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Healthcare Reform Update - November 19-25, 2009


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Compiled by Brian White*

November 25, 2009

Poll: Public Most Concerned With Bread-And-Butter Issues In Health Reform Debate

By Christopher Weaver, KHN Staff Writer
November 25, 2009

Even as the health overhaul legislation creeps forward, one thing that's been moving even slower is public opinion. The one-word description of American attitudes from different polls and different pollsters have been: "split," "divided," and, well, "split." What's more, they have been for months, and are expected to remain so barring a major new development in the debate, say the Kaiser Family Foundation's experts. (KHN is a program of the foundation).

A new Kaiser tracking poll "shows little movement in measures of public opinion . . . from recent months." According the poll, 35 percent want Congress to take on health care now, and like what they've heard about the current Democratic bills. Slightly fewer, 33 percent, want reform, but not what Democratic lawmakers have in mind. And 26 percent think Congress should not spend time on the issue now.

"There doesn't appear to be anything . . . that suggests debate is going to tip radically," said Drew Altman, president and chief executive of the Kaiser Family Foundation.

What recent polls do show is that views can sway as specific issues, such as abortion or the public option, rise and fall from prominence in the debate. But, changes in people's views on those specific issues don't seem to affect their broader outlook about the legislation or the need for an overhaul.

"There are two different health reform debates," Altman said. "There's the inside game and the swirling debate about the issues in contention on Capitol Hill. Then, there are the issues mostly on the public's mind, and those are bread and butter issues." At the top of the rankings for issues that affect people personally was "making sure affordable health insurance plans are available;" 79 percent said that was "extremely" or "very" important.

Kaiser's monthly tracking poll is built to "simulate the debate," Altman explains, capturing shifts on issues important at the time. The November edition, for instance, found that a top priority is "not adding to the country's budget deficit." The public option and malpractice reform got lower marks, with less than 20 percent saying either is "extremely important."

But, the poll also measures broader views. Those have remained more constant, in part because issues individuals are immediately concerned about, like how much their insurance costs and whether they have access to medical care, don't turn on a dime like Washington's message machine.

Health Reform's Impact on Premiums: Winners, Losers And, For Many, A Question Mark
By Julie Appleby, KHN Staff Writer
November 25, 2009

As the health care battle rages on, one central question keeps popping up: How would legislation affect premiums paid by individuals and small businesses, two groups that currently face wildly unpredictable rate increases year to year?

Republicans say premiums would go up, partly because of the possibility of new taxes on insurers. Democrats say they'll go down because of sweeping new regulations on insurers, as well as billions in federal subsidies to help individuals and small businesses.

Who's right? Perhaps both. There's heated debate over the long-term outlook. But, initially, many economists, insurers and health policy analysts agree, there would be a change of fortune for some people. Those with health problems would likely pay less, for example, while younger Americans would likely pay more.

The Senate and House bills would overhaul the way insurance is sold to individuals and small groups. They would buy policies in new, regulated marketplaces, called exchanges. Insurers could no longer reject applicants with health conditions, or set annual or lifetime limits on coverage. New rules would alter how they set premiums, tightening limits on how much rates can vary by age, for example.

Those rules, including a ban on insurers basing premiums on factors such as health status and gender, mean people with medical problems and women should initially see their rates drop compared with what they currently pay, says economist Paul Ginsburg, president of the Center for Studying Health System Change, a nonpartisan research group in Washington.

Proposed limits on how much insurers can adjust premiums based on age could initially lower premiums by more than 20 percent for older residents compared with current averages, an analysis by America's Health Insurance Plans, the insurance industry's lobbying group, says. Yet, those limits also mean that rates for younger ones could rise by more than 70 percent.

Sharp premium jumps caused by one or two employees falling seriously ill should moderate, because of the bar on considering workers' health when setting premiums, Gene Sperling, counselor to the Secretary of the Treasury, told Congress last month. But, that rule could also mean small businesses with a mainly healthy worker force could see premiums rise.

