Federal reform update

As legislators in both houses of Congress work to draft health reform bills for a floor vote, some Democrats have begun a new push for inclusion of a public option (Source: “Public option backers fight on,” Politico, Oct. 15, 2009).

Speaker Nancy Pelosi (D-Calif.) has signaled that she is moving closer to including a robust public option in the House bill and liberals in the Senate have began making emotional appeals for a similar inclusion in their legislation.

Congressional liberals estimate that the speaker has about 200 votes for a public option tethered to Medicare — 18 votes short of what is needed for passage.

Ohio Democratic Sen. Sherrod Brown, who supports the public option, said, “We have compromised already. We compromised single-payer to the public option with Medicare rates, which would have been obviously a much bigger scoring advantage for the CBO, to this language. I don’t see a lot more room for compromise.”

AHIP report draws ire of Dems
The release last week of an report commissioned by America’s Health Insurance Plans that concludes that the health reform bills before Congress would increase the cost of private insurance has been met with criticism by President Obama and Congressional leaders (Source: “Obama hits back at insurers over health reform,” Reuters, Oct. 15, 2009).

AHIP's report, which was authored by accounting firm PriceWaterhouseCoopers, investigates the potential impact of four Senate Finance Committee provisions: “Insurance market reforms coupled with a weak coverage requirement, a new tax on high-cost health care plans, cost-shifting as a result of cuts to Medicare, and new taxes on several health care sectors.”

The report concludes that on average, the cost of private insurance with increase by 40 percent between 2009 and 2013 if these provisions are implements (compared to a 26 percent increase under the current system), increase by 73 percent by 2016 (compared to 50 percent under current law) and increase by 111 percent by 2019 (compared to 79 percent under current law).

The findings of the AHIP report that reform would lead to higher private insurance costs are at odds, to a certain degree, with a new AARP-commissioned study from the Urban Institute. That study found that stricter limits on age-rating in the House health reform bill and the Senate HELP bill would significantly reduce private insurance costs for middle-income adults between the age of 50 and 64.

AMA’s support for reform push appears to be wavering
Having voiced support this summer for a broad health reform bill, American Medical Association officials now appear less enthusiastic about the legislation (Source: “Influential AMA's Support for Reform Is Far From Certain,” Washington Post, Oct. 16, 2009).

"We don't believe doing nothing is a good solution," said AMA President J. James Rohack, stopping short of endorsing any particular legislation. Observers see the reluctance to fully endorse reform bills as a sign of increased splintering among AMA membership and how the various bills under consideration deal differently with how the government reimburses doctors for treating Medicare beneficiaries, an issue of paramount importance to doctors.

Kaiser Foundation head explores health reform implementation
With the focus of health reform squarely on the passage of legislation, little attention has been paid to what will certainly be the arduous task of actually implementing any potention health coverage reform plan.

In his “Pulling it Together” column on the Kaiser Family Foundation site, Drew Altman, KFF President and CEO, wrote that “There are huge administrative challenges ahead in implementing health reform that have barely been discussed in the public debate, and have not been explicitly addressed in the legislation, at least not yet.”

The essay includes an interesting graphic that lays out the potential six-year timeline for implementation, based on the Senate Finance bill.

Institute launches Web hub for market-based reform ideas
The Galen Institute announced last week the launch of HealthReformHub.org, a Web site that the organization says will “serve as a central access point for the latest news and information about market-based ideas for health reform.”

“The American people are focused as never before on the details of proposals to solve problems facing our health sector,” said Galen Institute President Grace-Marie Turner. “We have created the Health Reform Hub as a one-stop site for access to the latest news and analysis about the reform debate, particularly the patient-centered proposals that have received far too little attention in the current discussion.”

Essay examines essential characteristics of insurance exchange
Writing on the blog for the journal Health Affairs, Elliot Wicks, a senior economist for Health Management Associates, lays out a series of design principles and insurance market reforms that would be necessary for an exchange to operate effectively (Source: “The Insurance Exchange In Health Reform: Essential Characteristics,” HealthAffairs.org, Oct. 14, 2009).

According to Wicks, the objectives of an exchange would be to provide a single point of entry into the insurance market, provide consumers with a choice of providers and plans, provide consumers with an objective source of information about plan options and create competition among health plans to improve plan quality and lower costs.

“If the exchange is to achieve these objectives, it must be carefully structured, and changes in insurance market rules must be crafted in a manner to ensure that the exchange can survive and not become simply a high-risk pool,” Wicks wrote.

In analyzing the three major proposals before Congress, Wicks concludes that the Senate Finance Committee bill is the closest to addressing all of the conditions to foster competition and avoid adverse selection against the exchange, although Wicks writes that it does lag behind the other proposals in providing for the exchange to negotiate with insurers.

Heritage releases fact sheet on reform impact on states
The Heritage Foundation released today a new fact sheet outlining the potention impact of health reform on the states.

Titled, “The End of Federalism: How Obamacare Will Impact States,” concludes that if Medicaid eligibility is expanded to 133 percent of the federal poverty level, a third of all states would see their Medicaid populations increase by 30 percent and 10 states would see their Medicaid rolls grow by 50 percent. Ohio would see an increase in Medicaid recipients of 27.1 percent, according to Heritage estimates.

The Heritage paper also criticizes the reduction of flexibility for states to manage their coverage programs, the increased financial burden placed on states through federal mandates, and the transferring of regulatory powers from state to federal authorities.