By Irene Card, NorthJersey.com -- Continuing on our them of long term care insurance, today's article will explain to you just how long term care policies are structured. Long term care insurance is designed to pay you a daily or monthly benefit when you need substantial assistance for 90 days or more with two out of six activities of daily living: Eating, bathing, dressing, toileting, transferring, or continence.
Or, if you have a cognitive impairment such as Alzheimer's Disease or senile dementia, you will go into claim and be eligible to receive benefits. Most policies will pay wherever you hang your hat – at home, in an assisted living facility, adult day care center, nursing home (all three levels of care, i.e., skilled, intermediate or custodial). Most people buy long-term care insurance to protect their assets. When you are looking at $300 a day for care, it doesn't take long to spend down your hard-earned savings.
Can you imagine yourself writing out a check for $9,000 EVERY month? How long do you think you will be able to do that before you run out of money? Other reasons people buy long term care insurance are because they don't want to be a burden on their children or other family members, they want to remain independent and choose where they get the care they need.
Most folks want to remain at home for as long as possible; long term care insurance will help pay for the care you need at home. You purchase long term care insurance from a reputable insurance agent who represents financially strong insurance companies.
You want to purchase a policy from an insurance company who consistently gets high financial ratings from independent rating firms such as Standard & Poors, A.M. Best, etc. You also want to make sure you are comfortable with the insurance agent selling you the plan.
Ideally, you should be able to develop a "reasonably high trust level with the person who presents a coverage plan to you," according to the Health Insurance Association of America (HIAA). Your agent will make suggestions as to combinations of benefits that he/she feels may best meet your needs but you should feel very comfortable to ask to see other combinations of benefits as well.
Your life and or health insurance agent may be able to sell you long term care insurance. I say, "may" because although their state insurance license qualifies them to sell long term care, not all life and health insurance agents sell this product. If you do not have an agent, you are certainly welcome to call our office or look in the yellow pages under "insurance."
Long term care insurance is custom designed to meet your particular needs. You choose how much money you want the policy to pay you. Do you want $200 daily, $300? The higher the daily benefit, the higher the cost.
Currently, $250 seems to be the average that people purchase in this part of the country. After deciding how much you want the policy to pay, you choose an elimination period. I don't like that word.
Think of it as a deductible. How many days will you be paying benefits out of your pocket before the policy kicks in? 20 days, 60 days, 90 days? Some companies will begin to pay benefits on the very first day of care if you receive that care at home and if you use their care coordinator.
You get credit for all of these days so that if you choose a 90 day waiting period, for each day you are getting care at home, you get the credit toward the 90 days. If you are home for three or four months and get transferred to a nursing home, or assisted living facility, the policy pays immediately because you used up the waiting period while receiving benefits at home.
Your next decision is to determine how long the policy will pay benefits. Standard choices are two years, three years, five years, six years, 10 years or unlimited. Again, choosing a policy with unlimited benefits over a policy with a three year pay out period will increase the premium. What is best for you? What is your family history?
While statistics tell us that the average nursing home stay is 2.76 years, you also need to look at your family history to see the other side of the story. Certainly if we had a crystal ball and knew what the end of our life looked like, we would know exactly whether or not we even needed a long term care policy, and if so for how long. That not being an option for us, we must make informed decisions given the information at hand.
For our clients who are purchasing long term care policies when they are in their 50s, unlimited lifetime benefits are often appropriate. For individuals wishing to purchase long term care that are in their 60s and 70s, a 3 or 5 year benefit may be fine. Now you have to look at inflation protection. If you purchase a policy today that offers a daily benefit of $250, and you don't start collecting on the policy for 15 years, will $250 still be adequate? Not at all likely. Therefore, the final component to a good long term care policy is the handling of inflation.
We are seeing more and more combinations of inflation protection but the top three still are 5 percent simple inflation protection which means every year your $250 daily benefit will increase by $12.50. Or, you may choose 5 percent compounded which means every year your daily benefit goes up by 5 percent compounded.
At the end of 20 years, the $250 should be worth approximately $632 per day based on a 5 percent compounded inflation rider. The third option is to choose no inflation protection whatsoever. People that are in their mid to late 70s will frequently opt for this benefit but they will start out by choosing a higher daily benefit, building inflation protection into the policy from the very start.
The premium that you pay is based on the inflation protection option that you choose. If you choose no inflation, some companies will allow you to increase the daily benefit every year or two, based on the current inflation rate. The premium for this additional benefit will be based on your attained age.
You can see that a substantial amount of study is needed to determine which combination of benefits is best for you. Your agent can be very helpful to you with making the right choices. In addition to the features I listed above, many companies offer other riders that can be added (and sometimes they are automatically included) such as a "survivorship benefit" which means if husband and wife each pay their premiums for 10 years and there are no claims in the 10 year period, they continue to pay their premiums but when one of them dies, the policy is paid in full for life for the surviving spouse. This is a nice benefit. Another option might be to choose a "shared benefit" whereby if one of the partners uses up all of their benefits, they can use benefits from their spouse's policy. There are a lot of exciting choices to make with long term care insurance. The government has made it very clear to us that they have no intention of paying for our care so we must take this very seriously.
Monday, February 14, 2011
What is long term care insurance?
What is long term care insurance?
By Irene Card, NorthJersey.com -- Continuing on our them of long term care insurance, today's article will explain to you just how long term care policies are structured. Long term care insurance is designed to pay you a daily or monthly benefit when you need substantial assistance for 90 days or more with two out of six activities of daily living: Eating, bathing, dressing, toileting, transferring, or continence.
Or, if you have a cognitive impairment such as Alzheimer's Disease or senile dementia, you will go into claim and be eligible to receive benefits. Most policies will pay wherever you hang your hat – at home, in an assisted living facility, adult day care center, nursing home (all three levels of care, i.e., skilled, intermediate or custodial). Most people buy long-term care insurance to protect their assets. When you are looking at $300 a day for care, it doesn't take long to spend down your hard-earned savings.
Can you imagine yourself writing out a check for $9,000 EVERY month? How long do you think you will be able to do that before you run out of money? Other reasons people buy long term care insurance are because they don't want to be a burden on their children or other family members, they want to remain independent and choose where they get the care they need.
Most folks want to remain at home for as long as possible; long term care insurance will help pay for the care you need at home. You purchase long term care insurance from a reputable insurance agent who represents financially strong insurance companies.
You want to purchase a policy from an insurance company who consistently gets high financial ratings from independent rating firms such as Standard & Poors, A.M. Best, etc. You also want to make sure you are comfortable with the insurance agent selling you the plan.
Ideally, you should be able to develop a "reasonably high trust level with the person who presents a coverage plan to you," according to the Health Insurance Association of America (HIAA). Your agent will make suggestions as to combinations of benefits that he/she feels may best meet your needs but you should feel very comfortable to ask to see other combinations of benefits as well.
Your life and or health insurance agent may be able to sell you long term care insurance. I say, "may" because although their state insurance license qualifies them to sell long term care, not all life and health insurance agents sell this product. If you do not have an agent, you are certainly welcome to call our office or look in the yellow pages under "insurance."
Long term care insurance is custom designed to meet your particular needs. You choose how much money you want the policy to pay you. Do you want $200 daily, $300? The higher the daily benefit, the higher the cost.
Currently, $250 seems to be the average that people purchase in this part of the country. After deciding how much you want the policy to pay, you choose an elimination period. I don't like that word.
Think of it as a deductible. How many days will you be paying benefits out of your pocket before the policy kicks in? 20 days, 60 days, 90 days? Some companies will begin to pay benefits on the very first day of care if you receive that care at home and if you use their care coordinator.
You get credit for all of these days so that if you choose a 90 day waiting period, for each day you are getting care at home, you get the credit toward the 90 days. If you are home for three or four months and get transferred to a nursing home, or assisted living facility, the policy pays immediately because you used up the waiting period while receiving benefits at home.
Your next decision is to determine how long the policy will pay benefits. Standard choices are two years, three years, five years, six years, 10 years or unlimited. Again, choosing a policy with unlimited benefits over a policy with a three year pay out period will increase the premium. What is best for you? What is your family history?
While statistics tell us that the average nursing home stay is 2.76 years, you also need to look at your family history to see the other side of the story. Certainly if we had a crystal ball and knew what the end of our life looked like, we would know exactly whether or not we even needed a long term care policy, and if so for how long. That not being an option for us, we must make informed decisions given the information at hand.
For our clients who are purchasing long term care policies when they are in their 50s, unlimited lifetime benefits are often appropriate. For individuals wishing to purchase long term care that are in their 60s and 70s, a 3 or 5 year benefit may be fine. Now you have to look at inflation protection. If you purchase a policy today that offers a daily benefit of $250, and you don't start collecting on the policy for 15 years, will $250 still be adequate? Not at all likely. Therefore, the final component to a good long term care policy is the handling of inflation.
We are seeing more and more combinations of inflation protection but the top three still are 5 percent simple inflation protection which means every year your $250 daily benefit will increase by $12.50. Or, you may choose 5 percent compounded which means every year your daily benefit goes up by 5 percent compounded.
At the end of 20 years, the $250 should be worth approximately $632 per day based on a 5 percent compounded inflation rider. The third option is to choose no inflation protection whatsoever. People that are in their mid to late 70s will frequently opt for this benefit but they will start out by choosing a higher daily benefit, building inflation protection into the policy from the very start.
