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Increasing The Medicare Eligibility Age: A Smaller Bargain

From Politico:


President Barack Obama and House Speaker John Boehner failed to strike a “grand bargain” on the nation’s deficit, but they may have pulled off another trick: revolutionizing the debate over Medicare.

When they both accepted the idea of increasing the Medicare eligibility age to 67, they gave a controversial idea more legitimacy and high-profile support than it’s ever gotten before.

The White House’s Fiscal Commission, led by Erskine Bowles and Alan Simpson, listed the idea of raising the eligibility age with the likes of such dramatic structural changes as the public option, block grants or an all-payer system. Alice Rivlin and former Sen. Pete Domenici didn’t even bring up the idea in their deficit report. And the top Democrats in both the House and Senate brushed aside the concept just last month.

But now the idea of raising the eligibility age has gotten the support of Obama and Boehner. While the age change is not expected to be part of the latest debt ceiling compromises, the idea is now likely to be a permanent fixture in the Medicare debate and, someday, to become a reality.

The idea has been loosely supported by Republicans in the past. Continue reading

PCIP Provides Bridge For Looming Healthcare Reform

From Forbes:

By DAVID A. LIEB –07.25.11, 10:21 AM EDT

JEFFERSON CITY, Mo. — One of the first prongs of President Barack Obama’s health care law has been in effect now for a year, and the result in Missouri is that about 500 additional people with chronic health problems now have insurance.

It is, by most accounts, an underwhelming result. Missouri’s experience is pretty typical of the national norm, which is causing even some supporters of the federal health care law to question how it is being implemented.

One of the less-publicized provisions of the 2010 law required a Pre-Existing Condition Insurance Plan in each state. Backed by $5 billion of federal subsidies, the health plans are intended to provide insurance at lower prices than typically available to people with health problems who have been uninsured for at least six months.

The new health insurance plans provide a bridge to 2014, when a new requirement kicks in prohibiting insurers from charging higher premiums to people based on their health status. That’s the same year that most people will be required to have health insurance or face tax penalties, and that people will be able to purchase coverage through new online health insurance markets called exchanges.

When Missouri began taking applications in July 2010 for its federally mandated Pre-existing Condition Insurance Plan, officials expected to cover about 3,000 people, said Vernita McMurtrey, executive director of the Missouri Health Insurance Pool. One year later, it has just one-sixth of that amount – about 500 enrollees.

Missouri is not unique.

“Enrollment is fairly low across all states,” said Jennifer Tolbert, director of state health policy at the nonpartisan Kaiser Family Foundation.

Relying on estimates from the Congressional Budget Office and a unit of the Centers for Medicare and Medicaid Services, the U.S. Department of Health and Human Services said last July that it believed between 200,000 and 400,000 people likely would enroll in the new health plans.

The actual number is but a fraction of that. Through May 31, a total of 24,712 people nationwide were enrolled in the pre-existing condition insurance plans.

Health care analysts and insurance executives cite several reasons for the lackluster response.

Chiefly, the health insurance premiums still are more expensive than many people can afford – or want – to pay.

Federal law prohibits the plans from charging more than the state’s standard individual health insurance premium for people of a similar age. That means chronically ill people can get insurance policies at the same cost as healthy people. But many chronically ill people who have gone without insurance for six months either are unemployed or in low-wage jobs, which makes it difficult for them to afford even the standard premiums.

Under Missouri’s plan, for example, a 50-year-old man who opts for a $1,000 deductible would pay a monthly premium of $544, McMurtrey said.

That would consume about half the paycheck of someone working 40 hours a week in a minimum wage job, without accounting for taxes, housing payments, food, utilities and gas for a car.

Missouri lowered its premiums by 25 percent, effective Feb. 1, in an attempt to make the plan more affordable. Program administrators currently are analyzing whether they can lower rates again, McMurtrey said.

Until now, “Missouri hasn’t been really creative in how to get the lowest prices,” said Thomas McAuliffe, a policy analyst at the Missouri Foundation for Health.

Not helping matters was the fact that many people – at least initially – found Missouri’s application for the program confusing, McAuliffe said.

Another factor holding down enrollment is the requirement to first go without insurance for a half year, Tolbert said.

“There are probably a lot of people – at least some people – who have existing insurance, but it’s fairly limited, who would likely benefit by enrolling in the better coverage,” she said. But “they’re simply not going to be willing to go bare, as we say, for six months to access the better coverage.”

Still another factor is the tendency of some people to avoid purchasing insurance until they know it’s needed, said Larry Case, executive vice president of the Missouri Association of Insurance Agents. Even though vehicle liability insurance is required by state law, about 14 percent of Missouri drivers lack it, Case said. Some people purchase car insurance only because it’s necessary to license their vehicle, then quit making payments, he said.

Similarly, Case said, people have little incentive to purchase health insurance under the pre-existing condition plan until they know they are headed to the hospital or have a major medical expense upcoming.

McMurtrey said many people who enroll in the plan immediately use their health coverage, in some cases have major operations such as heart bypass surgeries or organ transplants within two or three weeks.

