MICHIGAN ASSOCIATION OF HEALTH UNDERWRITERS

July 2, 2010
 
Big Day in Reform Implementation as Web Portal, Programs for Covering High-Risk Uninsured Individuals and Tanning Tax Get Underway
 
Yesterday was a big day for implementation of some of the Patient Protection and Affordable Care Act’s most immediate provisions. The Department of Health and Human Services unveiled its new consumer Web portal, www.healthcare.gov, a number of states and the federal government began accepting applications for new programs to cover previously uninsured individuals with serious medical conditions, and a new tax on indoor tanning services went into effect.
The new consumer Web portal is geared toward individuals and small business owners to allow them to compare private health insurance option information, as well as obtain information and applications for public health coverage programs like CHIP and Medicaid on a state-by-state basis. It was required by the PPACA to serve as a central repository of information about coverage options and the rollout of the PPACA’s provisions until states begin operating their own health insurance exchanges with online components in 2014. 
 
The portal is intended to be an evolving site, with information options being added between now and October 1. While the site does not currently contain a direct link to information about how to contact independent agents and brokers, NAHU has met with HHS and White House officials in the last few weeks to discuss adding this option in the near future. In addition, NAHU worked with Representative Charlie Melancon (D-LA) to craft a bipartisan letter from leading members of Congress that was sent to HHS Secretary Kathleen Sebelius this week urging the inclusion of independent health insurance and agent and broker contact information in the portal. 
One of the coverage information options included in the new web portal is the Pre-Existing Condition Insurance Plan (PCIP), the federal government’s new subsidized high-risk pool coverage option for previously uninsured individuals who have serious medical problems and previously had trouble accessing individual coverage. The PPACA gave states the option of operating their own such program by July or allowing for a federally administered plan in their state. 
Twenty-nine states and the District of Columbia have opted to start their own plans, and 21 states will allow residents to enroll in the PCIP program. To be eligible for the coverage, people must have been denied coverage by a private insurer due to a preexisting condition, and they must have been uninsured for at least six months.
The federal PCIP plan and many state plans began accepting applications for enrollment yesterday. The hope is to actually begin covering individuals in August or, in some states, later this fall. Eligible residents of Montana and Pennsylvania can apply for and obtain coverage now.
One of the major issues with the new program for uninsurable individuals is its cost. The PPACA appropriated $5 billion in funding for it over the next three years, and analysts at both the federal Centers for Medicare and Medicaid Services (CMS) and the Congressional Budget Office (CBO) have indicated that this amount will not be nearly sufficient to cover all eligible individuals across the nation, and that funding could run out as early as 2011. Most state programs have indicated their plans will cover individuals on a first-come first-served basis, so early applications are essential.
In addition, the premiums for coverage through this program, while subsidized to some degree, are still fairly expensive. Cost and benefit options will vary by state, but are expected to be in the range of $400-550 per month for single PPO coverage with a $1,500 deductible. As even Richard Popper, the former Maryland high-risk pool administrator and current HHS official operating the PCIP plan, noted, a “significant number” of people with preexisting conditions who are uninsured have limited income, and they will not be able to afford the premiums. He added, “But for those who can afford it this is going to be a great, great plan for them."
Finally, in addition to the portal and the high-risk pool programs, a new 10% excise tax on indoor tanning services went into effect yesterday. This "sin tax," which was added fairly late in the game to PPACA as a payment offset, has caught much of the American public by surprise. However, beginning yesterday, all indoor tanning salons must now levy this new tax directly upon their customers. 

 
Cloture Motion on Tax Extender Legislation Fails Again in Senate
 
A cloture motion on the latest iteration of the tax extender bill, which included extensions of unemployment benefits and the homebuyer’s tax credit, failed again in the Senate 58-38 on Wednesday. 
Senators Susan Collins and Olympia Snowe of Maine were the only Republicans to vote for the cloture motion. Senator Ben Nelson (D-NE) opposed it, and Senate Majority Leader Harry Reid (D-NV) registered a no vote for procedural reasons. Opposition to this measure has been based on cost concerns and the lack of payment offsets for the bill’s provisions. Three earlier, even more costly versions of this bill have been defeated in previous weeks. 
Following the failed cloture vote, Senate Minority Leader Mitch McConnell (R-KY) asked consent to pass a fully paid for, two-month extension of the expired unemployment assistance benefits, but Senate Democrats objected. 
The lack of progress on the tax extender legislation could have an impact on the budgets of many states. Earlier failed versions of this bill included an extension of the federal government’s increased Medicaid payments to the states that originated with the economic stimulus legislation passed last year. Without an extension, each state’s federal Medicaid match will drop to their original levels. But many states have balanced their already fragile 2010 budgets based on their anticipation that the increased federal Medicaid matching rate would be extended. This has led to many gubernatorial visits to Washington over the past few weeks to urge senators to restore the federal government’s increased Medicaid funding assistance. However, even if the Senate passes legislation that includes additional funds for Medicaid, there is no guarantee the states will get this money. Additional Medicaid matching funds were stripped out of the House-passed version of the tax extender bill due to the lack of federal dollars to pay for it.  

 
New Regulations on the Horizon
 
The Departments of Health and Human Services, Labor and Treasury are expecting to release the final two sets of interim final rules (IFRs) regarding PPACA provisions that become effective on September 23 within the next few weeks. 
The IFR specifying the terms of the preventive care insurance coverage mandate will be released as soon as next week. The preventive care mandate provisions in the PPACA will apply to all health insurance plans (individual, group, self-funded and fully insured) in contract years after September 23 unless the plan has grandfathered status. This regulation will spell out exactly what preventive care services must be covered by these plans, and it will specify how plans can utilize value-based insurance designs and still meet the terms of the coverage mandate.
On July 23, the Departments plan to issue the last IFR in this first wave of PPACA requirements that will clarify PPACA’s amendment of ERISA to require new federal insurance claim and appeal procedures. Like the preventive care rules, these requirements will apply to health plans created after September 23 and those plans that have surrendered their grandfathered status. Grandfathered health plans will be exempt from both the new preventive care and coverage and claims and appeal process rules. 

 
Small Business Legislation Contains NAHU-Advocated Tax Break for the Self-Employed
 
The Small Business Jobs Act, a new piece of legislation introduced by Senate Finance Committee Chairman Max Baucus (D-MT) and Senate Small Business Committee Chairwoman Mary Landrieu (D-LA), would allow self-employed individuals a one-year tax break on their health insurance coverage costs. NAHU for years has recommended that self-employed individuals who are sole proprietors or who have Sub-S corporations should have tax equity regarding the deductibility of health insurance premiums with businesses organized as “C” corporations. We have always suggested that the current deduction for premiums from gross income should be changed so that health insurance premium costs would be a fully deductible business expense. The Baucus/Landrieu legislation, among many other provisions, would do just this, albeit just for the 2010 tax year. NAHU will continue to report on the progress of this legislation in future issues of Washington Update. 

 
A Note About Health Reform Resources - Please Contact NAHU with Questions
 
From time to time we are pleased to be able to share with our members resources that have been complied and crafted from other groups, associations, law firms, etc. We ask NAHU members that if you have questions about any of the content in these publications, please contact us, NOT the authors of the publications. We cannot and should not impose upon our friends in the health care community questions that come from our members about their resources. Thank you for your cooperation, and we are always happy to help find the right answers for you.

June 18, 2010
NAHU NEWS

New Regulation on Grandfathered Health Plans Will Have an Immediate Client Impact
 
This week the U.S. Departments of HHS, Labor and Treasury issued interim final regulations governing the “grandfathered” status of certain health plans under the new health reform law. The Patient Protection and Affordable Care Act (PPACA) establishes that individual and group plans that were in force on the date of enactment (March 23) are grandfathered, meaning that as long as they maintain this status, plans will not have to comply with some of the new law’s insurance market provisions. Health insurance products sold after March 23 cannot be grandfathered.
The new regulation will have an immediate impact on both individual and group health plan purchasers. Since the proposed regulations went into effect yesterday, all grandfathered plans renewed after that date will have to comply with its provisions in their entirety if they wish to retain their status. NAHU members will need to immediately educate their clients about the new rules and help them weigh the advantages of retaining grandfathered status (exemption from many—but not all—of the law’s new mandates, rating restrictions and plan design requirements) with the disadvantages (inability to change health insurance carriers and stringent restrictions on future plan cost-sharing and structural changes). Furthermore, if clients elect to maintain their grandfathered status, NAHU members will have to take steps to ensure that any health plan changes are compliant with the new rules. 
To assist our membership, NAHU has developed an issue brief analysis on the grandfathering rules, so that you may best advise and service your clients. Members may also find this legal analysis of the proposed rules (courtesy of the Groom Law Group) and this PowerPoint presentation (courtesy of the American Benefits Council) helpful. These materials are also available on the NAHU website's Health Reform Resources page.
We look forward to continuing to update you and keeping you informed on the latest health reform implementation developments. Please continue to regularly check our Health Reform Resources page for new information and resources for you and your clients.

 
Grassroots Action Needed To Encourage Regulatory Transition Relief for Group Limited Medical Benefit Plans
 
About 1.4 million workers nationwide have coverage through group “limited benefit plans” with annual caps on benefits. Many of these individuals work for large employers on a part-time, seasonal, or temporary basis, or are in a waiting period for an employer’s regular health plan. The PPACA could cause these individuals to lose their coverage this year and would not provide them with other subsidized coverage options until 2014. The problem is that beginning September 23, the new law prohibits group health plans from having annual dollar limits, except as allowed by the HHS Secretary. Annual dollar limits are prohibited altogether beginning in 2014. Our main concern is that the PPACA’s annual dollar limit requirements could result in both the elimination of the limited benefit plan coverage option and the unintended consequence of a significant immediate increase in the number of uninsured Americans.
Unfortunately, the new high risk pools to be established this year under the PPACA will not help those adversely affected by elimination of these limited benefit plans. These limited benefit plans are considered "creditable coverage" under the law, but the new high risk pool rules under the PPACA require than an uninsured person seeking risk pool coverage not have creditable coverage.
NAHU has been working to bring public attention to this issue, and has also commented on it to HHS Secretary Kathleen Sebelius directly and through a broad-based coalition of employers and insurer-related groups. We are hopeful that HHS will issue a new regulation or guidance later this summer to address limited benefit plans under the PPACA. NAHU members can help by contacting their members of Congress and senators and urging them to weigh in with Secretary Sebelius to allow a temporary, limited exemption from new annual benefit limit rules until 2014 for these limited benefit plans.
We very much appreciate your taking a few minutes to participate in this important Operation Shout.

 
House GOP Members Force Vote on Repeal of PPACA's Individual Mandate Provisions
 
On Tuesday, House Ways and Means Committee Ranking Member Representative Dave Camp (R-MI) used a parliamentary procedural move called “a motion to recommit” to force a vote on a repeal of the individual mandate provisions to the PPACA. Camp attempted to attach the amendment to a small business tax incentive bill, and while 21 Democrats voted in favor of the repeal amendment, it was still defeated 187-230. Representative Joseph Cao (R-LA), who was the only GOP supporter of the original House-passed health reform bill, was also the only GOP member to vote against the repeal amendment.  
Since the enactment of the PPACA in March, House Republican leaders have been citing widespread public disapproval of the measure and calling for a repeal of many of its provisions in order to replace them with a bill that includes more limited insurance market reforms and places a greater focus on containing the cost of medical care. While it was clear the amendment would fail from the get-go, the House GOP leadership wanted to call attention to their cause. “This is a first step in Republicans’ efforts to repeal ObamaCare and replace it with common sense, step-by-step reforms to lower costs,” House Minority Leader John Boehner (R-OH) said in a statement prior to the vote.

 
Debate Over Tax Extender Bill Continues in the Senate
 
The Senate continues to work on “tax extender” legislation with possible significant health care implications, but so far the bill has failed to advance due to bipartisan concerns over the measure’s cost. A $140 billion version of the bill, which includes another short-term “fix” to the reimbursement rates paid to Medicare-participating providers and increased federal Medicaid funding to the states, failed on Wednesday. Only 45 Democrats voted to waive a budget point of order when 60 votes were needed. 
Senate Finance Committee Chairman Max Baucus (D-MT) then introduced a trimmed-down version of the bill later that day. The new bill reduces the length of the Medicare “doc fix” to just six months, so that the proposed 2.2% increase in provider reimbursement rates would now expire on November 30, 2010, instead of December 31, 2011. It also includes a six-month extension (through June 30, 2011) of increased federal Medicaid funding to the states. The Medicaid funds are designated as emergency spending and not offset with other spending cuts. And though many senators support it, due to cost concerns the bill also does not include extension of the federal COBRA subsidies for individuals who involuntarily have lost their employer-sponsored health insurance coverage that expired on June 1. A Senate vote on the reduced-cost version of the bill could come as soon as today, but may well be delayed until next week. 
The House passed a version of the tax extender legislation in May. That measure included a temporary “doc fix,” but due to cost concerns an extension of the COBRA subsidy and increased Medicaid funding to the states were not part of the legislation. 

 
Millions Received COBRA Assistance in 2009
 
As many as 2 million households participated in the Consolidated Omnibus Budget Reconciliation Act (COBRA) premium assistance program in 2009 at a cost of slightly more than $2 billion, the Treasury Department said in an interim report to Congress posted online Wednesday.
Employer tax reporting units filed more than 300,000 claims through early 2010, according to the report. It is not possible to determine based on data from the Internal Revenue Service the percentage of former employees eligible for COBRA premium assistance who actually received it, the report said.
The IRS estimates it has spent less than $2 million to administer the program, which it does through its payroll tax withholding process, the report said.

