Health and Human Services Secretary Kathleen Sebelius today released a new analysis showing that, without the Affordable Care Act, up to 129 million non-elderly Americans who have some type of pre-existing health condition, like heart disease, high blood pressure, arthritis or cancer, would be at risk of losing health insurance when they need it most, or be denied coverage altogether. Under the full range of policies in the Affordable Care Act to be enacted by 2014, Americans living with pre-existing conditions are free from discrimination and can get the health coverage they need, and families are free from the worry of having their insurance cancelled or capped when a family member gets sick, or going broke because of the medical costs of an accident or disease. Repealing the law would once again leave millions of Americans worrying about whether coverage will be there when they need it.
“The Affordable Care Act is stopping insurance companies from discriminating against Americans with pre-existing conditions and is giving us all more freedom and control over our health care decisions,” said Secretary Sebelius. “The new law is already helping to free Americans from the fear that an insurer will drop, limit or cap their coverage when they need it most. And Americans living with pre-existing conditions are being freed from discrimination in order to get the health coverage they need.”
The analysis found that:
· Anywhere from 50 to 129 million (19 to 50 percent) of Americans under age 65 have some type of pre-existing condition. Examples of what may be considered a pre-existing condition include:
· Heart disease
· Cancer
· Asthma
· High blood pressure
· Arthritis
· Older Americans between ages 55 and 64 are at particular risk; 48 to 86 percent of people in that age bracket live with a pre-existing condition.
· 15 to 30 percent of people under age 65 in perfectly good health today are likely to develop a pre-existing condition over the next eight years.
· Up to one in five Americans under age 65 with a pre-existing condition – 25 million individuals – is uninsured.
Prior to the Affordable Care Act, in the vast majority of states, insurance companies in the individual market could deny coverage, charge higher premiums, and/or limit benefits based on pre-existing conditions. Surveys have found that 36 percent of Americans who tried to purchase health insurance directly from an insurance company in the individual insurance market encountered challenges purchasing health insurance for these reasons.
A number of protections are already in place thanks to the Affordable Care Act. Insurers can no longer limit lifetime coverage to a fixed dollar amount or take away coverage because of a mistake on an application. Young adults have the option of staying on their parents’ coverage up to the age of 26 if they lack access to job-based insurance of their own, and insurers cannot deny coverage to children because of a pre-existing condition.
Many uninsured Americans with pre-existing conditions have already enrolled in the temporary high-risk pool program called the Pre-existing Condition Insurance Plan (PCIP), which provides private insurance to those locked out of the insurance market because of a preexisting condition. The PCIP program – which has already saved people’s lives by covering services like chemotherapy – serves as a bridge until 2014, when insurance companies can no longer deny or limit coverage or charge higher premiums because of a preexisting condition. There is a Pre-existing Condition Insurance Plan available in every state, and more information can be found at www.HealthCare.gov or by calling 1-866-717-5826.
In addition to the ban on discrimination against people with preexisting conditions, in 2014, individuals and small businesses will have access to new, high-quality insurance choices through competitive marketplaces called health insurance exchanges.
-----
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Showing posts with label reform. Show all posts
Showing posts with label reform. Show all posts
Tuesday, January 18, 2011
Thursday, November 04, 2010
What Now, for Health Reform?
/PRNewswire/ -- The following is released by Lockton:
Human resource and benefits managers--and perhaps a lot of CEOs and CFOs--who in recent weeks had begun thinking seriously about the impact of federal health reform on their profitability, workforce structure and health plan viability, may have awoken Nov. 3 asking, "What now?"
What now, indeed. As Republican candidates in federal, state and local races swept into office in historic numbers, promising a change in the course of government, attention has centered on the impact of the election results and on the future of the federal health reform law.
The answer is: Don't expect much in the way of change. At least not yet.
Repeal is Not an Option...For Now
There was a never a chance that Republican mid-term victories, under the most optimistic of projections, would or could unravel the health reform law. Even had Republicans managed to capture control of the Senate in addition to their reclamation of the House, the health reform law was in no danger of repeal. Any attempt by Congress to do that would be vetoed by President Obama, and the Republicans lack the 67 Senate votes necessary to override a Presidential veto. Any serious attempt at repeal must await the results of the 2012 elections. Repeal will require the complete reversal of 2008: Republican control of the White House and both chambers of Congress.
If the GOP cannot now outright behead the law, can they strangle it by denying it funding? To be sure, the funding issue is the law's weak underbelly. The law requires federal funding of more than 100 key components of the bill, most notably grants to states to establish insurance exchanges by 2014, and of course the $500 billion necessary to provide subsidies toward individuals' purchases of insurance in the exchanges. Federal taxpayers are also picking up, for the first several years, all or nearly all of the additional Medicaid expenses associated with the expansion of Medicaid eligibility.
Risky Business
But holding up the federal budget - threatening the shutdown of the government - is risky business. Many voters are weary of partisanship and are looking for Congress to make something good happen. Republicans must remember that according to a number of exit polls, voters identified the economy as their main concern, by a wide margin (about 62% of voters picked the economy as their primary issue; only 18% cited the health reform law). The American electorate wants results.
The new makeup of the Congress doesn't bode well in that regard. Among the many Democrats swept out of the House are a significant number of self-styled moderates, known as "Blue Dogs." This purging of Democratic moderates means we'll now have in the Congress, particularly on the Democratic side of the aisle, a caucus whose center of gravity is a fair bit farther left than before. Throw in a Republican majority infused with new blood drawn from the mid- to far-right, and you have all the makings of political gridlock.
What's in Store?
So what will happen, then? Our best guess, for the short term, is that Republicans in the House will pass a symbolic bill repealing the health reform law, a bill that will go nowhere in the Senate. Again, here the Republicans must be prudent. Voters, particularly those in the all-important political center, are likely to have little tolerance for symbolic gestures while the nation's economy festers. For the same reason, if Republicans allow themselves to become bogged down over fringe issues, they will have misread the lessons of the election results.
Some nibbling around the soft edges of the health reform bill is likely. The business community is rightly aghast at the new Form 1099 reporting requirement appended to the law. The requirement compels businesses to issue a Form 1099 to every vendor - from copy repairmen to bartenders - to whom the company pays $600 or more during a year. House Republicans will move swiftly to repeal that provision, and will likely attract enough Senate Democrats - spooked by the election bloodletting - to get it done.
There is talk of attempting to do even more, perhaps repealing the "Individual Mandate" (the provision that compels nearly all Americans to have minimum health coverage by 2014 or face a modest penalty) or the "Free Rider Surcharge"(the penalty employers will pay beginning in 2014 if they fail to offer affordable coverage to full-time employees who instead obtain subsidized coverage in the insurance exchanges).
Such actions, like the health reform bill itself, may have unintended consequences. The health reform law requires insurers to issue policies to all applicants, without pre-existing condition restrictions. That works only if the nation gets everyone in the risk pool. Otherwise, people will simply wait to buy insurance until they get sick. Removing the individual mandate without relieving carriers of the obligation to issue a policy to all applicants, without restrictions, makes it even more difficult for private insurance companies to survive.
Business has many reasons to oppose the Free Rider Surcharge. But if the insurance exchange concept survives until 2014, and employers find then that their employees have another, taxpayer-subsidized option for health coverage available, and no surcharge binding the employers to their existing group health plans, a great many more employers may simply terminate their group coverage. That will improve employers' bottom lines (although many employees will fare worse in the exchanges), but not the nation's.
The Congressional Budget Office, when estimating the first decade's cost of the bill at $1 trillion, assumed only about 4-5 million Americans (net) who have group insurance today will lose it by 2019, as a result of the health reform law. A recent study suggests that the cost of federal subsidies in the insurance exchanges rises about $300 billion for every additional six million Americans who seek exchange-based coverage. If the 4-5 million estimate balloons to 40-50 million, the first decade's cost of the program leaps to $2.5 - $3 trillion, a number that is simply not sustainable.
Stay the Course
So we shall see. Experienced political pundits say that prognostications based on mid-term election results are almost always wrong. In other words, we should not read too much into the results, although there is still much to make of them. Our advice to employers who are beginning to assess the impact of health reform and chart a course to address the issues it poses, is to "stay the course." There is still much to do, and health reform isn't going anywhere, at least not for a while.
-----
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Human resource and benefits managers--and perhaps a lot of CEOs and CFOs--who in recent weeks had begun thinking seriously about the impact of federal health reform on their profitability, workforce structure and health plan viability, may have awoken Nov. 3 asking, "What now?"
What now, indeed. As Republican candidates in federal, state and local races swept into office in historic numbers, promising a change in the course of government, attention has centered on the impact of the election results and on the future of the federal health reform law.
The answer is: Don't expect much in the way of change. At least not yet.
Repeal is Not an Option...For Now
There was a never a chance that Republican mid-term victories, under the most optimistic of projections, would or could unravel the health reform law. Even had Republicans managed to capture control of the Senate in addition to their reclamation of the House, the health reform law was in no danger of repeal. Any attempt by Congress to do that would be vetoed by President Obama, and the Republicans lack the 67 Senate votes necessary to override a Presidential veto. Any serious attempt at repeal must await the results of the 2012 elections. Repeal will require the complete reversal of 2008: Republican control of the White House and both chambers of Congress.
If the GOP cannot now outright behead the law, can they strangle it by denying it funding? To be sure, the funding issue is the law's weak underbelly. The law requires federal funding of more than 100 key components of the bill, most notably grants to states to establish insurance exchanges by 2014, and of course the $500 billion necessary to provide subsidies toward individuals' purchases of insurance in the exchanges. Federal taxpayers are also picking up, for the first several years, all or nearly all of the additional Medicaid expenses associated with the expansion of Medicaid eligibility.
Risky Business
But holding up the federal budget - threatening the shutdown of the government - is risky business. Many voters are weary of partisanship and are looking for Congress to make something good happen. Republicans must remember that according to a number of exit polls, voters identified the economy as their main concern, by a wide margin (about 62% of voters picked the economy as their primary issue; only 18% cited the health reform law). The American electorate wants results.
The new makeup of the Congress doesn't bode well in that regard. Among the many Democrats swept out of the House are a significant number of self-styled moderates, known as "Blue Dogs." This purging of Democratic moderates means we'll now have in the Congress, particularly on the Democratic side of the aisle, a caucus whose center of gravity is a fair bit farther left than before. Throw in a Republican majority infused with new blood drawn from the mid- to far-right, and you have all the makings of political gridlock.
What's in Store?
So what will happen, then? Our best guess, for the short term, is that Republicans in the House will pass a symbolic bill repealing the health reform law, a bill that will go nowhere in the Senate. Again, here the Republicans must be prudent. Voters, particularly those in the all-important political center, are likely to have little tolerance for symbolic gestures while the nation's economy festers. For the same reason, if Republicans allow themselves to become bogged down over fringe issues, they will have misread the lessons of the election results.
Some nibbling around the soft edges of the health reform bill is likely. The business community is rightly aghast at the new Form 1099 reporting requirement appended to the law. The requirement compels businesses to issue a Form 1099 to every vendor - from copy repairmen to bartenders - to whom the company pays $600 or more during a year. House Republicans will move swiftly to repeal that provision, and will likely attract enough Senate Democrats - spooked by the election bloodletting - to get it done.
There is talk of attempting to do even more, perhaps repealing the "Individual Mandate" (the provision that compels nearly all Americans to have minimum health coverage by 2014 or face a modest penalty) or the "Free Rider Surcharge"(the penalty employers will pay beginning in 2014 if they fail to offer affordable coverage to full-time employees who instead obtain subsidized coverage in the insurance exchanges).
Such actions, like the health reform bill itself, may have unintended consequences. The health reform law requires insurers to issue policies to all applicants, without pre-existing condition restrictions. That works only if the nation gets everyone in the risk pool. Otherwise, people will simply wait to buy insurance until they get sick. Removing the individual mandate without relieving carriers of the obligation to issue a policy to all applicants, without restrictions, makes it even more difficult for private insurance companies to survive.
Business has many reasons to oppose the Free Rider Surcharge. But if the insurance exchange concept survives until 2014, and employers find then that their employees have another, taxpayer-subsidized option for health coverage available, and no surcharge binding the employers to their existing group health plans, a great many more employers may simply terminate their group coverage. That will improve employers' bottom lines (although many employees will fare worse in the exchanges), but not the nation's.
The Congressional Budget Office, when estimating the first decade's cost of the bill at $1 trillion, assumed only about 4-5 million Americans (net) who have group insurance today will lose it by 2019, as a result of the health reform law. A recent study suggests that the cost of federal subsidies in the insurance exchanges rises about $300 billion for every additional six million Americans who seek exchange-based coverage. If the 4-5 million estimate balloons to 40-50 million, the first decade's cost of the program leaps to $2.5 - $3 trillion, a number that is simply not sustainable.
