Alaska Health Policy Review
comprehensive, authoritative, nonpartisan
May 4, 2010 - Vol 4, Issue 15
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From the Editor
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Dear Reader:
Inundated by the ceaseless welter of national health reform facts and foibles, it is hard to stay focused on any of it not to mention determine priorities. Given this frustrating dilemma, my attention was instantly drawn to a recent Families USA document, First 90 Days: State Advocates' To-Do List. Ah, shelter from the storm -- short time frame and limited To Do list. Let's see what we have....
Temporary Coverage for Uninsured People with Pre-Existing Conditions: Effective within 90 days of enactment, federal funding is available to cover individuals who have pre-existing conditions and who have been uninsured during the six months before they apply for coverage through this new, temporary program.
Grants for Consumer Assistance Offices or Health Insurance Ombudsman Programs: Grant funding will very soon be available for states to establish or support consumer assistance offices and health insurance ombudsman programs. These offices and programs assist health care consumers with filing complaints and appeals, collect and track consumer problems and inquiries, educate consumers on their rights and responsibilities, assist consumers with enrollment into health coverage, and will eventually resolve problems with premium credits for exchange coverage.
Grants for Rate Review: Under health reform, the secretary of HHS will work with the states to establish a process for annually reviewing premium increases requested by insurance companies. Insurers will have to justify unreasonable rate increases prior to implementing the increases and post information about rate increases online.
Medicaid and CHIP Maintenance of Effort (MOE) Requirements: Effective upon enactment, health reform requires states to maintain eligibility and enrollment policies for Medicaid and CHIP as a condition of receiving federal funding for Medicaid. States cannot reduce income eligibility levels or implement enrollment policies that make it harder to enroll in coverage than it was as of March 23, 2010 (the date health reform was enacted).
Option to Expand Medicaid Before 2014: All states are required to expand Medicaid eligibility to 133 percent of poverty beginning in 2014, and will receive full federal financing for all newly eligible individuals in 2014-2016. However, starting April 1, 2010, states can expand Medicaid to adults with incomes up to 133 percent of poverty through a state plan amendment (a waiver is not necessary) and receive their normal federal matching rate for this coverage.
Here it is. Some real, genuine, positive health reform measures we can begin to implement right now. See the full document, linked above, for more examples, important details, and suggestions. This is getting exciting! I may have to give up coffee.
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Overview of National Health Reform By Deb Erickson |
 The short version of the new national health reform law spills across 1,200 pages. What is in it for Alaskans? In order to find out, we attended -- recorder in hand -- an excellent presentation recently given by Deb Erickson, executive director of the Alaska Health Care Commission. Her talk ranged far and wide from individual mandates to tanning bed taxes and a massive Medicaid expansion. You may find Erickson's discussion a bit easier to absorb if you print out and refer to a copy of the accompanying PowerPoint outline of the issues. Following the initial presentation, there was extensive commentary by legislative aides from the offices of the three members of Alaska's Congressional delegation. Let us just say that the view of this new law through their political lenses yields quite different interpretations. In the article that follows the Erickson discussion, we present a summary of these three most interesting and rather diverse discussions. This extraordinary series of discussions took place at the Commonwealth North Health Care Action Coalition meeting April 15, 2010. Commonwealth North regularly sponsors these high-level health policy discussions, and they are open to the public.
Links to selected topics
... And 1000 Pages is Just the Beginning
Health Insurance Market Reforms
24,000 More Alaskans Covered in 2014
Requirements and Mandates For Individuals
Employer Requirements and Subsidies
Title V: Health Care Workforce Development
Title IX: Funding Health Care Reform
Erickson: This presentation is an attempt to lay out a general overview of the major provisions that are contained in the [new national health reform] law, trying to lay them out as objectively as possible just for informational purposes at this point. There isn't anything in here that is providing any sort of analysis of potential impacts for Alaska on the bill, except there is one slide where we include some Medicaid estimates. Other than that it's very early and we're updating regularly what's going on at the federal level.
[Referring to slide 2] We do have two federal laws now. Both have been signed by the president and enacted. What was H.R. 3590, was the bill that was essentially the U.S. Senate's health care reform bill that passed the Senate back in December. That bill was passed by the House on March 21, and was signed by the president and is enacted on the date that it was signed by the president, March 23. The Reconciliation Act, which was the bill that made the changes that the House wanted made to the Senate bill, was H.R. 4872. It's now Public Law 1.11.152. It passed Congress on March 25 and was signed by the president on March 30, and was enacted on that same day as well.
" ... Governor
Parnell has asked our attorney general to review the new
law for constitutionality, and to follow what these other states are
doing. We've also convened an executive branch interagency team just to
begin the work of trying to understand the impact, ..."
I'm sure you've all heard in the media that there are now, I believe, 18 states that have come out and publicly stated that they are planning to sue the federal government over the passage of this new law. At this point, in Alaska, our Governor Parnell has asked our attorney general to review the new law for constitutionality, and to follow what these other states are doing. We've also convened an executive branch interagency team just to begin the work of trying to understand the impact, and looking at the different areas that pertain to different parts of the state government. For example, our director of the Division of Insurance, Linda Hall, and her staff are studying both the work that state government might be required to do -- related to the new regulatory provisions that insurance market reforms -- just as an example.
Of course this law is going to impact the Department of Health and Social Services at the state level significantly, and we have all three deputy commissioners involved from there. We are also needing to study what the potential impacts on state government will be, related to the state as an employer since there are employer requirements included in this bill, so that we have the Department of Administration involved in helping to study and analyze what the impacts to state government will be from that perspective.
So, we're convening and starting to get together to figure this out, and I did bring a copy here. I have a printout of the full bill, both of the full bill and the Reconciliation Act.
Audience Member: All 2,000 pages?
Erickson: All. It actually is down to 906 pages now, just because they took out the double spacing and the lines, but it's still a good ream of paper when it's printed double-sided -- and that's without the Reconciliation Act which is another, I don't know, 150 [pages] or so. It's a lot, but it's still law. And moving on to the next slide, I guess the point about the fact that this is still law, is it's only the beginning of the more detailed implementation work that will start to need to happen at the federal level. We had heard from the National Governors Association recently that they would anticipate that we will see over the next several years, not just several months, as many as 100 pages of federal regulations for each page of the new law. That seemed a little bit high to me, so in my slide I added 'Program Guidance,' 'Grant Guidance,' and some other federal documents that we're going to see that are going to actually bring the details that we're going to need to really understand. Back to selected topics list
... And 1000 Pages is Just the Beginning
There are so many details that are needed. While you would think there would be enough detail in 1,000 pages, it's really just the beginning. We've just started receiving some of those guidances -- it will be a while, I would imagine, before they can start cranking out some federal regulations. The state already received the first guidance memo related to the new law from CMS [Centers for Medicare and Medicaid Services] just a few days ago. There's an optional provision for states that would allow them to expand Medicaid early. I'm going talk about the Medicaid expansion a little bit later here, but that was the first guidance memo received.
On slide five I just outlined, kind of in my own words to simplify the flowery language, what the different titles of the bills are, of the act, and what they address. So Titles I and II are both related to "Health Care Coverage." Title III is related to "Health Care Delivery," Title IV is devoted to programs for "Prevention and Public Health," Title V is related to "Health Care Workforce Development" and programs for that. I'm going to go into a little more detail on each of these, but I just wanted to give you an overview of the structure and what's included.
