Health Care Takes Federal Spotlight

Since the passage of the Affordable Care Act, there have been calls from the Republican Party to repeal the federal health care law. There were many votes in the House to try to accomplish that goal, but efforts stalled after that. The results of the November election, however, have put the issue on the fast track.

This week, the American Health Care Act was introduced in the House of Representatives; it’s a House Republican leadership-led plan that would repeal and replace the Affordable Care Act and is said to contain patient-centered reforms that drive down costs and expand access to care. More information can be found online.

The legislation has received mixed reactions from both sides of the aisle in the Indiana delegation. And overall, more mixed reaction – especially more from Republicans – has been prevalent in the Senate.

Representatives Larry Bucshon (IN-08) and Susan Brooks (IN-05) participated in the 27-hour hearing by the Energy and Commerce Committee on the new legislation. This markup phase lasted from Wednesday morning to Thursday afternoon before it was finally approved for advancement 31-23. During and since that marathon, Bucshon and Brooks have taken to social media to offer their support for the American Health Care Act. Here
are two updates they provided:

Brooks subsequently also stated: “The goals of the American Health Care Act are to provide states with more flexibility, lower health care costs for families and offer people more options when it comes to their health care decisions. Our plan protects coverage for people with pre-existing conditions, allows kids to stay on their parents’ insurance plans until the age of 26, continues to protect seniors from the high costs of prescription drugs caused by the Medicare Part D donut hole and bans lifetime caps to ensure that people will never have a limit imposed on their care.”

Meanwhile, Rep. Jim Banks (IN-03) offered: “While the replacement plan contains positive reforms like a permanent repeal of the medical device tax and repeal of the individual mandate, I have concerns about several aspects of the bill. These include the overall cost of the plan, the length of time it takes to repeal many Obamacare taxes, the possible creation of a new entitlement program and whether essential pro-life protections will be maintained. I will carefully study this legislation and evaluate how these concerns are addressed as this bill moves through the legislative process.”

Banks further stated that he supported two amendments to the replacement bill supported by the Republican Study Committee (of which he is a member) that he thinks would improve the underlying bill: one would freeze new enrollment in Medicaid expansion at the end of this year; the other would institute work requirements for able-bodied, childless adults on Medicaid.

On the Senate side, Indiana Republican Todd Young took to Twitter to give his quick thoughts on the new proposal: “Americans will have weeks to see what’s in the GOP health care plan before the Senate votes on it. (We) will not repeat mistakes of 2009. Feedback from both D’s & R’s alike will be welcome. We need input from all sides to fix the Obamacare mess.”

In an interview with WANE-TV in Fort Wayne, his counterpart – Democratic Sen. Joe Donnelley – implored Congress to not rush to pass a new law, but instead to work on a bipartisan effort to install some commonsense measures in the existing health care law that would be more beneficial to Hoosiers. Watch the full video interview.

Chamber on Federal Approval of HIP 2.0 to Satisfy ACA Requirement

Indiana Chamber of Commerce President and CEO Kevin Brinegar comments on the federal Centers for Medicare & Medicaid Services giving the green light to the Healthy Indiana Plan expansion (HIP 2.0), which is in lieu of traditional Medicaid expansion required under the Affordable Care Act (ACA).

“We are very pleased that the Centers for Medicare & Medicaid Services (CMS) appreciated Indiana’s unique brand of addressing the needs of our uninsured population and recognized HIP 2.0 as the best option for Indiana to expand health care coverage. The Indiana Chamber had reviewed HIP 2.0 and urged CMS to approve it.

“HIP provides reimbursement to health care providers at Medicare rates. Otherwise, health care providers recover such losses by increasing prices for private sector employers and their employees through cost shifting. Any attempt to lessen that cost shift is welcome.

“What’s more, the approval of HIP 2.0 will provide health care coverage for tens of thousands of additional Hoosiers and bring billions of dollars into Indiana’s economy.

“We applaud Gov. Pence and his administration for recognizing that HIP 2.0 was the best course for the state and for staying firm in that belief.”

Chamber Analysis of Governor’s Request to Expand Healthy Indiana Plan

The Pence administration last week unveiled plans to request a waiver from the Centers for Medicare & Medicaid Services (CMS) to expand the Healthy Indiana Plan (HIP). This expansion of HIP would be in lieu of a traditional Medicaid expansion. The announcement had been anticipated for several weeks.

