Health America, a health care insurer with offices Downtown, saidFriday it has made three executive-level personnel changes.
Mary Louise Osborne was named chief operating officer,responsible for statewide operations for the insurer's Medicare,Medicaid and individual lines of business.
Dr. Robert S. Mirsky was named chief medical officer, workingwith the insurer's medical directors and staff to manage the healthplan's quality assurance activities.
COMFORTABLE, working American has little cause to complain- about the quality of health care he receives. The United States is brimful with highly paid doctors, one for every 400 citizens. These doctors have at hand the world's finest gadgetry, in liberal quantities: the rich western part of Germany has 0.7 open-heart surgical units per million people, and Canada 1.2, but America boasts 3.3. Best of all, for that working American, health care is nearly always a perk that comes with the job. That renders almost bearable the mass of form-filling that sprouts with each verruca.
Physician paradise, though, is fast becoming corporate hell. For 50 years a benign federal government has encouraged companies to provide health cover for their workers by exempting health benefits from income tax. Employers now pay for 85% of the 173m Americans covered by private health insurance. The cost of health, meanwhile, has ballooned. Annual spending per head on health care has risen, in constant dollars, from $950 in 1970 to $2,350 in 1989. For most businesses, health care is the second-biggest item of expenditure behind salaries. The cost, on average, is now equivalent to two-fifths of companies' post-tax profits.
Yet it is the tax break which, more than anything, contributes to America's climbing health costs. Since an employer pays for most of the benefits of his staff, they have little incentive to keep medical costs down. By the same token, hospitals and doctors, charging a fee for each service rendered (and fearing malpractice suits), have a duty to themselves not to skimp on treatment.
Both business and government have made attempts to control medical costs by, for instance, rationing the services provided to consumers. But often costs saved in one quarter have merely flowed to another. Health spending continues to grow by 5% a year in real terms. In 1980 health spending absorbed 9.3% of GDP; in 1989 it absorbed nearly 12%, or $604 billion. Canada spends only 8.7% of itS GDP on health, Britain 5.8%.
Employees are now learning that they are not immune to business's troubles. Last year four-fifths of all of America's labour disputes centred on medical benefits that companies were trying to cut. Thousands of (mostly small) businesses cannot, or choose not to, provide health cover for their workers-particularly in industries that insurers deem to be high-risk. These workers are usually too poor to buy their own insurance. As a result, the employed account for most of the 34m Americans (including dependants) who languish without medical insurance. A large but unknown number of other employees, particularly those with a history of high medical costs, want to change jobs but cannot, for fear of losing health insurance.
As with business, so with federal and state governments. Largely through the Medicare programme for the elderly and Medicaid for the poor, federal and state governments now pay for 42 cents of every dollar spent on health care (they also lose about $58 billion of revenues from those tax perks). indeed, the American government spends almost as much of GDP on health as the British government does (see chart on next page). This might have been expected to rein in costs. Yet spending on health as a share of all federal spending has risen from 10% in 1975 to nearly 15% today. Medicare costs, at an annual $100 billion, are soaring, largely because more old people are being kept alive longer with ever costlier technology. The Medicaid programme covers only two-fifths of those officially described as poor. Yet the Bush administration is bewildered that Medicaid costs are wildly exceeding predictions.
A Democratic stretcher-case or two
All of which has led some Democratic Party barons, headed by George Mitchell, the Senate majority leader, to think that they might have found an issue with which to shame the administration. Two kinds of reform are proposed.
The first is for America to adopt the Canadian system of health care. in this, though hospitals and doctors work largely in the private sector, universal access to medical care is paid for by the government out of taxation. This idea is popular among an unusual alliance of labour leaders and big companies-the ones that would like to be relieved of expensive commitments to past and present employees.
Last week four Democratic senators launched a bill to reform health care in a different manner. Under this bill businesses would have the choice of either insuring all employees or contributing to a payroll tax, from which government would provide coverage. This plan, supported by Mr Mitchell, has the advantage that it would not radically change the current mix of health-care finance-non-profit insurers, private insurers and health maintenance organisations (HMOS), which, for an annual fee, dispense health care to their clients through own-brand doctors and hospitals.
Yet both plans are flawed. Canada's system suffers from queues, shortages and ropey equipment. Canada's long border with America's swifter medical services acts as a safety valve to a system under pressure. Moreover, the Canadian government's monopoly over health spending has failed to curb costs. in the 20 years to 1987, Canada's real spending per person rose by 4.6% a year, compared with 4.4% in America.
