Last Tuesday August 3, 2010 Missouri voters overwhelmingly approved Proposition C, a ballot measure that would prohibit the state government from requiring residents to have health insurance or from penalizing them for not having coverage. The referendum – now Missouri law – is in direct conflict with the individual mandate that’s part of the Patient Protection and Affordable Care Act of 2010. The federal requirement that most citizens have health insurance or face penalties begins in 2014. Because federal law generally overrules state law, the vote was largely symbolic as a show of the Tea Party movement’s strength and of popular discontent (particularly among conservative voters) with healthcare reform.

Missouri Opposes Federal Individual Mandate

71% of Missouri voters approved the measure while only 29% voted against it. Though turnout for the vote was low, the vast majority of those who did vote were Republicans. Analysts know this because even though Missouri’s open primaries do not require voters to register their party affiliation, many more voters took Republican ballots than Democratic ones. Republican legislators originally wanted to put Proposition C on Missouri’s November election ballot as a vote on a constitutional amendment, but to avoid a Democratic state senate filibuster they settled for a proposed law on last week’s primary ballot.

The purpose of the federal law’s individual mandate is to widen the pool of healthy individuals covered by insurers to balance out the influx of unhealthy individuals expected to enter the pool as a result of separate provisions which prohibit insurers from denying people with pre-existing medical conditions. Were there not to be an individual mandate in conjunction with eliminating denials based on pre-existing conditions, premiums would rise out of control.

Though this is nothing more than a symbolic gesture of disapproval from voters, several other states have also passed similar statutes not based on referenda, including Arizona, Georgia, Idaho, Louisiana, and Virginia. Arizona and Oklahoma voters are set to vote on state constitutional amendments to the same effect in November. In the same vein, public officials in more than twelve states (including Missouri) have filed lawsuits claiming the individual mandate violates usual federal-state relations. Defenders of the law argue the mandate falls under Congress’s power to levy taxes and regulate interstate commerce. Federal courts are expected to weigh in on the constitutionality of this issue before the individual mandate goes into effect.

A number of high powered interest groups were involved in campaigning for Proposition C. The Missouri Hospital Association was particularly vocal – to the tune of $400,000 – in warning voters that passage of the measure could increase hospital costs for treating the uninsured. The group argues that were there not to be an individual mandate, there is the potential for a massive cost-shift onto the insured to cover those visiting emergency rooms because they lack insurance. There was little opposition from grass-roots organizations or unions and consumer groups who had forcefully supported reform earlier this year.

The 2010 health care reform has been the center of debates since it was passed this past March. One key aspect of the new legislation was the mandate that new health insurance plans must offer free preventative health care to patients in an effort to improve the overall health of the country.

However, including one service in the preventative care has been a source of contention for many groups. Namely, that service is free contraception and family planning services for women.

Should Birth Control Be Included Under the Preventative Care Mandate?

According to Michelle Andrews from Kaiser Health News, American women spend an average of 30 years attempting to prevent pregnancy, and only five years of their lives actively trying to become pregnant. Birth control is one important approach to family planning, and many women’s and employer groups argue that it should be deemed a preventative service.

Still, many more conservative groups oppose including contraceptives in the preventative care mandate, honing in on the support of socially conservative voices. The U.S. Conference of Catholic Bishops argues that pregnancy is not the same as a disease, and therefore contraception should not be placed in the same category as preventative care.

Already, 27 states include birth control as preventative care measures. According to Ms. Andrews, there are over 3 million unplanned pregnancies nationwide every year—a product of the high cost of birth control. Women who use the birth control pill as a contraceptive can expect to spend nearly $75 every month to prevent pregnancy. Not surprisingly, many unexpected births can be attributed to the high cost of birth control options like the pill and IUDs (intrauterine devices).  Even when health insurance plans provide birth control, copayments could still be too high for women—ranging from $50 for the birth control pill and hundreds for IUDS. Young women in particular are hit hard by the prices.

And remember—even married women use birth control to prevent unwanted pregnancy. In fact, over 11 million American women use contraceptives.  Unplanned pregnancies actually cost the American health care system over 5 billion dollars every year—and 40% of these births are covered by Medicaid. Low-income women on Medicaid are less likely to have access to affordable birth control. Plus, many health plans for individuals do not include maternity coverage.

Some employer groups argue that offering contraceptives as a part of preventative care will decrease the cost of insurance, as prenatal and postnatal care is far more expensive than the cost of birth control.