The Healthy Indiana Plan, or HIP 2.0 as it is now being referred to, will have three “pathways” to coverage: HIP Basic, HIP Plus and HIP Employer Benefit Link. It is funded through the existing cigarette tax, the hospital assessment fee and federal Medicaid funds.

The Basic HIP plan is for Hoosiers below 100% of the federal poverty level (FPL). Basic members use an entirely state funded power account (similar to a health savings account) to cover a $2,500 annual deductible. The HIP Plus plan is for Hoosiers under 138% of FPL. They will be required to make contributions that range from $3-$25 per month. Members of HIP Plus and the state will jointly fund the power account based on a sliding income scale. This plan also includes dental and vision coverage.The HIP Employer Benefit Link allows HIP eligible individuals to enroll in either HIP Plus or receive a defined contribution power account funded by the state to access an employer-sponsored program. The defined contribution must be used to pay for premiums, co-pays or deductibles.

The Indiana Chamber has supported the expansion of HIP as an alternative to a traditional Medicaid expansion. The HIP plan has encouraged individual responsibility by attempting to mirror consumer driven health plans. HIP also reimburses at 100% of Medicare (higher than Medicaid), which ensures more provider participation and reduces cost shifting to the private sector, a point that is important to employers. The Indiana Chamber believes that the HIP Employer Benefit Link option will be an interesting program to potentially provide coverage to Indiana’s working poor. The Indiana Chamber will be securing more details on how the program will be implemented and will provide our members that information as it is received.

On a related note, this $25 million budget savings to the state – if the HIP expansion is approved by CMS – could cause some problems for insurance carriers providing health insurance coverage to the individual market in the insurance exchange/marketplace. The state is transitioning from a (209b) state, with its own disability definition, to what is called a “1634” state. Under a 1634 state, the administration will accept disability definitions of the Social Security Administration. As a result of the switch, the state will no longer be required to maintain a spend-down program. This program allowed those with high medical expenses to become eligible for Medicaid after they spent a designated portion of their monthly income on medical expenses. As of December 2013, there were over 134,000 people in this spend-down program.

Of that spend-down population, nearly 7,500 have incomes over 100% of FPL. It is this population that will be transferred to the insurance exchange/marketplace to purchase qualified plans in the commercial market. Medicaid claims for those individuals have been over $1,800 per member per month. Total claims for March 2013 through March of 2014 were $134 million. That amount is significantly higher than under normal individual insurance plans.

Insurance carriers participating in the insurance exchange filed their rates in May of last year. Those rates included calculations for the high risk pool being transitioned into the exchange, but the 7,500 “1634” transition eligibles are not included in those rates. This has serious impacts on those carriers: Significant losses to those participating which will result in considerable increases in current rates to cover the cost; those carriers that waited and will be coming into the exchange in 2015 have an advantage over those current participants in that they are taking on none of this additional risk; and for the smaller carriers there is a concern whether they will be able to participate in the exchange in the future, thus potentially jeopardizing Hoosier choices.

The Indiana Chamber will continue to evaluate and comment on this issue as more information is available.

Spend, Spend and More Spend

Few will argue with the idea that federal government spending is out of control. The Heritage Foundation's Federal Spending by the Numbers is a comprehensive look at the situation. We'll share a few of the many bullet points that just make me (and I'm sure many of you) wonder why our political leaders can't realize that the current course is a disastrous one.

  • Over the past 20 years, federal spending grew 71 percent faster than inflation.
  • In 1962, defense spending was nearly half the total federal budget (49 percent); Social Security and other mandatory programs were less than one-third of the budget (31 percent). Two major entitlement programs, Medicaid and Medicare, were signed into law by President Johnson in 1965.
  • In 2012 entitlements were nearly 62 percent of total spending, while defense dropped to less than one-fifth (18.7 percent) of the budget.
  • Federal spending per household reached $29,691 in 2012, a 29 percent increase (adjusted for inflation) from $23,010 in 2002. The government collected $20,293 per household in taxes in 2012.
  • The excess of spending over taxes produced a budget deficit of $9,398 per household in 2012.
  • For every $6.80 the federal government collected in taxes in 2012, it spent $10. Consequently, $3.20 out of every $10 spent was borrowed.
  • Major entitlements (Social Security, Medicare, Medicaid, Children's Health Insurance Program, Obamacare) will increase from 44 percent of federal spending in 2012 to 57 percent in 2022.
  • In 1993, Social Security surpassed national defense as the largest federal spending category, and remains first today.
  • Federal energy spending has increased steadily over the past decade with the government increasingly subsidizing activities like energy efficiency, energy supply, and technology commercialization. An unprecedented $42 billion was spent in 2009 as part of the stimulus, a nine-fold increase over the 2008 spending level.
  • Interest on the debt is the fifth largest federal spending category, even at today’s low interest rates.
  • All entitlements (excluding net interest) total nearly 62 percent of all federal spending today.
  • Spending on the largest, Social Security, Medicare, and Medicaid, will leap from 10.4 percent of GDP in 2012 to 18.2 percent by 2048.
  • The big three entitlements alone will absorb all tax revenues by 2048. Other spending, such as national defense or interest on the debt would have to be financed completely on borrowed money.
  • Medicare is the fastest-growing major entitlement, growing 68 percent since 2002. Medicaid grew 38 percent and Social Security 37 percent.