Forcing business to foot the bill is even less feasible. The Mitchell plan envisages a tangle of subsidies for small and barely profitable businesses. The annual cost of these and other subsidies could be $60 billion or more. Given the current state of the budget, the money could not be found.
Neither proposal promises to restrain spending. One that does is being advanced by the Heritage Foundation, a conservative think-tank. This simply proposes that the link between tax breaks and employer-provided cover be abolished. In its place, tax credits would be given to families, varying according to income and health expenditure. in return families would, by law, be required to buy a minimum degree of health cover. Such a system would help to control costs by putting spending choices in the user's hands, allowing him to choose among current insurers and providers. It would also allow him to carry health cover from one place of work to the next.
If they were imaginative enough to see it, such a proposal-as well as being by far the simplest of the three-would have something to appeal to both Democrats and Republicans. By taking nearly $60 billion of tax breaks from the well-paid employees who now benefit most from them, and then spreading them as credits to the less well-paid, the Democrats could back a progressive tax reform. And giving more power to the consumer would dance well to the tune of 'empowerment' that the White House has been whistling of late.
Byline: ROBERT PEAR New York Times
As part of its health care plan, the Clinton administration is considering a proposal to dismantle the Medicaid program and integrate low-income people into the same networks of doctors, hospitals and private insurance companies that would serve more affluent people, administration officials say. But poor people would probably receive medical and social services beyond the standard package of health benefits to be guaranteed to all Americans, the officials said.
These might include additional dental care, transportation to a doctor's office and translation services for people who do not understand English. And the government would help pay the insurance premiums and other health costs of low-income people.
Confidential work papers from Hillary Rodham Clinton's Task Force on National Health Care Reform say that maintaining a separate Medicaid program 'would perpetuate segregation of the poor in the health care system, with the associated adverse implications for access to and quality of care.'
Today, the task force will hold its first public hearing. The group is considering numerous proposals, some being leaked to test public reaction. Whatever the group recommends to the President and he approves will also have to be approved by Congress.
How to care for the nation's 35.7 million poor people is one of the most important moral, political and policy questions facing the administration as it drafts a legislative proposal for sweeping changes in America's health care system.
Drew E. Altman, president of the Henry J. Kaiser Family Foundation, which is sponsoring a major study of Medicaid, said: 'There are really serious problems in putting Medicaid into the new system, but that's what we ought to do. A separate program for poor people will always be a poor program, underfunded and neglected.'
Altman, a former commissioner of Human Services in New Jersey, said he worried about how poor people, members of minorities and those with special medical needs would fare under the new system.
While no final decisions have been made, the shift of millions of people out of Medicaid and into the networks of doctors and hospitals would probably occur over several years.
Established in 1965 to finance health care for low-income people, Medicaid now provides care for more than 30 million people, including several million with incomes just over the official poverty level. It has become one of the fastest growing programs in the government. The federal government expects to spend nearly $80 billion on Medicaid in the current fiscal year, while the states plan to spend $60 billion.
But many people, in and out of the government, question whether the differing needs of poor people and the middle class can be adequately addressed within the same networks of doctors, hospitals and insurance companies.
Doctors say poor people are more likely to have special health needs and problems, ranging from AIDS to drug abuse, tuberculosis, diabetes, high blood pressure and birth defects.
Throughout the work papers of the task force, it is assumed that Medicaid recipients 'will be integrated fully or partially' into the new system, which the administration calls managed competition.
Under that system, huge consumer groups, known as health insurance purchasing cooperatives, would buy health care from large networks of doctors and hospitals. Advocates of this proposal say the buyers will command so much economic power in the medical marketplace that they can get high-quality care at reasonable prices.
In most states, Medicaid recipients can now generally go to any doctor or hospital that will accept them. The doctors and hospitals are typically paid for each service or procedure they perform. But many doctors take only limited numbers of Medicaid patients, and some doctors and private hospitals do not take any.
Under Clinton's plan, more people would be enrolled in health maintenance organizations and similar groups. Government agencies and employers would pay a fixed amount, set in advance, for each patient.
Rather than having unlimited freedom to use any doctor or hospital, consumers might have to go through one doctor, a 'case manager,' who would approve their use of specialists and hospitals.
Proposals for Medicaid do not imply any immediate changes in Medicare, the federal health insurance program for the elderly. But the task force's working papers show that the administration is considering changes in Medicare so it would eventually be compatible with the new health care system for people under 65.
