Health Care Reform

Robert Wood Johnson Foundation

November 1, 2010

New brief examines what grandfathered health plans mean for consumers, employers and insurers.

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State steps up as insurers curb policies for sick kids (New Mexico)

By: Trip Jennings

The New Mexico Independent

October 26, 2010

State opens high-risk pool to children with preexisting conditions.

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HHS announces availability of $3.9 million to support families of children with special health care needs through the state-based Family-to-Family Health Information Centers

HHS

October 26, 2010

HHS Secretary Kathleen Sebelius has announced $3.9 million in funding to continue support for Family-to-Family Health Information Centers.

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NAIC Rebuffs Insurance on Rule Setting Minimum Medical Payouts for Insurance Policies

By: John Reichard

The Commonwealth Fund

October 21, 2010

The National Association of Insurance Commissioners (NAIC) on Thursday concluded months of intense deliberations on a key rule establishing minimum medical payouts under the health care overhaul law by rejecting arguments that would have given insurers much greater flexibility to meet the standards.

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Federal Funds to Help Consumers Combat Insurers Roll into States

By: Jane Norman

The Commonwealth Fund

October 19, 2010

Consumers will get help resolving disputes with insurance companies and better information before enrolling in health plans under $30 million in grants awarded to states Tuesday by the Department of Health and Human Services (HHS).

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Medicaid

Idaho to cut $8 million in Medicaid services

Associated Press

October 27, 2010

Cuts in Medicaid budget will greatly impact children with special health care needs.

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Events

2011 AMCHP and Family Voices National Conferences

Date: February 12  - 15, 2010

Location: Washington, DC

Registration is now open for the 2011 AMCHP and Family Voices National Conferences.

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Catalyst Picks

Many children not receiving needed mental health services

HRSA

October 19, 2010

New HRSA report released on mental and emotional health of US kids.

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The Case for Inclusion: An Analysis of Medicaid for Americans with Intellectual and Development Disabilites

By: United Cerebral Palsy

2010 Report

United Cerebral Palsy has released it's annual report looking at where states stood before the recession in providing community-based Medicaid services for people with intellectual and developmental disabilities.

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State steps up as insurers curb policies for sick kids (New Mexico)

By: Trip Jennings

The New Mexico Independent

October 26, 2010

Four of the state's major health insurers plan to limit the number of new insurance policies they write for children with preexisting conditions, prompting the state to take action earlier this month to ensure youngsters potentially affected won't go without health coverage.

New Mexico threw open the doors of its high-risk pool to youngsters upon learning that the insurers were, in effect, largely walking away from writing new child-only insurance policies.

The nation's new health care law prohibits insurers from denying coverage to children under 19 with preexisting conditions, but insurance companies fear that means families with sick kids could sign up for policies right before extremely expensive treatments, leaving them with no choice but to cover the sky-high bills.

The board for the New Mexico Medical Insurance Pool voted to waive a rule requiring applicants show proof, usually in the form of rejection notices, that they are uninsurable. The action was taken to ensure the children get coverage, Deborah Armstrong, the pool's executive director, said Monday.

"We saw the children as a class of individuals who wouldn't get insurance coverage," Jason Sandel, acting board chairman of the high-risk pool, told The Independent.

The insurers' decision to severely limit new child-only policies provoked disappointment, even indignation, in some corners Monday.

"While we are proud to be offering coverage to the state's uninsured children at this time, the current neglect of children within the private market is very unfortunate," Sandel is quoted as saying in a news release issued late Friday.

One health care advocate had even stronger words.

"It's hard to hear this in a country that prides itself on equality that we would fight over children with preexisting conditions," said Barbara Webber of Health Action New Mexico, which advocates for affordable and accessible health care.

State doesn't know how many kids will be affected

Lovelace, Presbyterian, United and Blue Cross and Blue Shield all notified the state that they intend to limit how often they will take applications for health coverage for children with preexisting conditions to once or twice a year in open enrollment periods, state officials said Monday. The notifications came during a meeting of the high-risk pool's board Oct. 14 and 15, Sandel said.

