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CCH® BENEFITS — 8/17/09

Health Care Reform Update

from Spencer’s Benefits Reports: This is another in 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.

Recent Polls Assess Health Reform

People’s perception of problems that affect the country, their assessment of their own current life situation, and their worries about their own future are the primary factors that shape public support for health care reform, according to a recent examination of 22 recent nationwide polls published in the New England Journal of Medicine.

The examination revealed these findings:

• Requiring insurers to cover people with preexisting conditions, increasing taxes on people with higher incomes, and an employer mandate have widespread public support.
• Introduction of a public plan as a competitor is supported in most polls, but respondents vary in their beliefs about how such a plan should function.
• There is widespread opposition to taxing employer-provided benefits and increasing the deficit to help pay for reform.
• The public is divided on an individual mandate, an increased role for government, and using Medicare savings to pay for reform.
• About half (47%) think that access to health care in the United States will expand if health care reform passes.
• Fourty-one percent believe that the quality of care in the United States will improve.
• The public is divided on the question of how reform will affect health care costs nationally, with one poll showing a plurality thinking that cost growth will slow and another showing a plurality thinking that costs will increase.
• Most Americans do not think the current reform legislation will improve their own health care or lower their costs.
• More than three-fourths believe that their own taxes will increase.

For more information, visit http://healthcarereform.nejm.org

Medicare Advantage Competition Examined

Private health care plans that enroll Medicare beneficiaries—known as Medicare Advantage (MA) plans—are being paid $11 billion more in 2009 than it would cost to cover these beneficiaries in regular fee-for-service Medicare. To generate Medicare savings for offsetting the costs of health reform, the Obama Administration has proposed eliminating these extra payments to private insurers and instituting a competitive bidding system that pays MA plans based on the bids they submit.

According to a recent Commonwealth Fund study, Medicare Advantage plan enrollment is highly concentrated in a small number of firms, meaning there is little competition. Among the 100 counties with the largest numbers of Medicare beneficiaries, 73 have highly concentrated MA enrollment, indicating a low level of competition, while a high level is indicated in only three counties. In 33 of the 100 largest counties, a single MA firm has more than 50% of MA enrollees.

The study is available at http://www.commonwealthfund.org/Publications.aspx.

HHS Studies Effects Of Preexisting Condition Exclusions

Insurance discrimination based on preexisting conditions makes adequate health insurance unavailable to millions of Americans, according to a report released by the Department of Health and Human Services (HHS).

The report revealed the following:

• In 45 states across the country, insurance companies can discriminate against people based on their preexisting conditions when they try to purchase health insurance directly from insurance companies in the individual insurance market. Insurers can deny them coverage, charge higher premiums, and/or refuse to cover that particular medical condition.
• 12.6 million non-elderly adults—36%of those who tried to purchase health insurance directly from an insurance company in the individual insurance market—were in fact discriminated against because of a preexisting condition.
• One in ten people with cancer said that they could not obtain health coverage, and 6% said they lost their coverage when they were diagnosed with the disease.
• It is legal in nine states for insurers to reject applicants who are survivors of domestic violence, citing the history of domestic violence as a preexisting condition.

The report is available at http://www.healthreform.gov/reports/denied_coverage/index.html.

Health Reform Proposals Have Potential To Help More Than 13 Million Uninsured Young Adults

Comprehensive health reform proposals now before Congress could help the more than 13 million uninsured young adults ages 19-29 gain coverage, and such reforms also would help ensure that those who now have coverage would not lose it, according to a new Commonwealth Fund report, Rite of Passage? Why Young Adults Become Uninsured and How New Policies Can Help, 2009 Update.

According to the report, in 2007, nearly 30% of young adults, or 13.2 million, were uninsured—an increase of 2.3 million since 2000. With the unemployment rate currently at 15% among those ages 20-24, up from 8.2% in 2007, more young adults are now likely uninsured.

“Loss of health insurance coverage impedes young adults’ access to the health system at precisely the time they should be establishing their own relationships with physicians, and puts them and their families at significant financial risk” said study author and Commonwealth Fund vice president Sara Collins. “It is critical that reform proposals provide comprehensive, affordable and continuous health insurance that young adults can count on regardless of where they work or whether they are in school.”

A copy of the report is available at http://www.commonwealthfund.org.

How States Might Be Affected By National Health Reform

The Kaiser Family Foundation has released an analysis of the impact of reform on individual states, which will by their economic situation, current health insurance coverage, and health care expenditures.

According to the analysis, “States with more extensive poverty, higher budget shortfalls, lower eligibility levels for public programs, higher rates of uninsured, and more primary care shortages will be more heavily impacted.”

The analysis is available at http://healthreform.kff.org/.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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