Stay the Course
So we shall see. Experienced political pundits say that prognostications based on mid-term election results are almost always wrong. In other words, we should not read too much into the results, although there is still much to make of them. Our advice to employers who are beginning to assess the impact of health reform and chart a course to address the issues it poses, is to "stay the course." There is still much to do, and health reform isn't going anywhere, at least not for a while.
-----
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Click to read MORE news:
www.GeorgiaFrontPage.com
Twitter: @gafrontpage & @TheGATable @HookedonHistory
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Thursday, September 23, 2010
Medicare beneficiaries in donut hole will see 50-percent discount on brand name drugs in 2011
Vice President Joe Biden, the U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services (CMS) today announced that the nation's pharmaceutical manufacturers will provide 50 percent discounts on the cost of covered brand-name prescription drugs for beneficiaries in the Medicare Part D coverage gap, or donut hole, starting in 2011.
Vice President Biden and Secretary Sebelius made the announcement on a grassroots conference call with seniors from across the country. On the call, the Vice President and the Secretary discussed the benefits of the Affordable Care Act for seniors including the prescription drug discounts and provisions in the law that help fight fraud and make certain preventive care and annual wellness exams, free for most Medicare beneficiaries.
"Thanks to the Affordable Care Act, millions of people with Medicare who will fall into the Part D donut hole next year will pay less for their prescription drugs," said Vice President Biden. "The discount manufacturers will pay on brand-name drugs, helping millions of seniors who are struggling to make ends meet at the end of the month, and it's just one of the ways the new health care law helps make Medicare stronger."
The Affordable Care Act has helped reduce costs for Medicare beneficiaries, beginning with one-time rebate $250 rebate checks for beneficiaries who hit the donut hole in 2010.
"More than 1.2 million beneficiaries who have hit the donut hole so far this year have received their $250 rebate checks as part of the cost savings provisions in the Affordable Care Act, and millions more are on deck to get a check," said HHS Secretary Kathleen Sebelius. "Now, with these new agreements, people who rely on Medicare will see even more savings off their drug costs next year, and savings will continue even after the coverage gap is closed in 2020."
Seniors and people with disabilities enrolled in Medicare drug plans will also find next year that through the use of the new tools provided by the Affordable Care Act, premiums are stable and the number of prescription drug plans that voluntarily help fill the donut hole has increased. In August, CMS reported that the average 2011 Medicare prescription drug plan premium will remain similar to rates beneficiaries are currently paying this year - an increase of $1.
"Most Medicare prescription drug plan premiums will remain stable next year and beneficiaries will find there are clearer plan options and many plans that can help them save even more - like those plans that are offering benefits that help fill the donut hole," said CMS Administrator Donald Berwick, M.D. "They will find that the Affordable Care Act improves the value of drug coverage they get next year."
Beneficiaries will soon receive their 2011 Medicare & You handbook and find updated information at www.medicare.gov and 1-800-Medicare in mid-October. Users of the Medicare Plan Finder, available at www.medicare.gov, will be able to compare plans' quality summary rating from the previous year, identify which drugs are included on a plan's formulary, and compare the cost ranges for plans available in their communities.
-----
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Vice President Biden and Secretary Sebelius made the announcement on a grassroots conference call with seniors from across the country. On the call, the Vice President and the Secretary discussed the benefits of the Affordable Care Act for seniors including the prescription drug discounts and provisions in the law that help fight fraud and make certain preventive care and annual wellness exams, free for most Medicare beneficiaries.
"Thanks to the Affordable Care Act, millions of people with Medicare who will fall into the Part D donut hole next year will pay less for their prescription drugs," said Vice President Biden. "The discount manufacturers will pay on brand-name drugs, helping millions of seniors who are struggling to make ends meet at the end of the month, and it's just one of the ways the new health care law helps make Medicare stronger."
The Affordable Care Act has helped reduce costs for Medicare beneficiaries, beginning with one-time rebate $250 rebate checks for beneficiaries who hit the donut hole in 2010.
"More than 1.2 million beneficiaries who have hit the donut hole so far this year have received their $250 rebate checks as part of the cost savings provisions in the Affordable Care Act, and millions more are on deck to get a check," said HHS Secretary Kathleen Sebelius. "Now, with these new agreements, people who rely on Medicare will see even more savings off their drug costs next year, and savings will continue even after the coverage gap is closed in 2020."
Seniors and people with disabilities enrolled in Medicare drug plans will also find next year that through the use of the new tools provided by the Affordable Care Act, premiums are stable and the number of prescription drug plans that voluntarily help fill the donut hole has increased. In August, CMS reported that the average 2011 Medicare prescription drug plan premium will remain similar to rates beneficiaries are currently paying this year - an increase of $1.
"Most Medicare prescription drug plan premiums will remain stable next year and beneficiaries will find there are clearer plan options and many plans that can help them save even more - like those plans that are offering benefits that help fill the donut hole," said CMS Administrator Donald Berwick, M.D. "They will find that the Affordable Care Act improves the value of drug coverage they get next year."
Beneficiaries will soon receive their 2011 Medicare & You handbook and find updated information at www.medicare.gov and 1-800-Medicare in mid-October. Users of the Medicare Plan Finder, available at www.medicare.gov, will be able to compare plans' quality summary rating from the previous year, identify which drugs are included on a plan's formulary, and compare the cost ranges for plans available in their communities.
-----
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Monday, September 13, 2010
NAIC: Few Aware That Additional Health Care Reform Provisions Take Effect This Month
/PRNewswire/ -- Earlier this year, Congress passed sweeping reforms designed to revamp the health care system and increase access to care for many Americans. Yet, according to a new survey by the National Association of Insurance Commissioners (NAIC), many consumers are confused about the provisions and unsure of timing for actual implementation.
When asked to choose from four dates for which the first health care reform provisions officially take effect, only 14 percent correctly identified Sept. 23, 2010.
"Our survey findings are a clear indicator that most Americans are not aware of how soon some of the early health care changes may impact them," said NAIC President and West Virginia Insurance Commissioner Jane L. Cline. "It's essential for consumers to understand what to expect and when to consult their state insurance departments for more information."
When asked about specific reform provisions that take effect Sept. 23, most respondents correctly identified provisions concerning children. Specifically, 72 percent knew that children with pre-existing conditions may not be excluded from coverage and 70 percent understood that individuals up to age 26 may be covered under their parents' insurance.
However, half of the respondents were under the impression that employers with fewer than 50 employees will have to offer coverage to employees, and 47 percent incorrectly thought that all health insurance plans must cover approved preventive care and checkups without co-payment.
In reality, employers with fewer than 50 employees are not required by the new law to provide health insurance to staff, and all co-payments for preventive care and checkups are not eliminated. However, those qualifying for Medicare will receive new preventive care benefits that will include annual visits free of co-payments, but this is not mandated for all health insurance plans.
"The results show that while most consumers are well attuned to provisions specifically affecting their children's health care, they do not grasp the overall reform framework," said Cline. "It's promising to see this, but we feel it necessary for consumers to fully understand the changes and get informed about what to expect."
To keep up with the complex health reform process that includes multiple implementation phases in the coming years, the NAIC urges consumers to contact their state insurance department with questions. Go to http://map.naic.org/ to find your state contact information.
In addition, the NAIC website has a special section dedicated to health care reform questions and resources. Visit http://www.naic.org/index_health_reform_section.htm to learn more.
-----
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When asked to choose from four dates for which the first health care reform provisions officially take effect, only 14 percent correctly identified Sept. 23, 2010.
"Our survey findings are a clear indicator that most Americans are not aware of how soon some of the early health care changes may impact them," said NAIC President and West Virginia Insurance Commissioner Jane L. Cline. "It's essential for consumers to understand what to expect and when to consult their state insurance departments for more information."
When asked about specific reform provisions that take effect Sept. 23, most respondents correctly identified provisions concerning children. Specifically, 72 percent knew that children with pre-existing conditions may not be excluded from coverage and 70 percent understood that individuals up to age 26 may be covered under their parents' insurance.
However, half of the respondents were under the impression that employers with fewer than 50 employees will have to offer coverage to employees, and 47 percent incorrectly thought that all health insurance plans must cover approved preventive care and checkups without co-payment.
In reality, employers with fewer than 50 employees are not required by the new law to provide health insurance to staff, and all co-payments for preventive care and checkups are not eliminated. However, those qualifying for Medicare will receive new preventive care benefits that will include annual visits free of co-payments, but this is not mandated for all health insurance plans.
"The results show that while most consumers are well attuned to provisions specifically affecting their children's health care, they do not grasp the overall reform framework," said Cline. "It's promising to see this, but we feel it necessary for consumers to fully understand the changes and get informed about what to expect."
To keep up with the complex health reform process that includes multiple implementation phases in the coming years, the NAIC urges consumers to contact their state insurance department with questions. Go to http://map.naic.org/ to find your state contact information.
In addition, the NAIC website has a special section dedicated to health care reform questions and resources. Visit http://www.naic.org/index_health_reform_section.htm to learn more.
-----
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Monday, August 30, 2010
Sebelius announces 1 million Medicare beneficiaries have received prescription drug cost relief under the Affordable Care Act
U.S. Department of Health and Human Services Secretary Kathleen Sebelius today announced that more than 1 million Medicare beneficiaries have received prescription drug cost relief through the Affordable Care Act. As part of the health insurance reform law's step-by-step efforts to close the Medicare Part D prescription drug coverage gap, eligible beneficiaries who fall in this "donut hole" this year are mailed a one-time, tax-free $250 rebate check. More than a quarter of the 4 million checks Medicare expects to distribute have been received by eligible Medicare beneficiaries.
"Many seniors and people with disabilities on Medicare face extraordinary prescription drug costs, and too often stop following the drug regimens that their doctors have recommended as a result," said Secretary Sebelius. "These checks will make a difference in helping seniors continue to get the medications they need, and are one of many ways that the Affordable Care Act is helping seniors."
Nationwide, 1 million Medicare beneficiaries have already been mailed their rebates and more beneficiaries will be receiving checks in the coming months as they enter the coverage gap. Eligible beneficiaries receive these checks automatically in the mail when they reach the donut hole, and they don't have to sign-up to be eligible for the rebates.
Rebate checks will help people with their drug costs this year. Next year, those who fall into the donut hole will receive a 50-percent discount on covered brand name medications while in the donut hole. Every year, the amount Medicare beneficiaries pay in cost sharing will decrease markedly until the coverage gap is closed.
The closing of the donut hole is just one of the ways seniors benefit from the Affordable Care Act. In addition to savings on prescription drugs, the law provides new benefits to Medicare beneficiaries when they visit their doctor. All beneficiaries will receive free preventive care services like mammograms and certain colon cancer tests and a free annual physical starting in 2011 in Original Medicare. Additionally, seniors can expect to save an average of nearly $200 per year in premiums by 2018 compared to what they would have paid without the new law, and most beneficiaries will also see a significant reduction in their Medicare coinsurance as a result of the Affordable Care Act.
The Affordable Care Act also contains important new tools to help crack down on criminals seeking to scam seniors and steal taxpayer dollars. Last week, HHS and the Department of Justice held their second regional fraud prevention summit in Los Angeles that brought together law enforcement experts, providers and seniors to help utilize these new tools to fight fraud and protect seniors.
The Affordable Care Act strengthens the screenings for health care providers who want to participate in Medicaid or Medicare, enables enforcement officials to see health care claims data from around the country into a single, searchable database, and strengthens the penalties for criminals. The reduction in waste, fraud and abuse returns savings to the Medicare Trust Fund to strengthen the program into the future.
Seniors are encouraged to contact 1-800-MEDICARE to report any solicitations of personal information, or go to www.stopmedicarefraud.gov.
-----
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"Many seniors and people with disabilities on Medicare face extraordinary prescription drug costs, and too often stop following the drug regimens that their doctors have recommended as a result," said Secretary Sebelius. "These checks will make a difference in helping seniors continue to get the medications they need, and are one of many ways that the Affordable Care Act is helping seniors."
Nationwide, 1 million Medicare beneficiaries have already been mailed their rebates and more beneficiaries will be receiving checks in the coming months as they enter the coverage gap. Eligible beneficiaries receive these checks automatically in the mail when they reach the donut hole, and they don't have to sign-up to be eligible for the rebates.
Rebate checks will help people with their drug costs this year. Next year, those who fall into the donut hole will receive a 50-percent discount on covered brand name medications while in the donut hole. Every year, the amount Medicare beneficiaries pay in cost sharing will decrease markedly until the coverage gap is closed.
The closing of the donut hole is just one of the ways seniors benefit from the Affordable Care Act. In addition to savings on prescription drugs, the law provides new benefits to Medicare beneficiaries when they visit their doctor. All beneficiaries will receive free preventive care services like mammograms and certain colon cancer tests and a free annual physical starting in 2011 in Original Medicare. Additionally, seniors can expect to save an average of nearly $200 per year in premiums by 2018 compared to what they would have paid without the new law, and most beneficiaries will also see a significant reduction in their Medicare coinsurance as a result of the Affordable Care Act.
