Weekly Round-Up – April 30, 2010

Take Action: NAHU’s Operation Shout

Just one month after the Patient Protection and Affordable Care Act was passed, there are more efforts in Congress that would place tighter restrictions and higher costs on the private health insurance industry.

NAHU is organizing a campaign to oppose the Health Insurance Rate Authority Act that would allow the federal government to block “unreasonable” health insurance premium increases. This action would effectively ignore treatment costs that drive premium rates.

• Click here to take part in Operation Shout, opposing this proposed legislation.

25 Ways Health Reform Impacts Small Business

Do you have small employers asking you how the health reform bill will affect them? Although there are few details about specific provisions in the bill, here is a short video of 25 ways the new legislation will affect small businesses.

CLASS Act: How It Can Benefit Private Long-Term Care

We are also beginning to learn more about the CLASS Act, which will mandate Long-Term Care coverage for all. The program would be paid for by taxes deducted from paychecks. Employers will be required to enroll all employees, unless the individual employee opts out.

The CLASS Act would:

• Provide coverage of $50 to $100 a day for Long-Term Care services.
• Guarantee coverage (no underwriting).
• Only be available after five years of paying premiums.

It is expected that the Long-Term Care coverage provided by the CLASS Act will be more expensive and provide less coverage than a private LTC policy.

However, the CLASS Act will provide great opportunity for the private industry in the way of creating interest in the market.

Click here to read about how the private insurance industry can take advantage of the CLASS Act.

Weekly Round-Up – April 16, 2010

Yes, it’s true – we missed posting the Weekly Round-Up last week. That doesn’t mean important things didn’t happen – we just fell a little behind. Catch up on this week’s reform news with us now.

In honor of Tax Day yesterday, this week’s first articles focus on the new taxes the PPACA contains:

• Tax Provisions of the Health Reform Legislation
  From taxes on the insurance industry to nonprofit hospitals, a legal breakdown of the taxes written into the bill. Courtesy Lexology
• Obamacare Will Make Every Day Feel Like April 15
  A more opinionated summary of the taxes that will affect middle-class familes. Courtesy the Washington Examiner

NAIFA’s Summary – What You Need to Know About the New Health Law

NAIFA recently published a more detailed summary to help you explain to customers the provisions of the law that will go into effect his year:

• Small Business Tax Credit (Effective now)
• Retiree Reinsurance Program (Effective 6/23/10)
• Dependent Coverage Extended to Age 26 (Effective 9/23/10)
• No Lifetime Limits (Effective 9/23/10)
• No Pre-Existing Condition Exclusions for Dependent Children (Effective 9/23/10)

Temporary High-Risk Pools to Start in July

Two weeks ago, Secretary of Health and Human Services Kathleen Sebelius, made an announcement about one of the first parts of the bill to be enacted – the temporary high-risk pools. Each state was asked to opt-in to participating in the pool meant to cover individuals who are currently uninsured and have pre-existing conditions.

Thirty-five states (including Iowa, with HIP-Iowa) already have a high-risk pool to provide coverage. Unfortunately, as the bill is written, high-risk individuals already in programs like HIP-Iowa would not be able to join the federal pool (you must be uninsured for six months). To date, Georgia is the only state to reject participation in the federal high-risk pool.

The Wrong Kind of Disappointment…

Let me see if I get this straight. Governor Culver is “disappointed” that Wellmark’s rate increases were justified.
 
Hmmm.
 
I’d like to ask the Governor just what disappointed him the most? That Wellmark wasn’t trying to cheat customers and actually knows how to price health insurance?  
 
Or was it the fact that Wellmark actually does need an 18% increase runs counter to the only narrative he subscribes to—that the health care problems in this country are due to greedy insurance companies, not due to the rising costs of health care itself.
 
Newsflash, governor! When 90% of premiums go to pay for actual medical care, premium increases are required when the cost of care goes up.
 
But by focusing on insurance companies, instead of what actually drives health care costs up, he’s contributed to the ridiculous political environment that exists today and that resulted in 2,500 pages of national insurance reform that will do nothing to actually lower costs.
 
