Tuesday, June 22, 2010

Georgia's New Healthcare Budgets Precariously Balanced

In order to tackle the large deficit and significant revenue declines while still protecting Medicaid, lawmakers enacted a temporary hospital provider fee to prevent significant rate cuts to hospitals, doctors, nursing homes, and other health care providers and balance the budget for the upcoming fiscal year. This and other aspects of the healthcare budgets are discussed in the Georgia Budget & Policy Institute's latest analysis: Lawmakers Protect Medicaid, Serious Funding Gaps Loom for 2012.

Thanks in large part to the enhanced federal Medicaid funding made available to all states through the Recovery Act in 2009, Georgia is not implementing major cuts to Medicaid eligibility or services in FY 2011.

But now Georgia is in a tough position.

Georgia is among 30 states that have built its state budget assuming that enhanced Medicaid funding will be available through next June, when our budget year ends. The U.S. Congress is currently considering legislation to extend this funding until then, but unless they act soon to extend the enhanced Medicaid funding, Georgia's budget will be short $375 million.

If, instead of finding additional state revenue, lawmakers cut the Medicaid program to save $375 million, the state would also forgo more than $650 million in federal funds that are in the state's Medicaid base budget.

"The Great Recession has caused more Georgians to seek help for their families through Medicaid and losing a billion dollars would devastate a Medicaid budget that already relies significantly on temporary funding in FY 2011," said Timothy Sweeney, the Institute's senior healthcare analyst and author of the healthcare budget analysis.

"The cuts necessary to balance the budget without these funds would be devastating for individual Georgians and for the healthcare sector that depend on an adequately funded Medicaid program. In addition, many local economies rely significantly on their healthcare industry."

Other notable changes lawmakers made for this upcoming fiscal year are:

*10% cut to state grants to county health departments
* Increasing premiums families pay for children in PeachCare
*Increased funding for mental health services

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Tuesday, June 15, 2010

U.S. Departments of Health and Human Services, Labor, and Treasury Issue Regulation on "Grandfathered" Health Plans under the Affordable Care Act

Allowing Americans to Keep Current Health Plans or Choose a New Plan While Extending Important New Benefits to All Consumers

The U.S. Departments of Health and Human Services, Labor and Treasury today issued a new regulation that makes good on President Obama's promise that Americans who like their health plan can keep it.

The new regulation protects the ability of individuals and businesses to keep their current plan while providing important consumer protections that give Americans - rather than insurance companies - control over their own health care. The new regulation also provides stability and flexibility to insurers and businesses that offer health insurance coverage as the nation transitions to a more competitive marketplace in 2014 when businesses and consumers will have more affordable choices through exchanges.

"The Affordable Care Act gives American families more control over their health care by providing greater benefits, cost savings and protections," said Secretary of Health and Human Services Kathleen Sebelius. "Today, with the announcement of the new 'grandfather' rule, we're providing the market stability and flexibility to ensure that families and businesses can make the choices that work best for them."

While the Affordable Care Act requires all health plans to provide important new benefits to consumers, under the law, plans that existed on March 23, 2010 are exempt from some new requirements. The "grandfather rule" issued today makes it clear that these plans can continue to innovate and contain costs by allowing insurers and employers to make routine changes without losing grandfather status. Plans will lose their "grandfather" status if they choose to significantly cut benefits or increase out-of-pocket spending for consumers - and consumers in plans that make such changes will gain new consumer protections.

"The rule we are announcing today will allow employers to make routine and modest adjustments to co-payments, deductibles and employer contributions to their employees' premiums without forfeiting grandfather status. This flexibility will encourage employers to continue offering health coverage to their employees and help to ensure coverage for all Americans," said Secretary of Labor Hilda Solis.

All health plans - whether or not they are grandfathered plans - must provide certain benefits to their customers for plan years starting on or after September 23, 2010 including:

* No lifetime limits on coverage for all plans;

* No rescissions of coverage when people get sick and have previously made an unintentional mistake on their application; and

* Extension of parents' coverage to young adults under 26 years old;

For the vast majority of Americans who get their health insurance through employers, additional benefits will be offered, irrespective of whether their plan is grandfathered, including:

* No coverage exclusions for children with pre-existing conditions; and

* No "restricted" annual limits (e.g., annual dollar-amount limits on coverage below standards to be set in future regulations).

