Health Reform Bill Disappoints

As a bill backed by health reform advocates to establish a state insurance exchange languishes in committee, a version supported by the insurance industry is moving through the Illinois House — and one longtime advocate wonders why Illinois Democrats are carrying water for the insurers.

The House Insurance Committee approved a measure Wednesday creating a study commission to recommend legislation to establish an exchange. The measure, backed by House Speaker Michael Madigan, includes language previously approved by the House and adds a series of preemptions that advocates say will undercut the effectiveness of health reform.

With the original legislation, the fear was that the insurance industry would dominate the study group and consumer and small business voices would be marginalized.

The new version includes provisions restricting the size of small businesses that could participate, and would create separate pools for individuals and small businesses, limiting economies of scale and bargaining power.

Other provisions would bar the state from adding mandates for insurance coverage beyond what the government establishes, and continue taxpayer subsidies that were to be dropped – amounting to $30 million to $35 million a year – for the state’s high risk pool, where insurers can dump patients with chronic illnesses whom they don’t want to cover.

One upshot would likely be significant reductions in cost savings, said Jim Duffett of the Campaign for Better Health Care.

He thinks the insurers are trying to sabotage health reform.  “The industry hopes that Obama loses next year and the Senate goes Republican and they can take health reform apart little by little.”

As for the legislative sponsors, he’s a bit nonplussed.  “These are Democrats,” he said. “They’re supposed to care about consumers and consumer protection, not the interests of the insurance industry.”

CBHC is calling on legislators to defeat the current measure, now listed as SB 1555.  The group backs another bill, SB 1729, which reflects a consensus negotiated earlier this year by insurance, consumer, business and health industry representatives meeting with the state’s Department of Insurance.  It’s stalled in the Senate Assignments Committee.

“It’s unfortunate the legislature is ignoring six months of stakeholder meetings and expert testimony about how to come up with the best plan this year to set up a competitive system – and adding this bad preemptive policy language,” said Brian Imus of Illinois PIRG.

“I hope that lawmakers pushing this legislation will give an equal opportunity for consumer advocates and small businesses to raise their issues,” he added.

Curtis Black
Newstips Editor, Community Media Workshop (originally posted here)

The CLASS Act: A New Option for Paying for Long-Term Services and Supports

Have you ever thought about how you would pay for services or supports to allow you to live independently if you acquired a disability or if a health condition you already have became worse and you needed assistance to complete basic tasks?

If you are like most people, you probably haven’t.

Most people don’t even want to think about the possibility that an illness, accident, or chronic health condition will happen to them, let alone plan for the possibility. Until now, the options have been limited even for those who have considered the possibility. Private long-term care insurance was the only option and for many the expense made it unaffordable. For others, a pre-existing illness or chronic health condition meant that long-term care insurance was not a viable option. Fortunately, there is a new program called the Community Living Assistance Services and Support Act, or CLASS Act, that will provide long-term services and supports to people who participate in the program.

The CLASS program is a voluntary, federally administered, consumer-financed long term care insurance plan. President Obama signed it into law as part of the Patient Protection and Affordable Care Act (ACA) on March 23, 2010. The CLASS plan provides those who participate through their employer with cash to help pay for needed assistance, if they become functionally limited, in a place they call home — from independent living in the community to a nursing facility, if they choose.

The CLASS Act is designed as an employer option to provide a long term care benefit for their current employees.  Employers that choose to participate in the program will deduct CLASS premiums from the earnings of employees, who can also decide whether to participate. There is no employer contribution required. There will also be a way for people whose employers don’t participate and for the self-employed to pay premiums and participate in the program.

The basic design of the program is simple: people over 18 who are actively at work (which will be defined in regulation by the U.S. Department of Health and Human Service (HHS)) must pay into the program for at least 5 years to be eligible to receive a benefit. A person who needs assistance with activities of daily living and has paid premiums for 5 years can apply for and receive a cash benefit to pay for the services required to maintain independence in the setting of their choice.

