Kennedy Health Bill Expected Monday.

The Washington Post is reporting this morning that Sen. Edward M. Kennedy (D-Mass.) is circulating the outlines of sweeping health-care legislation that would require every American to have insurance and would mandate that employers contribute to workers’ coverage.

The newspaper noted that in many respects the plan being circulated adopts the most liberal approaches to health reform being discussed in Washington citing as an example the fact that the plan embraces a proposal to create a government-sponsored insurance program to compete directly with existing private insurance plans.

The draft summary, according to the Post, also calls for opening Medicaid to those whose incomes are 500 percent of the federal poverty level, or $110,250 a year for a family of four.

The post also reported that a top administration official said the White House expects Kennedy to unveil his bill Monday. A timetable released by Kennedy’s office calls for Democrats on the Senate health committee to meet Tuesday, with a bipartisan session scheduled for Friday. Committee markups could begin June 16.

If Kennedy keeps to that ambitious schedule, it would put him ahead of several other Democratic leaders crafting health bills.

Could this bill, with its proposed expansion of an already unsustainable entitlement program, just be a way of softening up the opposition for what appears to be a bit tamer bill that is expected to emerge from the Senate Finance Committee? In contrast to Kennedy’s bill, the legislation being crafted by Sen. Max Baucus (D – MT) will probably come across to lawmakers as a much easier to pass alternative.

With this activity going on in Washington next week, it should make for interesting discussion at the meeting of America’s Health Insurance Plans (AHIP) scheduled to kick-off Tuesday in San Diego. I will be there and will be blogging about what I am hearing.

Washington D.C. Residents Most Fit.

Well, the data is out, and for the second consecutive year, Washington D.C. has been declared to be the “fittest City” in America. In the second annual American Fitness Index (AFI), a publication released by the American College of Sports Medicine, Washington, D.C., edged out Minneapolis-St. Paul, Minn., Denver, Boston and San Francisco.

The index ranks 45 metropolitan statistical areas (MSAs)–a geographical measurement defined by the U.S. Census Bureau used by federal agencies in collecting, tabulating and publishing federal statistics–that include the city and surrounding suburban area. It measures each city’s performance on 30 indicators, including acres of parkland, death rate from cardiovascular disease, the number of primary care physicians per capita and the percent of residents who bicycle or walk to work. The metrics were gathered from government and non-profit organizations. (For the complete methodology, visit www.americanfitnessindex.org.)

According to the index, Washington, D.C., residents are healthier than other Americans for a number of reasons. They have increased access to farmers’ markets, at 13 per 1 million residents, compared to a national average of 11. Fewer residents smoke and have diabetes, and nearly 90% have health insurance compared to a national average of 86%.

I have always wondered who all those people are I see riding bikes along he Potomac and jogging around the National Mall when I am visiting the nation’s capital. I always thought they were tourists. But, now I must assume that they are local residents doing what D.C. residents do best – staying fit. Way to go Washington!

Needed: Ross Perot-like Charts to Explain Raising Healthcare Costs

Drew Altman, president and CEO of the Kaiser Family Foundation has published a column that points out the stark differences between what experts believe and what the public believes about some of the key issues in health reform.

Using data collected from numerous Kaiser polls, Altman points out that there is a wide gulf on basic beliefs about what is behind the problems in the health care system and key elements of reform, especially delivery reform.

For example, experts believe the health care system is full of unnecessary care and troubling variations in care, and they are committed to the long-term reform of the health care delivery system to make it more efficient, smooth out variations and produce greater value for the health care dollar. On the other hand, the polls show that the public has a very different world view: People think that underservice is a bigger problem than overservice.

Altman’s article includes a chart that shows a number of the areas where the experts and the public are at odds on basic beliefs about underlying problems, delivery reform, and health care costs.

Starting with “Basic Beliefs,” the chart compares the thinking of experts with that of the public on the issue of why healthcare costs so much. The experts say it is because of costly advances in medical technology, and that consumers do not have enough “skin in the game.” The public, however blame the drug and insurance companies for making too much money. As for having more skin in the game, they say they are already paying too much.

You can see Altman’s article and the full chart by clicking here.

Altman’s concludes is that more needs to be done to educate the public about why health costs are rising as fast as they are in the U.S. “As long as people think we can solve the problem of rising health care costs simply by eliminating waste, fraud and profiteering, the hard choices they hear experts and leaders talking about will not make much sense to them,” he writes.

But, Altman admits that this educational process will not be easy, saying that we probably need to produce Ross Perot-like charts and graphs, with basic facts about why we have the problems we do in the health care system.

I wouldn’t mind seeing some of  those charts myself.

IRS Announces 2010 HSA Limits

The Internal Revenue Service (IRS) has announced the 2010 inflation adjusted amounts for health savings accounts (HSAs) in Revenue Procedure 2009-29.

Annual contribution limitation. For calendar year 2010, the annual limitation on deductions under a high deductible health plan is $3,050 for an individual with self-only coverage, and $6,150 for an individual with family coverage.