The situation that affects the Medicaid providers of this stateis unconscionable. The State of Illinois has not paid its billssince June, 1991. The Medicaid providers have continued to providetheir services. But, doomsday is imminent. Most of these providershave borrowed money to keep running; they all will soon reach theircredit limits. When that happens, the services will close.
I am on the board of directors of the Riverside Foundation, aresidential and day training facility in Lincolnshire for 96moderately and severely retarded adults. I know what our balancesheet looks like. I know just how stretched we are. I know that thebreaking point is not far off (within weeks). If we can't pay thestaff, buy food, provide medicine, wash sheets, repair plumbing, payrent, etc., we will have to close the doors. Where do the residentsgo?
The state Legislature has developed a voodoo-type plan thatdirects Medicaid providers to pay a tax - before they have any funds- that the state will then use to entice the federal government toreimburse the providers for all Medicaid expenses, plus a 'kicker.'And, in the process, the state gets to keep a little. Sounds great?
Hogwash!
The federal government has already closed that loophole. Theproviders must borrow funds to pay the tax - since the state isalready five to six months late in paying its bills. The increasedborrowing by the providers takes away opportunities to provide food,medicine and services to those in need. And, on top of everythingelse, who's going to trust the state at this point?
Something must be done now!
State of Illinois - pay your bills! Harvey L. Miller, corporate secretary, Quill Corp., Lincolnshire Bad policy
Regarding the CTA whistle blowers: They should have gotten amedal for guts in exposing dishonesty among the CTA workers.
Now, the rest of the employees will be kept in line so thedishonest ones can go on freely lining their pockets. No wonder ourfares are going up.
My heart goes out to the poor people who lost their jobs. Godhelp them! Bernice Wasielewska, Archer Heights Not Irish
Andrew Greeley ('Let Irish share in multicultural bounty,'column, Nov. 17) seems to think there are as many Irish in America asthere are blacks. He does not say where he got his numbers.
The term Irish should be used to describe people who have comehere from Ireland. It should not be applied to the children ofgrandchildren of such people unless they observe faithfully, overhere, the customs and folkways of that dear land across the sea. Andit should certainly not be applied to someone with an Irish nameinherited from some remote paternal ancestor.
In the 19th century, real, genuine Irish people were numerous inAmerica as a result of wholesale emigration from that most distressedcountry. They came here, and they made their mark. In our largercities, they were able to demonstrate a talent for politicalorganization that they never knew they had in the old country.
There are people today in certain lines of work, such aspolitics or the selling of used cars, who think it is helpful to callthemselves Irish. Their claims to the label are often dubious andsometimes quite imaginary, but they do no harm. Pseudo-Irish arewith us in abundance but should not be confused with the genuinearticle. John McIntyre, Downers Grove Wrong numbers
I'm writing in response to 'The new blue collars: City trainsstudents for manufacturing' (news story, Nov. 17). The figuresquoted to the reporter by the Economic Development Commission ofChicago misrepresented the precision metalworking industry, and Iwish to clarify the information regarding wages.
The Tooling & Manufacturing Association trains apprenticesthrough its apprentice-related theory program toward certification astool and die makers, moldmakers, precision machinists and precisionsheetmetal-modelmakers. Experienced precision metalworkers typicallyearn between $35,000 to $50,000 annually. Overtime is unquestionablycommon, with the work week averaging 45 to 50 hours.
Even at the intern level, aspiring precession metalworkers canexpect to earn nearly $20,000 during the first year. The news storystated an entry level metalworker can earn $16,000 to $32,000. Inorder for an entry level metalworker to earn $32,000, he or she wouldhave to possess a degree in engineering. After five years oftraining, some toolmakers will earn $35,000, but that depends ontheir responsibilities and skills.
The news story also stated a metalworker can earn as much as$70,000 a year, excluding overtime. This is grossly exaggerated.For a metalworker to earn $70,000 a year, he or she would have towork a 70-hour week, with time-and-a-half at $16 per hour. Topmetalworkers earn $20 an hour, which is $41,600 annually.
Indeed, there is a shortage of skilled technologists in themetalworking industry, not just in Chicago and Illinois, but alsoacross the nation. Despite good pay and job security, the industrycannot attract enough qualified applicants. Therefore, as many as1,500 to 2,000 jobs a year are going unfilled. Keith A. Miller, manager, communications and public affairs, Tooling and Manufacturing Association, Park Ridge Senseless losses
Your Nov. 20 edition had a picture of a Cooper's hawk thatkilled itself by flying into a Loop skyscraper. Sadly, Chicago'sdowntown area is built on a migratory bird path. Though thisbeautiful hawk is newsworthy, hundreds of small migratory birds meettheir death on the mirrored glass windows of Loop buildings everyspring and fall during the migration.