June 11, 2010 NAHU News
 
What We've Accomplished So Far
 A Note from Janet Trautwein, CEO
Although the vast majority of the changes in the landmark Patient Protection and Affordable Care Act (PPACA) won't come before 2014, it is the fraction of provisions being implemented now that may matter most to the law's success, as well as to the success of our industry.
We know many NAHU members have scores of questions from clients, and we are working hard to answer these in a timely and objective fashion. However, even more members have questions and concerns about the future of the professional benefit specialist community in general.
There were certainly many reasons why we as an industry opposed the health care reform law that was before us, and there are many challenges ahead in working with federal agencies and state policymakers to interpret and implement vague provisions in favorable ways. In spite of this, I want to take a moment to highlight and underscore the many positive accomplishments we, as an association, have achieved in the legislative phase of health care reform.
Due in large part to your efforts, our association made great strides in making a bad bill much better for our industry. The new law specifically includes health insurance agents and brokers as the marketing force for the purchase of private health insurance coverage both inside and outside the new exchanges (§1312(e) of the PPACA (P.L. 111-148)). Although subsidies will only be available to individuals who purchase coverage inside the exchanges (clearly an unlevel playing field which we strongly lobbied against), HHS will establish procedures under which a state could permit insurance agents or brokers to enroll individuals and employers in an exchange plan and assist them in applying for premium and cost-sharing subsidies.
Moreover, agent and broker commissions and compensation will continue to be established in the marketplace with state oversight―through negotiations between agents/brokers, insurance carriers and those for whom they provide services, based on the particular services involved and the competitive environment. Government regulators will not set agent commissions and fees, as was initially proposed in the Senate legislation.
Beginning in 2014 “qualified health plans” will have to meet certain requirements, including charging the same premium for a plan regardless if it was offered in or out of the exchange (including through an insurance agent or broker).
And, in many ways, the services of professionally licensed benefit specialists will be in demand even more than they are today. The new law introduces a host of new insurance and tax-compliance issues and requirements for individuals and employers on which our members will be well-equipped to provide services and guidance.
Additionally, there will still be a need for professionals to design benefit plans, explain coordination issues of public and private benefits, assist with enrollments and terminations, resolve claims disputes and billing problems and advise on changes in family/child status, among other things. There are also new opportunities to create and expand on cutting-edge health promotion and wellness programs for employers.
Another thing to keep in mind is that the exchange structures and mechanics are not going to be dictated from Washington―they will be implemented and designed on a state level, where NAHU members have developed great relationships and earned a commendable reputation.
We have our work cut out for us in working on the state level to ensure favorable policies for our industry, but bear in mind that professional benefit specialists will continue to be needed to provide multifaceted value and services that extend far beyond health care. They help employers and others maximize options on a broad range of insurance and financial security instruments, including disability insurance, long-term care insurance, life insurance and other financial planning considerations.
Our members will be at the forefront in helping to implement many of the changes coming in the months and years ahead, and to educate employers, individuals and families on complying with many of the new rules and requirements and making the most of their health insurance and other benefit options.
We continue to be a strong, viable and effective association because of dedicated members like you, and we thank you so much for your commitment. As always, NAHU staff is pleased to be here and serve as your advocacy voice and resource in the challenges and opportunities that lie ahead.

 
Congress Still Mulling Action on Tax Extenders, Doctor Fix, COBRA Subsidies and Medicaid Funding to the States
 
Upon returning to work this week from the week-long Memorial Day break, Congress turned its attention back to legislation to extend a variety of expiring tax breaks for individuals and businesses. A version of the so-called “tax extender” bill was passed by the House of Representatives before they departed Washington for the Memorial Day break, but most of the health-related provisions were stripped out of the measure before passage, including an extension of the federal COBRA subsidy for individuals who involuntarily have lost their employer-sponsored health insurance coverage, as well as increased Medicaid funding for the states. 
This week, the Senate took up the Democratic version of the tax extender legislation, which includes an extension of unemployment benefits, a temporary fix to the Medicare provider payment issue through the end of the year, and $24 billion in additional federal Medicaid funding to the states. The Senate Republicans have developed their own alternative that also renews tax breaks for businesses and families, extends unemployment insurance through November and would prevent Medicare physician payment cuts through 2012—a year longer than the Democrats' plan. The GOP bill also includes medical malpractice reform provisions, but does not include any additional Medicaid money for the states.
One thing that none of the bills (House-passed or either Senate option) includes is an extension of the federal COBRA subsidy, which was allowed to expire on June 1. With the expiration, the program has ended for those who first became eligible at its inception in March of last year and is not being offered to newly unemployed workers. Current beneficiaries can continue with the subsidy until they obtain new employer-sponsored coverage or their 15 months of benefits run out.  
Senator Bob Casey (D-PA) has introduced an amendment to add a subsidy extension through November into the legislation, but it is unclear if the amendment will make it to a vote. Despite the support of many Senate Democrats, the $7 billion cost of the provision is likely to be a sticking point, and if the COBRA subsidy is not included in either version of the measure, the likelihood that the program will be allowed to expire permanently increases dramatically.

 
Democrats Focus on the Benefits of Health Reform
 
This week, Democrats began a multi-pronged effort to start turning public attention back to health reform and the immediate benefits of the new law, perhaps as a precursor to the November congressional elections. In the beginning of the week, news of a $125 million public outreach effort called the Health Information Center to be co-chaired by former Senate Majority Leader Tom Daschle and Senator Ted Kennedy’s widow Victoria Kennedy was announced. The president of the Center will be Andrew Grossman, who previously founded Wal-Mart Watch, a labor-backed group to challenge the world’s largest retailer. In addition, White House Communications Director Anita Dunn is a consultant, working with the group on a daily basis. 
Grossman told Politico this week that the goal of the group was to provide the public with information and depoliticize the new law. “The law is in effect, and the best thing we can do now is explain it,” Grossman said.
In addition to the release of information about the new Center, President Obama held a national health care town hall meeting on Tuesday at a Maryland senior center that was telecast to over 100 other locations nationwide. The primary focus of his remarks was on the benefits the bill has for seniors. The events were seemingly timed to coincide with DHHS’s mailing of the first of the $250 prescription drug rebate checks to seniors this week.   
On Thursday, the Democratic National Committee released a 60-second television ad criticizing GOP efforts to repeal the health reform legislation and start over. "Republicans want to take it all away," the ad's narrator warns of the overhaul, "Tell Republicans we can't afford to go back." The latest Rasmussen Reports national poll, released on Monday, finds that 58% Americans now favor repeal of the law while 35% are opposed. 

NAHU NEWS
6/8/10

Professional Development Programming at Convention
Have you seen the professional development programming for the 80th Annual Convention in Chicago? We have developed a broad range of workshops designed specifically for benefits professionals like you. Unfortunately, it’s impossible to attend all of the sessions, so we have an exciting new option available.
Did you know that you can receive audio recordings synched to the PowerPoint presentations for all 20 breakout sessions and the Health Reform Update? Just select the Elite Registration status for an additional $99.00 when registering. If you’ve already registered, just contact our meetings department at meetings@nahu.org and ask to upgrade to Elite Registration status. We will not be posting breakout session handouts prior to convention; however, Elite Registrants will receive the PowerPoints prior to the meeting, as well as receiving the audio recordings after the convention. Please take advantage of this opportunity now, as the price will increase if you wait until you’re at the convention to upgrade. Visit our website at www.nahu.org for more information. We look forward to seeing you in Chicago!

 
Health Reform Resources
Are you looking for the most up-to-date information about the Patient Protection and Affordable Care Act and how it will affect you and your clients? Be sure to check out our Health Reform Resources webpage! This page is continuously being updated to keep you abreast of the latest developments.

 
NAHU in the News
NAHU was featured in more than 240 news stories in the past month, reaching an audience of 80 million people. You can access the major stories, including articles from Insurance & Financial Advisor, National Underwriter, Yahoo! Finance, Wall Street Journal, Forbes, Business Week, Washington Times, Boston Herald and Denver Post, on the NAHU in the News webpage.

 
Can NAHU Reach You?
With a few simple steps, you can ensure that NAHU has your most up-to-date contact information. This will help us stay connected with you and help us make sure you are informed about all the important industry related issues. 
Follow these simple steps to verify and update your contact information:
Step 1: Go to www.nahu.org.
Step 2: Click on "My NAHU."
Step 3: Click on "Update My Information."
Step 4: Log in.
Step 5: Click on "Manage Contact and Profile Information."
Step 6: View and update all the contact information on file for you.

HUPAC's Admin Fund

NAHU's political action committee, HUPAC, is of greater importance now that health care reform has been signed into law. We have just moved to a new and equally challenging phase of working with policymakers to interpret vague provisions in favorable ways. As we near another important election cycle this fall, it is imperative that the agent and broker community remain active and engaged with lawmakers both here in Washington and back in their home states.

HUPAC can help NAHU gain access and communicate our message. To achieve this goal, HUPAC needs to focus on raising member contributions to go directly to candidates.

Here is where your chapter can make a difference: Although chapters are not allowed to contribute money to the PAC that would go directly to political candidates, they can contribute to the HUPAC Administrative Fund, which covers various PAC administrative expenses.

We are asking your chapter to consider making a voluntary contribution of $5 per member (or any amount your chapter feels comfortable making) to the HUPAC Administrative Fund. Contributions, along with this form, should be sent to:

HUPAC Administrative Fund
PO Box 20865
Indianapolis, IN 46220-0865

All chapters that contribute to the fund will be recognized at NAHU’s Annual Convention in Chicago!

   Annual Convention Deadlines Approaching

The convention registration deadline is tomorrow, May 27. Register now before the fee jumps to $620! You can also see who from your chapter has already registered here.

The hotel deadline has also been extended to tomorrow. Please click here to make your hotel reservations.

Purchase the complete set of audio recordings of the breakout sessions now for only $99, before the fee jumps to $125! This offer is available to convention attendees only as part of the Elite Registration package.

Please visit our website to see the most up-to-date information on keynote speakers and Professional Development sessions. All eligible sessions have been applied for CE credit in IA, IL, IN, KY, MI, MO, OH and WI. On Tuesday, we've added a two-hour health reform update.

   NAHU in the News

NAHU was featured in more than 250 news stories in the past month, reaching an audience of 106 million people. You can access the major stories, including articles from Insurance & Financial Advisor, National Underwriter, Kiplinger's Personal Finance, Yahoo! Finance, Wall Street Journal, Forbes, Business Week and CNBC, on the NAHU in the News webpage.

   National Membership Retention Communications          

NAHU sends out a variety of communications to our members encouraging them to renew and remain NAHU members. We send out renewal e-mails and mail invoices to our members on a monthly basis, and NAHU staff also calls all lapsing members each month encouraging them to renew their membership. After we conduct a full renewal cycle, a regional lapse list is sent out to all local and state chairs encouraging them to also call and give our lapsing members one last opportunity to renew before they have to rejoin as a new member.   

In addition, welcome e-mails are sent to our new members every two weeks. We have also initiated a new member retention campaign, which involves us communicating with our new members several times during their first year of membership, like the "Welcome to NAHU" flyer they receive with their first issue of the HIU magazine. In addition, we communicate with our new members on a monthly basis and send out e-mails on various topics that will help them make the most out of their membership. The goal of these communications is to increase the retention rate of our new members at their first renewal.

The “Tip of the Month” is sent out to our local and state chairs on a monthly basis and covers a topic of interest to help keep our leaders informed of the latest NAHU happenings. We also include information that will hopefully make your job as a membership leader a little easier.

Once a member drops their membership, we communicate with them regularly and encourage them to rejoin. This is done by sending monthly reinstatement campaigns to targeted groups. These targeted e-mails are coupled with large-scale offers; for example, in December we sent a reinstatement offer to those who dropped in the January-September 2009 groups offering a free webinar coupon if they rejoined. We also mailed a postcard to over 3,700 lapsed members in October 2009 encouraging them to rejoin.

   Leadership Forum at Convention    

NAHU News
May 14, 2010
 
Additions to Our Member Resource Page
 
NAHU continues to update its Health Reform Resource Page for members. Some of the most recent additions include:
• A copy of the letter HHS Secretary Kathleen Sebelius sent to congressional leaders this week summarizing progress to date on reform implementation.
• A copy of the joint letter sent by NAHU and the Agent/Broker Alliance to HHS Secretary Kathleen Sebelius about the unveiling of the consumer Web portal. 
• The guidance/interim final rules on the coverage requirements for dependent children up to age 26.
• A new NAHU issue brief on prevention and wellness issues in PPACA.
Congressional Research Service reports on the following topics:
• Health Insurance Premium Credits in PPACA 
• Medicare Provisions in PPACA
• Requiring Individuals to Obtain Health Insurance: A Constitutional Analysis
• Health Care Flexible Spending Accounts 
• Corporate-Owned Life Insurance (COLI): Insurance and Tax Issues
• Private Health Insurance Provisions in PPACA
• Health-Related Revenue Provisions in PPACA
• Pre-existing Exclusion Provisions for Children and Dependent Coverage under PPACA
• Community Living Assistance Services and Supports (CLASS) Provisions in PPACA

 
CBO Ups Health Reform Cost Projections
 
The Congressional Budget Office (CBO) released a revised estimate of federal discretionary spending costs for the Patient Protection and Affordable Care Act (PPACA) on Tuesday. It tacks an additional $115 billion onto the legislation’s price tag. 
This new report, which was issued at the request of the ranking members of the House and Senate Appropriations Committees, Representative Jerry Lewis (R-CA) and Thad Cochran (R-MS), puts the official estimate as to how much the act will cost the American taxpayer over the next 10 years at over $1 trillion.
CBO indicates that between $10 billion and $20 billion will be needed by various federal agencies on implementation costs ($1 billion was appropriated by the original legislation for implementation) and about $86 billion will be spent on funding ongoing programs, including grants to community health centers and Indian health care.

 
Legal Battle over Individual Mandate Heats up
 
At the end of March, more than a dozen state attorneys general filed suit against the federal government regarding the individual mandate portion of PPACA, and this week seven more states have joined the effort, bringing the total of states suing the federal government to 20. In addition, the National Federation of Independent Business (NFIB), which represents more than 350,000 American small-business owners, announced today that it will also sign onto the lawsuit being brought on by the 20 state attorneys general. 
The multistate/NFIB case has been filed in the Federal District Court of Florida, and the Commonwealth of Virginia has filed its own suit in the Federal Court there. It is expected that one of these cases will eventually be heard by the U.S. Supreme Court. 
The Department of Justice also filed its first brief in another individual mandate case this week. The brief was filed Wednesday with the Federal District Court in Detroit in response to a challenge issued in Michigan by the Thomas More Law Center on March 23. The Thomas More Law Center case is based on largely the same grounds as the state government challenges to the legislation. In its brief, the Justice Department argues that Congress acted within its authority to regulate interstate commerce and to provide for the general welfare of the American people, and that challengers who argue otherwise are “flatly wrong.” The Justice Department has been given until May 24 to file a similar response in the Commonwealth of Virginia case. 

 
Federal Agencies Release Interim Final Rule on Increasing the Dependent Age to 26
 
The Departments of Health and Human Services, Labor and Treasury released an interim final regulation on Monday specifying the rules individual and group health plans must follow for covering dependent children up to age 26.
The new rules, which will take effect July 12, specify that employer-sponsored and individual plans that take effect on or after September 23 of this year and include dependent coverage must offer coverage to subscribers’ children up to the age of 26. The requirement applies regardless of whether or not the child is married, is a dependent for income tax purposes, or has student status. In addition, the federal income tax exclusion for the value of these benefits would be extended to these adult children. One exception is that grandfathered employer-sponsored plans may, until 2014, exclude coverage of adult children if they have access to another source of employer-sponsored health coverage.   
The new rules also establish a new qualifying event for these adult children by establishing that insurers and employers must provide a 30-day opportunity to enroll in their parents’ coverage. In addition, insurers and employers must notify newly eligible dependents who had previously aged off their parents' plan about their opportunity to re-enroll. Health plans are also prohibited from charging these adult “children” any more than they do for dependent children as currently defined by the plan. As a result, the cost for all American families with employer-sponsored coverage is expected to rise by about one percent, as 1.2 million new “children” are expected take advantage of this new coverage opportunity.