The premium that you pay is based on the inflation protection option that you choose. If you choose no inflation, some companies will allow you to increase the daily benefit every year or two, based on the current inflation rate. The premium for this additional benefit will be based on your attained age.
You can see that a substantial amount of study is needed to determine which combination of benefits is best for you. Your agent can be very helpful to you with making the right choices. In addition to the features I listed above, many companies offer other riders that can be added (and sometimes they are automatically included) such as a "survivorship benefit" which means if husband and wife each pay their premiums for 10 years and there are no claims in the 10 year period, they continue to pay their premiums but when one of them dies, the policy is paid in full for life for the surviving spouse. This is a nice benefit. Another option might be to choose a "shared benefit" whereby if one of the partners uses up all of their benefits, they can use benefits from their spouse's policy. There are a lot of exciting choices to make with long term care insurance. The government has made it very clear to us that they have no intention of paying for our care so we must take this very seriously.
Health Law Provision Raises Antitrust Concerns
by Robert Pear, NYTimes.com -- The new health care law encourages collaboration by doctors and hospitals for cost savings, but a split has developed here as to just how far they can go without running afoul of antitrust laws.
An influential Republican member of the Federal Trade Commission, J. Thomas Rosch, said that without “vigorous antitrust enforcement,” the new alliances of health care providers could reduce competition and increase costs to consumers.
Mr. Rosch set forth his concerns in private letters to the White House and the federal Medicare agency. The letters, obtained by The New York Times, reveal a struggle between the Justice Department and the commission over who should police the market.The internal debate creates uncertainty about antitrust enforcement policy at a moment when scores of hospitals, clinics and doctor groups are eager to band together and test innovative ways of delivering care. That uncertainty threatens to slow collaboration by health care providers. President Obama and other proponents say such cooperation could cut costs and improve care for millions of people.
When competitors collaborate, economists say, they can produce enormous efficiencies, but they may also be tempted to engage in monopolistic practices. The risk tends to be greatest in small- and medium-size communities dominated by one or two hospitals or health care systems, experts say.
David A. Balto, a private antitrust lawyer with close ties to the Obama administration, said the disagreement between the Justice Department and the Federal Trade Commission was “extremely unfortunate.”
“The commission has demonstrated unreasonable skepticism toward collaboration by health care providers,” Mr. Balto said.
The antitrust division of the department, under Christine A. Varney, an assistant attorney general, is widely seen by hospitals as more sympathetic to their efforts to band together with doctors and negotiate jointly with health insurance plans.
Officials of the two agencies, which normally share responsibility for enforcing antitrust laws, are trying to devise a joint statement explaining how they will evaluate proposed collaborations by doctors and hospitals. The agencies said, in response to questions, that their goal was to have one consistent policy, but they refused to give details of their talks.
The new health care law encourages joint ventures, known as accountable care organizations, in which doctors and hospitals take collective responsibility for the care of Medicare beneficiaries.
“The creation and operation of accountable care organizations potentially conflict with the antitrust laws,” Mr. Rosch wrote. “The Supreme Court long ago prohibited competing providers from jointly contracting to provide their services, except in specified circumstances.”
Mr. Rosch, an antitrust lawyer for more than 35 years, said he was speaking only for himself. But his views on antitrust policy in the health care industry generally reflect the views of the commission’s nonpartisan professional staff, based on numerous advisory opinions issued to health care providers over the last 15 years.
Unless doctors and hospitals share some degree of financial risk, Mr. Rosch said, the new entities are unlikely to achieve the promised cost savings. In recent years, independent doctors and hospitals have often come together to coordinate care but have been reluctant to pool resources and share the risks of financial losses.
The fragmentation of the health care system, in which patients often shuttle from doctor to doctor, is widely seen as a major problem. Under the new health care law, doctors and hospitals can earn financial rewards if they improve the care of Medicare patients while holding costs below benchmarks set by the federal government.
Dr. Donald M. Berwick, the administrator of the Centers for Medicare and Medicaid Services, said he would soon issue rules for these groups of health care providers. If a group becomes so powerful in a market that it can raise prices without fear of losing business to rivals, it could be required to seek review from one of the antitrust agencies, administration officials said. The health care law does not displace the antitrust laws or provide any exemption for the new entities.
Mr. Rosch said the government must set clear goals for Medicare savings and measure the performance of accountable care organizations with respect to both Medicare and the private insurance market.
“Otherwise,” Mr. Rosch said, “there will be a real risk that the savings accruing to Medicare will just come at the expense of private insurers.” In other words, he suggested, a network of doctors and hospitals could offset a loss of Medicare revenue by charging more to privately insured patients.
In recent years, the Federal Trade Commission has taken the lead in analyzing joint ventures by health care providers. Citing this experience, Mr. Rosch said his agency should also be responsible for policing compliance with the antitrust laws by accountable care organizations. This approach, he said, would “avoid time-consuming turf battles” with the Justice Department.
Health care providers said Mr. Rosch and the Federal Trade Commission were making a power grab that could jeopardize the success of accountable care organizations. As part of the Obama administration, they said, Ms. Varney and the Justice Department have a bigger stake in the success of the new entities.
As a member of the commission in 1996, Ms. Varney said the government should be receptive to new types of collaboration among health care providers, a view she has voiced lately as assistant attorney general. In 2003, as a lawyer in private practice, she testified “on behalf of the American Hospital Association,” one of her clients, at a hearing held by the Justice Department and the commission.
by Robert Pear, NYTimes.com -- In discussions between the two agencies, Mr. Rosch said, the department has taken the position that health care providers should be free to choose which agency would review their plans. Such an arrangement, he said, could lead to “a lack of regulatory consistency,” with the two agencies applying different standards. Justice Department officials declined to comment.
Mr. Balto, a senior fellow at the Center for American Progress, a liberal research and advocacy group, said: “The standards applied by the F.T.C. are out of date. For health care providers to get approval from the commission for a joint venture or other form of collaboration is an exhaustive, expensive process that typically takes more than a year.”
But another antitrust lawyer in Washington, Katherine I. Funk, said, “The commission has more experience and expertise analyzing the clinical integration of health care providers — a key goal of accountable organizations.”
GOP Seeks to Block Funding for Health Law
by Janet Hook, The Wall Street Journal -- House Republicans will use a stopgap spending bill coming to the floor next week as a vehicle to block money for the new health-care law, a top lawmaker said Tuesday.
The latest push to neutralize the legislation, confirmed by House Majority Leader Eric Cantor, (R., Va.), comes on the heels of an earlier effort to repeal the law. That passed the House but fell short in the Senate.
The spending bill, needed to fund the government through the end of the fiscal year on Sept. 30, is being drafted by the House Appropriations Committee, which is seeking deep spending cuts. The current stopgap bill expires March 4.While the initial version isn't expected to include the health-law funding ban, Republicans plan to introduce it as an amendment to the bill, Mr. Cantor said. It is expected to block the use of money in the bill to carry out the law, for example by preventing the Department of Health and Human Services from hiring more workers to oversee the new benefits.
The House Republicans' strategy means President Barack Obama's health-care initiative will be a major hurdle to passing the government-wide spending bill. Democratic leaders in the Senate are unlikely to back any move to defund the new law.
With repeal of the health law dead for now, Republicans have also called for rolling back specific parts of the legislation, such as the requirement that most Americans carry health insurance or pay a fine.
That requirement has become politically sensitive for Democrats in swing states after two federal judges ruled it was unconstitutional. Lawmakers from both parties are calling for Congress to look into replacing the requirement.
At least two Senate Democrats who voted for the new health-care law—Nebraska Sen. Ben Nelson and Missouri Sen. Claire McCaskill—say they're looking at other ways to bring people into the insurance pool without mandating coverage.
Health-industry officials say one alternative would be to make insurance more expensive for those who wait before buying it—similar to an incentive in the Medicare program for the elderly. But Republicans may not come through with the votes for such a measure, given it could help Democrats salvage a law strongly opposed by the GOP.
Monday, February 7, 2011
Sen. Weinberg criticizes N.J. commissioner's delay of implementation of health laws
by Susan K. Livio, NJ.com -- New Jersey Health and Senior Services Commissioner Poonam Alaigh declined to testify before the Senate health committee today. Chairwoman Loretta Weinberg (D-Bergen) said she would call a hearing based on the commissioner's schedule to discuss why a handful of laws have not been implemented.
Weinberg invited the commissioner a week ago to discuss why the state had failed to implement several laws on time. Among them, Weinberg cited the menu-labeling law that passed the day before Gov. Chris Christie took office 13 months ago requiring large chain restaurants to post calorie information, and the 3-year-old "Safe Patient Handling Practices Act," signed by Gov. Jon Corzine, that requires licensed health care facilities to train employees and buy equipment to avoid causing patient and worker injury."There is a long lag time between us passing a law, the governor signing it, and the regulation-writing that is necessary before a law can be implemented,'' Weinberg said. "I am not going to sit by quietly and pass laws that never get implemented.''
Alaigh was in Washington, D.C. today at a "long-standing" meeting with the U.S. National Institutes of Health, according to a letter she sent Weinberg last Thursday declining the invitation.
Weinberg asked Alaigh to send a deputy commissioner to the hearing in her place, "but due to the lateness of the request, it was not possible to accommodate'' the committee, Alaigh's spokeswoman Donna Leusner said.
