News

Differing Views on the Employment Effect of Healthcare Reform

February 15

This month, TMP Worldwide continues to explore the drivers behind health reform and their possible implications. Below are two emerging viewpoints: selling health insurance across state lines and the citizens' role in effecting change in healthcare.

Let Health Insurance Cross State Lines, Some Say

David M. Herszenhorn
The New York Times
February 13, 2010

"As Republicans and Democrats claim to be searching for common ground in the health care debate, one idea that lawmakers on both sides seem to agree on is that health insurance should be sold across state lines. Republicans like Representative John Shadegg of Arizona have long called for this change, saying it would increase competition among health insurers and provide consumers with a greater array of choices."

"But Republicans and Democrats fiercely disagree over how to go about allowing such sales, and some independent health care experts warn that the idea may be more appealing in theory than in practice, and that it might even raise rather than lower costs."

"Proponents of the idea say that the tangle of state regulation drives up costs, particularly in states with heavy mandates, and that a quick and easy way to reduce prices would be to allow people in states where insurance is expensive, like New York or Massachusetts, to buy policies in low-cost states like Minnesota."

"President Obama and leading Democrats, however, warn that without new regulations, private insurance companies would race to set up shop in states with lax regulation, minimal benefits requirements and the fewest consumer protections."

"Healthier adults would buy cheaper policies out of state, the budget office said, while less-healthy adults would stick to in-state insurance because it covers the services they need. Premiums would rise for the latter group as the risk pool became less healthy and more costly."

For the full article, see: http://prescriptions.blogs.nytimes.com/2010/02/13/let-health-insurance-cross-state-lines-some-say/

Health Care: Effecting Change From the Ground

Andrew Rubin
The Huffington Post
February 16, 2010

"Truth be told, I have no problem with insurance companies making money. While the numbers may seem very high, the insurance industry provides a valuable service to millions of Americans. Further, the margins are relatively small as compared with other industries. This is America and we have a market-based economy. We, the people, have set the rules for the health insurance industry to follow, and they following them exactly as they should. Therein lies the problem."

"How can America, the largest economy in the world, even with all our debt and high levels of unemployment, tolerate 30, 40, or 50 million people without access to health care services and subsequently health care insurance? The answer is actually quite simple — because we do."

"It has become increasingly difficult to get my message out as the mainstream media focuses more on the politics in Washington and less on the real story, which is how people are suffering. I simply asked, is it worth the fight anymore? Is anyone listening to us? Should I keep on fighting? I am very fortunate. I have a great job working for one of the largest and best medical centers in the world (NYU Langone Medical Center in New York City). I have great health insurance and access to the best doctors anywhere."

"I think what I find most strange and frustrating is the lack of public outcry over what is happening. There have been no rallies in Washington. Think about it, the news media covered the Tea Party Rally a few months back with their small protest in Washington, with constant updates and analysis. Can you imagine what would happen if a mere five percent of the uninsured marched on Washington to demand a change?"

"It is up to us. If you are reading this blog, call Congress. Tell them we have to do something. We cannot rely on others to fix this for us. We all play a role. Simply sitting on the sidelines waiting for something to happen is not going to work. Even scarier, you may end up one of the unlucky people who had insurance last year or even has insurance today, and loses it overnight. We are all at risk (unless of course, you work for the Senate and the House)."

For the full article, see: http://www.huffingtonpost.com/andrew-rubin/health-care-effecting-cha_b_463654.html

Facts and Figures Driving the Reform Movement (http://www.healthreform.gov) - This month, Arizona, Kentucky and Pennsylvania:

Arizona:

  • 1.3 million residents who do not currently have insurance and 281,000 residents who have nongroup insurance could get affordable coverage through the health insurance exchange.
  • 746,000 residents could qualify for premium tax credits to help them purchase health coverage.
  • 853,000 seniors would receive free preventive services.
  • 151,000 seniors would have their brand-name drug costs in the Medicare Part D "doughnut hole" halved.
  • 63,700 small businesses could be helped by a small business tax credit to make premiums more affordable.