The Affordable Care Act also contains important new tools to help crack down on criminals seeking to scam seniors and steal taxpayer dollars. Last week, HHS and the Department of Justice held their second regional fraud prevention summit in Los Angeles that brought together law enforcement experts, providers and seniors to help utilize these new tools to fight fraud and protect seniors.
The Affordable Care Act strengthens the screenings for health care providers who want to participate in Medicaid or Medicare, enables enforcement officials to see health care claims data from around the country into a single, searchable database, and strengthens the penalties for criminals. The reduction in waste, fraud and abuse returns savings to the Medicare Trust Fund to strengthen the program into the future.
Seniors are encouraged to contact 1-800-MEDICARE to report any solicitations of personal information, or go to www.stopmedicarefraud.gov.
-----
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Fayette Front Page
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Wednesday, August 25, 2010
Health Reform Costs, Benefits Explained in NCPA Consumer's Guide
/PRNewswire/ -- The first detailed and objective consumer's guide on the impact of the Patient Protection and Affordable Care Act has just been released by the National Center for Policy Analysis (NCPA), titled "What Does Health Care Reform Mean To You? A Detailed Analysis"
"The guide does not ignore the benefits of the Affordable Care Act, but it also does not deny the costs," said NCPA President, CEO and Kellye Wright Fellow John C. Goodman. "This is the first unbiased summary of health care reform costs and benefits, and it's a unique resource."
"The consumer's guide answers questions about the coming changes and costs in Medicare, Medicaid, health insurance, employer coverage, and income tax returns," added Goodman.
Guide: http://www.ncpa.org/pdfs/What-Does-Health-Reform-Mean-for-You-A-Detailed-Analy sis.pdf
The research analyzes the costs, benefits and drawbacks of health reform changes, including:
-- Health insurance requirements and fines for individuals and employers
-- Expanded health coverage for up to 34 million people
-- Projected shortages of doctors, nurses and hospitals
-- Free health plan preventative services
-- New coverage protections for patients with pre-existing conditions
-- Reporting family income totals to your employer
-- Benefit and spending cuts for the elderly and disabled on Medicare
-- New taxes on private health insurance, drugs, medical devices
-- Insurance subsidies and changes in coverage options
To educate patients, doctors and all those affected by the new health care law, the NCPA has also produced a shorter version of the guide in a summary pamphlet, also titled "What Does Health Care Reform Mean To You?" The pamphlet is a succinct and unbiased overview of the Affordable Care Act changes, in layman's terms, to help consumers understand what to expect from health care reform.
The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care; Medicare and Social Security;
retirement; taxes; small business policy; and energy and environmental regulation.
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"The guide does not ignore the benefits of the Affordable Care Act, but it also does not deny the costs," said NCPA President, CEO and Kellye Wright Fellow John C. Goodman. "This is the first unbiased summary of health care reform costs and benefits, and it's a unique resource."
"The consumer's guide answers questions about the coming changes and costs in Medicare, Medicaid, health insurance, employer coverage, and income tax returns," added Goodman.
Guide: http://www.ncpa.org/pdfs/What-Does-Health-Reform-Mean-for-You-A-Detailed-Analy sis.pdf
The research analyzes the costs, benefits and drawbacks of health reform changes, including:
-- Health insurance requirements and fines for individuals and employers
-- Expanded health coverage for up to 34 million people
-- Projected shortages of doctors, nurses and hospitals
-- Free health plan preventative services
-- New coverage protections for patients with pre-existing conditions
-- Reporting family income totals to your employer
-- Benefit and spending cuts for the elderly and disabled on Medicare
-- New taxes on private health insurance, drugs, medical devices
-- Insurance subsidies and changes in coverage options
To educate patients, doctors and all those affected by the new health care law, the NCPA has also produced a shorter version of the guide in a summary pamphlet, also titled "What Does Health Care Reform Mean To You?" The pamphlet is a succinct and unbiased overview of the Affordable Care Act changes, in layman's terms, to help consumers understand what to expect from health care reform.
The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care; Medicare and Social Security;
retirement; taxes; small business policy; and energy and environmental regulation.
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Thursday, August 12, 2010
Consumer Advocates Ask for White House/HHS Probe of Health Insurers' Reduced Medical Care Spending, Even As Premiums Spike
/PRNewswire/ -- Consumer Watchdog and the Center for Media and Democracy today asked the Obama administration to investigate how the major for-profit health insurance companies are reducing their proportion of spending on health care in advance of health reform, even as premiums spike upward. In a letter to Health and Human Services chief Kathleen Sebelius, the groups compared insurers' actions to those of credit card companies, which spiked annual interest rates last year in advance of new federal regulations that would curb corporate abuses.
"Insurance companies appear to be making sure that when new federal rules for spending on health care kick in next year, they can keep their administrative bloat and profits intact," said Judy Dugan, research director of Consumer Watchdog.
The groups noted in the letter that insurance companies are lobbying intensely to distort new rules meant to require increased medical spending -- 80% of premium dollars for individual and small group policies and 85% for large group policies. The insurers seek to redefine billions of dollars in overhead and administration expenses as health care. By cutting their medical ratio now, they can make room for the redefined overhead expenses next year and meet but not exceed the 80% to 85% minimums.
Co-signer Wendell Potter of the Center for Media and Democracy said that red flags went up when Cigna, the last major insurer to report 2nd quarter results, showed a startling 6.4% drop in its medical spending ratio (also called medical loss ratio, or MLR) to 78.8%, a cut that appears unprecedented for a large insurer.
Read the full letter at http://www.consumerwatchdog.org/resources/sebeliusletterCWDCMD081110.pdf
The letter said:
"We write jointly as advocates for consumer rights and transparency to urge you to examine health insurers' reports of reductions in their proportion of medical spending in recent quarters, even as premiums have risen substantially in advance of the new health reform law. The major insurance companies' behavior looks suspiciously like that of credit card companies, which spiked annual interest rates in advance of consumer protection laws intended to restrict the conditions under which rates could go up.
"Like the credit card companies, health insurers assume that they can get away with what amounts to bilking their customers now to set up higher profits in the future. The health insurers appear to be cutting the proportion of premium dollars spent on medical care, in the case of CIGNA by likely record proportions, in advance of regulations intended to make them spend a higher proportion on care, and less on administrative bloat.
"Unlike with credit card companies, you have the power to curb their gaming of the system. The regulations that you put in place to enforce the new health law requirement that they spend 80% to 85% of customers' premium on health care will decide whether the companies cater to Wall Street or to their patients.
"The outcome of the regulations that are now being written will depend on your resistance to a massive lobbying effort by the insurance industry.
"As you know, insurers already expect that changes in the [medical loss ratio] calculation specified in the Patient Protection and Affordable Care Act will allow more insurer activities to be defined as 'health quality improvements' and counted as health care. At least some and possibly all of their state and federal taxes will also be deducted from premium revenue. The combined effect, depending on vagueness or laxness in final regulations, could amount to a 5% or larger insurer 'bonus' in calculating the MLR.
"See Consumer Watchdog comment on tax deduction regulation at http://www.naic.org/committees_lhatf_ahwg.htm
"The result of this bonus is that it pays for an insurer to suppress MLR as much as possible now, to keep future MLR at -- but not above -- 80% for individual and small business policies, and 85% for large groups. It is not possible for the public to accurately determine how the company's drastic reduction in MLR -- which increases its value to Wall Street--was accomplished.
"The Center for Media and Democracy and Consumer Watchdog ask that HHS demand much more detail about the nature of the MLR reductions from CIGNA and lesser reductions by other insurers, and make the results public. The examination should seek to determine if financial coercion of employers and individuals (through unaffordable and unjustifiable spikes in the rates of less profitable plans, or the targeted closure of some plans) was part of any shift to higher-deductible and lower benefit plans.
"HHS should also seek to tighten new definitions of what can be included in the medical loss ratio. The National Association of Insurance Commissioners, which is finalizing proposed regulations to decide how medical loss ratios are defined, is being lobbied by insurers and their lawyers with an intensity that makes the lobbying of Congress pale by comparison. As the proposed regulations are being finalized, they risk being further weakened. It will be up to HHS to right the balance.
"Presumably the MLR reductions at CIGNA and other companies involved what insurers call 'aggressive medical management' to reduce the amount of care provided enrollees. However, it likely also involved the movement of more enrollees into plans that require greater cost sharing and provide less care, through marketing or price coercion."
Insurers and their lobbyists count on the technical detail of financial reports and regulatory actions to mask their intent, said Consumer Watchdog and the Center for Media and Democracy.
Consumers don't notice until their premiums shoot through the roof and their health benefit are reduced. Regulators must resist corporate lobbies and act to protect ordinary citizens, the groups said.
Consumer Watchdog and the Center for Media and Democracy are nonprofit, nonpartisan consumer advocates. For more information, see www.consumerwatchdog.org and www.prwatch.org
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"Insurance companies appear to be making sure that when new federal rules for spending on health care kick in next year, they can keep their administrative bloat and profits intact," said Judy Dugan, research director of Consumer Watchdog.
The groups noted in the letter that insurance companies are lobbying intensely to distort new rules meant to require increased medical spending -- 80% of premium dollars for individual and small group policies and 85% for large group policies. The insurers seek to redefine billions of dollars in overhead and administration expenses as health care. By cutting their medical ratio now, they can make room for the redefined overhead expenses next year and meet but not exceed the 80% to 85% minimums.
Co-signer Wendell Potter of the Center for Media and Democracy said that red flags went up when Cigna, the last major insurer to report 2nd quarter results, showed a startling 6.4% drop in its medical spending ratio (also called medical loss ratio, or MLR) to 78.8%, a cut that appears unprecedented for a large insurer.
Read the full letter at http://www.consumerwatchdog.org/resources/sebeliusletterCWDCMD081110.pdf
The letter said:
"We write jointly as advocates for consumer rights and transparency to urge you to examine health insurers' reports of reductions in their proportion of medical spending in recent quarters, even as premiums have risen substantially in advance of the new health reform law. The major insurance companies' behavior looks suspiciously like that of credit card companies, which spiked annual interest rates in advance of consumer protection laws intended to restrict the conditions under which rates could go up.
"Like the credit card companies, health insurers assume that they can get away with what amounts to bilking their customers now to set up higher profits in the future. The health insurers appear to be cutting the proportion of premium dollars spent on medical care, in the case of CIGNA by likely record proportions, in advance of regulations intended to make them spend a higher proportion on care, and less on administrative bloat.
"Unlike with credit card companies, you have the power to curb their gaming of the system. The regulations that you put in place to enforce the new health law requirement that they spend 80% to 85% of customers' premium on health care will decide whether the companies cater to Wall Street or to their patients.
"The outcome of the regulations that are now being written will depend on your resistance to a massive lobbying effort by the insurance industry.
"As you know, insurers already expect that changes in the [medical loss ratio] calculation specified in the Patient Protection and Affordable Care Act will allow more insurer activities to be defined as 'health quality improvements' and counted as health care. At least some and possibly all of their state and federal taxes will also be deducted from premium revenue. The combined effect, depending on vagueness or laxness in final regulations, could amount to a 5% or larger insurer 'bonus' in calculating the MLR.
"See Consumer Watchdog comment on tax deduction regulation at http://www.naic.org/committees_lhatf_ahwg.htm
"The result of this bonus is that it pays for an insurer to suppress MLR as much as possible now, to keep future MLR at -- but not above -- 80% for individual and small business policies, and 85% for large groups. It is not possible for the public to accurately determine how the company's drastic reduction in MLR -- which increases its value to Wall Street--was accomplished.
"The Center for Media and Democracy and Consumer Watchdog ask that HHS demand much more detail about the nature of the MLR reductions from CIGNA and lesser reductions by other insurers, and make the results public. The examination should seek to determine if financial coercion of employers and individuals (through unaffordable and unjustifiable spikes in the rates of less profitable plans, or the targeted closure of some plans) was part of any shift to higher-deductible and lower benefit plans.
"HHS should also seek to tighten new definitions of what can be included in the medical loss ratio. The National Association of Insurance Commissioners, which is finalizing proposed regulations to decide how medical loss ratios are defined, is being lobbied by insurers and their lawyers with an intensity that makes the lobbying of Congress pale by comparison. As the proposed regulations are being finalized, they risk being further weakened. It will be up to HHS to right the balance.
"Presumably the MLR reductions at CIGNA and other companies involved what insurers call 'aggressive medical management' to reduce the amount of care provided enrollees. However, it likely also involved the movement of more enrollees into plans that require greater cost sharing and provide less care, through marketing or price coercion."
Insurers and their lobbyists count on the technical detail of financial reports and regulatory actions to mask their intent, said Consumer Watchdog and the Center for Media and Democracy.
Consumers don't notice until their premiums shoot through the roof and their health benefit are reduced. Regulators must resist corporate lobbies and act to protect ordinary citizens, the groups said.
