ICYMI: Business Executives Say Healthcare Bills Do Not Reign in Costs
Posted by The Campaign on December 14, 2009 at 12:17 PM
Bloomberg reporter Alex Nussbaum writes that executives from more than a dozen businesses as well as senior research associate, Paul Fronstein, oppose current health reform bills' disregard for cost control.
Here are a few key excerpts:
"President Barack Obama’s $1 trillion health-care overhaul won’t buy corporate America relief from medical costs that more than doubled in the last decade, chief executive officers of more than a dozen U.S. companies said."
"What it won’t do is fundamentally alter a system in which medical costs routinely outpace inflation, hurting U.S. competitiveness, said Scott Davis, CEO at UPS, the world’s largest package shipper with 340,000 U.S. workers. 'Cost control ought to be at the base of any health-care reform, and I’m not sure it’s there,' Davis said in an interview from his Atlanta headquarters."
"'What’s currently on the table isn’t good enough, but I expect it to get better,' said [Steven Burd, CEO at Safeway], who has traveled to Washington 11 times this year to lobby on health care.'I wouldn’t like to see what’s in there today passed, but I know people are going to try to strengthen transparency. I know people are going to try to eliminate some of this cost shift.'"
"'If your goal is to maintain the benefit plan you’re offering today, as a large employer, there’s not a lot to help you,' [Paul Fronstin, a senior research associate at the Employee Benefit Research Institute] said."
For the full article, click here.
ICYMI: Small Businesses Critique Reform Legislation -- Not Enough Cost Control
Posted by The Campaign on December 14, 2009 at 11:06 AM
A Minneapolis Star Tribune reporter writes about health care legislation's lack of cost control and its detrimental impact on small businesses.
Here are a few key excerpts:
"Yet Glenn is not celebrating as Congress stands at the brink of passing health care legislation. He thinks the pending bills have too many mandates and too little cost control. Public insurance option? No, thanks. Glenn's response is typical among the nation's millions of small-business owners, many of whom would face sweeping new requirements as Congress and President Obama try to expand health insurance coverage in the United States."
"...the business critique exposes what is widely viewed as one of the weaknesses of the proposed legislation: Too little focus on controlling the nation's soaring health care costs."
"'We think it's a terrible approach,' said Mike Hickey, Minnesota director for the National Federation of Independent Business (NFIB), which has 13,000 members in the state, with 115,990 employees. 'It's detrimental to the economy and small businesses during a very bad recession.'"
For the full article, click here.
FACT CHECK: Key Facts About McCarran-Ferguson
Posted by The Campaign on December 13, 2009 at 6:58 AM
Information on Repeal of McCarran-Ferguson
Click here for a letter that was sent to Representative Conyers this morning. The letter states that “the bills attempt to remedy a problem that does not exist.”
Click here for a letter that was sent to Senator Leahy and Representative Conyers on October 8, which says that “the two bills under consideration may be based on a misperception of the scope and impact of the McCarran-Ferguson Act.”
Here is a link to a CRS document that provides background on the McCarran Ferguson exemption: http://88.80.13.160/leak/crs/RL33683.pdf. On page 9 it states, “given the courts’ narrowing definition of the ‘business of insurance,’ they would not be likely, in any event, to find such activities as market allocation, tying, or monopolization protected by McCarran-Ferguson from the application of the antitrust laws.”
Health insurance is one of the most regulated industries in America. Here is a link to a chart showing how health insurance is regulated at both the federal and state level: http://www.ahip.org/content/default.aspx?docid=24689.
What People are Saying
In the Wall Street Journal this morning, Scott Harrington wrote the following: “Repealing the antitrust exemption for health insurers would not significantly increase competition, and it would not make health-insurance coverage either less expensive or more available. There is no evidence that the exemption has increased health insurers' prices or profits or contributed to higher market concentration.”………“In other words, the insurance industry's antitrust exemption is inconsequential to the health-care reform debate. It just distracts attention from important issues and further demonizes private health insurance.”
A recent BNA article said, “Attorneys who spoke to BNA said, however, there is no evidence that the act has been an impediment to either federal or private efforts to prevent or curtail anti-competitive conduct in these sectors.” The article also quoted Jack A. Rovner, with The Health Law Consultancy in Chicago: “While the law does not have much impact on the health insurance industry, it makes a good political target,” he said. “This is more about politics than an effort to correct anti-competitive conduct by health insurers because the fact of the matter is that repeal would not make a significant difference with respect to either compliance or enforcement,” Rovner said. “McCarran-Ferguson has never been a valid defense to the price-fixing or other per se antitrust law violations targeted by the legislation, whether pursued by government or private parties,” he added. “While repeal could have a significant impact on the balance of state and federal relations, the proposed legislation will not change a lot in the legal landscape concerning the way health and malpractice insurers are regulated,” he said.”
