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Week In Review: HHS Begins Implementing Health Law, High-Risk Insurance Pools, States Struggling With Medicaid Bills

May 07, 2010

Today, we begin a new Friday afternoon feature: a wrapup of the week's major health policy news coverage.

We begin with coverage of the Obama administration's earliest steps toward implementing the recently-enacted health reform law. U.S. News & World Report described the health reform challenges that will emerge during this phase of the process. "The 2,000-plus page law will be dwarfed by a regulatory flood of epic proportions," they write, noting that the work of writing regulations will touch nearly "one fifth of the U.S. economy" and "will keep small armies of bureaucrats busy for years" (Moeller, 5/2).

As part of this push, the White House announced on Tuesday some of the details of a federal program to help companies pay the health insurance costs of early retirees. Politico noted that the new law requires that " the program be implemented by June 21, but HHS plans to have it up and running by June 1, according to a White House official." Here's how it will work: "Employers -- including private companies, local governments, nonprofits, unions or religious entities -- can apply for reimbursements of up 80 percent of claims costs for health benefits between $15,000 and $90,000" (Haberkorn, 5/4). The New York Times reported that the program's purpose "is to reverse the erosion of employer-sponsored insurance." In 1988, 66 percent of large firms offered such coverage, while only 31 percent offered it in 2008, according to a senior White House official. The White House is hoping programs such as this one will rally more support for the health law, which continues to flag in polls (Pear, 5/4).

According to Modern Healthcare, HHS Secretary Kathleen Sebelius described the announcement as a continuation of what “what has been a rapid-fire implementation schedule for health insurance reforms dictated by the new reform law. Over the past several weeks, the HHS has called on insurers to adopt measures that allow young adults to stay on their parents' coverage for a longer period of time and policies to end most rescissions" (DoBias, 5/4). 

More coverage of the early retiree program can be found in KHN's Morning Edition on May 3, May 4 and May 5.

Also on the implementation front, the dust began to settle this week surrounding one of the reform law’s first deadlines. By Friday, April 30, states were to inform the Department of Health and Human Services of their decision regarding the creation of temporary high risk insurance pools. Under the new law, they could opt to run them with federal subsidies, or bow out and leave the task entirely to the federal government. On Monday, Politico provided its post-game analysis, noting many Democratic governors "decided to help the Department of Health and Human Services" while most Republican governors deferred to the feds, "essentially punting." Politico offered a near-final tally, based on those states that spoke up. Twenty-eight plus the District of Columbia agreed to do the work while 15 deferred entirely to the feds – offering what "could be a telling sign of how well the states and federal government work together on putting the rest of the overhaul into action" (Haberkorn, 5/3).

Continuing details regarding the high risk pools are also provided in the May 3 Morning Edition.

By mid-week, WellPoint stepped back into the headlines when news reports surfaced that California's Department of Insurance found mathematical mistakes in the calculations the insurance company used to justify its proposed rate hikes. The Wall Street Journal reported that Sebelius sent a letter to governors and state insurance commissioners "calling for a national inquiry into the data underpinning rising health-insurance costs" and urging the officials to be on the watch for similar math errors (Johnson, 5/5). In an email, "WellPoint … said … it believed the miscalculation was unique to its California individual insurance business.'Further, we believe that our rates are in compliance with statutes and regulations in the states that we do business,'" The Associated Press reported (Murphy, 5/5).

Meanwhile, according to the Los Angeles Times, WellPoint's math mistake triggered some California consumer groups to join in the call for review (Hefland, 5/4). And, in Connecticut, The Hartford Courant noted that officials also are asking for an independent audit of WellPoint's rate hikes (Sturdevant, 5/5).

For more detailed coverage, see KHN's Morning Edition, May 5 and May 6

States are continuing to confront budget hardships related to health care programs for the poor. Stateline.org featured a story that detailed how many states, in the throws of finalizing their 2011 budgets, were facing a serious questions about Medicaid assistance they have been receiving as a part of the stimulus package. "The Medicaid assistance, set to expire at the end of December, has become a critical component in many state budgets during a time of devastating deficits. So critical, in fact, that two-thirds of the states crafted 2011 budgets assuming that more of it would come through, according to the National Conference of State Legislatures. ... Now, with Congress ratcheting up its scrutiny of new spending, it's not at all clear that the Medicaid assistance will ever materialize" (Grovum, 4/4).

CNN Money also examined the dire straits of the states: "Until now, stimulus money spared governors and state lawmakers from making some of the most brutal budget cuts. But with this lifeline running out, officials are looking at making significant cutbacks to public services, particularly schools and health programs. As of mid-April, states and localities have received nearly $109 billion since the American Recovery & Reinvestment Act was passed in February 2009, according to the U.S. Government Accountability Office. The vast majority of that money went to help states maintain their Medicaid services and education funding in the face of steep drops in tax revenues due to the recession" (Luhby, 4/5).

See additional coverage in KHN's Morning Edition, May 4, May 5 and May 7.

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