Look, some health insurance reform was needed. But what was needed could have been written in two pages instead of 2,000. (e.g., no more underwriting, pre-ex, or rescissions). Then, the rest of the law could have been devoted to reforms that would actually lower costs—things like tort reform, real wellness subsidies (50% of health care costs are attributable to preventable behaviors), and outcome-based reimbursement strategies.
 
Maybe what Governor Culver should be disappointed about is that his politically motivated charade deflected attention from the real issues that need to be addressed. Or that he gave false hope to thousands of Iowans. Or that he cost Wellmark perhaps $500,000 in administrative costs and over $5,000,000 in lost premium to comply with his pointless request. I wonder who will end up paying for that?

It’s unfortunate that Wellmark needs an 18% increase. And today’s high health insurance premiums create real hardships for individuals and businesses alike. No one understands that better than I do. But if we are ever going to find real solutions—solutions that would lower costs and improve quality—we need to focus on the real issues. And stop with the political nonsense.

What’s All of This Going to Cost Again?

Ever heard the saying that if it’s too good to be true, then it’s probably not true?  That’s exactly how I felt when I first read about the cost projections for the health care reform legislation. 

Let’s see…it expands coverage to an additional 32 million people, provides subsidies for entire new classes of individuals…and yet it lowers the deficit by $143 billion over the first 10 years.  What a neat trick! Especially since the bill is projected to cost $940 billion dollars in the first 10 years.  

So how, exactly, can a bill cost that much but still lower the deficit?  Well, for starters, the bill includes $438 billion dollars in new taxes. (Funny how it wasn’t promoted as a massive tax increase, when in fact, that’s exactly what it was.) The rest of the “savings” will supposedly come from $500 billion in savings from the Medicare program. I guess I will believe that when I see it.

But getting back to the costs… the bill is projected to cost $940 billion dollars. So how has the government done in the past when projecting the future cost of health care programs? Some examples:

In 1965, when Congress established a national Medicare program, the House Ways and Means Committee estimated that the hospital insurance portion (Part A) would cost about $9 billion annually by 1990. Good guess!  But the actual cost for Part A in 1990 was $67 billion. Oops!  Seems as though the costs were 740% higher than the projections.

In 1967, just after Medicare Part B was added, the House Ways and Means Committee predicted it would cost about $12 billion in 1990. Actual costs in 1990? $110 billion!  Double oops!  Missed it by almost 1,000% that time.

Multiple additional examples abound.

So fast forward 10 or 20 years.  Where will we be if the costs estimates for this bill are as underestimated as they have been for previous health care bills? In other words, what if instead of almost 1 trillion dollars, the bill ends up costing almost $10 trillion in its first 10 years? Or more?

It sounds crazy until you consider the track record. And if that happens, instead of lowering the deficits, this bill would explode the deficits beyond imagination.

Again, health care reform is needed. But this bill does almost nothing to contain health care costs…which is the primary problem. And…you read it here first…unless this bill is altered, the deficits is runs up will strangle this country’s budget for the foreseeable future.

Weekly Round-Up – April 2, 2010

Updated: At 11:30 today, Director of the Dept. of Health and Human Services Kathleen Sebelius will make an announcement about the temporary high-risk pool meant to provide emergency funds to cover those who are uninsured and have pre-existing conditions.

Details of how individual components of the PPACA will be carried out are few and far between. Yet, everywhere you look, people are discussing the pros and cons of reform. Simply put, health reform is a BFD (Thanks, Joe Biden).

Here’s a round-up of the latest news and opinions:

• Updated Timeline – Shows when components of the law will go into effect. The timeline takes into consideration the “fixes” passed by the House and Senate after the bill passed. Courtesy Kaiser Family Foundation
• Wellness: What Is and Isn’t Included – Not all of the wellness components talked about are in the final bill. Courtesy Health Promotion Advocates
• Mitt Romney for Health Czar – Newsweek’s opinion article about why Mitt Romney would be a good leader of reform efforts.
• Reform Dominates the News – Statistics showing how much media attention reform is getting. Courtesy Pew Research Center

Would you like to share your favorite articles from the week? Add them in the comments.