Budget Reflects Changing Times

I’ve seen these federal budget comparisons before, but they prove to be a somewhat fascinating look at how our nation has changed over the past 40-plus years. In this case, Kiplinger breaks down 1968 vs. projected fiscal year 2012. Some of the highlights:

  • Defense was an amazing 46% of the budget in 1968; it’s 19.8% now
  • In 1968, Social Security (13.4%), Medicare (2.3%) and Medicaid (1.1%) totaled less than 17%; today, it’s 20.6%, 13.2% and 7.2%, respectively, for a total of 41%
  • Not part of the picture 43 years ago, but with dollar numbers in the billions now are food stamps (2.2%, $80 billion), housing subsidies (1.6%, $61 billion), low-income tax credit (1.3%, $47 billion), supplemental security income (1.2%, $44 billion), nutrition programs (0.7%, $26 billion) and disaster relief (0.3%, $11 billion)

Maybe the scariest part is putting those billions next to the big-ticket social programs. The message: Something has to be done.

  • Social Security: $767 billion
  • Medicare: $492 billion
  • Medicaid: $269 billion
  • Net interest on debt: $242 billion 

Dead But Not Gone From Government Rolls

There’s the old joke (well, not really a joke in some cases) about dead people casting their ballots in elections. Now, it appears the dead are collecting taxpayer money in another example of government gone awry.

The National Center for Policy Analysis reported the following:

About $1 billion in taxpayer money goes to 250,000 deceased individuals, according to a review of reports by the Government Accountability Office, inspectors general and Congress itself.  How, might you ask?  According to Sen. Tom Coburn’s, R-Okla., office:

The Social Security Administration sent $18 million in stimulus funds to 71,688 dead people and $40.3 million in questionable benefit payments to 1,760 dead people.

The Department of Health and Human Services sent 11,000 dead people $3.9 million in assistance to pay heating and cooling costs.

The Department of Agriculture sent $1.1 billion in farming subsidies to deceased farmers.

But that’s not all, says the Washington Examiner:

The Department of Housing and Urban Development overseeing local agencies knowingly distributed $15.2 million in housing subsidies to 3,995 households with at least one deceased person.

Medicaid paid over $700,000 in claims for prescriptions for controlled substances written for over 1,800 deceased patients and prescriptions for controlled substances written by 1,200 deceased doctors.

Medicare paid as much as $92 million in claims for medical supplies prescribed by dead doctors and $8.2 million for medical supplies prescribed for dead patients. 

Throw Away Those Prescription Pads!

I’ve written a few stories for BizVoice magazine on electronic medical records during my tenure here at the Chamber. Over the last few years, I’ve asked three different physicians (our longtime doctor moved too far away and the first choice apparently skipped the bedside manner/communicate with your patients class in medical school; thus, three family docs) about their use of EMRs.

The paraphrased responses, in no particular order: not using them and don’t ever plan to; been using for about a year but it’s been a painful transition; and they are the greatest thing in the world. The latter seemed particularly efficient as she zipped off a prescription to the pharmacy while we were wrapping up our conversation.

E-prescribing is the focus of a new national report. According to the Center for Studying Healthy System Change, few doctors were e-prescribing advocates or using the advanced features that are available. The caveat is that the survey represents 2008 use, a year before federal incentives before put into place and prior to additional government emphasis on all things electronic in health care delivery.

Here’s a portion of the study release and link to the full report.

Even when physicians have access to e-prescribing, many do not routinely use the technology, particularly the more advanced features the federal government is promoting with financial incentives, according to a new national study released today by the Center for Studying Health System Change (HSC).