Health Insurance Reform Provides Early Relief and Health Security. Proposals implemented in 2010 and 2011 will produce real benefits for:

  • Families: The 6.5 million residents of Arizona will benefit as reform:
    • Ensures consumer protections in the insurance market. Insurance companies will no longer be able to place lifetime limits on the coverage they provide, use of annual limits will be restricted, and they will not be able to arbitrarily drop coverage.
    • Creates immediate options for people who can't get insurance today. 8 percent of people in Arizona have diabetes2, and 25 percent have high blood pressure3 — two conditions that insurance companies could use as a reason to deny health insurance coverage. Reform will establish a high-risk pool to enable people who cannot get insurance today to find an affordable health plan.
    • Ensures free preventive services. 36 percent of Arizona residents have not had a colorectal cancer screening, and 19 percent of women over 50 have not had a mammogram in the past two years.4 Health insurance reform will ensure that people can access preventive services for free through their health plans. It will also invest in a prevention and public health fund to encourage prevention and wellness programs.
    • Supports health coverage for early retirees. An estimated 111,000 people from Arizona have early retiree coverage through their former employers, but early retiree coverage has eroded over time.5 A reinsurance program would stabilize early retiree coverage and provide premium relief to both early retirees and the workers in the firms that provide their health benefits. This could save families up to $1,200 on premiums.
  • Seniors: Arizona's 853,000 Medicare beneficiaries6 will benefit as reform:
    • Lowers premiums by reducing Medicare's overpayments to private plans. All Medicare beneficiaries pay the price of excessive overpayments through higher premiums — even the 68 percent of seniors in Arizona who are not enrolled in a Medicare Advantage plan.7 A typical couple in traditional Medicare will pay nearly $90 in additional Medicare premiums next year to subsidize these private plans.8 Health insurance reform clamps down on these excessive payments.
    • Reduces prescription drug spending. Roughly 151,000 Medicare beneficiaries in Arizona hit the "doughnut hole," or gap in Medicare Part D drug coverage that can cost some seniors an average of $4,080 per year.9 Reform legislation will provide a 50 percent discount for brand-name drugs in this coverage gap.
    • Covers free preventive services. Currently, seniors in Medicare must pay part of the cost of many preventive services on their own. For a colonoscopy that costs $740, this means that a senior must pay $17210 — a price that can be prohibitively expensive. Under reform, a senior will not pay anything for that colonoscopy, or for any other recommended preventive service. A senior will also get free annual wellness visits to his or her provider, with a personalized prevention plan to remain in good health.
  • Small businesses: While small businesses make up 70 percent of Arizona's businesses, only 35 percent of them offered health coverage benefits in 2008.11 63,700 small businesses in Arizona could be helped by a small businesses tax credit proposal that makes premiums more affordable.12 And these small businesses would be exempt from any employer responsibility provisions.
  • States: State budgets will be relieved from rising health care costs as reform:
  • Reduces state employee premiums. Coverage would immediately be expanded to the uninsured, decreasing the amount of uncompensated care costs that gets shifted to the premiums of state employees. For states that provide early retiree health benefits to their state employees, a reinsurance program would provide premium relief of up to $1,200 per family policy per year for all employees.
  • Reduces uncompensated care. Right now, providers in Arizona lose $750 million in uncompensated care each year,13 which states subsidize at least in part. Instead, under reform, uncompensated care would begin to be reduced immediately as more uninsured people gain coverage.

Kentucky:

  • 654,000 residents who do not currently have insurance and 196,000 residents who have nongroup insurance could get affordable coverage through the health insurance exchange.
  • 444,000 residents could qualify for premium tax credits to help them purchase health coverage.
  • 724,000 seniors would receive free preventive services.
  • 129,000 seniors would have their brand-name drug costs in the Medicare Part D "doughnut hole" halved.
  • 44,800 small businesses could be helped by a small business tax credit to make premiums more affordable.

Health Insurance Reform Provides Early Relief and Health Security. Proposals implemented in 2010 and 2011 will produce real benefits for:

  • Families: The 4.3 million residents of Kentucky will benefit as reform:
    • Ensures consumer protections in the insurance market. Insurance companies will no longer be able to place lifetime limits on the coverage they provide, use of annual limits will be restricted, and they will not be able to arbitrarily drop coverage.
    • Creates immediate options for people who can't get insurance today. 10 percent of people in Kentucky have diabetes2, and 30 percent have high blood pressure3 — two conditions that insurance companies could use as a reason to deny health insurance coverage. Reform will establish a high-risk pool to enable people who cannot get insurance today to find an affordable health plan.
    • Ensures free preventive services. 36 percent of Kentucky residents have not had a colorectal cancer screening, and 22 percent of women over 50 have not had a mammogram in the past two years.4 Health insurance reform will ensure that people can access preventive services for free through their health plans. It will also invest in a prevention and public health fund to encourage prevention and wellness programs.
    • Supports health coverage for early retirees. An estimated 66,800 from Kentucky have early retiree coverage through their former employers, but early retiree coverage has eroded over time.5 A reinsurance program would stabilize early retiree coverage and provide premium relief to both early retirees and the workers in the firms that provide their health benefits. This could save families up to $1,200 on premiums.
  • Seniors: Kentucky's 724,000 Medicare beneficiaries6 will benefit as reform:
  • Lowers premiums by reducing Medicare's overpayments to private plans. All Medicare beneficiaries pay the price of excessive overpayments through higher premiums — even the 87 percent of seniors in Kentucky who are not enrolled in a Medicare Advantage plan.7 A typical couple in traditional Medicare will pay nearly $90 in additional Medicare premiums next year to subsidize these private plans.8 Health insurance reform clamps down on these excessive payments.
  • Reduces prescription drug spending. Roughly 129,000 Medicare beneficiaries in Kentucky hit the "doughnut hole," or gap in Medicare Part D drug coverage that can cost some seniors an average of $4,080 per year.9 Reform legislation will provide a 50 percent discount for brand-name drugs in this coverage gap.
  • Covers free preventive services. Currently, seniors in Medicare must pay part of the cost of many preventive services on their own. For a colonoscopy that costs $637, this means that a senior must pay $14810 — a price that can be prohibitively expensive. Under reform, a senior will not pay anything for that colonoscopy, or for any other recommended preventive service. A senior will also get free annual wellness visits to his or her provider, with a personalized prevention plan to remain in good health.
  • Small businesses: While small businesses make up 72 percent of Kentucky's businesses, only 41 percent of them offered health coverage benefits in 2008.11 44,800 small businesses in Kentucky could be helped by a small businesses tax credit proposal that makes premiums more affordable.12 And these small businesses would be exempt from any employer responsibility provisions.
  • States: State budgets will be relieved from rising health care costs as reform:
    • Reduces state employee premiums. Coverage would immediately be expanded to the uninsured, decreasing the amount of uncompensated care costs that gets shifted to the premiums of state employees. For states that provide early retiree health benefits to their state employees, a reinsurance program would provide premium relief of up to $1,200 per family policy per year for all employees.
    • Reduces uncompensated care. Right now, providers in Kentucky lose $1.1 billion in uncompensated care each year,13 which states subsidize at least in part. Instead, under reform, uncompensated care would begin to be reduced immediately as more uninsured people gain coverage.

Pennsylvania:

  • 1.3 million residents who do not currently have insurance and 683,000 residents who have nongroup insurance could get affordable coverage through the health insurance exchange.
  • 904,000 residents could qualify for premium tax credits to help them purchase health coverage.
  • 2.2 million seniors would receive free preventive services.
  • 393,000 seniors would have their brand-name drug costs in the Medicare Part D "doughnut hole" halved.
  • 151,000 small businesses could be helped by a small business tax credit to make premiums more affordable.

Health Insurance Reform Provides Early Relief and Health Security. Proposals implemented in 2010 and 2011 will produce real benefits for:

  • Families: The 12.4 million residents of Pennsylvania will benefit as reform:
    • Ensures consumer protections in the insurance market. Insurance companies will no longer be able to place lifetime limits on the coverage they provide, use of annual limits will be restricted, and they will not be able to arbitrarily drop coverage.
    • Creates immediate options for people who can't get insurance today. 9 percent of people in Pennsylvania have diabetes2, and 28 percent have high blood pressure3 — two conditions that insurance companies could use as a reason to deny health insurance coverage. Reform will establish a high-risk pool to enable people who cannot get insurance today to find an affordable health plan.
    • Ensures free preventive services. 37 percent of Pennsylvania residents have not had a colorectal cancer screening, and 21 percent of women over 50 have not had a mammogram in the past two years.4 Health insurance reform will ensure that people can access preventive services for free through their health plans. It will also invest in a prevention and public health fund to encourage prevention and wellness programs.
    • Supports health coverage for early retirees. An estimated 184,000 people from Pennsylvania have early retiree coverage through their former employers, but early retiree coverage has eroded over time.5 A reinsurance program would stabilize early retiree coverage and provide premium relief to both early retirees and the workers in the firms that provide their health benefits. This could save families up to $1,200 on premiums.
  • Seniors: Pennsylvania's 2.2 million Medicare beneficiaries6 will benefit as reform:
    • Lowers premiums by reducing Medicare's overpayments to private plans. All Medicare beneficiaries pay the price of excessive overpayments through higher premiums — even the 64 percent of seniors in Pennsylvania who are not enrolled in a Medicare Advantage plan.7 A typical couple in traditional Medicare will pay nearly $90 in additional Medicare premiums next year to subsidize these private plans.8 Health insurance reform clamps down on these excessive payments.
    • Reduces prescription drug spending. Roughly 393,000 Medicare beneficiaries in Pennsylvania hit the "doughnut hole," or gap in Medicare Part D drug coverage that can cost some seniors an average of $4,080 per year.9 Reform legislation will provide a 50 percent discount for brand-name drugs in this coverage gap.
    • Covers free preventive services. Currently, seniors in Medicare must pay part of the cost of many preventive services on their own. For a colonoscopy that costs $727, this means that a senior must pay $16910 — a price that can be prohibitively expensive. Under reform, a senior will not pay anything for that colonoscopy, or for any other recommended preventive service. A senior will also get free annual wellness visits to his or her provider, with a personalized prevention plan to remain in good health.
  • Small businesses: While small businesses make up 74 percent of Pennsylvania's businesses, only 49 percent of them offered health coverage benefits in 2008.11 151,000 small businesses in Pennsylvania could be helped by a small businesses tax credit proposal that makes premiums more affordable.12 And these small businesses would be exempt from any employer responsibility provisions.
  • States: State budgets will be relieved from rising health care costs as reform:
    • Reduces state employee premiums. Coverage would immediately be expanded to the uninsured, decreasing the amount of uncompensated care costs that gets shifted to the premiums of state employees. For states that provide early retiree health benefits to their state employees, a reinsurance program would provide premium relief of up to $1,200 per family policy per year for all employees.
    • Reduces uncompensated care. Right now, providers in Pennsylvania lose $2.5 billion in uncompensated care each year,13 which states subsidize at least in part. Instead, under reform, uncompensated care would begin to be reduced immediately as more uninsured people gain coverage.
  • 1 Garrett B, Hoalan J, Doan L et al. The Cost of Failure to Enact Health Reform: Implications for States. September 2009.
  • 2 Behavioral Risk Factor Surveillance System Survey Data. Atlanta, Georgia: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, 2008.
  • 3 Behavioral Risk Factor Surveillance System Survey Data. Atlanta, Georgia: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, 2007.
  • 4 Behavioral Risk Factor Surveillance System Survey Data. Atlanta, Georgia: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, 2007.
  • 5 Kaiser Family Foundation. 2009 Employer Health Benefits Survey.
  • 6 Kaiser State Health Facts. http://www.statehealthfacts.org/comparetable.jsp?ind=353&cat=7.
  • 7 Kaiser State Health Facts. http://www.statehealthfacts.org/comparetable.jsp?ind=353&cat=7.
  • 8 Rick Foster, Office of the Actuary, Centers for Medicare and Medicaid Services. Letter to Congressman Stark, June 25, 2009.
  • 9 Office of the Actuary. Centers for Medicare and Medicaid Services.
  • 10 Centers for Medicare and Medicaid Services.
  • 11 Center for Financing, Access and Cost Trends, AHRQ, Medical Expenditure Panel Survey - Insurance Component, 2008, Table II.A.2.
  • 12 Center for Financing, Access and Cost Trends, AHRQ, Medical Expenditure Panel Survey - Insurance Component, 2008.
  • 13 Hospital uncompensated care cost is estimated using a GAO model and the Hospital Cost Reports. Total uncompensated care is computed as hospital uncompensated care divided by 63% (Hadley and Holahan's study on "The Cost of Care for the Uninsured" for Kaiser in 2004 found that hospitals account for 63% of total uncompensated care). Data expressed in 2009 dollars using Centers for Medicare and Medicaid Services, "National Health Expenditure Data."
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