Still, the issue is a touchy one—pregnancies are not as black and white as diseases.  To the millions of American on birth control, hoping to avoid pregnancy, birth control is a crucial part of preventative care. To other Americans, pregnancy is not a disease to be prevented, but the gift of a life. Thus, birth control—like the new morning after pill, Ella One— falls into the health care reform’s gray area of morality.

Despite the tremendous cost benefits that providing contraception would provides—as well as a high demand, the White House took the politically safe route and opted not to include contraception in the preventative care mandate.

The debate over whether the new federally-funded high risk pool programs will allow funding for member’s elective abortions continues. The mandatory state high risk pools will be funded at least in part by the federal government and in some cases also federally administered, though many states have volunteered to administer the pools themselves and contribute the lion’s share of funding. The pools –referred to as “pre-existing condition insurance plans” – are meant to provide health insurance for residents with pre-existing conditions who would otherwise be ineligible for coverage. Last week, the Obama administration announced it would not permit funding to be used for elective abortions under the program. This angered pro-choice groups who argue the President is bending over backwards, compromising campaign promises to appease a few pro-life Democrats.

Will Obama Fund Abortions in High Risk Insurance Pools?

Pro-choice advocates further allege that the administration does not have the legal authority to determine whether funding can be used to pay for abortions, as the use of funds for such procedures in high risk pools was not mentioned in the language of the Affordable Care Act or the subsequent executive order. Pro-lifers and Republicans say that even if the high risk pools were not included in the language of the executive order which affirmed the Hyde Amendment, the principle of the deal which solidified pro-life Democrats’ last-minute votes should still apply. Essentially, the President promised Democrats the reform would neither expand nor contract abortion availability, and his office should keep that promise.

Abortion-rights groups respond that many states’ existing high risk pools currently cover abortions for good reason. Many of the women enrolled in high risk pools have chronic health problems like diabetes which can make pregnancy dangerous. Abortions must be available to these women as a backup plan if their birth control fails as a pregnancy could seriously threaten their health, or even their lives.

In 2006, Massachusetts established a broader health care system to provide universal health insurance coverage to its residents while also cutting down costs. The Massachusetts health care reform features several crucial components that expanded coverage to more than 100,000 uninsured.  The reform requires all Massachusetts adults to enroll in a health insurance plan or risk penalty, while all employers must also provide health insurance to employees or pay a penalty. Low-income adults have the opportunity to join one of the state-run Commonwealth Care plans.

Massachusetts Must Control It's Health Insurance Costs

While Massachusetts has succeeded in expanding health insurance coverage, it has not succeeded in slashing costs. As of June 2010, Massachusetts has the lowest uninsured rate in the United States at 4.8 percent, having slashed the uninsured rate by 60 percent. Compare that to the United States as a whole, where 15.4% of citizens are not covered.  Massachusetts’ efforts in expanding covered should be classified as successful.

However, the successes of broader coverage cannot hide the plan’s inability to cut costs.  The wide coverage, coupled with state subsidies and reduced rivalry between health providers, has caused costs to rise. The Massachusetts Department of Insurance has denied insurers’ demands for rate hikes in an attempt to keep expenses low for consumers. Meanwhile, insurers argue that reducing rates without slashing health provider costs places undue stress on them. Premiums have increased substantially for individuals and families, while the use of the emergency room for non-emergencies did not markedly decrease, perhaps indicating a deeper issue: the primary care physician shortage.

The similarities between the Massachusetts plan and the 2010 US Affordable Care Act make Massachusetts’ successes and failures ever more glaring on the national stage. According to a report from Fortune Magazine, both the Massachusetts and Obama plans increase health care demands without addressing health care shortages.  Prices have gone through the roof, and according to Fortune, will not decrease until the government stops targeting insurers.  Insurance pools also grow more expensive as younger, healthier members drop out while sicker members stay in.  Subsidizing middle-income plans may also prove expensive, while additional state-mandated benefits have also strained the system.  According to Fortune, Massachusetts residents have begun to manipulate the system to optimize their health insurance benefits and subsidies.

If Massachusetts can successfully manage the costs associated with its health care reform, perhaps this will bode well for the Affordable Health Care Act.  Four years into the Massachusetts plan, costs have continued to skyrocket as more residents are covered. In the current economy, controlling costs is ever more crucial to the health care industry and to the country’s economy as a whole.  Solving the primary care and health provider shortage may prove a good step in shaving down costs.