The birds see their reflection and think they are flying towardanother one of their kind, when it is actually their own destructionthey are about to meet. In most cases a simple hawk silhouette wouldfrighten these birds off and save their lives. Most of them aremembers of dwindling species that may ultimately face extinction astheir habitat continues to be depleted or destroyed.
It is not often that a huge hawk loses its life by striking abuilding, but certainly not unheard of. What saddens me is that Loopskyscrapers are a poignant examples of man's inability to cohabitatewith nature. We build these steel and glass giants but make noprovisions for the birds who have used this air space for centuries.Why can't the new survive without killing the old?
Further generations, maybe hundreds of years from now, willcertainly look back and wonder why we could not have spent two bucksfor a silhouette or, with all our ingenuity, come up with anothersolution so that our descendants could also witness the beauty of abird winging its way overhead toward destinations beyond the horizon. Buzz Alpert, Loop Serious problem
There is a serious problem in the African American community.It is not the problem of poor medical care, housing, gang wars ordrugs. The problem is 'outsiders' in control of all the businesseswithin the African American community.
I, personally, find it hard to accept or adjust to this insult.
There is truly something seriously wrong when an outside groupof people composes the majority of owners within any community.
But the biggest problem is that we - yes, us the AfricanAmericans - have adjusted and accepted this insult.
There is no outrage from our political representatives, churchleaders, educators, parents, etc.
Some of us even believe it's OK and, worse yet, believe we can'tand don't want to own or manage the businesses in our communities.
Please! Anyone and everyone, leaders and followers, show somevision and bring about a change. As consumers, we must be selective.
If you find yourself absolutely and completely surrounded byoutsiders, at least insist on employment, fair prices and qualityservice from these outsiders. Gwendolyn M. Carter, Douglas Curtail curfew
I have strong feelings against the new curfew laws that might bepassed. This law will affect many people who have nothing to do withgangs, drugs or violence.
Even though violence in Chicago has gone up, I think this lawshould apply only to the reputed gang members and drug dealers andthose known to help them.
This law would open doors for police to harass minorities. Thislaw would basically roll out the red carpet for police to harassyoung people.
I read that under this law, police would be able to disperse agroup (if you can even call it a group) of two people, even if theyare not engaged in any act of violence what so ever. This is notfair! Cesar Torres, West Town Right moves
We may perceive Donald (Trump) as a wild and carefree playboy,but I believe him to be a truthful playboy.
While blowing his trumpet the other day, Trump noted that thisso called recession is a depression. Who should know better, GeorgeBush?
George Bush, like Herbie Hoover will not admit how bad thingsare.
Yep, folks, listen to me! Prosperity is just around the corner.I see a chicken in every pot and a car in every garage. But some ofus don't have a pot or a garage.
Is it possible that George Bush, the world leader, is tired ofbeing president of the United States? If that is so, he's making allthe right moves.
We'll be thinking of you George, next year at the polls - yeah,sure we will! Chuck Robertson, Springfield, Wis. Unfair changes
Mr. Firemen, Mr. Policeman, retire early! We will give you$1,000 a month and you will pay $55 for family health insurance.That was 10 years ago.
WASHINGTON, DC -- The following information was released by the U.S. Department of Health & Human Services:
Statement by
Steven B. Larsen, J.D.
Deputy Administrator and Director
Center for Consumer Information and Insurance Oversight
Centers For Medicare and Medicaid Services
on
Expanding Health Care Options: Allowing Americans To Purchase Affordable Coverage Across State Lines
before
Committee on Energy and Commerce, Subcommittee on Health
United States House of Representatives
Chairman Pitts, Ranking Member Pallone, and Members of the Subcommittee, thank you for the opportunity to discuss important health insurance reforms that promote choice, affordability, and options for American families. The Patient Protection and Affordable Care Act (P.L.111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152), collectively referred to as the Affordable Care Act, ushered in a new era in American health care. The Affordable Care Act improves America's private health insurance system by instituting reforms that will help make affordable, high-quality insurance coverage accessible to millions of Americans, many of whom were not insured at the time of its passage.
