Volume I, Issue 9 – August 5
UnitedHealth Group is pleased to bring you this issue of the Health Care Modernization News Flash to update you on health care issues under discussion in Washington, D.C. and in the states, and to share our perspectives on modernization of the health care system.
Our Perspective
UnitedHealth Group Continues to Constructively Engage White House and Congress on Health Care Modernization
Over the past few months, UnitedHealth Group CEO Steve Hemsley and other company leaders have met with several White House officials, Senators, and House Representatives to address key issues under discussion in the health care modernization debate. The breadth of our company and depth of our experience has allowed us to use our data, analytics, and modeling to estimate the impact of legislative proposals and share our expertise to help the government reduce health care costs. During our meetings with White House officials and Congressional leaders, various issues have been discussed including comprehensive insurance market reform, the impact of a public plan option on the health insurance market, reform of the Medicare Advantage program, the value of the Medicaid program, the importance of end of life care planning, and ways that the federal government could contain health care costs through the use of technology, innovation, and best practices that have been employed by UnitedHealth Group. As the debate continues through the August Congressional recess and into the fall, we will continue to share our expertise and work with the White House and Congress to modernize the health care system.
UnitedHealth Group Brings Diverse Scholars to Capitol Hill to Discuss Health Care Reform
UnitedHealth Group welcomed 32 Diverse Scholars to Washington, D.C. last week to discuss health care issues with members of Congress, including Representatives from the Congressional Black Caucus, Congressional Hispanic Caucus, and Asian Pacific Islander Caucus. The United Health Foundation's Diverse Scholars Initiative, established in 2003, seeks to increase the number of qualified, yet underrepresented, college graduates entering the health workforce. By cultivating health professionals from diverse, multicultural backgrounds, the United Health Foundation hopes to increase culturally competent health care delivery, close the health disparities gap, and improve health outcomes. The Foundation has committed $1.2 million to the initiative for the 2009-2010 academic year to provide up to 200 scholarships to African American, American Indian, Asian American, and Latino American students pursuing careers in health care. As stated by Reed V. Tuckson, M.D., United Health Foundation board member and executive vice president and chief of medical affairs for UnitedHealth Group, "It is more important than ever that we encourage our country's brightest young minds to pursue careers in the health professions, and expose them to the political and policy environment. Expanding our Diverse Scholars Initiative to support more young people who are committed to advancing the health of our nation and of underrepresented minorities is especially important given the challenging economic times and a growing physician and nurse shortage."
National Spotlight
Energy and Commerce Committee Approves Reform Bill, Full House Consideration Delayed
On July 31, the last day before the August Congressional recess for the House of Representatives, the Energy and Commerce Committee approved an amended version of the health reform bill released by the three House committees with jurisdiction over health reform. The Ways and Means and Education and Labor Committees approved the bill with amendments on July 17. Approval of the bill was delayed in the Energy and Commerce Committee over concerns from conservative "Blue Dog" democrats regarding the cost of the bill, the structure of the public plan, and regional payment disparities in Medicare. After several days of negotiations between House leadership, "Blue Dog" democrats, and "Progressive" democrats, an agreement was reached allowing the bill to pass with amendments by a vote of 31 to 28 with all republicans and five democrats on the committee voting against the bill. The most notable amendments approved by the Energy and Commerce Committee include: 1) changes to the structure of the public plan allowing providers to opt out and requiring negotiation of provider rates, 2) $5 billion in loans and grants for the creation of health insurance cooperatives governed by policyholders, 3) limiting premium increases to 150 percent of medical inflation, 4) reductions in premium subsidies, 5) an increase in the number of employers excluded from the employer mandate, 6) requiring states to pay a larger portion of the costs for expanded Medicaid eligibility, 7) the establishment of standard benefit packages for Medicare Advantage and Part D plans, 8) negotiation by the Department of Health and Humans Services with drug manufacturers for drug prices under Part D, and 9) the creation of a new Center for Payment Innovation within CMS to test new provider payment methods. The three amended bills will need to be reconciled before a single bill is brought to the House Floor after the August recess.
Senate Finance Committee Delays Release of Health Reform Bill Till Fall
Although the Senate does not recess for their August break until Aug. 7, Senator Max Baucus, Chairman of the Finance Committee, has stated that the committee will not introduce health reform language for consideration before the August recess. A bipartisan group of six members from the Finance Committee including Senators Baucus (D-MT), Bingaman (D-NM), Conrad (D-ND), Grassley (RIA), Enzi (R-WY) and Snowe (R-ME), has yet to finish negotiations on key provisions of the legislation including the cost of the bill, how to pay for it, the taxation of high cost health plans, whether to include an employer mandate, and whether to include a public plan option or a health insurance cooperative. The other committee with jurisdiction over health reform in the Senate, the Health, Education, Labor, and Pensions (HELP) committee, passed health reform legislation on July 15. The HELP Committee bill will need to be reconciled with the bill that the Finance Committee intends to pass after the August recess before it is voted on by the full Senate.