In the letter to Weinberg, Alaigh wrote she had decided not to implement the law "prematurely'' because the U.S. Food and Drug Administration soon is going to release guidelines on how a similar federal law ought to be implemented. As for the safe handling act, the department released proposed rules January to enforce the law and is accepting public comments on them until March 4, according to the letter.
Sen. Joseph Vitale (D-Middlesex) said it was "frustrating'' no one from the health department attended the hearing. "What's important is we address these issues,'' he said.
Sen. Robert Singer (R-Ocean) questioned Vitale criticizing the Republican Christie administration for failing to implement laws when it's clear former Gov. Jon Corzine, a Democrat was guilty of the same thing when Vitale chaired the health committee during Corzine's term. "Amazing — maybe it was because it was Gov. Corzine,'' Singer said sarcastically.
Weinberg said she planned to contact Alaigh and ask her to name the date and time when she would be available to address the committee.
"We are not living in a monarchy yet, and there are three branches of government,'' Weinberg said. "The legislature branch is just passing laws, and no one in the executive branch has the right to ignore them.''
Senate rejects GOP-led bid to repeal healthcare law
By Noam N. Levey, LATimes.com -- Senate Democrats on Wednesday turned aside a bid by Republicans to repeal the new healthcare law, in the first Senate test of the sweeping overhaul that President Obama signed in March.
The 47-51 party-line vote on a procedural motion came two weeks after House Republicans pushed a repeal resolution through that chamber.
And it ended the first chapter of the GOP legislative attack on the new law, setting the stage for new battles over specific provisions of the law, including the controversial mandate that will require most Americans to get health insurance starting in 2014.
Republican leaders, who have pledged to go after the law "piece by piece," have not indicated what part of the overhaul they will target first.
With funding for the federal government set to expire in four weeks, the next battleground could be legislation to keep the government operating from March to September.
Short of shutting down the government, Republican leaders are working to peel off enough Democrats in the Senate to pass legislation taking out pillars of the healthcare law, such as the mandate or the funding needed to expand coverage to tens of millions of Americans.
Republicans are also considering proposals to allow states to opt out of parts of the law, as many GOP governors have said they want to do.
On Wednesday, the GOP repeal proposal did not win over a single Democrat, as 47 Republicans voted for it and 50 Democrats and one independent voted against it. Democrat Mark Warner of Virginia and Independent Joe Lieberman of Connecticut missed the vote.
Even Democrats from conservative states who face reelection in 2012 staunchly rejected a repeal, though many have said they are interested in modifying the law.
"Who wants to go backwards and tell 220,000 Nebraskans they can't have health insurance?" Nebraska Sen. Ben Nelson told reporters in his home state Wednesday.
"Who wants to deny children health insurance because they have preexisting medical conditions? Who wants to see Nebraskans forced into bankruptcy, or have to choose between selling their home, or paying for medical care?"
Republican lawmakers – backed by business groups such as the U.S. Chamber of Commerce and the National Retail Federation – said they would come up with an alternative to the law.
"We'd repeal this bill right now, and then we'd begin the work of achieving our common goal of delivering healthcare at a higher quality for lower costs," Senate Minority Leader Mitch McConnell (R-Ky.) told his colleagues on the Senate floor. "We'd put in place the common-sense reforms people actually want."
Republicans haven't yet offered an alternative, however, prompting warnings from consumer groups and patient advocates such as the American Cancer Society that Americans stand to lose new protections if the law is repealed.
The two parties agreed Wednesday to make a small change to the healthcare law to relieve businesses of a new tax reporting mandate. The provision required businesses to report purchases exceeding $600 to the Internal Revenue Service.
The Senate voted 81 to 17 to remove the widely reviled reporting requirement. The action was attached to an aviation bill being debated.
Elsewhere on Capitol Hill, the debate raged on over the healthcare law's insurance requirement, which a federal judge in Florida ruled Monday was unconstitutional.
At a hearing in the Senate Judiciary Committee, the mandate appeared to split even Republican legal scholars.
Michael Carvin, a former Reagan administration lawyer, called the mandate an unprecedented requirement that people buy a product, a line of reasoning offered by U.S. District Judge Roger E. Vinson.
"If Congress can require this of persons, there is literally no limiting principle to the government's power," Carvin said.
Harvard Law School professor Charles Fried, who served as President Reagan's solicitor general, countered Congress' well-established authority to regulate commerce gave it the clear right to require health insurance.
"I'm not sure it's good policy. I'm not sure it's going to make the country any better," Fried said. "But I am quite sure that the healthcare mandate is constitutional."
Friday, February 4, 2011
Christie vetoes bill to expand Medicaid to more women seeking family-planning services
By Susan K. Livio, NJ.com -- Gov. Chris Christie today vetoed a bill that would have expanded the Medicaid program to more women seeking family planning services, saying it would be "financially irresponsible'' to spend more on a program running a $1 billion deficit.
The veto sparked bitter remarks from female lawmakers and clinics operators who said the governor once again put his conservative ideology before women's health.
"On one hand he says he’s not opposed to birth control, but yet he shows up at a rally last week and joins a group speaking against women being trusted to make their own decisions about their reproductive health care,'' said Assemblywoman Linda Stender (D-Union) a bill sponsor. "He has also said that this issue is purely about money we don’t have, but all this bill would have done is leveraged the money already being spent in our Medicaid budget to obtain additional federal dollars to expand access to health care services for low-income women.”Christie last summer vetoed a bill that would have restored $7.45 million in grants to family planning clinics that he eliminated from the state budget. Although he does not support abortion rights, the governor said he made the decision to help plug an enormous budget hole.
The doomed bill, (A3273), would have directed the state to apply to the federal government to expand its Medicaid program to include women earning as much as twice the poverty rate -- $29,140 for a family of two -- to provide birth control, cervical exams and other family planning services. Abortions would not be paid with this money, sponsors said.
New Jersey cannot afford to expand Medicaid, which already serves 1.3 million people, according to Christie's veto statement. "In Fiscal year 2012, it is anticipated that the state's Medicaid program faces a budget shortfall of $1.1 billion,'' according to the statement. Expanding Medicaid to more people "does not make sense from an overall fiscal and health care policy perspective.''
PREVIOUS COVERAGE:
• N.J. lawmakers approve bill pushing Gov. Christie to submit federal application for family planning services
• N.J. Assembly approves restoring $5M for family planning services
• N.J. Senate fails to override Gov. Christie's veto of $7.5M in family planning funds
• N.J. Senate to hold family planning override vote
• N.J. Senate schedules vote to override Gov. Christie's veto of $7.5M family planning funds
• N.J. GOP lawmakers who voted to restore family planning funds refuse to override Christie's veto
• N.J. Democrats to launch campaign to override Christie's veto of $7.5M family planning funds
• Gov. Christie vetoes bill restoring $7.5M grant for family planning
The state would need to put up $1.1 million in order to qualify for $15.1 million from the U.S. Centers for Medicare and Medicaid Services, the bill said.
Sen. Loretta Weinberg (D-Bergen), also a sponsor, said she's frustrated the governor continues to speak inaccurately about the bill and its budget impact. "He said it would contribute to the Medicaid gap and is outside the budget, but we could use money in the budget as a match. We've said that time and time again,'' Weinberg said.
Christie also said women can go to federal qualified health centers and emergency rooms for these services, Weinberg said. "The centers themselves have said they have some centers that do not provide ob-gyn services,'' Weinberg said. "And who goes to the ER for birth control?"
Michele Jaker of the Planned Parenthood Federation of New Jersey noted that 27 states, including New York, Pennsylvania, Alabama, Arkansas, Oklahoma and Texas, expanded their Medicaid program through this application process. "New Jersey can’t afford to walk away from new funding sources for women’s health.''
Assemblywoman Alison Littell McHose commended Christie for axing the bill — particularly this week, given the release of a video Tuesday that documented a Planned Parenthood office manager in Perth Amboy advising a couple posing as a pimp and prostitute on how to receive abortion and birth control for 14-year-old prostitutes.
"This disgusting footage shows why government should be shutting these clinics down, not propping them up with public funds,” McHose said.
Marie Tasy from New Jersey Right to Life, an anti-abortion advocacy group, also praised Christie's veto.
"In vetoing this bill, Governor Christie has ensured that New Jersey taxpayers will not be complicit in the sexual abuse and exploitation of poor women and minors under the pretense of ‘women’s health,’” Tasy said.
Monday, January 31, 2011
U.S. recovers $4 billion from health-care fraud cases
By Amy Goldstein, The Washington Post -- The government recaptured a record $4 billion last year from pharmaceutical companies, hospitals, doctors, nursing homes and other providers of care that defrauded federal health-care programs, the Obama administration reported Monday.
Administration officials also called attention to new federal rules intended to prevent fraud - or detect it early - that took effect Monday as a result of the law enacted last year to overhaul the health-care system.
The annual report arrives as the new Republican leaders in the House are planning congressional investigations, suggesting that the administration is not aggressive in pursuing government waste and fraud.
"We can save $125 billion in simply not giving out money to Medicare recipients that don't exist for procedures that didn't happen," Rep. Darrell E. Issa (R-Calif.), the new chairman of the House Oversight and Government Reform Committee, said this month. Facing a hostile climate in the House, several senior aides to President Obama heavily touted what Health and Human Services Secretary Kathleen Sebelius called "unprecedented work to safeguard taxpayer dollars."