As a former insurance commissioner, these issues are particularly important to me. For the past 14 months, my office, the Center for Consumer Information and Insurance Oversight (CCIIO) within the Centers for Medicare and Medicaid Services (CMS), has been steadily working to implement provisions of the Affordable Care Act that expand access to affordable coverage to millions of Americans, strengthen consumer protections, and help to end some of the worst insurance company abuses. These reforms create an important foundation of patients' rights in the private health insurance market, increase choices and options for families, and put Americans back in charge of their own health care. To date, we have already implemented several important private market reforms, including: eliminating pre-existing condition exclusions for children; prohibiting insurance companies from rescinding coverage and imposing lifetime dollar limits on coverage; and enabling many adult children to stay on their parent's insurance plan up to age 26.
The Affordable Care Act also established new programs that make health care more affordable and accessible, such as the Pre-Existing Condition Insurance Plan (PCIP) program and the Early Retiree Reinsurance Program, as a bridge to 2014 when all Americans will have access to affordable coverage choices. With the Affordable Care Act, our country is finally moving away from the broken health insurance system of the past to a new system that insures more Americans at more affordable rates with more benefits and protections. Because of the new protections and provisions in the law, many insurers will no longer be able to discriminate against the sick, limit coverage, and profit at the expense of America's families.
Selling Insurance Across State Lines
Thanks to the Affordable Care Act, today, Americans have many more health care choices. In 2014, State-based health insurance Exchanges will be in place, providing more options and better value for consumers and small businesses. Health insurance Exchanges, market reforms, and other policies contained in the Affordable Care Act create a health insurance market where health plans will have to compete on price and quality by providing consumers with easy-to-understand choices.
Selling insurance across State lines has long been proposed as an option to increase competition and choices in health insurance, but there are serious pitfalls with this approach when it is not coupled with adequate consumer protections. The Affordable Care Act allows health care to be sold across State lines when both States agree and consumer protections are maintained. Without the consumer protections included in the Affordable Care Act, we run the risk of creating an environment where there is a 'race to the bottom' in which insurers have an incentive to sell plans from the State with fewest consumer protections. Under section 1333, by July 1, 2013, the Secretary of HHS, in consultation with the National Association of Insurance Commissioners (NAIC), will issue regulations for the creation of health care choice compacts. Under these compacts, two or more States may agree to allow qualified health plans to sell insurance in their States. Plans will be subject to the laws and regulations of the State in which the plan was written or issued. Additionally, these plans must offer the same required by the consumer's State. Health care choice compacts are effective beginning January 1, 2016. These provisions ensure that interstate sale of health insurance is not a back-door attempt to disadvantage higher-risk individuals or preempt critical consumer protections.
Ensuring Coverage for More Americans
The Affordable Care Act ensures that more Americans have health insurance coverage through programs that are already helping young adults and people with chronic health problems receive the coverage they need. As a result of the Affordable Care Act, most insurance companies now must allow adult children to stay on a parent's plan until age 26 and may not deny children health insurance benefits or coverage because of a health problem. CCIIO has already implemented the Pre-Existing Conditions Insurance Plan (PCIP) program, which makes health coverage available to uninsured Americans who have been without coverage for over six months and have a pre-existing condition - providing a bridge to 2014 when affordable coverage options will be widely available without discrimination. Thousands of Americans who had been turned away by insurers because of their health history are now getting critical treatments and medicines thanks to PCIP.
Between February 1, 2011 and April 1, 2011, enrollment in PCIP has increased by nearly 50 percent, with over 18,000 individuals currently receiving coverage under this important program.[1] The PCIP program has provided invaluable help to people like Jerry Garner. Mr. Garner, a real estate agent from Gowen, Michigan who the New York Times recently featured, lost his health insurance after undergoing a kidney transplant. Because of his pre-existing condition, he was unable to obtain new insurance to cover the $2,000 monthly bills for the immunosuppressive medications that transplant patients must take to prevent rejection of a new organ. Mr. Garner signed up for Michigan's PCIP program and is now paying lower premiums than he did under his previous insurance and is receiving more comprehensive coverage. Mr. Garner's wife told the New York Times that the PCIP program 'was definitely an answered prayer.'[2]
Before the passage of the Affordable Care Act, many young adults who were enrolled in college or starting in the workforce in entry-level jobs could not maintain coverage under their parent's health plan. Young adults are more than twice as likely to be uninsured than older adults, making it harder for them to get the health care they need, and putting them at risk of going into debt from high medical bills. Now, thanks to the Affordable Care Act, most health plans that cover children must make coverage available to adult children up to age 26. Alexander Lataille, 23, of Laurel, Maryland is one of many young adults who have benefited from this provision. Alexander graduated from college last spring and was worried his insurance company would kick him off his parent's plan, especially since he has asthma. As a result of the Affordable Care Act, his insurance company allowed him to stay enrolled in his parent's plan, giving him peace of mind while he looked for full-time employment. 'It was a big relief,' Mr. Lataille told Kaiser Health News.[3] Because of the Affordable Care Act, over 600,000 young adults[4] have already signed up for their parent's health plan; we estimate that a total of 1.24 million young adults will gain coverage through this provision in 2011.
