Daily Health Policy Report

Friday, March 29, 2013

Last updated: Fri, Mar 29

KHN Original Reporting & Guest Opinion

Health Reform

Administration News

Capitol Hill Watch


Health Care Marketplace

Coverage & Access

Health Information Technology

Public Health & Education

State Watch

Health Policy Research

Editorials and Opinions

KHN Original Reporting & Guest Opinion

Q&A: Can They Do That? Rules For Pricing Spousal Coverage

Kaiser Health News consumer columnist Michelle Andrews answers a reader's question about employers who charge a different premium to cover a spouse who has coverage available through his or her own job (3/29). Watch the video.

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Capsules: Oregon Shows Costs Of Putting Medicaid Enrollees In Private Coverage; Obamacare Is No Stumbling Block For Taxpayers This Year

Now on Kaiser Health News' blog, Phil Galewitz reports on what past experience suggests about a Medicaid option being considered by some Republican states: "The Arkansas plan to expand Medicaid by paying for enrollees to buy private health insurance has been billed as a new option for states led by Republicans who are leery of the federal health overhaul. And it's getting attention from Republican leaders in Florida and Ohio, among other states. However, the strategy is not new. Oregon has been using this model for more than a decade --- with mixed results" (Galewitz, 3/29).

Also, Colorado Public Radio's Eric Whitney, working in partnership with KHN and NPR, reports on a recent ad blitz by H&R Block: "Done your taxes yet? If you haven't, you might be feeling a little extra anxiety this year if you've seen this ad from H&R Block. Meg Sutton, H&R Block's senior advisor for tax and health care services, offered some details on what the big changes are" (Whitney, 3/29). Check out what else is on the blog.


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Political Cartoon: 'One Small Two-Step'

Kaiser Health News provides a fresh take on health policy developments with 'One Small Two-Step' by Nick Anderson.

Meanwhile, here is today's health policy haiku:


It’s not quite as hard
to agree on Medicare
in closed-door meetings


If you have a health policy haiku to share, please send it to us at http://www.kaiserhealthnews.org/ContactUs.aspx and let us know if you want to include your name. Keep in mind that we give extra points if you link back to a KHN original story.

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Health Reform

Study Predicts 30% Premium Increase For Some Californians Who Buy Their Own Insurance

The increases, prompted by the federal health law, will be offset for many people by new federal tax subsidies, the report suggests.

Los Angeles Times: Healthcare Law Could Raise Premiums 30% For Some Californians
About 5 million Californians got a first glimpse at what they might pay next year under the federal healthcare law. For many, that coverage will come with a hefty price tag. Compared with what individual policies cost now, premiums are expected to rise an average of 30% for many middle-income residents who don't get their insurance through their employers (Terhune, 3/28).

The Wall Street Journal: Insurance Prices Could Jump
Premiums for California consumers who buy their own insurance could be sharply higher next year on average because of the federal health-care law, while government subsidies will offset the impact for lower-income people, according to a new report. The report, written by actuarial consulting firm Milliman for Covered California, the agency created by the state government to set up its new health-insurance marketplace, is likely to draw close attention amid a broader debate over the law's effect on insurance rates (Wilde Mathews, 3/28).

The New York Times: Health Care Law Will Raise Some Premiums, Study Says
A study commissioned by the State of California says that the new federal health care law will drive up individual insurance premiums, but that subsidies will offset most of the increase for low-income people. The study, issued Thursday in the midst of a growing national debate over the impact of the law, is significant because California is far ahead of most states in setting up a competitive marketplace, or exchange, where people can buy insurance this fall (Pear, 3/28).

The Associated Press: Study: Some Health Premiums To Rise By 14 Percent
Californians who buy individual health plans will see their premiums increase an average of 14 percent next year under the Affordable Care Act, but payments will largely depend on income, age and where they live, according to a new report released Thursday by California's health care exchange. The report commissioned by Covered California found the increase is largely due to an influx of people who previously could not afford health insurance or were denied coverage because of pre-existing conditions (Lin, 3/28).

San Jose Mercury News: Health Insurance Premiums To Drop Dramatically For Many Californians, Rise For Others Next Year, Study Reveals
Nearly 600,000 Californians who buy health insurance on the individual market will likely see their premium costs plummet dramatically next year when the state unveils its new insurance marketplace, while more than 1 million wealthier residents could see double-digit increases. For the first time, state health leaders on Thursday outlined how consumers will be affected by one of the main features of President Barack Obama's national health reform law: the online insurance exchange, known as Covered California, which will open in October (Kleffmam, 3/28).

Meanwhile, in another look at the effects of the health law on taxpayers --

Kaiser Health News: Obamacare Is No Stumbling Block For Taxpayers This Year
Done your taxes yet? If you haven't, you might be feeling a little extra anxiety this year if you've seen this ad from H&R Block. Meg Sutton, H&R Block's senior advisor for tax and health care services, offered some details on what the big changes are (Whitney, 3/29).