So many factors affect premiums--some that would push up premiums and others that would lower them--that calculating the effect on individuals or families is very difficult, the CBO said in September after analyzing the Senate Finance Committee bill, which became the basis of the legislation now on the floor.

To be sure, without passage of any legislation, insurance premiums for employers and individuals are projected to continue to rise faster than inflation for the foreseeable future. As a result, more employers, especially small ones, would be likely to drop coverage, while others would continue to raise the amounts workers pay toward premiums and out of pocket costs, a study by the Urban Institute found. Under current law, the Commonwealth Fund estimates that the average cost of a family plan offered by employers, large and small, would approach $24,000 by 2020, up from about $13,000 now.

In the long run, economists say, controlling overall medical spending is the most effective way to hold down premium increases. But other factors would come into play, too: How well the exchanges work, whether enough young and healthy people enroll and the breadth of the coverage required by Congress.

--Exchanges: These state or national marketplaces could increase the number of insurers competing for business and allow consumers to compare prices among standardized policies, which could slow premium growth. But if the exchanges attract too few policyholders, they may not achieve the level of competition economists envision. Insurers would have lower overhead and administrative costs in the exchange, the CBO says. They would also face annual federal review of their premiums and could be excluded from the exchanges if they seek excessive increases.

--Subsidies and penalties: Premium growth would be tied closely to whether the carrot and stick approach gets the young and healthy to enroll. Insurance spreads risk, so those who use little medical care help subsidize those with high costs. The legislation offers subsidies to people earning up to 400 percent of the federal poverty level, currently about $73,240 for a family of three. At the same time, the legislation would fine those who don't enroll, with some exemptions. The Senate penalty would phase in, from $95 per person the first year--2014--to $750 per person by 2016. Insurers and some economists say those penalties would fail to prevent some people--especially younger, healthier ones--from forgoing insurance until they fall sick, which could raise premiums for everyone else. The House bill would fine the uninsured: 2.5 percent of their adjusted gross income, with a cap set at the average national premium cost.

--Benefit levels: The more benefits Congress requires, the higher the premium would be. Under a basic package each insurer selling in the exchange must offer, benefits would include coverage of preventive care, such as mammograms, along with hospitalization, doctor visits, prescription drugs and maternity care. The basic plan in the Senate bill would cover at least 60 percent of estimated medical costs; the House plan, 70 percent. Some policies currently bought by individuals and small businesses don't cover those minimums. So those policyholders, if they change plans, must meet new minimums--and would likely pay more. The CBO estimates that the basic policies would carry annual premiums of up to $5,300 for an individual and about $15,000 for a family by 2016. Those premiums are less than what the CBO projects individuals would pay in 2016 under current law, $6,000, but higher than its projected family premium of $11,000.

The bills take a stab at slowing national spending on medical care and services, which is projected to rise 6.2 percent a year through 2018. They include such steps as payment reductions in Medicare, incentives for doctors and hospitals to coordinate care, and a tax on high-cost insurance, says economist Len Nichols of the centrist New America Foundation, a think tank in Washington.

"There will be a lot more incentives to deliver high-value care, which means lower premium growth over time," Nichols says.

Still, there isn't agreement that such measures go far enough to slow spending.

That's "not being addressed much in any of the legislative proposals," says Christine Eibner, an economist with RAND, a think tank. Because of that, "I don't think there's any reason to think (premium growth) will moderate."

With Senate Health Bill, Reid Tries To Balance Many Interests
By Mary Agnes Carey and Phil Galewitz, KHN Staff Writers
November 18, 2009

In one of the most anticipated events in the health reform debate, Majority Leader Harry Reid, D-Nev., tonight released the bill expected to go to the Senate floor. Reid added new taxes and modified major provisions of health bills passed by two Senate panels in his quest to meet President Barack Obama's target of health legislation that would cost less than $900 billion and win 60 votes in the Senate.

Reid's bill would delay for one year, from 2013 to 2014, provisions dealing with subsidies, creation of health insurance "exchanges" and an expansion of the Medicaid program to 133 percent of the federal poverty level.

