Healthcare Blog

Boomer Health Care Updates October 28, 2009

Hello Fellow Boomers. Here is an update on health care. Seems like our lives are being consumed by this topic.

Reid decides Senate bill will include a public plan:

For the past week, Senate Majority Leader Harry Reid has been merging the two health reform bills passed by two different Senate committees. On Monday afternoon, he announced that the bill he takes to the floor for a full-Senate vote will include a public plan option. States, however, can choose not to participate in the government-run plan if they “opt out” by 2014.

This decision, he said, shows that he believes such a bill will have "the support of my caucus." He admitted, however, that he did not have commitments from all 60 Democrats, which he will need to prevent a filibuster.

A statement from the White House said Reid had the President’s support. As President Obama “said to Congress and the nation in September,” the statement said, “he supports the public option because it has the potential to play an essential role in holding insurance companies accountable through choice and competition.”

Other public-option approaches had been suggested. They included an "opt in" provision for states instead of an “opt out,” and a "trigger" that would create a government plan only if private insurers didn’t offer policies at affordable prices. The Senate Finance Committee’s bill included nonprofit health care cooperatives, instead of a public plan, and the new merged bill put together by Reid contains a provision for them as well.

Democratic moderates have said they prefer the “opt in” provision; Sen. Olympia J. Snowe of Maine, the only Republican to vote for health-care reform in either chamber, says she prefers the trigger and was “deeply disappointed” that Reid had chosen to put the public plan option in the bill. Sen. Joe Lieberman, an independent who caucuses with the Democrats, said he will not back any bill that includes a public plan, and Sen. Blanche Lincoln, D-Ark., said she was reluctant to sign on with Reid's plan.

The Business Roundtable immediately issued a statement in opposition to Reid’s decision, saying, “The public plan option will not only shrink the pool of individuals covered by private insurance, but it will siphon off those most needed to create balanced risk pools. To keep costs low, the public plan will also reimburse providers at a sub-market rate. Taken together, these two effects will exacerbate the cost shift to businesses, providers and insurers alike, creating an unsustainable system.” Read the entire statement here.

After the bills passed by the Senate Finance Committee and the Health, Education, Labor and Pensions Committee are merged, the final bill – along with some alternate scenarios – will be sent to the Congressional Budget Office, which will attach a price to the plan. The goal is to bring the bill to the Senate floor for debate the week of Nov. 9.

Reality check on health insurance industry profits:

From the Associated Press: A story that fact checks the insinuations that health insurance companies make “immoral profits,” as House Speaker Nancy Pelosi has put it. The story was posted on the New York Times political blog with the headline “FACT CHECK: Health Insurers' Profits 35th of 53.”

“Insurers are an expedient target for leaders who want a government-run plan in the marketplace,” the story says. “But in pillorying insurers over profits, the critics are on shaky ground. Ledgers tell a different reality.”

The story goes on to cite statistics many Humana employees are familiar with: “Health insurance profit margins typically run about 6 percent, give or take a point or two. That's anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.”

“Health insurers posted a 2.2 percent profit margin last year, placing them 35th of 53 industries on the Fortune 500 list. As is typical, other health sectors did much better – drugs and medical products and services were both in the top 10.

“The railroads brought in a 12.6 percent profit margin. Leading the list: network and other communications equipment, at 20.4 percent.”

Humana's 2008 consolidated pretax margin was 3.4 percent.

Read more of the Fact Check here:

Insurance industry responds
An op-ed in the Washington Post, written by Karen Ignagni, president and CEO of America’s Health Insurance Plans, responded to criticism of the health insurance industry for a report it commissioned from PricewaterhouseCoopers . That report was issued a few days before the vote of the Senate Finance Committee and showed the unintended effects of some of the committee’s proposed health reforms. The “central finding,” as Ignagni put it, was that implementing insurance market reforms without a strong requirement that everyone participate would significantly increase costs for individuals and small businesses.