A recent Business Week article said “Repeal wouldn't be a simple process.”
"There would be quite a bit of confusion and legal action on the state and federal level as regulators try to figure out who's responsible for regulating what," says Joseph Paduda, principal of Health Strategy Associates, a managed-care consulting firm in Madison, Conn. Austin Frakt, a health economist and assistant professor at Boston University's School of Public Health, says lawmakers also would have to take into account the other parties that contribute to driving up health-care costs—including doctors, hospitals, and drug companies—which McCarran-Ferguson does not address.
Threatening a repeal of McCarran-Ferguson "doesn't seem like it has been thoroughly thought through," says Frakt. As with every aspect of the proposed reform, the question of whether to regulate insurance at the federal or state level "requires a nuanced approach."
Duke Professor Clark Havighurst wrote in Modern Healthcare that, “There is therefore no reason to think that the McCarran exemption is any broader in scope than the state-action doctrine, or that its repeal would change anything important.”
ICYMI: CMS Actuary Report on Senate Legislation
Posted by The Campaign on December 11, 2009 at 2:26 PM
Impact on National Health Expenditures: “In aggregate, we estimate that for calendar year 2010 through 2019, NHE would increase by $234 billion , or 0.7 percent, over the updated baseline projection that was released on June 29, 2009.” (Page 14)
“Total national health expenditures in the U.S. during 2010-2019 would increase by about 0.7 percent. The additional demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting, and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage.” (Page 19)
New Health Care Taxes: “We anticipate that such fees would generally be passed through to health consumers in the form of higher drug and device prices and higher premiums…” (Page 16)
Impact on employer coverage: “For example, some smaller employers would be inclined to terminate their existing coverage, and companies with low average salaries might find it to their – and their employees’ – advantage to end their plans, thereby allowing their workers to qualify for heavily subsidized coverage through the exchange.” (Page 7)
Individual mandate: “The penalty amounts for not having insurance coverage were not sufficiently large to have a sizable impact on the coverage decision.” (Page 6)
Independent Medical Advisory Board: “The Board’s efforts would be further complicated by provisions that prohibit increases in cost-sharing requirements and that exempt broad categories of Medicare expenditures from consideration.” (Page 9)
CLASS Act: “there is a very serious risk that the problem of adverse selection would make the CLASS program unsustainable.” (Page 14)
For the full report, click here.
ICYMI: The Wall Street Journal -- Medicare Buy-In Will Lead to Higher Costs
Posted by The Campaign on December 11, 2009 at 2:16 PM
A Wall Street Journal editorial predicts that the Medicare buy-in option will yield disastrous results.
Here are few key excerpts:
"A buy-in is…the political strategy [single-payer advocates] have tried since the Great Society: Ratchet down the enrollment age for Medicare, boost the income limits to qualify for Medicaid, and soon health care for the entire middle class becomes a taxpayer commitment."
"In the case of Medicare, this means expanding a program that is already going broke. Medicare reimburses doctors and hospitals at rates 70% to 80% below those of private insurers...all empirical research shows that it adds tens of billions of dollars to consumer health bills, and this will accelerate if several million new patients are added to Medicare. That means higher prices for health insurance."
"As for costs, how does adding new beneficiaries square with...promises that they will cut Medicare spending on paper by two percentage points a year for the next two decades—just as the baby boomers retire and health costs continue to climb?"
"The latest polls show public support for the Senate plan falling into the mid-30%-range. The remaining supporters must not be paying attention."
For the full article, click here.
ICYMI: Senate “Deal” Could Result in Higher Premiums
Posted by The Campaign on December 11, 2009 at 1:59 PM
The New York Times examines the much talked about “deal” that is being analyzed by the Congressional Budget Office (CBO).
Here are few key excerpts:
"Senate Democrats have provided few details about their latest health care proposal, but this much seems clear: Anyone who wants to buy the same health benefits as members of Congress, or to buy coverage through Medicare, should be prepared to fork over a large chunk of cash."
"But Mr. Francis warned against the Medicare buy-in proposal, which he said would undermine the new national plans and would leave people nearing retirement with insufficient coverage."
"Marilyn Moon, a health economist and former public trustee of Medicare, said that for people 55 to 64, Medicare premiums could be higher than premiums charged by private health plans."
"Health policy experts said that the people who chose to enroll in Medicare were likely to be heavy users of health care, with higher-than-average costs."
For the full article, click here.
ICYMI: Senate and House Bills Do Not Reach the Root of the Problem -- Spiraling Health Costs
Posted by The Campaign on December 10, 2009 at 1:55 PM
An Appleton Post-Crescent editorial urges Congress to shift its focus to the most pressing healthcare issue - exploding costs.
Here are a few key excerpts:
"Because what everybody wants is lower health care costs — and the Senate bill, so far, doesn't do nearly enough to address that. The House bill does even less."