During the fiscal year ended in September, the report says, the government recovered $4.02 billion from fraud cases completed during that year or in the past. That sum compares with $2.6 billion recovered in fiscal 2009 and slightly more than $2 billion in 2008. Nearly three-fourths of the total recouped last year was from fraud against Medicare, the federal health insurance for older Americans. The figures also show that the government won court judgments and out-of-court settlements last year amounting to $2.5 billion, although not all that money has been collected.
According to Justice Department statistics, the number of new criminal and civil investigations of potential health-care fraud, most involving Medicare, increased slightly last year. And the number of defendants convicted of such fraud grew to more than 700 in 2010 from fewer than 600 the previous two years.
Less than a week after the Republican-led House voted to repeal the new health-care law, administration officials continued to focus attention on provisions they think the public will like.
Sebelius pointed out that the new rules authorized by the law, which took effect Monday, require more thorough screenings for health-care workers, companies and institutions that want to participate in Medicare, Medicaid or the Children's Health Insurance Program. And if such participants are accused of fraud, government officials can stop payments to them while they conduct an investigation.
Friday, January 28, 2011
Prospects for Private Health Insurance
By Reed Abelson, NYTimes.com -- One of the major concerns about the new health care law is whether it will usher in the demise of employer-based coverage, which is the source of insurance for the bulk of working Americans today.
A new report from Booz & Company, the management consulting firm, suggests that much of the worry that private health insurance will disappear is misplaced.
The report, titled “The Future of Health Insurance: Demise of Employer-Sponsored Coverage Greatly Exaggerated,” argues that while times will be certainly be challenging for the insurance industry, employers are likely to remain a large buyer of coverage for their workers.“Booz & Company research suggests traditional employer-based insurance will remain a significant market that will erode more slowly and less steeply than commonly thought,” the report says.
You can read the full report here.
Let us know what you think the future of employer-based coverage is likely to be if the health care law does take full effect in 2014.
Wednesday, January 26, 2011
Regulators have little power over health insurance rate increases
The healthcare law lets the Department of Health and Human Services set standards as to what constitutes an 'unreasonable' increase. But it doesn't give regulators any new powers to reject a proposed increase before it's implemented.
By Michael Hiltzik, LATimes.com -- Big, powerful industries facing tougher government oversight — the health insurance industry, say — know that the legislative battle in Congress or state capitals is just the first skirmish.
The more important fight is over the regulations that implement legislative policies. That's the point where laws with teeth in them are taken to the dentist to get them pulled.
That process is already happening in relation to the new federal healthcare law. Forget the fatuous play-acting over "repeal" by the Republican majority in the House of Representatives. The real action is behind the scenes.
Consider what's been happening with a provision in the new law designed to keep health insurers from unreasonably running up premiums before 2014, when they'll come more fully under federal oversight.
The provision required states and the federal government to start scrutinizing rate increases last year, with an eye toward identifying companies guilty of a "pattern" of "excessive or unjustified" rate increases.
Those insurers could be barred from joining the health insurance exchanges due to be set up starting in 2014. Exile from the exchanges would amount to punishment on a nuclear scale, because all individual and small-group policies eventually will have to be sold through the exchanges.
One would think that threat might have been used to discourage rate increases such as the one Blue Shield of California is proposing to implement in March. (Combined with rate hikes last October and on Jan. 1, the March increase would drive bills in its individual coverage line up as much as 59%.)
But it doesn't work that way. The healthcare law allows the Department of Health and Human Services to set standards as to what constitutes an "unreasonable" increase. It doesn't give federal or state regulators any new powers to reject a proposed premium increase before it's implemented.
Regulations the department proposed in December to govern the rate review, however, look a little watery. For one thing, the proposal states that only annual premium increases over 10% should be subjected to further regulatory scrutiny. Any rate hike below that level would be presumptively judged "reasonable."
That might give away too much to insurers right off the bat. HHS acknowledges that all annual measures of healthcare inflation have been running well below 10% for years, sometimes as low as 4.4%. Premium increases in the individual and small-group market, where buyers have the least leverage, have been exceeding 15% a year for the last three years.
Its setting of a 10% threshold, the agency says, partially reflects "industry concerns" that companies would have to justify too many premium hikes.
What are the regulators allowed to do about hikes they think are unreasonable? Not much. If the feds make such a determination, the proposed regulations require the insurer to provide a written "justification" that its increase is proper and post it on its website, along with the federal agency's finding.
If you think it will be hard for an insurer to scare up a justification that sounds convincing even for a rate increase that common sense calls outrageous, just remember that reputable credit-rating firms serving Wall Street certified billions of dollars in mortgage securities as gilt-edged right up until the moment the securities were recategorized as toxic waste.
In any event, requiring "justification" doesn't quite count as regulation. "Increases of 20, 30, 40% are not survivable for real people," observes Drew Altman, president of the Kaiser Family Foundation. "Whether they're justifying it or not, that's not a reasonable increase to ask people to pay."
The proposed federal regulations leave premium reviews to the states, wherever possible. But that's where the real mischief can be done. In Sacramento last year, a bill giving the insurance commissioner authority to reject any increase in health premiums — similar to the authority Proposition 103 gave the commissioner in 1988 over auto and homeowners insurance — was derailed in favor of one requiring only that health insurers "justify" their increases on actuarial grounds, like the proposed federal rule.
"We think that set the clock back," says Jamie Court, head of Santa Monica-based Consumer Watchdog, which backed the more stringent bill.
Some consumer advocates think the regulators' efforts to require insurers to make more information about their rate increases public will bear fruit, if indirectly.
"As people start to see more, they'll analyze what's going on and ask questions," says Gary Claxton, a health plan expert at Kaiser Family Foundation. "Where that will lead, we don't know. We're early in the public review process."
Some insurers may be able to make their case. Tom Epstein, Blue Shield's vice president for public affairs, says the insurer's planned rate hike won't even fully cover soaring costs in its individual insurance segment, thanks to higher hospital charges and increased pharmaceutical costs, among other things.
Blue Shield is paying for an independent actuarial analysis of its rate proposal and says it will refund to customers any premiums deemed excessive by the analysts.
But the "transparency" required under the federal proposal and existing state law isn't enough. "Rates have been transparently excessive in California for a decade, and that hasn't resulted in any decrease," says Insurance Commissioner Dave Jones.
He may soon get the authority for prior approval of health premiums that he craves. As it happens, the bill that got sidetracked last year was sponsored by then-Assemblyman Dave Jones. It is being reintroduced this year by Assemblyman Mike Feuer (D-Los Angeles), and it's a good bet that if it passes, it will be signed by Gov. Jerry Brown.
"But it will be hard-fought in the legislature," Jones told me. "Notwithstanding the huge public outcry about the need for reform, the health insurance industry wields a tremendous amount of influence in the legislature, and in the past has been successful in convincing conservative legislators to oppose this sort of reform."
In other words, there's always another battle to fight.
Michael Hiltzik's column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.
Sunday, January 23, 2011
Adding Clarity to Health Care Reform
By Richard H. Thaler, NYTimes.com -- NOW that House Republicans have voted to repeal health care reform, in full knowledge that their bill has no chance of passing in the Senate, much less avoiding a presidential veto, it is time for constructive action. There is an opportunity to improve health care and reduce uncertainty, a Republican mantra.
Perhaps the most unpopular feature of the health care legislation now in place is a provision that requires nearly everyone to buy insurance. It is known as the mandate, and it is the aspect of the bill that could end up before the Supreme Court. In contrast, nearly everyone seems to approve of the provision ensuring that pre-existing medical conditions won’t prevent you from finding affordable insurance, as well as the rule that prevents insurers from dropping you if you get sick.Unfortunately, it is hard to have the popular features without some version of the mandate. A health insurance system cannot work unless most healthy people participate.
The major source of uncertainty arises not from the bill itself, but rather from the lawsuits filed by states that object to the mandate. The legal issue is subtle, given that states have long imposed mandates of various kinds themselves, including those requiring children to go to school or requiring drivers to have liability insurance. So the states are not questioning the legality of mandates but whether it is constitutional for the federal government to foist one on state governments.
The Supreme Court may make the ultimate decision in the next year or two. If it rules the mandate unconstitutional, the viability of the rest of the plan is not clear. Until the legal issues are settled, the status of health care reform will be uncertain.
In this light, here are three thoughts about constructive steps we might take now:
SEAMLESS ENROLLMENT The first step is not really a substitute for mandates, but rather a supplement to whatever system we adopt, including the law as now written. The goal of having nearly everyone insured requires two steps. We have to get most people to enroll, and we have to keep them enrolled even if they move in and out of the labor market.
To address that second goal, we need to make it as easy as possible for people who lose jobs to remain insured. The setup I propose is that as soon as an employer submits a form notifying a laid-off worker that she has been dropped from its health insurance coverage, she would be automatically enrolled in a plan offered by her state insurance exchange, and directly billed at a rate that reflects her now-reduced income. Ideally, the default option would be an inexpensive, catastrophic policy that provides real insurance for major events.
Of course, she could choose another plan, or she could opt out of insurance altogether, but she would have to take some specific action in order to do so. And once she landed another job, she would be automatically enrolled in a plan from her new employer, again with the ability to opt out.
In a perfect world, all of this would be seamless, with one insurance ID number and no change in how claims are filed. If the Internal Revenue Service can keep track of you when you move from one job to another, the health care system should be able to do the same.