Title VI is "Fraud, Waste and Abuse," Title VII "Medical Technology," Title VIII is related to -- I don't know if those of you have been following up more closely might've heard of the "CLASS Act" -- Title VIII is the CLASS Act, which is "Community Living Assistant Services and Support," which is the long-term care insurance program the feds are now required to establish. Title IX is where all of the new taxes and fees that will finance the reform are included. Title X I've titled, "Amendments." I was joking the other day that when you read Democrats' policy analysis of the bill, they call that title the "Improvements." It's where all of the changes were made after the bill was introduced in the Senate to get the different fixes in it they wanted in the Senate. You read the Republican analyses and they call that section the "Backroom Deals."
I actually started a little table for myself because it was entertaining as I started to review different analyses from different places, different words that would be used. I have my own dictionary for defining what the Democrats call this, what the Republicans call it, [and] what I think it really means. Back to selected topics list
Health Insurance Market Reforms
Some of the major provisions -- I'm on slide six -- are the major areas of change related to health care coverage. This is just the next level breakdown in my outline here, and then I'll go into each of these in a little more detail. Related to health care coverage there is a series of health insurance market reforms, the requirement for the establishment of health insurance exchanges, and requirements for states to expand Medicaid. There are a number of other new types of insurance programs created under the bill. There are also the individual mandates and subsidies for individuals to purchase insurance, and employer mandates and subsidies.
Moving on to the next slide [slide ten], [I am] going into a little more detail on the insurance market reforms that are included. I've just listed some of the reforms that are included, related to changing requirements and regulation of insurance, so that insurance will be more accessible for folks. The inclusions for pre-existing conditions are now prohibited, or will be soon for children. I believe that will take effect in about six months for adults. The prohibition on exclusions for pre-existing conditions will take effect in 2014. Something else that will take effect this year is the extension of dependent coverage to 26 years of age. Limits on lifetime benefits will be prohibited beginning later this year. Also, there will be some restrictions on annual limits, and this gets way more complicated, I guess I wanted to [say], as another caveat.
There are provisions for grandfathered plans, and it gets complicated. I'm trying to simplify as much as possible. I haven't even begun to understand myself all of the details behind this. There will be a prohibition on rescissions, so insurance companies won't be allowed to rescind insurance, take insurance away from folks for whatever reason, I suppose, if they become ill. Medical loss ratios are going to be restricted. What that means is the amount of money that insurance companies are required to spend, the proportion of the income that they're to spend [from] premiums on actual medical care -- on paying for medical services -- will be set, and is set now in federal law. I believe it's about 85 percent, it varies, but it's 85 percent for most major plans. And that will begin, I understand, in 2011.
"There'll be guaranteed issue and renewal rules imposed in 2014, and
then new rating rules so insurance companies will be less able to limit
the variations in premiums that they charge. The level of premiums will
be limited to [variations in] geographic area, tobacco use, age, and
family composition."
There'll be guaranteed issue and renewal rules imposed in 2014, and then new rating rules so insurance companies will be less able to limit the variations in premiums that they charge. The level of premiums will be limited to [variations in] geographic area, tobacco use, age, and family composition. One point that is specific to community rating, but this is a general prohibition that's included in the new law, is related to gender discrimination. That is something else that insurance companies might sometimes use as a way to vary insurance premium levels -- just the fact that a person is a woman, with the possibility of having a pregnancy and the possibility of costing a lot of money at some point down the road. That's something that will be prohibited under these new community rating rules, just as an example.
Moving on from the insurance market reforms, slide eight, "Health Insurance Exchange." The federal government is required to set up an exchange for every state unless the state chooses to do so. States are going to have the option to set up state-based health insurance exchanges for making information and access to insurance for the public. I'm not going to go into the details, but there are lots of requirements related to benefit plans and structures and that sort of thing. Beyond what is in the law, we already have lots of questions about the sorts of things that will be required in regulation, in the grant program guidance that states will eventually receive.
There is an option for states to go in together. For example, [in] Alaska we've been talking about the fact that we are so small, population-wise, that we might not be able to put together a viable exchange that we can get insurance companies to participate in, but we might participate with other states if we choose to participate at all in this program. Again, if the state chooses not to participate in the health insurance exchange program, the federal government is required to, by this law, the U.S. Department of Health and Human Services is required to set up a health insurance exchange for those states that won't. We are told to expect initial grant dollars to be made available later this year for planning and implementation for states for creating the health insurance exchanges. Secretary Sebelius is required to make a determination during the year 2013 for each state, whether they are prepared to be ready to implement. The law requires that the exchanges be implemented in 2014, January 1, 2014.
The secretary is required to make a determination about which states are going to be ready in 2013, and, to begin setting up -- for those states that aren't ready -- a federally-administered exchange. States will have the option to contract with a nonprofit. They won't have to administer it themselves. Another thing about this provision is that the health insurance exchanges are required under the law to be self-sustaining by the year 2015. Back to selected topics list
24,000 More Alaskans Covered in 2014
The next slide, slide nine, is related to Medicaid expansion. Medicaid expansion is mandated to take effect in the year 2014. Under the expansion, eligibility will be expanded to all individuals under 65, including childless adults, for those individuals up to 133 percent of the federal poverty level. Effective immediately, as soon as the initial bill was signed by the president, all of the states had a "maintenance of effort" requirement imposed -- effective on that date -- which means that we are not allowed to change the eligibility standards now, for our state's Medicaid program. That will be in effect for adults until the insurance exchanges are up and running in 2014. Or, if we get an exchange operational earlier than that, I suppose it's a possibility, then we'll be released of that restriction and that requirement.
"Medicaid expansion is mandated to take effect in the year 2014. Under
the expansion, eligibility will be expanded to all individuals under 65,
including childless adults, for those individuals up to 133 percent of
the federal poverty level."
For children we're required to keep that "maintenance of effort" in place until 2019. And there is, I mentioned a little bit earlier, there is an option to expand early. Related to this Medicaid expansion, the federal government is going to kick in a much greater share of the FMAP, which is the Federal Medical Assistance Percentage, which is the state's share of Medicaid. I'll go over that in a little more detail in a minute. With this option to expand coverage earlier under Medicaid, we would be required to do it under our existing FMAP rate. So, we wouldn't have the same level of support from the federal government if we chose to expand early.
The next slide, slide ten, just shows the level of federal government support for the Medicaid expansion. For the first three years the federal government will pick up 100 percent of the bill, of the expansion. After that, beginning in the year 2017, states will begin to have a greater share in paying that bill. The federal share is 95 percent. The state's share will start at 5 percent and phase in to 10 percent in the year 2020 and beyond. Again, as I was mentioning earlier, the one slide where we included a little information on the impacts to Alaska, slide 11, is where we have projections of what we believe the cost to the state government will be, related to the number of new enrollees in the program.
This is just a summary. This isn't newly eligible, this is how many we expect to enroll for newly eligible of those adults who will now be eligible for Medicaid enrollment. Between 20,000 and 24,000 [will be eligible], growing gradually over the years as that population ages and grows. The state's share will start kicking in the year 2017. We estimate the cost in state general fund dollars to be about $5.5 million in that year, eventually growing to about $13, $14 million as the population grows, and with medical inflation it will grow just a little bit after that.