"The Affordable Care Act positions consumers, instead of insurance companies, as decision makers when it comes to their health care," said Assistant Treasury Secretary for Tax Policy Michael Mundaca. "The rule we're announcing today preserves individuals' ability to keep their current plan and provides strong consumer protections that give Americans more control over their health insurance choices."

Grandfathered health plans will be able to make routine changes to their policies and maintain their status. These routine changes include cost adjustments to keep pace with medical inflation, adding new benefits, making modest adjustments to existing benefits, voluntarily adopting new consumer protections under the new law, or making changes to comply with State or other Federal laws. Premium changes are not taken into account when determining whether or not a plan is grandfathered.

Plans will lose their grandfathered status if they choose to make significant changes that reduce benefits or increase costs to consumers. If a plan loses its grandfathered status, then consumers in these plans will gain additional new benefits including:

* Coverage of recommended prevention services with no cost sharing; and

* Patient protections such as access to OB-GYNs and pediatricians without a referral by a separate primary care provider.

Details about what routine changes insurers and employers can make without losing their grandfathered status, and the projected impact on large and small employer plans and the individual plan market can be found at http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html.

Most of the 133 million Americans with employer-sponsored health insurance through large employers will maintain the coverage they have today. Additionally, large employer-based plans already offer most of the comprehensive benefits and consumer protections that the Affordable Care Act will provide to all Americans this year - such as preventing rescission of coverage.

The roughly 42 million people insured through small businesses will likely transition from their current plan to one with the new Affordable Care Act protections over the next few years. Small plans tend to make substantial changes to cost sharing, employer contributions, and health insurance issuers more frequently than large plans. To help small businesses afford employee coverage, the Affordable Care Act includes a tax credit for up to 35% of their premium contributions.

The 17 million people who are covered in the individual health insurance market, where switching of plans and substantial changes in coverage are common, will receive the new protections of the Affordable Care Act sooner rather than later. Roughly 40 percent to two-thirds of people in individual market policies normally change plans within a year. In the short run, individuals whose plan changes and is no longer grandfathered will gain access to free preventive services, protections against restricted annual limits, and patient protections such as improved access to emergency rooms.

In 2014, small businesses and individuals who purchase insurance on their own will gain access to the competitive market Exchanges. These Exchanges will offer individuals and workers in small businesses with a much greater choice of plans at more affordable rates - the same choice as members of Congress. In fact, the Congressional Budget Office (CBO) has estimated that, on an apples-to-apples basis, premiums will be 14- 20 percent lower than they would be under current law in 2016 due to competition, lower insurance overhead, and increased pooling and purchasing power. Small businesses also will have more affordable options. CBO has estimated that a family policy for small businesses would be available in the Exchanges at a premium that is $4,000 lower than under current law in 2016.

These reduced premiums do not take into account the tax credits available to small businesses and middle class families to help make insurance affordable. These additional new choices and cost savings may further lower the likelihood that small businesses workers will remain in grandfathered health plans. Consumers insured through large employers are more likely to remain in grandfathered plans in 2014 and beyond.

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Thursday, June 10, 2010

Deloitte Survey: Majority of Insured Consumers Satisfied With Current Health Plan -- But Concerned About Changes Health Care Reform Act May Bring

/PRNewswire/ -- Of the 82 percent of consumers surveyed who consider themselves "well" or "adequately" insured, nearly all (96 percent) are somewhat or very satisfied with their health plans overall, according to a new Deloitte poll. (www.deloitte.com/us/consumerhealthpulse) Many are concerned the new health reform law will bring about significant changes to their current coverage. Of those enrolled in employer-sponsored health plans, 61 percent believe their employer will reduce benefits for dependents and retirees and 32 percent think employers will probably pay the penalty and discontinue health coverage for employees altogether.