In the future, more people will obtain coverage or more comprehensive benefits or realize lower health insurance premiums because of the critical protections of the Affordable Care Act. The Congressional Budget Office estimates that by 2019, 24 million people will gain insurance coverage through the new health insurance Exchanges.[5] These Exchanges will create affordable, quality insurance options for many Americans who previously did not have health insurance coverage, had inadequate coverage, or were at risk of losing the coverage they had. The Exchanges will make purchasing private health coverage easier by providing eligible consumers and small businesses with 'one-stop-shopping' to compare and select from a range of affordable plans.
Additional Consumer Protections and Resources
The Affordable Care Act gives millions of Americans important new health insurance protections. The Affordable Care Act also prohibits most insurers from discriminating against patients with health conditions like cancer and diabetes. About one in 12 Americans suffer from diabetes,[6] and nearly one in 25 Americans has cancer.[7] The Affordable Care Act helps ensure these Americans have access to care. Before passage of the Affordable Care Act, tens of thousands of people were denied insurance each year because of an illness or condition. Today, most plans cannot deny coverage to children because of a pre-existing condition. Up to 72,000 uninsured children are expected to gain coverage through this provision.[8] In 2014, most insurance companies cannot discriminate against someone because of a pre-existing condition.
We have also prohibited insurance company rescissions, so most insurers can no longer cancel coverage when individuals get sick just because they made a mistake with their application paperwork. We have put an end to lifetime dollar limits on essential benefits - limits that in the past often meant coverage was gone when people needed it most. Patients in non-grandfathered health plans now have greater freedom to choose their own doctor and to go to the nearest emergency room when they are injured or face a life-threatening health situation. By 2014, annual dollar limits on essential benefits will also mostly be a thing of the past. Americans are already benefiting from new rules that require coverage of preventive services; important early detection services like mammograms and colonoscopies must now be available to Americans in new plans without expensive co-pays or deductibles.
Consumers today have unprecedented access to critically important information about insurance options and public programs available to them on a geographic basis. During the past several months, www.HealthCare.gov has had millions of visitors and the information housed in this on-line tool continues to grow rapidly. Visitors can get easy-to-understand information in English and Spanish about the coverage options available to them, their protections, and their rights as health care consumers.
Affordable Coverage for All Americans
The Affordable Care Act makes coverage more affordable by holding insurers accountable for the premiums they charge consumers and helping employers maintain or offer health benefits. Significant health insurance premium hikes proposed by insurers will be publicly available on the internet and will be subject to a review. States will receive $250 million in grants to bolster their own rate review process. For the first time, insurers will be held accountable for how premium dollars are spent. The new medical loss ratio (MLR) protections implemented last year ensure that insurers spend at least 80 or 85 percent (depending on the market) of premium dollars on actual health care services and quality improvement efforts - not marketing and CEO bonuses. Insurance companies that do not meet the standard will have two choices: reduce premiums or send cash rebates to their customers. Recognizing State flexibility, the law allows for a temporary adjustment to the individual market MLR standard if a State requests it and demonstrates that the 80 percent MLR standard may destabilize its individual insurance market. We are already seeing indications that the MLR and rate review policies are causing insurance companies to think twice about their premium increases and, in some cases, mitigate annual premium hikes. For example, more than 15,000 Aetna customers in Connecticut may see their health insurance premiums drop by between five and 19.5 percent due to, in part, the new MLR policy. [9]
The Affordable Care Act also provides new programs and tax credits to assist employers that offer health benefits to their workers. More than 5,000 businesses, State and local governments, and employee trusts are participating in a new program under the Affordable Care Act[10] that helps employers retain retiree coverage for Americans 55 to 64 years of age. Also, more than 4 million small businesses have been notified that they may be eligible for tax relief to help provide insurance coverage to their workers.[11]
Americans will see additional savings from the health insurance Exchanges that begin by 2014. Beginning in 2014, State-based health insurance Exchanges will improve access to affordable, quality insurance options for Americans who previously had no health insurance coverage or inadequate coverage. The Exchanges will make purchasing private health insurance coverage easier by providing individuals, families, and small businesses with 'one-stop shopping' where they will be able to compare a range of plans. Eligible individuals will also have new premium tax credits and cost-sharing reductions available to them to make coverage more affordable. By increasing competition between insurance companies and allowing individuals and small businesses to band together to purchase insurance, Exchanges will help to lower health care costs for consumers.