FORFEITURE, NOT FINES After 2014, when the main components of health care reform kick in, the important question will be what happens to people who do not enroll initially, or do not stay enrolled. Under the current law, they will be fined an amount that depends on their income, payable when income taxes are filed. Fines are what differentiate a mandate from a suggestion.
But fines are not the only way to give people an incentive to join. One alternative is based on a proposal by Paul Starr, the Princeton sociologist and health care expert. Instead of facing a financial penalty for not buying health insurance, people would lose some of their insurance rights. For a stretch of time — say, five years — people would no longer have the right to buy insurance at rates subsidized by the government, nor would they be protected from price discrimination based on pre-existing conditions.
Under these rules, waiting until you become sick to buy insurance would have substantial risks. If the details are set properly, this arrangement could provide as big an incentive to join as a cash penalty. And because that cash penalty is imposed only when income taxes are due, the alternative plan may be easier to enforce.
MY “REAGAN PLAN” If you don’t like that idea, here’s another. In 1984, President Ronald Reagan signed a bill encouraging all states to adopt a minimum drinking age of 21. To nudge states into going along, the plan said that any state that didn’t join would have its highway funds cut by a certain percentage. Although Mr. Reagan initially had misgivings about the plan, he would later come to embrace it, saying that the harm caused by teenage drunken drivers was “bigger than the individual states.”
All of the states ended up complying, although some were reluctant — and South Dakota, in fact, sued. But in that case, the Supreme Court ruled 7 to 2 that the law was constitutional.
Here is how the Reagan plan could apply to health care: Adopt a new bill that says that if a state doesn’t want to accept a mandate — or some alternative like the one described above — it may opt out of health care reform. But a state that chooses this course would lose a percentage — or perhaps all — of the federal funds that the health care bill would funnel to state governments. In other words, states would be permitted to turn down the health care program, but they would then give up a share of the revenue, as well as other features of the law that are popular.
BOTH political parties could benefit from a civil discussion of these issues. By creating a viable alternative to mandates, Democrats could ensure that an adverse decision by the Supreme Court would not create legal chaos. Republicans could get a seat at the table if they engaged in a constructive way — and they might try to make progress on tort reform, which has the potential to help reduce health care costs.
As the recent tax compromise has shown, negotiations between the parties offer the potential for gains. In this situation, we can learn more from Ronald Reagan than from the slogan popularized by his wife, Nancy. It is not always the best policy to “just say no.”
Richard H. Thaler is a professor of economics and behavioral science at the Booth School of Business at the University of Chicago.e
Friday, January 21, 2011
N.J. judge upholds law requiring public workers to pay for health care
By The Associated Press , NJ.com -- Public employees who challenged a requirement to start paying toward their health insurance have lost a round in court.Mercer County Superior Court Linda Feinberg issued a pair of rulings today upholding a law requiring public workers to pay 1.5 percent of their salary toward health care.
Police and firefighters unions filed one suit against the state. The other was filed on behalf of government workers represented by the Communications Workers of America workers and teachers.The unions argued that the requirement that went into effect in May infringes on collective bargaining and amounts to a tax on government employees.
The judge ruled that the law is constitutional.
An appeal is possible.
Thursday, January 20, 2011
N.J. Horizon Blue Cross Blue Shield to make doctors responsible for preventative health care
By Susan K. Livio, NJ.com -- Thousands of Horizon Blue Cross Blue Shield members who live in northern and central New Jersey should expect their doctors to start checking in with them, even before they get sick.
Horizon Healthcare Innovations, a subsidiary of Horizon, the state’s largest health care provider, has enlisted 63 primary care physicians to provide "patient centered medical homes" to their 24,000 patients, said Richard Popiel, president and chief operating officer of Horizon Healthcare Innovations.
This means doctors and their employees will be responsible for coordinating preventative health care and making themselves more available when patients need advice.
For this, Horizon will pay doctors a fee for "coordinating" patient care — scheduling wellness visits and tracking people’s health — rather than the current model of paying doctors for treating patients after they’ve gotten sick. Doctors could make additional money if they can show their efforts ensure that more patients are getting timely screenings, Popiel said.
"We need a transformation in New Jersey and around (the) country in health care,’’ he said. "If we are successful, this will mean a big difference to patients, in quality of care and affordability.’’
Thomas Ortiz, medical director and founder of Forest Hill Family Health Associates in Newark, said the project will make primary care medicine a more appealing option to med students.
"The Patient Centered Medical Home is a key ingredient in addressing the primary care physician shortage throughout our state," he said.
A list of participating medical practices may be found at www.horizonhealthcareinnovations.com/our-commitment/pcmh/participating-practices
House votes to repeal year-old health care law
By Herb Jackson, The Record -- New Jersey Republicans and Democrats relied on shaky and sometimes contradictory statistics to argue the dangers and benefits of last year's sweeping overhaul of health insurance before the GOP-dominated House voted to repeal it Wednesday.
The 245-189 party-line vote was largely symbolic because the House bill has almost no chance of passing the Democrat-dominated Senate, and President Obama promised a veto if it does.
House Republicans said the repeal was the first step toward crafting a new bill that provided common-sense and cost-cutting measures. That bill will take time to craft, however, and both parties spent most of Tuesday and Wednesday arguing about the impact of erasing last year’s law from the books.
Rep. Scott Garrett, R-Wantage, said the law needed to be repealed because it would “destroy” jobs, and cited the Congressional Budget Office to back him up.
On the contrary, the law would create jobs, countered Rep Frank Pallone, D-Long Branch. He also relied on CBO to support his argument.
Rep. Rob Andrews, D-Haddon Heights, charged: “The majority are adding $1 trillion to our national debt with this vote.”
Rep. Leonard Lance, R-Clinton Township, rebutted: “The health care law includes sleights of hand to mask the true cost. For example, it includes six years of entitlements and subsidies that are paid for by 10 years of taxes.”
Reality lies between those extremes.
The nonpartisan web site factcheck.org, citing CBO and other sources, concluded the law would have little impact on overall employment. Some low-paying jobs might be eliminated by small businesses facing a future mandate to cover workers, but jobs in the health care industry would be created when more people have insurance.
The CBO also said that following every mandate in last year’s law – and the only thing CBO is allowed to do is assume that laws on the books will be followed – would reduce the deficit. As a result, CBO said earlier this month that a repeal would increase the deficit.
But Medicare’s chief actuary said some of the law’s assumptions about savings could be unrealistic, so the deficit picture is much murkier. Congress has also shown in recent years that when laws requiring Medicare savings are about to kick in, members often will vote to prevent cuts and add the cost to the deficit.
Rep. Bill Pascrell Jr., D-Paterson, said in a news release that repeal would allow insurers to deny coverage to at least 108,000 people with pre-existing medical conditions in his district alone.
But Pascrell was relying on estimates released this week by the U.S. Department of Health and Human Services of how many people actually have such conditions, and not the number actually seeking insurance who cannot get it.
But dealing with pre-existing conditions illustrates how complicated the current health system is, and how black-and-white pronouncements are usually inaccurate.
New Jersey for nearly 20 years has had a “take all comers” law that prohibits companies that sell policies to individuals and small groups from refusing coverage, so the horror stories of sick people unable to get coverage are not as prevalent in the Garden State.
Those policies are expensive, however, in part because the coverage risk is spread among relatively small pool of patients, many of whom have expensive health problems. The policies also require someone with a condition, such as a history of cancer, to pay premiums for up to a year before treatment for the condition would be covered.
The new federal law called for creating regional or national “exchanges” where people could buy coverage that would presumably be cheaper because risks would be spread among a larger group.
Those exchanges are not due to begin operating until 2014, however, so the law also provided funding to states to set up high-risk pools in the interim.
Governor Christie decided to accept up to $141 million from the federal government to set up the state’s own pool, called NJ Protect, rather than let Washington devise one. While not cheap, NJ Protect policies are federally subsidized and do not include the same one-year exclusion as the state-regulated policies.
But to be eligible, someone must have had no insurance for the previous six months, which means people paying for coverage under the previous state program could not immediately switch.
So far, NJ Protect has signed up just 274 people, according to Marshall McKnight, spokesman for the state Department of Banking and Insurance.
A repeal would halt parts of the new law that have already begun to take effect, especially changes to the Medicare prescription drug benefit.
Checks of $250 were sent last year to Medicare recipients who hit the “donut hole,” a point at which federal benefits stop and patients must pay the full cost of drugs until their expenses are high enough for coverage to resume. This year, recipients in the “donut hole” are supposed to receive cheaper drugs as well, as part of an agreement with pharmaceutical companies.
PAAD, the state-run prescription program for low-income seniors, also got extra federal aid because of the law, and that money last year helped Christie cancel a planned increase in patient copayments.
Other issues surrounding the law are not as clear-cut. Christie’s transition team, for example, said the overhaul would result in New Jersey getting more Medicaid money from Washington in the future, when people with higher incomes are able to enroll. But to get that money, Christie could be barred from cutting back on Medicaid benefits this year to save state money.
Tuesday, January 18, 2011
House kicks off debate over health-care repeal
By Felicia Sonmez, The Washington Post -- The House meets Tuesday for its first day of debate on a measure that would repeal the national health care overhaul, following a week during which legislative action came to a standstill following the Tucson shooting tragedy.