That change is a sharp deviation from past practice in which insurers allowed enrollment all year long, and would severely limit how many child-only policies are written.

Presbyterian and Blue Cross Blue Shield could not be reached for comment Monday afternoon. The Independent previously reported on Lovelace Health Plan and its plans to allow parents to apply for child-only health policies only to one month every year.

It is unclear how many children might be affected by their decision. But state officials said the number didn't matter.

"Whether we're talking about one child or 1,000 children up to the age of 19 who aren't being provided services as the Patient Protection and Affordable Care Act (PPACA) intended - these young people will be allowed access to our pool - that's what we do," the state's insurance superintendent, John Franchini, is quoted as saying in last week's news release.

Currently, premium rates for children at the New Mexico Medical Insurance Pool are $142 per month for a $500 deductible plan, according to last week's news release. Premiums are lower for higher deductibles.

Policies will still be available in New Mexico-but parents will only be able to apply during one or two months per year

It's unclear when the health insurers will hold their open enrollment periods. "All of them apparently want to hold their respective open enrollment periods at different times of year," Gerald Garnder, a spokesman for the New Mexico Public Regulation Commission, told The Independent via e-mail Monday.

Franchini and members of the Insurance Division will meet with these companies next week to discuss the particulars, Garner said.

At heart in the insurers' decision is the tug of war inherent in the insurance industry between balancing costs and spreading the risk around of pay outs due to unexpected medical costs.

Insurance is at its core based on the concept of shared risk, meaning the more people who are insured reduces the risk of catastrophic medical costs an insurer is required to pay out in certain situations. A requirement to cover already sick children could expose insurers to large medical costs, industry officials have said.

A health insurance industry representative has described the new federal provision as a powerful incentive to parents to wait until their child becomes sick before they buy insurance, potentially costing insurers money.

NAIC Rebuffs Insurance on Rule Setting Minimum Medical Payouts for Insurance Policies

By: John Reichard

The Commonwealth Fund

October 21, 2010

The National Association of Insurance Commissioners (NAIC) on Thursday concluded months of intense deliberations on a key rule establishing minimum medical payouts under the health care overhaul law by rejecting arguments that would have given insurers much greater flexibility to meet the standards.

The recommendations agreed to by the NAIC were hailed by the Obama administration and blasted by the insurance industry.

The nation's largest health insurance lobby-America's Health Insurance Plans (AHIP)-issued a statement predicting that a number of insurers would be forced to drop out of the market as a result of NAIC's action and that others would pare back their spending to improve the quality of care and prevent fraud.

The recommendations, which NAIC will forward to Health and Human Services (HHS) early next week, "will reduce competition, disrupt coverage, and threaten patients' access to health plans' quality improvement services," said AHIP President Karen Ignagni.

HHS Secretary Kathleen Sebelius hailed the NAIC recommendations as a victory for consumers. She said they would not imperil the availability of coverage.

"Not only do they ensure consumers receive better value for their health care dollar, they recognize special circumstances in different markets to preserve market stability and employee coverage," Sebelius said in a statement on NAIC's unanimous vote.

NAIC was responsible under the law for recommending how various types of spending by insurers should be counted-whether as "medical" or "administrative"-under a "medical loss ratio" (MLR) rule setting minimum percentages of premium income insurers must pay for medical care.

The law requires that policies sold to individuals and small groups pay out at least 80 percent of premiums for medical care. In the case of policies sold to larger groups, the minimum is 85 percent. To the extent insurers fall short of the standards, they must issue rebates to purchasers of the policies.

HHS is expected to issue a regulation within weeks based on the NAIC recommendations. The standards take effect Jan. 1. Insurers will have to issue rebates in 2012 in the amount they fall short of the standards in 2011.