And the Oregonian examines efforts there to be ready for implementation of the law --

The Oregonian: Oregon's Ambitious Health Insurance Marketplace Races To Meet Federal Reform Deadlines
When the phones in Rocky King's offices went on the blink last week, he wasn't bothered. Better now than in six months, when his $300-million project -- which you've likely never heard of -- must come out of the gates without a hitch. It's called Cover Oregon, a key to federal health reforms that kick in Jan. 1, 2014, and it could soon become a part of your life. King directs a team designing a marketplace for individuals and small businesses to comparison-shop between health insurance plans, and to tap federal tax credits and other assistance. Deadlines loom and controlled chaos reigns inside the team's red brick offices near Tigard's Bridgeport Village shopping center (Budnick, 3/28).

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Administration News

Potential Pact On Medicare Changes Could Lead To Budget Deal

The New York Times reports that a possible agreement between President Barack Obama and congressional Republicans on "broad systemic changes to Medicare" could help spur a budget deal. And The Wall Street Journal reports the White House is weighing inclusion of some entitlement changes in its 2014 budget proposal as a way to prod further talks. 

The New York Times: Talk of Medicare Changes Could Open Way to Budget Pact
As they explore possible fiscal deals, President Obama and Congressional Republicans have quietly raised the idea of broad systemic changes to Medicare that could produce significant savings and end the polarizing debate over Republican plans to privatize the insurance program for older Americans. While the two remain far apart on the central issue of new tax revenue, recent statements from both sides show possible common ground on curbing the costs of Medicare, suggesting some lingering chance, however small, for a budget bargain (Calmes and Pear, 3/28).

The Wall Street Journal: White House Weighing Entitlement Limits
The White House is strongly considering including limits on entitlement benefits in its fiscal 2014 budget—a proposal it first offered Republicans in December. The move would be aimed in part at keeping alive bipartisan talks on a major budget deal. Such a proposal could include steps that make many Democrats queasy, such as reductions in future Medicare, Medicaid and Social Security payments, but also items resisted by Republicans, such as higher taxes through limits on tax breaks, people close to the White House said (Paletta, 3/28).

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Capitol Hill Watch

Senators Urge HHS To Step Up Efforts To Curb Medicare Overpayments

The lawmakers pointed to a report showing a $70 million loss caused by overpayments on medical equipment, The Hill reports.

The Hill: Senators Hit HHS More Than $70 Million In Medicare Overpayments
A bipartisan group of Senate Finance Committee members said Thursday that the federal Medicare agency isn't doing enough to prevent overpayments. The senators pointed to a new Health and Human Services Department report that says Medicare has lost $70 million due to overpayments to companies that supply durable medical equipment — heavy-duty items like hospital beds and wheelchairs (Baker, 3/28).

Also, in congressional news, two well known Massachusetts politicians are vying for an open Senate seat, and their most recent debate hit on differences over health care.

CBS News: Mass. Senate Candidates Spar Over Health Care, Abortion
For over a decade, Massachusetts Democrats Ed Markey and Stephen Lynch have served together in the U.S. House of Representatives -- but that doesn't mean they agree on much of anything. Seeking the Democratic nomination for the special election to fill the seat vacated by Secretary of State John Kerry, the two congressmen squared off in a debate on Wednesday night, and sparks flew over just about everything, from the president's health care law to abortion (Miller, 3/28).

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Doctors Renew Lobbying To Change Medicare Payment Formula

The American Medical Association is pushing hard to get Congress to make a permanent "doc fix," The Hill reports.

The Hill: Doctors Push 'Doc Fix' In Light Of Medicare Advantage Controversy
The controversy over proposed Medicare Advantage cuts shows the need for Congress to pass a permanent "doc fix," the American Medical Association said Thursday. The AMA — the nation's largest lobbying group for doctors — latched on to a letter from Congress's Medicare advisory board that recommended a permanent fix (Baker, 3/28).

Meanwhile, Medicare pay cuts of 2 percent to doctors and hospitals begin next week as a result of sequestration --

Medscape: No April Fooling: 2% Medicare Pay Cut Hits Monday
Medicare payments to physicians for services performed beginning Monday, April 1, will shrink by 2% under the automatic, across-the-board budget cuts called sequestration. And unlike other impending Medicare pay cuts in the past, this one will not be called off by last-minute Congressional action. Lawmakers are on spring break. The current federal sequester was authorized by the Budget Control Act (BCA) of 2011, which tasked a bipartisan "supercommittee" with proposing at least $1.2 trillion in deficit reduction over 10 years for lawmakers to approve (Lowes, 3/28).

