February 2010 Archives

What are the lessons learned from this week's White House health care summit, and how should reform efforts proceed from here?

House Minority Leader John Boehner, R-Ohio, said: "The thing I have heard more than anything over the last six or seven months is that the American people want us to scrap this bill. They have said it loud. They have said it clear."

House Ways and Means Chairman Charles Rangel, D-N.Y., said: "We entered this room with the understanding that we agree on 70 percent of what is in the health reform bill. If that is the case, I simply cannot understand the repeated calls by my Republican colleagues to scrap the bill and start anew. That type of rhetoric means you've made up your mind that we're not going to have a health reform bill. And I don't think that's consistent with what the American people sent us to Congress to do."

What is the best course of action at this point, and was the summit at all worthwhile?

15 responses: Sally C. Pipes, John Sheils, Rep. John Dingell, D-Mich., J. James Rohack, Michael F. Cannon, Marilyn Werber Serafini, Karen Davis, Jason Rosenbaum, John C. Goodman, Uwe Reinhardt, John Sheils, Sen. Max Baucus, D-Mont., Rep. John Boehner, R-Ohio, Rep. John Boehner, R-Ohio, Andy Stern

Updated at 10:17 a.m. on Feb. 22.

President Obama this morning released a health care proposal that he will bring as a starting point for the bipartisan health care summit he is hosting Thursday. The plan closely follows the health care reform legislation that the Senate passed in December, but adds a new provision that would give the HHS secretary authority to block insurance company premium increases if the secretary deems them unjustified. Currently, that power rests with states, though states don't often take action.

Are large insurance premium hikes justified from profitable carriers? What veto or moderating authority should the federal government or states have over insurance rates? Are states asleep at the switch? What strikes you as positive or negative about Obama's new plan, and will it provide a basis for compromise legislation?

A White House spokesman said that the president does not want to "start from scratch" at the summit Thursday, but that he is still open to incorporating ideas from Republicans.

Obama's proposal makes a number of changes to the Senate-passed bill, including eliminating Nebraska's extra Medicaid funding and providing extra federal Medicaid help to all states. He also would come down harder on employers that fail to offer insurance to employees by requiring a $2,000 per employee penalty, as opposed to $750. He also would increase the threshold for the excise tax on the most expensive health plans from $23,000 for a family to $27,500.

The president's proposal would add about $75 billion to the cost of the Senate-passed bill, say White House officials, who added that the extra cost would be fully offset. That would bring the full cost of the Senate-passed bill to about $900 billion over 10 years.

Recent reports that Anthem Blue Cross of California would increase health insurance premiums by 39 percent are only the latest evidence that insurers are raising prices while reaping huge profits, HHS Secretary Kathleen Sebelius said last week as she released a report on premium hikes. The House Energy and Commerce Oversight and Investigations Subcommittee has scheduled a hearing for Wednesday.

Sebelius pointed to provisions in the House- and Senate-passed health reform bills that would require insurers to spend 80-85 percent of premiums on medical claims.

The five largest health insurance companies "took in combined profits of $12.2 billion, up 56 percent over 2008," the report says. But according to Karen Ignagni, president of America's Health Insurance Plans, "Fortune 500 puts the health plan industry profits at 2.2 percent, 35th on its list of profits by industry sector."

In a statement, Ignagni blamed multiple factors for premium hikes:

• sharp increases in provider rates;

• increased cost-shifting as providers seek to offset the costs of treating more Medicaid patients;

• an increase in uncompensated care costs;

• consolidation among hospitals and other health care providers;

• a wide range of new state laws, including benefit mandates, regulations, and premium taxes; and

• economic factors that have caused some people to drop coverage, resulting in a risk pool that is more heavily weighted with older, less healthy persons.

11 responses: Robert Greenstein, John Sheils, Darrell G. Kirch, Sally C. Pipes, Grace-Marie Turner, Andy Stern, Janet Trautwein, Michael F. Cannon, Paul B. Ginsburg, Karen Ignagni, Elizabeth A. McGlynn

Is a new health care proposal by Newt Gingrich and John Goodman worth considering? Here are the highlights.

(Gingrich is former speaker of the House and founder of the Center for Health Transformation, and Goodman is president of the National Center for Policy Analysis).

• Allow people a generous tax credit or let them deduct the value of their health insurance up to a certain amount.

• Encourage employers to provide portable insurance, and allow individuals to purchase insurance across state lines.

• Allow those with chronic diseases to manage health dollars in health savings accounts, and use Medicaid's Cash and Counseling program for the homebound disabled as a model.

• Encourage some health plans to specialize in managing chronic diseases.

• As long as total cost to the government does not rise and quality of care does not suffer, doctors should be free to repackage and reprice services.

• Don't cut Medicare.

• Allow employers to obtain individually owned insurance for retirees at group rates and to deposit premiums for post-retirement insurance into HSAs. Employers and younger employees could save tax-free for post-retirement health.

• Make anonymous Medicare claims and other government data available to consumers.

• Eliminate junk lawsuits.

• Use enhanced coordination of benefits, third-party liability verification and electronic payment to stop health care fraud.

• Cut red tape before and during review by the FDA and monitor the quality of drugs and devices once they reach market.