Audience Member: Deb, if I could just interject. These are just based on very rough assumptions. Any changes in the economy could certainly impact our projections into the out years.
Erickson: Yes. These [slide 12] are just some examples of some of the new insurance programs that are created. One of the provisions that takes effect immediately is the creation of new high-risk health insurance pools. And there are 35 states in the country who already have high-risk health insurance pools, and Alaska is one of them -- ACHIA, the Alaska Comprehensive Health Insurance Association. The federal government is most interested in contracting with those states that have a high-risk insurance program in place already, to administer the new federal program for those states.
" ... the Federal Office of Personnel
Management, is required to set up new health plans, multi-state health
plans, in each state. I believe ... at least two
for each state, that would be shared with at least one other state
across state boundaries. I believe one of the two has to be with a
for-profit, and one has to be with a non-profit health insurance agency."
It's something that the state's considering right now. They've already received a letter from Secretary Sebelius to start considering this and providing some preliminary information about it. There are probably more questions than answers right now, and the state needs to assess whether there is a sufficient benefit, and what the risks would be to state government to take on provision of this. If a state chooses not to, [for example] it determines that there's too great a risk to the state because there's a concern that there won't be enough money provided, or a concern that it will be set up just to be taken down -- it is a temporary program and it's only meant to be in place until the insurance exchanges are in place as well. So, those are the sorts of things that the analysts are looking at right now. If the state government decides not to participate, then the U.S. Department of Health and Human Services will be required to establish this new, a second, high-risk pool plan for Alaska.
The federal government, actually the Federal Office of Personnel Management, is required to set up new health plans, multi-state health plans, in each state. I believe they are required to set up at least two for each state, that would be shared with at least one other state across state boundaries. I believe one of the two has to be with a for-profit, and one has to be with a non-profit health insurance agency -- that's what I'm remembering about this, but we will see how that plays out here. That's not something that the states have an option to participate in, it's something that the Office of Personnel Management is required to release these contracts for.
Health care cooperatives -- you've maybe heard about those at some point in the media. [These are] the new non-profit member-operated health insurance companies. The federal government will make loans and grants available to set those up in each state. Health choice compacts are another provision. State health insurance regulators will have an opportunity to enter into compacts in order to facilitate the creation of more multi-state health plans. Those will be established and allowed starting in 2016. Back to selected topics list
Requirements and Mandates For Individuals
Health care coverage, slide 13, related to the individual requirements to purchase insurance and the new federal subsidies available for individuals. These will all take effect in the year 2014. Both the requirements and the mandates for businesses, some of the subsidies take effect this year. Starting with individuals, the mandate means that an individual has a choice between buying insurance or paying a tax penalty. The tax penalty will grow too. It will be phased in starting in 2014. It actually starts at $95 per year per individual, and it's capped for families at three times whatever the individual penalty is. But it will eventually grow to $695 per person per year in the year 2016. Beyond that, 2017 and beyond, there will be some adjustments made to that, just based on inflation. There are exemptions for the requirement to buy insurance or pay the penalty, and just I've just listed some examples here: financial hardship, religious reasons, American Indians and Alaska Natives are not required to do it either.
Audience Member: Deb, correct me if I'm wrong, but I also believe on that list is TRICARE [the health care program serving active duty service members, National Guard and reserve members, retirees, their families, survivors and certain former spouses worldwide], which is an important population within the state of Alaska.
Erickson: I don't know if it's explicitly in the law included as an exemption, but I think we determined that people who are on it ... it is included explicitly?
[Amanda Makki, Senator Murkowski's aide who is on the phone, notes that a new law was just passed a few days earlier to provide this fix.]
Erickson: The individual subsidies will start taking effect in the year 2014 as well. Premium credits will be refundable, or advanceable -- I don't understand the details yet of how that will work -- to the extent that there are details out. These credits will be available for purchase of insurance through the exchange. They will apply to individuals and families with incomes between 133 percent and 400 percent [of federal poverty level]. The amount of the subsidies will be tied to the cost of plan. Leaving out lots of details, there are different tiers of benefits. They are going to take one of the tiers of benefits, I think the Silver Plan, and figure out the average cost in the region for that level of plan. So that's the plan costs that they will look for, to tie subsidy level to, and then it will be set on a sliding scale beyond that, based on where the individual and family falls between 133 percent and 400 percent of poverty. In addition to the premium credits, there will be cost-sharing subsidies as well, for folks between 133 percent and 400 percent of poverty. Back to selected topics list
Employer Requirements and Subsidies
Moving on to slide 15 for the employer requirements and employer subsidies. Mandates on employers will take effect in the year 2014, and the subsidies for small businesses actually start taking effect this year. I'll get to those in a minute. As far as the requirements -- small employers, and whether a business is a small employer -- the definition of "small employer" varies in different places and different provisions throughout the law. In this case, a small employer is defined as employers with less than 50 employees. Employers with less than 50 employees are exempt from this requirement. They are not required to provide insurance for their employees, and they will not be forced to pay a penalty if they do not.
Employers with greater than 50 employees [have] different levels of penalty. The way it is set up is, if they have one or more employees who actually receives a subsidy through the health insurance exchange and they do not offer coverage, then they are required to pay a fee of $2,000 per year, per FTE [full-time employee]. The first 30 employees in their business are exempt from that calculation. If one or more of their employees receive a subsidy through the insurance exchange, and they do provide some level of coverage already for their employees, they'll be required to pay a fee of $2,000 per FTE, or $3,000 per subsidized employee, whichever is less.
Audience Member: Wow, I can see the regulations coming down on that.
Erickson: This will be one of the areas that state government, as an employer, will be looking at what the requirements are. Beyond that -- and the state will fall into this next category but I'm not sure how this will be implemented -- employers with greater than 200, the largest employers, are just required to provide insurance for their employees. One provision that we're going to need to be looking at again, state government as an employer, is providing vouchers. Employers will be required to provide vouchers to employees with incomes less than 400 percent of federal poverty level who choose to participate in the exchange.
This was just a minor thing, just a note, in this presentation I put together at the request of, and to give to, the legislature. I was trying to highlight it for them [because] they were particularly interested in the impact on state government a couple of weeks ago when we were going over this. This seems like a minor detail but this is something that employers will have to do beginning next year. [They will have to] report the value of health care benefits on employees' W-2s.
Employer requirements and subsidies. The subsidies begin in the year 2010 for the smallest employers, for those with 25 employees or less. They will begin receiving tax credits this year. These are employers with 25 or fewer employees who have average annual wages of $50,000 or less. So those smallest employers will begin receiving tax credits this year, for the tax year 2010.
" ... there were more provisions related to some of the other areas addressed
in health care improvement plans generally, like prevention and public
health. We have this new act for prevention and public health, that
essentially creates a whole bunch of new grant programs and appropriates
a bunch of new federal money for those programs."
There is also a new reinsurance program that's being established this year, something that the state government might actually benefit from, potentially. For employers -- and the law stipulates specifically state and local governments are included in the definition of employers for this provision -- who offer health insurance to early retirees. As an incentive to businesses to provide coverage for their retirees who are below the age of entry into Medicare, under 65, but greater than 55, the federal government through this new program will reimburse employers 80 percent of retirees' claims, between $15,000 and $90,000. It's a temporary program. It will take effect this year, but then will expire when the insurance exchange and the Medicaid expansion, take effect in the year 2014.
