WeeklyFinancingNewsPulseNationalEditionfinal20100528.pdf (PDF | 238.88 kb)
SAMHSA222s Weekly Financing News Pulse: National Edition May 28, 2010 5/28/10 1 SAMHSA222s Weekly Financing News Pulse: National Edition National News HHS Files Motion to Dismiss Lawsuit in Virginia, NAIC to Delay MLR Report; Medicare Part D Rebate Checks to be Mailed Early; CMS to Send Mailing on Medicare Benefit Changes under Reform Poll Finds More Americans Still Disapprove of Reform but Approval Rising Up date: Lawmakers Eliminate Extensions of ARRA COBRA Subsidies and Medicaid Funds from Jobs Bill, Delay to Medicare Reimbursement Rate Cut to be Separately Debated House Armed Services Committee Approves Defense Authorization Containing TRICARE Dependent Expansion, CBO Projects Cost at $924 Million over Five Years National Restaurant Association and UnitedHealth Group Inc. Form Alliance to Extend Coverage to Uninsured in Food Service Industry Surveys Released on Employer Expectations of Health Care Reform Law Impacts on Health Benefits Studies Released KFF Releases State - by -State Analysis of Impact of Medicaid Expansion under National Reform Law; Employer -Sponsored Coverage Survey; Brief on Impact of Reform on Young Adults NIHCR Releases Study Projecting Coverage by High-Risk Pools Established in National Health Care Reform Law KHN Releases Breakdown of Medicare Spending Growth Nationally Health Affairs Study Finds Most Low -Income Medicare Beneficiaries not Enrolled in Part D Subsidies, Part D Enrollment Rejected over Costs and Difficulty of Enrollment The Commonwealth Fund Releases Brief on Health Care Reform222s Impact on Uninsured Young Adults AHIP Report Finds HDHP Enrollment up 25 Percent from Last Year Health Affairs Releases Brief on Changes to Medicare under Reform Athenahealth Releases Rankings of Insurers by Payment Efficiency and Claims Denials Journal of General Internal Medicine Study Examines PCMHs 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_subscribe.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 May 28, 2010 5/28/10 2 National News HHS Files Motion to Dismiss Lawsuit in Virginia, NAIC to Delay MLR Report; Medicare Part D Rebate Checks to be Mailed Early; CMS to Send Mailing on Medicare Benefit Changes under Reform : On May 24, U.S. Heal th and Human Services (HHS) Secretary Kathleen Sebelius filed a motion in federal court in Virginia to have Virginia Attorney General Ken Cuccinelli222s federal lawsuit over the individual insurance mandate in the national health care reform law dismissed. Attorney General Cuccinelli argued in his suit that Congress exceeded its 10th amendment authority in passing the mandate, but Secretary Sebelius argu ed in her motion to dismiss the suit that the measure is within the scope of the Commerce Clause of the Constitution, and that Virginia lacks the jurisdiction to file suit ( AP, 5/26 ). In other health care reform news, on May 24 the National Association of Insurance Commissioners (NAIC) announced that it will not be able to provide HHS with a detailed medical loss ratio (MLR) proposal by the previously anno unced date of June 1. HHS has requested that NAIC help craft definitions of MLRs to aid the development of regulations for the health care reform law222s requir ement that insurers have MLRs of 85 percent for large group plans and 80 percent for small group and individual plans. NAIC plans to provide Secretary Sebelius with a preliminary response on June 1, but it will not include final definitions or calculation methodologies. NAIC has not yet officially announced when it will furnish HHS with the detailed response, but NAIC officials say their target is July 1 ( Kaiser Health News, 5/24 ; Kaiser Health News, 5/25 ). On May 27, President Obama222s Administration announced that $250 rebate checks for the first 80,000 seniors that hit the Medicare Part D 223doughnut hole224 will be mailed out on June 10, five days before the deadline established in the health care reform law . Checks will continue to go out monthly as more seniors reach the coverage gap until the rebate is replaced with a discount in 2011 ( Los Angeles Times, 5/27 ). On May 24, the Centers for Medicare & Medicaid Services (CMS) announced that it would soon be mailing brochures to all Medicare beneficiaries outlining the immediate changes to Medicare and benef its available under the national health care reform law. CMS officials also intend for the mailing to make seniors aware of potential scams to obtain their personal information ( Kaiser Health News, 5/25 ). Poll Finds More Americans Still Disapprove of Reform but Approval Rising: A CBS News poll found that 47 percent of Americans disapprove of the national health care reform law, down from 53 percent when the law was signed in March. Approval rose from 32 percent in March to 47 percent in May. The poll also found that 36 percent of America ns think the law will hurt