Modern Healthcare: Sequester Cuts Manageable For Not-For-Profits, Ratings Firms Say
Like their investor-owned counterparts, not-for-profit hospitals are expected to weather the impact of sequestration, but that doesn't mean the belt-tightening will be easy. Medical centers across the country are preparing for April 1, when the 2% payment cut takes effect for Medicare providers. Hospitals are expected to lose $5.8 billion under sequestration—an amount that could lead to job losses and service cuts, state hospital associations warn. But credit rating agencies say the cuts will be manageable for a sector that has demonstrated a keen ability to manage its costs and find new revenue streams (Kutscher, 3/28).

And the Associated Press examines criticism of some companies that make power wheelchairs and scooters and advertise heavily to beneficiaries -

The Associated Press: Critics Say Scooter Company Ads 'Brainwash' Seniors And Contribute To Millions In Gov't Waste
TV ads show smiling seniors enjoying an "active" lifestyle on a motorized scooter, taking in the sights at the Grand Canyon, fishing on a pier and high-fiving their grandchildren at a baseball game. The commercials, which promise freedom and independence to people with limited mobility, have driven the nearly $1 billion U.S. market for power wheelchairs and scooters. But the spots by the industry's two leading companies, The Scooter Store and Hoveround, also have drawn scrutiny from critics who say they convince some seniors that they need a scooter to get around when many don't (3/28).

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Health Care Marketplace

Hospitals Often Don't Tell Patients About Assistance Programs To Help Pay Bills

ABC reports that although nonprofit hospitals are obligated to give back to the community, they often don't ease the strain for patients with financial difficulties. And in other news, The New York Times looks at efforts to cut emergency room care costs.

ABC News: 'Real Money': Hidden Money At Your Hospital
[Joyce Ann] Huston still owes $25,000 from her original [lupus] diagnosis, and new bills from her ongoing care are mounting. ... what Huston and many others don't realize is that more than half of the nation's hospitals — the nonprofits — are required to give back to the community, often through what is called "Patient Assistance Programs." ... But in one study by Community Catalyst of 100 hospitals, nearly half didn't mention it on their website and almost 70 percent didn't tell patients how to qualify when they called (Faris, 3/28).

The New York Times: The Costs Of Emergency Room Cost-Cutting
For close to 50 years, emergency rooms have been fingered as a major source of excessive health care costs. And while some newer research has challenged the idea that a large proportion of patients visit the emergency room for routine problems, many payers and policy makers continue to focus on these patients as a major source of wasteful spending. Not long ago, for example, in an effort to cut back on Medicaid expenditures, several states zeroed in on these so-called "unwarranted visits" and proposed a policy so apparently logical that it was hard to resist the temptation to slap yourself on the forehead. The proposal was to reimburse for an emergency room visit based on the urgency of the discharge diagnosis. ... But according to the new study, published in The Journal of the American Medical Association, such a policy relies on a huge, and erroneous, assumption (Chen, 3/28).

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Coverage & Access

Study Highlights Cost Savings Of Generic Drugs

Consumer Reports offers new analysis that finds not all patients realize they can save big by shopping around for drugs. Meanwhile, two outlets look at insurance coverage issues for couples.

Reuters: Prescription Drugs Cost Least At Costco And Most At CVS: Study
Some of the most popular prescription drugs that recently became available in generic form are sold at the lowest prices at Costco and at the highest prices at CVS Caremark, according to an analysis by Consumer Reports. Failing to comparison shop for drugs -- such as generic Lipitor to lower cholesterol or generic Plavix to thin the blood -- could result in overpaying by $100 a month or even more, depending on the drug, the report said (Sherman, 3/28).

Kaiser Health News: Q&A: Can They Do That? Rules For Pricing Spousal Coverage
Consumer columnist Michelle Andrews answers a reader's question about employers who charge a different premium to cover a spouse who has coverage available through his or her own job (Andrews, 3/29).

The Medicare Newsgroup: Fact/Fiction: Medicare Costs More For Same-Sex Married Couples
As the Supreme Court begins to review the constitutionality of the Defense of Marriage Act (DOMA), news outlets have been reporting that DOMA increases both private and federal health care costs for same-sex couples. Because DOMA prevents the federal government from recognizing same-sex marriages, these couples are thus excluded from the same benefits offered to heterosexual married couples in programs such as Medicare, Medicaid and Social Security (Vahlkamp, 3/28).

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Health Information Technology

Health Industry Faces Shortage Of IT Professionals

In addition, a regulation permitting hospitals to donate medical records software to doctors is scheduled to expire.

The Wall Street Journal: Talent Deficit, Poaching Weigh On Healthcare IT
Healthcare CIOs are finding it hard to attract and retain IT professionals to operate hospital computer systems. They blame the talent crunch on several factors, including limited supply of qualified workers, poaching by rivals, rising levels of compensation, and legacy computer systems that IT staff don't like to use. A shortage of workers is never a good thing, but in this case, it's particularly worrisome. Without a proper IT staff, hospitals may have a more difficult time qualifying for federal incentives that are paid to hospitals that can demonstrate that better management of healthcare information is leading to an improvement in patient outcomes. The incentives—which total billions of dollars—are being distributed by the U.S. Centers for Medicare and Medicaid (Boulton, 3/28).