High deductible health plan. For calendar year 2010, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less  than $1,200 for self-only coverage or $2,400 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $5,950 for self-only coverage or $11,900 for family coverage

This revenue procedure is effective for calendar year 2010.

8 Million People Now Covered by HSA-Qualified Health Plans

An annual census by America’s Health Insurance Plans (AHIP) of U.S. health insurance carriers released this week shows that the number of people covered by health savings accounts/high-deductible health plans (HSA/HDHPs) totaled 8.0 million in January 2009. This is up from 6.1 million in January 2008, 4.5 million in January 2007, and 3.2 million in January 2006.

The survey, which polled virtually all private health insurance carriers in the HSA/HDHP market, not only continued showed robust growth but growth within all segments of the market. Between January 2008 and January 2009, the fastest growing market for HSA/HDHP products was large-group coverage which rose by approximately 35 percent, followed by small-group coverage which similarly rose at 34 percent.

Likewise the gender of those adopting this form of coverage was evenly split with fifty-two (52) percent male and forty-eight (48) percent female participants.

Enrollment in the individual market also rose. As of January 1.8 million individuals were covered by HSA/HDHPs, up from 1.5 million covered lives in January 2008, and fifty-three (53) percent of all individual market enrollees-including dependents covered under family plans-were aged 40 or older.

The states with the highest levels of HSA/HDHP enrollment were California (854,000),

Florida (524,000), Illinois (497,000), Texas (476,000), Ohio (464,000), and Minnesota

(388,000).The highest premiums for HSA/HDHPs were reported in Massachusetts where they averaged $361 for single coverage and $925 for family coverage. The lowest priced plans were found in North Dakota where they averaged $210 for single coverage and $461 for family coverage.

Health savings account (HSA) plans give consumers incentives to manage their own health care costs by coupling a tax-favored savings account used to pay medical expenses with a high-deductible health plan (HDHP) that meets certain requirements for deductibles and out-of-pocket expense limits. Most HDHPs cover preventive care services (e.g., routine medical exams, immunizations, well-baby visits) without requiring the enrollee to first meet the deductible. The funds in the HSA are owned by the individual and may be rolled over from year to year. HSAs were authorized starting in January 2004.

Read the entire report here: http://www.ahipresearch.org/pdfs/2009hsacensus.pdf

Health Insurers Agree to End Charging Higher Premiums for Women.

Yesterday, on this blog, I referred to the national healthcare reform debate as being like a chess game with each side making moves in turn that will eventually lead to the final outcome.

In yesterday’s blog post, I wrote about how, on Monday of this week, a conciliatory position was struck by Senator Charles E. Schumer (D-NY) who said that any new government-run insurance program should be made to comply with all the rules and standards that apply to private insurance.

Schumer went on to list out a series of principles that should apply to any public plan. This included:

  • The public plan must be self-sustaining. It should pay claims with money raised from premiums and co-payments. It should not receive tax revenue or appropriations from the government.
  • The public plan should pay doctors and hospitals more than what Medicare pays. Medicare rates, set by law and regulation, are often lower than what private insurers pay.
  • The government should not compel doctors and hospitals to participate in a public plan just because they participate in Medicare.
  • To prevent the government from serving as both “player and umpire,” the officials who manage a public plan should be different from those who regulate the insurance market.

Still, the insurance industry through Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, responded to the Schumer plan by saying, “We are very, very grateful that members of Congress have been thoughtfully looking at our concerns.” But she said she still saw no need for a public plan “if you have much more aggressive regulation of insurance,” which the industry has agreed to support.

That was Monday. On Tuesday, Ignagni made her move on the chess board by offering to end the practice of charging higher premiums to women than to men for the same coverage. She made the offer in testifying before the Senate Finance Committee and with a nudge from Senator John Kerry, (D-MA), who, according to the New York Times, told Ignagni, “The disparity between women and men in the individual insurance market is just plain wrong, and it has to change.”

The Times pointed out that women are often charged 25 percent to 50 percent more than men for insurance providing identical coverage. In interviews last fall, insurance executives said they had a sound reason for the different premiums: Women ages 19 to 55 tend to cost more than men of the same age because they typically use more health care, especially in the childbearing years. Moreover, insurers said women were more likely to visit doctors, to get regular checkups, to take prescription medications and to have certain chronic illnesses.

The importance of the leveling the cost of insurance between men and women really has to do with plans for Congress to provide tax credits or subsidies to millions of people with low or moderate incomes to help them buy insurance. If the insurance being purchased is priced higher for a woman than it is for a man then the woman will end up receiving less assistance from the government than would a man.

The move on the part of Ignagni to agree to parity in pricing will help tidy up this issue and will better position the industry to continue argue against the need for a government-run health plan designed to compete with private plans to provide coverage for low income persons.

With these day-to-day serves and volleys, I may soon need to change my analogy from that of a chess match to that of a fast-paced tennis match.