Consumer Watchdog and the Center for Media and Democracy are nonprofit, nonpartisan consumer advocates. For more information, see www.consumerwatchdog.org and www.prwatch.org
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Wednesday, August 04, 2010
Medical Tourism Association Releases Healthcare Reform White Paper
(PR.com)-- The Medical Tourism Association has released an educational White Paper on Healthcare Reform, detailing what positive and negative effects healthcare reform is expected to have on both inbound, outbound and domestic medical tourism. Healthcare Reform passed into law in March 2010 and has both immediate implications and those to go into full effect in 2014. Many expect the reform will continue to raise healthcare and health insurance costs in the United States. As healthcare costs and health insurance costs rise in the United States this will push American patients to choose to travel domestically for medical tourism, a new term coined towards the provision of more affordable healthcare services within the US, or to leave the United States to travel abroad for medical care.
As stated by Devon Herrick of National Center for Policy Analysis, USA, “The recent Health Reform legislation contains virtually nothing to encourage patients and providers to control costs. By contrast, medical tourism represents global competition in health care, where providers compete on price and quality. Medical tourism is our best opportunity to encourage competition within the health care industry.”
The Healthcare Reform white paper is meant to give guidance and understanding on how the different aspects of healthcare reform will interact with medical tourism. The Medical Tourism White Paper can be read in the Healthcare Reform Updates section of the Medical Tourism Congress website. http://medicaltourismcongress.com/en/healthcare-reform-updates.html
“We have released this white paper in order to provide insight into healthcare reform and its different provisions, projecting how it may affect medical tourism. Many people around the world do not understand the lengthy healthcare reform document passed in the US and mistakenly think that it provides more affordable healthcare to Americans and that it will lower healthcare costs. Costs will likely go up under healthcare reform and this was reaffirmed in the recent medical tourism survey the MTA conducted with almost 100 insurance companies and employers, where almost 100% of respondents found that they believe costs will rise,” said Jonathan Edelheit, CEO of the Medical Tourism Association.
The healthcare reform and medical tourism white paper will be available at the MTA’s annual conference, The World Medical Tourism & Global Healthcare Congress, which will have a large focus on Healthcare Reform this year in Los Angeles, California from September 22-24th. The conference will focus on how healthcare reform affects employers, insurers, insurance agents, healthcare providers and patients and will peel back the onion of the thousands of pages of healthcare reform bill to look at how different aspects of health care reform will really work. www.medicaltourismcongress.com
The Medical Tourism Association also conducted a survey of over one hundred US insurance companies and US employers on the effect medical tourism will have upon them. The survey, “Healthcare Reform Survey Among Industry Stakeholders Discovers Similar Concerns,” July, 2010, shows a sample of the future growth potential of the medical tourism industry. 71 percent of insurance companies and employers felt healthcare reform was extremely positive for the medical tourism industry and more Americans would travel overseas under the new law. Employers and insurance companies know that healthcare reform will increase costs and medical tourism is one of the few ways to lower those costs. http://medicaltourismmag.com/article/healthcare-reform-survey.html
The Medical Tourism Association (Medical Travel Association), also known as the Global Healthcare Association, at http://www.MedicalTourismAssociation.com is the first international non-profit association comprised of the top international hospitals, healthcare providers, medical travel facilitators, insurance companies, and other affiliated companies and members with the common goal of promoting the highest level of quality of healthcare to patients in a global environment. Our Association promotes the interests of its healthcare provider and medical tourism facilitators members. The Medical Tourism Association has three mission-driven tenets: Education, Communication and Transparency.
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As stated by Devon Herrick of National Center for Policy Analysis, USA, “The recent Health Reform legislation contains virtually nothing to encourage patients and providers to control costs. By contrast, medical tourism represents global competition in health care, where providers compete on price and quality. Medical tourism is our best opportunity to encourage competition within the health care industry.”
The Healthcare Reform white paper is meant to give guidance and understanding on how the different aspects of healthcare reform will interact with medical tourism. The Medical Tourism White Paper can be read in the Healthcare Reform Updates section of the Medical Tourism Congress website. http://medicaltourismcongress.com/en/healthcare-reform-updates.html
“We have released this white paper in order to provide insight into healthcare reform and its different provisions, projecting how it may affect medical tourism. Many people around the world do not understand the lengthy healthcare reform document passed in the US and mistakenly think that it provides more affordable healthcare to Americans and that it will lower healthcare costs. Costs will likely go up under healthcare reform and this was reaffirmed in the recent medical tourism survey the MTA conducted with almost 100 insurance companies and employers, where almost 100% of respondents found that they believe costs will rise,” said Jonathan Edelheit, CEO of the Medical Tourism Association.
The healthcare reform and medical tourism white paper will be available at the MTA’s annual conference, The World Medical Tourism & Global Healthcare Congress, which will have a large focus on Healthcare Reform this year in Los Angeles, California from September 22-24th. The conference will focus on how healthcare reform affects employers, insurers, insurance agents, healthcare providers and patients and will peel back the onion of the thousands of pages of healthcare reform bill to look at how different aspects of health care reform will really work. www.medicaltourismcongress.com
The Medical Tourism Association also conducted a survey of over one hundred US insurance companies and US employers on the effect medical tourism will have upon them. The survey, “Healthcare Reform Survey Among Industry Stakeholders Discovers Similar Concerns,” July, 2010, shows a sample of the future growth potential of the medical tourism industry. 71 percent of insurance companies and employers felt healthcare reform was extremely positive for the medical tourism industry and more Americans would travel overseas under the new law. Employers and insurance companies know that healthcare reform will increase costs and medical tourism is one of the few ways to lower those costs. http://medicaltourismmag.com/article/healthcare-reform-survey.html
The Medical Tourism Association (Medical Travel Association), also known as the Global Healthcare Association, at http://www.MedicalTourismAssociation.com is the first international non-profit association comprised of the top international hospitals, healthcare providers, medical travel facilitators, insurance companies, and other affiliated companies and members with the common goal of promoting the highest level of quality of healthcare to patients in a global environment. Our Association promotes the interests of its healthcare provider and medical tourism facilitators members. The Medical Tourism Association has three mission-driven tenets: Education, Communication and Transparency.
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Thursday, July 29, 2010
Many Americans Still Confused About New Healthcare Reform Law and its Provisions
/PRNewswire/ -- Not sure what's in--and not in--the new healthcare legislation signed into law by President Barack Obama in March? You're not alone. More than 2,100 adults were given a list of 18 reform items and asked to identify what's included and what's not included in the law. Only four items were correctly identified by the majority of those polled.
Most (58 percent) know that the reform package will prohibit insurers from denying coverage to people because they are already sick; 55 percent know the law permits children to stay on their parents' insurance plan until age 26; and 52 percent realize that people who don't have insurance will be subject to financial penalties. Additionally, half are aware that employers with more than 50 employees will have to offer their workers affordable insurance.
These are some of the major findings of today's HealthDay/Harris Poll, conducted between July 15 to 19, 2010 among 2,104 adults (aged 18 and over).
Among other findings: 82 percent think the bill will result in rationing of health care or that it might (it won't); 79 percent don't know or aren't sure if drug companies will pay an annual fee, (they will); 73 percent don't know the law establishes a new tax on the sale of medical devices; 66 percent don't know or aren't sure if the legislation will result in insurance exchanges where people can shop for insurance, (it will); and 63 percent either aren't sure or don't know if the new law will increase the number of people eligible for Medicaid, (it will).
"The problem for the (Obama) administration is healthcare reform is fiendishly complicated because the healthcare system is fiendishly complicated, and it is not politically feasible to tear up the system and build it again," said Humphrey Taylor, chairman of the Harris Poll, Harris Interactive's long-running public opinion poll. "Instead you have to build on the system that you have. When you try to build on a fiendishly complicated system, you have fiendishly complicated reforms."
Another cause of the confusion is due to the long and heated political debate that surrounded the bill before it was passed, Taylor said.
"The level of ignorance and misinformation is sort of astounding," he said. "It seems people are still reacting to the rhetoric, not the substance of what is in the bill, because they don't actually know what is or is not in the actual legislation."
For more information, click here to read the full report and methodology. HealthDay's news report is available here. Full data on the poll and its methodology are available at Harris Interactive.
Note: Percentages may not add up exactly to 100% due to rounding.
Methodology
This survey was conducted online within the United States July 15 to 19, 2010 among 2,104 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents' propensity to be online.
All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words "margin of error" as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.
Respondents for this survey were selected from among those who have agreed to participate in Harris Interactive surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in the Harris Interactive panel, no estimates of theoretical sampling error can be calculated.
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Most (58 percent) know that the reform package will prohibit insurers from denying coverage to people because they are already sick; 55 percent know the law permits children to stay on their parents' insurance plan until age 26; and 52 percent realize that people who don't have insurance will be subject to financial penalties. Additionally, half are aware that employers with more than 50 employees will have to offer their workers affordable insurance.
These are some of the major findings of today's HealthDay/Harris Poll, conducted between July 15 to 19, 2010 among 2,104 adults (aged 18 and over).
Among other findings: 82 percent think the bill will result in rationing of health care or that it might (it won't); 79 percent don't know or aren't sure if drug companies will pay an annual fee, (they will); 73 percent don't know the law establishes a new tax on the sale of medical devices; 66 percent don't know or aren't sure if the legislation will result in insurance exchanges where people can shop for insurance, (it will); and 63 percent either aren't sure or don't know if the new law will increase the number of people eligible for Medicaid, (it will).
"The problem for the (Obama) administration is healthcare reform is fiendishly complicated because the healthcare system is fiendishly complicated, and it is not politically feasible to tear up the system and build it again," said Humphrey Taylor, chairman of the Harris Poll, Harris Interactive's long-running public opinion poll. "Instead you have to build on the system that you have. When you try to build on a fiendishly complicated system, you have fiendishly complicated reforms."
Another cause of the confusion is due to the long and heated political debate that surrounded the bill before it was passed, Taylor said.
"The level of ignorance and misinformation is sort of astounding," he said. "It seems people are still reacting to the rhetoric, not the substance of what is in the bill, because they don't actually know what is or is not in the actual legislation."
For more information, click here to read the full report and methodology. HealthDay's news report is available here. Full data on the poll and its methodology are available at Harris Interactive.
TABLE 1
KNOWLEDGE OF ITEMS THAT ARE INCLUDED IN REFORM BILL (PPACA)
"Please indicate if you believe each of the following is included (or
will result from) or is not included (or will not result from) the
health care reform bill that was signed by President Obama in March
of this year. If you don't know, please do not guess but
check "Not sure."
Base: All adults
Is Not
Is Included/ Included/
Will Result Will Not
From Result From Not
Sure
Not allowing insurers to deny
coverage to people % 58 9 34
because they are sick
Allowing children to stay on their
parents' insurance until % 55 9 35
they are 26 years old
Financial penalties for all
individuals who do not have or % 52 9 39
do not buy insurance
All employers with more than 50
employees must offer % 50 9 41
their employees affordable
insurance
Tax credits for small business to
provide insurance to % 43 14 43
their employees
Increasing the number of people who
are eligible for % 37 13 50
Medicaid
Insurance exchanges where people
can shop for % 35 14 52
insurance
A new tax on the sale of medical
devices % 27 13 60
An annual fee to be paid by drug
companies % 21 14 65
Note: Percentages may not add up exactly to 100% due to rounding.
TABLE 2
BELIEF THAT ITEMS NOT IN REFORM BILL (PPACA) ARE INCLUDED
"Please indicate if you believe each of the following is included (or
will result from) or is not included (or will not result from) the
health care reform bill that was signed by President Obama in March
of this year. If you don't know, please do not guess but
check "Not sure."
Base: All adults
Is Not
Is Included/ Included/
Will Result Will Not
From Result From Not
Sure
An increase in the federal
government's budget deficit % 45 13 42
Higher income taxes for the middle
class % 37 22 41
All Americans will have health
insurance % 36 29 35
New ways to ration health care % 36 18 46
A new government run health plan
to compete with % 36 22 43
private insurance plans
A cut in Medicare benefits % 33 21 45
Higher tax deductions from
workers' pay % 33 16 50
Panels to decide what care very
sick, older people % 30 26 44
should receive
Illegal aliens will have health
insurance % 28 27 45
Note: Percentages may not add up exactly to 100% due to rounding.
Methodology
This survey was conducted online within the United States July 15 to 19, 2010 among 2,104 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents' propensity to be online.
All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words "margin of error" as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.
Respondents for this survey were selected from among those who have agreed to participate in Harris Interactive surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in the Harris Interactive panel, no estimates of theoretical sampling error can be calculated.
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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
innovation.
Methodology:
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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"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
innovation.