Modern Healthcare: Lawmakers Urges Extension Of Safe Harbor For EHRs
Normally, it would be illegal for a hospital to donate electronic medical-record software to an independent doctor who refers patients for treatment at the hospital. But federal officials created special rules to allow such transfers as a way to encourage healthcare providers to adopt the costly systems. Those exceptions to the Stark law and the anti-kickback statute are due to expire at the end of the year, and observers say little is being done to renew them, even though federal subsidies for EHR systems are slated to continue via Medicare until 2016 (Carslon, 3/28).

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Public Health & Education

Report Finds Most Restaurant Children's Meals Are Still Unhealthy

Many menu items don't meet the restaurant association's own standards for healthful children's meals, the New York Times reports.

The New York Times: Most Children's Meals At Large Restaurant Chains Are Still Unhealthy, A Study Finds
A new study of the nutritional quality of meals for children on the menus of the nation's largest chain restaurants has found that 91 percent do not even meet the standards set by the National Restaurant Association's Kids LiveWell program. An even larger percentage — 97 percent of restaurant children's meals — failed to meet stricter standards developed by a panel of nutrition and health experts for the Center for Science in the Public Interest, the nonprofit research and advocacy group that commissioned the study (Strom, 3/28).

In other public health news, a government study finds no link between vaccines and autism -

NPR: The Number Of Early Childhood Vaccines Not Linked To Autism
A large new government study should reassure parents who are afraid that kids are getting autism because they receive too many vaccines too early in life. The study, by researchers at the Center for Disease Control and Prevention, found no connection between the number of vaccines a child received and their risk of autism spectrum disorder. It also found that even though kids are getting more vaccines these days, those vaccines contain many fewer of the substances that provoke an immune response (Hamilton, 3/29).

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State Watch

Oklahoma Dentist Called 'Menace To The Public Health'

Dr. W. Scott Harrington faces an April 19 hearing over unsanitary conditions that may have exposed patients to hepatitis B, hepatitis C and HIV infection. Health inspectors went to his practice after a patient with no known risk factors tested positive for both hepatitis C and the virus that causes AIDS.

The Associated Press: HIV Test Urged For 7,000 Oklahoma Dental Patients
Health officials on Thursday urged thousands of patients of an Oklahoma oral surgeon to undergo hepatitis and HIV testing, saying unsanitary conditions behind his office's spiffy facade posed a threat to his clients and made him a "menace to the public health." State and county health inspectors went to Dr. W. Scott Harrington's practice after a patient with no known risk factors tested positive for both hepatitis C and the virus that causes AIDS. They found employees using dirty equipment, reusing drug vials and administering drugs without a license (Juozapavicius, 3/29).

Los Angeles Times: Oklahoma Urges 7,000 Dental Patients To Get Hepatitis, HIV Tests
As many as 7,000 dental patients in Oklahoma are being urged to take blood tests for hepatitis or the virus that causes AIDS after health officials said they discovered that instruments in a local practice were not properly cleaned. The warning of possible infection from blood-borne viruses was issued Thursday by the Oklahoma State Department of Health, the Tulsa Health Department and the state Board of Dentistry. Letters will be sent to some of the patients of Dr. W. Scott Harrington, who operated a practice in Tulsa (Muskal, 3/28).

USA Today: HIV Test Urged For 7,000 Oklahoma Dental Patients
Health officials are urging 7,000 patients of an Oklahoma dentist to be tested for potential exposure to HIV, hepatitis B and hepatitis C. The possible exposure happened at the dental practice of Dr. W. Scott Harrington in Tulsa, Okla., and Owasso, Okla. (Lackey and Winter, 3/28).

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Oregon Offers Guide To States Eyeing Potential Of Putting Medicaid Enrollees In Private Insurance

In the last days of Georgia's General Assembly, lawmakers eliminate cuts in Medicaid payments to providers, while the state's Medicaid agency gives initial approval to a hospital fee. In Kansas, possible reductions in KanCare services draw advocates' concern, and California's Medi-Cal interpreters are pushed to unionize.

Kaiser Health News: Oregon Shows Costs Of Putting Medicaid Enrollees In Private Coverage
The Arkansas plan to expand Medicaid by paying for enrollees to buy private health insurance has been billed as a new option for states led by Republicans who are leery of the federal health overhaul. And it's getting attention from Republican leaders in Florida and Ohio, among other states. However, the strategy is not new. Oregon has been using this model for more than a decade --- with mixed results (Galewitz, 3/29).