"Anxiety about current and future health insurance coverage will continue to be a major issue for American consumers as health care reform is implemented nationally," stated Paul Keckley, Ph.D., executive director of the Deloitte Center for Health Solutions. "For example, our research shows that consumers who are covered through Medicare are more highly satisfied with their health care services than those in employer-sponsored plans."

Among survey respondents who consider themselves "very knowledgeable" about the Patient Protection and Affordable Care Act, many also indicated concerns over the impact of health reform on access to quality health care. They believe that some hospitals and medical practices will close (72 percent) and that their employers may drop their coverage (51 percent).

The cost of care is also an issue for the majority of consumers. Survey respondents anticipate increases in taxes (76 percent), health insurance costs, including premiums and out-of pocket expenses (65 percent), hospitals and physicians services (66 percent), and the cost of medications (54 percent) as reform is implemented.

Age is a major factor contributing to opinions about health care reform. In general, younger adults are more positive about health reform than older consumers. According to the survey, more than half (51 percent) of 18-34 year-olds believe that the reform bill will reduce health care costs in the long term, compared to respondents 45-54 years old (23 percent), 55-64 years old (36 percent), and 65 years old and above (30 percent).

"Younger consumers are beginning to embrace a new norm for health care," said Keckley. "Those in the younger age groups, (18-44 years old), are increasingly aware that the health care reform process has many moving parts and that they may find themselves entering into a new pact with employers."

The Deloitte survey also identified that consumers with employer-sponsored coverage seem to be the most skeptical and expect to experience negative impacts from the implementation of reform. This segment of survey respondents agree with the following:

-- The cost of the health reform act will be higher than expected (82
percent), which is significantly different from those who are
individually insured (68 percent).
-- The health reform act will not reduce health care costs in the
long-term (58 percent), which is significantly different from the
uninsured (43 percent).
-- Employers will pass the increased cost of health benefits through to
their employees (80 percent).

"Our research indicates that health insurance plans and employers may need to collaborate more than ever to help ease the anxiety of plan participants and employees as new health reform measures are implemented," said John T. Bigalke, vice chairman and Deloitte's health sciences and government industry leader.

Additional key findings from the survey include:

-- Eighty-four percent of all consumers surveyed have health insurance.
-- More than half (56 percent) of those surveyed believe that incentives
for doctors and hospitals to use electronic medical records will be
effective or very effective at improving the overall performance of
the health care system.
-- Cutting the rate of growth of Medicare costs will be only somewhat or
not effective at improving the overall performance of the health care
system according to 60 percent of those surveyed.
-- Sixty-nine percent of those surveyed believe the issue is not whether
an organization is for-profit or not-for-profit -- it's what they do
that matters.
-- Sixty-one percent of respondents agree that a mix of for-profit and
not-for-profit organizations stimulates positive competition and


This survey was conducted via telephone interviews within the United States by Harris Interactive on behalf of the Deloitte Center for Health Solutions from May 21-24, 2010 among 1,019 adults ages 18 years old and above. Results were weighted to reflect the U.S. adult population. The survey results have a sampling error of +/- 3 percentage points at the 95% confidence level.

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Tuesday, June 08, 2010

Secretary Sebelius Announces $51 Million in Affordable Care Act Grants to Innovate, Improve and Enhance Health Insurance Premium Rate Review

New grant program providing $250 million to states over next five years will strengthen oversight of insurance premiums and rate hikes

HHS Secretary Kathleen Sebelius today (June 7) announced the availability of $51 million in Health Insurance Premium Review Grants through the Affordable Care Act. These funds are the first round of grants available to states through a new $250 million grant program to create and strengthen insurance rate review processes.

"This is an important step in putting consumers back in control of their health care," said Secretary Sebelius. "These new grants will help states protect consumers and small employers by holding insurers accountable for unreasonable insurance rate increases that have made coverage unaffordable for many American families. By strengthening oversight of insurance premiums, these grants will help put affordable coverage back within the reach for Americans who have been hit hard by skyrocketing costs."

All states and the District of Columbia are eligible for this first round of rate review grants. To receive a grant, a state must submit a plan for how it will use grant funds to develop or enhance its process of reviewing and approving, disapproving, or modifying health insurance premium requests. States with successful applications will receive a $1 million grant during the first round.