7 responses: Tom Miller, John C. Goodman, Tom Miller, Michael F. Cannon, Jason Rosenbaum, Michael F. Cannon, John C. Goodman

Republicans are sure to come to President Obama's newly announced health care summit later this month armed with proposals for how to change Democratic health care reform bills. House Republicans late last year proposed an alternative that is summarized below. Which proposals are good ideas that should be seriously considered, and which should be scrapped?

1. Provide states with $25 billion to create high-risk pools or reinsurance programs. States would have to eliminate waiting lists for existing high-risk pools, and premiums would be capped at 150 percent of the state's average premium (down from 200 percent).

2. Protect those with pre-existing medical conditions by extending current provisions under the Health Insurance Portability and Accountability Act of 1996.

3. Prohibit insurers from imposing annual or lifetime spending caps.

4. Prohibit insurers from fraudulently canceling health insurance by creating an independent appeals panel.

5. Provide $50 billion to states that adopt reforms reducing the cost of health insurance and expanding coverage (subsidizing health insurance or expanding Medicaid eligibility wouldn't qualify).

6. Allow small businesses to pool together through association health plans to buy insurance.

7. Require health plan dependent coverage to go up to age 25.

8. Allow Americans to purchase insurance in any state.

9. Enhance health savings accounts by providing tax credits to low and moderate-income individuals for some contributions, and allowing taxpayers to use HSA funds to pay premiums.

10. Establish a statute of limitations on bringing a medical malpractice case; cap noneconomic damage awards at $250,000; allow the court to restrict attorney fees; clarify and limit punitive damages; and protect states with existing "functional medical liability laws."

11. Repeal the Federal Coordinating Council for Comparative Effectiveness Research.

12. Prohibit federal money from being used to pay for abortions, and create a conscience protection clause to allow health care providers to refuse to perform abortions based on moral or religious objections.

The full summary provided by the Republican staff at the House Ways and Means Committee in November can be found here.

5 responses: Tom Miller, Jason Rosenbaum, Jennifer Luray, John C. Goodman, Stuart Butler

Are the national health expenditure numbers released by the government today as bad as they sound? Which is the most important indicator to watch? Percent of GDP? Per capita spending? The shift from private to public spending? Which sectors of the industry should we be carefully watching for jumps in spending?

Spending in 2009 grew to 17.3 percent of GDP, marking the single largest annual increase in at least 50 years, according to CMS. Spending could consume 19.3 percent of GDP by 2019. Total U.S. health care spending is estimated to have been $2.5 trillion in 2009, up 5.7 percent from the year before.

The Centers for Medicare and Medicaid Services' Office of the Actuary released the data and wrote the report for Health Affairs. The findings do not account for any changes that health care reform legislation now under consideration might achieve.

The economic recession has affected both public and private health care spending as more people have lost their private insurance and government has been hit with increases in Medicaid enrollment and therefore spending. While public spending grew 8.7 percent from 2008 to 2009, private spending grew by a smaller 3 percent.

Looking forward, health spending is projected to annually outpace growth in the GDP by about 1.7 percentage points. Through 2019, public spending is expected to grow at an average of 7.0 percent a year, and private spending at a lower 5.2 percent.

The growth of Medicare spending is estimated to have slowed a little in 2009, increasing by 8.1 percent -- half a percentage point less than the previous year. The authors attribute the change to slower growth in prescription drug and hospital spending.

Overall, however, total health care spending on most medical services increased. Spending on hospitals increased 5.9 percent last year from the year before -- up from 4.5 percent growth in 2008, mostly because of increased enrollment in Medicaid. Growth in private hospital spending also accelerated, however.

Spending on physician services also was up, again driven by additional Medicaid enrollment. That spending grew 6.3 percent in 2009, up from 5.0 percent a year earlier. Private spending on physician care also increased, however, due in part to the swine flu outbreak.

Spending on prescription drugs grew at an estimated 5.2 percent in 2009, significantly more than the 3.2 percent increase of 2008. The authors attribute the growth to the need for anti-viral drugs to combat swine flu and to higher price growth in brand-name drugs.

4 responses: Paul B. Ginsburg, John C. Goodman, Sally C. Pipes, Karen Davis

In his fiscal 2011 budget proposal to Congress this morning, President Obama focused mostly on the need to bolster the economy. Can the economy be improved -- in either the short or the long term -- without also reforming the nation's health care system? How closely are they related, and what and how much needs to be done on health care to positively affect the economy?

Here is what Obama wrote in his budget proposal:

"Because even the best-trained workers in the world can't compete if our businesses are saddled with rapidly increasing health-care costs, we're fighting to reform our Nation's broken health insurance system and relieve this unsustainable burden. My Budget includes funds to lay the groundwork for these reforms -- by investing in health information technology, patient-centered research, and prevention and wellness -- as well as to improve the health of the Nation by increasing the number of primary care physicians, protecting the safety of our food and drugs, and investing in critical biomedical research."

According to the budget document, Obama is supporting expansions of patient-centered health research "to give patients and physicians the best available information on what treatments will work the best for them; supporting investments in health information technology; expanding prevention and wellness activities; and launching payment reform demonstration programs in Medicare." He proposes $290 million for centers that would expand health care to the medically underserved.

What is the proper mix of work on the economy and health care this year?

Also, what policy proposals in Obama's health reform budget do you find interesting, disturbing or missing? The president's full proposal can be found here. The specific proposals for the Department of Health and Human Services are on pages 77-83 of the PDF.

5 responses: Darrell G. Kirch, Karen Davis, Jeffrey Levi, Len Nichols, Uwe Reinhardt