Georgia Health News: Legislating Health: The 2013 Results
Health care providers received good budgetary news Thursday, the final day of this year's Georgia General Assembly. The agreement between the House and the Senate on fiscal 2014 (July 2013 through June 2014) eliminated cuts in payments for Medicaid services to dentists, nursing homes and other medical providers. Gov. Nathan Deal’s original budget proposed a 0.74 percent reduction for providers other than hospitals, hospices, primary care physicians, and some clinics (Miller, 3/28).

Georgia Health News: State Agency Board OKs Hospital Provider Fee
The board of the state's Medicaid agency gave initial approval Thursday to the hospital provider fee mechanism, paving the way for renewal of the current formula in July. The next step is for the Department of Community Health to submit the proposal to federal officials, who have 90 days to approve it. The current provider fee runs out June 30. The renewal is expected to fill a hole of nearly $500 million in the financially squeezed Medicaid budget. Legislation that sped through the General Assembly this year transferred decisions on the assessment from the Legislature itself to Community Health (Miller, 3/28).

Kansas Health Institute: Advocates Raise Concerns Over Possible Reductions In KanCare Services
The head of an advocacy program for the disabled said he doubts the agency would be able to help many KanCare beneficiaries who protest cuts in the services they receive…Nichols said the center, which is federally funded, recently learned that its already stretched budget had been cut by 15 percent (Ranney, 3/28).

Sacramento Bee: Lawmakers Push To Unionize, Regulate Medi-Cal Interpreters
Thousands of Medi-Cal medical interpreters would have the right to join a public employees union and collectively bargain with the state under a legislative push to regulate that profession. Assembly Speaker John A. Perez is leading the drive, fueled by a major public employees union and sparked in part by federal subsidies for Medi-Cal expansion as part of national health care changes. Perez's Assembly Bill 1263 would create an oddity in which Medi-Cal interpreters would remain independent contractors but would pay dues to a public employees union for representation. They would be guaranteed at least $60 an hour (Sanders, 3/28).

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State Roundup: NYC Firms Will Be Required To Offer Sick Leave; Fla. Part-Timers To Get Health Coverage

The latest developments in health policy from California, Florida, Maryland, Missouri, New York, North Carolina, Texas and Wisconsin.

The New York Times: Deal Reached To Force Paid Sick Leave In New York City
New York is poised to mandate that companies with 15 or more employees provide paid time off for them when they are sick. A compromise agreement reached Thursday night resulted from a raw display of political muscle by a coalition of labor unions and liberal activists who overcame fierce objections from New York’s business-minded mayor, Michael R. Bloomberg, and his allies in the corporate world (Barbaro and Grynbaum, 3/28).

The Associated Press: Panel Backs Health Coverage For Part-Time Workers
A Florida House panel approved a measure Thursday to offer health insurance to the 8,737 of the state's part-time employees and their family members instead of paying a hefty fine under the federal health overhaul. The panel could have decided to cap part-time employees to working 30 hours per week or chosen not to provide any health coverage, which would result in a $318 million fine under the Affordable Care Act (Kennedy, 3/28).

The Associated Press/Wall Street Journal: Soda Appeal Filed
New York City asked appeals judges to reinstate a ban on supersized sodas and other sugary drinks, which was struck down by a Manhattan judge the day before it was to go into effect. The city had vowed an appeal and said Thursday that lawyers had filed it late Monday (3/28).

The Associated Press: Missouri House Seeks To Limit Medical Liability
The Missouri House pushed Thursday to reinstate a cap on certain damages in medical malpractice cases that the state Supreme Court struck down last summer. Doctors say the cap helps control malpractice insurance premiums and warned that unlimited economic damages for issues such as pain and suffering would harm the availability and affordability of health care in Missouri. Opponents of the damages cap said it prevents juries from determining in each case what an injured person should receive (Blank, 3/28).

Baltimore Sun: Proposed Law Would Govern Surrogate Birth
When Whitney Watts of Columbia agreed to bear twins on behalf of an infertile Boston couple two years ago, she entered a murky area of Maryland law. Nothing forbade her from signing a contract to carry babies conceived through in vitro fertilization and implanted in her uterus. But neither were there guarantees that Maryland courts would enforce the contract if something went wrong. To this day, such questions are left up to individual judges (Dresser, 3/28).

California Healthline: Douglas Updates Legislators on Health System Changes
[Department of Health Care Services Director Toby] Douglas has been at the center of many large-scale changes over the past few years in the state's health care system. At an Assembly hearing last week, he updated legislators on several projects and explained what his department hopes to accomplish in the near future (Gorn, 3/28).

The Texas Tribune: Legislature To Mull Mental Health Training For Teachers
State Sen. Bob Deuell, R-Greenville, has filed legislation that would encourage Texas educators to learn how to help the state's estimated 1 million public school students struggling with mental illnesses (Zaragovia, 3/29).