Methodology:
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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Sunday, December 20, 2009
AHIP Statement On Senate Health Care Reform Legislation
/PRNewswire/ -- Karen Ignagni, President and CEO of America's Health Insurance Plans (AHIP), released the following statement today on the Senate health care reform legislation:
"The debate before us today is not whether insurance market reforms are needed. In fact, health plans proposed and support a complete overhaul of insurance market rules and new consumer protections to ensure all Americans have guaranteed access to affordable, portable coverage. The critical policy questions are whether the current legislation can bend the cost curve and result in a sustainable system. While the bill makes important improvements in access and takes steps towards cost-containment, it lacks accountability to ensure that costs are brought under control. Moreover, this bill includes provisions that will increase costs for families and small businesses and disrupt the quality coverage on which millions of Americans rely today."
Barriers to affordability:
-- A new $70 billion premium tax that will increase the cost of health
care coverage for millions of Americans and fall primarily on small
businesses and those who purchase coverage in the individual market.
-- More cost shifting to patients with private coverage as providers are
forced to make up for hundreds of billions in reduced Medicare
payments.
-- New market and rating rules that will increase premiums for
individuals and small businesses with coverage today.
Disruptions for current policyholders:
-- New regulatory requirements and benefit mandates that go into effect
beginning next year - before access provisions go into effect - that
will cause major disruption for millions who have already enrolled in
their plan for next year.
-- A new federal plan that would preclude many high-quality plans from
participating and increase complexity in the exchanges.
-- Arbitrary caps on administrative costs that will undermine essential
health care services, such as disease management and care coordination
programs, investments in health information technology, programs to
root out fraud and abuse in the health care system, and new
administrative simplification requirements.
-- Major cuts in Medicare Advantage benefits beginning next year that
will ultimately result in millions of seniors losing their current
coverage.
"These issues need to be resolved if the country is to make health care coverage more affordable and put the system on a sustainable path. Health plans will continue to work to solve the problems that have been identified."
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"The debate before us today is not whether insurance market reforms are needed. In fact, health plans proposed and support a complete overhaul of insurance market rules and new consumer protections to ensure all Americans have guaranteed access to affordable, portable coverage. The critical policy questions are whether the current legislation can bend the cost curve and result in a sustainable system. While the bill makes important improvements in access and takes steps towards cost-containment, it lacks accountability to ensure that costs are brought under control. Moreover, this bill includes provisions that will increase costs for families and small businesses and disrupt the quality coverage on which millions of Americans rely today."
Barriers to affordability:
-- A new $70 billion premium tax that will increase the cost of health
care coverage for millions of Americans and fall primarily on small
businesses and those who purchase coverage in the individual market.
-- More cost shifting to patients with private coverage as providers are
forced to make up for hundreds of billions in reduced Medicare
payments.
-- New market and rating rules that will increase premiums for
individuals and small businesses with coverage today.
Disruptions for current policyholders:
-- New regulatory requirements and benefit mandates that go into effect
beginning next year - before access provisions go into effect - that
will cause major disruption for millions who have already enrolled in
their plan for next year.
-- A new federal plan that would preclude many high-quality plans from
participating and increase complexity in the exchanges.
-- Arbitrary caps on administrative costs that will undermine essential
health care services, such as disease management and care coordination
programs, investments in health information technology, programs to
root out fraud and abuse in the health care system, and new
administrative simplification requirements.
-- Major cuts in Medicare Advantage benefits beginning next year that
will ultimately result in millions of seniors losing their current
coverage.
"These issues need to be resolved if the country is to make health care coverage more affordable and put the system on a sustainable path. Health plans will continue to work to solve the problems that have been identified."
-----
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Monday, December 14, 2009
NORD Calls for Immediate End to Lifetime Insurance Caps
/PRNewswire/ -- The National Organization for Rare Disorders (NORD) today called upon Congress to put an immediate end to lifetime and annual health insurance caps. In a full-page ad in The Politico, a newspaper distributed widely on Capitol Hill, NORD said the current Senate health reform bill includes loopholes that would allow caps to continue for most Americans, contrary to what many people believe.
"NORD supports health care reform and welcomes the promises made by President Obama and Congress to eliminate lifetime and annual caps," said NORD President Peter L. Saltonstall. "However, under the current version of the Senate bill, caps would continue for several years for many people and would never be eliminated for others."
Private insurers often set lifetime or annual caps on the amount of health care coverage an individual may have. For Americans with chronic diseases, rare disorders, or major medical crises, this can lead to financial crisis or bankruptcy when insurance benefits are exhausted.
The health care reform debate has focused a spotlight on this problem. President Obama promised this fall that the caps would be eliminated under health reform, noting that insurance companies would "no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime." Originally, the Senate health reform debate also advocated eliminating the caps.
However, the current version of the Senate bill provides for "grandfathering" existing insurance plans so that existing plans would be subject to annual lifetime caps indefinitely. The bill also allows self-insured plans to impose annual or lifetime caps indefinitely, which means that many people with employer-provided insurance would still be subject to caps. Even when the bill would require eliminating caps, it would not require doing so for several years.
Earlier this fall, NORD sent a letter to all members of Congress and President Obama outlining four measures that it considers essential to any health reform plan: prohibiting discrimination based on pre-existing conditions; protecting patients against catastrophic out-of-pocket costs and lifetime or annual caps; prohibiting insurers from canceling policies as a result of medical diagnoses; and including tax credits and other direct financing support to assure that all Americans can afford coverage.
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"NORD supports health care reform and welcomes the promises made by President Obama and Congress to eliminate lifetime and annual caps," said NORD President Peter L. Saltonstall. "However, under the current version of the Senate bill, caps would continue for several years for many people and would never be eliminated for others."
Private insurers often set lifetime or annual caps on the amount of health care coverage an individual may have. For Americans with chronic diseases, rare disorders, or major medical crises, this can lead to financial crisis or bankruptcy when insurance benefits are exhausted.
The health care reform debate has focused a spotlight on this problem. President Obama promised this fall that the caps would be eliminated under health reform, noting that insurance companies would "no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime." Originally, the Senate health reform debate also advocated eliminating the caps.
However, the current version of the Senate bill provides for "grandfathering" existing insurance plans so that existing plans would be subject to annual lifetime caps indefinitely. The bill also allows self-insured plans to impose annual or lifetime caps indefinitely, which means that many people with employer-provided insurance would still be subject to caps. Even when the bill would require eliminating caps, it would not require doing so for several years.
Earlier this fall, NORD sent a letter to all members of Congress and President Obama outlining four measures that it considers essential to any health reform plan: prohibiting discrimination based on pre-existing conditions; protecting patients against catastrophic out-of-pocket costs and lifetime or annual caps; prohibiting insurers from canceling policies as a result of medical diagnoses; and including tax credits and other direct financing support to assure that all Americans can afford coverage.
-----
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Tuesday, December 08, 2009
Insurance Industry Facing Uncertain Regulatory Environment, Competitive Shake-Up, Says PricewaterhouseCoopers Report
/PRNewswire/ -- The insurance industry may not see a return to relative stability and certainty for a few years as it reacts to the effects of regulatory reform, increased government intervention and potential tax law changes in the aftermath of the financial crisis, said PricewaterhouseCoopers LLP in a report released today. Within five years, the industry landscape could look markedly different, and Americans may find their insurance policies underwritten by a handful of large, well-capitalized firms that can demonstrate financial strength and economies of scale.
The PricewaterhouseCoopers report, entitled "Emerging from the Storm: The Day After Tomorrow for Insurance," outlines nine key developments that are expected to reshape the insurance industry and their strategic implications during the next five years. The most significant of these developments for U.S. insurers will likely be sweeping regulatory changes resulting from proposed legislation to reform health insurance and increase federal oversight of insurance and financial industries.
The majority of regulation of insurance firms in the U.S. occurs at the state level, but there is political pressure to expand federal oversight. Creation of a Federal Insurance Office could provide federal policymakers with the information and resources to better respond to crises, mitigate systemic risks and help ensure a well-functioning financial system, but it could also lead to dual regulation at both the state and federal levels.
"Insurers are in the business of managing risk and measuring probability. They don't like uncertainty, yet they are facing two massive reform initiatives, the outcomes of which are unknown but could alter their destiny," said Bill Chrnelich, partner, PricewaterhouseCoopers' insurance sector. "Some insurers are taking a cautious, wait and see approach, while others see this period as a once-in-a-generation opportunity to shape their future."
According to PricewaterhouseCoopers, the insurers most likely to succeed once regulatory changes are enacted are those that closely monitor developments and create business strategies that anticipate the most likely possibilities for reform. In addition, they will carefully factor the following considerations into their business decisions:
-- Insurance Industry consolidation: The U.S. insurance market remains
highly fragmented, and the strong underlying rationale for
consolidation and restructuring means that merger and acquisition
activity may be set to accelerate rapidly, particularly as larger,
better-capitalized firms consume smaller firms. Consolidation is
expected to help to deliver the capital stability and economies of
scale that will be important in attracting customers and demonstrating
financial strength not only to ratings agencies but also to
third-party distributors whose "ownership of the customer" makes them
a key determinant of an insurers' fate.
-- The end of innocence for retail investors: The faith of investors, who
had become accustomed to high yields but were unaware of the related
risks, appears to have given way to shock, disillusionment and
caution. The pursuit of innovation appears to have been displaced by
a focus on stability, risk management and demand for simpler, more
straightforward and transparent policies and investment products such
as index-linked investments. An example of this is the recent
resurgence in demand for whole life insurance. The apparent desire
for guarantees, however, could create dilemmas for insurance companies
that want to scale back such products as they seek to limit risk.
Potentially higher costs of risk and guarantees, along with what may
be higher commission payments to distributors, could change product
economics, and insurers will need to better understand component
costs, pricing and profit profiles.
-- Mounting uncertainty over tax: As debts and fiscal deficits mount,
governments are looking for ways to increase their tax revenues. They
will look closely at insurance companies, as the industry is a major
source of potential tax receipts and has moved significant business
capacity to other jurisdictions in recent years. Accordingly,
insurers can expect renewed scrutiny of their tax planning techniques,
as well as more stringent requirements for transparency and
information exchange relating to clients.
-- Organic restructuring: As a result of the financial crisis, many
insurers have been forced to raise prices, restrict the pursuit of new
business or withdraw from high risk and peripheral markets. As
insurers withdraw from some of their geographic markets and scale back
particular lines of business, the market shares and opportunities for
those that remain could sharply increase, leading to a significant
reconfiguration in the list of leading players. Companies with a
better understanding of their risks are likely to be in a stronger
position to capitalize on potential openings that less-informed and
less-assured competitors may miss.
-- Rethinking insurance financial reporting: Many insurance executives
justifiably complain that their share prices fail to reflect the true
level of value being created within their business. Without an
industry consensus on a genuinely relevant, intelligible, and
comparable basis of accounting and disclosure, insurers may find it
increasingly difficult to compete for capital. With funds
constrained, many portfolio investors could simply choose to put their
money elsewhere, leaving the insurance industry with major challenges.
According to PricewaterhouseCoopers, it seems imperative that the
industry come together to develop a basis of relevant disclosures that
reflect the nuances of their business and satisfy analyst and investor
demands.
-- Blurring the lines between the public and private sector: The
relationship between the public and private sectors could change as
the government exerts a stronger influence over the insurance market
as a result of bailouts, regulatory reform, and greater control over
pensions, healthcare, trade credit and mortgage support.
-- Greater scrutiny of executive compensation: Two concerns raised by the
financial crisis were the lack of understanding of risk at the board
of directors' level and compensation for senior executives. With
appointment of the Special Master for TARP Executive Compensation, in
the United States, insurers are likely to base much more of their
performance-related pay on risk-adjusted measures, aligned to their
business strategy. They also are expected to face tougher regulation
over how compensation is governed.
-- Challenging prospects for reinsurers: While demand for reinsurance is
likely to increase within emerging markets, this is unlikely to offset
the decline in reinsurance buying in developed markets and may force
many reinsurers to rethink how they sustain profitability and growth.
The trend toward higher retention of straightforward risks could
accelerate. As companies become more risk-aware through advances in
enterprise risk management, they will be better able to choose what
risks to retain and which to reinsure.
"There is only one certainty for the insurance industry: change is coming and, as a result, the competitive landscape will be very different in five years from what exists today," added Chrnelich. "This will jeopardize some insurers' business, but it should also enable those who are better prepared to excel in a new environment. Success will likely depend on close monitoring of developments and the ability to quickly capitalize on opportunities as reforms and changes within the industry become clearer."
-----
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The PricewaterhouseCoopers report, entitled "Emerging from the Storm: The Day After Tomorrow for Insurance," outlines nine key developments that are expected to reshape the insurance industry and their strategic implications during the next five years. The most significant of these developments for U.S. insurers will likely be sweeping regulatory changes resulting from proposed legislation to reform health insurance and increase federal oversight of insurance and financial industries.
The majority of regulation of insurance firms in the U.S. occurs at the state level, but there is political pressure to expand federal oversight. Creation of a Federal Insurance Office could provide federal policymakers with the information and resources to better respond to crises, mitigate systemic risks and help ensure a well-functioning financial system, but it could also lead to dual regulation at both the state and federal levels.