Although some health care analysts said Missouri’s program has not been sufficiently publicized, McMurtrey said she has traveled the state to discuss it at hospitals, nursing homes, community centers, schools and with any group that can spread the information among those with chronic health problems.

“Even though the 500 itself is not a high number, we are serving needy Missourians,” she said. “Quite honestly, across the country, none of the states have the enrollment we thought we would.”

Inefficiencies Of “One Size Fits All” Health Care Reform

From Market Watch:


Press Release–July 21, 2011, 2:00 p.m. EDT

ORANGE, Calif., Jul 21, 2011 (BUSINESS WIRE) — A panel of industry experts has advised states on alternative strategies to comply with federal health reform focusing on each state’s “unique demographic, business and cultural characteristics.” The discussion was part of a podcast conducted by CHOICE Administrators Exchange Services; ACS, A Xerox Company; and Benefitfocus. The three companies are working together to deliver health insurance exchange solutions to states throughout the country. The podcast was an outgrowth of a white paper — “State-Based Health Reform: A 7-Step Strategy” — issued last month by CHOICE Administrators.

Panelists included Kevin Counihan, president of CHOICE Administrators Exchange Services and author of the white paper; Ron Goldstein, president and CEO of CHOICE Administrators, which manages the country’s longest-standing, state-approved exchange — CaliforniaChoice; Kevin Walsh, vice president of healthcare eligibility and exchange services at ACS, a Xerox Company; and John Emge, government programs manager at Benefitfocus, which helped launch the Maryland Virtual Compare Portal. Continue reading

A Health Bargain That Will Address The Debt

From Politico:

The author writes that both sides can declare victory if they agree on health  care finance.

By STEPHEN T. PARENTE | 7/17/11 9:30 PM EDT

A frustrated President Barack Obama last week reportedly declared “enough is enough” during one debt limit discussion with Republicans. Frustration aside, the problem is that both parties have been using the wrong tools to try to fix the right problem.

Arguing about the scale of Medicare cuts or size of tax increases on unrelated industries pushes both parties into their respective ideological trenches. They should focus instead on a “grand bargain” for health care finance, which could allow both sides to declare victory well before the debt bomb explodes.

The goal of this grand health bargain is to generate trillions in savings through laser-focused policy changes designed to help the government balance its budget in the short term — by increasing revenues and decreasing expenditures. In addition, these policies could help “bend the curve” of health care spending in the long term, by encouraging consumers to be more cost-sensitive.

Such a bargain would rely mostly on clearing the national balance sheet of poor public policy choices made in the 1940s and 1960s, based on demographic assumptions that have turned out to be ruinously incorrrect. Continue reading

Health Officials Move To Loosen State Requirements

By Noam N. Levey–July 12, 2011

Washington— The Obama administration moved Monday to ease some requirements on states to help them set up new insurance exchanges in 2014, a key feature of the healthcare law the president signed last year.The state-based exchanges are intended to make buying health insurance comparable to shopping the Internet for an airline ticket or a hotel room. And by 2019, the exchanges are expected to provide insurance for an estimated 24 million Americans who don’t get their health insurance from their employer, according to the nonpartisan Congressional Budget Office.

Small employers with fewer than 100 workers also will be able to use the exchanges, which will have to offer plans with a minimum level of coverage. No plans will be able to deny coverage to people with pre-existing conditions.

Contradicting Surveys Create Public Confusion

From The New York Times:

Douglas Holtz-Eakin headed a group of 105 economists opposed to the ACA

By — June 20, 2011

The debate over the effects of the federal health care law on employer-provided insurance has been intensifying in recent weeks, with controversial polls and consultants contradicting one another about whether employees will benefit or lose coverage by 2014.

Douglas Holtz-Eakin headed a group of 105 economists opposed to the Affordable Care Act.

After nearly two weeks of widespread queries and criticisms, McKinsey & Company, the management consulting firm, posted on Monday the questionnaire and methodology of an online survey it had released that was denounced by the White House and others for contending that nearly a third of employers would definitely or probably drop coverage for employees when provisions of the health care law took effect in 2014. Continue reading

Medicare: Health Care Reform Working, Lowering Costs

From Bloomberg:
By Drew Armstrong –

The administration for Medicare, the U.S. health insurance program for the elderly and disabled, said the health-care law will save the program $120 billion in the next five years through lower payments to hospitals and insurers.

About $50 billion of the savings come from reduced payments to insurers including Humana Inc. (HUM), WellPoint Inc. (WLP) and UnitedHealth Group Inc. (UNH), companies that lead the market in enrollees in Medicare Advantage, the privately run, government- subsidized portion of the U.S. health program.

The savings prove the health-care overhaul that Democrats passed last year is working, Medicare Deputy Administrator Jonathan Blum said.

“Savings are happening,” he said by phone. “The program is becoming more efficient. We are promoting payment reforms that are elevating quality, elevating performance and lowering costs.”

Cutting spending in Medicare was a major priority of the health-care overhaul U.S. President Barack Obama signed into law in March 2010. The law is projected by the Congressional Budget Office to reduce U.S. deficits by $143 billion, partly through almost $500 billion in cuts and savings from the Medicare program in a decade.