 
NAHU Submits Comments on Medical Loss Ratio Requirements
 
One of the health reform implementation issues NAHU is following most closely, due to its potential to impact on health insurance costs, as well as the relationship carriers have with licensed health insurance agents and brokers, is the medical loss ratio (MLR) requirement. The law specifies that beginning January 1, 2011, carriers must provide an annual rebate to each enrollee if the carrier’s medical loss ratio exceeds 80% for the individual and small-group (1-100) markets and 85% in the large-group market. It charges both HHS and the National Association of Insurance Commissioners (NAIC) with crafting requirements and definitions to carry out these provisions of the law by December 31, 2010.
This week the first set of comments concerning the calculation and reporting of MLRs were due to the Department of Health and Human Services, and NAHU submitted a detailed letter to Secretary Sebelius. In our letter, we urged HHS to use as a broad as possible definition in determining “activities that improve health care quality.” In particular, we urge the inclusion of the costs associated with transparency, wellness and disease-management programs to be included in the definition of medical costs. NAHU also urged a transitional period for the individual and small-group markets, the exemption and transparency of pass-through expenses like agent commissions from the MLR calculation, and the use of existing processes used by the states to calculate MLRs, such as the use of the calendar year for the basis of MLR calculations. As the MLR requirements and definitions are crafted over the course of this year, NAHU will continue to submit comments and work with HHS and the NAIC on this issue.

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Progress is Slow on Financial Services Reform Legislation
 
Senate leaders hoped to have financial services reform legislation wrapped up this week, but floor debate over amendments has slowed its progress. Approximately 85 amendments to the bill have been filed, with 60 still pending consideration. Senate Majority Leader Harry Reid (D-NV) has been pushing for a quick resolution to the measure so that other measures can be considered before the Memorial Day recess, and Senate Banking Committee Chairman Chris Dodd (D-CT) has publicly warned that allowing the amendment process to drag on too long could result in the death of the legislation. However, senators on both sides of the aisle have been pushing for the amendment process to remain open so that they can all contribute to the development of this legislation. Democratic leaders held a meeting on Thursday to determine an end game for the bill, and it is possible that Reid may call for a cloture vote early next week.
NAHU has been watching the progress of the financial services bill very carefully since two of the 60 amendments that could still be considered would have a direct impact on agents and brokers. One is an amendment by Senator Robert Menendez (D-NJ) that would change the underlying bill to establish a liability maze of “fiduciary standard of care” for all broker-dealers and registered representatives who provide any advice in connection with the sale of a financial product. Senator Patrick Leahy (D-VT) has filed an amendment to repeal the federal antitrust exemption for health insurance companies, claiming it would help reduce costs and improve competition.
Senator Dianne Feinstein (D-CA) had expressed interest in offering as an amendment a version of her legislation (S. 3078/H.R. 4757) that would arbitrarily cap health insurance premiums without any linkage to the factors that are driving them. However, she announced yesterday that she would not pursue this controversial course, as her legislation lacks the necessary 60 votes needed for passage in the Senate. Attaching it to the financial services legislation could give senators a reason to vote against that bill as well.

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Annual Convention Registration and Room Block Closing Soon!
 
Time is running out to register for NAHU's 80th Annual Convention in Chicago! Registrations must be received by May 27 in order to qualify for the discounted rate. Click here to register now. Our hotel room block will be closing on May 20, so make your reservations now! We've added a new two-hour update on the federal health reform legislation's implementation efforts to Tuesday's program that you will not want to miss!
We are pleased to offer a new Elite Registration package at this year's convention. Elite registration gives you:
• Full event registration (including the Professional Development Program)
• Access to the Elite Counter, offering express check-in and special assistance
• Extended delegate credential certification hours
• Exclusive access to our new CyberLounge, with complimentary Internet access
• Access to complete online convention audio recordings through our new NAHU Live Learning Center. All breakout sessions are being recorded and will be accessible to Elite registrants 24/7 via the online NAHU Live Learning Center in streaming media format or for download - even to your MP3 player. The sessions will contain the audio fully synchronized to the PowerPoints to provide you with a true multimedia recreation of the session.
Just click the "Elite Registration BEST VALUE" box to add this to your main registration for an additional $99.
We will also be offering a jam-packed day filled with exciting professional development sessions. All eligible sessions have already been submitted for CE credit in IA, IL, IN, KY, MI, MO, OH and WY. Click here to view the scheduled sessions.


NAHU News

May 7, 2010
 
Additions to Our Member Resource Page
 
NAHU continues to update the Health Reform Resource Page for its members. Some of the most recent additions are:
• NAHU's "Plain English" primer summary of some of the changes to health benefits that consumers and clients should be thinking about.
• Three new PowerPoint presentations, including an abbreviated version on health care reform implementation, a simplified presentation for employer clients and one on major issues of concern.
• Our cover letter and joint letter sent by NAHU and 12 coalition partners to the Obama administration requesting that applicable federal agencies provide affected entities with a six-month good-faith compliance standard in implementing the many near-term provisions of the PPACA.
• New guidance from the IRS regarding the small-business health tax credit.
• New guidance from HHS regarding reinsurance for early retirees.
• Preliminary guidance regarding the Medicare coverage gap discount program.
• Interim final rule with comment period on consumer internet web portals.
• Request for information and comment on Medical Loss Ratio requirements.

 
NAHU Joins with Business Groups on Good Faith Compliance Letter to Obama Administration
 
This week, NAHU and 12 other coalition partners, including the U.S. Chamber of Commerce, the National Federation of Independent Businesses, the American Benefits Council, the Blue Cross Blue Shield Association, the Society for Human Resource Management, the Healthcare Leadership Council and the National Business Group on Health, sent a letter to the Obama administration requesting a six-month transition period for implementing the provisions of the Patient Protection and Affordable Care Act (PPACA) that will take effect in September of 2010. The letter explains that such a transition period would be of substantial help to American employers, insurers and benefit professionals as we move forward to implement the many confusing provisions in PPACA under severe time constraints and without final regulations to guide us. The letter also proposes a detailed “good faith” initial compliance standard for companies making a sincere effort to implement the legislation’s provisions. 
We are currently awaiting a response to our proposal, and will keep you apprised of any official answer from the Obama administration. 

 
New Guidance
 
Federal agencies released several new pieces of guidance this week on the implementation of PPACA provisions. The new guidance includes updated information from the IRS on the new small-business tax credit regarding employer contribution amounts, information released by HHS on the employer reinsurance program for early retirees and state health information Web portals and preliminary guidance from CMS on the Medicare coverage gap discount program. 
The IRS guidance helps determine the amount of the new tax credit for eligible small employers that make “non-elective” contributions toward their employees' health care premiums by establishing wihat the average small-group premium amount for 2010 will be for each state. The new credit is based on  a percentage of the lesser of:
• the amount of “non-elective” contributions paid by the small employer or
• the amount of “non-elective” contributions the employer would have paid if an employee were enrolled in a plan with a premium equal to the average premium for the small-group market in the state where the insurance is provided.
HHS issued guidance in the form of an interim final rule on the Early Retiree Reinsurance Program, which becomes effective on June 1 and will reimburse qualified employers and other plan sponsors for up to 80% of claims costs between $15,000 and $90,000 incurred by employers in providing group health benefits to early retirees. The program also applies to claims filed by their spouses, surviving spouses and dependents. Reimbursements will be made on a first-come, first-served basis, and it is expected that the amount of eligible reimbursements will substantially exceed the program’s $5 billion in federal funding, so speed is of the essence for agents and brokers assisting eligible employer plans with applications for this program.
Additionally, HHS released an interim final rule and request for comments adopting the categories of information that will be collected and displayed on its consumer Web portal as required under PPACA. The rule specifies that the portal, which must be available no later than July 1, will include information about tax credits for small businesses available under Tax Code Section 45R. In addition, a health insurance issuer's tax identification number will be used to support the structure of the database so that data can be easily retrieved to support uploading information the portal test site.
CMS also issued preliminary guidance for Medicare Part D plan sponsors regarding the Medicare Coverage Gap Discount Program. In closing the coverage gap, CMS has proposed making manufacturer discounts on coverage gap claims available to beneficiaries at the point of sale beginning in 2011. Part D sponsors are expected to prepare their 2011 bids by June 7, 2010.

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Senate and House Act to Extend COBRA Subsidies/UI
 
On Thursday, the Senate approved the Continuing Extension Act of 2010 (H.R.4851), a package of short-term extensions of several federal programs, including federal unemployment benefits and COBRA subsidies, after warding off several Republican amendments to offset the bill’s cost.
The vote was 59-38, with only GOP Senators Susan Collins and Olympia Snowe (both from Maine) and George Voinovich (OH) joining all Democrats present in voting for final passage. Shortly after the Senate’s approval, the House passed the bill 289-112, clearing the way for sending it to the president for enactment into law.
In addition to extending expanded unemployment benefits, the short-term legislation would extend COBRA health insurance subsidies for the unemployed and would provide higher payments for physicians who treat Medicare patients. It also would extend a national flood insurance program and the use of 2009 poverty guidelines for federal programs.
All of these benefits would be extended through the end of May, except the unemployment benefits, which would last until June 2. The measure also would provide back pay to workers who were furloughed because of a lapse in the Highway Trust Fund, and would extend satellite TV transmission laws.
The short-term extension package is designed to buy time for House and Senate negotiators to reach a deal on a bill (H.R. 4213) to provide benefits and programs through the end of this year.
Senate Democrats defeated several Republican efforts to pay for the bill. Sen. Tom Coburn (OK), who led the GOP opposition, offered one amendment Wednesday and two amendments Thursday to fully offset the costs of the bill, arguing repeatedly that the measure should not add to the country’s growing deficit. All three amendments were rejected.
Senate Finance Chairman Max Baucus (D-MT) said now was not the time to demand offsets for spending on critical safety-net program expenditures and other essential programs.

NAHU NEWSWIRE
April 9, 2010
 
Implementation Begins
 
We know you have a lot of questions on the new health reform law, and your clients have even more. As part of NAHU’s mission to represent our members and keep you apprised of the latest details on implementation issues, we have held four webinars since the Patient Protection and Affordable Care Act was signed into law on March 23, and we plan to hold more in the coming weeks. Additionally, NAHU is maintaining and continually updating a health reform “resources” link on our website homepage, providing issue briefs on various topics, analyses and the latest in regulatory guidances. The last bullet item in this Washington Update provides an overview of the latest items, including a “Questions and Answers” document that was developed in response to many inquires posted during our webinars.

 
IRS Commissioner Lays Out Vision for Enforcing Health Reform
 
Commissioner of Internal Revenue Douglas Shulman said Monday his agency intends to “run a balanced program” in implementing controversial provisions under new health care legislation that require taxpayers to purchase insurance coverage and certify that they have done so on their tax returns, or face financial penalties owed to the government.
Speaking at the National Press Club, Shulman said a big part of the IRS's job will be to push out benefits available under the new law, including $400 billion in tax credits, and stressed that none of the individual provisions come into play this year.
On health reform enforcement of the new individual mandates to purchase qualified health insurance, Shulman said the IRS will have a matching program in place to ensure that taxpayers have reported correct information. However, with regard to payments owed, the IRS has no power to levy or seize taxpayer assets under the law, he said. He noted that “these are not the kind of things that we send an agent out for,” and instead, taxpayers will receive a letter.
In the absence of levy and seizure collection tools, Shulman told reporters after the speech that refund offsets would be “the most obvious option.” However, in responding to audience questions, he said that he believes “the vast majority of taxpayers will have a healthy respect for the law.”
In his exchange with the audience, Shulman emphasized that the law does not provide for criminal sanctions, and said that “IRS tries to stay out of the political fray. We try to administer the laws that are on the books. If there is fraud and abuse, we will have programs to address that.”

 
HHS Asks States to Declare Interest in Implementing New High-Risk Pools
 
The Department of Health and Human Services has taken the first step toward implementing the new health care reform law, asking states to detail their interest in implementing a provision by this summer establishing high-risk pools to cover uninsured individuals with pre-existing medical conditions.
HHS sent a letter to state officials last Friday asking them whether they would be interested in establishing the temporary high-risk pools created by the reform law (Pub. L. No. 111-148). The provision was included in the law to provide a bridge to more substantial reforms on coverage of those with pre-existing medical conditions and other health insurance reforms scheduled to be implemented in 2014.
States may choose whether and how they will participate in the program, and if they decline, the federal government will operate the pool. States have until the end of April to answer the letter. Legislative action may be needed in some states to implement the new program, according to HHS.
HHS officials said they plan to have the program operational within 90 days of the law's enactment, as the statute requires. Funding for the program will be available July 1.
Thirty-four states already operate similar pools, according to HHS officials, and the new pools could be incorporated into these programs or separate programs could be established. However, many state programs do not provide coverage for individuals with pre-existing medical conditions. The health care law includes a $5 billion allocation for the provision.
Jeanne Lambrew, director of the HHS Office of Health Reform, told reporters during an April 2 telephone conference call that under the provision, individuals with illnesses such as diabetes or high blood pressure who have been denied coverage due to their illness may qualify for coverage under rates that likely will mirror those for standard coverage in the individual market.
Lambrew said the department does not yet have an estimate of how many individuals will seek coverage from the pools, but added the number likely will be “significant.”

 
More States Join in Court Challenge to New Health Reform Law
 
This week, five states announced that they will join the lawsuit led by Florida Attorney General Bill McCollum challenging the new federal health care reform law. Indiana, North Dakota, Mississippi, Nevada and Arizona will join Florida and 12 other states in the first lawsuit filed that challenges the new law’s constitutionality.
The lawsuit, filed in the federal court’s Northern District of Florida on March 23, alleges the new law infringes upon the constitutional rights of Floridians and residents of the other states by mandating all citizens and legal residents have qualifying health care coverage or pay a tax penalty. They contend that by imposing such a mandate, the law exceeds the powers of the United States under Article I of the Constitution. Additionally, the tax penalty required under the law constitutes an unlawful direct tax in violation of Article I, sections 2 and 9 of the Constitution.
The lawsuit further claims the health care reform law infringes on the sovereignty of the states and and contravenes the Tenth Amendment to the Constitution by imposing onerous new operating rules that states must follow as well as requiring the state to spend billions of additional dollars without providing funds or resources to meet the state's cost of implementing the law.
South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Colorado, Michigan, Pennsylvania, Washington, Idaho, and South Dakota had previously joined Florida’s lawsuit. A scheduling hearing is set for April 14 at 9:00 a.m. CDT at the federal courthouse in Pensacola.