"Insurers are in the business of managing risk and measuring probability. They don't like uncertainty, yet they are facing two massive reform initiatives, the outcomes of which are unknown but could alter their destiny," said Bill Chrnelich, partner, PricewaterhouseCoopers' insurance sector. "Some insurers are taking a cautious, wait and see approach, while others see this period as a once-in-a-generation opportunity to shape their future."
According to PricewaterhouseCoopers, the insurers most likely to succeed once regulatory changes are enacted are those that closely monitor developments and create business strategies that anticipate the most likely possibilities for reform. In addition, they will carefully factor the following considerations into their business decisions:
-- Insurance Industry consolidation: The U.S. insurance market remains
highly fragmented, and the strong underlying rationale for
consolidation and restructuring means that merger and acquisition
activity may be set to accelerate rapidly, particularly as larger,
better-capitalized firms consume smaller firms. Consolidation is
expected to help to deliver the capital stability and economies of
scale that will be important in attracting customers and demonstrating
financial strength not only to ratings agencies but also to
third-party distributors whose "ownership of the customer" makes them
a key determinant of an insurers' fate.
-- The end of innocence for retail investors: The faith of investors, who
had become accustomed to high yields but were unaware of the related
risks, appears to have given way to shock, disillusionment and
caution. The pursuit of innovation appears to have been displaced by
a focus on stability, risk management and demand for simpler, more
straightforward and transparent policies and investment products such
as index-linked investments. An example of this is the recent
resurgence in demand for whole life insurance. The apparent desire
for guarantees, however, could create dilemmas for insurance companies
that want to scale back such products as they seek to limit risk.
Potentially higher costs of risk and guarantees, along with what may
be higher commission payments to distributors, could change product
economics, and insurers will need to better understand component
costs, pricing and profit profiles.
-- Mounting uncertainty over tax: As debts and fiscal deficits mount,
governments are looking for ways to increase their tax revenues. They
will look closely at insurance companies, as the industry is a major
source of potential tax receipts and has moved significant business
capacity to other jurisdictions in recent years. Accordingly,
insurers can expect renewed scrutiny of their tax planning techniques,
as well as more stringent requirements for transparency and
information exchange relating to clients.
-- Organic restructuring: As a result of the financial crisis, many
insurers have been forced to raise prices, restrict the pursuit of new
business or withdraw from high risk and peripheral markets. As
insurers withdraw from some of their geographic markets and scale back
particular lines of business, the market shares and opportunities for
those that remain could sharply increase, leading to a significant
reconfiguration in the list of leading players. Companies with a
better understanding of their risks are likely to be in a stronger
position to capitalize on potential openings that less-informed and
less-assured competitors may miss.
-- Rethinking insurance financial reporting: Many insurance executives
justifiably complain that their share prices fail to reflect the true
level of value being created within their business. Without an
industry consensus on a genuinely relevant, intelligible, and
comparable basis of accounting and disclosure, insurers may find it
increasingly difficult to compete for capital. With funds
constrained, many portfolio investors could simply choose to put their
money elsewhere, leaving the insurance industry with major challenges.
According to PricewaterhouseCoopers, it seems imperative that the
industry come together to develop a basis of relevant disclosures that
reflect the nuances of their business and satisfy analyst and investor
demands.
-- Blurring the lines between the public and private sector: The
relationship between the public and private sectors could change as
the government exerts a stronger influence over the insurance market
as a result of bailouts, regulatory reform, and greater control over
pensions, healthcare, trade credit and mortgage support.
-- Greater scrutiny of executive compensation: Two concerns raised by the
financial crisis were the lack of understanding of risk at the board
of directors' level and compensation for senior executives. With
appointment of the Special Master for TARP Executive Compensation, in
the United States, insurers are likely to base much more of their
performance-related pay on risk-adjusted measures, aligned to their
business strategy. They also are expected to face tougher regulation
over how compensation is governed.
-- Challenging prospects for reinsurers: While demand for reinsurance is
likely to increase within emerging markets, this is unlikely to offset
the decline in reinsurance buying in developed markets and may force
many reinsurers to rethink how they sustain profitability and growth.
The trend toward higher retention of straightforward risks could
accelerate. As companies become more risk-aware through advances in
enterprise risk management, they will be better able to choose what
risks to retain and which to reinsure.
"There is only one certainty for the insurance industry: change is coming and, as a result, the competitive landscape will be very different in five years from what exists today," added Chrnelich. "This will jeopardize some insurers' business, but it should also enable those who are better prepared to excel in a new environment. Success will likely depend on close monitoring of developments and the ability to quickly capitalize on opportunities as reforms and changes within the industry become clearer."
-----
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Thursday, December 03, 2009
Sebelius Statement on Benefits of Health Insurance Reform for Businesses
HHS Secretary Kathleen Sebelius today highlighted the benefits of health insurance reform for businesses and released a new fact sheet regarding a recent analysis from the Congressional Budget Office.
"Businesses across the country are struggling under the weight of high health care costs," Secretary Sebelius said. "Health insurance reform will help lift this burden, help businesses prosper, and ensure workers have the affordable, quality health care they need."
A fact sheet regarding the analysis is included below.
Fact Sheet: New CBO Analysis Confirms Benefits of Health Insurance Reform for Businesses
American businesses know the health care status quo is unacceptable. Since 2000, premiums have more than doubled, a rate three times faster than the growth in wages. Between 2000 and 2009, the percentage of firms offering coverage fell from 69 to 60, with much of that drop occurring in the past year alone. Small businesses in particular struggle under the current health care system. For firms employing less than 10 workers, the erosion in coverage is striking -- from 57 percent offering coverage in 2000 to 46 percent offering coverage in 2009. If we do nothing, over the next ten years, health care costs for large businesses are projected to reach $28,530 per employee, a 116 percent increase from 2009.
A new analysis by the Congressional Budget Office (CBO) affirms that businesses' health insurance costs will be lower under health insurance reform -- even though the analysis does not take into account the full range of policies that will benefit businesses.
Health Insurance Premiums for Businesses According to CBO. In a November 30 letter to Senator Evan Bayh, CBO assesses the impact of the Patient Protection and Affordability Act on premiums for the individual, small-group, and large group markets. In 2016, CBO estimates that 159 million or 83 percent of privately insured people will be insured through employers.
Premiums for small business will go down. Small businesses are likely to see premiums drop by 1 to 4 percent under the proposal due to lower prices. These lower prices come from:
-- Lower administrative overhead. Right now, each small business
has to consult with a broker or hire someone to collate plan
information, assist employees with decisions, and handle issues as they
arise. Under reform, in the exchange, there will be people whose job it
is to provide plan information and facilitate enrollment. The exchange
centralizes what is otherwise a process that is extremely duplicative,
streamlining administrative costs and lowering premiums.
-- Greater competition. CBO attributes savings to "providing a
centralized marketplace in which consumers could compare the premiums of
relatively standardized insurance products." This includes competitive
pressure from a public health insurance option.
-- Administrative simplification. Physicians spend on average about
140 hours and $68,000 a year just dealing with health insurance
bureaucracy. By simplifying and standardizing paperwork and
computerizing medical records, doctors will be able to focus on caring
for their patients instead of dealing with bureaucracy. CBO estimates
nearly $20 billion in Federal savings over 10 years, with additional
savings accruing to businesses and families.
Up to 3 percent premium savings as the risk pool for employer-based coverage improves. Today, businesses have seen their premiums skyrocket every year, with many facing double digit percentage increases in their premiums. Health insurance reform will stop this trend.
With nearly 30 million additional Americans gaining health insurance, the purchasing pool for businesses will expand and, largely, improve. Big businesses will save from 0 to 3 percent on premiums due to the changing risk pool while small businesses could save 1 percent on
premiums.
Better options for small businesses. Small businesses would gain access to the health insurance exchanges and new benefit options and tax credits under reform.
-- 3.6 million small businesses could qualify for a tax credit to
help pay their premiums.[vii] An estimated 12 percent of people insured
through small businesses will qualify for tax credits that lower
premiums by 8 to 11 percent. This translates into $620 to $860 for
individuals and $1,540 to $2,120 for families assuming that the coverage
is comparable to what they get today.
-- Today, small businesses often have coverage that has high
deductibles and gap-ridden benefits. The legislation offers such
businesses better options that CBO assumes businesses will take. Such
better coverage has premiums that are 0 to 3 percent higher than the
average plans today, but will save money for employees by ensuring they
are not forced to pay high out-of-pocket costs for services not covered
by their current insurance.
-- In the current health insurance system, small businesses may see
premiums skyrocket if just one or two workers fall ill and accumulate
high medical costs. Health insurance reform will prevent insurance
discrimination based on health status, meaning that small businesses
will no longer be unfairly penalized if a worker falls ill.
9 to 12 percent premium savings for high-premium plans under current law. By assessing high-cost plans, the excise tax encourages businesses and individuals to streamline coverage, leading to lower premiums over time.
-- CBO estimates that the 19 percent of people in employer-coverage
in high-cost plans today will pay 9 to 12 percent less under reform.
This translates to premium savings of at least $835 for single and
$2,070 family policies.
-- This could yield increases in workers wages, by around $70
billion in 2019.
Nearly $10 billion in savings for small businesses.
-- Under current law, CBO estimates premiums to be $7,800 for
single policies and $19,300 for families in the small group market.
-- Small businesses that opt for comparable coverage under reform
could save up to $390 for single policies and $965 for family policies.
Assuming all 25 million people insured through small business save at
least $390 (more for families), this will yield nearly $10 billion in
savings in 2016 alone.
-- Additional savings will accrue to low-wage, small businesses
that newly offer coverage in the exchange. CBO estimates that roughly
12 percent of people in the small group market would get the credit
which would reduce premiums by about 10 percent in 2016. Multiplying
this by the population and average premiums in the report, this suggests
that about one and a half million people would save roughly $780 per
person on premiums in 2016.
-- Even those that CBO estimates will "buy-up" will save, paying
$100 less per family for coverage that is more protective.
At least $13.4 billion in savings for large businesses.
-- Under current law, CBO estimates premiums to be $7,400 for
single policies and $20,300 for families in the large group market.
-- CBO estimates that, under reform, large business premiums will
drop by $100 per single policy and $200 per family policy. With 134
million people enrolled in such coverage, this translates into at least
$13.4 billion in savings in 2016 alone.
Businesses can keep what they have.
-- CBO affirms that any proposed benefit mandates would not affect
the small or large group markets: "The requirement would have relatively
little effect on premiums in the small group market, however, because
most policies sold in that market already cover those services and would
continue to cover them under current law."
-- CBO also affirms the effectiveness of the grandfather policy:
"Further, small group policies that are maintained continuously would be
grandfathered under the proposal."
-- In the large group market, CBO affirms that "[Benefit]
requirements would have no significant effect on premiums in the large
group market."
No cost-shifting to the employer-based insurance market.
-- CBO states: "... CBO's assessment is that the legislation would
have minimal effects on private-sector premiums via cost shifting."
Additional Policies To Benefit Businesses. CBO does not include in its analysis several additional policies in the Patient Protection and Affordable Care Act that would benefit businesses.
Reinsurance for businesses that cover early retiree plans.
-- The proportion of employers that offer retiree coverage has been
declining precipitously over time, from 66 percent in 1988 to 29 percent
in 2009.
-- The proposal would provide a time-limited, Federal reinsurance
program to cover some of the cost of covering early retirees. This
translates to savings of up to $1,200 off the premium of every family
plan offered by that company.
Policies to slow health care cost growth.
-- Insurance oversight: In recent years, several states' insurance
commissioners have rejected unjustifiably high premium increases in the
small group and individual insurance markets. Health insurance reform
will allow insurance commissioners to continue to play this important
role and require transparency and oversight of premium increases.
-- Delivery system reform. Health insurance reform will invest in
care innovations such as accountable care organizations, make healthcare
providers more accountable and efficient through value-based purchasing,
and improve quality and patient safety, including reducing preventable
readmissions. A recent report by the Business Roundtable found that if
many of the delivery system reforms were adopted by the private sector,
large businesses could save $3,000 per employee by 2019.
-- Lowers expensive drug costs. Biologic drugs are some of the most
expensive drugs on the market, and yet there is no streamlined avenue to
get generics on the market to provide lower-cost alternatives. Reform
will create an expedited process to make generic biologic drugs
available, significantly lowering drug costs.
Immediate benefits. While the CBO report provides savings estimates for 2016, several of the policies discussed above would take effect immediately, including early retiree reinsurance, administrative simplification, small business tax credits, and increased oversight of the insurance industry.
Benefits to Businesses Beyond Lower Costs. CBO focused exclusively on health insurance premiums which are critical to businesses. There would be other benefits of health reform for businesses as well.
Improved workplace productivity.
-- The Institute of Medicine found that lost productivity due to
untreated illness among uninsured workers cost businesses between $75
billion and $150 billion per year. Expanding coverage to the uninsured
will create a more productive workforce.
