 percent reporting problems with medical bills, senior citizens over the age of 65 are better protected than working-age adults, the report revealed.

The study is based on data derived from nation-wide phone interviews with 4,052 adults aged 19 and older.

"The trend toward higher deductibles in employer plans may have gone too far," said Commonwealth Fund President Karen Davis in response to the findings.

"Greater care should be taken to ensure that health care is affordable for lower-wage workers if all Americans are to get the care they need and preserve savings they will need in retirement."

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Hey, Don't Forget Us—Administration Forwards Medicaid Bills to Congress

AUGUST 10, 2005 -- Much of the attention of late in the Medicaid overhaul debate has been on proposals by the nation's governors and on congressional staff efforts to revise the program. But the Bush administration is reasserting itself by submitting a draft bill to Congress to restrain Medicaid spending growth.

The provisions in the bill and a related administration proposal regarding home-based alternatives to nursing home care are much the same as Medicaid overhaul proposals detailed in the Bush administration's fiscal 2006 budget request. But the draft legislative language marks a fresh attempt by the administration to end what it calls "accounting gimmicks" by the states to boost the federal Medicaid payments they receive. And it also contains some new details on how the administration plans to trim spending for administrative expenses, analysts say.

The administration forwarded the measures Aug. 5 to House and Senate leaders and to the two committees preparing Medicaid overhaul legislation for mid-September markups, the House Energy and Commerce and Senate Finance.

"These proposals will help keep Medicaid affordable and sustainable for states and the federal government by restructuring reimbursement for prescription drugs, reforming rules for long-term care eligibility, and strengthening the program's financial integrity," Leavitt said in a letter to congressional leaders.

The "integrity" proposals to end the so-called accounting gimmicks haven't found favor with state governors but could generate billions of dollars in federal savings if the administration can persuade Congress to accept them.

There are some "new twists" in the integrity proposals, said Leighton Ku, an analyst with the left-leaning Center on Budget and Policy Priorities.

For example, the draft language provides for advance submission of state Medicaid spending plans in a way that allows federal officials to prevent use of controversial financing practices designed to boost federal matching funds, Ku said. The Centers for Medicare and Medicaid Services had backed away from reviews of these "CMS Form 37s" detailing the spending plans because of state objections, but the draft language represents an attempt to bring back that approach, he said.

Also new are details in the draft on how the administration would cap federal payments to the states for Medicaid administrative costs, Ku said. The administration would establish a limit for each state on federal matching funds for Medicaid administrative costs using 2003 as a base year and increasing payments each successive year by the percentage increase in the consumer price index plus 4.5 percent.

Ku predicted that states would object to that plan because it wouldn't take into account higher state administrative expenses associated with implementation of the Medicare overhaul law (PL 108-173). The analyst also noted the absence in the administration's draft bill language of programs to increase Medicaid funding that were highlighted in the budget proposal earlier this year. They included extended funding for transitional Medicaid coverage for people coming off welfare and for certain refugees, and money to enroll more children in Medicaid and to cover certain Medicare out-of-pocket costs for low-income Americans qualifying for both Medicare and Medicaid.

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Medicare Officials Expect Beneficiaries, Government to Pay Less for Drug Benefit

AUGUST 9, 2005 -- Citing "robust competition" among companies eager to offer drug coverage to seniors, Medicare officials said Tuesday they expected beneficiaries' monthly premiums as well as the government's cost to provide the benefit to be lower than previously estimated.

Average monthly premiums are expected to be $32.20, about $5 less per month than estimated in the March 2005 Medicare Trustee's Report. In addition, the government is expected to spend about $15 less per month on each beneficiary—a decrease of about 14 percent.

"Lower premiums should make the benefit more attractive to more people," Centers for Medicare and Medicaid Services (CMS) Administrator Mark B. McClellan told reporters during a briefing at Department of Health and Human Services (HHS) headquarters. HHS Secretary Michael O. Leavitt said between 28 to 30 million of Medicare's more than 40 million beneficiaries are expected to enroll, but added "we're building a system to accommodate more."

While the new figures would save the government billions in the first year of the program, McClellan declined to give an aggregate savings number for the cost of the drug benefit over the next decade." We're not making a new forecast of the cost of the drug benefit," McClellan said. That estimate is expected next February when the administration submits its fiscal 2007 budget request.

In February, McClellan said the administration's 10-year net cost of the drug benefit would be "in the neighborhood" of $720 billion. The cost of the Medicare drug legislation (PL 108-173) was central to the 2003 heated debate about overhauling the program because Congress capped the cost at $400 billion over 10 years.

At Tuesday's briefing, McClellan said that a lower than expected "weighted average" among the plan bids helped reduce the premiums and the government's share, as did the plans' ability to negotiate lower prices for drugs and increase the use of generics, which often cost less than their brand name counterparts. McClellan also said that premiums for prescription drug coverage in Medicare Advantage health plans are expected to be lower on average than in stand-alone prescription drug plans.