This conclusion “has long been noncontroversial in health policy circles,” Ignagni wrote. “(It) echoes the message President Obama delivered in his address to Congress last month: ‘And unless everybody does their part, many of the insurance reforms we seek – especially requiring insurance companies to cover preexisting conditions – just can’t be achieved. And that’s why, under my plan, individuals will be required to carry basic health insurance,’ (Obama) said.”

“Doc fix” not fixed yet:
One of the more perplexing problems for members of Congress during the reform conversation has been to find a way to execute a “doc fix” – that is, to change a Medicare formula so physician payments aren’t automatically reduced when their costs exceed budget targets. For example, payments to physicians are scheduled to decrease by 21 percent next year.

Most years, Congress votes to block the cuts, largely out of fear that lower rates will lead to fewer doctors accepting Medicare patients. Physicians, of course, want the formula eliminated once and for all, but the cost – $247 billion for the first 10years – is high. A “doc fix” passed this year would create special problems, since that $247 billion would be on top of the $900 billion to $1.2 trillion cost of proposed reforms. And the President has promised Americans he will not sign a reform bill that adds “one dime” to the national debt.

So Senate Majority Leader Reid’s strategy to fix the problem and get doctors on board for reform was to separate the “doc fix” from the health care overhaul. The legislation he wanted members to consider, however, did not include a way to pay for it. This addition to the national debt bothered a number of senators, and on Wednesday, a majority of them refused to go along. Reid needed 60 votes to proceed, but he got only 47. Twelve Democrats and an independent voted with the Republicans instead.

Minority Leader Mitch McConnell, R-Ky., was triumphant. He said, “In the Senate’s first vote on health care spending this year, a bipartisan majority rejected the Democrat leadership's attempt to add another quarter trillion dollars to the national credit card without any plan to pay for it.”

The Capitol Hill publication Roll Call called the vote “an ominous beginning for Democrats on the health care debate.” The New York Times said, “Democrats lost a big test vote on health care legislation….The Medicare bill has become a proxy for larger issues in the debate.”

Sen. Ron Wyden, D-Ore., explained his "no" vote this way: “On the eve of a historic debate on health care, it’s essential to show a commitment to real reform,” which he said includes fiscal responsibility.

HHS says House reform plan bends the curve in the wrong direction
A report from the Health and Humana Services Department says that the nation’s health care bill would increase under the House leaders’ proposed reforms. The analysis says that if H.R. 3200 passed, costs between 2010 and 2019 would actually increase by 2.1 percent over what they would be without reform. Health care would account for 21.3 percent of the economy in 2019, compared to 20.8 percent if no bill passed.

The report also said:

“With the exception of the proposed reductions in Medicare…(the legislation) would not have a significant impact on future health care cost growth rates.”

“The additional demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage.”

Forty percent of the 27 million people who would buy coverage through the health insurance exchange would choose the public plan because its premiums would be about 11 percent lower than private insurance.
It’s “doubtful” that proposed Medicare cuts would stay in place.
Anti-trust and other regulations
Last week, the House Judiciary Committee voted 20-9 to repeal anti-trust regulations for health insurers. The Senate is expected to include similar legislation in its health reform bill.

Since 1945, the McCarran-Ferguson Act has given states broad authority to regulate the insurance business without interference from federal intervention. But as Karen Ignagni of AHIP said in a letter to the Judiciary Committee chairman, the bill is an “attempt to remedy a problem that does not exist.” She pointed out, “Health insurance is one of the most significantly regulated areas of the economy.”

Associated Press said the vote “signaled a growing determination by Democrats to punish the insurance industry for its criticism of President Barack Obama’s health care overhaul agenda.”

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Boomer Health Care Updates as of October 23

Hey Boomers! So much going on in the Great National Health Care Debate. Here is a brief synopsis of what is going on as of October 23. Remember this affects you now and in the future so stay an informed consumer!!!