-- Current job-lock (inability to leave current employment if it
will result in loss of health insurance) has been demonstrated to hurt
the economy through reduced productivity, and prevents an employee from
taking a job with potentially higher wages. By ending limitations on
coverage based on pre-existing conditions and expanding portable
coverage options through the health insurance exchange, reform will
increase the flexibility and productivity of the workforce.
New jobs.
-- Bringing down the cost of healthcare will enable investments in
business and job creation. The President's Council of Economic Advisers
(CEA) estimated that if the annual growth rate of health spending slows
by 1.5 percentage point, new jobs could rise by 500,000.
-- The health insurance exchange will expand options for coverage,
making small businesses a more attractive place for people to work, and
encouraging people to start up businesses of their own.
-- Health insurance reform could save 80,000 jobs in the small
business sector by 2019 and increase take-home pay by almost $30
billion.
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"Businesses across the country are struggling under the weight of high health care costs," Secretary Sebelius said. "Health insurance reform will help lift this burden, help businesses prosper, and ensure workers have the affordable, quality health care they need."
A fact sheet regarding the analysis is included below.
Fact Sheet: New CBO Analysis Confirms Benefits of Health Insurance Reform for Businesses
American businesses know the health care status quo is unacceptable. Since 2000, premiums have more than doubled, a rate three times faster than the growth in wages. Between 2000 and 2009, the percentage of firms offering coverage fell from 69 to 60, with much of that drop occurring in the past year alone. Small businesses in particular struggle under the current health care system. For firms employing less than 10 workers, the erosion in coverage is striking -- from 57 percent offering coverage in 2000 to 46 percent offering coverage in 2009. If we do nothing, over the next ten years, health care costs for large businesses are projected to reach $28,530 per employee, a 116 percent increase from 2009.
A new analysis by the Congressional Budget Office (CBO) affirms that businesses' health insurance costs will be lower under health insurance reform -- even though the analysis does not take into account the full range of policies that will benefit businesses.
Health Insurance Premiums for Businesses According to CBO. In a November 30 letter to Senator Evan Bayh, CBO assesses the impact of the Patient Protection and Affordability Act on premiums for the individual, small-group, and large group markets. In 2016, CBO estimates that 159 million or 83 percent of privately insured people will be insured through employers.
Premiums for small business will go down. Small businesses are likely to see premiums drop by 1 to 4 percent under the proposal due to lower prices. These lower prices come from:
-- Lower administrative overhead. Right now, each small business
has to consult with a broker or hire someone to collate plan
information, assist employees with decisions, and handle issues as they
arise. Under reform, in the exchange, there will be people whose job it
is to provide plan information and facilitate enrollment. The exchange
centralizes what is otherwise a process that is extremely duplicative,
streamlining administrative costs and lowering premiums.
-- Greater competition. CBO attributes savings to "providing a
centralized marketplace in which consumers could compare the premiums of
relatively standardized insurance products." This includes competitive
pressure from a public health insurance option.
-- Administrative simplification. Physicians spend on average about
140 hours and $68,000 a year just dealing with health insurance
bureaucracy. By simplifying and standardizing paperwork and
computerizing medical records, doctors will be able to focus on caring
for their patients instead of dealing with bureaucracy. CBO estimates
nearly $20 billion in Federal savings over 10 years, with additional
savings accruing to businesses and families.
Up to 3 percent premium savings as the risk pool for employer-based coverage improves. Today, businesses have seen their premiums skyrocket every year, with many facing double digit percentage increases in their premiums. Health insurance reform will stop this trend.
With nearly 30 million additional Americans gaining health insurance, the purchasing pool for businesses will expand and, largely, improve. Big businesses will save from 0 to 3 percent on premiums due to the changing risk pool while small businesses could save 1 percent on
premiums.
Better options for small businesses. Small businesses would gain access to the health insurance exchanges and new benefit options and tax credits under reform.
-- 3.6 million small businesses could qualify for a tax credit to
help pay their premiums.[vii] An estimated 12 percent of people insured
through small businesses will qualify for tax credits that lower
premiums by 8 to 11 percent. This translates into $620 to $860 for
individuals and $1,540 to $2,120 for families assuming that the coverage
is comparable to what they get today.
-- Today, small businesses often have coverage that has high
deductibles and gap-ridden benefits. The legislation offers such
businesses better options that CBO assumes businesses will take. Such
better coverage has premiums that are 0 to 3 percent higher than the
average plans today, but will save money for employees by ensuring they
are not forced to pay high out-of-pocket costs for services not covered
by their current insurance.
-- In the current health insurance system, small businesses may see
premiums skyrocket if just one or two workers fall ill and accumulate
high medical costs. Health insurance reform will prevent insurance
discrimination based on health status, meaning that small businesses
will no longer be unfairly penalized if a worker falls ill.
9 to 12 percent premium savings for high-premium plans under current law. By assessing high-cost plans, the excise tax encourages businesses and individuals to streamline coverage, leading to lower premiums over time.
-- CBO estimates that the 19 percent of people in employer-coverage
in high-cost plans today will pay 9 to 12 percent less under reform.
This translates to premium savings of at least $835 for single and
$2,070 family policies.
-- This could yield increases in workers wages, by around $70
billion in 2019.
Nearly $10 billion in savings for small businesses.
-- Under current law, CBO estimates premiums to be $7,800 for
single policies and $19,300 for families in the small group market.
-- Small businesses that opt for comparable coverage under reform
could save up to $390 for single policies and $965 for family policies.
Assuming all 25 million people insured through small business save at
least $390 (more for families), this will yield nearly $10 billion in
savings in 2016 alone.
-- Additional savings will accrue to low-wage, small businesses
that newly offer coverage in the exchange. CBO estimates that roughly
12 percent of people in the small group market would get the credit
which would reduce premiums by about 10 percent in 2016. Multiplying
this by the population and average premiums in the report, this suggests
that about one and a half million people would save roughly $780 per
person on premiums in 2016.
-- Even those that CBO estimates will "buy-up" will save, paying
$100 less per family for coverage that is more protective.
At least $13.4 billion in savings for large businesses.
-- Under current law, CBO estimates premiums to be $7,400 for
single policies and $20,300 for families in the large group market.
-- CBO estimates that, under reform, large business premiums will
drop by $100 per single policy and $200 per family policy. With 134
million people enrolled in such coverage, this translates into at least
$13.4 billion in savings in 2016 alone.
Businesses can keep what they have.
-- CBO affirms that any proposed benefit mandates would not affect
the small or large group markets: "The requirement would have relatively
little effect on premiums in the small group market, however, because
most policies sold in that market already cover those services and would
continue to cover them under current law."
-- CBO also affirms the effectiveness of the grandfather policy:
"Further, small group policies that are maintained continuously would be
grandfathered under the proposal."
-- In the large group market, CBO affirms that "[Benefit]
requirements would have no significant effect on premiums in the large
group market."
No cost-shifting to the employer-based insurance market.
-- CBO states: "... CBO's assessment is that the legislation would
have minimal effects on private-sector premiums via cost shifting."
Additional Policies To Benefit Businesses. CBO does not include in its analysis several additional policies in the Patient Protection and Affordable Care Act that would benefit businesses.
Reinsurance for businesses that cover early retiree plans.
-- The proportion of employers that offer retiree coverage has been
declining precipitously over time, from 66 percent in 1988 to 29 percent
in 2009.
-- The proposal would provide a time-limited, Federal reinsurance
program to cover some of the cost of covering early retirees. This
translates to savings of up to $1,200 off the premium of every family
plan offered by that company.
Policies to slow health care cost growth.
-- Insurance oversight: In recent years, several states' insurance
commissioners have rejected unjustifiably high premium increases in the
small group and individual insurance markets. Health insurance reform
will allow insurance commissioners to continue to play this important
role and require transparency and oversight of premium increases.
-- Delivery system reform. Health insurance reform will invest in
care innovations such as accountable care organizations, make healthcare
providers more accountable and efficient through value-based purchasing,
and improve quality and patient safety, including reducing preventable
readmissions. A recent report by the Business Roundtable found that if
many of the delivery system reforms were adopted by the private sector,
large businesses could save $3,000 per employee by 2019.
-- Lowers expensive drug costs. Biologic drugs are some of the most
expensive drugs on the market, and yet there is no streamlined avenue to
get generics on the market to provide lower-cost alternatives. Reform
will create an expedited process to make generic biologic drugs
available, significantly lowering drug costs.
Immediate benefits. While the CBO report provides savings estimates for 2016, several of the policies discussed above would take effect immediately, including early retiree reinsurance, administrative simplification, small business tax credits, and increased oversight of the insurance industry.
Benefits to Businesses Beyond Lower Costs. CBO focused exclusively on health insurance premiums which are critical to businesses. There would be other benefits of health reform for businesses as well.
Improved workplace productivity.
-- The Institute of Medicine found that lost productivity due to
untreated illness among uninsured workers cost businesses between $75
billion and $150 billion per year. Expanding coverage to the uninsured
will create a more productive workforce.
-- Current job-lock (inability to leave current employment if it
will result in loss of health insurance) has been demonstrated to hurt
the economy through reduced productivity, and prevents an employee from
taking a job with potentially higher wages. By ending limitations on
coverage based on pre-existing conditions and expanding portable
coverage options through the health insurance exchange, reform will
increase the flexibility and productivity of the workforce.
New jobs.
-- Bringing down the cost of healthcare will enable investments in
business and job creation. The President's Council of Economic Advisers
(CEA) estimated that if the annual growth rate of health spending slows
by 1.5 percentage point, new jobs could rise by 500,000.
-- The health insurance exchange will expand options for coverage,
making small businesses a more attractive place for people to work, and
encouraging people to start up businesses of their own.
-- Health insurance reform could save 80,000 jobs in the small
business sector by 2019 and increase take-home pay by almost $30
billion.
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Tuesday, October 27, 2009
Overriding State Insurance Protections Should Not Be Part of Financial Re-Regulation Package, Writes Consumer Watchdog to Geithner, Frank
/PRNewswire/ -- Consumer Watchdog sent a letter to Treasury Secretary Geithner, House Financial Services Committee Chair Barney Frank, and Financial Services Subcommittee Chair Paul Kanjorski today, arguing that legislation intended to undermine state insurance protections (H.R. 2609) is inconsistent with the re-regulatory promise of the financial reform package. The bill will be marked up in the House Financial Services committee today.
"We are at a loss to understand why you have proposed a measure to deregulate the insurance industry by preempting state laws as part of the financial re-regulation package," wrote Consumer Watchdog. "Each version of the bill would restrict the ability of state lawmakers and regulators to protect insurance consumers by granting the Treasury Department and a new Federal Insurance Office the authority to preempt state laws and regulations on prudential matters on behalf of foreign insurance firms."
"This proposal is even more perplexing in light of the strong fight, on the part of both the administration and majority members of the Financial Services committee, to preserve states' ability to protect their citizens during the debate over the Consumer Financial Protection Agency," the letter continued.
As Assistant Treasury Secretary Michael Barr put it to the Washington Post last week:
"'Washington doesn't always know what's best'... He said the administration wanted to restore the right of states 'to protect their citizens with the rules that they think make sense.'"
"If Washington doesn't always know what's best for American consumers, why would you expect foreign diplomats and regulators to know what's best for American insurance policyholders?" asked Carmen Balber, Washington Director for Consumer Watchdog.
The letter concludes: "Wall Street firms are again riding high a year after the crash, but the rest of the country continues to suffer rising foreclosures, increased unemployment, and a dearth of credit. With American homes, jobs and businesses already on the line, now is hardly the time for Congress to place our insurance policies at risk as well."
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"We are at a loss to understand why you have proposed a measure to deregulate the insurance industry by preempting state laws as part of the financial re-regulation package," wrote Consumer Watchdog. "Each version of the bill would restrict the ability of state lawmakers and regulators to protect insurance consumers by granting the Treasury Department and a new Federal Insurance Office the authority to preempt state laws and regulations on prudential matters on behalf of foreign insurance firms."
"This proposal is even more perplexing in light of the strong fight, on the part of both the administration and majority members of the Financial Services committee, to preserve states' ability to protect their citizens during the debate over the Consumer Financial Protection Agency," the letter continued.
As Assistant Treasury Secretary Michael Barr put it to the Washington Post last week:
"'Washington doesn't always know what's best'... He said the administration wanted to restore the right of states 'to protect their citizens with the rules that they think make sense.'"
"If Washington doesn't always know what's best for American consumers, why would you expect foreign diplomats and regulators to know what's best for American insurance policyholders?" asked Carmen Balber, Washington Director for Consumer Watchdog.
The letter concludes: "Wall Street firms are again riding high a year after the crash, but the rest of the country continues to suffer rising foreclosures, increased unemployment, and a dearth of credit. With American homes, jobs and businesses already on the line, now is hardly the time for Congress to place our insurance policies at risk as well."
