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SAMHSA222s Weekly Financing News Pulse: National Edition February 26, 2010 2/26/10 1 SAMHSA222s Weekly Financing News Pulse: National Edition National News President Obama Unveils Health Care Reform Proposal, Holds Bipartisan Health Care Summit; Democrats Likely to Pursue Partisan Legislation Sen. Bunning Blocks Bill to Extend COBRA Benefits, Delay Medicare Physician Reimbursement Cuts Obama Administration Reduces States222 Cost for Dual Eligibles222 Prescription Drugs House Passes Bill to End Health Insurers Anti Trust Exemption HHS Awards States $100M in Grants for Children222s Health House Subcommittee Investigates WellPoint Premium Increases; WellPoint Increases Premiums in 11 States, HHS Secretary to Hold Meeting for Health Insurance CEOs Petzel Sworn in as VA Under Secretary of Health CMS Issues Preliminary 2011 MA Payment Increases Polls Find Health Care Fears Eased, Frustration with Congress, and Support for Individual Reform Provisions Studies Released Study Finds Medicare Advantage Premium Increase in 2010 CDC Survey Finds Disparity in Health Care Access Among Young Adults Survey Finds Large Employers Face Increased Health Care Costs Study Finds Health Care Reform Must Reflect Changing Health Needs, Increased Medicare Spending for Chronic Conditions Including Mental Heath Around the Hill: Hearings on Health Financing To Subscribe to SAMHSA222s Weekly Financing News Pulse, please go to the following link and choose 223Health Care Financing224: https://service.govdelivery.com/service/multi_subscr ibe.html?code=USSAMHSA&origin=http://www.samhsa.go v/enetwork/success.aspx For questions or comments, please contact Kevin Hennessy ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: National Edition February 26, 2010 2/26/10 2 National News President Obama Unveils Health Care Reform Proposal, Holds Bipartisan Health Care Summit; Democrats Likely to Pursue Partisan Legislation: On February 25, President Barack Obama hosted a bipartisan health care summit for 38 members of Congress as well as top administration officials and representatives from the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) ( Kaiser Health News, 2/25 ; TPM LiveWire, 2/25 ). After more than six hours of televised discussion, the group failed to reach a bipartisan compromise, leading experts to predict that Democrats will attempt to pass partisan health care reform legislation, likely using budget reconciliation measures ( Kaiser Health News, 2/25 ; Kaiser Health News, 2/25 ). To avoid a filibuster or the need for 60 votes in the Senate, both chambers must pass an additional bill making spending changes to the Senate222s health care reform bill ( HR 3590) using the budget reconciliation process. The House must also pass HR 3590 and Democrats may need to pass a third bill227without reconciliation227 making non budgetary changes to HR 3590 ( Politico, 2/26 ). The likely blueprint for Democrats222 health care modifications comes from the health care reform proposal President Obama unveiled on February 22. Based largely on the Senate222s bill but incorporating aspects of the more liberal House bill ( HR 3962 ) and some new proposals, White House officials estimate the proposal would cost $950 billion over 10 years and extend health care coverage to 31 million people by 2019; however, the CBO has yet to release an official score ( Kaiser Health News, 2/23 ). In addition to many provisions from HR 3590, President Obama222s proposal would: Delay the Senate bill222s 40 percent 223Cadillac224 health plan tax until 2018 and raise the definition of 223high cost224 plans to $27,500 for families and $10,200 for individual s Apply a 2.9 percent Medicare payroll tax to investment income for individual s earning over $200,000 annually Create state based exchanges in which individual s can purchase health insurance and a national Health Insurance Rate Authority to provide federal input and exert some regulatory control over health insurers222 rates Increase the Senate222s proposed government subsidies for uninsured individual s earning up to 400 percent of the federal poverty level (FPL) Increase the fine paid for companies with more than 50 employees that do not offer health insurance whose employees receive a government subsidy for health care Expand the federal share of newly eligible Medicaid beneficiaries222 costs to 100 percent from 2014 to 2017, 95 percent through 2019, and 90 percent thereafter Close the 223doughnut hole224 in Medicare