Without being too specific, President Obama signaled a willingness to consider changes to the Patient Protection and Affordable Care Act (PPACA) during his State of the Union speech last week. The only detail referenced, though, was the proposed elimination of a tax-reporting provision of the law that is unpopular with small businesses because of the new administrative burdens it creates. The provision mandates that small businesses provide a 1099 form to any entity from which they purchase more than $600 in goods and services, starting in 2012. The proposed elimination drew bipartisan applause during the speech. But if both sides of the aisle appear to like that particular revision, it is far less clear that consensus can be reached on any of the other proposals floated so far. A new survey shows that Americans remain divided on the health care law, with the percentage having an unfavorable view of the law growing. But the survey also found that a majority of Americans are opposed to using tactics such as blocking appropriations as a means to slow or undercut implementation of the law.
A pattern seems to be developing on the House side of Congress as Republicans are now flexing their majority muscles via Congressional hearings aimed at questioning the legality and practicality of the health care reform act passed in 2010. It was the Ways & Means Committee’s turn last week as the committee heard from two small business owners who expressed concern about future health insurance costs, their ability to maintain current levels of coverage, and barriers to expanding and hiring new employees. Committee Chairman Dave Camp (R-MI) noted the inherent conflict of imposing new taxes (e.g., on insurers) and expecting cost containment nonetheless. Rep. Richard Neal (D-MA) discussed the importance of the individual health insurance coverage requirement, emphasizing that the success of market reforms is closely linked to bringing everyone into the system. Austan Goolsbee, Chairman of the President’s Council of Economic Advisors, testified regarding the Administration’s expectation that the new law will succeed in holding down costs, and he highlighted the value of the small employer tax credits. On the flip side, Douglas Holtz-Eakin, former CBO Director and President of the American Action Forum, cautioned that the law frontloads new taxes and backloads new spending, thereby creating the illusion of federal deficit reduction. Holtz-Eakin testified that the law will have a detrimental impact on employment, wages, and economic growth.
Another health care hearing last week was held by the House Budget Committee, which focused on the fiscal consequences of the health reform law. Rep. Paul Ryan (R-WI), the committee chairman, emphasized that “health care spending is driving the explosive growth in our spending and our debt.” He criticized the new law as a “centrally planned, bureaucratically run health care system” and expressed interest in building bipartisan support for policies that create incentives to enhance quality, reduce costs, and promote patient satisfaction. Richard Foster, chief actuary of the Centers for Medicare & Medicaid Services (CMS), testified that the health reform law (from 2010 through 2019) will increase national health expenditures by an estimated $311 billion, or 0.9 percent, compared to prior law. He also discussed the impact of Medicare funding cuts and indicated that some of the savings may be “unrealistic.” Foster expressed particular concern about productivity adjustments for hospitals, skilled nursing facilities, and home health agencies, stating that simulations by his office suggest that roughly 15 percent of Part A hospital providers would become unprofitable within 10 years as a result of the productivity adjustments.
Arizona health insurance : While the legislature is focused primarily on the budget and the governor’s request for a Medicaid waiver, bills are beginning to be introduced. Of interest are: a proposed requirement that state employees be offered a wellness program as part of their health benefits; a mental-health parity mandate; a proposed requirement that the sponsor of a benefit mandate review data evaluating the effectiveness of the treatment or service; and a proposed exemption of health-care-sharing ministries from regulatory oversight on the premise that such practices do not constitute the business of insurance.
California health insurance : As the legislature continues to introduce bills in advance of the February 18 deadline, several repeat bills have already been introduced, including mandates on mental health, acupuncture and maternity services. A new mandate has been proposed to require health plans to cover fertility preservation services for cancer patients. The legislation, sponsored by the American Society for Reproductive Medicine, would require coverage of services such as ovarian suppression, freezing of eggs and ovarian tissue, and fertility services after treatment of the cancer.
Illinois health insurance : A formal health insurance exchange bill has not yet been introduced for consideration in the General Assembly. However, the Health Insurance Rate Review Act has been introduced to create an independent, quasi-judicial Health Insurance Rates Review Board to determine whether proposed “insurance rates are reasonable and justified.” The bill sets forth duties and prohibited activities concerning the board, and it would allow the Governor to make all of the appointments. The bill would set requirements and procedures that health insurance carriers must follow in filing current and proposed rates and rate schedules, and it would allow the new board to review and approve/reject all rates and rate schedules filed or used by a carrier. Rate standards, public notice, and hearings are all addressed. The General Assembly is expected to consider quite a few bills and hold hearings on both exchanges and rate review during the current session.
Oklahoma health insurance : Last week the Department of Insurance held a meeting of the Oklahoma State Healthcare Exchange as a first step in the creation of a strategic road map. The Department announced the creation of Key Advisory Work Groups to develop recommendations on exchange-related issues. Each work group and sub-group will be responsible for researching and developing recommendations on language to be used for the development of a strategic plan during the next three months. The key issues of study will include: governance and administrative structure, eligibility process and infrastructure, enrollment, information technology, carrier and plan selection, financial management, and education and marketing. Stakeholders attending the meeting were asked to volunteer to participate on groups for which they have knowledge and leadership experience. The Department hopes to assign volunteers to their preferred committees in the next few weeks so that workgroup meetings can get underway.
Texas health insurance : While publicly affirming his opposition to the federal health care reform bill, Rep. John Zerwas is explaining health insurance exchange legislation he drafted through an op-ed piece published in multiple major newspapers in the state. Zerwas argues that Texas could be forced to cede regulatory control of a significant chunk of its health insurance market to the federal government if it fails to create its own exchange this session. He explained that a desire to avoid such oversight has generated broad support for his bill from groups that include the Texas Association of Business, Texas Hospital Association, Texas Medical Association, Texas Restaurant Association and two Texas health insurance industry groups, as well as Republicans and Democrats in the legislature. Though supportive of efforts by Texas Attorney General Greg Abbott and others to have the health care bill ruled unconstitutional, Zerwas said his connector proposal is about bringing down the cost of coverage by promoting competition and ensuring that Texas families and Texas employers have the right to choose their own coverage. He called passage of the bill good policy, regardless of whether PPACA is repealed, replaced or unfunded. The legislature will debate the bill during the current session, which will end June 1, 2011.