Other major savings in the law come from cutting payments to hospitals and providers of medical equipment like oxygen and wheelchairs.

Blum said the savings were in line with expectations by the Obama administration. “We’re very much consistent with where we thought we would be,” he said.

CBO: New GOP Bill Would Boot Kids From Medicaid Rolls

From Congressional Quarterly (subscribers only):

May 11, 2011 – 8:43 p.m.

By Emily Ethridge, CQ Staff

Tens of thousands of children might lose health coverage temporarily under a Republican bill that would allow states to tighten their Medicaid rolls, according to a Congressional Budget Office report released Wednesday.

The CBO found that the bill (HR 1683), to be marked up in a House subcommittee Thursday, would lead to a significant — but temporary — increase in the number of the uninsured before the new state exchanges that are part of the health care overhaul law start in 2014.

The legislation, which would remove requirements that states maintain current eligibility standards for Medicaid and the Children’s Health Insurance Program (CHIP), would save $2.8 billion between 2012 and 2016, the CBO found. But the bill also would leave about 300,000 more people without insurance in 2013, many of whom would be children.

“In the short term, children would be the overwhelming biggest losers in terms of lost coverage if the House passes its bill,” said Bruce Lesley, who is on the board of directors of the First Focus Campaign for Children, a group that advocates for children’s issues.

Continue reading

HHS: Health Reform Already Working

Without health reform ‘consumers and businesses would face higher premiums,’ Sebelius says. | AP Photo

By: J. Lester Feder
January 28, 2011 04:50 AM EST

The Obama administration is firing back at one of the major attacks Republicans have leveled at the health reform law: that it will make insurance premiums rise.

A report released by HHS on Friday argues that individuals and families purchasing coverage through the exchanges in 2014 will save 14 percent to 20 percent over what coverage would cost them if the law had never been enacted. These savings come from market reforms and regulations — they do not include the tax credits that will effectively reduce premiums for some individuals by more than half.

The report points to “preliminary evidence” that provisions of the Affordable Care Act already in place will contribute to rate increases in 2011 that are lower than in previous years. State premium rate reviews have reined in premium hikes in states including Connecticut and California, and HHS says the new Medical Loss Ratio requirements will “likely lead to rebates” in 2012 for an estimated 5 million insurance customers. The report says early retirees from more than 5,000 businesses and unions are having their premiums reduced through the Early Retiree Reinsurance Program.

“For too long, skyrocketing health care costs have made it hard for businesses to provide coverage for employees and have made it difficult for families to afford coverage,” said HHS Secretary Kathleen Sebelius. “Without the Affordable Care Act, consumers and businesses would face higher premiums, fewer insurance choices and rapidly rising health care costs.”
Continue reading

Opinion: Flimflammery Over ‘Obamacare’

This is not about the health reform law, it is about honesty, the author writes. | AP Photo



By MICHAEL KINSLEY | 1/25/11 4:50 AM EST

It’s a standard item in the Republican checklist of what’s wrong with Obamacare: that advocates of the program, in computing its costs, compare six years of expenses with 10 years of revenues. Because the most important benefits don’t kick in until 2014, the health reform program has an extra four years (2010-2014) to collect money before it has to start paying out. When the first 10 years is up (government costs and revenues are usually reported over 10-year periods), and every year’s income is compared with every year’s outgo, Obamacare will turn out to cost 60 percent more than projected, Republicans say. According to the official stats of the Congressional Budget Office, Obamacare will actually reduce costs and save the government money over 10 years. Not so, say Republicans (who voted last week in the House to repeal the whole thing). The accounting is phony. The Democrats are giving themselves a four-year head start.

The first time I heard this particular argument, months ago, I thought, “That can’t be right.” The deception, if it exists, is too obvious. Democrats aren’t that stupid. Nor do they think voters are that stupid. Or at least I hoped not. Besides, it makes no sense. Think about it for a second: Virtually all the new revenues from health care reform are inextricably tied in with the costs — penalties for not carrying insurance and so on. If it’s not yet required that everybody carry insurance, there can’t be any penalty for not carrying it, can there?

“The only thing supporters of Obamacare

have going for them is the truth.”

But then, Republicans are not so stupid, and they don’t think voters are so stupid as to think they could get away with this, are they? Almost any issue involving economic statistics is complicated enough, or can be fudged enough, to create some ambiguity — some argument for your side that isn’t completely wrong. Could this be one of those rare exceptions?

And sure enough, if you go to the Congressional Budget Office documents, you see that the CBO estimates that the revenue from penalties on corporations and individuals for not carrying insurance are exactly $0 for the first four years. Total revenues from all sources for the first four years are $32 billion, out of a total for the first decade of $525 billion.

Furthermore, the Republican 10-years-in-six charge has been repeatedly debunked in great detail by prominent liberal bloggers like Ezra Klein of The Washington Post, Paul Krugman of The New York Times and Jonathan Chait of The New Republic. Chait even includes an attractive chart showing that, as you would expect, the costs and revenues of Obamacare phase in more or less together. No one on the right, at least no one I could find, has even attempted to debunk the liberal challenge to the right’s charge, but the charge keeps getting repeated.

Continue reading