NAHU NEWSWIRE
April 6, 2010

New Resources on Health Reform
On March 23, President Obama signed H.R. 3590, the Patient Protection and Affordable Care Act and on March 30, H.R. 4872, the Health Care and Education Affordability Reconciliation Act of 2010, a companion package of "fixes" to H.R. 3590, was signed into law. Taken together, the two measures make the most profound changes to our country's private-market health care system in 50 years.
Many provisions of the new health reform law impact American employers and private health insurance consumers immediately, while others take effect over the course of the next eight years. NAHU has prepared numerous resources that will help you make sense of all the reforms and changes. Please visit our Resources on Health Reform webpage for more information. Specific questions can be addressed to reformimplementation@nahu.org.

 
Health Reform Webinars
The response to our free implementation webinars held throughout the past week has been phenomenal, as the March 29, April 1 and April 5 webinars reached their 1,000-member capacity within hours of announcement.
We have scheduled another webinar for Thursday, April 8, at 4:00 p.m. EDT; you can register here. We will continue to schedule these free webinars for members as long as the demand persists. If you are denied access to a webinar, that just means the 1,000-member capacity for the meeting has been reached. Please be patient and watch your e-mail for announcements of additional future webinars you can attend. Once a webinar fills up, we will schedule another event within the next few days. In addition, we record these calls and the recording and slides are posted for NAHU members on our website. 

 
Annual Convention Registration Now Open!
Registration for NAHU’s 80th Annual Convention at the Hyatt Regency Chicago is now open. In this economic and legislative environment, you need to be at the top of your game. Join us June 27-30 in Chicago to get the tools and information you need to grow and manage your business. Click here to make hotel reservations at the Hyatt Regency Chicago.
Exhibitor and sponsor information is available on the convention website.

 
Respond to the New Bill with an Editorial
Respond to the passage of H.R. 3590 by writing a letter-to-the-editor or op-ed and submitting it to your local paper. There are two updated op-ed templates (Medical Loss Ratio and Antitrust) and one new LTE. Feel free to submit these editorials as-is with a letter of introduction to your local media or use them as templates to personalize the message. You will not be able to send the LTE as-is but must insert your information where indicated. By inserting your name and contact information, as well as including a few sentences addressing specific concerns in your community or referencing a recent article in the paper, the editorial is more likely to get placed and the issues will receive a wider audience.

 
NAHU in the News
Did you miss NAHU member Ingrid Martin engage President Obama in a one-on-one debate? If you did, you can hear her talk about it on an interview with FOX and Friends as well as another interview with FOX Business. Show your support for Ingrid by commenting on blogs and news stories where she is mentioned. By supporting each other in our media efforts, we can generate more discussion and get health care right.
NAHU was featured in more than 520 news stories last month, reaching an audience of 152 million people. You can access the major stories, including articles from Kiplinger's Personal Finance, Google News, Insurance Journal, Insurance & Financial Advisor, National Underwriter, Yahoo! News, San Francisco Chronicle, Boston Globe, CNBC, FOX News, NPR, Atlanta Journal-Constitution, San Jose Mercury News, Detroit Free Press, Miami Herald, Cleveland Plain Dealer, Denver Post and Oregonian, on the NAHU in the News webpage.

NAHU NEWSWIRE

April 2, 2010
 
Reconciliation Legislation Signed by President Obama
 
On Tuesday, President Obama signed into law the Health Care and Education Affordability Reconciliation Act of 2010, a companion package of “fixes” to the comprehensive Patient Protection and Affordable Care Act that was enacted last week. Taken together, the two measures make the most profound changes to our country’s private-market health care system in 50 years and levy nearly $438 billion over 10 years in new taxes targeted at high-income individuals, selected health care-related industries and corporate taxpayers.
As always, NAHU continutes to be supportive of comprehensive health reform. However, we believe that many parts of these new laws are misguided, are too costly and will not do enough to promote truly affordable access to coverage or contain the costs of medical treatments—the true driver of health insurance premiums. As a result, we plan to dedicate significant resources to federal and state legislative efforts in the coming months to make improvements to the new laws’ existing provisions that we feel warrant change. We will also support efforts to repeal aspects of the legislation that we feel are unsustainable. Specifically, we plan to focus on changes to the individual and employer responsibility provisions, the medical loss ratio requirements, improvements to the market reform provisions, subsidy improvements, the elimination of the CLASS ACT provisions that create a new and financially unsound federal long-term care program, and establishing more responsible means of financing the reform provisions—rather than on the backs of people who already have private health insurance coverage and/or purchase it for their employees. 
In addition, NAHU will be working intensely on the regulatory processes surrounding implementation of these new measures. Influencing these processes will be critical to ensuring that the reforms that take effect in the next few months will happen as smoothly as possible, and in a way that is the least disruptive to the private insurance marketplace. Some of the specific program implementation and regulatory issues we are working on immediately are:
• The small employer health insurance premium tax credit program, which is retroactive and will apply to premiums paid in taxable years beginning after December 31, 2009. This credit will give certain qualified small employers who have no more than 25 full-time equivalent employees, pay average annual wages of less than $50,000 and provide qualifying coverage (among other criteria), a maximum tax credit, based on number of employees, of up to 50% of premiums for up to two years if the employer contributes at least 50% of the total premium cost.
 
• The development of the national high-risk pool program for individual market consumers with preexisting conditions, which will become effective in 90 days. Existing state high-risk pools will be impacted, and there will also be significant individual market changes for those states that currently do not have a high-risk pool.
 
• The development of the temporary reinsurance program for employers that provide retiree health coverage for employees over age 55, which is also scheduled to begin within 90 days.
 
• The development of the relevant definitions that will govern the medical loss ratio requirements for health insurance carriers by the National Association of Insurance Commissioners. This process must be completed by December 31, 2010. 
 
• The development of the new grant program for small employers that offer wellness programs, which is slated to begin in October 2010. 
 
• The rollout of the new market reforms and coverage provisions that will apply to all plans within six months, including grandfathered plans. These provisions include the increase in the dependent age to 26, the new preventive care provisions and other mandates, the policy rescission provisions and the restrictions on annual and lifetime benefit limits. 
If you have any questions about our government affairs efforts going forward, please do not hesitate to contact any member of our staff.

 
NAHU Health Reform Implementation Resources and Teleconferences
 
A number of aspects of the new health reform law impact American employers and private health insurance consumers immediately. We know that you are being inundated with questions from your clients, and NAHU is committed to providing you with accurate and timely information about all of the reform provisions. As benefits professionals, it will be critical for NAHU members to know the finer points of implementation, and this presents an excellent opportunity for our membership to show its value to both their clients and the overall private market delivery system.
The response to our free implementation webinars held this past week has been phenomenal. The March 29 and April 1 webinars reached their 1,000-member capacity within hours of announcement, and our April 5 webinar is also at capacity. We have scheduled another webinar for Thursday, April 8, at 4:00 p.m. EDT; you can register here. We will continue to schedule these free webinars for members as long as the demand persists. If you are denied access to a webinar, that just means the 1,000-member capacity for the meeting has been reached. Please be patient and watch your e-mail for announcements of additional future webinars you can attend. Once a webinar fills up, we will schedule another event within the next few days. In addition, we record these calls and the recording and slides are posted for NAHU members on our website. 

NAHU government relations staff also answers questions in the live chat during the calls, and many members have requested transcripts of these Q&As. Over 1,000 questions were posed by members during the first two calls, so it would be impossible for us to answer every single one in a timely fashion. However, we are compiling a list of the most frequently asked questions organized by topic from the first two calls, and will make available those questions with detailed and updated answers to the entire membership early next week. We will continue to add to this document and provide members with updated versions as the implementation process moves forward.
During the past week, NAHU has updated our detailed timeline on reform provisions as well as our simplified timeline that may be helpful for you to use with your employer clients. In addition, we have developed a detailed PowerPoint presentation on reform implementation, as well as one that is more targeted for use with your employer clients.
NAHU has prepared a new issue brief on the Small Business Tax Credit program, and we encourage you to review these newly released resources from the IRS on this program, specifically the frequently asked questions, three-step fact sheet determination process, and hypothetical examples of how the credit applies to different employer scenarios. We have also prepared a new issue brief on how the health reform legislation will impact agents and brokers, specifically focused on the medical loss ratio provisions. We intend to release a series of these topic-specific issue briefs to the membership over the next few weeks. Upcoming topics include the new health insurance premium tax credit program for eligible small businesses, the new reinsurance program for employer-sponsored coverage of early retiree health plans, and the new CLASS Act national long-term care program and its impact on employers, among others. Please look for these in your e-mail and on the NAHU website within the next week.
Finally, NAHU is planning a series of webinars targeted at your employer clients. Members who would like to purchase access for their employer clients to participate in an NAHU-hosted webinar on how health reform will impact employers will have the opportunity to do so beginning next week. We plan on hosting several of these employer-focused webinars in April, and will release the date and fee structure to the membership next week.
If you have any specific questions about implementation or suggestions about resources that would be helpful to you and your clients, please direct them to reformimplementation@nahu.org.

 
Guaranteed-Issue Coverage for Children with Preexisting Conditions
 
When you draft 2,700+ pages of health reform legislation, give members of Congress and the American public barely 72 hours to read the provisions, and allow for limited amendments to the measures throughout the process, there are bound to be mistakes.
One of the first drafting errors in the new health reform legislation that came to light this past week concerns the coverage of preexisting conditions in children. President Obama campaigned on this issue, and he and his administration have repeatedly touted eliminating the ability to deny coverage to children with preexisting conditions, and requiring the coverage of such conditions with no look-back or exclusionary periods, as one of the first benefits of the new reform laws. The President and congressional Democrats have repeatedly cited these provisions as benefits that will help American children within the next six months. A small problem, though—the new laws don’t actually say that.
The new measures do require health plans serving all markets—individual, small- and large-group and self-funded—to cover the preexisting conditions in children age 19 and under with no limitations if the coverage is already offered or in force for all plan years beginning on or after six months of the March 23, 2010, enactment date. However, the new laws do not require insurers in all markets to guarantee-issue coverage to anyone at any age until plan years beginning on or after January 1, 2014. That means for the markets where health insurance coverage is not guaranteed issue under existing federal or state law (the individual market in most states and technically the large-group market), insurers could choose to not offer coverage in the first place to a child with a preexisting medical condition. 
Once this mistake came to light, the Obama administration immediately responded that it was the intent of the legislation to both offer these children access to coverage and provide for that coverage without regard to preexisting condition. Federal Department of Health and Human Services Secretary Kathleen Sebelius wrote a letter to Karen Ignagni, president and chief executive officer of America's Health Insurance Plans (AHIP), blaming insurers for potentially failing to offer such affected children coverage, and indicating the administration’s plan to correct the problem in the new laws via federal regulation:
"Unfortunately, recent media accounts indicate that some insurance companies may be seeking to avoid or ignore a provision in the new law that prohibits insurance companies from excluding children with preexisting conditions from coverage.
 
"To ensure that there is no ambiguity on this point, I am preparing to issue regulations in the weeks ahead ensuring that the term 'preexisting condition exclusion' applies to both a child’s access to a plan and to his or her benefits once he or she is in the plan. These regulations will further confirm that beginning in September 2010:
• Children with preexisting conditions may not be denied access to their parents' health insurance plan;
• Insurance companies will no longer be allowed to insure a child, but exclude treatments for that child's pre-existing condition.
 
I urge you to share this information with your members and to help ensure they cease any attempt to deny coverage to some of the youngest and most vulnerable Americans."
AHIP President Karen Ignagni quickly sent back a response indicating that "With respect to the provisions related to coverage for children, we await and will fully comply with regulations consistent with the principles described in your letter."

 
Health Reform Implementation to Have a Profound Economic Impact on American Businesses
 
In the first few days following the passage of comprehensive health reform, the mantra you heard was “repeal and replace” from opponents of the bills signed into law. But now, the overwhelming initial costs and administrative burdens that the new legislation will impose on many American businesses and the impact they will have on jobs and the economy are making headlines.  
One of the first substantial economic issues to come to light is the elimination of corporate deductibility for the Medicare Part D Prescription Drug subsidy program. Since the passage of the Medicare Modernization Act of 2003, the federal government has been providing tax-free payments to companies that provide comprehensive prescription drug coverage to their retirees, since these retirees then do not participate in the federal Medicare Part D program. While the new law doesn’t eliminate the subsidy all together, it does eliminate the corporate deductibility of the subsidy payments—they will now be a taxable benefit beginning in 2013. 
Even though the loss of the deductibility doesn’t take place for three years, there is an immediate accounting impact for companies that currently provide this benefit, even if the loss of benefits is spread over several years. An estimated 1,400 for-profit companies will be exposed to the tax change, according to benefits consultant Towers Watson, and it will have a significant impact on first-quarter 2010 earnings reports. It’s been reported that first-quarter charges among companies in the Standard & Poor's 500-stock index could reach $4.5 billion. Many of these large companies have also stated that the tax change will cause them to rethink their ability to continue to provide their retirees with prescription drug coverage—which most seniors consider to be far preferable coverage than the traditional Medicare Part D alternatives.
Some of the largest immediate charges firms are taking to account for the effect of the health bill on retiree drug benefits include:
Company     $ in Millions
AT&T      1,000
John Deere   150
Boeing    150
Caterpillar   100
Prudential Financial    100
Lockheed Martin  96
3M    85-90
Illinois Tool Works  22
Xcel Energy   17
AK Steel   31
Valero    15-20
Honeywell      13
Goodrich   10
Allegheny Technologies  5
Source: Dow Jones Newswire

Other provisions that are expected to have a profound immediate economic impact include the costs of adding dependents up to age 26 to existing employer-sponsored health plans and limiting annual and lifetime benefit limits (as well as the resulting administrative costs to plans to make these changes), the impending excise tax on the medical device industry which already has indicated that the new tax will cost thousands of jobs, the new medical loss ratio requirements on insurers and the impending insurer premium tax, the impending new taxes on the name-brand pharmaceutical industry and the impending fines to American employers as a result of the new responsibility requirements for providing adequate health coverage.
The Congressional Budget Office estimated that reform implementation costs could be in the over $100 billion dollar range for the federal government, and the American business community has estimated that the costs on private-sector employers could be in that range as well.
The public isn’t responding favorably to these economic impact reports, either. Sixty-five percent of Americans believe the reforms cost too much, and 64% say they bring too much government involvement into a private industry, according to a USA Today/Gallup poll released on March 30. 