"These funds will help states strengthen their oversight capabilities and will allow states that do not currently review rates to establish a program," said Jay Angoff, Director of the Office of Consumer Information and Insurance Oversight. "By subjecting rates to new public scrutiny, the oversight of premium increases will ultimately help ensure that consumers receive substantial value for their insurance dollars."

In early May, Secretary Sebelius sent a letter to Governors and State Insurance Commissioners urging them to review the authority they have under their state laws to determine whether they have all of the regulatory tools needed to approve health insurance rates before they take effect.

Several provisions in the Affordable Care Act strengthen HHS' and states' oversight of insurance premiums and rate hikes. These include the Medical Loss Ratio, requiring insurers in the individual and small group markets to spend at least 80 percent of the premium dollar on health care, and insurers in the large group market to spend at least 85 percent of the premium dollar on health care; rate review, requiring insurers to justify unreasonable premium increases to state regulators and the Secretary of Health and Human Services; and grant funds for states to help create or strengthen reporting and review processes.

The Health Insurance Premium Review Grants that will be available during FY 2010 are only the first in a five-year grant program. HHS will take applications for a second round of state grants beginning in Fiscal Year 2011, after new regulations regarding rate review take effect. Second-round grants will allow states to further strengthen their rate review, and begin to provide the Secretary of HHS with the rate data required under the law.

This grant solicitation can be found at grants.gov.

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Thursday, June 03, 2010

HHS Announces Availability of $60 Million in Affordable Care Act Grants to Help People Navigate their Health and Long-term Care Options

HHS Secretary Kathleen Sebelius announced the availability of $60 million in Affordable Care Act grants to states and communities to help individuals and their caregivers better understand and navigate their health and long-term care options.

Through this opportunity made possible by the Affordable Care Act HHS' Administration on Aging (AoA) and the Centers for Medicare & Medicaid Services (CMS) will work collaboratively to award funds for an integrated approach that focuses on the unique needs of seniors, disabled Americans and their caregivers as they seek health care and long-term care.

"The Affordable Care Act seeks to lower health care costs, improve the quality of health care and perhaps most importantly give people more control over their own care. These new grants, authorized under the new law, will help seniors, individuals with disabilities and their families get better quality care and more control. We've also streamlined the process for states and people who rely on these funds," said Secretary Sebelius.

"We know how difficult it can be for caregivers and patients to try and deal with a sudden illness or chronic disease while at the same time trying to navigate through a complex health care system to figure out where you can get help. These new funds that we have bundled together will help promote better opportunities for coordination of health and long-term supports," said Sebelius.

The purpose of this new grant program authorized by the Affordable Care Act is to create streamlined, coordinated statewide systems of information, counseling, and access that will help people find consumer-friendly answers they seek to meet their health and long-term care needs. AoA and CMS will administer the funding through separate announcements, but will coordinate implementation and monitoring through a single process.

Some specific areas of focus will include assisting individuals who are under-served and hard to reach with information about their Medicare and Medicaid benefits, helping older adults and individuals with disabilities live at home or in settings of their choosing with the right supports, assisting people transition from hospital or nursing home stays back into the community, and strengthening linkages between the medical and social service systems.

"When it comes to long-term health care, each patient has a unique mix of complex medical and social needs that must be considered when seeking care," said Marilyn Tavenner, acting CMS administrator. "Our health care system can offer many options to meeting those needs from traditional nursing home care to home and community-based services. Making patients and their families aware of these options will help them make inherently difficult decisions about long-term care. This integrated program will help families make informed choices and make sure patients have more control over their own care."

AoA and CMS have provided grants to states for several years to develop person-centered systems of information, counseling and access to make it easier for individuals to learn about and access their health and long-term services and support options. This grant program through the Affordable Care Act strengthens and enhances the ability of states to truly integrate the medical and social services care models.

"AoA's national network of community-based organizations has long served as the central place for individuals and families seeking information and help to address health and long term care challenges. This collaborative opportunity between AoA and CMS will further strengthen the network's capacity to help people in a more coordinated and comprehensive way in the communities where they live," said Kathy Greenlee, assistant secretary for aging.

