Medical loss ratios (MLRs), those metrics used by insurance companies to gauge medical costs as a percentage revenues from premiums, will be attracting some attention this week thanks to a provision in the recently passed reform bill that will allow a third party to be instrumental in determining how much insurers can ultimately spend on those admin costs — influencing profits in the process. That third party — the National Assn. of Insurance Commissioners (NAIC) — could have far-reaching authority in determining Insurance’s role in final implementation of the healthcare reform law come 2014.
HHS Sec’y Kathleen Sebelius could be at the mercy of the NAIC with respect to these new rules, creating disquietude among top Dems who favored reform with as little corporate influence as possible. Although the federal government has final say over where MLRs begin and end, states’ insurance commissioners actions will give lobbyists and insurers alike time to affect ultimate MLR regulations under reform law. Expect a mildly bumpy road at the hands of Insurance — which desires as little distance as possible between administrative quotas and earnings. | LINK
Healthcare reform begets the need for laws to ensure the intent of reform. This has never been truer than on the eve of implementation of the major role individual states’ insurance commissions in keeping Insurance accountable. As coverage begins to expand to include demographics never before considered by insurers, many states have no mechanism to face enforcements of the central tenets of the reform law. Most outstanding, states will now have the ability to review insurance premium hikes, for example — the number one stealth maneuver of insurers of late to guarantee profitability.
If states are not able to carry out insurance compliance in accordance with with reform law, the feds step in to guarantee standards. Problem is, as intricate as the central aspects of reform are, the provisions in many states’ laws are just as myriad.
Some state regulators said they would ask state legislators to expand their authority by putting the federal standards into state law next year. Others said they would rely on their powers of persuasion, the good will of insurers or general state laws that ban unfair or deceptive trade practices.
Despite assurances to states by the federal government that, ultimately, such oversight is well within their scope, gaps in executive powers vary widely; these inconsistencies place yet another wrinkle on the rapid rollout of reform provisions the Obama administration hopes will result in a smooth transition between the parties that will continue to drive healthcare in this country (insurers) and the ultimate functional unit of healthcare commerce (the physician-patient partnership). | LINK
HIV is once again in the news lately — first with news of a new strategy to combat the infection with enhanced vaccination research, the commitment of HHS in reallocating funds for HIV research on a global scale, and now the creation of the first “national HIV strategy” by a sitting president.
In the report, the administration calls for steps to reduce the annual number of new H.I.V. infections by 25 percent within five years. [..] [T]he administration will redirect money to areas with the greatest need and population groups at greatest risk, including gay and bisexual men and African-Americans.
Obviously, simple “redirection” of federal funds for medications and treatments of HIV/AIDS is not the final mechanism of care access for the millions of patients afflicted with this chronic disease; it is unclear where these funds will provide an absolute siphon for spending. Kudos to the administration in its efforts to reacquaint an entirely new generation of Americans on the urgency of this disease, but it’s got a long way to go to reduce sharply its transmission rates and healthcare policy atrophy in this area. | LINK
HIT alert: The HHS is proposing new privacy guidelines designed to protect consumers’ (patients) health information when that health information is handled by third parties. The proposed rules come as part of the Health Information Technology for Economic and Clinical Health (HITECH) Act — enacted as part of the American Recovery and Reinvestment Act of 2009 under Obama. The ubiquitous HIPPA legislation signed into law in 1996 is essentially strengthened, and hopefully clarified, as finer points in patients’ health records in the past have been exploited and mismanaged under perverse interpretations of that law by third party entities — many of which are payers.
Among the expansion of HIPPA parameters expanded by these proposals by HHS:
- setting new limitations on the use and disclosure of protected health information for marketing and fundraising
- prohibiting the sale of protected health information without patient authorization
- expanding individuals’ rights to access their information and to restrict certain types of disclosures of protected health information to health plans
It only follows that if consumers have and expect access to their personal health information in whatever form desired, then they have to be encouraged to expect safety mechanisms are in place to protect the delivery of and accessibility to that information. These proposals are to go into effect later this year. | LINK to HHS’ privacy site | LINK to 60-day public comment site
Have you been rejected for insurance coverage because of a pre-existing condition? Have you been without coverage for at least 6 months? Finally, are you a legal U.S. resident? If you hit the trifecta, you qualify for the HHS’s Pre-existing Condition Insurance Plan. Kathleen Sebelius makes the announcement today.