Moving Forward
Through new coverage options and consumer protections, the Affordable Care Act has already improved America's health care system for millions of Americans. And every day we move forward to full implementation of the law, when all Americans will have access to quality, affordable health insurance free of restrictions due to pre-existing conditions or benefit caps. In the meantime, I look forward to continuing to implement provisions of the Affordable Care Act, while considering stakeholders' ideas and input.
[1] 'State by State Enrollment in the Pre-Existing Condition Insurance Plan, as of March 31, 2011.' Link here.
[2] Walecia Konrad, 'Pre-existing Condition? Now, a Health Policy May Not Be Impossible.' The New York Times, March 18, 2011, link here.
[3] Phil Galewitz, 'At Least 600,000 Young Adults Join Parents' Health Plans Under New Law.' Kaiser Health News, May 3, 2011, link here.
[4] Phil Galewitz, 'At Least 600,000 Young Adults Join Parents' Health Plans Under New Law.' Kaiser Health News, May 3, 2011, link here.
[5] CBO's March 2011 Baseline: Health Insurance Exchanges. Link, here.
[6] 'Data from the 2011 National Diabetes Fact Sheet.' January 26, 2011, link here.
[7] 'Cancer Prevalence: How Many People Have Cancer?' October 7, 2010, link here.
[8] 'Patient Protection and Affordable Care Act: Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patients Protections.' (OCIIO-9994-IFC), link here.
[9] Arielle Levin Becker, 'As Federal Health Reforms Take Effect, Aetna Proposes Rate Cuts.' The Connecticut Mirror. May 11, 2011, link, here.
[10] Progress Report on the Early Retiree Reinsurance Program, March 31, 2011. Link, here.
At a hearing of the Senate Finance Committee, Sen. Charles Grassley made the following opening remarks:
Our first mark before us today is the Medicare, Medicaid, and SCHIP Indian Health Care Improvement Act of 2006. This bill encompasses the provisions of the Indian Health Care Improvement Act, S.1057, reported by the Indian Affairs Committee on March 16, that are in the jurisdiction of the Finance Committee. This legislation today helps us keep our commitment to provide quality health care to Indians. The legislation we are considering today would allow the tribes to be able to use money from Medicare and Medicaid to maximize improvement of the care provided to Indians. This legislation provides for increased outreach for Indian tribes to assist Indians in applying for Medicaid or SCHIP. This legislation also provides relief for Indians from Medicaid cost-sharing or premiums if that Indian comes to Medicaid by contract or referral. This is a fair and balanced policy as those Indians would not be subject to cost-sharing or premiums if their care was provided by an Indian Health provider.
This legislation creates incentives for Medicaid managed care plans that enroll Indians to include Indian Health providers in their networks. Indians have relationships with their health care providers and many prefer to receive services from an Indian Health provider. Under current law, if an Indian sees a provider not in the plan's network, that provider won't likely get paid except under certain circumstances. The Chairman's Mark helps fix that by requiring managed care plans that serve a large number of Indians to include Indian Health providers in their networks or to make alternative arrangements to make sure they're paid.
Finally, this legislation requires reporting of data on Indians served, the status of their health care, and efforts being made to upgrade facilities that may not be in compliance with Social Security Act requirements. This is valuable information that will aid us in insuring that we are providing quality care to Indians. I appreciate the efforts of Senator Baucus in helping us with this legislation as well as Senator McCain and Senator Dorgan. The work that has gone into today's markup has been a bipartisan process involving both committees. Their assistance has been invaluable.
Today we will also consider a bipartisan Chairman's Mark, the Improving Outcomes for Children Affected by Meth Act of 2006. This bill reauthorizes and improves the Promoting Safe and Stable Families program as well as the Mentoring of Children of Prisoners program. There is a long history of the Congress working productively on a bipartisan basis to improve child welfare. I am glad to report that this spirit of bipartisanship is alive and well on the Senate Finance Committee. The Senate Finance Committee has held two important hearings on child welfare. These are the first hearings the Senate Finance Committee has held on child welfare issues in nearly ten years. One of those hearings dealt specifically with the effects that methamphetamine addiction has had on America's child welfare system. I am persuaded that meth abuse and addiction have created a unique and pressing problem, notably in rural states like Iowa and Montana.