Aggregation Rejected

Insurers had hoped to persuade NAIC that their medical payouts could be "aggregated" across the various states in which they operate to calculate a national average. That would have made it easier to meet the standards than having to meet them in each state in which they do business.

But the NAIC rejected the idea of having a national average.

Another issue that the NAIC tackled was compensation of insurance agents. Agents did not want their commissions treated as administrative expenses because insurers likely would trim those payments if they were counted that way. But NAIC decided it did not have the flexibility under the law to count commissions as anything other than administrative spending.

Commissioners did agree, however, to ask HHS to establish a working group to address agent compensation. The National Association of Insurance and Financial Advisors issued a statement praising the commissioners for that action.

NAIFA President Terry K. Headley said that "while disappointed the NAIC did not believe it has the authority to modify the MLR definition to accommodate agent commissions, NAIFA is hopeful that the NAIC and HHS will side with consumers by recognizing that agents need to be compensated for the vital assistance they provide consumers in managing day-to-day health care issues."

Insurers Wanted Transition

Ignagni said that the recommendations would undermine the key goal of the overhaul law, improving access to insurance while minimizing disruption to the existing insurance market. "We are concerned that the current draft proposal will create unintended consequences," she said.

AHIP also emphasized the importance of having NAIC suggest regulations establishing transition periods to ease compliance burdens and complained that the recommendations took too narrow a view of what constitutes quality improvement spending that can be counted under the MLR rule as medical care.

At a press briefing after the vote, one key commissioner said the NAIC knows fully that some insurers may have a tough time meeting the standards being set.

"This is placing on [insurers] some pretty stringent requirements," Kansas Insurance Commissioner Sandy Praeger said. Praeger chaired one of two main NAIC committees overseeing the development of the recommendations.

"There are some companies that probably in the current environment operate below these new established standards," Praeger added. "I think that most [commissioners] feel that the large group market is not going to have much difficulty complying with the 85 percent, but in the individual and small group market where you have a really small book of business there might be some difficulty."

A longtime health insurance executive who requested anonymity in order to speak more freely predicted that Sebelius, who earlier in her career served as the insurance commissioner in Kansas, would ease the impact of the rule on markets where a it looked like a significant number of insurers would drop out.

NAIC "did not issue transition regs, but on the other hand, the secretary has flexibility to issue waivers," the executive said. "It's highly unlikely she would ignore waiver requests where the insurance commissioner or the governor said: 'We need a waiver or the market could be severely disrupted.'"

"She's a former insurance commissioner and really understands these issues, the source said. "On the other hand, she's going to make states justify such requests."

Praise for ruling

Sen. John D. Rockefeller IV, who authored the MLR portion of the overhaul law, and Health Care for America Now (HCAN), a consumer group, praised the NAIC decision.

"Because of this strong standard, health insurance companies across the country will not be able to take advantage of people in states with weaker consumer protections,'' Rockefeller, D-W.Va., said in a statement. "And, those companies that fail to meet the benchmark will be held accountable-if they are overcharging, they will be required to increase benefits, lower premiums, or pay rebates directly to consumers.''

The senator pointed to a report last week by Citigroup Investment Research health analyst Carl McDonald who estimated that had just the minimum MLR rule been in effect for 2010, consumer rebates would have totaled nearly $900 million.

HCAN Executive Director Ethan Rome called the NAIC decision "an important milestone in the implementation of the Affordable Care Act.

"After HHS adopts the commissioners' recommendations, the formal rule will end the insurance companies' practice of spending too few premium dollars on actual medical services even as they deny people the health care they need and charge us more and more."

Federal Funds to Help Consumers Combat Insurers Roll into States

By: Jane Norman

The Commonwealth Fund

October 19, 2010

Consumers will get help resolving disputes with insurance companies and better information before enrolling in health plans under $30 million in grants awarded to states Tuesday by the Department of Health and Human Services (HHS).

