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ARTICLE Health Care Modernization News

Volume I, Issue 5 – June 15

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 Engaging White House and Congress on Health Care Modernization

Within the past few weeks, UnitedHealth Group CEO Steve Hemsley has met with several White House officials and Congressional leaders in the House and Senate to discuss issues in the health care modernization debate. During these meetings, multiple issues were discussed including ways that the federal government could achieve significant, tangible savings through the implementation of best practices that have been employed by UnitedHealth Group. As the debate continues, we will continue to constructively engage the White House and Congress to effectively modernize our health care system.

National Spotlight

Senate HELP Committee Introduces Affordable Health Choices Act

The Health, Education, Labor, and Pensions (HELP) Committee, chaired by Senator Edward Kennedy, has released a draft health reform bill. The HELP Committee is one of two committees in the Senate with jurisdiction over health reform. The Finance Committee, that also has jurisdiction over health reform in the Senate, previously released three documents outlining policy options under consideration for health reform legislation anticipated to be introduced by the committee later this month. Key components of the HELP Committee draft proposal include:

  • Individual and Group Insurance Market Reforms: Health plans may not impose pre-existing condition exclusions, must accept all individuals and employers that apply for coverage, and may not base premiums on health status, gender, class of business, or claims experience. Premium rates may only vary by rating area, family structure, actuarial value of benefits, and age. Health plans must establish reimbursement incentives for quality, provide coverage for preventive care, provide dependent coverage for children through the age of 26, and are prohibited from establishing annual or lifetime benefit limits.
  • American Health Benefit Gateways: Establishes "Gateways" or health insurance exchanges at a state level for individuals and employers to compare and enroll in health insurance coverage. Gateways will also assist eligible individuals in enrolling in Medicaid, CHIP, or other federal health programs for which they may be eligible. Participation in a Gateway is voluntary. A "Medical Advisory Council" is to be established to make recommendations on the criteria for a minimum benefit set and the conditions under which coverage is considered affordable for individuals and families at different income levels.
  • Affordability: Three different levels of cost sharing are to be established for qualified health plans offered in a Gateway. Premium credits for the purchase of qualified health plans will be provided on a sliding scale for individuals and families with incomes up to 500 percent of the federal poverty level. Medicaid eligibility is to be expanded to 150 percent of the federal poverty level. A health insurance credit or subsidy will be available to small employers with fewer than 50 fulltime employees who have an average wage of $50,000 or less.
  • Shared Responsibility: Individuals will be required to have health insurance coverage and will be assessed a "shared responsibility payment" through the tax system for every month that they are without coverage. An exemption will be available for individuals without access to affordable coverage. Although the bill language is silent on an employer mandate the committee summary of the bill poses various options for the committee to consider, including a requirement that employers that do not contribute a certain percentage towards the cost of employee health coverage would be required to pay a fee. Small employers are exempt.
  • Health Information Technology: Requires the development of standards-based, interoperable systems to facilitate the electronic enrollment of individuals in federal and state health and humans services programs. Awards grants to state or local governments to develop new or adapt existing technology to simplify the enrollment and eligibility processes across a range of health and human services programs.
  • Long-Term Care Services and Supports: Establishes the "CLASS" program which is a voluntary long term care insurance program to provide cash benefits, advocacy services, and counseling for individuals who have functional limitations expected to last more than 90 days. The program is funded through beneficiary premiums paid into a fund managed by the Secretary of the Treasury. Employers who automatically enroll employees will receive a 25 percent premium credit.
  • Government-Sponsored Plan: A public plan will be created to compete with private insurers in the "Gateway." Although not included in the bill language, the committee summary discusses that under the public plan, reimbursement rates for providers would be set at Medicare rates plus ten percent.

House Committees Announce Outline of Health Reform Proposal

The three committees with jurisdiction over health reform in the House of Representatives, the Energy and Commerce, Ways and Means, and Education and Labor Committees, have released a draft outline of their health reform proposal. Components of the proposal include:

  • Investments in the health care workforce to improve access to primary care.
  • Investments in prevention and public health programs.
  • Insurance market reforms that would prohibit pre-existing condition exclusions, prohibit rating based on health status, gender, or occupation, and limit premium variation by age.
  • Creation of a National Health Insurance Exchange for individuals and small employers to choose from private health insurance options or a new public plan option. It would allow states to develop state or regional exchanges.
  • Sliding scale premium subsidies in the Exchange for individuals and families with incomes between Medicaid eligibility and 400 percent of the federal poverty level. It includes small business tax credits for the purchase of coverage.
  • Creation of various levels of standardized benefits and cost-sharing arrangements with an independent advisory committee to make recommendations on benefit packages.
  • A mandate for all individuals to have health insurance coverage, except in cases of hardship.
  • Employers would be required to offer coverage or pay into a fund. Small low-wage businesses would be exempt.
  • Reductions in payments to Medicare Advantage plans and new provider payment methods to promote coordinated care and reward quality and efficiency.

House Democrat Coalitions Release Public Plan Principles

The "New Democrat Coalition" representing 69 moderate democrats and the "Blue Dog Coalition" representing 51 conservative democrats in the House of Representatives recently released principles for a public plan option to compete with private insurers. Both coalitions agree that a public plan must compete on a level playing field with private insurers and must not pay Medicare rates, not require provider participation, not be managed by those regulating the market, be self-sustaining and not subsidized by tax revenue, be actuarially sound, follow the same rules and regulations as private plans, and establish a reserve fund as private plans are required to do now. They both stress that premium subsidies should be available for the purchase of a private or public plan. The Blue Dog Coalition also states that a public plan should only be available as a fallback option in markets where it is deemed that there is inadequate competition and cost containment.

State Spotlight

Politics Stall Movement of Health Care Legislation in New York

With two weeks left in the scheduled legislative session, political upheaval in the State Senate has halted legislative action in New York. On June 8th, Senators Espada and Monserrate defected to the Republican Party, shifting the 32 member Senate majority to Republican control. Since then, confusion has ensued, party loyalty has waivered, legal challenges have been brought, and control of the Senate remains unresolved to date.

Prior to the Senate unrest, four pieces of health care legislation championed by Governor Paterson were moving through the Legislature. The first bill would require health insurance plans to receive prior approval of rates for individual and small group products before they go to market, allow the Insurance Department to modify rates, and require a medical loss ratio of 85 percent for individual and small group products. The second bill, the Governor¿s "Managed Care Reform" bill, would make a number of changes to managed care processes such as limiting the ability of plans to recoup overpayments to providers and reducing the timeframe for payment of claims to providers. The third bill would expand COBRA continuation coverage from 18 to 36 months and the Governor¿s fourth bill would require 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 unresolved political situation in the Senate has stalled these and other pieces of legislation. The Legislature will need to return and resolve some legislative issues, but it is unclear if they will address these pieces of health care legislation when they return.

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