News & Information

 

FEATURED PRODUCT

Special Report: Dealing With Your 401(k) Plan In A Challenging Economy
Times are tough. Tough times make working with your retirement plan even tougher. This raises many special issues for you to consider. Employees want their money for everyday needs. They are more interested in plan loans. They contribute less.

Learn More »

CCH® BENEFITS — 06/17/09

Health Care Reform Update

from Spencer’s Benefits Reports: This is one of a series of regular health care reform updates from Spencer’s Benefits Reports. Included are links to items already covered, brief summaries of actions taken by the federal government, recent reports and studies on health care reform, policy statements by major stakeholders, and other recent health care reform activity.

Sens. Conrad, Rockefeller, Offer Competing Public Plan Options

On June 10, Sen. Kent Conrad (N.D.) suggested a health reform alternative to a public plan in the form of member-run health-care “cooperatives,” according to published reports

Under Mr. Conrad’s proposal, cooperatives on a state and possibly a national level could gain a federal charter, collect premiums and provide health care benefits for their members. The proposal would allow nonprofit organizations to negotiate directly with health care providers for low-cost rates. The plans they offer would be sold, like private plans, through new Internet- based “exchanges” where consumers could buy insurance at lower-cost group rates.

Mr. Conrad drew a distinction between his proposal and a government-run public health insurance option, calling a public option government-controlled and government-run; while a cooperative approach would be membership-owned and membership-controlled.

Meanwhile, Sen. John D. Rockefeller IV (W. Va.), chairman of the Senate Finance subcommittee on health care, published an outline of his Consumers Health Care Act, which would establish a public plan option within a national insurance exchange. As Mr. Rockefeller envisions it, the public plan would be financially self-sustaining from premiums and from employer contributions. It would be required, at a minimum, to follow the same insurance regulations as private plans. Provider payment rates for the first two years wouldl be based on Medicare rates, including new delivery models enacted under health reform.

For more information, visit http://rockefeller.senate.gov/press/Rockefeller%20Consumers%20Health%20Care%20Act%20Background.pdf.

Baucus, Conrad Propose Comparative Effectiveness Legislation

On June 10, Senate Finance Committee chairman Max Baucus (Mont.) and Senate Budget Committee chairman Kent Conrad (N.D.) introduced legislation to improve the quality of health care that Americans receive by ensuring doctors and patients have research and information on the effectiveness of different health care treatments.

S.1213, the Patient-Centered Outcomes Research Act of 2009, would establish a private, nonprofit corporation, called the Patient-Centered Outcomes Research Institute to generate scientific evidence and new information on how diseases, disorders, and other health conditions can be treated to achieve the best clinical outcome for patients. Providing patients and doctors with more unbiased data on the effectiveness of the treatments available to them would reduce the rate of growth in health care costs, according to the Congressional Budget Office.

For more information, visit http://finance.senate.gov/press/Bpress/2009press/prb060909.pdf.

Administrators Question Reform Proposals’ Potential For Cost Reduction

Although health care administrators agree that health care reform is important, they are concerned about the toll that proposed approaches could take on their businesses and patients, according to a recent survey from IVANS, Inc., a provider of electronic services to the health insurance industry. Nearly three-fourths (72%) of health care administrators believe that a pay-for-performance model could lead to improved patient outcomes, but 79% said that it would increase the costs of doing business, most likely due to increased reporting and recordkeeping requirements. Not surprisingly, many administrators believe that a national health insurance plan would be even less effective at reducing costs and improving care: 75% think that such a plan would actually reduce the quality of care or at best, have no effect; while 41% think that it could reduce costs, 22% said that it would actually increase costs, and 13% said that it would have no effect at all.

With respect to consumer-driven health care (CDHC), 44% think that CDHCs can reduce health care industry costs; 37% think that it would actually increase costs, and 31% expect it to provide some cost relief for their own businesses. But more (41%) believe that it will increase their administrative costs for staffing and resources. With respect to patient outcomes. 38% think that CDHCs will increase the likelihood of improved patient outcomes, 37% said that it will decrease positive results, and 25% believe that it will have no effect at all.

The IVANS study is available at http://www.ivans.com/assets/09_Provider_Survey_Executive_Summary.pdf

ERIC Expresses Concerns Over Reform Proposals

In a June 8 letter to the members of the five congressional committees with jurisdiction over health care reform, the ERISA Industry Committee (ERIC) expressed its concerns over proposals that could weaken the current employment-based health care system.

Noting that ERIC supports reforms to the nation’s health care system that will increase its efficiency, reduce costs, and extend health care coverage to the uninsured, ERIC president Mark Ugoretz wrote, “ERIC is concerned that some reform proposals could compromise the successful employer-based system that currently provides health care to 170 million Americans who strongly support its continued viability.” Mr. Ugoretz added that the “employer-based system has been the source of more innovation and efficiency and enjoys greater support among its beneficiaries than any other delivery system. The mechanisms and principles that make it successful should be extended to those businesses, workers, and individuals who currently cannot take full advantage of it.”

With respect to the taxation of benefits, Mr. Ugoretz asserted, “ERIC has serious concerns with limiting the ability of an employee to exclude from income the value of employer-provided health insurance. If this exclusion were curtailed, employment-based insurance would suffer. Young, healthy employees would exit their employers’ plans in search of cheaper coverage rather than pay taxes on a more expensive plan.”

According to Mr. Ugoretz, “Our concerns with employer mandates center on costs, flexibility, and appropriate design. Employer mandates by definition will restrict the ability of employers to devise and operate health care plans that best meet the needs of employees. The imposition, for instance, of a minimum plan actuarial value would in many cases either increase costs for employers or force the realignment of health care dollars to pay for government-required benefits to the detriment of compensation and other benefits also highly valued by employees.”

For more information, visit http://www.eric.org/forms/uploadFiles/19E030000001C.filename.ERICHealthReformLetter060809.pdf.

Visit our News Library to read more news stories.