Debate on the health care repeal bill is expected to begin after the House reconvenes at 2 p.m. The House has set aside seven hours for debate on Tuesday and Wednesday, with a vote on the measure expected to come Wednesday afternoon.The repeal measure is expected to pass the House on Wednesday but is unlikely to make it through the Senate, where Democrats still hold the majority.
Worth watching will be just how much the tenor of the debate will have changed in the aftermath of the Tucson shootings. A new Washington Post-ABC News poll shows that 82 percent of Americans believe the tone of political discourse is negative, with 49 percent saying that it's negative enough to encourage violence.
Over the weekend, there were some signs that congressional leaders have begun adjusting their rhetoric. A post on House Speaker John Boehner's (R-Ohio) Web site described the health care law as "job-crushing" and "job-destroying" rather than "job-killing." Democrats, meanwhile, have begun to frame the repeal effort as a "Republican plan to repeal patients' rights."
In addition to Tuesday's floor debate, backers and opponents of repeal were also gearing up for a series of dueling Capitol Hill news conferences. House Minority Leader Nancy Pelosi (D-Calif.) announced that the House Democratic Steering and Policy Committee will hold a hearing Tuesday afternoon featuring testimony from seven ordinary Americans on how repeal of the health care law would affect them.
Iowa Republican Rep. Steve King, meanwhile, is planning a news conference at 3 p.m. at which he and other House Republicans are slated to receive hundreds of thousands of petitions demanding the repeal.
Also expect to see lawmakers speak out on the floor not only on the repeal itself but also the process by which the bill has been brought up; Democrats have argued that Republicans have minimized the minority party's role in the process by not holding any hearings on the bill and by limiting the number of amendments that may be proposed. Republicans have contended that the health care overhaul has already been litigated and that the public stands firmly in favor of repeal; they have also allowed for an amendment proposed by Rep. Jim Matheson (D-Utah) regarding the "doc fix," requiring the committees working on replacing aspects of the law to provide a permanent fix for the formula that sets Medicare payments for physicians.
Friday, January 14, 2011
U.S. Chamber of Commerce says economy is improving, but healthcare law must go
by Jim Puzzanghera, The LATimes.com -- The head of the U.S. Chamber of Commerce struck an optimistic tone Tuesday about the direction of the economy and the Obama administration's approach to the business community. But he warned that Washington must do more to expand trade, cut the deficit and reduce regulations -- including repealing the controversial healthcare overhaul.
"The state of American business is improving," Chamber President Thomas Donohue said in his annual speech on the topic before a Washington, D.C., crowd of executives, lobbyists and journalists. "Last year, we worried about a double-dip recession. Today, we are cautiously optimistic that the recovery will continue and pick up steam as the year progresses."The chamber, the nation's largest business organization, predicted that the economy would expand by 3.2% in 2011 and create about 2.5 million jobs. But such job growth still would only reduce the current 9.4% unemployment rate by 1 percentage point, highlighting the need for more pro-business policies "to turn an economic recovery into a jobs recovery," Donohue said.
To do that, Donohue took aim at two of his favorite targets -- the healthcare and financial regulatory overhauls passed by Congress last year. Both major White House priorities must be scaled back to reduce uncertainty among businesses and get them to use some of their record corporate profits to hire workers, he said.
"We cannot allow this nation to move from a government of the people to a government of the regulators," Donohue said.
The chamber supports the attempt by House Republican leaders to repeal the healthcare law, even though the group doesn't expect the effort to get past opposition by Democratic Senate leaders and the White House. The chamber also would like to see the process of writing hundreds of new financial rules slowed down.
The chamber led the charge against healthcare and financial reform, drawing the ire of administration officials and their allies in Congress. The group was a major factor in helping Republicans win big in November's congressional elections, spending millions of dollars to help mostly GOP candidates.
But since the election, President Obama has tried to tone down his often-sharp rhetoric about the role of Wall Street and big corporations in the financial crisis and the sluggish recovery. He made a business-friendly move last week in naming JP Morgan Chase executive William Daley, a former Commerce secretary, as his chief of staff.
Obama also accepted an invitation to give a speech to the chamber next month as both sides try to mend relations. . . .
"It's never been personal with us," Donohue told reporters after his Tuesday speech, noting that the chamber also supported many administration initiatives, including the $814-billion stimulus package in 2009.
Donohue said the "new tone coming out of the White House," along with progress on a trade deal with South Korea and the temporary extension of the Bush-era tax cuts, has helped address some of the immediate concerns of U.S. businesses. But he said more aggressive efforts were necessary by the White House and Congress, such as more spending to improve the nation's highways and airports to facilitate the flow of goods.
The chamber is willing to work with both parties, Donohue said in dismissing suggestions that his organization will simply be an ally of the Republican House majority it helped elect.
"We'll support the new House leadership on many occasions, and we'll work with Democratic legislators as well, but no one should expect the chamber to march in lock step with anyone," Donohue said.
The Republican-led effort to repeal the healthcare law will be "an opportunity for everyone to take a fresh look at healthcare reform -- and to replace unworkable approaches with more effective measures," Donohue said.
The chamber will keep its grass-roots and advocacy programs "fully mobilized, funded and fired up throughout 2011" to push its agenda in Washington, Donohue said. And he ended his speech with a warning for anyone taking on the powerful organization.
"We will not allow the business community to be intimidated and we will use every tool at our disposal to challenge those who try to silence our voice," he said.
-- Jim Puzzanghera
Tuesday, January 11, 2011
Christie may propose cutting Medicaid spending, employee benefits to help close $10.5B budget gap
By Bloomberg News, NJ.com -- New Jersey Gov. Chris Christie may propose cutting Medicaid spending and employee benefits to help close a $10.5 billion budget deficit, even as he considers contributing $512 million to the state’s underfunded pension.
The 48-year-old chief executive, who joined 28 other Republican governors asking President Barack Obama and congressional leaders last week for permission to reduce Medicaid outlays below federally prescribed levels, said in a Jan. 4 interview that “certainly” the program “is one of the things we’re going to have to look at.”The second-wealthiest U.S. state budgeted $3.1 billion for Medicaid in the fiscal year ending June 30 and was scheduled to receive $1.1 billion in federal stimulus funding, according to the Treasury Department. Christie, who took office a year ago, said he’ll tell lawmakers in his Jan. 11 State of the State speech that New Jersey remains in a financial crisis and they need to maintain fiscal controls as employment and revenue recover slowly from the longest recession since the 1930s.
New Jersey has run consecutive annual deficits for a decade. The governor told reporters last month that balancing the next budget will be even tougher than with the current plan.
“First and foremost is continuing on the path of fiscal discipline,” Christie said in his wood-paneled office at the state Capitol in Trenton. “I’m not going to allow us to revert back to the wild spending that we’ve had for the last decade. It’s going to take years for us to dig out of this hole.”
DEFICITS NATIONWIDE
States face deficits that may reach $140 billion in the next fiscal year, according to the Center on Budget and Policy Priorities in Washington. The 2009 economic-stimulus bill and the health-care overhaul signed by Obama last year bar governors from reducing eligibility for the state-administered health-care program for the poor and uninsured below a prescribed income level.
From New York to Washington, governors are targeting Medicaid for cuts. New York’s new governor, Democrat Andrew Cuomo, said he wants to lower spending $2.1 billion, the Wall Street Journal reported. Rick Scott, the recently elected Republican governor of Florida, said he is looking to trim the program by $1.8 billion.
BIG HOLE
Christie may face a deficit next year equivalent to more than a third of his current budget, the nonpartisan Office of Legislative Services projected in July. In the current year, he closed a record $10.7 billion gap by slashing school and municipal aid and skipping a $3 billion pension payment.
The governor didn’t specify how much he may take out of Medicaid. He said he anticipates seeking to trim costs through unspecified efficiencies, after leaving spending on the program intact last year because of the economic slump.
New Jersey will also lose $900 million in federal funding for Medicaid next year, even as it’s required to maintain benefits, under conditions of the stimulus act, according to Michael Drewniak, Christie’s spokesman.
“That’s a big hole to have to fill,” Christie said. “We’re going to have to look at all options. We have to figure out how we’re going to deal with that.”
CONTRACT TALKS
Christie said in the interview he’ll also seek savings in contract talks with state workers’ unions later this year, especially since the Jan. 1 expiration of a no-layoff agreement instituted by his predecessor, Democrat Jon Corzine. He declined to provide details. Christie said he’d prefer to make moves through negotiations with unions, not executive order.
“I think collective bargaining is an important process and I want to participate in it fully with the workers of this state so they feel whatever deal they end up getting is a fair deal,” Christie said. “If I have to resort to other tactics, I will, because I have to balance this budget.”
While he wants to cut Medicaid and worker benefits, Christie said he may resume contributions to the state’s pension system for the first time since 2008, when Corzine made a partial payment of $1 billion. The fund had assets to cover 62 percent of its obligations as of June 30, down from 66 percent a year earlier, according to Treasury Department data.
New Jersey’s pension deficit increased $8.05 billion, or 18 percent, this year to $53.9 billion, from $45.8 billion as of June 2009. The state has failed to make actuarially recommended contributions since 2003, according to bond documents. The funding shortage was $28.3 billion in 2007.
BENEFITS OVERHAUL
Christie said the pension deficit would have grown this year even if he made the $3 billion recommended payment. He said his ability to make a $512 million contribution next fiscal year will depend on the state’s financial condition.