As expected, Reid included a provision in the bill that would allow states to opt-out of a government-run public health insurance plan though states would have to pass legislation to do so. Abortion could be covered under the public plan but only if the secretary of Health and Human Services could certify that no taxpayer funds would be used, according to Senate Democratic aides.

"There will be a strict firewall between federal funding and abortions," said Sen. Barbara Boxer, D-Calif.

Starting in 2014, most Americans would be required to have health insurance or face financial penalties of $95 that year, growing to $750 by 2016. While employers would not be required to provide health insurance to workers, firms with 50 or more employees which did not provide health insurance would pay a penalty if workers received government subsidies to purchase coverage through the exchange.

The bill, estimated to cost $849 billion over the next decade, would also place a 5 percent excise tax on elective cosmetic surgery, which would raise more than $5 billion in the next 10 years. Another revenue-raiser is an increase in Medicare payroll taxes--from 1.45 to 1.95 percent--on individuals earning $200,000 a year and couples earning $250,000. The tax would raise about $54 billion in revenue over the next decade, aides said.

High-cost health insurance plans--with yearly premiums of $8,500 for individuals and $23,000 for families--would be subject to a 40 percent excise tax, a provision that many analysts have said would help reduce health care costs. Reid increased those thresholds from those in the Senate Finance Committee bill to appease some lawmakers and unions who have opposed the provision, saying that it would hurt workers who have received more generous health benefits in exchange for foregoing salary increases.

Children now enrolled in the Children's Health Insurance Program (CHIP) would remain in the program and not be moved into the health insurance exchanges for coverage.

Beginning in 2010 insurers could not cancel health insurance policies once people become ill--a practice known as rescissions. Insurers could not have lifetime or annual limits on coverage and Medicare would remove all copayments or cost sharing on preventive services. And also in 2010, Medicare beneficiaries would receive $500 towards paying for prescription drugs once they fall into the so-called "doughnut hole."

At a news conference Wednesday, Reid and other Democrats said the bill would provide health care coverage to 31 million people who don't have it now. According to preliminary estimates from the Congressional Budget Office, the measure would reduce the federal deficit by $127 billion over the next decade and by as much as $650 billion over the second 10 years.

"One hundred and twenty-seven billion in deficit reduction and 94 percent coverage equals 60 votes," said Sen. Charles Schumer, D-N.Y. "We're going to get there."

The Senate could vote on Saturday to begin debate on the bill but it's unclear if all of the chamber's Democrats will support Reid. Sen. Ben Nelson, D-Neb., said Reid's bill was "better in some ways than in other ways." After seeing an outline of the bill he did not say if he was any closer to voting for the measure.

Senators Away For Holiday Continue Health Debate At Home
November 25, 2009

Senators away for the Thanksgiving holiday are continuing the health care reform debate with constituents and are facing far less vitriol than during the August recess.

CongressDaily : "In a memorandum to members, Senate Democratic leaders suggested this is a prime time to frame the debate because momentum is growing after Saturday night's vote to start debate on the measure. . . . The memo plays down a dispute between moderate Democrats who threaten to scuttle the language due to opposition to the public option with a state opt-out and liberals who say they might balk if that measure is dropped." Meanwhile, a talking points memo from GOP leadership claims "that the measure will cost $2.5 trillion when fully implemented" (Friedman and House, 11/24).

White House health care czar Nancy-Ann DeParle on Tuesday praised Sen. Mary Landrieu, D-La., and Rep. Anh "Joseph" Cao, R-La., for their roles in helping move health care reform along, reports The New Orleans Times-Picayune . "DeParle said she believes that Congress can craft legislation that will pass both (chambers) with both Cao and Landrieu on board." DeParle said that she can see the pieces of a compromise coming together on the public option, which is a sticking point for many moderate senators, but she wouldn't say what such a compromise might look like (Tilove, 11/24).