So, that's it for coverage, which is a huge part. One of the things that was interesting, and going through this bill in more detail [is that] we've mostly heard about this act as "health insurance reform," and it's significantly about that. But there were more provisions related to some of the other areas addressed in health care improvement plans generally, like prevention and public health. We have this new act for prevention and public health, that essentially creates a whole bunch of new grant programs and appropriates a bunch of new federal money for those programs. Everything from healthy lifestyle incentive programs, community wellness grants, increased support for immunization programs, governmental public health capacity support specifically for epidemiology and public health laboratory services, childhood obesity demonstration grants, and those are just some examples.
There are a few more regulatory provisions. One example will require chain restaurants to include nutrition labeling on their menus now. There's also a new National Prevention Council and a new Prevention and Public Health Fund established under the act. Funded under the act as well are appropriations. There are parts of this bill that authorize new programs. Many of those include in the bill the actual appropriation provision as well as the authorization. There are others, like the Indian Health Care Improvement Act, [that have] all of the authorization but appropriations aren't included with that. So it varies. Back to selected topics list
Title V: Health Care Workforce Development
Moving on to health care workforce development -- this is far from a comprehensive list, just examples of some of the types of programs. Recruitment and retention programs are set up, new loan repayment programs, and requirements and funding for the expansion of the National Health Service Corps. There will be a new National Health Care Workforce Commission created, and they're required, in the first year, to conduct a national assessment of the health care workforce. Something that we've been particularly interested in seeing here, the graduate medical education slots -- the residency slots that Medicare and Medicaid can provide support for -- without going into any of the details, those are capped and Alaska has been disadvantaged in that capping. There will be a requirement that those slots be redistributed and allocated specifically for primary care. So it's something that Alaska may benefit from.
Erickson: I just realized I skipped a slide when I turned my page. I was already up on slide 19, but I will go back to slide 17.
Erickson: There's Title III, [which] is devoted to "Health Care Delivery," Title IV is devoted to "Prevention and Public Health." And, just some examples of some of the health care delivery system improvements and changes that this law attempts to address include things, it has a real focus on enhancing primary care. I just included a few examples here. For example, between 2011 and 2015 Medicare will be required to provide a 10 percent bonus payment to primary care physicians. The Medicaid program states will have a new plan option for medical homes as kind of a demonstration project.
This is an example of another provision, but this one will not impact Alaska in any way. Most states, their Medicaid rates are actually lower than their Medicare rates. Many states experience the same sort of problem for their Medicaid populations that we've been experiencing here, especially in Anchorage, for our Medicare population -- where the reimbursement rate is so low that medical practices will refuse to see them, and they'll show up in the emergency room when they get desperate. This law will force the states to raise their Medicaid payments so that they are at least at the Medicare level rate. Again, our Medicaid rates are actually pretty generous when you look at it compared to many other states, and even other payers in our state, so it's not an issue here.
"[Title III] includes a number of new programs ... pilot
projects and demonstration projects-related to payment reform to start
to test different ways to pay for health care services. ... bundling payments around DRGs [diagnosis-related groups],
pay-for-performance,..."
There are a number of other programs related to looking at ways to improve quality of health care delivery: evidence-based medicine improvements, evidence-based practice, care coordination, and service integration. So, [there will be] attempts through different research programs, grant programs, demonstration projects to move health care delivery to a different structure that might be more effective and efficient. This title includes creation of a maternal, infant, and early childhood home visitation program, also some new trauma care system programs. It also includes a number of new programs that I believe are mostly like pilot projects and demonstration projects-related to payment reform to start to test different ways to pay for health care services. [They include for example] bundling payments around DRGs [diagnosis-related groups], pay-for-performance, those sorts of things to test those to see if they work better than our current fee-for-service approach, and start moving at least the public payers -- Medicare, Medicaid -- in that direction.
Title VI, Slide 20, includes a number of provisions that address fraud, waste, and abuse in some way. It requires for Medicaid and Medicare that new provider enrollment processes be set up. It includes a series of requirements for federal government programs and agencies to do a better job of sharing data and information across their programs. There's a new requirement related to disclosure of financial relationships between health entities. For example, a physician who owns a share in a hospital would be required to disclose that, or [who owns a share in a] drug company. [There are] increased penalties, and there also is a new demonstration grant program that would provide grants to states to study approaches to medical malpractice reform.
Title VIII, again is "Community Living Assistance" -- I mentioned earlier that this program is the CLASS Act. [The] title creates a new federal long-term care insurance program. It will be a voluntary program, and for individuals who decide to buy into this there will be a five year vesting period. So, once they start paying premiums they'll be eligible for benefits five years out from that point. These are meant to be cash benefits to help the elderly and disabled stay at home as long as possible and to get assistance for living at home, but the insurance program will also cover nursing home costs as well. Back to selected topics list
Title IX: Funding Health Care Reform
Slide 22 covers some of the examples of provisions that are included in the financing title. The first tax that takes effect under this bill, in this year, 2010, is a new 10 percent sales tax on indoor tanning. I'm sorry I had to leave early- I wanted to ask Senator Begich why Alaska couldn't get an exemption from that one! [There is] $2.8 billion for an annual fee on the pharmaceutical industry that will be imposed starting in 2012, and that actually increases over time. There will be a new sales tax, 2.3 percent beginning in 2013 on medical devices. Some of the basics like glasses and hearing aids are exempt from that definition of "medical device."
There will be a Medicare payroll tax imposed on individuals. That does not include the employer's share of the Medicare payroll tax. It increases from 1.45 percent to 2.35 percent for those individuals who make more than $200,000 a year, or couples making more than $250,000 a year. That's a change that takes effect 2013. There also is a new tax for individuals and couples in that same tax bracket on unearned income, of 3.8 percent.
"There is a new Elder Justice Act, and a number of new grant programs
included under this act. States will be able to apply for elder
protective services, for example. There's a whole other area here that's
real significant that we'll be studying to see what the potential
benefits to Alaska would be."
This next bullet, the third from the bottom, there will be an elimination of a subsidy that employers have had. I threw this in because, one, it's going to potentially impact the Alaska state government in terms of a new tax, but especially [because] a couple of weeks ago, when I was making this presentation to the legislature, there was a lot of news in the media about some of the major industries and businesses coming out and noting how much the new law was going to cost them. It was specific to this provision, where they were having to file their financial disclosures. This is where it came from. Businesses have had this tax deduction, which was essentially a federal government subsidy, for providing Part D Medicare coverage for their retirees. That's being eliminated in the year 2013.
[There will be] new fees on the insurance industries starting at $8 billion in the year 2014, and those will increase over time. You've heard about the "Cadillac Tax." This was the new tax on employer-sponsored high-value insurance plans. [This is] something else state of Alaska government is looking at for the impact on the state as an employer. That will take effect in the year 2018, so that one is a ways out there.
I wanted to throw in some of the other provisions that I didn't capture under their specific titles, and I think a number of these actually show up in that amendment section as well. There is a significant amount of new funding for Community Health Centers, especially in the Reconciliation Act. You have to look at the Reconciliation Act, because there's significantly more provided there than in the initial bill. One billion dollars more for enhancement of Community Health Centers starting just next year in 2011. That will increase to 3.6 billion in the year 2015. There also is additional funding, another 1.5 billion dollars, just for facility repair and renovation and more capital projects.