them, 16 percent think it will help them, and 40 percent think it will have no effect on them ( CBS News, 5/25 ). Update: Lawmakers Eliminate Extensions of ARRA COBRA Subsidies and Medicaid Funds from Jobs Bill, Delay to Medicare Reimbursement Rate Cut to be Separately Debated: U.S. House Democrats were unable to get a May 27 vote on a pared down version of the proposed American Jobs and Closing Tax Loopholes Act of 2010, and hope to have a vote on May 28. The scaled back legislation will be voted on in two pieces, one of which would delay a scheduled 21 percent cut in Medicare reimbursement rates until 2012, rather than 2014 as outlined in the previous proposal. The reimbursement rates would be increased by 2.2 percent for the remainder of 2010 and by 1 percent for 2011, after which a 33 percent Medicare reimbursement rate reduction would take effect without further Congressional action. The other piece of the bill, pertaining to jobless benefits , no longer contains measures that would extend the American Recovery and Reinvestment Act222s (ARRA) 65 percent COBRA subsidy or the ARRA222s additional Federal Medical Assistance Percentage (FMAP) funding for state Medicaid programs. Officials say those measures will now likely be considered after the Memorial Day recess. Even if the House approves the Medicare reimbursement rate legislation on May SAMHSA222s Weekly Financing News Pulse: National Edition May 28, 2010 5/28/10 3 28, the U.S. Senate will not be able to take the bill up until after it returns from recess on June 7, which means that the scheduled 21 percent cut to Medicare reimbursement rates and the cutoff of COBRA subsidies will go ahead on June 1. CMS has placed a hold on Medicare claims for the first 10 business days of June while Congress addresses the cuts to avoid immediately implementing them in case they are retroactively averted ( Kaiser Health News, 5/28 ; Health Leaders Media, 5/28 ; Insurance and Financial Advisor, 5/28 ; AP, 5/27 ; CQ, 5/27 ; Politico, 5/28 ). House Armed Services Committee Approves Defense Authorization Containing TRICARE Dependent Expansion , CBO Projects Cost at $924 Million over Five Years : On May 21, the U.S. House Armed Services Committee approved the National Defense Authorization Act for Fiscal Year 2011 ( H.R. 5136), which contains an extension of TRICARE coverage for dependents up to age 26. The extension would apply only to dependents that are not eligible for employer -sponsored coverage, and the measure would take effect on October 1. The Congressional Budget Office (CBO) projects that the extension would cost $92 4 million over five years. That projection assumes that the U.S. Department of Defense (DOD) would subsidize approximately 75 percent of the cost, rather than recouping it in full through premiums. The bill now goes before the full House. Legislation to offer the dependent coverage expansion has been previously introduced in both the House ( H.R. 4923) and U.S. Senate ( S. 3201), but neither bill has advanced out of committee ( The Washington Post, 5/26 ; Kaiser Health News, 5/26 ). National Restaurant Association and UnitedHealth Group Inc. Form Alliance to Extend C overage to Uninsured in Food Service Industry: On May 21, UnitedHealth Group Inc. announced that it formed the Restaurant Health Care Alliance with the National Restaurant Association to offer coverage to uninsured workers in the food service industry. Th e Alliance will offer employers access to a web portal to shop for UnitedHealth plans to offer employees, and will offer employees access to information about individual market plans they can purchase if their employer does not offer health benefits. Unit edHealth officials project the employer -sponsored plans offered through the alliance could be 10 to 20 percent cheaper than traditional HMO or PPO plans offered by small businesses. The plans will first be offered in Pennsylvania and Colorado, and UnitedHealth plans to expand the plans to California, Texas, Florida, Illinois, and other states within one year. There are approximately 13 million individuals employed in the food service industry, and between four and six million of them are uninsured, representing approximately 10 percent of the uninsured nationally ( Los Angeles Times, 5/21 ; NBC Dallas Fort -Worth, 5/21 ). Surveys Released on Employer Expectations of Health Care Reform Law Impacts on Health Benefits: On May 25, Towers Watson & Co. released a survey on the impact of the national health care reform law on employer -sponsored insurance. The survey found that 90 percent of employers believe the law will increase their health care benefit costs, 88 percent plan to pass those costs on to employees, and 74 percent plan to reduce health benefits and programs. Most employers surveyed plan to continue offer ing health benefits to their employees in 2014, once the employer requir ement to either offer