Dems Offer Compromise on Proposed Government-run Insurance Program.

Time moves quickly inside the Beltway. It was just last week that Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, told a press briefing that Congressional leaders “will get to this a little later,” referencing the creation of any new government-run insurance program.

Apparently “a little later” was yesterday when Senator Charles E. Schumer of New York, the third-ranking member of the Senate Democratic leadership, proposed that any new government-run insurance program comply with all the rules and standards that apply to private insurance.

The New York Times said that the proposal was made in a bid to address fears that a public program would drive private insurers from the market. It added that this was an attempt by Democrats in Congress to shift the debate from the question of whether to create a public health insurance plan to the question of how it would work.

The Times reported that the chairman of the Senate Finance Committee, Baucus, had asked Schumer to seek a solution to the public plan issue that would be acceptable to the Obama administration as well as Republican leaders and the insurance industry. In his response, Mr. Schumer set forth these principles:

  • The public plan must be self-sustaining. It should pay claims with money raised from premiums and co-payments. It should not receive tax revenue or appropriations from the government.
  • The public plan should pay doctors and hospitals more than what Medicare pays. Medicare rates, set by law and regulation, are often lower than what private insurers pay.
  • The government should not compel doctors and hospitals to participate in a public plan just because they participate in Medicare.
  • To prevent the government from serving as both “player and umpire,” the officials who manage a public plan should be different from those who regulate the insurance market.

In addition, the Times reported that Schumer said the public plan should be required to establish a reserve fund, just as private insurers must maintain reserves for the payment of anticipated claims. And he said the public plan should be required to provide the same minimum benefits as private insurers.

This sounds to this blogger as if the Democratic leadership has made the first step to find a compromise solution on one major issue now separating  the two sides in this debate. Still, as the Times article points out, some thorny questions remain. Could states tax the premiums of a public plan, as they tax private insurance premiums? Would the public plan have to comply with state laws, as private insurers do? Would the government ever allow the public plan to become insolvent?

Alas, the biggest question may be whether the insurance industry will ever accept  a public plan of any kind. The Times reported that Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, responded to the Schumer plan by saying, “We are very, very grateful that members of Congress have been thoughtfully looking at our concerns.” But she said she still saw no need for a public plan “if you have much more aggressive regulation of insurance,” which the industry has agreed to support.

This chess match will continue for a while, but keep in mind the Democrats are in the position to end the game their way this fall through the budget resolution passed last week allowing them to consider healthcare reform legislation without the threat of a filibuster.

Needed: More Primary Care Docs.

A thoughtful piece on healthcare reform appeared yesterday on the HealthLeaders website, www.healthleadersmedia .com.

In an article entitled “It’s Time to Pay Primary Care More,” Elyas Bakhtiari noted that at a time when Democratic leaders in Congress prepare to introduce healthcare reform legislation, the Obama administration is expressing concern about the growing primary care doctor shortage and exploring ways to increase physician supply.

Bakhtiari applauded the national healthcare reform architects for paying attention to previous efforts in Massachusetts, where the promise of universal coverage has fizzled somewhat, in part because of a primary care shortage. He writes that faced with inadequate primary care access, patients are showing up at emergency rooms and adding to overall costs-ED visits have risen 7% and the cost of emergency care has climbed 17% in Massachusetts in the past two years.

Causing the shortage in primary care docs, Bakhtiari points out, is that primary care doesn’t pay enough to lure many of today’s medical students. He notes that when presented with the options of making $180,000 as a family practitioner and $400,000 or more as a proceduralist, students are increasingly choosing the latter.

Bakhtiari then points to the large government-run healthcare programs as driving this shortage. The pool of dollars for reimbursing physicians for Medicare and Medicaid is limited, writes Bakhtiari. And, he says, that while the payment disparity has benefited certain surgeons and specialists, the damage caused by a lack of primary care physicians affects the entire healthcare system.

The conclusion that Bakhtiari reaches is that reforming the entire healthcare system can only be done by making some very hard choices such as increasing payment to primary care at the expense of some of the higher-paid specialists.

It appears that the Congressional architects of healthcare reform may have gotten this same message. On Wednesday of this week, the New York Times reported that Senator Max Baucus, (D MT), and Senator Charles E. Grassley (R IW), had unveiled a set of detailed recommendations intended to slow the growth of Medicare, hold doctors and hospitals more accountable, and improve the care of patients with chronic illnesses.

Key to this effort, The Times said, is a proposed 5 percent bonus payment for office visits and other “primary care services” provided to Medicare patients by family doctors and internists. General surgeons in rural areas would receive a similar bonus, but Medicare payments to many other specialists would be reduced.

Of course, this proposal has made many providers nervous, but it is, I think, a step in the right direction. Government programs like Medicare and Medicaid now provide coverage for about half of our population. If healthcare reform developed this year contains a “Public Plan” option that would be available to the working population, this percentage will skyrocket. It is time that these programs are used help shape healthcare delivery into a more efficient, cost effective system.