Insurers, Young, Uninsured All Prepare For Different Changes Under Health Reform

Insurers, the young, the uninsured and lawmakers are just a few of the groups sorting out what the implementation of health reform means for them as details emerge on changes to the system.

The New York Times: Insurers are fighting over the details of how much of the premiums they collect they must spend on health care. "The law requires health insurers to spend at least 80 cents out of every dollar they collect in premiums on the welfare of patients, a critical issue for the companies' bottom lines." Sides are fighting over just what would be considered "care," however. "WellPoint, which operates Blue Cross plans in more than a dozen states, wants to include the cost of verifying the credentials of doctors in its networks. Insurance companies like Aetna argue that ferreting out fraud by identifying doctors performing unnecessary operations should count the same way as programs that keep people who have diabetes out of emergency rooms." Some even say sales commissions or taxes on investments should not be considered part of insurance premiums, which would "make it easier for them to meet the 80-cent minimum." Consumer groups are pushing back against such inconsistences. The National Association of Insurance Commissioners is tasked with offering guidelines for the so-called "medical-loss ratio," and will submit a final draft of its work as soon as next month (Abelson, 7/23).

The Wall Street Journal: The relatively young may get more coverage cheaper at the expense of the old. The Journal reports: "Humana Inc., Mary Baumann's insurer, intends to pare her 'Medicare Advantage' plan to make up for the smaller government payments it will soon receive as a result of the new law, leaving her with higher costs or fewer services." Baumann's son, however, is looking forward to "stable coverage" to pay for his insulin shots and blood tests. "Across the country, dozens of private insurers that run similar Medicare plans are preparing to pare dental, vision and certain prescription-drug coverage starting next year, according to consultants who have helped them assemble annual bids." The debate "also represents a change in how the government spreads its social safety net underneath Americans. Already, it's creating tensions that are a harbinger of debates to come." Providing coverage for the younger in the health law is paid for by lower fees to hospitals and others that participate in Medicare, mostly in extra benefits (Adamy, 7/25).

The Columbus (Ohio) Dispatch: Many uninsured people are already anticipating coverage that's affordable. "In 2014, companies will face penalties if health premiums exceed 9.5 percent of a full-time worker's income. If an employee still can't afford coverage, he or she will be eligible for a subsidy through state health exchanges to help buy an affordable policy." For employers, those who don't offer coverage will face a penalty of $3,000 for each employee that enrolls in the exchange or $2,000 for each full time worker (excluding the first 30 employees), whichever is less (Hoholik, 7/26).

Time: The law's mandates — both on individuals to carry and on employers to provide health insurance — remain among the most contentious aspects of the law. "But at least in San Francisco, where an employer mandate was instituted in 2008, most business owners are embracing the new rule and reporting it's had little impact on their operations. … That's not to say that the mandate hasn't been a point of contention. In fact, the long-term viability of the San Francisco employer mandate was in doubt until June when the Supreme Court declined to hear a case challenging its legality." Many restaurants, which are also hit by the mandate, are adding three to four percent to customer bills as a health care surcharge. "San Francisco is not the only place that's testing an employer mandate ahead of the new federal rule's implementation four years from now. Hawaii launched a mandate in 1974 and Massachusetts did so in 2007. In both states, the mandate has successfully lowered the rate of the uninsured far below the national average, without substantially adversely affecting businesses" (Pickert, 7/26).

The Washington Post: The changes also come as nonprofit health insurers sit on what could be unnecessarily large surpluses, the Consumers Union says. "The report released Thursday by the Consumers Union, the nonprofit publisher of Consumer Reports, found that seven of 10 Blue Cross Blue Shield affiliates examined had amassed surpluses that are more than three times the level regulators deemed necessary for them to remain solvent. At the close of 2009, for instance, Blue Cross Blue Shield of Arizona had a surplus of $717 million, more than seven times the regulatory minimum. That same year, the company raised premiums for its individual market customers between 8.8 and 18.4 percent." Other insurers proposed similar surpluses. "For-profit plans are less likely to accumulate surpluses substantially above the required minimum because they have an incentive to give the money back to shareholders as profit, said Sondra Roberto, a staff attorney at Consumer Reports who co-wrote the report." The nonprofit insurers say that if they used the surpluses to push down premiums, it would provide only a temporary reprieve, and that they need the surpluses to guard against unexpected expenses (Aizenman, 7/26).

The New York Times, in a separate story: On the politics side, Democrats are promoting free provisions of the health law to win votes in November. "You can see it in the administration's piece-by-piece rollout of the new health care law, and Mr. Obama's travels to highlight individual benefits of economic stimulus legislation. … The White House demonstrated its step-by-step messaging on health care last week with a video from Michelle Obama and Jill Biden on new preventive care services, and the award of grant money for states to assist new parents. Mr. Obama's aides insist it is gradually working, pointing to polls showing an uptick in public support for the health care law. 'Good luck with that,' said [Neil] Newhouse, [a] Republican pollster. The administration and Democratic candidates are only 'treading water' with such positive messages, he said" (Harwood, 7/26).

(Louisville, Ky.) Courier-Journal: Finally, at the National Conference of State Legislatures, lawmakers told colleagues that they need to start thinking about the health law changes that take effect in 2014 now. "'You are already behind the eight-ball,' Utah House Speaker David Clark told fellow lawmakers at a health summit, part of the four-day conference. 'There is no time to waste.' … Several Kentucky lawmakers were among the more than 100 legislators and others from across the United States who attended the all-day session. Some expressed concern Kentucky isn't moving fast enough to plan for the new law" (Yetter, 7/25).

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