President Obama Outlines Consumer Protections Needed in Health Reform Legislation
President Obama has detailed a list of consumer protections that he believes are needed to bring more security and stability to health care consumers. The President has outlined the following eight consumer protections that he says must be included in health reform legislation enacted this year: 1) individuals must not be refused coverage because of their medical history, 2) there must be an annual limit on how much can be charged for out-of-pocket expenses, 3) insurance must fully cover regular checkups and tests that help prevent illness, 4) insurance coverage must not be dropped or reduced for individuals who become seriously ill, 5) individuals must not be charged higher premiums because of their gender, 6) there must not be an annual or lifetime limit on insurance coverage, 7) children must be eligible for family coverage through the age of 26, and 8) individuals must be allowed to renew any health insurance policy as long as they pay their premium in full.
State Spotlight
California: Governor Signs Budget Amendment Including Health Care Funding Cuts
On July 28, Governor Schwarzenegger signed an amendment to the 2009-2010 budget enacted in February to close a $26 billion budget gap. Without this amendment, the state would have run out of cash on July 29. The Governor approved the spending cuts passed by the Legislature and used line item vetoes to cut an additional $500 million from state programs. The budget amendment includes a $178.6 million cut to the state Children's Health Insurance Program, Healthy Families. This spending gap has resulted in an enrollment freeze and waiting list, while the program seeks funding from private sources. It also transfers $6.6 million out of the state high risk pool to provide additional funding for the Medi-Cal Medicaid program and reduces spending by $1.4 billion in Medi-Cal by seeking a federal waiver to obtain $1 billion in past due or additional federal funding, utilizing managed care for vulnerable populations, implementing new drug pricing policies, and reducing funding for private hospitals.
New York: Governor Enacts Health Care Bills Following Political Upheaval
After political unrest in June, with the defections of Senators Espada and Monserrate to the Republican Party halting work in the state Senate, it was unclear whether four health care bills championed by Governor Paterson would be addressed. Following extended negotiations which included changes to the Senate leadership, the two Senators returned to the Democratic Party, allowing the Senate to finish work on legislation. On July 29, the Governor signed three of his four health care bills into law. The first bill, the Governor's "Managed Care Reform" bill, makes changes to a number of managed care processes that include limiting the ability of plans to recoup overpayments to providers and reducing the timeframe for payment of claims to providers. The second bill expands COBRA continuation coverage from 18 to 36 months. The third bill requires insurers to cover unmarried children through age 29 under a parent's group policy regardless of whether the child is financially dependent on the parent. The Governor's fourth bill, that would have required health insurance plans to receive prior approval of rates for individual and small group products, allowed the Insurance Department to modify rates, and required a medical loss ratio of 85 percent for individual and small group products, failed to pass the Legislature.
New York: State Releases Report Analyzing Impact of Four Health Reform Proposals
The New York Departments of Health and Insurance have released a study conducted by the Urban Institute estimating the cost and coverage levels of four health reform proposals. The four proposals include: 1) "Public-Private Partnership" that expands public program eligibility, merges the small group and individual markets, includes individual and employer mandates, provides individual coverage subsidies, and includes a public plan option, 2) "Public Health Insurance for All," a single payer plan, 3) "New York Health Plus" that gives residents the option to enroll in Family Health Plus regardless of income and requires employers to offer coverage or pay a 10 percent of payroll fee, and 4) "The Freedom Plan" that includes premium subsidies for individuals and small groups and premium flexibility for age and health status. The study found that the "Public-Private Partnership" proposal would most cost-effectively reduce the number of uninsured New Yorkers; it would cover 94 percent of residents at a cost of roughly $1 billion.
Ohio: Governor Signs Budget Requiring Section 125 Plans and Changes to Market Rules
Governor Strickland recently signed the 2010-2011 budget into law that requires employers to offer section 125 plans, increases the dependent age for health insurance coverage, and changes the rules for Ohio's HIPAA high risk mechanism. Employers with 10 or more employees will be required to offer Section 125 plans to their employees to allow them to pay health insurance premium with pretax dollars. Insurers will be required to offer dependent coverage up to the age of 28. The language does not require employers to offer dependent coverage, nor pay any portion of the premium for dependent coverage. The budget bill also makes changes to Ohio's high risk mechanism by increasing the enrollment cap to 16 percent of an insurer's individual market enrollment and decreasing the premium differential to 1.5 times the base rate for individual market coverage.