Be well!
Denny - Cincinnati


WellPoint Shows Premiums Will Increase: WellPoint this week released analysis that sheds further light on the impact of the Senate Finance Committee's proposed health care reform legislation on premiums. The findings show increases in premiums due to new fees placed on industries such as drug manufacturers, medical device makers and the insurance industry.

AHIP Provides More Context to Premiums Study: Karen Ignagni, President and Chief Executive of American's Health Insurance Plans (AHIP) provided greater context to the recent report from Pricewaterhouse Coopers that showed the Senate Finance Committee bill to have the unintended consequence of increasing the cost of health care coverage. Ignagni stated in an op-ed in Tuesday's Washington Post, "[AHIP] continues to strongly support reform. In fact, last year we proposed new insurance market rules and consumer protections to achieve universal coverage, remove restrictions on preexisting conditions and end the practice of basing premiums on health status or gender. We firmly believe that all the cost concerns the report raised can be resolved."

Senate and House Negotiations:

Public Option Continues to Shape Debate: White House officials appeared on NBC's "Meet the Press," ABC's "This Week," CNN's "State of the Union," and CBS's "Face the Nation" this past weekend to set the parameters for this week's round of negotiations around health care reform, particularly regarding a public option. The officials, including Chief of Staff Rahm Emanuel, and Senior White House Advisors Valerie Jarrett and David Axelrod indicated that President Obama continues to prefer a public option, but will not demand its inclusion in the final legislation.

Senate Majority Leader Harry Reid (D-NV) continues to face mounting pressure from liberal lawmakers to revive a proposed government-run option. As Sen. Reid (D-NV) works to craft the legislation, reports indicate he is 'more likely' to include a version of the public option that requires the government to negotiate rates with providers, as private insurers do, and not just peg them to Medicare reimbursement rates as a way of creating fair competition in the marketplace.

On the House side, Speaker of the House Nancy Pelosi (D-CA) continues to voice strong support of the public option, declaring in a news conference last week, "our House bill will have a public option."

Senate Finance Committee Courts AMA: Lawmakers on Wednesday voted to block a $247 billion measure proposed by Senator Debbie Stabenow (D-MI) aimed at eliminating scheduled Medicare reimbursement cuts for doctors and enacting a permanent, predictable system for future rate increases. Lawmakers criticized the bill for adding to the budget deficit. Senate Majority Leader Harry Reid (D-NV) brought the measure to the floor in an attempt to court the American Medical Association's (AMA) support for the Senate health care reform legislation. AMA's President, Dr. James Rohack, countered the attempted appeasement indicating that reform legislation must also address significant medical liability reform to win AMA support.

CBO Provides Estimates For House Versions: Speaker of the House Nancy Pelosi (D-CA) announced Tuesday that recent Congressional Budget Office (CBO) estimates showed that a health care overhaul by House Democrats would reduce the U.S. budget deficit over 10 years and cost less than $900 billion, a goal outlined by President Obama. Sen. Pelosi (D-CA) had asked the CBO to provide cost estimates for three competing House versions for executing the public option -- one based on reimbursement rates paid to healthcare providers under Medicare and two that would rely on reimbursement rates negotiated with the providers.

Medicare Office of the Actuary Points to Cost Increase Under House Legislation: The Medicare Office of the Actuary released a report on Wednesday that shows that total national health care spending would increase by an additional 2.1 percent from 2010 - 2019 under the bill drafted by House Democratic leaders. The report found that health care would account for 21.3 percent of the U.S. economy in 2019, slightly more than an estimated share of 20.8 percent of the economy if no bill passes.

Additional Activities:

Insurance Industry Antitrust Exemption Under Scrutiny: Top Senate Democrats, Sens. Reid (D-NV), Leahy (D-VT), and Schumer (D-NY) announced Wednesday that they are inclined to incorporate an amendment into the health care reform legislation to strip the health insurance industry of its exemption from federal antitrust laws. Also on Wednesday, the House Judiciary Committee voted 20 - 9 to end the industry exemption that dates back to 1945. If enacted, the measure would increase federal regulation over the insurance industry.