Today, the Pre-Existing Condition Insurance Plan gives them a new option — the same insurance coverage as a healthy individual if they’ve been uninsured for at least six months because of a medical condition. This program will provide people the help they need as the nation transitions to a more competitive and fair marketplace in 2014.
The plan covers primary and specialty care and begins today in states where HHS implements the program. States with their own programs will roll out the initiative later in the summer.[] One’s income is not a consideration. | LINK
Kathleen Sebelius is nicely settling into her role as the reform effort’s PR point gal. She wasted no time in blasting a second California insurer of unfairly hiking premiums — on the basis of “fuzzy math”.
I applaud California for its decision to shine more light on skyrocketing insurance rates and demand more accountability after uncovering that a second insurer used faulty math to try to justify exorbitant health insurance premium increases. As President Obama has said, Americans across the country have been at the mercy of insurers for far too long when it comes to premiums and prices.
LINK
UPDATE: Although the insurance companies say that simple “human error” may have accounted for lapses in coverage and premium mechanisms among Aetna (the insurer to which Sebelius refers), the bigger issue afoot is the pressure the federal government is placing on third parties to comply strongly with reform as it relates to the individual policyholder and the small business. Could rate regulations on a larger scale be far behind in the offing? | LINK
It apparently takes a financial stimulus of a different kind to jump start states into an investigative mood. Just days after the announcement of the availability of funds[] for oversight of insurance rate hikes by the feds for states’ use, Pennsylvania’s governor announces the scrutiny of nine insurers there.
The insurance rate review process is milking opportunity in the window prior to the reform law’s provision to make underwriting as a mechanism for premium rate setting illegal as it pertains to medical history (existence of prohibitive pre-existing conditions). In 2014, once the law makes this provision ironclad, insurers will have to resort to other mechanisms to underwrite policy terms — such as community-based ratings. As things stand right now, small insurers in very competitive markets are keen to medical history underwriting to gain share over major players — such as the regional Blues — which employ tested methods in markets where patient demographics encourage fiscally advantageous claims patterns. | LINK
HHS Secretary Sebelius is warning insurers’ Medicare Advantage contracts not to increase premium rates for their beneficiaries. This is ahead of insurers’ submissions of plans to the feds yesterday. The memo also comes on the heels of many Congressional Democrats asking the government to evaluate thoroughly the cost of those plans.
The issue of overpayments to insurers by the government is of prime concern to Sebelius and the White House. But, not according to the AHIP — which is lobbying for increased rates at which the feds pay them. The AHIP says that stagnant rate schedules from 2010-2011 and pending cuts to the insurers who contract with CMS based upon the new reform law essentially forces them to push for greater payments. It’s a classic let-the-market-run-itself scenario versus the continued fleecing of the largest subsidized healthcare coverage program in the country; and there are probably elements of both at play at any given time. | LINK
Is the President waging an apparent one-man war as he still continues to gauge support for his nascent reform overhaul? As recently as a couple of days ago — as part of his weekly address — he renewed attacks on Insurance, noting that “For too long, we have been held hostage to an insurance industry that jacks up premiums and drops coverage as they please. But those days are finally coming to an end.”
Naturally, this message was directed to WellPoint, the California insurer which came under fire during the latter stages of the reform bill fight in Congress; it was accused of raising premiums to astronomical levels, establishing a fighting target and kicking off a newfound confidence in the President in getting his plan passed into law.
WellPoint’s CEO specifically responded to Obama and essentially told him to stop the attacks.
WellPoint Chief Executive Angela Braly fired back. In a letter Sunday addressed directly to Obama, she noted that policy changes were underway nationwide, and she called on him to stop his attacks on the industry. It will take cooperation between the industry and government to implement the new healthcare reform law, she said.