“There’s a benefit problem,” Christie said. “We need to get at the benefits and we need to get realistic with folks and tell them the truth: promises were made that can’t be kept. We need to go after the drivers of these costs.”
In September, Christie proposed undoing a 9 percent pension increase enacted in 2001, raising the retirement age and freezing cost-of-living raises for retirees. The governor said he will push the Democratic-led Legislature to pass a measure requiring require employees to contribute 8.5 percent of salaries toward pensions, up from 5.5 percent now.
As the economic recovery took hold, the state collected 3.8 percent more revenue in the first five months of the fiscal year than projected as income taxes ran almost 13 percent above estimates, Treasurer Andrew Sidamon-Eristoff said on Dec. 14.
WORK REMAINS
The increase may not herald the end of lean times for the state, Christie and Sidamon-Eristoff said. It may be a one-time infusion as high-income filers avoided potentially higher rates that were averted when Congress approved an extension of the Bush-era tax cuts.
“Imposing fiscal discipline is not a one-year fix,” Christie said.
During his first year in office Christie enacted a 2 percent cap on the growth of New Jersey’s property taxes, which at an average of $7,281 are the highest in the U.S. He also placed a threshold on school superintendents’ pay and limited at 2 percent raises given to police and firefighters by arbitrators when contact negotiations break down.
Getting the economy moving, as well as calls for austerity and job creation, also will dominate the speech, Christie said. The governor will also push a proposal to make it easier for school districts to fire their worst teachers and base pay on student performance.
Christie needs to get lawmakers to approve the remaining items in his “toolkit” of measures designed to help schools and municipalities stay within the new cap, which took effect this year, said Brigid Harrison, a professor of law and politics at Montclair State University. The proposals would cap contract awards and curb payouts for unused sick-leave and vacation days.
“It’s the difference between his being able to achieve political success and just being another politician with promises to lower property taxes,” she said.
Saturday, January 8, 2011
A Talk With the Doctor May Help Patients Afford Care
By Walecia Konrad, The New York Times -- Readers of this column have been advised more than once to negotiate prices with health care providers for things like an M.R.I. scan, surgery and office visits. With patients paying more out of pocket for their health care than ever before — in the form of higher co-payments and co-insurance, high deductibles and uncovered and out-of-network treatments — negotiating with doctors and other providers has become commonplace.
But how exactly should you approach these nerve-racking discussions? Do you bring it up when you book the appointment? In the examining room? And just what do you say? Dr. Jeffrey Kullgren, an internist and clinical scholar at the University of Pennsylvania, specializes in research on the impact of consumer-driven health care. Here are his answers, condensed and edited, to some common questions about negotiations with a health care provider.
Q. When exactly should patients bring up price?
A. There really is no right or wrong time. The most important thing is just that you do it.
That said, I’m a primary care physician, and often we have a really short amount of time during office visits. So I would advise not waiting until the last minute to bring up finances. It helps to bring it up early in the visit so you have enough time to talk about it.
Q. What if my physician tells me that someone else in his office handles billing and insurance, and that I should talk to that person?
A. This is the case most of the time. In a smaller practice, it may be the office manager. In a large practice, the billing staff may be in a separate location and specialize in developing payment plans. In a clinic, it may be a social worker.
No matter whom you end up dealing with, it shouldn’t preclude financial discussions directly with your doctor. Remember, physicians order services.
Billing people work on getting those services paid for, whether it is by you or insurance. They are not the ones who can offer alternative treatments that may cost less — say, generic medicines instead of brand name, for example.
Only your doctor can do that, which is why he or she needs to know your situation.
Q. What can I do to prepare for these conversations?
A. Your physician may be just as uncomfortable with these conversations as you are. That’s because — and I can tell you firsthand — doctors are simply not trained for this.
I was trained to give the very best care for my patients, regardless of cost. And many doctors are still laboring under the illusion that most people have good insurance that pays for the bulk of their care, even though out-of-pocket health care costs have gone up for everyone, and the number of uninsured is high.
With that in mind, if you can get a good handle on the tests, medicines and monitoring you will need for a health condition, as well as a clear idea of what, if anything, your insurance will cover, you’ll be able to ask your doctor and the billing staff specifics about ways you can save money.
Q. Why do patients who pay the bills themselves get charged more than patients who have insurance? Can they do anything about this?
A. What’s happening is that people without insurance are paying full price, while insurance companies, with their high volume of patients, can negotiate steep discounts. For patients paying for care out of their own pockets, it’s important to let everyone you encounter know that. The next step: ask for the discounted rate.
The reality is, you may not have as much leverage as the big insurers. But it almost always pays to ask.
Another tip: If your doctor is prescribing a test, find out if it matters where you have it done. Some physicians feel strongly that a test like, say, an echocardiogram needs to be done by a specialist whom they know and trust. Other tests are more routine.
Ask your doctor how he or she feels about the specific test you are about to undergo and if shopping around for a lab with the lowest price is an option.
Q. But how do I find out about prices, whether it’s for a lab, a hospital or a doctor? How do I shop for less expensive but still high-quality alternatives?
A. It’s not easy, but fortunately there are resources available.
First, if you have insurance, check if your company lists average prices for various treatments, tests and procedures online. A growing number of insurers are doing this. Or check your state insurance department’s Web site. Some states, like New Hampshire, publish average prices for health care treatments.
In addition, private sites like healthcarebluebook.com list average prices for common health care treatments in various parts of the country.
Each of these resources has drawbacks. Data isn’t great, and prices can vary significantly from one provider to another. But you will at least get a rough idea of what an encounter may cost.
Once you have that information, you can try to call around to different facilities and see what they are charging patients not covered by insurance for a test, procedure or office visit. Or you can take the information on what a fair price might be in your area back to your physician or health care provider and negotiate a lower rate.
Say you need an M.R.I. for your knee, and now you have an idea what it might cost. You talk to the imaging facility your physician usually uses, and you determine that the amount is substantially higher than the fair price might be. Go back and tell them that other facilities in the area are charging substantially less and you would like a reduced rate. Remind them that you are paying out of your own pocket, if that is the case.
The worst a facility can do is say no.
Q. Prescription drugs are a huge part of most people’s annual health bill. What can I do about that?
A. You can have a meaningful conversation with your doctor about what the two of you can do to lower your prescription drug costs and still stay healthy.
I suggest to my patients who take a number of medications that we periodically review their prescriptions. We go through each one asking if the medicine is still necessary and, if it is, whether there is a lower-cost alternative available. Remember, it’s important to do this only with the advice of your doctor.
I had a patient who has multiple health problems call me recently to tell me he couldn’t afford his medicines. Together we went over the 10 different pills he was taking.
We found a vitamin supplement on his list that was prescribed years ago but that he didn’t need anymore. This happens all the time. A patient will start a medication for a short-term problem and just keep taking it over time because no one thinks to take him or her off of it.
Next I changed his blood pressure medication, which was vital, from a three-month prescription to a monthly prescription to lower the co-pay.
Together we figured out a way he could afford his medications. That gives me confidence going forward that the more financial-oriented conversations that take place between patient and doctor, the more headway we can make.
Friday, January 7, 2011
Cost of healthcare repeal put at $230 billion
by Noam N. Levey, LATimes.com -- The Congressional Budget Office's latest analysis on the effect a repeal of the overhaul would have on the federal deficit may pose a challenge to GOP efforts to dismantle the law. House Speaker John Boehner dismisses the estimate.
The Republican plan to repeal the healthcare law would drive up federal deficits by $230 billion by 2021, the nonpartisan Congressional Budget Office concluded Thursday, undercutting GOP efforts to seize the mantle of fiscal responsibility.
Overturning the law President Obama signed in March would also leave 32 million more Americans without health coverage, the analysts concluded.And although health insurance premiums would be lower in some cases, the analysts estimated that without the law, consumers would get skimpier coverage and many would actually pay more because they would lose subsidies included in the new law.
House Republican leaders quickly dismissed the new projection from the CBO as unrealistic. Some analysts have also questioned whether all the savings in the sweeping overhaul will be realized.
"CBO is entitled to their opinion," House Speaker John A. Boehner (R- Ohio) said. "I do not believe that repealing the job-killing healthcare law will increase the deficit."
The closely watched CBO, an agency that lawmakers from both parties have historically relied on, is considered one of the most important independent sources for information about the effect of proposed legislation.
The new analysis underscores the cost of repealing the healthcare law at a time when millions of Americans have been losing health benefits and insurers are raising premiums. It updates earlier estimates that a repeal would cost $143 billion over the next decade, and it poses a new challenge for the GOP as the party begins its campaign to dismantle the law.
As the $230-billion hole in the budget was projected, House Republicans celebrated a $35-million savings by trimming members' office budgets by 5% this year. Those cuts, the first of promised weekly budget cuts coming from the House GOP, passed on a 410-13 vote.
The GOP has strategically exempted the cost of repealing the healthcare law from new House rules that require new costs or spending to be offset by cuts elsewhere. The House is to vote Wednesday on the two-page resolution to repeal the healthcare law.
The legislation is unlikely to progress in the Senate, where Democrats retain a majority.
Even conservative Democrats, such as Nebraska Sen. Ben Nelson, have expressed opposition to repeal, although Assistant Senate Majority Leader Richard J. Durbin (D-Ill.) said Thursday that Democrats would consider adjustments to the overhaul.