In the end, it will be the costs, not universal coverage, that determine success for both the Massachusetts and federal reform programs. I hope that both reforms can find a way to cut costs beyond placing limits on insurers, perhaps by streamlining health care overall and improving the pool of preventative

Even as federal Medicaid funds through the stimulus package dwindle, experts and state officials are collaborating on ways to identify and enroll eligible children in CHIP and traditional Medicaid this year. They are also working on similar strategies to target the millions of adults who will become eligible for Medicaid in 2014. Kaiser Health Network recently interviewed three health policy analysts for their take on how states can bring the nearly 5 million eligible but unenrolled children into the Children’s Health Insurance Program. The experts from the National Academy for State Health Policy, the Center for Children and Families at Georgetown, the Kaiser Family Foundation, and the Center on Budget and Policy Priorities enumerated several strategies states could adopt.

First, simplify Medicaid enrollment by giving states the option to enroll children automatically based on their records with other government agencies like those that administer food stamps or subsidized school lunch programs. In early 2010, Louisiana identified nearly 10,000 children via its food stamp program who were eligible for CHIP or Medicaid by not enrolled. Express lane eligibility could be expanded by developing a joint Medicaid/CHIP online application which eliminates the now-mandatory in-person interview. This expedited process is currently allowed for enrolling children under a 2009 federal law and 18 states already use it as an option. Federal law could further be changed to allow express lane enrollment for adults, especially those who will become Medicaid eligible in 2014. Creating an express lane process which applies to all Medicaid eligible individuals would encourage enrollment by lowering the barriers to entry. Eligibility terms could also be increased from 6 months to 1 year, and the process for renewing Medicaid coverage could be streamlined.

New Strategies Employed to Enroll More Children & Adults in Medicaid

States might also consider eliminating the asset test applied when determining adults’ Medicaid eligibility. This test has already been dropped for parents enrolling their children in most states. One big barrier to enrolling more of the Medicaid eligible population is the social stigma associated with being on Medicaid. Unfortunately, this stigma places Medicaid enrollees in the same category as welfare recipients. Though both these programs provide necessary services to families in need, “welfare” has taken on a negative connotation in popular culture, one which Medicaid has also acquired. In order to encourage a culture of coverage, states could rename Medicaid to something more appealing and which sounds less like a welfare entitlement. My home state of Connecticut already made such a change, renaming CHIP the “Husky” Program after our NCAA Champion UConn basketball teams.

Finally, experts suggested paying incentives to nonprofit social service agencies who help enroll children in Medicaid and CHIP. Some states including Oregon, California, Louisiana, New Hampshire, Illinois, and Indiana have had success enrolling thousands of kids via these groups using paid incentives. Any or all of these strategies could prove useful to Medicaid program administrators in the years to come as the pool of eligible individuals is set to swell tremendously.

On Monday, Connecticut announced that it would be the first state to move low income residents to the Medicaid program.  This shift will allow the state to save over 53 million dollars over the next year.  Because the government made changes in the Medicaid program to allow low-income singles without kids to enroll in Medicaid for the first time Connecticut was able to move these people from the State Administered General Assistance (SAGA) program.

Low-Income Single Adults Eligible for Medicaid in CT

Medicaid provides a wider range of health services than SAGA, and by enrolling low-income singles in Medicaid, Connecticut will save money and provide the approximately 45,000 qualifying individuals with more medical care.  Before the Affordable Care Act, adults without kids did not qualify unless the state allowed exceptions. On top of the savings, Connecticut will get some cash from the federal government for this endeavor. Kathleen Sebelius, Secretary of Health and Human Services Department, lauded Connecticut for early enrollment because it

The District of Columbia also followed Connecticut’s lead, and requested the government to expand its own Medicaid program, slashing over 56 million dollars from the city’s budget.  Both Connecticut and Washington, DC took advantage of the Affordable Care Act.  By 2014, every state will need to expand its Medicare coverage with federal funding, so successes in Connecticut and DC could indicate overall success for the Affordable Care Act.

Are states finally accepting the Affordable Health Care Act? Hopefully Connecticut and Washington, DC’s Medicaid expansion will truly prove successful in reducing expenses and providing citizens with quality health care.

