• President wants health care bill broader than insurance reform
• Reconciliation still a possibility for health reform
• CBO reports on Medicare trust fund savings under Senate reform bill
• DOL, HHS, Treasury issue rules requiring parity in treatment of mental and substance use disorders

• Health care costs increase at double digit rates, survey finds
• Employers committed to employee health and wellness programs
• Top health care plans continue to see declines in membership rates
• Americans divided about health reform proposals overall

President wants health care bill broader than insurance reform

President Obama on January 22, 2010 said that a final health care reform package needs to be broader than insurance reform alone. As Democrats in Congress try to determine the next step for health care reform legislation following the upset victory of Republican Scott Brown to a Senate seat in Massachusetts, Obama stressed that many of the proposed insurance reforms are "connected to some other things we have to do to make sure that everybody has some access to coverage."

"We can't prohibit insurance companies from preventing people with preexisting conditions getting insurance unless everybody essentially has insurance," Obama said at a town hall meeting in Elyria, Ohio. In an interview on January 20, the president urged congressional Democrats to "coalesce" around elements common in the House and Senate bills, namely insurance reform, health care cost containment and small business assistance. Some lawmakers favor a narrower bill focusing on insurance provisions alone.

However, White House Press Secretary Robert Gibbs on January 21 stepped back from recommending specific provisions that should be in a final package, suggesting that Democratic leaders need time to "let the dust settle" before determining the path forward. Preparing for what could be a messy legislative process ahead, Obama told the town hall audience that Congress should not shy away from passing a health care bill simply because the issue is controversial or complex. "The health care system is a big, complicated system, and doing it right is hard," Obama said.

Source: CCH Washington News Bureau.

Reconciliation still a possibility for health reform

The use of the Congressional process known as reconciliation appears to be one remaining option to pass health reform legislation quickly, because the Senate Democrats no longer have the 60 votes necessary to overcome a Republican filibuster and House Speaker Nancy Pelosi (D-Cal) on January 21, 2010 closed the possibility of the House of Representatives passing the Senate bill (HR 3590), saying, "There isn't a market right now for proceeding with the full bill unless some big changes are made."

In October 2009, the House Committee on Ways and Means approved a procedural measure to send HR 3200, the America's Affordable Health Choices Act of 2009, to the House Committee on the Budget with reconciliation instructions.

Reconciliation process. Under reconciliation the Senate Finance and Health Education, Labor, and Pensions (HELP) committees would send proposed changes within their jurisdictions to the Senate Budget Committee. The House Ways and Means, Education and Labor and Energy, and Commerce Committees would report their own changes to the House Budget Committee.

The House and Senate budget committees would then craft legislation based on those changes.

The legislation crafted by the budget committees would go to the full House and Senate, with a maximum of 20 hours for debate, little or no opportunity to make amendments, and subject to a simple majority vote.

In the Senate, the bill may be challenged on the floor by any senator who asserts that a provision runs afoul of the "Byrd Rule" (named for Senator Robert Byrd (WVa)) and ask the Senate parliamentarian to strip a non-budget related provision from the bill (or, in Senate lingo, to give it a "Byrdbath"). If that happens, then at least 60 senators must agree to add the provision back to the bill.

If the House and Senate bills are approved, they generally are sent to a conference of House and Senate negotiators to agree on a single piece of legislation. That single bill is then returned for a final vote by the two chambers under strict rules that set a timetable for action and that prohibit any amendments. The compromise measure is also subject to Senate "Byrd Rule" objections. If the bill is passed, it would then be sent to the president for his signature or veto.

Since the early 1980s, reconciliation has been used 19 times, primarily to steer controversial fiscal and budgetary policies through the Senate. COBRA continuation of coverage provisions originally were included in the reconciliation bill that gave the provisions their name (Consolidated Omnibus Budget Reconciliation Act of 1985).

CBO reports on Medicare trust fund savings under Senate reform bill

The Patient Protection and Affordable Care Act (PPACA), as passed by the Senate on Dec. 24, 2009, would extend the life of the Medicare Part A trust fund until at least 2019, according to an analysis of the legislation by the Congressional Budget Office. Under current law, the Part A trust fund would be exhausted by the end of fiscal year 2019. Under provisions of PPACA, the trust fund would have a balance of $170 billion at the end of 2019. The majority of the hospital insurance trust fund savings under PPACA, however, would be used to pay for other federal spending and therefore would not enhance the ability of the government to pay for future Medicare benefits. CBO analysis, Jan. 22, 2010.

