- 795
Nothing really shocking, but just demonstrates what a clusterflark this whole thing is. So far, in the 22 states with pools, 2400 people have signed up. That's brilliant...
Here's the email/article, which can be found here.
Here's the email/article, which can be found here.
Definitions count
On August 18, at their annual meeting in Seattle, state insurance commissioners overwhelmingly approved the new form – or "blank" – that health care plans must submit in the future to report the percentage of premiums they spend on health care. This was the first part of a two-part process. The National Association of Insurance Commissioners (NAIC) continues to work on the second part: writing a regulation for calculating the medical loss ratio.
The health reform law requires that health insurers spend at least 85 percent of large-group premiums on health care and quality improvement efforts – and 80 percent of individual and small group premiums. If they fall short of this "medical loss ratio," or MLR, they must pay rebates to their customers.
In the blank and calculation, the NAIC will define which health care and quality improvement efforts count as "medical loss." Some of that work was completed with the adoption of the blank. More will be done as an NAIC actuarial task force considers the regulation for calculating medical loss. The health reform law gave the NAIC the task of guiding Health and Human Services on how to classify expenditures, but HHS will have the final say.
One of the thorniest issues in the calculation regulation has been federal taxes. NAIC leaders now face a conflict between the broad language in the law that seems to exclude taxes from the calculation and a narrower interpretation advanced in a letter to HHS Secretary Kathleen Sebelius by several Democratic committee chairmen who played a major role in the passage of reform. The NAIC will decide whether federal income taxes are counted as expenses health insurance companies should absorb in their 15 percent, with profits and administrative costs. But as the Wall Street Journal pointed out in an editorial, "Taxes can't be sent to Washington and at the same time count as 'resources' that should be devoted to patient care."
HHS hasn't given any hints on what it will do. Secretary Kathleen Sebelius, who served as NAIC president when she was the Kansas insurance commissioner, wrote in a blog simply that the medical loss ratio regulations will "build on the NAIC recommendations."
As for the overall work done by the NAIC so far, Karen Ignagni of America's Health Insurance Plans said, "The NAIC is conducting a transparent and thorough process as it develops the medical loss ratio definition," but warned that "the current proposal could have the unintended consequence of turning back the clock on efforts to improve patient safety, enhance the quality of care and fight fraud."
In a statement after approving the blank, the insurance commissioners said, "The form's approval represents the culmination of months of work…through meetings, conference calls and public comment periods." See the blank here.
Message shift on reform
Congress is in recess until mid-September, but many senators and representatives are on the campaign trail. Families USA, the Herndon Alliance, and three leading Democratic pollsters had some advice for Democrats: Change their pitch for health reform.
"Use personal stories – coupled with clear, simple descriptions of how the law benefits people at the individual level – to convey critical benefits of reform," a PowerPoint presentation says. "Keep claims small and credible; don't overpromise or 'spin' what the law delivers."
The presentation also says "Don't say the law will reduce costs and (the) deficit" – a "message shift…abandoning claims it will reduce costs," as the Capitol Hill publication Politico characterized it.
The presentation calls the political situation challenging. "Straightforward policy defenses fail to be moving voters' opinions about the law," the Democratic advisors point out. "Public is disappointed, anxious and depressed by current direction of the country – not trusting. Voters are concerned about rising health care costs and believe costs will continue to rise….Many don't believe reform will help the economy."
The PowerPoint advises politicians to "avoid overheated political rhetoric" and suggests that the way to keep audiences relaxed is to say, "The law is not perfect, but it does good things and helps many people. Now we'll work to improve it."
Meanwhile, in a recent CNN poll, 83 percent of respondents said that the issue of health care reform is "extremely" or "very" important in determining their vote for Congress in the upcoming elections.
$46 million awarded to help states review insurance premium hikes
Last week, $46 million in grants went out to 45 states and the District of Columbia to "help improve the oversight of proposed health insurance premium increases, take action against insurers seeking unreasonable rate hikes, and ensure consumers receive value for their premium dollars," a press release from Health and Human Services said.
States can use the funding to create programs for reviewing and approving premium increases, to expand the scope of the review they're already doing, to improve the review process, to make more information publicly available, or to develop or upgrade technology.
The total amount of grant money for this purpose will be $250 million, to be awarded over a period of five years. Betsy Imholz at Consumers Union said the money is needed because "the sad truth is that health insurance rate filings have most often flown below the radar screen."
Robert Zirkelbach, a spokesman for America's Health Insurance Plans, responded to the grants by saying insurance companies welcome more transparency around rate hikes. "It's medical costs that are driving those premium increases," he said.
Looking ahead
The National Business Group on Health, which surveyed 72 companies with a total of more than 3.7 million employees, said about 63 percent of businesses plan to make employees pay a higher percentage of their premiums in 2011, with 46 percent planning to raise the maximum out-of-pocket costs employees must pay.
The companies said they will offer more plans that have high deductibles paired with tax-free health savings accounts. Wellness programs are the biggest benefit changes they anticipate. The programs will include incentives to stop smoking, lose weight and make other lifestyle changes.
Businesses expect the costs of health care benefits to rise about 8.9 percent next year. One of those percentage points is due to the health reform law, the National Business Group says.
Meanwhile, the Cabinet for Health and Human Services says seniors will see a modest increase in their prescription drug programs next year. Standard coverage will average $30 a month in 2011, an increase of $1 over 2010.
Kaiser Health News reported that the high-risk insurance pools for those with pre-existing conditions are getting off to a slow start. In the 22 states where the plans are run by the federal government, 2,400 people had applied as of Aug. 13.
"It is certainly possible that the market for this coverage is smaller than everyone anticipated," said a health care consultant who wrote a report for the Center for Studying Health System Change. The Congressional Budget Office had estimated that as many as 4 million people would be eligible for high-risk pools. One problem is that even with federal subsidies, the cost for this coverage can be high.