Today is the deadline for states to submit details to the Department of Health and Human Services on how they intend to operate the high-risk health insurance pools mandated by healthcare reform. The high-risk pool program is intended to provide coverage to those who have been denied health insurance because of a pre-existing condition and who have been without coverage for more than six months. These pools are meant to bridge the gap for such individuals until subsidies and new health insurance exchanges are instituted in 2014. Other crucial reforms included in the package which brought on these pools are provisions that allow individuals to stay on their families’ insurance plans up to age twenty-six, prevent insurers from excluding children because of preexisting conditions, and eliminate lifetime limits on health costs imposed on policyholders. Twenty-nine state and the District of Columbia have elected to run their own pools and will be entitled to a portion of the $5 billion allocated by the federal government to fund them. Nineteen states said they would leave operation of pools in their states to the federal government. Some think tank analysts and state officials worry that federal funding may run out, leaving states liable to cover these high-risk patients out of their own budgets. Federal officials at the Department of Health and Human Services have assured these doubters that the funds will last for until 2014 in states where it will administer the pools. They further say the federal government will cover the costs of developing or modifying accounting or enrollment systems and any other start-up costs states may incur. The contracts due to Health and Human Services today must include strategies for operation of the pools, estimations of total cost, and other provisions. Enrollment in the pools begins July 1 and coverage for policyholders will begin August 1. For more information on the high-risk pools in your state, contact your state’s Department of Insurance.

According to Hartford Business online, the Connecticut State Government is debating on passing a bill which will mandate expanded coverage for more than six medical conditions. Such mandates would add approximately 3% to total premiums, according to insurance experts.

The six medical condition mandates for the new proposal include: ostomy-related supplies, prosthetic devices, hearing aids for children and wigs for patients who experience hair loss due to medical conditions. These mandates would cover what is typically paid for out of pocket, therefore increasing premium costs.

Thousands of families who took advantage of the federal government subsidy for extending their former employer’s health insurance coverage through COBRA have had to rethink their options in the past few weeks. On June 1, 2010 the federal government’s subsidy of COBRA health plan extensions expired. COBRA is a federal program which allows workers who have been laid off to continue the health insurance benefits their families received through their job after their employment has been terminated. With employer-sponsored coverage, companies contribute a given portion of the cost of their workers’ health insurance premiums and workers pay the rest. When a worker is laid off, COBRA gives that individual the option to remain on the same insurance plan as long as they agree to pay the total cost of monthly premiums themselves. Unfortunately, the full burden of such premiums is often too onerous for unemployed individuals to bear, especially in economic times such as these. That’s why as part of last year’s economic stimulus package, the federal government offered to subsidize the cost of extending one’s old coverage through COBRA at 65%. This subsidy was available beginning March 1, 2009 and offered 15 months of subsidized coverage to those who took advantage of the extension.

According to a study by the Treasury Department up to 1/3 of eligible unemployed workers signed up for the program. Last Tuesday, this benefit expired leaving thousands of families who took advantage of the opportunity to extend their health plan feeling they can no longer afford to continue this coverage without the help of the subsidy.  One exception to the June 1, 2010 expiration date remains for those who did not become unemployed until more recently. Those families who accepted the COBRA subsidized extension after March 1, 2009 but before December 31, 2009 are able to continue COBRA until September 30, 2010 when the subsidy expires completely. These families will be dropped off COBRA on a rolling basis based on when they signed up.

Though Congress has extended the COBRA subsidies four times since February 2009, the most recent proposed subsidy extension failed due to worries on the part of legislators about the federal budget deficit. Some states are offering additional COBRA extensions (called “mini-COBRA” laws) to supplement federal COBRA to extend benefits up to 36 months but again, the cost of these premiums tend to be much higher than those for plans available on the individual market.

Recently we have had many families losing their COBRA coverage visit our website to look into other, less expensive health insurance options offered on the individual and family health insurance market through us at Health Plan One. With individual and family plans, consumers are able to tailor their coverage so they only pay for the benefits which meet their specific needs. If you’re interested in doing your homework on the individual and family plans available to you, call one of our licensed agents at (877) 567-5267 for an expert, personalized consultation. Other public options for individuals with major preexisting conditions dropping their COBRA exist in most states, as do so-called “HIPAA-eligible” plans. Visit your state’s informational page at healthplanone.com to learn more about the publicly funded programs available in your area which benefit groups like pregnant women, children, and low-income families.

Debicella vs. Himes and Lamont

On Monday night I had the pleasure of attending the health care debate between congressman Jim Himes, Ned Lamont, and State Senator Dan Debicella. The participants offered up a comprehensive review of Democratic and Republican talking points that are worth a quick analysis. We’ll start with the Democratic talking points:

1. We have a moral obligation to cover all those without insurance.

I think many Americans agree with that statement. And we actually do cover all Americans today because no one can get turned away in an emergency room. A related question to ask is: why don’t these Americans have insurance? In many states, like Connecticut – and in Massachusetts prior to healthcare reform – almost half of the uninsured individuals are, in fact, eligible for Medicaid. They may not sign up because the state makes it difficult to enroll or the individual does not take the time to enroll. It seems like one prescription for our health care problem is: let’s get people enrolled in a program we have today.