You've heard about the closure of the Medicare doughnut hole, of course. That will start with a subsidy provided to folks this year, and then close eventually within a few years, entirely. There has been a lot of talk and speculation about cuts to Medicare, so I was actually a little bit careful about how I phrased this general reference to the provisions. What they will do is cap funding growth for Medicare, so they're not cuts, on one hand. On the other hand, the problems that we are experiencing with our payments to providers right now, through Medicare, are resulting from essentially a legislative cap on the growth. And it's more complicated than that, but it's simplified. So, anyway I'm trying to be careful and trying to be as objective as possible, and as fair as possible in how we're describing these, as we will work over the next several years to analyze and understand what the real impacts will be.
There is a new Elder Justice Act, and a number of new grant programs included under this act. States will be able to apply for elder protective services, for example. There's a whole other area here that's real significant that we'll be studying to see what the potential benefits to Alaska would be. The Indian Health Care Improvement Act is reauthorized [and] again, the appropriation wasn't included in this. Something that's really significant in this reauthorization is that Indian Health Services now are authorized to provide behavioral health and long-term care services. Historically, those were not services that were provided by the Indian Health Services. You could spend a whole other hour talking just about that and the implications for that, but it's significant.
I think my time is up. The next few slides just lay out a timeline. Again, it was more focused on kind of highlights for state government. Starting in the year 2010 [there are] the provisions that will start taking effect this year and going out into the latest year, 2018. 2014 is the big year for some major things like implementation of the insurance exchanges, [and] Medicaid expansion. Many of the insurance market reforms will fully take effect at that point, and that's when the employer and individual mandates and subsidies will take full effect. And then going out into the out-years -- 2018 is the last year I have here -- that's when that "Cadillac Tax" takes effect. So I'll allow you to just have that, and sign off.
Dr. Tom Nicewander: Thank you very much Deb. For those of you on the phone, Deb's got to run off to do some testifying before some bills that we've all been interested in. So excellent, wow! That's really a piece of work, and I'm sure you're adding to it as we speak.
Erickson: Well, I've referred to this -- and for those of you on the phone I'm pointing at the ream of paper in my notebook -- I've referred to it as the "Health Planners and Health Policy Analysts Full Employment Bill." We're going to have a lot of work to do over the next few years. Back to selected topics list
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Take Alaska Health Policy Class in Fall 2010 ... In Your Jammies! |
Early warning! AHPR Editor Lawrence Weiss will be teaching HS 690 Alaska Health Policy in Fall 2010, a class offered by the Master of Public Health Program at UAA. This course is also open to persons who are not in the MPH program with permission of the department. It will be entirely online so you can do most of it at 2 a.m. in your jammies if you like. The focus will be on health-related public policy in Alaska. The educational style will be fast-moving, highly interactive, and intellectually challenging. The curriculum will explore what health policy is, what impact it has on day-to-day practical operation of health care, how it is created, who influences it, and how national policies may affect health policy in Alaska. Teleconferenced guest speakers will include some or all of the following: state legislators, lobbyists, program administrators, and advocates. Main source materials will include selections from approximately 1,800 pages of back issues of Alaska Health Policy Review, and a variety of relevant websites and other online resources. Students will conduct a high priority health policy analysis with practical application in Alaska, and will have the opportunity to have it reviewed for possible publication in Alaska Health Policy Review. Sound interesting? Contact Katie Frost, ankrf@uaa.alaska.edu, administrative assistant in the UAA Department of Health Sciences. Ask her to put you on the "interested" list for HS 690 Alaska Health Policy so you can learn more about it and have the opportunity to sign up later this year. This class will be interesting, fun, and a great opportunity to network with like-minded health policy wonks! Back to top
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Alaska Congressional Delegation: Health Reform in Alaska
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Legislative aides from Alaska's three Congressional offices spoke following Deb Erickson's breakdown of the new law and reconciliation act during a Commonwealth North Health Care Action Committee meeting on April 15 (as reported in the above article). Opinions ranged from an optimistic outlook on increasing the number of Alaskans with health insurance and increased prevention efforts, to more serious concerns about cuts to Medicare and home health services, and increased burdens on small businesses and insurance companies.
Links to Congressional Aides Presentations
Bruce Scandling, Legislative Aide to Senator Mark Begich
Holly Croft, Legislative Aide to Representative Don Young
Amanda Makki, Legislative Aide to Senator Lisa Murkowski
Bruce Scandling, Legislative Aide to Senator Mark Begich
Scandling opened with a summary of his background in public health and policy. He lived in Juneau for about 27 years before moving to D.C. 15 months ago. He started his career in Alaska as a news reporter, and in 1995, began working for Tony Knowles -- focusing on speech writing and health policy -- for the next eight years. At the end of the Knowles administration, he was hired by Deb Erickson to work for the atate Division of Public Health in Juneau, where he worked for six years before joining Senator Begich in Juneau.
Scandling gave Senator Begich's office's perspective on the impacts of the national health reform bill on Alaska, grouping his talk into three main categories: expanded coverage and the insurance reforms, access to health care, and cost containment efforts.
Expanded Coverage and Insurance Reforms
Scandling spoke highly of the most notable insurance reforms: limits on pre-existing conditions, the end of caps on lifetime coverage and annual caps, and the allowance of adult dependents to be covered on parents' policies up until age 26. "We see all of those as big benefits, and I can tell you that the incoming that we have been getting on that is virtually all positive. I think people across the board seem to agree that those are good things."
He views the creation of the state-based health exchanges as both a benefit and a challenge:
There was great interest on the part of the state health insurance commissioners, a national association of insurance commissioners, and virtually every private insurer that I met with out here from Alaska. Everybody wanted these to be state-based exchanges, and they are. I know that there are lots of questions now about how these are going to go up and how they're going to operate, and there will be challenges. At the same time, the state-based approach does allow flexibility so we are hoping that this will help Alaska tailor an exchange to our unique situation.
He urged Alaskans to go to either ehealth.com or the Massachusetts Connector, for examples of what the exchanges will eventually will look like. Scandling indicated that the creation of exchanges will increase competition, which his office feels is a good thing for Alaska. The bill outlines many levels of plans, from basic to comprehensive (and more expensive). Private insurers would be offering the plans which would contain terms and fees negotiated by a federal agency, the Office of Personnel Management, which runs the federal employees' plan right now. Regarding pooling among these exchanges, he noted that, "This is what we see as a real opportunity for more competition for small-market plans."
Expanded Coverage or Unfunded Mandate?
Scandling indicated that the Medicaid expansion portion of the bill is somewhat controversial, "[This is] being looked at two different ways. Some people are calling it an unfunded mandate. I guess the way we look at it is if Alaska is going to be able to offer basic health benefits to 24,000 more people, at a cost to the state of no more than 10 percent GF [general fund]... that's actually a pretty darned good deal."
He indicated that there will be challenges regarding the CMS [Centers for Medicare and Medicaid Services] development and regulations for the expansion:
I think that there will be a great need for probably more administrative staff within all of the state Medicaid programs to make sure they are administering this right. That is of course a challenge, and there should be federal money that comes along with, in part, the money that's going out to the states soon here to start with the development of the exchanges. Hopefully it will help cover some of the administrative costs that the state Medicaid programs will face.