March 19, 2010
 
Process, Policy and Pandemonium in Final Health Push
 
This week the White House and Democratic congressional leaders started the final procedural processes in their drive to enact into law revised national health reform based largely on the Senate-passed Patient Protection and Affordable Care Act (HR 3590). Yesterday they released a new-and-improved set of side-car reconciliation “fixes” to the Senate bill which they hope can secure enough Democratic votes for passage (see story below).
An expected vote this Sunday is going down to the wire, and is so close that President Obama now has further postponed his overseas trip to Indonesia and Australia until June (a trip he had already delayed by several days).
The now famous “Slaughter Solution” (named after House Rules Committee Chairwoman Democrat Louise Slaughter of NY) is being pursued. In an awkwardly contorted process, the House Democrats are looking to use a “deem-and-pass” tactic allowing Democrats who face difficult re-election races this fall to avoid having to ever vote for the reform bill initially passed by the Senate, which contains problematic tax and abortion provisions, as well as state-specific sweeteners that were negotiated behind closed doors in order to win enough votes for passage. The vote would be on the “deemed” Senate bill combined with a reconciliation bill of fixes (see below).
Republicans used the deeming procedure when they were in the majority, but never on a bill of this magnitude, and they are hammering Democrats on with charges of political cowardice and not being forthright on both policy and process. The GOP notes one reason for significant public opposition to the bill is the means used to pass it. The Senate buyouts, the naked arm-twisting, the procedural manipulations are all disliked on their own merits and further convince independent voters that the underlying bill itself must not be very good to require such efforts.
Possible legal challenges to the “deem and pass” maneuver are already being discussed.
Meanwhile, yesterday more than 130 economists signed a letter to the White House explaining how the Democrats’ health care legislation would be a huge drain on job creation. The letter was signed by more than three times as many economists as a separate letter cited by the White House last week in support of President Obama’s “comprehensive health care bill.”

[back to the top]

 
Democrats Release Reconciliation Fix Revised Senate Bill
 
Yesterday, Democratic leaders in Congress released their revised Senate health bill / side-car reconciliation “fix” package, which the nonpartisan Congressional Budget Office (CBO) preliminarily estimates will cost $940 billion and reduce the deficit by $138 billion in its first 10 years. The reconciliation package tracks closely to Obama’s proposed changes to the Senate bill, a reflection of the negotiations between the White House and House and Senate Democratic leaders.
The Joint Committee on Taxation’s analysis of the revenue provisions can be accessed here. 
Republicans and other critics slammed the new numbers, claiming Democrats are engaging in more of the same back-loading of costs, hiding costs and double counting among Social Security and Medicare accounts, as well as through the creation of the CLASS Act’s new national long term care program. They also note the CBO score does not include the $300+ bill Medicare Part B “Doctor Fix” or more than $100 billion in discretionary spending it is estimated will be needed for start-up costs of various programs and initiatives.
Compared to the original Senate-passed bill, even though the cost estimate to the federal government has increased by approximately $65 billion, the coverage estimates are nearly the same. The proposal would cover one million more people for a total coverage increase of 32 million, bringing the total insured estimate to 95 percent (excluding unauthorized immigrants). Half the newly insured would be covered by Medicaid and CHIP, and 24 million people would enroll in exchange health plans. A net total of 9 million people would no longer be covered by their employer (~4 million) or the individual market (~5 million).
Of particular importance to NAHU and private insurers, the reconciliation bill does not include the President's problematic proposal to give HHS direct rate approval authority over insurers. Therefore, the existing Senate-passed bill language, which includes many new federal rules that could impact premium increases (e.g., requiring public reporting on rate increases by insurers and federal grants for state rate review), remains unchanged.
NAHU has updated its comparison chart of the major health reform bills, and also a comparison chart of the Senate-passed bill, to reflect this latest proposal.
The major proposed side car reconciliation bill changes to Senate legislation largely track the President’s proposal released late February and include the following:
• Individual Mandate: Compared to the Senate-passed bill, the proposal somewhat strengthens the penalties for those who do not purchase health insurance coverage. However, the bill maintains the exemption for those who would face premiums of more than 8 percent of their income, which would exempt millions of people.
• Employer Mandate: The proposal increases penalties for large employers that do not offer health coverage to $2,000 per full time employee (FTE) versus $750 per FTE in the Senate bill.
• Grandfathered Plan Requirements: The Senate bill generally "grandfathered" plans in effect on date of enactment from various new benefit and consumer protection rules. The reconciliation bill makes several targeted changes, including subjecting grandfathered plans to new requirements concerning lifetime and annual dollar limits, rescissions, dependent coverage to age 26, and limits on waiting periods before employees are eligible for coverage under employer-sponsored plans.
• Subsidies: The proposal slightly increases premium and cost-sharing subsidies for those who purchase coverage through the exchange. However, beginning in 2019, a failsafe mechanism is applied that reduces overall premium subsidies if the aggregate amount exceeds 0.504 percent of GDP.
• Health Insurance Industry Tax: The proposal delays the effective date of the fee imposed on health insurance providers by three years (until 2014). The proposal would also create limited exceptions for plans that serve a critical purpose, including plans serving a high percentage of seniors and disabled individuals. For tax-exempt service providers, only 50% of net premiums written would be taken into account. The fee would equal $8 billion for 2014, $11.3 billion for 2015 and 2016, $13.9 billion for 2017 and $14.3 billion for 2018. For years after 2018, the fee would be the amount applicable for the preceding year, increased by the rate of premium growth as calculated for the premium tax credits included in the Senate bill.  
• Tax on "Cadillac" Health Plans: The proposal changes the effective date of the Senate's tax on "Cadillac" plans from 2013 to 2018. It also raises the threshold for premiums that are exempt from the assessment from $8,500 for individual coverage to $10,200 and from $23,000 for families to $27,500. The bill also changes the formula for indexing the thresholds and takes into account age, gender and certain other factors.
• Modification of New Medicare Payroll Tax Increase: The proposal broadens the Medicare Hospital Insurance Tax Base for High-Income Taxpayers - additional surtax of 0.9% on earned income in excess of $200,000/$250,000 (unindexed), and 3.8% surtax on investment income for taxpayers with AGI in excess of $200,000/$250,000 (unindexed).

 
• Medicare Part D: The proposal fills the Part D "donut hole" by including a government-issued $250 rebate to Medicare beneficiaries who hit the donut hole in 2010 and closes the donut hole completely by phasing down the overall coinsurance to 25 percent by 2020.
• Medicare Advantage (MA): The proposal cuts MA by a total of $202 billion (about $130 billion in direct MA cuts and $70 billion due to other cuts to traditional Medicare) by freezing benchmarks for one year in 2011 and then reducing benchmarks to different percentages of fee-for-service Medicare spending, with bonuses for quality and enrollee satisfaction. It increases the ability of HHS to reduce MA plan payments because of plan coding practices. In addition, it requires MA plans to maintain at least an 85 percent medical loss ratio (MLR) or face termination from the program.
• Medicaid: The proposal includes increased reimbursements for states to cover the expansion population (up to 133 percent of poverty). It also strikes the controversial "Nebraska deal" that would have required CMS to pay that state the full cost of the expansion population in perpetuity. For Puerto Rico, it raises the Medicaid funding cap by 35 percent rather than the Senate bill's 30 percent.
• Fraud and Abuse: The proposal includes several new provisions to strengthen Medicare and Medicaid anti-fraud activities. 
• Implementation Funding: The proposal provides $1 billion to HHS for implementing the Senate-passed bill and reconciliation proposal. 

[back to the top]

March 5, 2010
 
Moving Forward, Like It or Not
 
Less than a week after the bipartisan health summit at Blair House during which President Obama asked both Republicans and Democrats to spend the next four to six weeks working cooperatively on health reform legislation, President Obama switched strategies in a nationally televised address,calling on the House and Senate to have an up or down vote on the comprehensive health reform bills already on the table within the next few weeks, stating, “I do not know how this plays politically, but I know it's right.”
While President Obama never used the words “budget reconciliation” in his remarks, he and the members of his administration, as well as Democratic congressional leaders, appear to have endorsed the controversial budget reconciliation strategy to pass the legislation. However, in an interesting twist, they have abandoned they idea of passing a reconciliation bill first that includes all of the negotiated changes and deals to things like the Cadillac tax, as well as the bipartisan ideas the president keeps touting in his summary plan for reform. Instead, Democratic leaders appear to have agreed to attempt to have the House pass the original Senate bill verbatim first, then move forward with fixing what they can through reconciliation. 
In some ways, this makes the reconciliation process a little bit easier for them, as there was much concern that going forward under the other method was both procedurally impossible and illegal, since you can’t amend a law before its actually signed into law. However, politically, the process is still fraught with peril (see reconciliation article below). President Obama has also called for an extremely aggressive timeline for this course of action, hoping to have the whole matter wrapped up before Congress leaves for Easter break in three weeks, with the House voting on the original Senate-passed legislation by March 18 before the president leaves for a trip to Asia. He’s also begun aggressively courting House Democrats for their votes. Speaker Pelosi and House Majority Leader Steny Hoyer both stated yesterday that the Obama time frame may be unrealistic, and that they will not necessarily rush a vote before Easter.
NAHU opposes both the original Senate-passed bill as well as the use of the budget reconciliation process to pass comprehensive health care reform legislation. While we strongly believe that our country could benefit from some affordable and responsible reforms to our private-market delivery system, legislation of this magnitude should not be developed and passed by a single political party. 
Our members attending NAHU’s annual Capitol Conference in Washington will be meeting with their congressional representatives in person to spread this message, and we have been working in conjunction with coalition partners like business groups, other agent trade associations and the health insurance industry to promote sensible and bipartisan reform. We’re particularly targeting members of the House of Representatives who either voted “NO” on the original House legislation or those who voted “YES” but have indicated that they may not be able to support the Senate-passed legislation as it currently stands. Here’s a letter on this issue you can send today to your member of the House of Representatives and here is another one that you can encourage your clients, family and friends to send.
February 19, 2010
 
Getting Ready for the Bipartisan Health Summit
 
The health policy community in Washington, DC, is busy preparing for next Wednesday’s bipartisan health summit at the White House. The six-hour summit, to be moderated by President Obama, will be nationally televised on C-SPAN. According to news reports from yesterday, the Obama administration will release its own version of a comprehensive health reform bill to be discussed at the summit and post it online on Monday. It was previously reported that the congressional Democrats might arrive at the summit with a merged version of the House and Senate bills that they could agree on for passage, but it has become clear in recent days that no agreement between the two chambers has been reached. In addition, the Obama administration has let it be known that the bill they will be presenting has not been agreed to by either House or Senate leaders, but that they have instead independently picked what they considered to be the best provisions from each of the two bills currently on the table. It does not appear that the Obama bill will have been scored by the Congressional Budget Office. 
The Republican leadership has been asked to also present its own comprehensive alternative bill on the 25th, and also post it online by this coming Monday. It’s still unclear whether or not they will do so, as there are several different versions of GOP comprehensive health bills that have been proposed in the House and the Senate. These include the Empowering Patients First Act and the Patients' Choice Act, among others. 
Attendees at the summit will include the president and vice president, HHS Secretary Kathleen Sebelius, head of the White House office on Health Reform Nancy Anne DeParle, as well as representatives from the Congressional Budget Office, the Office of Management and Budget and the Joint Committee on Taxation. From Congress, the most senior House/Senate respective party leadership, as well as the chairmen and ranking members of the committees that oversee health insurance reform legislation in both chambers have been invited. In addition, each party’s congressional leadership will be allowed to ask four additional members of Congress to attend. Who these additional attendees will be is being kept very close to the vest by both parties, as a surprise element.
From the GOP side, possibilities include: Senator Orrin Hatch (UT), who serves on both the HELP and Finance Committees; Senator Olympia Snowe (ME) of the Finance Committee; Senator Tom Coburn (OK), who serves on the HELP Committee and is an M.D.; Representative Tom Price (GA), who is an M.D, and, due to his role as chair of the GOP Study Committee, was the principal author of the GOP alternative health reform bill offered in the House; Representative Paul Ryan (WI) of the Ways & Means Committee; and Representative Michael Burgess (TX), who serves on Energy & Commerce and is also an M.D., among others. 
Democrats angling for an invitation include: Senators Jeff Bingaman (NM) of the HELP and Finance Committees; Kent Conrad (ND), who chairs the Budget Committee and serves on Finance; Jay Rockefeller (WV), who chairs the Finance subcommittee on Health; Barbara Mikulski (MD) of the HELP Committee; Chris Dodd (CT); and Charles Schumer (NY), who serves in both the Senate leadership and the Finance Committee, among others. On the House side, contenders for inclusion may be Representatives Pete Stark (CA), Rob Andrews and Frank Pallone, both of New Jersey, who serve as the ranking members of the various health subcommittees in the House, as well as former Energy & Commerce Chair John Dingell (MI), and Blue Dogs with a vested interest in health reform like Bart Stupak (MI) and Mike Ross (AR).  
As the summit date approaches, there has been much speculation as to who it will actually benefit, whether or not any bipartisan progress can be made, or if the whole event is simply a political stunt. NAHU has consistently called for a true bipartisan effort to pass substantive health reform, and as Congress and the Obama administration prepare for the summit, we continue to advance NAHU’s ideas for affordable, responsible health reform with lawmakers on both sides of the aisle. If you have any questions about our activities, please do not hesitate to contact any member of NAHU’s government relations staff.

2/16/10 NAHU News

Snow Slows Health Care Action, But Doesn't Halt It Completely
 
Washington, DC, is famous for many things, including its complete inability to handle any weather-related emergency gracefully. This week’s two record-breaking blizzards were no exception, resulting in the federal government closing its doors for business four out of the past five days. As a result, little substantive legislative activity took place this week, but that doesn’t mean that there wasn’t any action at all on health care reform.
During a nationally televised interview with Katie Couric prior to the Super Bowl on Sunday, President Obama called for a bipartisan televised health care summit to be held at Blair House on February 25. "I want to consult closely with our Republican colleagues," Obama told Couric. "What I want to do is to ask them to put their ideas on the table... I want to come back [after the President’s Day recess] and have a large meeting, Republicans and Democrats, to go through, systematically, all the best ideas that are out there and move it forward." Obama followed up on this call for bipartisan cooperation with a meeting of Republican and Democratic congressional leaders at the White House on Tuesday. After the meeting, he told reporters about the GOP, “I’m willing to move off of some of the preferences of my party in order to meet them halfway, but there’s got to be some give from their side as well.” 
But there was decidedly non-bipartisan action going on as the snow piled up outside the Capitol too. Democratic Senate staffers continued to ponder scenarios to move health care reform legislation acceptable to Democrats in both chambers forward using the budget reconcilliation process. However, procedural hurdles (as reported in last week’s Washington Update) still daunt them.
In addition, in an interview with Roll Call on Tuesday, House Speaker Nancy Pelosi (D-CA) continued to urge the use of reconcilliation to pass health reform in the Senate. “It’s up to us to make sure the public knows that this is not extraordinary,” she said. “ And the public knows that a constitutional majority is 51. It would be a reflection on us if we could not convince people that this is not an unusual place to go.”
At an Academy for Health meeting that same day, her top health care aide, Wendell Primus, outlined a way in which he believes the Senate could do so. “The trick in all of this is that the president would have to sign the Senate bill first and then the reconciliation bill would be signed second and the parts of the reconciliation bill that trump the relevant portions of the first signed bill. You would really have to use the fact that a later enacted bill takes precedent over a previously enacted bill to achieve the right outcome.”
It’s very unclear whether or not Primus’ strategy would be deemed legal, as rules seem to not allow Congress to pass changes to a bill that is not yet law. And the Senate parliamentarian (who would make this determination) has yet to weigh in on Primus’ theory. 