full-time employees minimal essential cover age or pay an annual penalty takes effect ; 46 percent report that they will definitely offer coverage , 42 percent report that they are likely to offer coverage, and only 3 percent report that they will opt to pay the penalty rather than offer coverage ( Towers Watson, 5/25 ; Kaiser Health News, 5/26 ; AP, 5/25 ). In a related survey by the Midwest Business Group on Health , 54 percent of employers reported that it is either unlikely or not very likely that they will opt to pay the penalty ra ther than offer coverage, and 18 percent reported that it is likely or very likely that they will consider opting to pay the penalty and not offer coverage. The survey also SAMHSA222s Weekly Financing News Pulse: National Edition May 28, 2010 5/28/10 4 found that 47 percent of employers were likely or very likely to charge their employees more for health coverage once the measure offering coverage to employees222 dependents up to age 26 takes effect, and an equal number are either not very likely or unlikely to charge more ( Business Insurance, 5/24 ). Additionally, Mercer released a survey on May 20 that found that 41 percent of employers expect the national health care reform law to increase their costs for providing health benefits by 2 percent or less, while 25 percent expect their costs to increase by at least 3 percent. On average, only 25 percent of employers plan to offer coverage to their employees 222 dependents up to age 26 before they are required to do so, and only 17 percent of employers with 5,000 or more employees expect to offer the coverage before their next plan renewal, which in most cases will be January 2011 ( Mercer , 5/20 ; AP, 5/20 ; Kaiser Health News, 5/21 ). Studies Released KFF Releases State- by- State Analysis of Impact of Medicaid Expansion under National Reform Law; Employer - Sponsored Coverage Survey; Brief on Impact of Reform on Young Adults : On May 26, KFF released a study conducted by the Urban Institute for the Kaiser Commission on Medicaid and the Uninsured that offers a state -by -state analysis of the impact of the expansion of Medicaid outlined in the national health care reform law. The report examines the impact of the expansion on Medicaid enrollment, the number of uninsured, and state and federal Medicaid costs. Nationally, the study projects that the federal government will cover $443.5 billion of the cost of the Medicaid expansion, or 95.4 percent of the total cost, while the states will fund $21.2 billion. The study also estimates that the expansion will result in 15.9 million more individuals enrolling in Medicaid than otherwise would have by 2019, and 11 million fewer uninsured ( KFF, 5/26 ; Kaiser Health News, 5/27 ). KFF also released a survey of employers on employer - sponsored benefits for 2009, which found that since 1999, average annual premiums for family coverage have increased 131 percent to $13,375, and average annual employee contributions toward premiums for family coverage have increased 128 percent to $3,515. The survey found that workers with employer - sponsored coverage, on average , paid for 17 percent of their premium costs for single coverage and 27 percent for family coverage, and that the two most commonly utilized plans are PPOs and HMOs, with 60 percent and 20 percent of those with e mployer -sponsored coverage enrolled in them, respectively ( Kaiser Health News, 5/27 ). Additionally, KFF released a brief on the impact of the national health care reform law on young adults. The brief examines the current insurance coverage trends among young adults and outlines the impact the reform law will have on young adults ( Kaiser Health News, 5/21 ). NIHCR Releases Study Projecting Coverage by High- Risk Pools Established in National Health Care Reform Law: On May 27, the National Institute for Health Care Refo rm (NIHCR) released a study projecting the cost and extent of coverage offered by the high-risk insurance pools established under the national health care reform law. The study estimates that the $5 billion the federal government has committed to subsidize the pools may only be enough to offer coverage to 200,000 individuals, unless states take actions to maximize the value of those dollars. Twenty - nine states and the District of Columbia have opted to run their own high -risk pools, 19 have opted to let the U.S. Department of Health and Human Services (HHS) run the pools for them, and two have yet to decide ( Kaiser Health News, 5/27 ; National Institute for Health Care Reform, 5/27 ). KHN Releases Breakdown of Medicare Spending Growth Nationally: On May 25, Kaiser Health News released two charts on Medicare tren ds nationally. The first outlines the top 10 regional hospital markets with the highest rate of growth in Medicare spending from 2000 to 2007, and the second SAMHSA222s Weekly Financing News Pulse: National Edition