During these hearings, the committee also learned the terrible toll that methamphetamine addiction is taking on Native American Indians. I am also convinced that the meth epidemic has created an unsustainable strain on an already overburdened child welfare system in states and on Indian reservations. I am very pleased to have successfully worked on this legislation with Senator Baucus. I appreciated his thoughtful comments and questions during our hearings on meth abuse and child welfare. By marking up this legislation today, members of the Senate Finance Committee have the opportunity to help address the problems that the meth epidemic has created for state child welfare systems. We do this by directing $40 million a year toward grants for regional partnerships. These partnerships will increase the well-being of, and improve the permanency outcomes for, children affected by methamphetamine abuse and addiction.
These grants will improve collaboration and coordination among providers of services for children and families. The Secretary is directed to give consideration for receipt of these grants to rural areas that have a lack of capacity for access to comprehensive family treatment services. By emphasizing comprehensive family treatment, we are promoting a promising strategy for families to recover from meth addiction together.
Additionally, the mark before us expands the Mentoring of Children of Prisoners program, so that children in areas that have not been able to access these mentoring services may gain access to these important programs. The mark also increases and improves access for needed funding for Indian Tribes as well as increases states accountability.
Last August, Congress passed the Health Insurance Portability and Accountability Act (the Kassebaum-Kennedy Bill) which restricts the use of pre-existing condition exclusions in employer-sponsored group health insurance policies.
While providing valuable protection against employers who refuse to insure workers with MS, the bill also includes an important and little-noticed provision that may profoundly affect the availability of long-term care to Americans with severe disabilities.
In the United States, the primary payor for long-term services is Medicaid, a government program that serves as the health benefit component of state public assistance benefits. Medicaid is only available to eligible recipients who meet strict financial limitations. Those limitations are so rigorous that most recipients may have $2,000 or less in savings (not counting the value of a home -- assuming the spouse still lives in it).
People with disabilities without substantial private means usually have no other option for financing long-term care services.
Most must look to the Medicaid system. Therefore, many completely legal strategies have been developed by attorneys and financial planners to create or preserve Medicaid eligibility. One of these strategies is asset transfers -- signing away property and savings in order to meet Medicaid limits. At least one state study found that over half of its Medicaid nursing home beneficiaries had transferred assets shortly before applying for Medicaid.
In 1993, in order to deter an 'abuse' of the Medicaid system, Congress created several rules to discourage transfers. One was the imposition of a 'look back' period.
If any assets were transferred within 36 months of the Medicaid application (60 months if a trust was involved) the applicant was generally required to wait as many as 36 additional months to be eligible for Medicaid. The length of the period of ineligibility was based on the amount of the transfer.
The New Bill Raises the Stakes
Under the new law, the act of transferring assets is still not illegal, but applying for Medicaid during a 'look back' period is. It not only delays eligibility but may also result in a fine and/or imprisonment. The law now imposes criminal liability. In other words, applying for Medicaid during the period of ineligibility that follows transferring assets is now a criminal violation of the law -- not merely the grounds for temporary denial of Medicaid benefits. The bill provides for penalties of up to one year in jail and a fine of $ 10,000.
The purpose of the law is to prevent what Congress believed to be an abuse by middle- and upper-income people trying to go on public assistance. It was also intended to encourage purchase of private longterm-care insurance -- and, in fact, the same bill contains tax incentives for buying private insurance.
But the bill does nothing to make long-term care insurance policies available to people who are already ill or disabled. Nor has anything been done to alleviate the widespread tendency toward poverty and lack of reasonable private financing alternatives for non-elderly adults with chronic disabilities and illnesses.
Asset transfers are still completely legal. But the potential of criminal liability will chill the willingness of legal and financial advisors to suggest them. So this option is now even more difficult to find, understand, and wisely employ.
Plan Now
I advise people with multiple sclerosis to begin aggressive financial planning to develop private long-term-care strategies as soon as possible, regardless of their income.
In addition to accumulating cash, private strategies might include forming or joining a personal-assistance care cooperative*; developing independent living skills and creating a completely accessible environment to reduce the need for services; developing care resources through church or community groups; and purchasing stop-gap insurance coverage such as catastrophic excess major medical policies.
As it stands now, people who have transferred financial assets, need to plan on a 3-year waiting period (5 years if a trust was involved) before even filing a Medicaid application. The cost of being poor in America just went up.
* The author is currently involved in a pilot personal-care-assistance cooperative for herself and other residents of her apartment complex.