The New York Times (1/30, A14, Pear) reported the Obama Administration "issued new rules...that promise to improve insurance coverage of mental healthcare for more than 140 million people insured through their jobs." Under the rules that go into effect July 1, "employers and group health plans cannot provide less coverage for mental healthcare than for the treatment of physical conditions like cancer and heart disease."         The AP (1/30) reported that the new rules prohibit "separate annual deductibles for mental health treatment" and higher "copayments for visiting a psychiatrist or social worker." The measure "also prohibits health plans from setting limits on number of visits or hospital days for mental health problems that are different from any such limitations on treatment for medical problems."         CQ HealthBeat (1/30, Norman, subscription required) reported that HHS Secretary Sebelius said, "The rules we are issuing today will, for the first time, help assure that those diagnosed with these debilitating and sometimes life-threatening disorders will not suffer needless or arbitrary limits on their care. ... I applaud the long-standing and bipartisan effort that made these important new protections possible."         Modern Healthcare (1/29, Zigmond) reported, "The rule applies to group plans of 50 or more people and divides benefits into the following six categories: inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; emergency care; and prescription drugs."
FROM NAHU
1/29/09

Health Reform: Dead or Alive? On a Back Burner or on Life Support?
 
While many in Washington, DC, and across the nation assumed that congressional Democrats and the Obama administration would have made a clear decision on the best way to advance health reform forward by now, they have instead been all over the map with no agreement on strategy.

During his State of the Union address on Wednesday, the president did call on Congress to not give up on health care reform and asked them to reconsider the two bills currently on the table. But he also asked for anyone, on a bipartisan basis, who could come up with a better plan to bring their ideas to him, and stated that his current top legislative priority is a jobs bill.

Over the course of the week, congressional leaders have made all kinds of conflicting statements about health reform, ranging from pursuing a quick resolution through the use of the budget reconciliation process in the Senate to focusing on jobs immediately and taking the rest of the year to address the issue. Perhaps a clearer indication of at least the president’s goals for moving forward will come next week when the administration is due to release its draft FY 2011 budget to Congress and public, as it will contain his health care spending blueprint for the upcoming year.

While their ultimate path remains unclear, if you listen closely to what the Democrats are saying, a few key themes are evident. First, it’s clear that they haven’t abandoned the idea of health reform entirely—it’s not dead, it just may take them a while. Second, their focus is going to be on health insurance market reforms and not cost containment, helping the uninsured or other delivery system improvements. 
In the Senate, Democratic aides are still investigating various procedural means of advancing H.R. 3590, including any way they could use the reconciliation process to pass fixes to the Senate bill with just a simple majority vote. But reconciliation is a complicated procedural maneuver and its use is not supported by several key Democratic senators. Also, because the rules governing its use limit it to matters with a direct federal budgetary impact, the process may not even be capable of satisfying the political problems many House members see with the Senate bill. Over the past few days, Senate leaders have indicated that it may take weeks or even months to decide what process will make the most sense for their chamber and that their current focus will be on jobs. Senator Reid even went so far as to say that the 111th Congress still has another year to act.
The clearest anyone has been on how they plan to forge ahead so far is House Speaker Nancy Pelosi (D-CA). Yesterday, she indicated that the House would move a series of market reform-oriented bills aimed at addressing the issues House members feel are most important. At the top of her list was eliminating the federal antitrust exemption for health insurers (see more detailed story below), and she identified other market-reform possibilities including medical loss ratios, pre-existing condition clauses, rescission protections and rating reforms as potential future bill topics. Pelosi said she was not giving up on passing a comprehensive bill, but she made it very clear that there are serious differences between the House- and Senate-passed legislation that will have to be addressed first and that there is really only about 70% agreement between the two bills.
With the focus now seemingly on insurance market reform, NAHU plans to be more vigilant than ever in advancing affordable, responsible reforms that will help contain costs and bring needed access to the private market. Many of the market-reform ideas promoted in both of the comprehensive measures, particularly in the House-passed bill, would be incredibly damaging to the private market, so we have our work cut out for us! As our press release following the State of the Union indicates, we have long advocated, and continue to advocate, members of Congress working together in a bipartisan fashion on sensible solutions that rein in health care costs, provide better access to care, improve quality, create better efficiency, and put our health care system on an affordable and sustainable path.

1/29/10 NAHU Newswire

Media reports and analyses are casting today's Senate election in Massachusetts as a dire threat to President Obama's plans to overhaul the country's healthcare system. In preparation for the possibility of Republicans getting a 41st Senate vote, Democrats are said to be looking for a way to salvage their reform effort. Reports, however, downplay the likelihood that what is portrayed as the preferred Democratic back-up plan -- having the House vote on the Senate bill -- will succeed.         The AP (1/18, Babington) described the White House and its "Democratic allies" as "panicky," as they "scrambled Sunday for a plan to salvage their hard-fought healthcare package in case a Republican wins Tuesday's Senate race."         AFP (1/18) noted that "Obama advisor David Axelrod denies that there is any panic," and says that Obama campaigned for Coakley "because 'he was asked.'"         The Washington Times (1/18, Dinan) noted that in his remarks, "Obama steered clear of healthcare -- the issue that Republicans say has fueled Mr. Brown's rise -- and instead reprised the anti-Wall Street, anti-Bush Administration language that carried him to victory in 2008."         The Wall Street Journal (1/18, Hitt, subscription required) reported that also appearing at the rally, Sen. John Kerry said of the President's agenda, "A lot of these measures are going to rest on one vote in the United States Senate. ... So understand what's at stake here, Massachusetts. It's whether we're going forward or we're going backwards." The Hill (1/18, O'Brien, subscription required) reports that Obama similarly said, "On many of the major questions of our day, a lot of these measures are going to rest on one vote in the United States Senate."         The Washington Post (1/19, Balz, Cillizza) reports that "some Democrats said Monday that the methods proposed for pushing through a health bill if they lost...in Massachusetts were unlikely to work, with House Speaker Nancy Pelosi's (D-CA) office signaling the House wouldn't adopt the version already passed in the Senate." Other "top Democratic aides on Monday" also "described" that plan "as an unlikely scenario." The Post adds, "Democratic officials, while publicly saying the bill remained on track, were facing the sobering reality that the effort, after seeming nearly assured of success just days ago, could collapse."         On its front page, the New York Times (1/19, A1, Herszenhorn, Pear) describes "the White House and Democratic Congressional leaders" as "scrambling for a backup plan," and adds that "have begun laying the groundwork to ask House Democrats to approve the Senate version." But, "some lawmakers, aides, and lobbyists described numerous obstacles to House approval of the Senate-passed bill." For example, "in an interview on Monday, Representative Bart Stupak, Democrat of Michigan...said: 'House members will not vote for the Senate bill. There's no interest in that.'" Politico (1/19, O'Connor) also reports that "House Democrats privately worry that the rank-and-file would reject" the "doomsday strategy that requires them to approve the Senate healthcare bill," with one "aide" predicting, "Progressives and conservatives in the caucus won't go for it."         The Wall Street Journal (1/19, Adamy, Bendavid, subscription required) runs a similar analysis under the headline "Massachusetts Race Now Key To Health Bill," and McClatchy (1/19, Lightman) reports that the election "could deal a fatal blow" to reform efforts. AFP (1/19, Smith), meanwhile, says that the election could "possibly" decide "the fate of...Obama's ambitious reform agenda." Democrats "are scared," and "racing to draw up contingency plans." The AP (1/19, Fouhy) reports that "Brown has thrown Democrats for a loop, riding a wave of voter anger with Obama's healthcare plan and what critics call big government spending."         Meanwhile, The Hill (1/19, O'Brien, subscription required) reports, "Democrats are eyeing a parliamentary maneuver to sidestep the Senate's filibuster rules to pass healthcare if they lose their supermajority, one House lawmaker hinted Monday." Rep. Allyson Schwartz (D-PA), who heads "the New Democrat Coalition taskforce on healthcare, suggested that Senate Democrats may use budget reconciliation to pass a health bill."
1/15/10 NAHU

January 15, 2010
 
Closed-Door Sausage-Making Greases House-Senate Health Reform Negotiations
 
Hidden from C-SPAN cameras or any other kind of public scrutiny, Democratic congressional leaders and the Obama administration were hard at work this week seeking to reach a deal on the broad outlines of a final health care bill by Friday or Saturday, and President Obama is promising to sell it to the public.
The President went to Capitol Hill late Thursday to reassure House Democrats who had assembled for their annual issues conference and to promise that once a bill is passed and signed into law, he will launch an all-out campaign to sell its provisions to the American people.
Democratic leaders and Democratic committee chairmen held a marathon negotiation session Thursday at the White House on sticking points between the House and Senate bills (H.R. 3962, H.R. 3590). They hoped to build on a breakthrough reached earlier on financing of the huge package, so that the proposal can be sent to the Congressional Budget Office (CBO) for analysis of its costs and benefits. It will likely take CBO several days, possibly a week or longer, to produce a cost estimate necessary before a vote.
Labor leaders who spent much of Wednesday at the White House battling to ease the burden of the Senate’s proposed excise tax on high cost employer-provided health insurance plans, announced a supposed deal that they discussed Thursday with House Democrats. The deal, however, appears unlikely to soothe the concerns of House opponents of the excise tax.
Under the Senate-passed legislation, the 40% excise tax would be assessed on health plans that cost more than $8,500 for individuals or $23,000 for families. A higher limit of $9,850 for individuals and $26,000 for families would be allowed for retirees over 55 but not yet eligible for Medicare, and for workers in high-risk professions, such as law enforcement, firefighting, and construction.
Union leaders and President Obama agreed on a plan that would bump up the threshold before the 40% tax is imposed to $24,000 for a family—a $1,000 increase from the Senate-passed bill (H.R. 3590)—while excluding vision and dental insurance from being counted toward the threshold beginning in 2015. Individuals would see their thresholds rise $400 (to $8,900) under the compromise.
The threshold levels would also be adjusted to account for age, gender, and geographic areas to keep people in high-cost groups from being disproportionately impacted by the tax.
Most controversially, the pact with labor unions would gradually phase in the excise tax for workers subject to collective bargaining agreements. The excise tax would be subject to a transition period for collectively bargained health care plans, as well as health care plans for all state and local government workers.
While the excise tax would go into effect in 2013 for most plans, collectively bargained and state and local plans would not be taxed until 2018. These same plans would be allowed to enter into the proposed health care exchanges in 2017, AFL-CIO President Richard Trumka told reporters.
White House aides and Trumka defended the phase-in period for workers under collective bargaining agreements, saying that transition periods are common in legislation and are already used throughout other parts of the health care reform bill. Trumka said the change is akin to the five-year transition period the insurance companies have to phase in all the costs. As the costs are being phased in, he said, the plans need a couple of years to be able to make the adjustments.
The announced compromise would of course lower the revenues generated by the high-cost excise tax provision: the Senate bill would generate about $150 billion over 10 years and the compromise would reduce that figure to around $60 billion. Because of this, negotiators are looking for ways to fill the hole with further savings from various health care sectors. Industry lobbyists said pharmaceutical companies could be asked to contribute further savings between $10 billion and $20 billion over 10 years, in addition to the $80 billion they have already committed to providing.
The Senate bill would index the threshold to the rate of growth using the consumer price index for all urban consumers plus one percentage point, but opponents have argued that the index would still result in a growing number of middle class households with health insurance that falls into the category of so-called “Cadillac” plans over the next decade. The White House did agree to allow the thresholds to be adjusted upward, however, if health care inflation is above the assumptions for inflation between 2010 and 2013. That change would keep more households from being affected by the excise tax immediately after the new provisions go into effect.
White House aides speaking on condition of anonymity said President Obama made the deal because he strongly believes the excise tax is needed to help drive down long-term health care costs, but he does not want the legislation to be paid for “on the backs of the middle class.” This is despite the fact that President Obama during the 2008 campaign strongly opposed and attacked Sen. John McCain’s proposals to convert the employer tax exclusion and for the first time begin to tax health benefits.
Meanwhile, five Democratic senators this week urged the Senate Majority Leader Harry Reid of Nevada to include a “fail-safe mechanism” in the final version of major health care legislation in order to guarantee the hundreds of billions of dollars in projected government savings that are intended to help pay for the bill.
In a letter to Mr. Reid, the five senators urge that the legislation include some sort of fast-track and fail-safe mechanism that they said would give Congress “the tools to keep cost under control should the current savings estimates fail to materialize.”
The letter was signed by Senators Evan Bayh (IN), Michael Bennet (CO), Kay Hagan (NC), Claire McCaskill (MO) and Mark Warner (VA).

1/15/10 NAHU Newswire

The New York Times (12/30, A19, Cave) reports that Florida Attorney General William McCollum, "a Republican who is running for governor in 2010," on Tuesday "questioned the constitutionality of the federal healthcare bill." McCollum called "on states to study whether to file suit to kill a provision requiring that individuals buy health insurance or pay a fine." He called the insurance mandate "an affront to our country's principles." The view "places him in line with the attorneys general of South Carolina and nearly a dozen other states who have also threatened to sue over the mandate."         According to the Miami Herald (12/30, Logan), McCollum said the mandate "would penalize people who choose to do nothing, compared with the car-insurance requirement, which is connected with the decision to own a car and drive." He "directed his staff Tuesday to investigate the legality of" the requirement and "sent a letter to his counterparts in other states, asking them to join his investigation."         The St. Petersburg Times (12/30, Logan) notes that McCollum "also said he will join other attorneys general looking into the constitutionality of a Senate bill provision that would pay for Nebraska's share of the proposed Medicaid expansion, a deal secured by Sen. Ben Nelson (D-NE)."         The Christian Science Monitor (12/30, Richey) reports that the individual health insurance mandate "is a centerpiece of the healthcare bills currently pending in Congress." While "conservative analysts have been debating the legality of the measure for months," their liberal counterparts "have dismissed these concerns as overblown and political posturing."         In a telephone conference with reporters, McCollum "rejected several questions about his motivation being political," the AP (12/30, Kallestad) reports. He said, "I'm not opposed to healthcare reform as such although I'm not happy about this particular bill." Florida's Palm Beach Post (12/30, Bender) also covers the story.         Utah AG to join constitutional challenge. KSL-TV Salt Lake City (12/30) reports that Mark Shurtleff, Utah's attorney general, "is preparing to join a lawsuit that challenges the Senate's massive healthcare reform bill. Utah is one of 10 conservative states prepared to challenge the healthcare bill." The attorneys general "say the so-called Nebraska compromise part of the deal smells of corruption."
12/29/09 NAHU Newswire
Nebraska Medicaid deal may be "unconstitutional," South Carolina AG says.

