As the November elections near, more Democrats appear to be campaigning on the health care law, touting a package of consumer protections that went into effect for plan years starting after Sept. 23. Meanwhile, retailers and restaurants say that they need waivers from some provisions of the health care law so that they can continue to offer affordable coverage to workers. And a new analysis from the Kaiser Family Foundation finds that monthly premiums for stand-alone prescription drug plans will rise by 10 percent, on average, next year if beneficiaries stay in their current plans.
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JACKIE JUDD: Good day. This is Health on the Hill. I am Jackie Judd. It is just over six months now since President Obama signed into law the Health Care Reform Bill. How is it playing in congressional campaigns across the country and in corporate board rooms? Here to help us answer those questions and more are Mary Agnes Carey, senior correspondent for Kaiser Health News, and Ricardo Alonso-Zaldivar of The Associated Press. Welcome to you both.
Mary Agnes, we have spent some time on this program talking about this question of will Democrats be running on or from health care reform during the November elections and the lead up. What is your take at this moment?
MARY AGNES CAREY: I think you’re hearing more from Democrats now because there is simply more to talk about. As of September 23rd for health plan years beginning after that point, there are a lot of consumer protections that Democrats can get out and talk about now. No recisions, no cancelling insurance once you get sick. You can keep adult children up to age 26 on your health plan.
Democrats can point to that now if they deem it’s in their best interest for their race and talk about it. Russ Feingold, a Democrat from Wisconsin, is talking a lot about that.
JACKIE JUDD: Who is in the race of his life.
MARY AGNES CAREY: Exactly. Steve Israel, a congressman from New York, Democratic congressman, is getting out there and talking about it. In a Louisiana contest, there is a Democratic challenger pointing to the Republican incumbents’ vote against the Health Care Bill. If they think there is more to talk about and they want to talk about it and it is of interest in their race, I think they are talking about it a lot more.
Both President Obama and House Speaker Nancy Pelosi have said to different incumbents in Congress, run your race the way you see fit. If you need to talk more about the economy, focus on that. If health care is a big issue for you, focus on that. And I think Democrats that think they need to talk about health care and it is going to help them, they are doing just that.
JACKIE JUDD: All politics is local.
MARY AGNES CAREY: Exactly.
JACKIE JUDD: And for Republicans, Ricardo, do they find it at this moment in the campaign and from week to week these things change, we know that, that it’s a very viable issue for them to campaign against?
RICARDO ALONSO-ZALDIVAR: That continues to be the case. All along it is health care and legislation that was basically pushed through by the Democrats has been a big issue to energize the Republican base and it continues to be the case and they are going to keep pushing the message of repeal and replace, and there is unity among Republicans on repealing the legislation. It seems to be pretty solid on that, but when you look at replace, less so. We have seen some consensus items that the House Republican Leadership put out so far.
JACKIE JUDD: The other idea out there is to not fund some of the pieces of the legislation, right?
RICARDO ALONSO-ZALDIVAR: Well, yeah, a straight forward repeal, probably odds are it would not work because President Obama could veto it and no one anticipates at the moment that Republicans will have enough votes to overcome that veto, so another strategy would be a funding strategy, deny HHS and IRS the money that they need to carry out the law, and that could lead to all sorts of places. It could lead you to a situation where you are looking at a shut down of an agency or a government shut down, depending on the vehicle for that funding.
JACKIE JUDD: Let’s talk now for a moment about the business community and health care reform, last week there was some indication of some of the problems that some parts of the business community will have, are having, with health care reform law, McDonald’s spoke out, the restaurant association did, walk us through what their issues are.
MARY AGNES CAREY: Retailers and restaurants often offer these smaller, more limited benefit plans. They are called mini meds. They are pretty inexpensive for the employees but they have a limited benefit, probably not as comprehensive as many people have from their employers, so what these groups have said to the government is we need waivers on two key elements of your Health Bill.
Number one is annual limits. You are not supposed to have any annual limits anymore, but we need a waiver there and also on the medical loss ratio, and for the small group market that means that an insurer has to spend 80-percent of the premium dollar on health care, but these folks are saying if you require us to lift annual limits and we can’t get a waiver on the medical loss ratio, we are either not going to offer coverage or it is going to be even more expensive for our workers.
JACKIE JUDD: The reaction from HHS, Ricardo, seems to be hold on, let’s not over react. We haven’t even written some of the regulations yet. What should we take from that in terms of how the Administration may approach these challenges in the future?