DOL, HHS, Treasury issue rules requiring parity in treatment of mental and substance use disorders

On January 29, 2010, the US Departments of Labor, Health and Human Services (HHS), and the Treasury jointly issued new rules providing parity for consumers enrolled in group health plans who need treatment for mental health or substance use disorders.

The new rules prohibit group health insurance plans - typically offered by employers - from restricting access to care by limiting benefits and requiring higher patient costs than those that apply to general medical or surgical benefits. The rules implement the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

Parity law expanded. MHPAEA greatly expands on an earlier law, the Mental Health Parity Act of 1996, which required parity only in aggregate lifetime and annual dollar limits between the categories of benefits and did not extend to substance use disorder benefits.

The new law requires that any group health plan that includes mental health and substance use disorder benefits along with standard medical and surgical coverage must treat them equally in terms of out-of-pocket costs, benefit limits and practices such as prior authorization and utilization review. These practices must be based on the same level of scientific evidence used by the insurer for medical and surgical benefits. For example, a plan may not apply separate deductibles for treatment related to mental health or substance use disorders and medical or surgical benefits. They must be calculated as one limit.

Coverage. MHPAEA applies to employers with 50 or more workers whose group health plans choose to offer mental health or substance use disorder benefits. The new rules are effective for plan years beginning on or after July 1, 2010.

Background. The Wellstone-Domenici Act is named for two dominant figures in the quest for equal treatment of benefits. The late Senator Paul Wellstone (D-Minn), who was a vocal advocate for parity throughout his Senate career, sponsored the ultimately successful full parity act. He was joined by former Senator Pete Domenici (R-NM), who first introduced legislation to require parity in 1992. Champions of the legislation also included the bipartisan team of Representative Patrick Kennedy (D-RI), and former Representative Jim Ramstad (R-Minn).

The issue of parity dates back more than 40 years to President John F. Kennedy, and also was supported by President Clinton and the late Senator Edward Kennedy.

"Today's rules will bring needed relief to families faced with meeting the cost of obtaining mental health and substance abuse services," said US Secretary of Labor Hilda L. Solis. "The benefits will give these Americans access to greatly needed medical treatment, which will better allow them to participate fully in society. That is not just sound policy, it's the right thing to do."

"The rules we are issuing today will, for the first time, help assure that those diagnosed with these debilitating and sometimes life-threatening disorders will not suffer needless or arbitrary limits on their care," said Secretary of Health and Human Services Kathleen Sebelius. "I applaud the longstanding and bipartisan effort that made these important new protections possible."

"Workers covered by group health plans who need mental health and substance abuse care deserve fair treatment," said Deputy Treasury Secretary Neal Wolin. "These rules expand on existing protections to ensure that people don't face unnecessary barriers to the treatment they need."

Submitting comments. The interim final rules released today were developed based on the departments' review of more than 400 public comments on how the parity rule should be written. Comments on the interim final rules are still being solicited. Sections where further comments are being specifically sought include so-called "non quantitative" treatment limits such as those that pertain to the scope and duration of covered benefits, how covered drugs are determined (formularies) and the coverage of step-therapies. Comments are also being specifically requested on the regulation's section on "scope of benefits" or continuum of care.

Comments on the interim final regulation are due 90 days after the publication date. Comments may be emailed to the federal rulemaking portal at http://www.regulations.gov/. Comments directed to HHS should include the file code CMS-4140-IFC. Comments to the Department of Labor should be identified by RIN 1210-AB30. Comments to the Treasury's Internal Revenue Service should be identified by REG-120692-09. Comments may be sent to any of the three departments and will be shared with the other departments. Please do not submit duplicates.

The Interim Final Rules under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, scheduled for publication in the Federal Register on February 2, 2010, are available at http://hr.cch.com/cases/Health_Parity.pdf.

Source: US Department of Labor.