Audits reveal $92 million in improper Medicaid payments in New York.

Healthcare bill passes 60-vote threshold in Senate bid to close debate.

December 18, 2009
	Scrooge, Grinch or Just Plain Crazy? Despite Obstacles, Majority Leader Reid Continues to Eye Christmas Eve Health Reform Vote
The Senate Democrats continue to stampede toward passing some form of health reform before year's end, even though only 31 percent of the American people support what Senate Majority Leader Harry Reid (D-NV) is doing, bill language is still not finalized and the Congressional Budget Office still hasn’t released an estimate of how much it will cost the American taxpayer. Several Democratic senators still haven’t committed to vote on the bill, while House Democrats are threatening to oppose the legislation in conference committee and key unions and Democratic party leaders are blasting the legislation. Procedurally, in order to vote before Christmas, Reid has to lock down the 60 votes he needs by tomorrow night. Under that scenario, the Senate would release a revised version of the bill this weekend or on Monday, take a series of votes on the bill next week and end with a vote to close debate at about 7:00 p.m. on Christmas Eve. This is all contingent on Reid’s securing 60 votes together in the coming days and keeping the Senate working practically round-the-clock.   As House Minority Whip Eric Cantor (R-VA) predicted this past summer, "If the bill fails it will be because of disagreement among the Democrats." Currently, Senator Ben Nelson (D-NE) remains uncommitted on the bill and on Thursday he rejected compromise language offered by his colleague Bob Casey (D-PA) relative to public financing of abortion-related services in health insurance policies sold through the exchanges. Nelson has publicly threatened to oppose the legislation if it does not include protections against public funding of abortion-related services similar to what were included in the Stupak amendment to the House-passed legislation, but those provisions are vehemently opposed by many liberal senators. Nelson has also expressed concerns about the bill’s cost, the CLASS Act, any public option language and the lack of available bill language to review. On the other end of the political spectrum, Independent Socialist Senator Bernard Sanders (VT), who caucuses with the Democrats, has also refused to commit to vote on the bill. Sanders was forced to withdraw his single-payer amendment to the original bill, H.R. 3590, this week after Senator Tom Coburn (R-OK) insisted the Senate clerk read the 767-page amendment for three hours on the floor, so that senators and the American people could understand what a single-payer system would entail. Since most variations of any type of government-run public plan option have been taken off the negotiating table, Sanders has refused to say if he will support a compromise Senate bill until he can review it and determine if it is strong enough for him.Beyond Sanders and Nelson, other moderate Democratic senators like Bayh (IN), Lincoln (AR), Webb (VA), Landrieu (LA), Specter (PA), as well Independent Joe Lieberman (CT), are not certainties either. Currently these senators seems to be on board, but since no senator has seen a completed new bill yet, and since a final cost analysis has yet to be made public, it is uncertain whether or not these moderates will have additional concerns once an actual draft and/or cost analysis is released. We've certainly seen that before in this process!Reid is also experiencing difficulty from key party leaders outside of the Senate. Former Vermont Governor and Democratic National Committee Chair Howard Dean came out in opposition to the Senate bill in a column in the Washington Post on Wednesday because it does not contain enough government intervention. The Service Employees International Union and the AFL-CIO are also publicly attacking the bill, particularly relative to its financing provisions which would levy a 40% excise tax on the highest cost health plans, like those that unions offer to their members. In addition, a number of more liberal House Democrats are voicing their displeasure about the potential compromises being considered by the Senate that they feel water down the bill, and have threatened to derail the legislation should it get to a conference committee.NAHU continues to oppose the Senate legislation in its current form, and we will continue to inform our membership of any breaking developments on the bill as they occur. Expect updated analysis from NAHU as soon as the revisions to the measure are released. In the meantime, we encourage you to contact your senators to oppose this legislation, particularly those of you represented by moderate Democrats who have expressed serious concerns about the cost of this measure and its potential to increase premium costs on the American people. We also encourage you to contact your senators about these specific provisions in the bill. [back to the top]

HHS awards $72M to nine states for gains in children's health insurance.

Liberals express outrage over White House tactics in healthcare debate.

Obama "cautiously optimistic" about prospects for health reform.

Senate Democrats appear close to dropping Medicare expansion.

Reid seeks to line up 60 votes for Senate health bill.

	Health Care Reform in the Senate — What in the World Is Going On?
It’s been a whirlwind week in the U.S. Senate regarding health reform developments. On Tuesday, Senate Majority Leader Harry Reid (D-NV) announced that he, along with five more liberal senators (Schumer-NY, Feingold-WI, Rockefeller-WV, Harkin-IA) and five moderate Democrats (Ben Nelson-NE, Carper-DE, Pryor-AR, Landrieu-LA and Lincoln-AR) had come to terms on a plan that would replace the public option in the current Senate bill with a new national insurance plan offered by private insurers, and provide a chance for older Americans to buy in to Medicare. Much like last month when Reid announced he and key moderates and progressives had come to terms on the inclusion of a public option with a state opt-out provision (an idea that is now apparently off the table), no real details or legislative language on the “deal” have been released–even to other senators. However, the group did agree to send information over to the Congressional Budget Office for scoring–a process that is expected to take the weekend and perhaps be completed by next Monday or Tuesday. Reid has told reporters and his caucus that the final details of the proposal, which could be offered as a “Manager’s Amendment” to H.R. 3590 as early as the middle of next week (depending on its cost) will not be released until the CBO has completed its work. Some of the consensus details that are known include: The creation of a national insurance plan to be administered by the federal Office of Personnel Management, which is the same agency that oversees the Federal Employees Health Benefits Program (FEHBP). Like FEHBP (which is really just the nation’s largest employer-sponsored health plan offering), the insurance options within the new plan would be offered by private carriers. And while the new plan would have many similarities to FEHBP, it would not be an opening of the FEHBP pool to the general public. A trigger option for a government-run plan if private carriers fail to participate in the new program. Expanded access to Medicare allowing people age 55 to 64 to purchase coverage in the program. Details of who would be eligible within that age group are unclear, as is if the rating and pricing for this population would be separate from the rest of the Medicare population. Some of the Senate negotiators have indicated that the buy-in period could start in 2011 (three years earlier than most other market reforms and the exchanges would take effect), but that no subsidies would be available for such coverage until 2014.  A medical loss ratio requirement for insurers to spend at least 90% of premium money on medical care, rather than on administrative costs or profits. It is unclear at this time if this requirement would apply to just the new national insurance program or to other markets/the exchanges as well. A reauthorization of the Children’s Health Insurance Program, which was set to expire on October 1, 2013. It is unclear at this time how the program would be impacted, whether or not this population would eventually move to the exchange, as is proposed in H.R. 3590 and if the mandatory premium assistance provisions in H.R. 3590 (which NAHU strongly supports) will be impacted. While we are waiting for actual legislative details to emerge, NAHU is opposed to all of the components of the compromise deal in concept. A new national insurance option is both unnecessary and a new government expense, and we believe the other significant market reforms under consideration should be given a chance to work before any type of new government-run plan is considered. A buy-in to Medicare would create an enormous adverse selection problem for an already financially troubled program and it would further exacerbate the existing Medicare/private insurance cost-shift, which already costs privately insured American families almost $1800 a year. We believe that it could represent a gateway to the full government takeover of American health care. Furthermore, it is unnecessary, as the new market reforms and high-risk pool provisions in the current bill will provide immediate access to coverage to anyone in this population who does not have it currently.  Finally, the 90% MLR idea is completely unworkable and unprecedented—no state insurance market has anything remotely similar, and we have seen the negative impact in state markets that have tried to set MLR levels at lower levels than those proposed. It will result in higher premiums and the loss of necessary consumer services that are not considered direct medical care costs, like claims processing, fraud protections, disease management, and more, not to mention its potential impact on the role of health insurance agents and brokers and the education and service they provide to consumers.

Hospital, physician groups opposed to Senate Medicare provision.

Senate public option compromise buoys Democratic health reform supporters.

Senate Democrats discuss compromise alternative to public option.

State approves UnitedHealth acquisition of Health Net Connecticut's membership renewals.

Senate defeats GOP amendment to reverse Medicare cuts in healthcare bill.

AARP voices support for proposed Medicare cuts in Senate healthcare bill.

Sen. Coburn targets health reform bill's Medicare cuts.

Senate Democrats' coalition on health reform said to be fracturing.

HHS report enumerates benefits of healthcare reform.

The Los Angeles Times (11/17, Levey, Hamburger) reports that "Congressional Democrats' intensifying efforts to pay for their healthcare overhaul and provide more relief for consumers are threatening to unravel a White House deal with the pharmaceutical industry and turn one of Washington's most powerful lobbies against the legislation." Under a "White House deal struck in the summer, companies pledged to support an overhaul and provide limited discounts to Medicare patients in exchange for a promise that no other controls would be imposed on pharmaceutical prices." But now a "bipartisan group of senators" is considering opening "the door to lower-priced prescription drugs from other countries." Meanwhile, "other lawmakers want to speed the development of cheaper generic versions of biologic drugs."

        AARP report shows higher prices for brand-name drugs. CQ HealthBeat (11/17, subscription required) reports, "A study released Monday by the senior advocacy group AARP found that brand-name drug prices have climbed by 9.3 percent since October 2008, despite the economic downturn." According to the AARP Rx Watchdog Report (pdf), "average manufacturer price increases for brand name and specialty prescription drugs often used by Medicare beneficiaries shot ahead of price increases for other consumer goods in the past year." Meanwhile, "average prices for generic drugs decreased."

        AFP (11/17) also notes that price increase "was considerably greater than the average increase over the past seven years -- 5.8 to 8.3 percent a year -- even though the US economy has been in a dive during much of the past year." The data also showed that "drug prices as a whole, including low cost generics, rose 5.4 percent in the past 12 months."

        Rising drug prices seen as betrayal of cost savings promises. In an editorial, the San Jose Mercury News (11/17) calls the pharmaceutical industry "cunning," as "only weeks ago, President Barack Obama was hailing a White House deal with drugmakers to 'save' the nation $8 billion a year in prescription drug costs. Now it turns out that Big Pharma has been quietly hiking wholesale prices of prescription drugs." The President "should renew his push to give the federal government the ability to negotiate bulk purchases of prescription drugs," according to the News. "Drugmakers deserve a fair profit for their lifesaving products. But they shouldn't get away with hoodwinking the president and the American public."

The AP (11/16, Yen) reports, "The government paid more than $47 billion in questionable Medicare claims including medical treatment showing little relation to a patient's condition, wasting taxpayer dollars at a rate nearly three times the previous year," according to a "fiscal 2009 financial report." According to the AP, President Obama "is expected to announce new initiatives this coming week to help crack down on Medicare fraud, including a government-wide website aimed at providing a fuller account of healthcare spending and improper payments made by various agencies." Likewise, CMS "will launch a Web interactive next month that will allow users to track Medicare payment information by categories such as state, diagnosis and hospital."

        Letters show CMS ignored Medicare fraud warnings. The AP (11/14, Kennedy) reported that, according to letters provided to the AP by Sen. Charles Grassley's (R-IA) office, CMS "received roughly 30 warnings from inspectors over three years...but didn't respond to half of them, even after repeated letters." The agency "repeatedly ignored internal watchdog warnings about swindlers stealing millions of dollars by scamming several programs." HHS Secretary Kathleen Sebelius said the CMS "typically responds to fraud warnings promptly, and has investigated more than 300 since 2006. She was not satisfied that all fraud alerts were receiving sufficient responses and her office is implementing a new process for tracking the red flags." Sen. Grassley said CMS should "respond to future fraud warnings within two months and Sebelius agreed. After Grassley's letter, all of the warnings were investigated, according to Sebelius spokesman Nicholas Papas."

The New York Times (11/13, A19, Pear) reports Senate Majority Leader, Harry Reid "is considering a proposal to increase the Medicare payroll tax on high-income workers" to help offset healthcare reform costs, Senate aides said. Reid "is apparently considering an increase in the Medicare payroll tax rate for workers with incomes of more than $250,000 a year." The proposal "is part of a legislative package that Mr. Reid has put together in secrecy" and sent to the Congressional Budget Office for analysis. The Wall Street Journal (11/13, A4, Bendavid) says the Medicare tax proposal is gaining popularity in the Senate.

        Reid seen as negotiating reform's cost while raising numbers of insured. The Wall Street Journal (11/13, A4, Adamy) reports that the health reform bills approved by the Senate committees each would expand coverage to a different percentage of Americans. In combining the bills, Senate Majority Leader Harry Reid (D-NV) must expand coverage to the most people possible, while keeping the total cost of the bill around $900 billion. Currently, 83% of legal US residents have health insurance, a number which the Senate Finance Committee bill would raise to 94%. Notably, the House healthcare reform bill passed recently would raise insured levels to 96%.

        Health reform bills would cut HMO funds. The Miami Herald (11/13, Dorschner) reports, "At the moment, both House and Senate healthcare reform proposals are seeking to slash funds to the HMOs that have attracted...283,000...South Florida seniors because of rich benefit packages that can include free dental and many other perks." However, "the House bill, which has already passed, and the main Senate proposal, still in committee, offer widely different specifics for reducing benefits for South Florida's elderly." The House bill would cut "HMOs down to the same level as fee-for-service plans. Some areas could be extremely hard-hit by that provision -- since they are high far higher than the average of 14 percent. South Florida would hardly be touched, except for one small provision." The Senate Finance Committee's bill, meanwhile, "would force insurers into competitive bidding to get the Medicare HMO contract for an area."

The Washington Post (11/12, Thompson) reports, "The nation's Hispanic lawmakers and largest advocacy groups are scrambling to develop a strategy to counter what they see as efforts to shortchange immigrants in health bills on Capitol Hill. ... With the current bills excluding more than a million Hispanics -- mostly legal immigrants -- the debate runs into the issue of immigrants' rights." According to the Post, "Under the health bill passed in the House on Saturday, illegal immigrants would be allowed to buy insurance on a newly created exchange with their own money and without government subsidies," but "the bill expected in the Senate would bar illegal immigrants from the exchange altogether. In both the Senate and House, all legal immigrants are eligible for government subsidies to buy insurance on the exchange, but immigrants who have been in the country for less than five years would remain barred by existing law from enrolling in Medicaid and Medicare."