Although the basic outline of the CLASS program was established in the ACA, it does require HHS to fill in many of the details -- such as the amount of premiums people will pay -- through regulation. There may be some changes to the program as implementation moves forward to 2013. We anticipate that HHS will make the following changes in order to provide a benefit that employers opt to offer and that is sustainable without tax dollars, as is required by the CLASS Act.

1) The premium will be adjusted so as to account for inflation.

2) The program will continue to be guaranteed issue available to people with underlying health conditions. However, the minimum earnings level will probably be raised in order to ensure that the program has beneficiaries who are consistently active workers.

3) The program will also close loopholes to guard against beneficiaries who intermittently pay into the program over the course of their working life.

4) The CLASS benefit design should be completed in 2012, with premium collection either beginning later next year or in early 2013.

5) The Secretary of HHS is evaluating ways to make the CLASS program sufficiently flexible to ensure that the diverse long-term services and supports needs of Americans are met.

Here are two helpful links you can use to follow the development of the CLASS Act benefit: LeadingAge and AdvanceClass. Also, here is HHS's FAQ on CLASS.

Lisa Ekman, JD, MSW

Senior Policy Advisor 

Health & Disability Advocates

Medicare Improving Fast

There is an intense debate over Rep. Paul Ryan’s (R. WI) proposal to scrap Medicare and turn it into a voucher program shifting costs to seniors, a debate that became even more intense when it was passed by the Republican-controlled House of Representatives. The Senate has not passed it, and the President has registered his opposition. The American people are also firmly opposed.

But that debate has taken news focus away from the substantial improvements to the Medicare program that have been accomplished in just the last year under the Affordable Care Act, with more improvements soon to come. Costs are lower and care is better for seniors all over the country.

Here is what happened in 2010 and is about to happen in 2011 in Medicare under the Affordable Care Act. The numbers apply to Illinois, but the same impact is happening everywhere in America.

1. Prescription drugs are more affordable. In 2010, 152,170 Illinois residents hit the Medicare prescription drug “donut hole” and received at $250 rebate check to defray their costs. Across the state, this came to $38 million in savings for seniors. In 2011, everyone in Illinois who hits the donut hole will receive a 50% discount on their brand name and generic prescription drugs. As of March, Illinois Medicare beneficiaries who had triggered into this benefit were getting about $800 a month in savings.
2. Preventive services are free. In 2010, when this section of the new law had not yet taken effect, Medicare charged co-pays for preventive services like mammograms and other cancer screenings. In 2011 all of the 1.9 million Medicare beneficiaries in Illinois now get all recommended preventive services with no out-of-pocket costs.
3. The annual checkup is free. In 2010, when this section of the new law had not yet taken effect, Medicare charged a co-payment for the annual checkup. Starting in 2011, Medicare beneficiaries can go to an annual wellness visit with no out-of-pocket cost. As of April 20, 17,508 Illinoisans have had a free wellness visit. 
4. Premiums are lower. Under the new law, in 2010 Medicare Part B premiums were nearly $8 less per month than projected by the Medicare trustees. In 2011, the premiums are almost $5 less per month than projected by the Medicare trustees. The lower premium translates to $107 million in savings for Illinois Medicare beneficiaries in 2011.
5. Medicare Advantage. In 2010 and 2011 all beneficiaries still retain the option of joining a Medicare Advantage plan if they so desire.

This is a story typical of many things in the Affordable Care Act. Improvements to the system are constantly rolling out, but the general public remains unaware of them. In part, this is because the subject matter is complex and hard to absorb unless you are directly affected. And in part it is a deliberate strategy of the opponents to keep the focus elsewhere and downplay the accomplishments of the law as they endeavor to repeal it and roll back its benefits. The intense reaction to Rep. Ryan’s proposal shows that at least the people directly affected – seniors who depend on Medicare – are well aware of the increasing quality of their program.