May 28, 2010 5/28/10 5 outlines the top 10 regions with the highest rate of increase in Medicare services from 2000 to 2 008 ( Kaiser Health News, 5/25 ). Health Affairs Study Finds Most Low- Income Medicare Beneficiaries not Enrolled in Part D Subsidies, Part D Enrollment Rejected over Costs and Difficulty of Enrollment: On May 13, Health Affairs released a study examining enrollment in Medicare Part D prescription drug coverage and the subsidy program for low -income seniors established in the law that created Medicare Part D. The study found that in 2006, 63 percent of all eligible seniors and 69 percent of eligible low -income beneficiaries were enrolled in Medicare Part D. However, the study found that during the same time only 29 percent of low-income beneficiaries were enrolled in the subsidy program. Those who were not enrolled in the prescription drug program cited costly premiums, difficulty enrolling, and difficulty obtaining information about enrollment as reasons for not joining the drug program. The study also suggests that the national health care reform law may reduce enrollment in Medicare Part D for certain beneficiaries, and proposes expanding eligibility and changing policies to make enrollment easier ( Health Affairs, 5/13 ; Kaiser Health News, 5/21 ). The Commonwealth Fund Releases Brief on Health Care Reform222s Impact on Uninsured Young Adults: On May 21, the Commonwealth Fund released a brief on the impact of the national health care reform law on uninsured young adults. The brief outlines the law222s provisions that affect young adults and projects their potential impact on reducing the number of uninsured young adults. The brief projects that the extension of coverage to dependent children up to age 26 that goes into effect on September 23 could result in coverage for 1.2 million young adults, 650,000 of which are uninsured . The brief also projects that in 2014, when the Medicaid eligibility expansion provision of the law go es into effect, it could result in 7.1 million uninsured young adults obtaining coverage, while the establishment of insurance exchanges and subsidies for low and moderate-income families could result in coverage for six million uninsured young adults ( Commonwealth Fund, 5/21 ; Healthcare Finance News, 5/21 ). AHIP Report Finds HDHP Enrollment up 25 Percent from Last Year: On May 19, America222s Health Insurance Plans (AHIP) released a report that found that the number of Americans enrolled in high -deductible health plans (HDHPs) increased 25 percent from last year, to over 10 million. The report found that nationally , an average of 4.8 percent of privately insured Americans under age 65 have HDHPs. HDHPs were first approved by Congress in 2004, and are typically paire d with a health savings account or health-reimbursement arrangement ( Milwaukee Business Journal, 5/20 ; Kaiser Health News, 5/21 ). Health Affairs Releases Brief on Changes to Medicare under Reform: On May 20, Health Affairs released a brief examining the changes made to Medicare under the national health care reform law. The brief examines individual changes to Medicare contained within the law, when they take effect, and how they will impact beneficiaries and the health care delivery syste m ( Kaiser Health News, 5/21 ). Athenahealth Releases Rankings of Insurers by Payment Efficiency and Claims Denials: On May 26, Athenahealth Inc. released rankings of insurance providers based on the efficiency of their payments and their rate of claims denials. Athenahealth found that nationally, insurers are paying doctors in 39 days, which is 7 days faster than last year, and that insurers denied an average of 7 percent SAMHSA222s Weekly Financing News Pulse: National Edition May 28, 2010 5/28/10 6 of claims in the first quarter of 2010. Medicaid continues to rank poorly against other insurers in payment efficiency ( The Boston Globe, 5/26 ; Athenahealth, 5/26 ; Kaiser Health News, 5/26 ). Jo urnal of General Internal Medicine Study Examines PCMHs: On May 14, the Journal of General Internal Medicine released a study comparing patient centered medical home (PCMH) pilot projects nationally, based on their ability to lower costs while improving quality. The study found concerns over the adequacy of payment mechanisms in the pilot programs as well as a lack of self -evaluation ( SpringerLink, 5/14 ; Kaiser Health News, 5/21 ). Around the Hill: Hearings on Health Financing House Veterans222 Affairs Subcommittee on Health : Veterans222 Health Legislation May 27, 10:00 a.m., 334 Cannon House Veterans222 Affairs Subcommittee on Health : VA222s Recreational Therapy Services June 8, 8:30 a.m., site TBA, New Port Rich e y, FL Senate Veterans222 Affairs Committee : Veterans222 Claims Process June 16, 9:30 a.m., 418 Russel l House Veterans222 Affairs Subcommittee on Health: VA Rural Health Issues and Technology June 24, 10:00 a.m., 334 Cannon
