Saturday, January 16, 2010

If The Health Care Train Leaves The Station, Make Sure These Concepts Are On Board

Just when it seemed like sweeping health care legislation was on a straight path to completion with Congress starting the work of melding together House and Senate bills, yet another bend in the road surfaces.

A special election to fill Sen. Ted Kennedy’s seat in Massachusetts is proving surprisingly close with the real possibility that Republican candidate Scott Brown may edge out Democrat Martha Coakley. If Brown wins the special election, his win could undo the Democratic voting bloc needed to give health care reform its final push to completion.

It’s pretty ironic that filling the seat of probably the staunchest advocate of health care reform may cast doubt on its future as Kennedy envisioned it.

But, it is also highly unlikely that the whole effort will fall apart and that no reform legislation will be completed. There was a positive note this week when an accord between labor unions and Congressional Democrats was reached over taxation of rich health care plans.

And, in spite of the partisan bickering and voting, after all that work Americans will expect some legislation to be delivered. And if it isn’t, the question they may be asking is ‘How effective is Congress if it can’t deliver on an issue that is of critical importance to American citizens?’

And since some form of law will probably be finalized in the near future, different insurance constituents are weighing in on what the final bill should look like.

On Jan. 14, leadership of the National Conference of Insurance Legislators, Troy, N.Y., wrote to Nancy Pelosi, speaker of the House, and Sen. Harry Reid, majority leader in the Senate, expressing “our unwavering support for the McCarran-Ferguson Act’s limited antitrust exemption for insurers…” NCOIL warned that “Rolling back the antitrust exemptions for health and medical malpractice insurers, as H.R. 3962 proposes, would increase costs while reducing competition, harm consumers by creating confusing, conflicting regulation, and ignore already-existing state antitrust protections.”

NCOIL points out that “The limited exemption fosters competition by granting insurers the ability to share loss history and other information, and it ensures that smaller and more regional insurers can compete with large insurers that are less dependent on industry-wide data.”

Leadership of the National Association of Insurance Commissioners, Kansas City, Mo., also weighed in the pending law. NAIC commended provisions in the bill that would:

.Extend guaranteed issue protections to the non-group health insurance market.
.Eliminate pre-existing condition exclusions and annual and lifetime limits.
.End the practice of rating policies based upon gender and health.

However, it urged Congress to:
• Oppose the creation of a new federal Health Choices Commissioner and Health Choices Administration. Instead, regulators recommend health insurance exchanges be established and administered at the state level with the flexibility to meet the needs of local markets and consumers.
• Ensure that all group policies be subject to the bill’s reforms at the end of a five-year grace period and ensure that any risk adjustment be applied to both grandfathered and newly-issued policies.
• Impose stronger penalties under the individual mandate provisions.
• Avoid any provision that could separate the regulation of premiums from the regulation of solvency.
• Allow the federal government to quickly shut down fraudulent multiple employer welfare arrangements (MEWAs) that falsely claim to be exempt from state regulation.
• Ensure that the effective dates of provisions in the new law are coordinated with implementation of the individual mandate and subsidies in order to mitigate the risk of adverse selection.
• Insist that nationally-sold plans be subject to all statutes and regulations that apply to other plans being sold to the same population and that they remain subject to the oversight of state insurance regulators.

The American Council of Life Insurers, Washington, advises Congress that the Community Living Assistance Services and Supports (CLASS) Act should not be part of any final legislation. “It’s a well-intentioned program but has been shown to be unsustainable,” notes Whit Cornman, an ACLI spokesperson.

Frank Keating, ACLI president and CEO, summed up the ACLI’s position when he explained that “…it appears highly unlikely that enough Americans will participate to ensure its fiscal soundness. Indeed, the Congressional Budget Office has estimated that perhaps only 3.5 percent of Americans will participate. Its success relies on participation by a wide range of the populace, including young and middle-aged individuals. But with so many Americans struggling to make ends meet, it is unlikely that enough will enroll in a program that will take, at present estimates, $123 monthly from their paychecks. A program that is underfunded by individual payments will require the federal government to make up the difference at a cost that is likely to be in the tens of billions of dollars.”

And America’s Health Insurance Plans, Washington, acknowledges the need for reform but in a way that does not increase costs. Earlier this month it noted that data released by CMS, Washington, shows that U.S. health care spending grew 4.4% in 2008. AHIP cites CMS figures stating that “Despite the slowdown, national health spending reached $2.3 trillion, or $7,681 per person, and the health care portion of gross domestic product (GDP) grew from 15.9 percent in 2007 to 16.2 percent in 2008.”

Last month following passage of both the House and Senate versions of health care reform, Karen Ignagni, AHIP’s president and CEO, reiterated how crucial it is to provide health care to Americans but in a cost effective way. She noted that health plans support guaranteed access with no pre-existing condition limitations and no health status-based premiums.

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