John Bouman
President, Sargent Shriver National Center on Poverty Law (originally posted in the Shriver Brief)

States Take Steps to Improve Oversight and Consumer Engagement

In the past few months, several states have taken dramatic steps to strengthen their rate review authority, protect consumers, and call out insurers on excessive rate increases. For example, earlier this year, California health insurers announced planned rate increases that would have driven premium costs up as much as 87 percent for some individuals. But in the face of increasing insurer profits, Insurance Commissioner Dave Jones elicited promises from California’s major health insurers that they would decrease and delay implementing proposed rate increases until the state had a chance to evaluate the accuracy of the insurers’ filing. This week, Consumer Watchdog released a report indicating state reviews of insurer rate increases found erroneous math and unsupported actuarial assumptions in rate filings submitted by health insurers. California legislators are moving legislation to give the insurance commissioner explicit authority to disapprove of or reduce proposed premium increases through the state Assembly.

And in New Mexico, the state’s Republican Governor recently signed into law a bill that enhances the state’s rate review authority. The new law includes strong provisions encouraging public participation by establishing a thirty day public comment period on proposed rate increases and requiring insurers to notify policyholders of any possible increase in their premium rate before the increase can be implemented. The statute further gives policyholders the right to request a public hearing on rate increases that the Insurance Superintendent has approved.

Affordable Care Act Mandates Rate Review
The Affordable Care Act requires an annual review of unreasonable health insurance premium increases. Federal regulations, soon to be finalized, outline the process through which the U.S. Department of Health and Human Services (HHS), together with state regulators, will review and evaluate health insurance premium rate increases.

While several states currently have review processes requiring a comprehensive evaluation of proposed rate increases before insurers may charge consumers and businesses more for their premiums, other states are using the new federal rate review requirement to expand consumer protections. In February, HHS announced $200 million worth of federal grant money available to states to help them strengthen their rate review processes and states will finalize their application for this money this summer.

Together with their Insurance Departments, and independently, state consumer health advocates are making tremendous progress toward protecting consumers from unreasonably high insurance premium increase. At the end of this blog post you will find new resources Community Catalyst has developed to assist states in advocating for stronger rate review laws.

State Advocates are Helping to Improve Rate Review Processes
State consumer health advocates all over the country are taking the lead to guide their states toward revising and implementing stronger rate review laws. For example, in Pennsylvania, the PA Health Access Network is developing an online petition that they intend to use to encourage their insurance commissioner to hold public hearings on proposed rate increases, giving consumers and policyholders the opportunity to provide input on rate increases.

Advocates with Illinois’ Campaign for Better Health Care are supporting legislation that would give their insurance commissioner authority to disapprove or reduce proposed premium rate increases. Recent data released by the Illinois Department of Insurance shows that while insurance premium rates have increased 181 percent since 2005 for individuals and families in Illinois, the top five insurers brought in more than $28 billion in profits in 2010 alone.

And in Ohio, advocates at UHCAN Ohio are in the research phase of their campaign to improve the state’s rate review process, enhance transparency and consumer involvement as a means to protect individuals, families, and small businesses from rising health insurance costs. These advocates are in communication with officials at the Ohio Department of Insurance to better understand the current rate review process and gather data about increasing premium rates.

While we provide three examples here of state advocates working to strengthen their states’ rate review laws and two states where reform is on the horizon, many other states are progressing toward stronger, consumer protective rate review processes or currently have robust laws on the books.

Tools for States to Engage in Rate Review Reform
Because most states will continue to oversee health insurance premium rate increases in their markets, Community Catalyst has designed a toolkit to assist state advocates in evaluating their state’s current rate review process and to develop advocacy resources supporting stronger rate review laws. Use the general fact sheet to explain rate review to policymakers and community organizers. The state-specific template is a guide to asking the right questions and gathering the right information and data to demonstrate the critical need for enhanced rate review authority in your state.

Sarah Blumenthal
Community Catalyst (originally posted on Health Policy Hub)