The next big batch of uninsured Americans is illegal aliens. This is one of the toughest issues in healthcare reform – what do we do with the 10-15 million illegal aliens in the United States that do not have health insurance. I wish I had a prescription but unfortunately there is no easy answer on this one. The next batch of the uninsured are “risk takers.” Unfortunately, the risk takers are risking the taxpayers’ money and the money of those who are insured, not their own. If they get really sick we treat them anyway! A prescription for this problem is, in fact, a mandate. Finally, the rest of the uninsured population is people who are too sick to qualify for health insurance. Those people need financial assistance.

2. We need more competition (more insurance companies). Therefore, we need a public option.

Interesting point but completely irrelevant in Connecticut. In Connecticut’s individual insurance market we have Cigna, Aetna, Connecticare, Anthem Blue Cross, Time Assurant, Celtic, Golden Rule, and a few other no-names. Clearly, lack of competition is not a problem. So I’m not sure why Himes raised this talking point.

3. Insurance companies are bad.

Congressman Himes skewered the insurance companies; referring to their “pernicious” practices of rescinding policies after issuing them. In reality, this practice of “rescission” is rare. At Health Plan One, we have sold thousands and thousands of policies and have never had one client’s policy rescinded. Rescission occurs in the event of fraud perpetrated on the insurance company and its policyholders. For example, if an insurance applicant has cancer and intentionally misrepresents his/her condition, an insurance company may face hundreds of thousands of dollars of liability and has one of two choices: rescind the policy, due to fraud or take those losses and charge all their honest customers. Pretty easy choice for the policyholders and insurance company. Not sure who Mr. Himes thinks should pay for insurance fraud?

4. Medicare represents a $40 trillion unfunded liability.

Wow! Kudos to Congressman Himes for bringing this up. He got off the talkpoint memo. The insolvency of Medicare and $40 trillion unfunded liability is our ultimate problem and everything else we’re doing is working on the margins. Unfortunately, after announcing this financial bomb, the Congressman had no solutions other than to cut Medicare Advantage which is a cut to seniors’ benefits, but sounds like cuts to the insurers which is more politically palatable. He offers no clear solutions for a big problem.

5. Eliminate preexisting conditions.

Good idea. Who’s going to pay for it? You can’t have a functioning insurance market with no preexisting conditions unless you mandate that everyone gets in the insurance pool. For proof, go to the New York insurance department where they implemented no pre-existing conditions. Every insurer in the state has moved out and prices are 10 times what they are in Connecticut or Pennsylvania. The weak $750 mandate will not be sufficient to obligate people to buy health insurance.

Republican talking points:

Senator Debicella started out strong with the salient point that escalating costs are the key problem. Then, on to Republican talk points:

1. Tort Reform

The cornerstone of any Republican plan is tort reform. Certainly a good idea and should be part of any plan. Reduce physician costs and mitigate wasteful defensive medicine.

2. Electronic medical records (also a Democratic talking point)

EMRs are a good idea and cost a lot of money, but they might save a lot of money in the future.

3. Buying insurance across state lines.

Great idea if you live in NY, RI, VT, and a whole bunch of states that have blown up their individual insurance market. You have to fire a lot of state regulators, though, so Dems hate this idea.

4. Introducing high deductible plans.

This is a great point. Higher deductible plans have lower premiums and introduce the concept of cost-sharing to the consumer. For example, at Health Plan One, we carry many high quality, high deductible plans that are great options, especially for younger consumers who are healthy. Reducing health care costs must include patient cost-sharing and innovation on health benefit designs. Current congressional bills prohibit this.

5. Wellness (also a Democratic talk point)

Who could argue with wellness? Wellness is a great idea but you’ve got to have a plan to implement it. Close McDonald’s?

Prospective governor talk points:

Mr. Lamont made it very clear he will run for governor. He pointed out that Connecticut has not created a lot of jobs over the last 20 years and believes that the high cost of health care is part of the problem. We’ve heard a lot about the problems which were largely accurate but the prescription is unclear.

A fun event but, unfortunately, Congressman Himes could not adequately defend the House or Senate health care bills that he wants to pass.

Score one for Debicella – start again!