Health News Florida: If You Know Someone In Universal …
Nearly half of Universal Health Care customers -- those enrolled in a Medicare plan -- need to act immediately if they want to protect themselves from the possibility of unexpected expenses next month. If they switch plans by Sunday, March 31, they will be fully covered under their new plan as of Monday, April 1. If they don't, the federal government will automatically enroll them in traditional Medicare (Gentry, 3/28).

North Carolina Health News: Bill Could Trim BCBSNC’s Ability To Dominate Market
With more than 70 percent of the private health insurance customers in North Carolina, Blue Cross and Blue Shield is the 800-pound gorilla in the state's health insurance market. But a bipartisan bill that easily passed votes in the House Judiciary committee and on the floor of the House of Representatives this week could cause that gorilla to shed some of its weight. House Bill 247 would prohibit any insurer from adding clauses to contracts requiring that doctors and hospitals charge all competitors equal or higher prices, so-called “most favored nation” clauses (Hoban, 3/29).

HealthyCal: Home Care Workers Are In Demand, But Still Struggling To Make Ends Meet
As the US population ages in record numbers, home care workers are becoming part of an increasingly in-demand market. They make an independent life possible for thousands of seniors and people with disabilities, but in the Central Valley and elsewhere across California and the US, they’re barely scraping by themselves. Many seniors are choosing to stay in their homes for as long as possible, and employing a home care worker – or two – is one way to make this arrangement work (Underwood, 3/28).

Milwaukee Journal Sentinel: Scott Walker Budget Could Create Deficit In Next Biennium
Gov. Scott Walker's 2013-'15 budget bill would leave the state with a potential shortfall of $664 million for the following two-year budget, a new report shows. The memo from the Legislature's nonpartisan budget office shows the state's finances would take a big swing from the current budget, which according to the method used in the memo will leave a $146 million surplus going forward. But the Legislative Fiscal Bureau still pegs the potential shortfall at the second-lowest level since 1997. The impact of these budget figures could fall on everyone from taxpayers to students and those in need of government-funded health care (Stein, 3/28).

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Health Policy Research

Research Roundup: Hospitals Will Benefit From Medicaid Expansion; Medicare's Rising Costs

Each week, KHN reporter Alvin Tran compiles a selection of recently released health policy studies and briefs.

Urban Institute/Robert Wood Johnson Foundation: The Financial Benefit To Hospitals From State Expansion Of Medicaid – The authors write that, because of the health law's expansion of Medicaid coverage to adults making below 138 percent of the federal poverty level, "hospitals’ public insurance revenue [will create] a larger Medicaid coverage pool. At the same time, it will mean some people currently paying for private coverage will drop it and enroll in Medicaid, resulting in lower payments when they receive hospital care." While the additional Medicaid revenue will offset some of the uncompensated care they now provide, the federal "disproportionate share hospitals" payments that currently helps cover those uncompensated expenses will be reduced. Still, after analyzing these changes, the authors write: "Put simply, a Medicaid expansion increases the number of patients for whom hospitals are paid, but some patients shift from private to more poorly reimbursed public coverage. The net result of these two factors greatly favors hospitals. Altogether, for each dollar in private revenue that a Medicaid expansion eliminates, hospitals' Medicaid revenue rises by $2.59" (Dorn, Buettgens, Holahan and Carroll, 3/19).

The Heritage Foundation: Medicare's Rising Costs – And The Urgent Need For Reform – "The rising cost of Medicare is placing an increasing burden on current and future taxpayers, as well as exacerbating the poor financial condition of a program on which America’s seniors depend in their retirement," the authors write. They add that the traditional fee-for-service payment system encourages an increase in the number of services requested, ultimately contributing to excessive spending. In this report, the researchers examine why rising costs, among other factors, support the political efforts to reform Medicare. "Congress and the Administration should undertake short-term reforms of traditional Medicare that will contain costs, while transitioning, prudently but quickly, to a more effective system that will not only control costs over the long term, but will also provide high-quality health care to a rapidly growing Medicare population," they conclude (Moffit and Senger, 3/22).  

Center For Studying Health System Change/The Kaiser Family Foundation: Medicare Spending Limits: Issues And Implication – According to this brief, "Some experts have argued for a change in law that would bring Medicare spending growth in line with growth in the economy, and advocate for a limit on Medicare spending growth." The author adds, however, that "there is little consensus as to how tight the limit should be, how it should be enforced, and whether the limit should apply just to Medicare, all federal health care spending, or even total health spending, including public and private payments." He analyzes various approaches to setting and enforcing limits on Medicare spending while also examining the effects of proposed spending (White, 3/26).