Funds will be available to states, area agencies on aging (aaa's), State Health Insurance Assistance Programs (SHIPs) and Aging and Disability Resource Centers (ADRCs). Through the grant program, states and local aging and disability programs will receive funds to:

* provide outreach and assistance to Medicare beneficiaries on their Medicare benefits including prevention;
* use additional funds through a competitive process to provide Options Counseling on health and long-term care through ADRCs;
* use additional funds through a competitive process to strengthen the ADRCs role in Money follows the Person program and support state Medicaid agencies as they transition individuals from nursing homes to community-based care; and
* coordinate and continue to embed tested Care Transition models that integrate the medical and social service systems to help older individuals and those with disabilities remain in their own homes and communities after a hospital, rehabilitation or skilled nursing facility visit.

"CMS and AoA share a long-standing goal of expanding access to community-based care for the elderly and individuals with disabilities. The Affordable Care Act provides significant resources for state Medicaid agencies and providers to balance the nation's long-term care systems and assure that individuals have a choice of where and how they receive their services," said Cindy Mann, director of CMS's Center for Medicaid, CHIP, and Survey and Certification.

The announcement combines funding opportunities from several provisions in the Affordable Care Act signed into law by President Obama on March 23, 2010, including the Role of Public Programs (Title II, Sections 2403 - Money Follows the Person and 2405 - Funding for Aging and Disability Resource Centers) and Improving the Quality and Efficiency of Health Care (Title III. Section 3306 - Funding for Outreach and Assistance for Low-Income Programs).

These grants also complement President Obama's "Year of Community Living Initiative," which focuses on better serving those individuals with disabilities who need ongoing services and support programs in the community such as those provided by AoA, CMS and other HHS agencies.

The deadline for applications is: Monday, July 30, 2010. Grants will be awarded in September 2010. For more information about this grant opportunity, please visit http://www.aoa.gov/AoARoot/Grants/Funding/index.aspx or www.grants.gov.

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Wednesday, June 02, 2010

ObamaCare: Giant Meteor Scheduled to Strike in 2014

/PRNewswire/ -- Some argue that ObamaCare isn't ripe for legal challenge, since the most onerous requirements won't be in effect until 2014. By then, the machinery for implementation, and associated "stakeholders," will be cemented in place and much harder to dislodge.

The effect, however, is already being felt, argues attorney Andrew Schlafly, writing in the summer issue of the Journal of American Physicians and Surgeons (http://www.jpands.org/vol15no2/schlafly.pdf). Schlafly is general counsel for the Association of American Physicians and Surgeons (AAPS), which filed suit in the District of Columbia on March 26, three days after the Patient Protection and Affordable Care Act (PPACA or "ObamaCare") was signed into law (www.aapsonline.org/hhslawsuit).

"By analogy," he writes, "if we knew that a giant meteor would crash into the Earth in 2014, it would have a huge immediate impact on behavior today."

After enactment of PPACA, there was a 10 percent drop in the value of health-related stocks, while the rest of the stock market was rising.

Some physicians are planning an early retirement, and bright students will forgo a medical career because they want to practice "innovative medicine in the free market rather than Post Office-style medicine controlled by government bureaucrats."

Likely physician shortages may keep businesses from relocating to rural areas, and anticipated new costs may keep businesses from expanding.

AAPS argues that it is an unconstitutional "taking" to force individuals to buy insurance they do not want, and which may not cover the medical care that they eventually do need.

Mandatory insurance has failed in Massachusetts, where there have been relatively few uninsured, and imposing that approach on a nation 50 times as large as and less wealthy than Massachusetts is likely to be a still bigger failure.

Schlafly cites a reason for cautious optimism: free enterprise could still expand "amid the rubble and ruins wrought by this legislation."

In addition to overturning the insurance mandates, the lawsuit asks the Court to demand an honest accounting of the solvency of the Medicare and Social Security programs, and to invalidate a rule that seniors must forfeit all Social Security benefits if they decline to participate in Medicare Part A, with its increasingly draconian restrictions.

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