White House Pushes to Influence Negotiations: As the final health care reform bills are taking shape in the House and the Senate, White House officials have stepped up their efforts to influence the negotiating process. On Tuesday, President Obama spoke from New York City by video to hundreds of small gatherings sponsored by Organizing for America, a spin-off of his 2008 Presidential campaign. Top White House aides will attend strategy sessions for the Common Purpose Project, a coalition headed by President Obama's former campaign officials. And, President Obama's Chief of Staff Rahm Emanuel and other aides will be at the table when Senate Majority Leader, Harry Reid (D-NV) and Speaker of the House Nancy Pelosi (D-CA) meet with their respective committees to negotiate and draft legislation.

Republicans and Democrats Back Medical Device Industry: Countering Democrats on the Senate Finance Committee who view medical device manufactures as a reason for increasing health care costs, Democrats and Republicans from Minnesota, Indiana, New Jersey, and other states have come together to defend the industry in their home states. The Senate Finance Committee approved last week a $40 billion fee on device makers over the next 10 years. In reaction, 14 Democratic senators sent a letter to Senate Majority Leader Harry Reid (D-NV) urging them to "moderate" the fees which will "threaten the existence of some manufacturers" and result in "significant job reductions." Five Republican governors also expressed objections to the fees.

Public Opinion:

Polls Suggest Remaining Divide: A CNN/Opinion Research Corporation Survey poll released Wednesday showed that 53 percent of Americans say it would be better for the country if Congress passed a reform bill, with 44 percent feeling that things would be better if the current health care system was left in place with no changes. In addition, a USA Today/Gallup poll this week showed that Americans are increasingly worried about the cost and quality of medical care that could result from the health care reform. 49 percent of Americans believe that costs will increase under the measure, up from 42 percent last month.

Looking Ahead:

Senate Majority Leader Harry Reid (D-NV) may introduce a combined Senate bill for health care reform as soon as Friday of this week. If this happens, Senate floor debates are expected next week.

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Boomer Health Care Decision is Near

Greetings Fellow Boomers. The U.S. Senate Finance Committee tomorrow could decide on an important step in the health care reform. This is a very hot issue and will affect all of us. In discussions with many of you, health care costs will continue to be a large portion of our retirement expenses, whether it's through insurance premiums or taxes. We have a fantastic system of health care, but it does come with a price tag.

The Washington Post today reports that after "months of collaboration on President Obama's attempt to overhaul the nation's health care system, the insurance industry plans to strike out against the effort on Monday with a report warning that the typical family premium in 2019 could cost $4,000 more than projected" under the plan sponsored by Sen. Max Baucus (D-MT). Industry officials "said they intend to circulate the report prepared by Pricewaterhouse Coopers on Capitol Hill and promote it in new advertisements. That could complicate Democratic hopes for action on the legislation this week." Meanwhile, Administration officials, "who spent much of the spring and summer wooing the insurers, questioned the timing and authorship of the report, which was paid for by America's Health Insurance Plans (AHIP), an industry trade group."

Denny
Cincinnati

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Boomer Cost for Healthcare Plans

Greetings Fellow Boomers. As a Generation health care is one of many concerns we will have to deal with. Who would of thought when all of us were 20 something that this day would come!

The end of this week may indicate the direction of so-called health care reform. We shall see! Many of my clients ask me about the cost of legislation to them and their families. The Kaiser Foundation has put together a calculator to determine what that cost would be. Here is the website:

http://healthreform.kff.org/SubsidyCalculator.aspx

I think you will find this website informative and eye opening.

For all of us, let's continue to research, read and contact your representatives in Congress what you think, and what you feel.

Be well!
Denny
Cincinnati

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