prescription drug coverage Reduce Medicare Advantage (MA) premiums by more than the Senate bill Set new definitions for community based mental health centers and other community based behavioral health providers ( CQ Politics, 2/22 ; Kaiser Health News, 2/22 ; Kaiser Health News, 2/23 ; Missoulian, 2/22 ; National Council via 247 Press Release, 2/25 ). The Kaiser Family Foundation (KFF) has updated their side by side health care reform tracking tool to include President Obama222s proposal.In addition to the President222s proposal, Republicans offered a six point health care reform plan. The plan draws from a House bill introduced last fall and would not seek near universal coverage, instead focusing on reducing health care costs by curbing medical malpractice suits, encouraging state reform, and preventing insurers for denying coverage to the sick ( Wall Street Journal, 2/25 ; Kaiser Health News, 2/24 ). Sen. Bunning Blocks Bill to Extend COBRA Benefits, Delay Medicare Physician Reimbursement Cuts: On February 24, the Senate approved a $15 billion 223jobs bill224 ( HR 2847 ) that SAMHSA222s Weekly Financing News Pulse: National Edition February 26, 2010 2/26/10 3 excluded an extension of the American Recovery and Reinvestment Act (ARRA) COBRA subsidies and a postponement of scheduled 21 percent Medicare physician reimbursement reductions, both included in the House222s version passed in December. The bill also excludes an expansion of ARRA Medicaid Federal Medical Assistance Percentage (FMAP) increases included in the House version.The Senate bill now heads back to the House. Meanwhile, Senate Majority Leader Harry Reid (D NV) is pursuing two additional measures to address the Medicare, COBRA, and Medicaid issues considered in the original House bill. However, Senator Jim Bunning (R KY) is filibustering one bill ( HR 4691), passed by the House February 25, that would temporarily extend the ARRA COBRA subsidy and delay Medicare physician payment cuts for 30 days to allow the Senate to work on a long term bill. Sen. Bunning is insisting that the Senate offset roughly $10 billion in spending included in HR 4691; without the measure physicians Medicare reimbursements will be cut by 21 percent beginning March 1 (CQ Today, 2/26; CQ Today, 2/25; Kaiser Health News, 2/26 ; Kaiser Health News, 2/25 ; CQ Politics, 2/24 ; Kaiser Health News, 2/23 ; CQ Politics, 2/24 ; Roll Call, 2/24 ; Kaiser Health News, 2/24 ; AP, 2/23 ). Obama Administration Reduces States222 Cost for Dual Eligibles222 Prescription Drugs: On February 18, U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced $4.3 billion in financial relief for states by applying the ARRA Medicaid FMAP increase to 223clawback payments.224 223Clawback payments224 were created by the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) to recoup some of the federal Medicare Prescription Drug Benefit Program222s (Part D) expense for dual eligibles222 prescription drugs. Prior to the MMA, state Medicaid programs covered prescription drug costs for residents eligible for both Medicaid and Medicare. The FMAP increase will apply retroactively from October 2008 through December 31, 2010. State savings range from $4 million for North Dakota and Wyoming to $675 million for California ( HHS, 2/18 ; Reuters, 2/19 ; San Jose Mercury News, 2/18 ). House Passes Bill to End Health Insurers Anti Trust Exemption: The House voted 406 19 on February 24 to repeal health insurers222 exemption from federal antitrust laws under the 1945 McCarran Ferguson Act . The bill ( HR 4626 ) does not affect medical malpractice insurers. The White House and other supporters argue that the bill will prevent insurance company price fixing; however, previous Congressional Budget Office (CBO) reports indicate that the change will apply to a small number of offenders and have no significant impact on federal spending or health care premiums. In addition to receiving unanimous Democratic support, the bill split GOP leadership, with House Minority Leader John Boehner (R OH) voting against the bill and House Minority Whip Eric Cantor (RVA) and the majority of the Republican Conference backing the measure ( Kaiser Health News, 2/24 ; AP via Atlanta Journal Constitution, 2/24 ; Roll Call, 2/24 ; Kaiser Health News, 2/24 ; Kaiser Health News, 2/23 ). Kaiser Health News offers a primer on the anti trust exemption here . HHS Awards States $100M in Grants for Children222s Health: On February 22, HHS Secretary Kathleen Sebelius announced grants totaling $100 million