Health care costs increase at double digit rates, survey finds

Costs for the most popular types of health care coverage are projected to increase at double-digit rates for 2010, according to a national survey of insurers and administrators by Buck Consultants, an ACS company.

In its 21st National Health Care Trend survey, Buck Consultants measured the projected average annual increase in employer-provided health care benefit costs. The study analyzed responses from over 100 health insurers and HMOs. Insurers providing medical trends for the survey cover a total of approximately 78 million people.

Costs for the most popular medical plans are projected to increase by more than 10 percent and are in line with the trends reported in the prior two surveys. Health insurers reported an average prescription drug trend of 10.9 percent, up 0.1 percent from the 10.8 percent reported in the prior survey.

For plans that supplement Medicare, health insurers reported a projected increase of 5.8 percent excluding prescription drug coverage, down from 7.4 percent in the prior survey. This lower trend reflects the impact of federal controls on Medicare fees and the lower increases expected in Medicare deductibles and copays.

The survey also reported trend factors for dental and vision plans.

"Health insurers are concerned about higher costs due to federal mental health parity, as well as an increase in COBRA enrollment," said Harvey Sobel, FSA, a Buck principal and consulting actuary who directed the survey. "There is also uncertainty due to health care reform and its impact on all sectors of the health care industry."

Health insurers use trend factors to calculate premium rates, and large self-funded employers use these trend factors to budget their future health care costs. In general, trend factors provide for price increases that may result from such variables as inflation, utilization of services, technology, changes in the mix of services, and mandated benefits.

Source: Buck Consultants, January 28, 2010.

Employers committed to employee health and wellness programs

Most midsize and large companies in the United States are strongly committed to continuing to invest in health improvement programs for their employees in 2010, according to a recent survey from Fidelity Investments and the National Business Group on Health (NBGH). Fidelity and the NBGH conducted the survey, which includes responses from 121 firms, online from Sept. 11 to Oct. 5, 2009. The survey results reveal employers’ strong commitment to health improvement programs for their employees, regardless of any health care reform changes in Washington (91% expressed such support).

Employer annual per-employee spending on health improvement and wellness programs averages 2% of employers’ total spending for medical claims, Fidelity and the NBGH found. The 2% figure excludes costs associated with employee incentives, onsite health centers, and human resources staff dedicated to wellness programs, they explained. Most employers have implemented an average of 21 programs focused on prevention, lifestyle wellness, medical condition management, and communication and education. Half (51%) of all employers planned to implement at least one additional health improvement program in 2010, and 89% expected to maintain the current programs they offer.

ROI and measurement. The study revealed that six out of ten companies with health improvement programs do not know their return on investment (ROI) across all of their programs. In fact, companies ranked outcome measurement as their number one challenge, followed by employee engagement and participation. More than one in four (27%) companies, however, do not measure the outcomes of these programs, and 65% of companies have no measurable goals for their initiatives.

“Wellness programs are now a standard workplace benefit as employers recognize the need to invest in initiatives that help employees to better manage their health given that health care costs continue to soar,” said Sunit Patel, senior vice president of Fidelity’s consulting services business, which commissioned the study with the NBGH. “However, when it comes to measurement, wellness programs are in their infancy. Most employers need help establishing clear program goals and measuring the impact these programs have on the overall well-being and productivity of their employees.”

“Offering wellness programs and encouraging employees to maintain healthy lifestyles can be enormously beneficial to any organization, as well as to its workers,” said Helen Darling, NBGH president. “Employers, however, won’t see meaningful results from these programs unless they effectively communicate information about them to employees and provide incentives that will motivate employees to participate and focus on taking the necessary steps to improve their own health.”

In order to encourage participation in wellness programs, more than half (57%) of the surveyed companies said that they use incentives with a cash value. The most common incentives offered are to reduce the employee’s health care premium, followed by cash and contributions to a health reimbursement arrangement or a health savings account. One out of five companies (20%) spends more than $400 per employee per year on incentives alone. Nearly one-third (29%) spend less than $100 per employee.