Tax Credits: A Relief for Alaska's Individuals and Families
Scandling discussed the benefits to Alaska families under the new affordability tax credits and highlighted what the new eligibility requirements mean for Alaska: "I think it helps us when we talk about what 400 percent of federal poverty level means in Alaska. That's roughly $56,000 for an individual, and up to about $110,000 for a family of four. So, we are talking about some sort of affordability assistance for many, many families in Alaska." He also mentioned that for those worried about the cost of private insurance plans being driven up, those purchasing these plans will now see a net reduction in what it costs their family budget because of these affordability credits.
Tax Credits: A Relief for Alaska's Small Businesses
Scandling noted that the same tax credit benefits for individual Alaskans will also apply to small businesses and gave recommendations for resources for small businesses. For example, on Senator Begich's office website, they have a small business calculator, and they will continue to update that website with additional information. He referred to the work that Terry Gardiner, former Alaska speaker of the state House, has been doing recently in D.C. with the Small Business Majority, and suggested that businesses go to their website, which contains questions and answers, as well as a more comprehensive calculator. "You can type in the number of employees, what your average wages are for the employees, how much of the premiums you pay for as a small business owner, etc., and get a really good idea, right now, of how this kind of works."
Finally, under the topic of expanded coverage, Scandling mentioned that Senator Begich's office is particularly pleased with the the re-authorization of the Indian Health Care Improvement Act: "We think that's a very big deal. As a matter of fact, it was not in the bill initially, it was under consideration in a separate committee, but actually Senator Begich and a handful of other senators pushed pretty hard to get the re-authorization language included in the final bill."
Access to Health Care
Scandling broke up his second category into three additional categories: fair reimbursement for existing providers, workforce development, and basic infrastructure. Regarding reimbursement to providers of Medicare, he stated,
The bill right now does include already a 10 percent bonus for Medicare providers. We had actually drafted and pushed through, and talked with the plan committee about very similar amendments on this, Senator Begich himself did. But this provision is certainly a help.
Scandling also stressed that action on creating a permanent fix for the Medicare reimbursement rates to physicians needs to happen quickly:
The Senate leadership is committed to a permanent fix for the Medicare physician reimbursement rate, that so-called 'Doctor Fix' bill. And right now it's a mess, and I think it's a huge challenge, especially for Alaska and we're in this process. We're just sort of preventing the reduction on almost a month-to-month basis now in these various job bills that have been coming through. But there is a commitment by the Senate leadership, working with the AMA [American Medical Association] to do a permanent fix.
Scandling discussed Senator Begich's role in the increase in loan repayment National Health Services Corps for providers who work in designated shortage areas: "That actually was an amendment, by Senator Begich, that increases that loan repayment to a total of $100,000 over two years. It was $70,000 in statute before that, but in practicality, I'm told, it was often more like only $50,000 because of funding shortages."
Another area that Senator Begich was heavily involved in was the rural community hospital demonstration project within Medicare, which reauthorizes and expands the program. He noted that currently, the beneficiary hospitals are Soldotna, Juneau, and Sitka. With the reauthorized and expanded program, "...other hospitals around the country, and hopefully in Alaska, will be able to take advantage. This is a huge infrastructure thing for those hospitals."
Cost Containment
Scandling discussed the interaction between improvements in chronic disease prevention and health promotion and health care delivery, in containing health care costs. He listed several areas within the reform bill that Senator Begich's office sees as benefits and positive steps, including electronic health records and payment reforms - such as bundling payments, paying for outcomes instead of the traditional fee-for-service model. He stated that, "I think this is a huge question and a huge challenge for Alaska, and I honestly don't know how this is going to play out up there." He noted the success of Southcentral Foundation's Nuka Model of health care delivery, but was skeptical about the options for model demonstration projects in Alaska:
Obviously, there's a good model right in our backyard, with the Nuka Model of Southcentral Foundation. And I realize that's a totally different animal when a totally privately-funded provider looks at it. But are there incentives in the bills for other providers to try that sort of approach? Or are our economies scaled so small, that it just won't work? We tried and failed to get some better language in there, in the bill, about accountable care organizations, where we wanted to make smaller providers eligible to try these demonstration projects. We were told by the CBO (Congressional Budget Office) [that the] idea would sort of blow up the potential savings reflected in this bill, because we wouldn't be able to show enough savings with small groups of providers. So, I think that's a both a challenge and hopefully an opportunity for Alaska.
Regarding chronic disease prevention and health promotion, Scandling indicated that Senator Begich's office is not sure how Alaska will benefit from the new prevention fund, which begins with $500 million nationally this year and then goes up to about $2 billion. He expressed concerns based on his experiences within Alaska's Division of Public Health, where programs were often initiated and funded through grants, but were unsuccessful in their longevity due to denial of additional funding. Scandling ended with an example of why policy needs to play a role in health reform right now:
I guess I'm just sensitive, having worked in public health, when people push back about the 'nanny state,' and this is 'overkill.' I have in my office a picture of a Time magazine cover from August of 2009. It shows a woman on a treadmill and it says, 'The Myth about Exercise.' It basically says, 'Hey, it's not just how many calories that you burn, it's how many you eat.' It shows her looking at a donut or a cupcake while she's [working out]. So my point is, if Time magazine thinks that's front-page news, that Americans don't understand how this works, then I think we've got a lot of work to do, and that certainly public policy programs are one part of the solution to this. Back to list of legislative aides
Holly Croft, Legislative Aide to Representative Don Young
Croft's discussion on the impacts of the new health reform laws on Alaska focused primarily on the expected changes to Medicare and Medicaid. She expressed concern over Medicare cuts and other health care payment reductions, the potential for doctors to refuse new Medicaid patients, and the costs associated with insuring more individuals through Medicaid.
Croft noted that Rep. Young's office is concerned with the disproportionate share of hospital payments (DSH), which were about $9 million in the fiscal year 2010 for the state of Alaska, and are to be reduced to about 25 percent of that amount, by 2019. She stated, "The concern for Congressman Young, and I think for probably Senator Murkowski as well, is that even though we are going to have a whole bunch of newly insured folks in Alaska, many of them will be on Medicaid. Will that completely make up the gap that they are getting from the DSH payments? We just don't know."
Croft expressed additional concern with cuts to home health payments, which she noted will be reduced by $40 billion over 10 years, nationwide. She gave an example of the impact on Alaska:
We had the folks from the National Association of Home Care and Hospice in the office yesterday, and they are very concerned because it looks like 84 percent of Alaska Home Health services are expected to basically become insolvent over the next year, due to cuts that CMS [Centers for Medicare and Medicaid Services] is proposing. They are supposed to get a 2.71 percent cut next year, in 2010. However, CMS is actually considering increasing the cut to 4.26 [percent], which would, they feel, decimate home health care services throughout the state. So they are very worried.
Medicare: Boards, Cuts, and Sustainable Growth Rate
Croft listed many changes to Medicare, including the creation of a Medicare Advisory Board which has been assigned the duty of recommending changes that will cut costs. The goal is to cut $23 billion starting in 2017. She expressed concern over the potential authority of the new Medicare board, "Whatever the board recommends will become basically law, unless Congress goes and overturns what they've decided to do. So, we don't know what kind of recommendations the board will have. We're not sure what kind of cost savings will actually materialize. We'll just have to see."