to establish a national quality system allowing states to improve health care delivery and coordination through Medicaid and the Children222s Health Insurance Program (CHIP). Ten states (CO, FL, MA, MD, ME, NC, OR, PA, SC, UT) will receive funding ranging from $2 million to $11 million to test new Medicaid and CHIP technologies and initiatives to improve services for children ( BusinessWire, 2/22 ). House Subcommittee Investigates WellPoint Premium Increases; WellPoint Increases Premiums in 11 States, HHS Secretary to Hold Meeting for Health Insurance CEOs: On SAMHSA222s Weekly Financing News Pulse: National Edition February 26, 2010 2/26/10 4 February 24, the House Energy and Commerce Subcommittee on Oversight and Investigations held hearings into Anthem Blue Cross of California222s planned premium increases. Anthem, a subsidiary of WellPoint Inc., recently proposed premium hikes of up to 39 percent for individual policyholders.At the hearing, WellPoint CEO Angela Braly said thatrising medical costs drive the company222s premium increases, citing hospital costs rising an average of 10 percent annually and pharmaceutical costs up 13 percent. However, House Democrats argued that internal company documents reveal that returning Anthem to WellPoint222s targeted 7 percent profit margin was the motivation for the premium increases. Braly noted that WellPoint222s individual policies lost money in 2009 and are slated to earn less than 2 percent profit in 2010. In related news, a Center for American Progress report found that double digit individual premium increases have been implemented or are pending in WellPoint222s Blue Cross Blue Shield companies in California, Colorado, Connecticut, Georgia, Indiana, Maine, Nevada, New Hampshire, New York, Virginia, and Wisconsin. Finally, HHS Secretary Kathleen Sebelius asked CEOs from WellPoint Inc. , UnitedHealth Group Inc. , Cigna Crop., Aetna Inc. , and Health Care Service Corp. to attend a March 3 meeting to discuss the industry222s premium increases ( Kaiser Health News, 2/25 ; Kaiser Health News, 2/24 ; Kaiser Health News, 2/22 ; ABC, 2/24 ; AP via Washington Times, 2/25 ). Petzel Sworn in as VA Under Secretary of Health: On February 18, Dr. Robert Petzel was sworn in as the U.S. Department of Veterans Affairs (VA) Under Secretary for Health. Petzel has served as Acting Principle Deputy Under Secretary for Health since May 2009 and previously directed one of the VA222s geographic health care networks. Petzel now heads the Veterans Health Administration, which is expected to treat nearly 6 million patients in 2010 ( VA via PRNewswire, 2/18 ; Kaiser Health News, 2/19 ). CMS Issues Preliminary 2011 MA Payment Increases: On February 19, the Centers for Medicare & Medicaid Services (CMS) issued preliminary 2011 Medicare Advantage (MA) rates, proposing a 1.38 percent payment increase. In 2010, the government reduced MA plan payments 4.5 percent and many analysts had predicted reductions for 2011. However, analysts note that final rates may change significantly before CMS releases them in April. MA plans222 costs are expected to increase 5 percent in 2011 ( Wall Street Journal, 2/22 ; Insurance News Net, 2/22 ). Pol ls Find Health Care Fears Eased, Frustration with Congress, and Support for Individual Reform Provisions: A Robert Wood Johnson Foundation (RWJF) poll found that 75 percent of respondents believe it is important that President Obama includes health care reform as part of his plan to address the economic crisis. Respondents also reported concerns about future affordability of and access to health care ( Kaiser Health News, 2/24 ). Meanwhile, KFF222s February health tracking poll indicates that Americans remain equally in favor (43 percent) and opposed (43 percent) to health care reform, but at least six in ten respondents support numerous individual provisions that comprise major components of the current bills . Fifty eight percent of respondents reported that they would be disappointed or angry if Congress decided to stop working on health care reform and did not pass a law this year ( Kaiser Health News, 2/23 ; Washington Post, 2/23 ). In a similar poll , CNN found that 67 percent think Republicans are not doing enough to cooperate with the White House on health care reform and 52 percent think President Obama is not doing enough to cooperate with the GOP. A survey conducted by the CNN/Opinion Research Corp. from February 12 15 indicated that 25 percent of people think Congress should pass a bill similar to