HHS Secretary Kathleen Sebelius announced the grants to 35 states, four territories and the District of Columbia at a news conference at HHS. She said that for years, consumers and small businesses have been left to fend for themselves in the complex and often confusing insurance market. But help is on the way via the new health care law.

"When insurance companies rejected a claim people felt they had nowhere to go," Sebelius said. Now states will use the grant money to educate consumers about their new rights and consumer protections under the law (PL 111-148, PL 111-152).

Karen Pollitz, deputy director for consumer support at HHS's Office of Consumer Information and Insurance Oversight, said many of the programs receiving awards will be at state insurance departments. Congress wanted to provide direct assistance to consumers who have complaints or need to make appeals, Pollitz said. Many of the grantees already have track records recovering money for their state residents, she said.

"These programs are also important because they'll have a sentinel effect," she added. The law requires grantees to collect data and report on problems consumers are encountering. "That will help us to strengthen oversight" and dig deeper into the sources of common problems, she explained.

"Because there will be a watchdog in the marketplace I think everyone will be a little more accountable and a little more careful to provide the coverage consumers are entitled to," she said.

For example, New York will receive $1.76 million to "provide consumer assistance to at least 8,000 New Yorkers with their enrollment in coverage and/or their navigation and disputes with insurance carriers," said an HHS statement. The money will also pay for expanded walk-in services and public education about the state's high-risk pool.

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Idaho to cut $8 million in Medicaid services

Associated Press

October 27, 2010

BOISE, Idaho (AP) - The state is poised to make $8 million worth of cuts to Medicaid programs and services that cater to low-income adults with severe mental illness or children with disabilities like Autism.

The Idaho Department of Health and Welfare has drafted a new set of rules that would authorize cuts designed to save the agency about $1.6 million. The state cuts, however, would also trigger the loss of another $6.5 million in Medicaid matching money used to pay for those services.

Advocates for the mentally ill and disabled say the rules unfairly target a group that can ill afford rollbacks in services and programs.

Set to go in effect in January, the reductions or elimination of some services target programs for adults diagnosed with severe depression and schizophrenia, or children with Asperger's syndrome or other developmental challenges.

Many children not receiving needed mental health services

HRSA

Of nearly 7.4 million children in the United States diagnosed with emotional, behavioral, or developmental conditions, a disproportionate number do not get the mental health services they need because they are underinsured, according to a new report released by the Health Resources and Services Administration (HRSA).  The study also finds that boys, adolescents, and children from low-income families are affected by conditions such as depression or Attention Deficit Disorder at higher rates than other children, but that adequate health services for these children remain an unmet need. 

The report, "The Mental and Emotional Well-Being of Children: A Portrait of States and the Nation 2007," identified seven emotional, behavioral, or developmental conditions: depression, anxiety, Attention Deficit Disorder/Attention Deficit Hyperactivity Disorder, conduct disorders, autism spectrum disorders, developmental delay and Tourette Syndrome. Children with these conditions can benefit from a variety of therapies including counseling and medication.

Additional findings include:

• 11.3 percent (nearly 7.4 million) of children in the United States are reported by their parents to have been diagnosed with emotional, behavioral, or developmental conditions.
• Nearly two-thirds (65.7 percent) are boys
• More than half (51.1 percent) are between the ages of 12 and 17 years
• Nearly one-quarter (24.8 percent) have family incomes below the Federal poverty level
• One-third of these children have also been diagnosed with a chronic physical condition
• 29.4 percent of diagnosed children with insurance were reported by their parents to have insurance that did not usually or always meet their needs.
• 40.3 percent of diagnosed children have more than one emotional, behavioral, or developmental condition.
• 45.8 percent of children with one or more emotional, behavioral, or developmental conditions also had learning disabilities, compared to 2.7 percent of children without these conditions.

More in-depth information about the survey and its findings can be found at:

 http://www.mchb.hrsa.gov/nsch/07emohealth/index.html.