Prevention and treatment. Companies are spending nearly the same amount of money on prevention and wellness programs (45%) as on programs to manage conditions after the onset of disease or illness (43%). The most prevalent programs in the prevention and wellness categories are worksite flu shots (90% of companies offer them), preventive care reminders related to screenings or annual exams (68%), employee assistance programs (92%), stress management (68%), and smoking cessation (66%). The top condition management programs used are telephone hotlines where nurses are available to answer questions (79%); diabetes disease management (74%); and coronary artery disease, congestive heart failure, and asthma disease management (69%).

For further information, visit http://www.businessgrouphealth.org.

Top health care plans continue to see declines in membership rates

From September 2008 to September 2009, the nation’s eight top health care insurers saw membership decline by 1.7 million members, according to research from Mark Farrah Associates (MFA), a health care plan market data and analysis aggregator. This was a decrease from 133.2 million members in September 2008 to 131.5 million members in September 2009. MFA’s review of enrollment and financial trends included information from the following health care insurers: Aetna, CIGNA, Health Care Service Corporation, Health Net, Humana, Kaiser Permanente, UnitedHealth Group, and WellPoint. These insurers cover nearly 60% of the total insured population in the nation, according to MFA.

The recession and high unemployment will continue to take a toll in terms of declining membership, as most of the leading health care plans are projecting year-end and 2010 membership declines. According to MFA, Aetna has projected a “300,000 to 350,000 net decrease in total national account membership during first quarter 2010.” UnitedHealth also has projected its “commercial membership decline to slow meaningfully” for 2010 as compared to 2009, which means that UnitedHealth’s 2010 membership is expected to decrease, just at a slower rate than in 2009.

For more information, visit http://www.markfarrah.com/healthcarebs.asp.

Americans divided about health reform proposals overall

A new Kaiser Family Foundation poll found that Americans are divided over congressional health reform proposals, but also that large percentages of people, including skeptics, become more supportive after being told about many of the major provisions in the bills.

The January Kaiser Health Tracking Poll, conducted before the Massachusetts Senate vote, found that opinion was divided when it comes to the hotly debated legislation, with 42% supporting the proposals in Congress, 41% opposing them and 16% withholding judgment. However, majorities reported feeling more favorable toward the proposed legislation after learning about many of the key elements, with the notable exceptions of the individual mandate and the overall price tag.

For example, after hearing that tax credits would be available to small businesses that want to offer coverage to their employees, 73% said that it made them more supportive of the legislation. Sixty-seven percent said they were more supportive when they heard that the legislation included health insurance exchanges, and 63% felt that way after being told that people could no longer be denied coverage because of preexisting conditions. Sixty percent were more supportive after hearing that the legislation would help close the Medicare “doughnut hole” so that seniors would no longer face a period of having to pay the full cost of their medicines.

n some cases, elements of the legislation were popular enough to prompt a majority of skeptics to soften their opposition, including the tax credits for small businesses (62% of current opponents said it made them more supportive), the fact that most people’s existing insurance arrangements would not change (59%), and the stipulation that no federal money would go to abortion (55%).

Confusion remains. The poll found that even after a year of substantial media coverage of the health reform debate, many Americans remain unfamiliar with key elements of the major bills passed by the House and Senate. About half are aware that tax credits would be available to small businesses, one of the most popular provisions. In addition, 44% recognize that the legislation would help close the Medicare “doughnut hole.”

Among the least known elements of the bills, those with the biggest potential to change minds include the fact that the Congressional Budget Office has said health reform would reduce the deficit (only 15% expect the legislation to reduce the deficit, but 56% said hearing that makes them more supportive), and that the legislation would stop insurers from charging women more than men (37% are aware that the legislation would do this, but 50% said this provision makes them more supportive).

Donut hole. The survey also found that America’s seniors lean against the proposed legislation, with 48% opposed, 37% in favor and, 15% offering no opinion. However, the survey found that, somewhat surprisingly, seniors were less likely than younger Americans to be aware that the legislation includes provisions to close the “doughnut hole.” Thirty-seven percent of seniors were aware of such provisions, compared to 53% of those younger than age 40. Six in ten seniors said that if the legislation did work to close the doughnut hole, they would feel more supportive of it, a level of support identical to that found among younger Americans.

For more information, visit http://www.kff.org/kaiserpolls/8042.cfm.