the 2009 health care reform bills and 48 percent believe Congress should work on a new bill. In addition, 25 percent of respondents believe Congress should stop working on health care reform ( Kaiser Health News, 2/25 ; Politico, 2/24 ). SAMHSA222s Weekly Financing News Pulse: National Edition February 26, 2010 2/26/10 5 Studies Released Study Finds Medicare Advantage Premium Increase in 2010: A study conducted by Avalere Health found that Medicare Advantage (MA) premiums face average increases of 14.2 percent for prescription drug coverage. This increase contrasts with the previous year, as the average monthly Medicare Advantage Prescription Drug plan premiums increased 5.2 percent between 2008 and 2009. The study found that the average monthly premium for 2010 is $39.61, compared with $32.98 in 2008. The premium increases follow 3 to 5 percent reductions in government payments for MA plans in 2010 ( Kaiser Health News, 2/19 ). CDC Survey Finds Disparity in Health Care Access Among Young Adults: The Center for Disease Control and Prevention222s (CDC) National Center for Health Statistics released the National Health Interview Survey , depicting the nation222s access to health insurance coverage and utilization of medical care. The survey focused on younger adults noting that, in 2008, 30 percent of young adults ages 2029 years were uninsured (13 million) and young adults 20 29 were twice as likely as adults ages 30 64 years to lack health insurance coverage. The survey found that young men ages 2029 years were 36 percent more likely to be uninsured than young women. Furthermore, young women had more health insurance coverage, received more health care services and, among the uninsured, were 75 percent more likely to have a doctor visit in the past year than young men ( Kaiser Health News, 2/25 ). Survey Finds Large Employers Face Increased Health Care Costs: A report released by Towers Watson surveyed more than 500 large employers from November to January, finding that median health care costs are projected to increase 6.5 percent in 2010. Towers Watson222s survey revealed that 83 percent of responding companies have already refurbished their health care strategy or plan to do so within two years, compared to 59 percent in 2009. According to the survey, employers also plan to encourage healthy behaviors, promote incentives for employees to become informed health care consumers, and recognize room for improvement in medical vendor program delivery ( ABC News, 2/22 ). Study Finds Health Care Reform Must Reflect Changing Health Needs, Increased Medicare Spending for Chronic Conditions Including Mental Heath: A study published in Health Affairs finds that there has been a shift in the costs driving increased Medicare spending between 1987 and 2006 and contends that health reform must reflect these changes. The study notes that Medicare beneficiaries increasingly receive services for chronic conditions, including mental health conditions, rather than intensive inpatient services, such as episodic onsets of heart disease. In addition, the primary setting in which Medicare beneficiaries receive services has also shifted from hospitals to outpatient and community based centers. The study recommends supporting preventive services, evidence based practices, and health care coordination ( Kaiser Health News, 2/19 ). Around the Hill: Hearings on Health FinancingHouse Veterans222 Affairs Subcommittee on Oversight and Investigations : Fiscal 2011 Budget: Veterans Affairs February 23, 10:00 a.m., 334 Cannon House Veterans222 Affairs Subcommittee on Health: Fiscal 2011 Budget: Veterans Health Administration February 23, 1:00 p.m., 334 Cannon SAMHSA222s Weekly Financing News Pulse: National Edition February 26, 2010 2/26/10 6 House Oversight and Government Reform Subcommittee on Federal Workforce, Postal Service and Related Agencies : Federal Employee Health Benefits Program February 23, 2:00 p.m., 2154 Rayburn House Energy and Commerce Subcommittee on Oversight and Investigations : Anthem Blue Cross Premium Increase February 24, 10:00 a.m., 2123 Rayburn House Veterans222 Affairs Committee : Link Between Medication and Veteran Suicide February 24, 10:00 a.m., 334 Cannon Senate Veterans222 Affairs Committee : Fiscal 2011 Budget: VA February 26, 9:30 a.m., 418 Russell Senate Veterans222 Affairs Committee : Veterans Suicide Prevention March 3, 9:30 a.m., 418 Russell House Veterans222 Affairs Subcommittee on Health: Payment for State Veterans Homes March 3, 2:00 p.m., 340 Cannon