McClellan also predicted that the approximately 14 million Medicare beneficiaries who qualify for a low-income subsidy will have multiple choices for coverage with plans whose premiums can be paid with the Medicare subsidy. According to CMS, most beneficiaries with limited incomes will also have no deductibles, no gaps in coverage, and only small co-payments for each prescription.

Leavitt, who along with other HHS officials is traveling around the country via bus to discuss the benefit with Medicare beneficiaries, described the effort as a "large scale national conversation" that includes physicians, pharmacists, volunteer organizations, and others who are trying to educate beneficiaries about the program.

Noting that most of the reporters as well as agency staff in the room had seen the Medicare drug benefit unfold on Capitol Hill, "the politics of this are over," Leavitt said. "It's now about implementation."

In other matters, Leavitt and McClellan declined to answer questions about Dr. Sean Tunis, the agency's chief medical officer who was placed on paid administrative leave in April amid allegations that he submitted false documents to Maryland medical authorities and interfered with their investigation into the matter.

In late May, Tunis agreed to a one-year suspension and a $20,000 for submitting falsified documents that stated he had met his requirements for continuing medical education.

"That is a personnel matter that is under review. And when the review is over we'll have more to say," McClellan said. A spokeswoman for the HHS Inspector General's office said the Tunis matter is "under review."

Concerning proposed new conflict-of-interest rules for National Institutes of Health employees, Leavitt said "there may be some ways in which we can make the proposal more efficient and not create an undue administrative effort." The review of those proposed changes will be completed soon, Leavitt said.

An HHS Inspector General report issued last month noted numerous problems with outside activities of senior-level NIH employees, such as 32 percent of approved outside activity requests missing at least one required piece of information, such as an official signature or required form.

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Report: Community Health Centers Under Growing Financial Strain Despite Funding Increases

AUGUST 8, 2005 -- Despite increased federal funding, community health centers are under growing financial pressure that will intensify if Congress gives states greater power to reduce Medicaid benefits, health center officials said at a news briefing Monday.

The growth in federal funding, a major Bush administration health care priority since 2000, hasn't kept pace with the rise in health care costs and the growing number of uninsured patients treated by the facilities, according to a report the officials released at the briefing. The event was sponsored by the National Association of Community Health Centers (NACHC).

The centers generally do not turn any patients away, so the federal dollars are increasingly important. The patients treated by the facilities are overwhelmingly poor, with 71 percent earning below the federal poverty level. As a result, any reduction in Medicaid benefits adds to the financial pressure on the centers, the officials said.

According to the report, 40 percent of community health center patients last year were without health coverage. Of those who had insurance, Medicaid was the primary payer.

Because of those realities, any overhaul of Medicaid should not give states the power to reduce benefits or assess new out-of-pocket costs for existing Medicaid beneficiaries, said Dan Hawkins, vice president of the NACHC.

But slimmed-down benefits or higher co-payments would be appropriate for people who qualify under expanded eligibility criteria, he said. The Bush administration says that greater control over benefits would allow states to broaden eligibility for Medicaid coverage.

The administration's overhaul plan makes such "flexibility" a key element of changing Medicaid, but states could water down benefits and charge new out-of-pocket fees for existing Medicaid beneficiaries, not just residents who would qualify for Medicaid expansions.

New Patients
Hawkins said that during the Bush administration, the number of patients treated per year by the facilities has grown by 4 million to a total of 15 million. That's the biggest increase in the 40-year history of federal funding of the centers, he said.

But federal funding as a share of per-patient treatment costs declined from 58 percent in 1999 to 52 percent in 2004, said Hawkins, citing data in the report.

The number of uninsured patients treated by the facilities rose 43 percent between 1999 and 2004, the report said.

The effects of state-level Medicaid cuts are already being seen in Tennessee community health centers, said Mary Bufwack, the head of United Neighborhood Health Services, a Nashville-based organization that runs six centers.

Hundreds of thousands of Tennessee residents have begun losing coverage because of huge cuts in TennCare, the state's expanded Medicaid program, she said.

"As I speak, 1,900 people are losing TennCare every day," she said.

Community health centers in Tennessee won't close their doors because of the state's growing number of uninsured residents, but treating them is going to be "a real struggle," she said.

Some states are not only cutting Medicaid—seven reduced direct funding to the centers in 2005, with those cuts totaling $14 million, according to the report.

The report also said two of every five centers ran operating losses last year and that margins for all centers combined averaged just 0.9 percent. "At such low operating margins, a single unexpected event—a disease outbreak, or a hurricane, snowstorm, or power outage alone—could easily put a health center in deficit, thereby threatening its ability to provide comprehensive care," the report said.

Asked specifically what Congress should do to help centers, Hawkins said lawmakers should "fully fund" the administration's fiscal 2006 request for an added $300 million in federal outlays. Hawkins asserted that added funding will help reduce Medicaid spending by giving center clientele "a medical home."

In other words, by getting regular preventive and primary care at community health centers, center patrons won't end up in the emergency room needing much more costly treatment.

However, the House has approved a fiscal 2006 increase of only $100 million (HR 3010) and the Senate a hike of only $105 million in its version of the same measure.

Hawkins added that medical liability coverage should be extended free of charge to doctors who volunteer their services to community health centers.

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