WellPoint also backed down and pledged its own internal investigations when recently accused of rescinding coverage to previously covered policyholders obtaining breast cancer treatments. HHS Secretary Sebelius and, now, Senator Diane Feinstein (D-CA), are urging for more discussions with the CEO and others to address this issue. Of course, this all begs the question — as insurance companies are supposed to be working with the President before the law requires them to specifically do so — can’t they all just get along? | LINK
California Governor Schwarzenegger is throwing his support behind healthcare reform on a national scale. Could his newfound support of Obamacare have something to do with the almost $20B deficit in his state’s coffers? At this point, it’s probably not too terribly important, as HHS Sec’y Sebelius is no doubt gratified at the result. Fears of the cost of the overhaul on California’s end, while significant, will have to be hammered out over the next few months as the state must work with the federal government to find ways of subsidizing care for its high-risk uninsured — a task too daunting for a state encroaching on the 40M mark [PDF] with respect to its population to do on its own.
On the other hand, here in Minnesota, Governor Tim Pawlenty gave Sebelius the cold shoulder — stating in a memo that Minnesota will not participate in such plans within the national overhaul. Citing the fact that this state already has such a provision to provide high-risk pool care, Pawlenty is refusing federal help in cost-sharing in order to participate in this portion of the health reform law. | LINK
Last year this time, Kathleen Sebelius was appointed by President Obama as his Secretary of Health & Human Services. 
While the former Kansas governor’s style was been unassuming yet administratively effective, her appointment has not been without its challenges. In the midst of the H1N1 virus crisis her ascension came during increased scrutiny of Obama’s ability to apply a sort of brain trust to his cabinet’s inner workings. Doctor Pundit noted an op-ed in the NYT a year ago which conveyed this issue.
So, how will the Obama administration be judged on his response to the 2009 swine flu crisis? Without stable CDC and HHS appointments, it will be an interesting case study in the bridge between his First 100 Days and the meat of his remaining (first) term.
Stunned by the embarrassment over the presumptive and “inevitable” appointment of his initial choice to that position, former South Dakota senator, Tom Daschle; Obama’s approach to filling the position benefited him on a couple of fronts: the choice of Sebelius would be a prudent one, based upon leadership skill rather than implied cronyism, and Sebelius’s appointment was a fulfillment of the career boost she needed — as her inclusion on Obama’s short list for VP fell to former Delaware Senator Joe Biden.
If anything, Sebelius has been a fairly effective steward of Obama’s administrative goals with respect to healthcare reform. Most recently, she has had to tangle with Big Insurance in the aftermath of the reform bill’s passage — asking them to explain massive premium hikes in the wake of beneficiaries’ plummeting access to care amid lower wages and layoffs. Evolving in her role as government spokeswoman for calm during the H1N1 crisis to her current perception as Obama’s domestic healthcare reform ambassador, she continues to meet those challenges head-on.
There’s some good news/bad news on the immediate post-reform bill economics front. HHS and Kathleen Sebelius are releasing a report that seems to contradict the CBO’s analysis on the long-term economic viability of the Obama reform bill. In adding over 30 million to the coverage rolls, the new Affordable Care Act may not control costs as keenly projected by the Democrats — raising healthcare spending by 1 percent over the next 10 years.
The report is actually the product of CMS actuaries; it suggests a solvency of Medicare up until, at least, 2019 — twelve years longer than originally anticipated. However, the real issue is looming cuts to Medicare and their effect on acute hospitals’ operations and revenue — not to mention the ongoing debate on how to address those cuts to physicians in the short term. | LINK
Thursday § February 18, 2010
Hot on the heels of Insurance hiking premiums among policyholders in California comes a warning of sorts from HHS Sec’y Sebelius: California is not immune. In fact, the spectre of recent burgeoning rates seen at the hands of a Blue Cross/Shield plan subsidiary in the Golden Gate State is only the tip of a rapidly moving iceberg in a healthcare marketplace within which Big Insurance says it must remain competitive.
RI, CT, and OR were three other states cited in Sebelius’s remarks. As healthcare reform moves at a more restrained pace in the run-up to an eventual bill, there is no denying the market is seeing the effects of an economy far from recovery. As millions jettison more expensive coverage for the bare minimum, costs for care delivery are beginning to reflect payouts to plans for the sicker and older portion of the risk pools, creating even more urgency for Obama and company for reform as he has seemingly moved on to his other top domestic priority — jobs. | LINK
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