Slightly more than two in five office-based physicians reported that information technology (IT) was available in their practice to write prescriptions in 2008, the year before implementation of federal incentives, according to the study funded by the Robert Wood Johnson Foundation (RWJF). And, among physicians with e-prescribing capabilities, about a quarter used the technology only occasionally or not at all.

The study also found that  fewer than 60 percent of physicians with e-prescribing capability had access to three advanced features included as part of the Medicare and Medicaid incentive programs—identifying potential drug interactions, obtaining formulary information and transmitting prescriptions to pharmacies electronically—and less than a quarter routinely used all three features.

“Adoption of e-prescribing remains low, particularly among the half of all physicians who work in solo or two- to five-physician practices, said study author Joy Grossman, Ph.D., an HSC senior researcher. “And, among physicians with e-prescribing capabilities, many do not use the technology routinely, and even fewer use advanced e-prescribing features routinely.”

 

Insurance by the Numbers

When the subject these days is health care, that dreaded six-letter "r" word that ends in "form" usually follows. Let’s skip that topic and its consequences. Instead, a few interesting insurance facts, courtesy of The Council of State Governments and its annual The Book of the States.

  • Top five states for percentage of residents covered by insurance: Massachusetts (97%), Hawaii (92.5%), Wisconsin (91.8%), Minnesota (91.7%) and Maine (91.2%)
  • Bottom five states for percentage of residents covered by insurance: Texas (74.8%), New Mexico (77.5%), Florida (79.8%), Mississippi (81.2%) and Louisiana (81.5%)
  • On a regional basis, percent insured are 88.6% in the Midwest, 88.5% in the East, 83.9% in the South and 82.8% in the West
  • Where people get their insurance: 53.7%, employer; 13.2%, Medicaid; 12.1%, Medicare; 4.9%, individual
  • People under age 65: 65% have private insurance and 17% are uninsured
  • Children under age 18: 58% have private insurance, 34% are on a public health plan and 8.9% are uninsured

What do all the numbers mean? Let us know your interpretation.

Federal Spending Now … and Then

Discussion of President Obama’s proposed fiscal 2011 budget has focused on several numbers: $3.8 trillion in spending and $1.3 trillion as the deficit.

Much has changed, of course, over the last 40-plus years but look at the share of the total budget for some of the top programs in 2011 compared to 1968 (middle of the Vietnam War and just the beginning of the Medicare program).

Program: Fiscal 2011; Fiscal 1968

Defense: 19.6%; 46%

Social Security: 19.0%; 13.3%

Medicare: 13.0%; 2.6%

Medicaid: 7.8%; 1.1%

Food stamps: 2.0%; 0%

Housing subsidies: 1.7%; 0% 

Supp. Security Income: 1.3%; 0%

Low-income tax credit: 1.2%; 0%

Pick different years and you would undoubtedly find other interesting comparisons.

Health Care Bill Draws Ire for Questionable Numbers

Jeffery H. Anderson of the Pacific Research Institute has a column published in today’s New York Post, labelling the latest health care reform bill as a harbinger of fiscal disaster. He also calls it a fraud (so, you know, not a fan). He contends:

The Senate Finance Committee yesterday voted on a fraud: Sen. Max Baucus’ "responsible" health-reform bill is actually a recipe for fiscal disaster — and the Congressional Budget Office report that supposedly bolstered the bill actually exposes it.

As others have noted, Baucus used all manner of budgetary gimmicks to oblige the CBO to give him the headlines he needed — a supposed pricetag of "just" $829 billion over 10 years, with enough other spending cuts and tax hikes to avoid adding to the federal deficit. But the CBO exposed the truth by taking the rare step of calculating what the bill would cost in its second 10 years.

In its second decade alone, the CBO projects, the bill’s costs would triple — to $2.8 trillion. The taxes and fines it levies would also triple — to $1.8 trillion. And its cuts to Medicare and related federal health programs would quadruple — to $1.9 trillion.

In its first two decades combined, the bill would cost $3.6 trillion and would raise taxes by $2.3 trillion.

Baucus’ most elementary trick was to have the bill’s "first 10 years" include several years when it hadn’t really kicked in. It was scored for 2010 to 2019, yet it wouldn’t be in full swing until 2015 — when its costs would exceed those of its first five years combined.

In fact, the bill wouldn’t cost anything in 2010. In its real first decade (2011-20), it would cost more than $1 trillion.

Furthermore, the CBO projects that, by the end of 2030, the Baucus bill would have cut spending on Medicare and other existing health programs by more than $2.6 trillion.  Continue reading