Urban Institute/Robert Wood Johnson Foundation: Uninsured Veterans And Family Members: State And National Estimates Of Expanded Medicaid Eligibility Under The ACA – According to the authors, just over a half million U.S. veterans have incomes below 138 percent of the federal poverty level (FPL), making them eligible for Medicaid coverage under the efforts of the health law to expand Medicaid. But that expansion is voluntary for states and many have expressed reluctance to go along, even though the federal government will pay the total cost of the additional beneficiaries in the beginning of the program. In states that do not expand, residents with incomes between 100 and 138 percent of the FPL could still get help through federal tax subsidies to buy private policies on the exchanges, or insurance marketplaces, being set up in each state. "Most of these uninsured—414,000 veterans and 113,000 spouses—have incomes below 100 percent of FPL, and will therefore only have new coverage options under the ACA if their state expands Medicaid," the authors write. "However, fewer than half live in states in which the governor supports their state participating in the expansion, while the majority live in states that have chosen not to expand Medicaid or have not yet decided whether to expand." The authors conclude that "as is the case for the rest of the nonelderly uninsured, the Medicaid expansion could help address coverage gaps for veterans and their family members in many states" (Haley and Kenny, 3/25).

Here is a selection of news coverage of other recent research:

NBC News: Hospital Deaths Declined Just A Little Over 10 Years, Report Finds
The number of people who died in the hospital has fallen just 8 percent over 10 years, despite a big emphasis on letting people die in hospice or even at home, new federal statistics show. And a lot of the decrease appears to be from an overall drop in many types of death, the new report from the National Center for Health Statistics shows. … The study found another trend – deaths in the hospital from sepsis, an overwhelming immune response to infection, rose 17 percent over those 10 years. Other data shows sepsis cases overall more than doubled over that time (Fox, 3/27).

MedPage Today:  MRI For Low Back Problems Deemed 'Overused'
More than half of outpatient lumbar spine MRI scans weren't appropriate, with a particularly poor record of ordering by family physicians, researchers found. When analyzed by an expert panel, 29% of MRI referrals to two large teaching hospitals were deemed inappropriate and a further 27% were of "uncertain value," Derek Emery, MD, of the University of Alberta in Edmonton, and colleagues found. Only 34% of lower back scans ordered by family physicians were considered appropriate compared with 58% ordered by physicians in other specialties, the group reported online in JAMA Internal Medicine (Phend, 3/26). 

Reuters: Fewer Blood Pressure Screens May Be More Effective
Less may be more when it comes to blood pressure checks, according to a new study. After analyzing five years' worth of data for more than 400 patients, researchers conclude that the current practice of screening at every visit to the doctor's office -- up to several times a year -- may result in more people mistakenly diagnosed and unnecessarily treated for high blood pressure than would simple yearly screening (Doyle, 3/22).

Time: 18 Million Cancer Survivors Expected By 2022
An aging population coupled with improved treatment methods mean more people will survive cancer. But at what cost? The American Association for Cancer Research (AACR) released its second Annual Report on Cancer Survivorship, which shows that the current 13.7 million cancer survivors in the U.S. will likely swell by 31% to 18 million by the year 2022. ... While the survival trend is encouraging, it may come at a price. Cancer survivors generally have twice the annual medical costs that patients without cancer do, because of they need routine monitoring for recurring tumors, as well as for side effects from their treatment or long term effects of their disease (Sifferlin, 3/26). 

MedPage Today: Data Lacking on Pediatric Surgery Outcomes
Relationships between surgical volume and outcome appear to extend to pediatric populations, although variation in studies' definitions and methods confounded efforts to compare results, authors of a literature review concluded. More than three-fourths of the studies showed positive correlations between experience and primary outcomes, reported Jarod McAteer, MD, of the University of Washington and Seattle Children's Hospital, and colleagues [in JAMA Pediatrics] (Bankhead, 3/27).

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Editorials and Opinions

Viewpoints: Time To Focus On Prices; Entitlement Programs And Generational Warfare

The New York Times: U.S. Health Care Prices Are The Elephant In The Room
Traditionally, the theory driving discussions on the high cost of health care in the United States has been that there is enormous waste in the system, taking the form of excess utilization of care. From that theory it follows that methods of controlling the growth of health spending should focus on ways to reduce the use of unnecessary or only marginally beneficial health care. Largely overlooked in these discussions has been the elephant in the room: the extraordinarily high prices Americans pay for health care (Uwe E. Reinhardt, 3/29).

Bloomberg: How To Make The Health-Care Market Work Better
How could government help the health-care market work better? Here's an idea so obvious it's shocking it hasn't already been done: Let's require large hospitals and medical providers who receive dollars from Medicare, Medicaid or federal research grants to collect and publish basic price data (Evan Soltas, 3/28).

JAMA: Will The Evaluation Of The ACA Be Health Services Research's Finest Hour?
The Affordable Care Act (ACA) provides an unprecedented opportunity to expand insurance coverage and to reform the health care delivery system in the United States. The political debate about its merits and shortcomings has been highly partisan and unrelenting and not particularly evidence-based (Andrew Bindman, 3/28).