Croft indicated that Representative Young's office is skeptical about an assumption related to a sustainable growth rate [SGR] for physicians who take Medicare payments. She indicated that this would require a 21 percent cut, which Congress continues to delay.
Just yesterday, I think, they in the Senate were working on passing another two-month delay in the 21 percent cut. So we are also not sure if that will materialize. We know that several physicians have contacted this office and said, 'You know this is getting crazy, we don't know what's going on from month to month, we can't run a business this way, we're basically opting out of Medicare,' and we know this has been a continued problem in Anchorage. We have worked in the past with the delegation to increase the Medicare rate that physicians in Alaska get. Unfortunately, it just didn't entice enough back, or enough to sustain the program to give seniors the access they needed through the program. So we continue to be very, very worried about what's going to happen to Medicare beneficiaries if we decide to go through with the SGR cut.
Medicaid: Increasing the Insured, but also the Costs
Croft ended her discussion with a lengthy analysis of the impact of increasing coverage through Medicaid, which Rep. Young's office views as being a potential funding problem for Alaska. "As far as Medicaid, Alaska is looking at about $13.2 million per year in new Medicaid costs once 2020 gets here, as far as the newly insured that will go into the Medicaid program."
In closing, Croft expressed concern regarding the modified gross income calculation for eligibility, noting that it could increase costs overall. "Medicaid enrollees who otherwise would lose coverage because of the change in income counting, will be able to maintain this eligibility even if they have a temporary increase in their income, and would go over the levels temporarily." She closed with a caveat, noting that Rep. Young's office worries that increases in Medicaid eligibility could potentially burden Alaska's doctors, and parallel the current Medicare crisis in Alaska. Back to list of legislative aides
Amanda Makki, Legislative Aide to Senator Lisa Murkowski
Makki's talk focused heavily on the inadequacies in the new health reform law, giving multiple examples of areas that Senator Murkowski's office feels will require continuous "fixes." Additionally, there was an emphasis on the potential impact to small businesses as well as to health insurance companies and pharmaceutical companies. Finally, she ended with a discussion on the multiple ways in which the new law will be funded (i.e. "revenue raisers") as well as the impact of health care compacts on insurance companies and individual purchasing of health insurance.
Confusion and a Need for Continued "Fixes"
Makki opened with examples of recent areas of confusion in the new law, indicating that promises made were not necessarily fulfilled:
The first thing out of the box would be coverage of the pre-existing conditions for children. That was one of the things that the president had really promised was, 'First thing, children are going to be covered under these new pre-existing laws.' And the AP [Associated Press] did a story the very next day after the bill was signed by the president, saying that the law requires insurance companies to cover pre-existing conditions for children in the policies, but it allows new policies to be denied for children.
The next thing we heard was, 'Well, allowing dependents up to age 26 to stay on health care plans was not resolved.' I believe Senator Begich has introduced something to try and fix that. I don't know when we'll be doing another fix. But that's kind of a new issue that we're contending with is, 'Well, everyone else gets to have their kids on their plans until age 26, but does TRICARE get to?' Under the current law, no they don't, but maybe that will be fixed.
Lots of Math: Impact on Small Employers
Makki talked at length about the negative impact on small businesses in Alaska, describing confusing formulas and expensive penalties. She noted that the smallest employers, those with 50 employees or less, won't have to pay any penalties, but warned that the individual mandates for insurance could eventually raise costs for these employers. Makki continued with a discussion on the new provisions for businesses with 51-499 employees, indicating that there may be some confusing calculations and increased costs.
Whether or not you're self-insuring or if you're buying insurance, they are both going to be subject to these new provisions, and penalties are going to kick in as well. So, if you have employees, and you don't provide coverage and you have over 51 employees, you deduct the first 30, and then there's a penalty or a tax (or whatever you'd like to call it), of $2000 per employee. So if one person walks out of the program, if you're providing coverage, and they walk away and they go into the health exchange to buy coverage and they are eligible for a subsidy, then you are going to be subject to a penalty.
Makki discussed the subsidies that will be available to small businesses, and expressed concern over the lack of eligibility for businesses with seasonal employees, especially for businesses with 25 employees or less.
One of the things that the 25 full-time employees doesn't consider, or is excluded from, are seasonal employees, which we know are critical to a lot of the industries in Alaska. So, if you have five employees all year long, and then it goes up to 40 employees during the year, you're not going to be eligible for that, if those are considered seasonal employees. And seasonal employees are defined in the bill as 'working less than 120 days a year.' So, I think the small-business subsidies that are being touted are certainly good, but you have to keep in mind that they don't apply to just every small business, there are criteria that have to be met.
Mandated Benefits and Coverage
Makki noted that Senator Murkowski's office has concern about the mandated health insurance benefits outlined in the new law and stated that they feel this will ultimately raise costs for individuals. "So a lot of these are now mandated benefits, and according to the insurance companies, they can tell you to the 'T' how much a new mandate is going to cost. So these are just things that are going to raise the premiums, because they are certainly mandated services."
Makki gave several examples of recent discussions with Alaskans regarding the new health reform law. She described one area of concern is the potential for businesses to opt for paying penalties, as they may be cheaper than providing coverage.
Revenue Raisers: Cadillacs
Makki gave a comprehensive list and discussion about the "revenue raisers" listed in the new law, which are projected to raise enough funds to pay for expanded coverage, among other things. She indicated concern for many of the new taxes, stating that many constituents had expressed their fears about the potential taxes they might face. For example, she discussed her views on the impact of the so-called "Cadillac tax:"
It's currently dubbed as a 'Cadillac tax' because they're such grand, great, expensive plans. But in Alaska, a high-cost state, these aren't necessarily high-cost plans, they are just higher-costing plans, as Alaska tends to be more expensive. We have less providers, therefore the negotiated rates aren't as good as what you can get in a Washington, D.C. market, where you can negotiate down the rates pretty low, because you have more providers.
Makki's list of the taxes in the new law include a 10 percent tax on indoor tanning, which goes into effect July 1 of this year and is expected to raise $2.7 billion. Another is a tax on drug companies that will target brand name drug producers and raise a total of $27 billion over the course of 10 years. "It's fair to say that the drug companies are not going to be absorbing those costs, they're just going to be passing them along."
Purchasing Insurance Across State Lines: Health Care Compacts
Makki stated that Senator Murkowski's office is discouraged that an allowance for individuals to purchase health insurance across state lines (through health care compacts) is not in the new law. She discussed the differences in health insurance premium costs between states, and gave the example of a difference of $250 in monthly premiums between D.C. and Maryland. She indicated that these differences are related to state mandates and the new health reform law does not address this adequately:
So, it's pretty interesting when you see the level of mandates, and what they can do to the cost of insurance. That's why we felt very strongly that where a state like Alaska, where the cost of insurance is high, if you can purchase [it] in another state, it would be very helpful. But what these compacts do, is they allow the state to enter in to a compact with another state, and the insurance company has to be subject to the laws and regulations of that state, as well as other states. So in other words, they have to be part of both states, and so some of the laws of one state will apply to them. The other laws, for example with regards to market conduct, unfair trade practices, network adequacy, those are going to be subject to the other state's requirement. So it's kind of not as easy to say, 'Well, people will be able to purchase insurance across state lines.' The states have to first enter into a compact, and then the insurance companies have to actually participate.