Here's a rundown of what's happening at home for some members of Congress:

Sen. Joe Lieberman, D-Conn., is facing criticism from religious leaders in Connecticut for opposing the government-run public plan for insurance, The Hartford Courant reports. "Roughly 50 religious leaders--Jews, Christians and Muslims--gathered on the sidewalk outside One Constitution Plaza Tuesday (the site of Lieberman's Hartford office), holding a banner that read 'Interfaith Fellowship for Universal Health Care'" (Sturdevant, 11/25).

Sen. Blanche Lincoln, D-Neb., is being aided by the liberal group Health Care For America Now with new television ads praising her vote to allow debate on the health reform bill, The Hill reports. "The spot airing in Arkansas gives political cover to (Lincoln), who is facing a tough re-election next year" (Bolton, 11/25).

The Christian Science Monitor reports that Lincoln, however, is shifting her focus away from health care to issues that can win her support from constituents, like job creation. "A recent poll by Zogby International shows Lincoln narrowly edging out a likely Republican opponent--until healthcare is added to the mix" and her poll numbers slip (Chaddock, 11/24).

Sen. Michael Bennet, D-Colo., is facing criticism from his opponents for saying that he would vote for a health care bill even if it would cost him his job, The Grand Junction (Colo.) Sentinel reports. Jane Norton, one of three Republicans seeking Bennet's seat, said his "response 'shows he's very out of touch with Colorado'" (Harmon, 11/24).

Sen. Maria Cantwell, D-Wash., is calling for states to take on a bigger role to provide affordable coverage for their residents in health care reform, The Seattle Post-Intelligencer reports. "Back home on Thanksgiving break, Cantwell did a tour Monday at International Community Health Services, which saw 16,000 patients last year--43 percent of them supported by Washington's Basic Health Plan" (Connelly, 11/24).

Sen. Sam Brownback, R-Kansas, held a town hall Tuesday in Olathe, Kansas, where he brought the 2,074 page Senate health care reform bill with him, The Olathe News/The Kansas City Star reports. "Brownback said he hopes the bill is defeated because the plan that calls for 'public option' health care would put the country deeper in debt" (Wright, 11/24).

Sen. David Vitter, R-La., also brought the bill with him to a meeting with business owners and health care providers in Lafayette, La., the (Lafayette, La.) Daily Advertiser reports. "What Vitter heard was 'overwhelming opposition,' from doctors, business owners and anti-abortion advocates" (Moore, 11/25).

Sen. George LeMieux, R-Fla., "spoke Monday to more than 500 members and guests of The Forum Club of the Palm Beaches," the Palm Beach (Fla.) Daily News reports. He voiced his opposition to the bill. "'So we're going to raise taxes, cut Medicare and raise your health insurance prices,' he said. 'That doesn't sound to me like a good start'" (Dargan, 11/24).

Senate Minority Leader Mitch McConnell told WYMT in Kentucky that the bill will remain on the Senate floor for "many, many weeks with lots and lots of amendments." McConnell also said of the bill: "It cuts Medicare, raises taxes, raises insurance premiums; I don't think that's reform" (Bates, 11/24).

Reid Releases Senate Health Reform Bill, Includes Tax On Wealthy Americans
November 18, 2009

Health reform news coverage went into detail of the Senate legislation Wednesday evening.

The New York Times : "Democratic leaders in the Senate unveiled their proposal on Wednesday for overhauling the health care system, outlining landmark legislation that they said would cover most of the uninsured while reducing the federal budget deficit. Senator Harry Reid of Nevada, the majority leader, said at an evening news conference that the legislation, which represents President Obama's signature domestic initiative and will be subject to lengthy and heated debate on the Senate floor, would impose new regulations on insurers, extend coverage to 31 million people who currently do not have any and add new benefits to Medicare" (Pear and Herszenhorn, 11/18).

The Associated Press : "The Democrat's $849 billion measure is designed to remake the nation's health care system, relying on cuts in future Medicare spending to cover costs--as well as on higher payroll taxes for the well-to-do and a new levy on patients undergoing elective cosmetic surgery. Aides said the mammoth, 2,074-page bill would reduce deficits by $127 billion over a decade and by as much as $650 billion in the 10 years that follow, citing as-yet-unreleased estimates by the Congressional Budget Office.