RICARDO ALONSO-ZALDIVAR: It seems to me that they are sending a strong signal that they would look for ways to compromise and particularly since the law gives them the means to reach accommodations with different interests. The law gives the secretary authority to waive certain provisions, so they seem to be sending a strong signal that they are open to compromise. Now, you have to wait down the line to see what that compromise looks like and whether it is acceptable to the business community.
Another factor to keep in mind is what is going to be the reaction of Democrats on the Hill, particularly progressives who see these requirements that insurers spend a fixed percentage of premium on medical care as one of the big accomplishments of the Health Care Bill, what is going to be their reaction if the Administration starts to issue exemptions and waivers?
And finally, you have got to keep in mind that we are in the opening act here because the major provisions of the legislation are not going to take effect until 2014, and I think that is a consideration, too. You have got to weigh how much of a fight to you want to have about certain things at this stage?
JACKIE JUDD: And also if concessions are to be made and we don’t know what will happen yet, but if concessions are to be made, doesn’t that mean that other organizations, other special interests, will come forward and say we need concessions, too, and before you know it is the Administration looking at a situation where the underpinning of the Health Care Reform Law begins to loosen up?
MARY AGNES CAREY: That pressure is already happening in a regulatory process, I mean you can see it in comments that all the different sectors are filing, they are pushing to get interpretation of the law and the regulatory approach in favor for them.
But I think Ricardo is right, you are going to have Democrats on the Hill pushing back, Jay Rockefeller, a Democrat who is very strong in the medical loss ratio provision, is already calling for a congressional investigation into these mini meds, what do they cover, what do they look like? He obviously feels a little sunshine in that area will illuminate a lot of points of view.
JACKIE JUDD: The final subject I want to talk to you both about has to do with Medicare recipients, elderly people who are a potent voting block, there is new research out about what will happen to premiums for the Part D, for prescription drugs, Mary Agnes?
MARY AGNES CAREY: Well, today the Kaiser Family Foundation released a report that said if seniors stay in their current Medicare Part D prescription drug plans, they can expect a premium increase of 10-percent next year. So, that is certainly something Democrats don’t want to hear as they go into an election season.
JACKIE JUDD: And Ricardo, you did some reporting earlier similar research on the subject of potential increases and consolidation, tell us about that.
RICARDO ALONSO-ZALDIVAR: Right, and today’s Kaiser research confirms some previous research that found that basically the same thing, that if you stay in your plan and you are in one of the top plans, you are going to face a premium hike.
There are two things going on here and some are good and some probably you would say if you are a beneficiary they are not good. On the not good side there is a big reorganization of the benefit to winnow out duplicate of plans, and that is why you are going to see a big number of beneficiaries have to switch to another plan and/or face higher premiums if they don’t switch.
Now on the plus side, because of the health care law, there is a 50-percent discount on brand name drugs in the coverage gap next year, and that is going to be significant, but there is a timing thing going on here. Right now, it is October. We are a month away from elections. And, people will be seeing a premium increase, but what would you say as far as the benefit on the donut hole? That probably won’t kick in for most of them until —
MARY AGNES CAREY: I think it is around twenty-eight hundred, fifty dollars of spending, so for a lot of people they have got to go several months into the year to hit that.
JACKIE JUDD: What has the Administration said about this potential for a 10-percent increase?
RICARDO ALONSO-ZALDIVAR: Well, the Administration calculates the numbers differently, because when they do their calculations, they assume that seniors are going to look at the increase and they are going to say wait a minute, I’m not going to pay this. I am going to see if there is another plan that covers my drugs for less, and they are going to make a switch. And so, according to the Administration’s calculations, building in that assumption, it will be about 3-percent on average.
JACKIE JUDD: Okay, and then a final question to you, Mary Agnes, how does this consolidation of plans, forcing some senior citizens to be moved from one plan to another, how does that, does it undercut the President’s statement which he says often, “If you like your health plan, you can keep your health plan.”
MARY AGNES CAREY: Well, I think if you are one of these seniors that Ricardo is talking about who feels they have got to make a switch and maybe the benefits aren’t as generous in the plan you switch to, you might not be too happy. I mean, we have certainly seen in the employer marker open enrollment is coming up and people are looking at higher premiums now, one can argue you cannot blame those on the health care law, even though some people do.
It is a matter of great debate, so you have got people in the employer market looking at that and saying wait a minute. I thought the Health Bill was going to help me with my coverage. I didn’t think it would be as expensive, or my employer has dropped that carrier, so it creates some difficulties.
JACKIE JUDD: Okay, Mary Agnes Carey, thank you very much. Ricardo Alonso-Zaldivar, thank you. I appreciate it. We will see you again.