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Wednesday, September 23, 2009
Analysis Shows Narrow Age Rating Would Raise Premiums by Nearly 50 Percent, Causing Many Young and Healthy to Forgo Coverage
/PRNewswire/ -- Allowing age adjustments more restrictive than 5 to 1 would cause dramatic premium spikes for the young and healthy in the individual insurance market, making coverage unaffordable for many according to a new analysis.
The Blue Cross and Blue Shield Association (BCBSA) released today new data, prepared by Oliver Wyman's Actuarial and Health and Life Sciences practice, showing that a 2 to 1 age rating ratio would increase premiums for the youngest and healthiest Americans in the individual market in many states by nearly 50 percent in the first year, relative to a 5 to 1 age rating ratio.
Currently 42 states permit health plans to vary premiums based on age by 5 to 1 or more -- the primary benefit being that premiums are kept affordable for younger individuals to encourage broad participation. If more restrictive age ratings are implemented, younger people would opt out of purchasing coverage. Oliver Wyman estimates that, over a five year period, more than 1 million younger members would leave the market, resulting in a 10 percent premium increase overall for individuals in some parts of the country.
"An affordable, sustainable insurance market requires broad participation across all age groups to maintain more affordable premiums. As this analysis shows, overly restrictive age rating regulations would hurt a large portion of those with individual coverage -- making coverage less affordable and undermining the key goals of healthcare reform," said Scott P. Serota, president and CEO of BCBSA. "To ensure the long-term sustainability of healthcare reform, we must strike the right balance on age rating to avoid disproportionately burdening one segment of the population over another. For this reason, we support a 5 to 1 age rating similar to what the vast majority of states permit today."
The Oliver Wyman analysis also finds that restricting age rating ratios to 3 to 1 would increase premiums in many states by as much as 30 percent for younger people, relative to a 5 to 1 ratio.
"Younger individuals are much more sensitive to the costs of health insurance compared to older individuals. The bottom line is that if premiums are too high, young and healthy individuals simply will not purchase insurance and their needed cross-subsidies for older, sicker people will be lost, increasing the cost of healthcare for everyone," Serota said.
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The Blue Cross and Blue Shield Association (BCBSA) released today new data, prepared by Oliver Wyman's Actuarial and Health and Life Sciences practice, showing that a 2 to 1 age rating ratio would increase premiums for the youngest and healthiest Americans in the individual market in many states by nearly 50 percent in the first year, relative to a 5 to 1 age rating ratio.
Currently 42 states permit health plans to vary premiums based on age by 5 to 1 or more -- the primary benefit being that premiums are kept affordable for younger individuals to encourage broad participation. If more restrictive age ratings are implemented, younger people would opt out of purchasing coverage. Oliver Wyman estimates that, over a five year period, more than 1 million younger members would leave the market, resulting in a 10 percent premium increase overall for individuals in some parts of the country.
"An affordable, sustainable insurance market requires broad participation across all age groups to maintain more affordable premiums. As this analysis shows, overly restrictive age rating regulations would hurt a large portion of those with individual coverage -- making coverage less affordable and undermining the key goals of healthcare reform," said Scott P. Serota, president and CEO of BCBSA. "To ensure the long-term sustainability of healthcare reform, we must strike the right balance on age rating to avoid disproportionately burdening one segment of the population over another. For this reason, we support a 5 to 1 age rating similar to what the vast majority of states permit today."
The Oliver Wyman analysis also finds that restricting age rating ratios to 3 to 1 would increase premiums in many states by as much as 30 percent for younger people, relative to a 5 to 1 ratio.
"Younger individuals are much more sensitive to the costs of health insurance compared to older individuals. The bottom line is that if premiums are too high, young and healthy individuals simply will not purchase insurance and their needed cross-subsidies for older, sicker people will be lost, increasing the cost of healthcare for everyone," Serota said.
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Vice President Biden, Secretary Sebelius Issue New Report on Seniors and Health Insurance Reform
Vice President Joe Biden and Health and Human Services (HHS) Secretary Kathleen Sebelius today hosted a town hall meeting with seniors in Silver Spring, Md., and released a new report,
Health Insurance Reform and Medicare: Making Medicare Stronger for America's Seniors. The report, authored by HHS, outlines how health insurance reform will help seniors and answers key questions about President Obama's health insurance reform plan. The complete report is
available now at www.HealthReform.gov.
"We will protect seniors -- not burden them with out of pocket costs," said Vice President Biden. "The bottom line is, seniors will be better off under what we are proposing, and not a dollar from the Medicare trust fund will be used to pay for health insurance reform."
"Under health insurance reform, seniors will get better care and their health care costs will go down," said Secretary Sebelius. "Reform will strengthen Medicare, cut drug costs, and help ensure all seniors get the high-quality, affordable care they deserve."
The report highlights several problems in the current health care system and health insurance reform solutions such as:
* Preserving and strengthening Medicare.
According to the Medicare Trustees 2009 report, the Medicare Part A
Trust Fund will be exhausted by 2017. Health insurance reform will
extend the life of the Medicare Trust Fund by an additional four to five
years -- and delivery system reforms included in health insurance reform
have the potential to keep the Trust Fund solvent even longer into the
future. Health insurance reform will also reduce overpayments to private
plans and will clamp down on fraud and abuse to strengthen Medicare for
all seniors. Coupled with improvements in the quality of care, expansion
of the health care workforce, and reductions in out-of-pocket costs,
health insurance reform will ensure that Medicare will continue to
provide the high-quality, affordable coverage that America's seniors
deserve and expect.
* Cutting high prescription drug costs.
Prescription drug costs represent a significant expense for seniors.
While Medicare added a prescription drug benefit, this benefit includes
a coverage gap commonly called the "donut hole." In 2007, over 8 million
seniors hit the "donut hole." For those who are not low-income or have
not purchased other coverage, average drug costs in this coverage gap
are $340 per month, or $4,080 per year. Health insurance reform will
close the coverage gap in Medicare Part D over time, so seniors do not
have to worry about losing coverage for their drug costs. While the
closure of the coverage gap is phased in, health insurance reform will
also provide seniors with a discount of 50 percent on their brand name
medication costs in the coverage gap, saving thousands of dollars for
some seniors.
* Making preventive services free.
Many seniors do not receive recommended preventive and primary care,
leading to less effective and more expensive treatments. For example, 20
percent of women aged 50 and over did not receive a mammogram in the
past two years, and 38 percent of adults aged 50 and over have never had
a colonoscopy or sigmoidoscopy. Seniors in Medicare must pay 20 percent
of the cost of many preventive services on their own. For a colonoscopy
that costs $700, this means that a senior must pay $140 -- a price that
can be prohibitively expensive. Under health insurance reform, a senior
would not pay anything for a screening colonoscopy or other preventive
services. Reform will eliminate any deductibles, copayments, or other
cost-sharing for obtaining preventive services, making them affordable
and accessible.
* Ending overpayments to private insurance companies that cost all
Medicare beneficiaries.
The federal government pays private insurance companies on average 14
percent more for providing coverage to Medicare Advantage beneficiaries
than it would pay for the same beneficiary in the traditional Medicare
program. There is no evidence that this extra payment leads to better
quality for Medicare beneficiaries, and all Medicare beneficiaries pay
the price of these excessive overpayments through higher premiums --
even the 78 percent of seniors who are not enrolled in a Medicare
Advantage plan. A typical couple in traditional Medicare will pay on
average nearly $90 next year to subsidize private insurance companies
that do not provide their Medicare benefits. Health insurance reform
will eliminate excessive government subsidies to Medicare Advantage
plans, which could save the federal government, taxpayers, and Medicare
beneficiaries well over $100 billion over the next 10 years.
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Health Insurance Reform and Medicare: Making Medicare Stronger for America's Seniors. The report, authored by HHS, outlines how health insurance reform will help seniors and answers key questions about President Obama's health insurance reform plan. The complete report is
available now at www.HealthReform.gov.
"We will protect seniors -- not burden them with out of pocket costs," said Vice President Biden. "The bottom line is, seniors will be better off under what we are proposing, and not a dollar from the Medicare trust fund will be used to pay for health insurance reform."
"Under health insurance reform, seniors will get better care and their health care costs will go down," said Secretary Sebelius. "Reform will strengthen Medicare, cut drug costs, and help ensure all seniors get the high-quality, affordable care they deserve."
The report highlights several problems in the current health care system and health insurance reform solutions such as:
* Preserving and strengthening Medicare.
According to the Medicare Trustees 2009 report, the Medicare Part A
Trust Fund will be exhausted by 2017. Health insurance reform will
extend the life of the Medicare Trust Fund by an additional four to five
years -- and delivery system reforms included in health insurance reform
have the potential to keep the Trust Fund solvent even longer into the
future. Health insurance reform will also reduce overpayments to private
plans and will clamp down on fraud and abuse to strengthen Medicare for
all seniors. Coupled with improvements in the quality of care, expansion
of the health care workforce, and reductions in out-of-pocket costs,
health insurance reform will ensure that Medicare will continue to
provide the high-quality, affordable coverage that America's seniors
deserve and expect.
* Cutting high prescription drug costs.
Prescription drug costs represent a significant expense for seniors.
While Medicare added a prescription drug benefit, this benefit includes
a coverage gap commonly called the "donut hole." In 2007, over 8 million
seniors hit the "donut hole." For those who are not low-income or have
not purchased other coverage, average drug costs in this coverage gap
are $340 per month, or $4,080 per year. Health insurance reform will
close the coverage gap in Medicare Part D over time, so seniors do not
have to worry about losing coverage for their drug costs. While the
closure of the coverage gap is phased in, health insurance reform will
also provide seniors with a discount of 50 percent on their brand name
medication costs in the coverage gap, saving thousands of dollars for
some seniors.
* Making preventive services free.
Many seniors do not receive recommended preventive and primary care,
leading to less effective and more expensive treatments. For example, 20
percent of women aged 50 and over did not receive a mammogram in the
past two years, and 38 percent of adults aged 50 and over have never had
a colonoscopy or sigmoidoscopy. Seniors in Medicare must pay 20 percent
of the cost of many preventive services on their own. For a colonoscopy
that costs $700, this means that a senior must pay $140 -- a price that
can be prohibitively expensive. Under health insurance reform, a senior
would not pay anything for a screening colonoscopy or other preventive
services. Reform will eliminate any deductibles, copayments, or other
cost-sharing for obtaining preventive services, making them affordable
and accessible.
* Ending overpayments to private insurance companies that cost all
Medicare beneficiaries.
The federal government pays private insurance companies on average 14
percent more for providing coverage to Medicare Advantage beneficiaries
than it would pay for the same beneficiary in the traditional Medicare
program. There is no evidence that this extra payment leads to better
quality for Medicare beneficiaries, and all Medicare beneficiaries pay
the price of these excessive overpayments through higher premiums --
even the 78 percent of seniors who are not enrolled in a Medicare
Advantage plan. A typical couple in traditional Medicare will pay on
average nearly $90 next year to subsidize private insurance companies
that do not provide their Medicare benefits. Health insurance reform
will eliminate excessive government subsidies to Medicare Advantage
plans, which could save the federal government, taxpayers, and Medicare
beneficiaries well over $100 billion over the next 10 years.
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Sunday, August 09, 2009
New State-by-State Reports Show How Health Insurance Reform Will Benefit All Americans
HHS Secretary Kathleen Sebelius August 7 released Stable and Secure Health Care for America, a series of new state-by-state reports outlining how health insurance reform will improve health care for all Americans. Sebelius announced the availability of the new reports as part of a
Webcast -- "Health Insurance Reform: What's In It For You?" -- where Sebelius and top HHS officials took questions from the American people and discussed the importance of health insurance reform. The new reports are available at www.HealthReform.gov.
"These reports show how health insurance reform will help Americans save money, get better care, strengthen their insurance if they already have it, and afford insurance if they don't," said Sebelius. "Every American will benefit when we pass health insurance reform."
The reports released today show reform will:
* Lower health care costs;
* Increase health care choices by protecting what works and fixing
what's broken; and
* Assure quality, affordable care for all Americans.
Friday's reports are the second in a series of state-by-state reports on health care across the country. Earlier this summer, Sebelius released The Health Care Status Quo in Your State, a series of state by state reports on the current state of health care in America. The reports are
available at http://www.healthreform.gov/healthcarestatus.html.
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Webcast -- "Health Insurance Reform: What's In It For You?" -- where Sebelius and top HHS officials took questions from the American people and discussed the importance of health insurance reform. The new reports are available at www.HealthReform.gov.
"These reports show how health insurance reform will help Americans save money, get better care, strengthen their insurance if they already have it, and afford insurance if they don't," said Sebelius. "Every American will benefit when we pass health insurance reform."
The reports released today show reform will:
* Lower health care costs;
* Increase health care choices by protecting what works and fixing
what's broken; and
* Assure quality, affordable care for all Americans.
Friday's reports are the second in a series of state-by-state reports on health care across the country. Earlier this summer, Sebelius released The Health Care Status Quo in Your State, a series of state by state reports on the current state of health care in America. The reports are
available at http://www.healthreform.gov/healthcarestatus.html.
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