The New York Times: Cheating Our Children
So talk of a fiscal crisis has subsided. Yet the deficit scolds haven't given up on their determination to bully the nation into slashing Social Security and Medicare. So they have a new line: We must bring down the deficit right away because it's "generational warfare," imposing a crippling burden on the next generation. What's wrong with this argument? For one thing, it involves a fundamental misunderstanding of what debt does to the economy (Paul Krugman, 3/28).

Los Angeles Times: Remove Medicare's Straitjacket
The bipartisan deal that kept the federal government from hurtling over the "fiscal cliff" on Jan. 2 actually increased Medicare spending. At the last minute, a powerful bipartisan group of senators inserted a provision into the bill that blocked Medicare, for two years, from getting a better price on an expensive drug used by kidney dialysis patients. This was in addition to a previous two-year extension obtained by Amgen, the drug's manufacturer. The move saddled Medicare with roughly $500 million in added costs over the next two years and generated a windfall for Amgen. This is but one example of how Congress publicly criticizes growth of Medicare costs while privately restraining the Centers for Medicare and Medicaid Services, or CMS, from getting a better deal for Medicare patients and U.S. taxpayers (Dr. Art Kellerman, 3/29). 

Raleigh News and Observer: NC Faces A 'Sophie's Choice' On Medicaid Expansion
North Carolina policymakers faced what I've termed a "Sophie’s Choice" on Medicaid expansion. Agreeing to the expansion might well have helped some uninsured North Carolinians, but it also would have hurt many others who either have or could have obtained private health insurance coverage. The correct path is not nearly as simple as expansion advocates might make it seem. I don’t know what our state ultimately will decide about this in the years ahead. The best solution, now being worked out in states such as Arkansas and Ohio, might be one in which those on Medicaid are allowed to enroll in private health insurance on the exchange (Christopher Conover, 3/27).

The Washington Post: 'I Thought I Knew What Being Disabled Meant, And I Don't'
Over the weekend, "This American Life" and "Planet Money" ran a story by Chana Joffe-Walt looking at the extraordinary growth of America's disability insurance system. Joffe-Walt visited Hale County, Ala., where one-in-four residents is on disability, looked at the lawyers who specialized in winning disability cases against the government (and getting paid by taxpayers for it), and spent time with a young child whose disability check has become the key to his family’s survival. The result is a detailed, nuanced, and discomfiting look at a social insurance program that has become a catch-all for the failures of both our economy and our safety net. It's worth reading, or listening to, in full. I spoke with Joffe-Walt on Wednesday. A lightly edited transcript of our conversation follows (Klein, 3/28).

USA Today: Raise Cigarette Prices To Snuff Teen Smoking: Our View
The nation's decades-long battle against smoking has been remarkably successful, especially among teens. In 1997, 36% of high school students smoked. Today, half as many do. That's quite an accomplishment, particularly because all but 10% of smokers take up the habit during their teens. But the decline has slowed, and the youth smoking rate is still far too high. These young recruits will be tomorrow's addicts, and many will become victims of lung cancer and heart disease in coming decades. ... but the most effective tool for curbing teen smoking is also one of the simplest: Raise cigarette taxes (3/28).

USA Today: Cigarette Tax Hikes Don't Help: Opposing View
We all support reducing underage use of tobacco products, and proven methods are in place — such as retailer training programs, federal regulation and underage possession laws — to help achieve this goal. ... Attempts to further this progress through excise tax increases, however, have had negative effects on both tobacco control efforts and responsible retailers. There is a direct correlation between increased excise taxes and black market sales. The numbers are not small (Lyle Beckwith, 3/28). 

Richmond Times-Dispatch: Covering Abortion
Supporters of abortion rights are furious at Gov. Bob McDonnell over amendments he has made to two health care measures. But they have few principled grounds on which to object – and are distorting the truth in the process. The legislation would help establish the insurance exchanges required under the federal Affordable Care Act, or Obamacare. Individuals who don’t get health insurance through their employers will be required to buy insurance through the exchanges. McDonnell’s amendment prohibits buying insurance plans that cover abortion (3/29). 

Arizona Republic: Medicaid Expansion Plan Stinks But Better Than Alternative
Gov. Jan Brewer’s proposal for Medicaid expansion absolutely stinks. It puts Arizona in a position of supporting “Obamacare.” The governor wants us to take $3 billion of federal dollars that we all know just adds to the deficit and national debt. It doesn’t matter that Obamacare may not be going away because Republicans lost the last presidential election. Heck, some Republicans chose Barack Obama and Obamacare in 2008 over John McCain by staying home. Apparently John McCain wasn’t conservative enough for some (Hugh Hallman, 3/28).


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Stephanie Stapleton

Andrew Villegas

Lisa Gillespie
Shefali Luthra

The Kaiser Daily Health Policy Report is published by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation. (c) 2014 Kaiser Health News. All rights reserved.