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Healthcare Reform Update - April 8-16, 2010


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Compiled by Andrew Fichter*

April 16, 2010

Abortion Coverage Debate Moves To The States
April 8, 2010

The debate over insurance coverage for abortion is moving to the state level, with "lawmakers in at least six states" pushing for a ban on the coverage that goes beyond provisions in the new health law, The Wall Street Journal reports. "The final legislation requires insurers that sell plans in new government-run exchanges to segregate payments for abortion coverage from other premiums to ensure government subsidies won't go toward the procedure. Still, many abortion opponents say that didn't go far enough. So lawmakers are turning to another provision in the legislation that says states can choose to prevent plans offered through their exchanges from covering abortion altogether. That would likely affect most individual and small-group plans in a state, starting when the exchanges launch in 2014. The new state-level proposals are likely to rekindle abortion as a political issue in November elections."

But "[i]t's not clear how much state restrictions on abortion coverage in their exchanges would affect abortion access. Different studies have found different levels of coverage for abortion among private plans. One from [the] Guttmacher [Institute] said that 13% of abortions in 2001 were directly billed to insurers, though the institute says this may not give a full picture, since covered women may pay up front and seek reimbursement. Many women seeking abortion are uninsured or have Medicaid, which generally doesn't cover abortion" (Mathews, 4/8).

Wave Of Tax Changes Comes With Health Law
April 8, 2010

The new health law will make a variety of changes to the tax code, including higher levies on the wealthy and millions of dollars in lost deductions for some corporations.

Los Angeles Times: "With enactment of his signature healthcare law, President Obama has also made good on another major campaign promise: to ease the tax burden on middle-class Americans and pay for his domestic agenda by raising taxes on the wealthy." Upper-income families earning more than $250,000 ($200,000 for individuals) will pay new taxes to pay for the overhaul on top of expiring Bush-era tax cuts. Together they could be on the hook for another $650 billion over ten years (Hook, 4/7).

Detroit Free Press: A roundup of new tax changes includes: A 10-percent excise tax on tanning services; deductions for health expenses will be limited beginning in 2013; the adoption tax credit will be increased and extended; and new penalties will be imposed on people who don't have health insurance. The penalties, beginning in 2014, will range from $95 to $285 a year to start, but will rise in 2016 to $695 for an adult (4/8).

The (Raleigh, N.C.) News & Observer: "A new 10 percent tax on indoor tanning sessions, buried in the new health care law, couldn't come at a worse time for Jill's Beach salons." Tanning salon owners are concerned that the new levy comes on top of revenue drops as high as 20 percent as Americans curb their personal budgets because of the slumping financial situation (Ranii, 4/8).

The (Norfolk) Virginian-Pilot: "Norfolk Southern Corp. has announced it will pay about $27 million more in expenses for the first quarter of the year as a result of federal health care legislation signed last month." The charge is the result of a health-law tax change that would affect a deduction for company-sponsored drug coverage (McCabe, 4/8).

Associated Press/Bloomberg BusinessWeek: For the same reason, "United States Steel Corp. said Wednesday it expects to record a $27 million charge in the first quarter as a result of tax adjustments in the health care reform law" (4/7).

Fox News: Meanwhile, Republicans are warning that the IRS tax collectors will seek new power. Although "IRS Commissioner Douglas Shulman says his agents may target taxpayers' refunds in order to collect fines from those who don't buy health coverage," but little more, Republicans expect the IRS to engage in a power grab. "That'll be the next part, the broadening of the authority of the Internal Revenue Service," said Rep. Peter Roskam, R-Ill. (4/7).

Comparative Effectiveness Funds Spur Changes, But Not Without Critics
April 14, 2010

The new health law will infuse $3 billion into health research that compares treatments to gauge which are most effective, building on an earlier federal investment of $1.1 billion from the stimulus package, Bloomberg BusinessWeek reports. In response to the recent wave of interest in so-called "comparative effectiveness research," Harvard Medical School has hired five new faculty members to study prescription drugs after receiving new grants since July that were nearly three times the normal annual budget for such research. Interest in such research has also spurred UnitedHealth to acquire QualityMetric, Inc., a firm that "measures how patients rate the effectiveness of care" (Tirrell, 4/14).

Despite the growing interest in comparative effectiveness studies, the research is not without controversy. The Iowa Independent reports, at a recent town hall meeting hosted by Sen. Charles Grassley (R), a woman complained that the government planned to establish, as part of the health overhaul, "a special committee that will . . . be 'between every doctor and every patient.'" The committee in question is the Patient-Centered Outcomes Research Institute, the group that will oversee comparative-effectiveness research. Grassley responded to the audience member's remarks by suggesting a comparison with a British health institute that he said amounts to government determining "the value of life" (Hancock, 4/13).

CLASS Act Provision In Health Law Will Provide Long-Term Care For Elderly, Disabled
April 15, 2010

Kaiser Health News: The Community Living Assistance Services and Supports (CLASS) Act program, a provision of the health reform law, "establishes a voluntary, long-term care program that will provide cash to enrollees who suffer at least two limitations in daily activities, such as eating, bathing and dressing. . . . There are about 10 million Americans who need long-term care services, including 4 million under age 65."

"Under the terms of the health law, the CLASS program has to pay for itself through premiums and cannot be subsidized by the government. Keeping the program solvent, CBO said, hinges on enrollment of healthy individuals" (Meyer, 4/15). "It is well known that nearly all seniors and adults with disabilities want to remain in their homes as long as possible, and it's vastly cheaper for states to provide the help—meals, bathing and dressing, and other home services—that allows them to do so rather than resort to institutionalization."

But "here's the problem: Medicaid—which pays nearly 50 percent of all nursing home bills in the country and 40 percent of all long-term care—is biased in favor of institutional care. When seniors qualify financially and are deemed to need care, Medicaid funding for a nursing home bed is guaranteed. But for those who want to remain at home, funding is only a possibility and a national shortage of home health providers often means long delays." The new law gives states incentive to reduce the costs of long-term care (Vestal, 4/15).

*We would like to thank Andrew Fichter, JD, PhD (Widener University Law School, Wilmington, DE), for selecting the articles for this week's update.

This information was reprinted from with permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery. © Henry J. Kaiser Family Foundation. All rights reserved.

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