"The majority of the Senate still believes in healthcare reform," Durbin said. "We also believe that the only perfect bill ever enacted was carried down the mountain by Sen. Moses. Every other effort has needed some visitation, reconsideration, and this will too."
In the House, Republicans have not said how they would seek to change the law if their repeal effort failed.
On Thursday, Republicans rejected Democratic calls for hearings on the effect of a repeal before a vote.
"We believe that we owe the American people an up or down vote," said Rep. John Kline (R-Minn.), who will help lead the repeal effort as chairman of the House Education and Workforce Committee.
GOP leaders on the House Rules Committee rejected bids from Democrats to offer amendments to the repeal resolution that would protect parts of the law, such as new restrictions on insurance companies. That drew heated criticism from Democrats on the committee.
"You're saying: 'Let's repeal this bill. We don't have a replacement. Trust us,' " said Rep. Jim McGovern (D-Mass.). "So much for the open process. There is none."
Speaking to reporters elsewhere at the Capitol, Boehner countered: "I promised a more open process. I didn't promise that every single bill was going to be an open bill."
Times staff writers Kathleen Hennessey and Lisa Mascaro in Washington contributed to this report.
Copyright © 2011, Los Angeles Times
Thursday, January 6, 2011
U.S. health-care expenditures up only 4 percent in 2009, suggesting effects of recession
By Amy Goldstein, The Washington Post -- The nation's expenditures on health care in 2009 grew by 4 percent, the smallest increase in at least a half-century, according to new federal figures that suggest Americans stinted on medical services as they lost jobs and insurance in the recent recession.
Although health insurance premiums rose slightly faster than they did a year earlier, overall spending on private health insurance decelerated as the number of people with such coverage fell by 6.3 million. And the out-of-pocket amount Americans spent on health care barely increased, the figures show.
On the other hand, spending on Medicaid soared - by 9 percent, compared with less than 5 percent in 2008 - as more people qualified for the public insurance program for the poor.
Taken together, the figures, contained in a report released Wednesday by the Department of Health and Human Services, indicate that the severe recession that ended in mid-2009 left a quicker and deeper imprint on the health-care landscape than did other recent economic downturns.
"Job losses caused many people to lose employer-sponsored health insurance and, in some cases, to forgo health-care services they could not afford," according to the report prepared by economists and statisticians at HHS's Centers for Medicare and Medicaid Services. Compiled by the government annually since 1960, it is the most recent version of a snapshot of spending across the health-care system.
Overall, U.S. health-care spending reached $2.5 trillion, or an average of $8,086 per person. The 4 percent increase in spending in 2009 compares with more than 6 percent two years earlier, 8 percent in 2005 and double-digit jumps in 1990 and 1980.
Despite the deceleration, health expenditures continued a long-term trend of gobbling up an ever-larger share of the economy. As the gross domestic product contracted, in 2009, health-care costs accounted for 17.6 percent of the GDP - the largest one-year increase since the government has been keeping track.
On the other hand, spending on Medicaid soared - by 9 percent, compared with less than 5 percent in 2008 - as more people qualified for the public insurance program for the poor.
Taken together, the figures, contained in a report released Wednesday by the Department of Health and Human Services, indicate that the severe recession that ended in mid-2009 left a quicker and deeper imprint on the health-care landscape than did other recent economic downturns.
"Job losses caused many people to lose employer-sponsored health insurance and, in some cases, to forgo health-care services they could not afford," according to the report prepared by economists and statisticians at HHS's Centers for Medicare and Medicaid Services. Compiled by the government annually since 1960, it is the most recent version of a snapshot of spending across the health-care system.
Overall, U.S. health-care spending reached $2.5 trillion, or an average of $8,086 per person. The 4 percent increase in spending in 2009 compares with more than 6 percent two years earlier, 8 percent in 2005 and double-digit jumps in 1990 and 1980.
Despite the deceleration, health expenditures continued a long-term trend of gobbling up an ever-larger share of the economy. As the gross domestic product contracted, in 2009, health-care costs accounted for 17.6 percent of the GDP - the largest one-year increase since the government has been keeping track.
The period covered in the report ended months before Congress last year passed a broad law intended to change the health-care system, so the figures do not reflect any effects of the measure.
Pro / Con: The fairness of health insurance incentives
By Brendan Borrell, Special to the Los Angeles Times -- Many employers offer discounts to workers who take steps toward better health. This can cut costs and encourage wellness, but it could also penalize those who can't make the changes and yet will pay more in premiums.
Wanna make a fast buck? Quit smoking. According to the National Business Group on Health, which represents large employers including Wal-Mart and Wendy's, about 68% of its members either offer a discount of several hundred dollars on health insurance premiums to employees who quit smoking, or provide other incentives or penalties to make it happen.
The evidence is mixed on how well incentives like these work, but large employers are already embracing them to encourage good diets and exercise — with an eye toward keeping their employees from missing work and to keep health costs down. The revolution began with the approval of the so-called Safeway Amendment as part of President Obama's healthcare reform: This allows employers to provide employees reimbursement of up to 20% of insurance premiums (rising to 30% in 2014 or 50% with special approval) if they participate in reasonable wellness programs.
The amendment got its name because of the outspoken support of Safeway Chief Executive Steve Burd, who wrote in a 2009 Wall Street Journal opinion piece that his company's Healthy Measures program was proof that incentives could cut our nation's healthcare costs by 40%.
Some of Burd's claims, including the assertion that Healthy Measures had kept costs from rising, later proved to be not quite true. Now many critics say poorly designed wellness programs can introduce inequity into the healthcare system — when healthcare reform was supposed to reduce it.
Read on for two nuanced takes on the issue.
Wellness incentives are key but may unfairly shift healthcare costs to employees
Harald Schmidt is a health policy expert and Harkness Fellow at the Harvard School of Public Health in Boston, working on personal responsibility and health incentives.
"In principle, I think wellness incentives are a good idea. But it all depends on how they are implemented. If the focus is on just reducing the cost of healthcare rather than improving health, then you may have a problem. The second issue is, we must make sure everybody has a reasonable chance of benefiting from incentive programs. We really have a problem if some find it much harder than others, and especially if we hold people responsible for things that are in fact beyond their control.
Firstly, the evidence on whether or not incentives work is very mixed. We have evidence in some cases that they work well in the short term — boosting vaccination rates, for instance. In the longer term, it's less clear, and we can't make sweeping claims that they work in all areas. We can only find out by trying, but we have to make sure this is done in a fair way.
"More troubling is the way these incentives can be structured. As it stands, the Safeway Amendment allows you to increase premiums for all employees by, say, $500. The employer will pay you back $500 if you meet certain targets; for example, if your body mass index is below 25. This is good for people who are already healthy: They have less-expensive premiums. It may also be a real incentive for those who want to change their behavior but don't quite have the motivation. But there are a lot of people who have tried to change their behavior and regularly fail, diets being a prime example. They now face an increased contribution of $500. The person who is already healthy will benefit; the person with underlying motivation benefits. But those who try but just can't meet standards? Tough luck.
"The problem is, these incentives can hold people responsible for things beyond their control. Certainly a bad diet can contribute to obesity, but there are other genetic and environmental factors as well. Obesity and income also correlates in a clear way. Since poorer people are more likely to be obese, there's a potential double whammy: They may need to make higher insurance contributions and suffer the consequences of being obese.
"And this also brings up another interesting question: Why should people get an advantage if they are healthy? If your aim is to use money as an incentive to promote better health, does it really make sense to give premium discounts to people who are healthy already?"
Incentives can encourage good health and align the interests of the patient with those of the insurer and employer.
Kevin Volpp is a physician and the director of the Center for Health Incentives at the University of Pennsylvania School of Medicine and the Wharton School in Philadelphia.
"The reality is that we have a healthcare financing system that pays to treat people once they are sick. There's a growing recognition that health behaviors are a major driver of premature mortality and healthcare costs. We need to rigorously test approaches that can better align incentives for patients with other interests of the health system, such as employers and insurers, so that resources go to keep people healthy. Wellness incentives are a piece of that and can be used in ways that provide positive feedback to patients.
"Most people tend to be not very good at making trade-offs between immediate gratification and future health benefits. There's a probability that something bad will happen to them, but it's not definite, whereas the cost of changing a behavior is immediate and often requires a lot of effort. An incentive program can be helpful in areas like smoking, where it can help change the equation so people weigh the future consequences of their actions.
"Indeed, in our study with GE employees, we provided financial incentives up to $750, which is approximately the annual cost difference between a smoking and nonsmoking premium. That incentive tripled the long-term smoking cessation rate, and in January 2010, GE decided to implement the program for all their employees.
"I believe that these programs can be implemented fairly. Lower-wage workers tend to have higher rates of the health problems we're trying to fix: smoking and obesity. Consequently, offering programs for these conditions might disproportionately help lower-income people. I'm not sure why some people think they are going to be less likely to be helped. The same dollar amount may have a greater impact on a lower-income person.
"One of the things that is unanswered is whether, when you do a program, you should offer awards based on achievement of outcome or effort. The evidence out there suggests that it is less effective to pay for effort than outcome. There are lots of reasons you can imagine simply showing up at a smoking cessation program doesn't work on its own — because many programs aren't that effective. Rewards for achieving better outcomes, on the other hand, seem to work quite well."
health@latimes.com
Copyright © 2011, Los Angeles Times