'Tonight begins the last leg of this journey,' said Nevada Sen. Reid, less than two weeks after the House approved its version of a sweeping remake of the health care system--and nearly 10 months after President Barack Obama's Inauguration Day summons to action" (Espo, 11/18).

CongressDaily: "The Senate Democrats' healthcare overhaul will be paid for in part by increasing the Medicare payroll tax for couples earning more than $250,000, according to Senate Budget Chairman Kent Conrad. The tax would increase from 1.45 percent to 1.95 percent. Conrad also said the bill taxes high-cost 'Cadillac' insurance plans valued at more than $8,500 for individuals and $23,000 for families" (11/18).

Reuters reports: "The $849 billion price tag puts the measure well under President Barack Obama's target of $900 billion for his top domestic priority" (Whitesides and Smith, 11/18).

Politico : "Reid's plan contains considerable differences from House legislation passed earlier this month--with a more limited public option and different ways to pay for the bill. Reid included an excise tax on insurers who offer 'Cadillac' health plans, not the 'millionaire's tax' that's in the House bill. Democrats on Wednesday were clearly hoping that the deficit figures--the biggest deficit reduction of any health bill to date, Reid's office noted--would knock down one of the last remaining obstacles to winning the votes of key centrists, at least to go ahead with debate on the bill as early as this weekend. . . . And, in fact, the strategy seemed to be working. Nebraska Sen. Ben Nelson and Louisiana Sen. Mary Landrieu both sounded more positive about voting to allow debate to proceed" (Budoff Brown, 11/18).

CNN has video of the Reid announcement and notes: "President Barack Obama hailed what he called a 'critical milestone' in the push to meet his top domestic priority for 2009. 'From day one, our goal has been to enact legislation that offers stability and security to those who have insurance and affordable coverage to those who don't, and that lowers costs for families, businesses and governments across the country,' Obama said in a statement, adding that the Senate proposal 'meets those principles'" (Barrett, Walsh and Bash, 11/18).

The Wall Street Journal : The legislation represents the Nevada Democrat's first attempt to build consensus among Senate Democratic liberals and centrists, as well as the two independents allied with the party. . . . The $849 billion figure and the prospect of deficit reduction cheered Democrats. But the figures aren't likely to win over Republicans, who say the bill adds costly new benefits for some Americans when the federal budget deficit is reaching new heights. 'We're going to do everything we can to defeat this monstrosity,' said Sen. John Thune (R., S.D.)" (Hitt and Adamy, 11/18).

Roll Call reports that the "liberal Sen. John Kerry (D-Mass.) agreed that the measure appeared to address most of the concerns Senate Democrats had before Reid merged a Senate Finance package with a competing measure approved by the Senate Health, Education, Labor and Pensions Committee. 'Where there has been a difference [between the two panels], the leader chose the right difference,' Kerry said. Kerry acknowledged, however, that Democrats would still be eager to change the bill even more if it survives a GOP-led filibuster designed to prevent debate from starting. He noted that the expansion of Medicaid would need to be tweaked to satisfy many Senators, including himself" (Pierce and Dennis, 11/18).

Kaiser Health News has details about the CBO preliminary score and a copy of the bill.

The Washington Post reports that a Senate leadership aide "said hopes were fading that the Senate would be able to hold a crucial procedural vote Friday to usher the measure onto the Senate floor. That vote is now likely to occur no earlier than Saturday, the aide said. Complicating the Senate's timetable was the absence of Senate Finance Committee Chairman Max Baucus (D-Mont.), who flew home because of a family medical emergency. A Baucus spokesman said it was unclear when Baucus, whose committee drafted one of two health care measures in the Senate, would be able to return to Washington. Because Republicans have threatened to filibuster the health package, Reid needs all 58 Democrats and two independents to be present and voting yes in order to prevail on the procedural motion that would formally begin debate" (Montgomery, 11/18).

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.

*We would like to thank Brian A. White, Esquire (University of Iowa Hospitals and Clinics, Iowa City, IA), for selecting the articles for this week's update.

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