        USA Today debates including undocumented immigrants in health overhaul. USA Today (11/12) editorializes that uninsured, undocumented immigrants "will continue to get sick" and continue to receive hospital and clinic care -- "both of which are supported directly or indirectly by taxpayers, the insured population, or both." Hence, it is illogical to exclude them when doing so could help "defray the costs" of insurance premiums and taxes. Moreover, data from the Migration Policy Institute show that "of the estimated 12 million unauthorized people in this country, about 3.7 million have insurance through an employer"; approximately 7 million are uninsured; and about 362,000 buy individual insurance. "Only the last group, plus the small segment of uninsured who have the means to buy insurance, would be" affected by health reform.

        In an "Opposing View" column in USA Today (11/12), Dan Stein, president of the Federation for American Immigration Reform, argues that extending insurance to unauthorized immigrants would make healthcare "even more expensive." According to Stein, "uncompensated care for illegal aliens already costs taxpayers $11 billion" annually. He cites a CBO analysis, which concluded that "expanded utilization" often leads to higher medical spending; and adds that greater utilization by undocumented immigrants would also "impact healthcare quality," by increasing physician wait times and reducing "access to services." Stein also contends that allowing unauthorized immigrants to purchase insurance under exchanges would create a "powerful magnet" for increased "illegal immigration."

The AP (11/11, Espo) reports that former President Bill Clinton "urged Senate Democrats on Tuesday to pass healthcare legislation by year's end, pointedly telling skittish lawmakers that an imperfect bill is preferable to another failure like the one he and the party endured in 1994." After the caucus meeting, Clinton said, "It's not important to be perfect here. It's important to act, to move, to start the ball rolling." The AP adds that Clinton "made an unusual visit to the party's weekly closed-door caucus meeting at the invitation of Majority Leader Harry Reid (D-NV) who has said he hopes the Senate can vote on a bill before the year is out."

        ABC World News (11/10, story 5, 0:15, Gibson) reported Clinton "called the bill an economic imperative. He warned Senators there will always be unintended consequences for whatever they do, but the worst thing to do, he said, is nothing." The New York Times (11/11, A22, Herszenhorn) notes that Clinton's "visit that seemed intended especially to encourage centrist Democrats who have yet to commit their support, including Senator Blanche Lincoln of Arkansas, Mr. Clinton's native state."

        McClatchy (11/11, Lightman) reports that Clinton urged the Senate Democrats, "Don't get too stubborn or demanding as you consider different pieces of the vast bill...just pass something." Clinton's "pitch came as" Majority Leader Reid "said he hoped that the full Senate could begin considering a healthcare plan next week. Reid faces enormous hurdles," and Clinton's "appearance Tuesday didn't appear to sway anyone."

        The Hill (11/11, Rushing) reports that Democrats "say Clinton explained his missteps during the 1993 debate, avoided specifics such as urging a public option plan and zeroed in on the need for quick action." Clinton also "was frank about his failure to pass healthcare during his presidency, added a third senator. Specifically, Clinton said he did not adequately explain to the public the impact of Senate filibusters and the need for reform." The Wall Street Journal (11/11, A4, Bendavid, Adamy, subscription required) also covers the story.

        Kennedy's long term insurance proposal could be sticking point. The Washington Times (11/11, Haberkorn) reports an insurance plan "championed by Sen. Edward M. Kennedy that would help elderly or disabled people avoid nursing homes ironically adds yet another sticking point to the comprehensive healthcare reform plans for which the Massachusetts Democrat fought through much of his career." The Community Living Services and Support (CLASS) Act "is designed to help those who need assistance with basic daily tasks pay for in-home assistance. But moderate Democrats and Republicans worry about the plan's impact on the deficit and the potential for saddling the federal government with the responsibility of another insurance program."

        Reid expects to finish healthcare reform before Christmas. The New York Times (11/11, A22, Herszenhorn) reports Senate Majority Leader Harry Reid (D-NV) "said Tuesday that he expected to bring major healthcare legislation to the floor next week and to complete work on the bill before Christmas," but "other Democratic leaders said it was unlikely that a bill could reach President Obama's desk by year's end." In a "first procedural step toward Senate debate, Mr. Reid on Tuesday night moved to put the House bill on the Senator calendar, from which he could call it up any time after Tuesday." Aides "said there was still much uncertainty, and Senate Democrats have repeatedly missed self-imposed deadlines on the health bill."

        Senate bill said to be preferable to House measure. In his New York Times (11/11, B1) column, David Leonhardt writes, "Making the medical system more efficient is, in short, about saving lives and giving Americans a long overdue raise. It is arguably the single most important step that the federal government could take to improve people's lives. And the bill that the House of Representatives passed last weekend simply does not get it done." The House bill "falls far short when compared with a bill that passed the Senate Finance Committee last month. It also fails to live up to Mr. Obama's campaign proposals and recent speeches."

The House passed H.R. 3962, the Affordable Health Care for America Act, by a 220-215 vote at 11:16 p.m. Saturday evening. Rep. Joseph Cao (LA) was the lone Republican to join 219 Democrats in supporting the bill, while 39 Democrats joined 176 Republicans in opposing it. About an hour earlier, the Republican alternative plan sponsored by Minority Leader John Boehner (R-OH) was rejected on a vote of 258-176, completely along party lines with the exception of GOP Rep. Timothy Johnson's (IL) vote against his party's measure. An amendment offered by Rep. Bart Stupak (D-MI) limiting abortion coverage in insurance policies, seen as crucial to getting anti-abortion Democrats to vote for the final measure, passed 240-194, with Republican Rep. John Shadegg (AZ) voting present. On that vote, 176 Republicans and 64 Democrats voted yea, while 194 Democrats voted nay.

        The AP (11/8, Espo) reported that the "Democratic-controlled House narrowly passed landmark healthcare legislation," against "nearly unanimous" Republican opposition. The vote "cleared the way for the Senate to begin a long-delayed debate on the issue that has come to overshadow all others in Congress." According to the AP, a "triumphant Speaker Nancy Pelosi (D-CA) likened the legislation to the passage of Social Security in 1935 and Medicare 30 years later -- and Obama issued a statement saying, 'I look forward to signing it into law by the end of the year.'"

        In a front-page story, the Washington Post (11/8, A1, Montgomery, Murray) added that "Democrats closed ranks" on the vote "after months of acrimonious partisanship." The Post also noted Rep. Cao's "surprise" vote, saying Cao, who represents "the Democratic-leaning district of New Orleans," had been "the target of a last-minute White House lobbying campaign."

        The Los Angeles Times (11/8) reported, "After a day of testy, sometimes repetitive debate," the House passed "a landmark healthcare bill that would create a new role for the federal government in supplying insurance for almost all Americans." The New York Times (11/8, A1, Hulse, Pear) reported in a front-page story that Republicans "were united in their withering criticism of the proposal" throughout the daylong debate, portraying it "as a government takeover of medical care that would damage a struggling economy, lead to job loss and result in the rationing of healthcare." Bloomberg News (11/7, Jensen, Rowley), McClatchy (11/8, Lightman), the San Francisco Chronicle (11/8, Lochhead), the Washington Times (11/8, Haberkorn, Miller), The Hill (11/8, Soraghan, Allen), and AFP (11/8) also reported on the vote.

        Major hurdles said to remain on path of healthcare reform drive. Media reports last night and this morning cast Saturday night's House vote on healthcare reform as a key step toward enactment of healthcare reform legislation. Analysts, however, say significant challenges remain as the reform push moves to the Senate. The AP (11/9, Alonso-Zaldivar), for example, reports that "the glow from a healthcare triumph faded quickly for President Barack Obama on Sunday as Democrats realized the bill they fought so hard to pass in the House has nowhere to go in the Senate." The Senate "won't run with" the House bill, because "the government health insurance plan included in the House bill is unacceptable to a few Democratic moderates who hold the balance of power in the Senate." AFP (11/9, Knox) notes that GOP Sen. Lindsey Graham (SC) said Sunday, "The House bill is dead on arrival in the Senate."

        NBC Nightly News (11/8, lead story, 3:30, Holt) referred to the House vote as "a critical milestone," but cautioned that "the battle is far from over." Obama was shown saying, "Given the heated rhetoric surrounding this legislation, I know this was a courageous vote." NBC went on to point out that "though the President cleared a big hurdle last night, an even bigger one looms in the Senate where there's disagreement on public option and how to pay for all it."

        In a front-page story, the New York Times (11/9, A1, Stolberg) describes the White House as increasingly "concerned that the Congressional timetable for passing a healthcare overhaul could slip into next year," and as result "stepping up pressure on the Senate for quick action." The Times adds that "the slim margin in the House...suggests even greater challenges in the Senate, where the majority leader, Harry Reid of Nevada, is struggling to hold on to all 58 Democrats and two independents in his caucus." The Los Angeles Times (11/9, Hook), McClatchy (11/9, Lightman), the Wall Street Journal (11/9, Adamy, Bendavid, subscription required), The Hill (11/9, Yager), USA Today (11/9, Fritze), the Washington Times (11/9, Lengell), and the Washington Post (11/9, Shear) also cover the story.

In what media reports termed a surprise appearance, President Obama visited the White House briefing room to tout the endorsements of AARP and the American Medical Association of the House Democrats' healthcare bill. The visit was noted on each of the networks last night, albeit in stories that were largely devoted to the raucous conservative protests at the Capitol. ABC World News (11/5, story 6, 2:45, Karl) reported, "President Obama touted two big endorsements of the healthcare bill, from the AARP and the American Medical Association." President Obama said, "I urge Congress to listen to AARP, listen to the AMA, and pass this reform for hundreds of millions of Americans."

        The CBS Evening News (11/5, story 4, 2:15, Reid) reported, "The White House is worried enough about the vote that the President made an unannounced appearance today to tout endorsements of the bill by the senior's lobby, AARP, and by the AMA, the nation's largest organization of doctors." NBC Nightly News (11/5, story 8, 2:25, O'Donnell) reported, "AARP, the lobby group for Americans over 50, signed on and showed off boxes of supportive petitions."

        The Washington Times (11/6, Ward) reports that Obama "urged Congress to heed new endorsements of the House healthcare bill by the AARP and the American Medical Association and pass the bill on Saturday, in a rare appearance at the White House briefing." The New York Times (11/6, A18, Hulse, Herszenhorn) reports Obama "noted that the endorsements covered viewpoints from two distinct sides of the debate: elderly Americans fearful that a healthcare overhaul could cut into Medicare, and the nation's doctors and medical professionals." Obama said, "We are closer to passing this reform than ever before. And now that the doctors and medical professionals of America are standing with us, now that the organizations charged with looking out for the interests of seniors are standing with us, we are even closer."

        The Chicago Tribune (11/6, Levey) reports that AARP Executive Vice President Nancy LeaMond "said the group saw the House Democratic bill as the most promising proposal." The AARP's backing "counters mounting opposition among employer groups who are stepping up their advertising campaign against the House Democratic bill." The Wall Street Journal (11/6, A8, Bendavid, Adamy, subscription required) also covers the story, noting that the AMA endorsement was not without qualifications.

        The Los Angeles Times (11/6, Muskal) points out that "Obama especially lauded AARP, saying the organization's nonpartisan support was important to reassure seniors worried about losing Medicare benefits if the health plan is signed. Critics contend that as part of the healthcare overhaul package, Medicare would be cut, but proponents say the decrease is just a cost savings and would not affect benefits."

        The Christian Science Monitor (11/6), The Hill (11/6, Young), Roll Call (11/6, Koffler, subscription required), the AP (11/6), USA Today (11/6, Kiely), Politico (11/6, Brown), CNN (11/6), Bloomberg News (11/6, Rowley, Dodge) CongressDaily (11/6, Edney, subscription required), and the Financial Times (11/6, Fifield, subscription required) also cover the story.

        Bloomberg News (11/4, Rowley) reports, "Undeterred by Republican election triumphs in Virginia and New Jersey," House Democratic leaders set a "vote as early as Saturday on the most sweeping overhaul of healthcare policy in four decades." Party leaders "signaled they're ready for the House to begin debating the legislation and vote on its final passage by filing a 42-page amendment that made last-minute changes to the bill." The Washington Post (11/5, A4, Montgomery) reports that Democratic leaders "were still locking down support Wednesday among a handful of holdouts, with the biggest bloc dissatisfied with the measure's handling of abortion." Many Democrats "said passing the measure has become even more crucial politically after Republicans won governor's races in Virginia and New Jersey this week."

        The New York Times (11/5, A22, Pear, Herszenhorn) reports that House Democratic leaders "struggled Wednesday to strike a deal that would restrict the use of federal money to pay for abortions under sweeping healthcare legislation headed for debate on the House floor this week. But the proposed compromise satisfied neither supporters nor opponents of abortion rights." The Wall Street Journal (11/5, A6, Adamy, Vaughan, subscription required) also notes the GOP gubernatorial wins increased some House Democrats' concerns about voting for the bill, and Democratic leaders did not appear to have 218 votes on Wednesday.

        The Washington Times (11/5, Haberkorn) reports leaders "and at least a handful of pro-life Democrats appear to be close to a deal on language that would assure them that taxpayers would not have to pay for abortions, which is the most significant hurdle to final passage." There are "expected to be conservative Democrats who vote against the bill over worry that it adds to the debt, allows for taxpayer-funded abortion or provides illegal immigrants access to the insurance exchanges."

        The Hill (11/5, Soraghan, Hooper) reports that on Wednesday, lawmakers "started clarifying their positions. Two committee chairmen -- Armed Services Chairman Ike Skelton (D-MO) and Science and Technology Chairman Bart Gordon (D-TN) -- announced they will oppose the bill, and two freshmen who voted against the bill in committee switched to support it." Republicans will "get a chance to offer their substitute, but it appears unlikely that Democrats will get the up-or-down votes many of them want for a Medicare-based public option, a single-payer system, or assurance that no tax dollars will fund abortions."

        Roll Call (11/5, Dennis, subscription required) reports Rules Chairwoman Louise Slaughter (D-NY) "clarified later that final votes could begin around 6 p.m. but may not necessarily be finished by then. She also said there would be five hours of debate on the measure." Slaughter, the "co-chairwoman of the Pro-Choice Caucus, said the rule for the bill would add language proposed by Rep. Brad Ellsworth (D-IN) aimed at beefing up a prohibition on federal funding for abortions."

        AARP to endorse House healthcare bill. The AP (11/5, Werner, Alonso-Zaldivar) reports that in a "coup for House Democrats, AARP will endorse sweeping healthcare overhaul legislation headed for a history-making floor vote, officials told The Associated Press on Wednesday." An announcement "from the 40-million member group is expected Thursday, said officials with knowledge of the group's decision." But "backing the 10-year, $1.2 trillion House bill is a tricky move for AARP. Many retirees are concerned about cuts in Medicare payments to medical providers, which will be used to finance an expansion of health insurance coverage to millions of working families who now lack it."

        Up to 30 Blue Dogs could vote against bill. The Hill (11/5, Allen) reports that many of the 52-member Blue Dog Democratic caucus met with Douglas Elmend