"...the bill is likely to focus on increasing access to health insurance for more Americans — a noble goal. But without a major change in focus, it'll do little to get to the root of the problem — spiraling costs...And it will do little to alleviate the worry of millions of Americans who are not just being priced out of health insurance. They're being priced out of health care."
For the full editorial, click here.
Fact Check: New Premium Tax Will Make Health Care More Expensive for Families and Employers
Posted by The Campaign on December 10, 2009 at 11:40 AM
Why New Taxes on Health Insurance Plans Mean Higher Prices for Families and Employers
One of the goals of health care reform is to make coverage more affordable, but the proposed annual $6.7 billion health insurance premium tax will have the opposite effect by increasing costs for families and employers across the country. The new health insurance premium tax will:
Increase premiums for families and small businesses: CBO has stated that new taxes on health plans will result in “higher premiums for private coverage.” These taxes would increase costs for families and employers at a time when they are already struggling with rising health care costs.
Cause immediate disruption for policyholders: While broader reforms will not begin until 2014, the new health insurance premium tax would go into effect in 2010 – after contracts have been negotiated and after individuals have enrolled in their plan for next year. Imposing new taxes next year that cannot be supported by current premium levels will cause significant disruption and higher costs for policyholders, and could impede the ability of health plans to meet promised benefits.
Create an unsustainable burden on health plans: Health plans will be required to pay a $6.7 billion tax beginning next year for the next 10 years, in addition to ‘stabilization’ fees of $25 billion in 2013, 2014, and 2015. According to Fortune magazine’s analysis of the companies listed under ‘Insurance and Managed Care’, earnings in 2008 totaled $8.61 billion with a profit margin of 2.2% -- ranking the industry 35th out of 53 sectors on the list.
The new tax is non-deductible and is layered on top of existing state and federal taxes paid by health insurance plans, including: premium taxes, assessments to support high risk pools, state and federal income taxes, employment taxes, sales and use taxes, and property taxes.
Put benefits at risk for families and employers: The new health insurance premium tax is assessed based on market share and is not tax deductible. As shown in this chart, the new tax will disproportionately impact health plans with the lowest net income, and for some health plans, could result in an effective tax rate of more than 100 percent. This would put at risk the reserves health plans are required by law to keep on hand to pay out benefits for families and businesses.
ICYMI: Mort Kondracke -- Congress' Reform Bills Will Increase Premiums and Healthcare Spending
Posted by The Campaign on December 10, 2009 at 11:22 AM
Mort Kondracke opposes the health bills being considered in Congress and provides polls showing the public's agreement. He writes that unless Congress implements cost-control measures, the current legislation will not "bend the curve" and costs will shift to private payers.
Here are a few key excerpts:
"Practically every aspect of the bills Democrats are considering - from covering the uninsured to taxes on providers, insurance reforms and Medicare cuts - will result in higher premiums for those with insurance."
"...unless Congress is willing to impose stricter cost controls than presently contemplated, many experts think there's little chance of 'bending the curve' of national health outlays or premiums."
"...a new Quinnipiac University poll shows that by 52 percent to 38 percent, the public opposes Congress's health care plans..."
"But the...new companion idea - allowing people ages 55 to 64 to buy into Medicare - would expand a government-run program that is already going broke."
"...because Medicare pays hospitals and doctors only 80 percent of what private plans do, the plan would lead to yet more shifting of costs to private payers, raising premiums."
"...insurance reforms - such as limits on age-based premium differentials - plus weak penalties for not being insured will give incentives for young people to go without insurance until they get sick or injured."
For the full article, click here.
ICYMI: Expanding Medicare Will Only Worsen The Cost Problem
Posted by The Campaign on December 10, 2009 at 9:12 AM
The Journal-Sentinel's Patrick McIlheran writes that expanding an already dysfunctional program like Medicare will perpetuate and worsen the increasing costs of healthcare in our country.
Here are a few key excerpts:
"Medicare is government-run. It's eight years away from fiscal ruin, its own trustees reported earlier this year. This deal trades a dysfunctional plan for a laughable one...It also reveals the futility of [current proposals] reaching one of its key goals: slowing the rise in health care spending."
"Congress [has] odd ideas about bending the cost curve. So far, the cost measures all aim to restrain how much all of us together spend on health care. Independent studies say Congress fails even at this, but that's another column. At any rate, whether Washington spends less overall isn't especially relevant to whether a hospital bill will bankrupt you."
"The president and his allies are not, in other words, seeking less costly health care. They're seeking to spend less. You can get the latter without the former; you just buy less care overall."
"This [paying doctors and hospitals less] already worsens health care prices. Because they lose money on Medicare, doctors and hospitals make it up on privately insured patients."
For the full article, click here.