Makki ended her talk by responding to a question about the current environment in Washington, D.C. regarding amendments to the health reform bill, and suggested partisan differences in working on making improvements:
I would say that from what I understand, and talking to some Democratic staffers yesterday about this -- the Democrat staffers that I was talking to were like, 'Well, we really just have to move on from this bill. We are not looking at opening this up to, "Oh, we screwed up on this, or we screwed up on that." That's just not something that we want to undertake right now ... you know, the bill doesn't even go into effect, really, for another four years. Even though a lot of the revenue provisions start, pretty much, right away. But we have time to deal with this, and right now, and certainly before the elections, that's not really what we want to deal with.' So that's kind of what I heard. And I would be inclined to believe that, only because no one's talking about health care anymore. Everything is on to other things. So, I just don't see this as any kind of urgency to amend anything right now. Back to list of legislative aides
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Alaska Health Policy Review is sent to individual and group subscribers for their exclusive use. Please contact us for information regarding significant discounts for multiple subscriptions within a single organization. Distributing copies of the Alaska Health Policy Review is prohibited under copyright restrictions without written permission from the editor; however, we encourage the use of a few sentences from an issue for reviews and other "Fair Use."
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Final Status of Selected Health Policy Bills: 2010 Legislative Recap
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There were several bills that stalled at the last minute, despite overwhelming support from legislators and community organizations. We discuss those bills, as well as the status of other key health policy bills, in the following brief summary of the legislative session. Those that passed made it through both the House and Senate, and were sent to the governor for signature. Unless otherwise stated, the bills that passed still have the potential to be vetoed. There were several bills that stalled at the last minute, despite overwhelming support from legislators and community organizations. We discuss those bills, as well as the status of other key health policy bills, in the following brief summary of the legislative session. Back to top |
Bill Watch: Drugs
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HB 277 Certify Emergency Use of Epinephrine - PASSED
This bill, which is awaiting the governor's signature, proposes the addition of a state program in the Department of Health and Social Services that would provide prescriptions to eligible individuals for emergency use of epinephrine.
SB 215 Pioneer Home Rx Drug Benefit - PASSED
This bill (companion to HB 284), if signed by the governor, will require that the Department of Health and Social Services accept federal prescription drug benefits, or provide comparable benefits for residents of the Alaska Pioneers' Home, and would provide additional financial assistance for seniors requiring medication.
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Bill Watch: Health Professional Workforce and Health Education
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Several bills introduced during the last two sessions targeted the health care workforce shortage in Alaska. Many key organizations and individuals worked diligently over the last year and half to educate and encourage legislators about the importance of legislation in the effort to bring and retain health care providers in our state. There were many disappointments in this area, but we applaud the efforts and hard work of those behind these bills. These bills are discussed below, and included is a quote by Shelley Hughes of the Alaska Primary Care Association, who was one of the key players involved in SB 139 Incentives for Medical Providers.
HB 50 Limit Overtime for Registered Nurses - PASSED
This bill, which is awaiting the governor's signature, remained idle for most of the 2010 session, receiving the bulk of attention and movement through committees in the last few weeks. The bill cites the frequent overtime work schedules among nursing professionals as one of the reasons for high employee turnover and inadequate health care. It requests that a previous statute be amended to include limitations related to overtime among nursing schedules. These limitations include that no nursing professional is to work more than 80 hours during a 14 day period, and that time between each shift should be no less than 10 hours. There are exemptions for certain situations, such as a school nurse on a field trip, and allowances for nurses to voluntarily work overtime. The bill, if signed, removes the mandatory overtime often required by employers of nurses, and is a step forward in improving health care delivery and Alaska's health care workforce.
HB 58 Educ Loan Repayment Program - DID NOT PASS
This bill, which received most of its attention during the first session, requested that general funds be set aside for incentive use to recruit individuals in occupations facing a shortage. Dentists and licensed practical nurses were among the occupations listed that would have access to these funds and incentive programs. Allocation of these funds was grouped by geographical location, with more funding available to professionals who are employed in rural areas of the state. A minimum of one year of employment is required for eligibility, and the amount of funding increases incrementally with the number of years of employment. The funding would have been allocated for employees of the state only.
HB 204 Postsecondary Medical Educ. Prog. & SB 18 Postsecondary Medical and Other Educ - DID NOT PASS
These bills would have increased the number of medical students enrolled in the University of Washington's Medical School program, WWAMI. There is much community support regarding increases in the number of medical students in the WWAMI program, and this issue will likely come up again during the next session.
HB 335 Physician Shortages: Grants - DID NOT PASS
Although this bill did not pass, the capital budget included a line item allocating $1 million to the creation of a Medicare-only clinic in Anchorage. This bill was also known as the "Medicare and Primary Care Access Act," and proposed the establishment of state-funded grants for the specific use of providing "incentives by expanding the availability of nonprofit primary care clinics when the clinics can provide cost-effective help to solve medical access problems."
SB 139 Incentives for Certain Medical Providers - DID NOT PASS
Despite receiving a unanimous vote in the Senate, and being on the agenda to be heard in House Finance Committee during the last week of the session, this bill was never heard and failed to pass. This bill was amended over the course of the 2010 session, with the removal of the loan repayment option, offering direct incentives only for specified health occupations. The original bill proposed the establishment of a loan repayment and direct incentives program in the Department of Health and Social Services. The bill included tiered incentive options for providers, which are based on the level of difficulty in hiring, as well as need. Many organizations and individuals in Alaska spent months in correspondence with the bill sponsor, Senator Olson, among others, to encourage the movement and passing of the bill. Shelley Hughes of the Alaska Primary Care Association, stated the following about the final status of SB 139:
The APCA is disappointed that despite the excellent hearings, legislators' favorable receptivity of the bill, and the hard work invested by so many advocates over the last year and a half, that SB 139 stalled in the final committee in the closing days of the session.
The APCA thanks all advocates who offered testimony throughout the process and provided support letters. Each did an excellent job providing important points for the committee members to consider.
The APCA will remain hopeful as it considers the next steps. The health care workforce shortage problem is not going away, and it is important that Alaska continues to work toward a solution.
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Bill Watch: Medical Assistance and Health Insurance
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There was some progress and success in this area of health policy, with the passing of SB 13, which restores the income eligibility for Denali KidCare to 200 of the federal poverty level, increasing coverage for approximately 1300 additional children. Another success was SB 199, which now allows an individual to receive a full set of dentures in one year, as opposed to over the course of two years. There were a few disappointments, including SB 32, which would have required Medicaid rate reviews for home and community-based services, and had the potential to increase payments for providers of those services.
HB 30 Repeal Defined Contribution Plans & SB 23 Repeal Defined Contrib Retirement Plans- DID NOT PASS
These bills would have restored the public employee retirement plans to a defined benefit plan, improving the health coverage for Alaska's public employee retirees. Senator Elton, the sponsor for SB 23, stated that, "SB 23 returns guaranteed pension and health care benefits to Alaska public employees. Analyses by actuaries and the state Division of Retirement and Benefits show that Alaska's defined benefit pension -- paying a guaranteed monthly benefit plus health care -- costs the same as the new defined contribution system but provides much better benefits. SB 23 repeals the laws putting public employees into risky individual savings account plans, and enrolls them in the least expensive pension plans, the current public employee tier III and teacher tier II."
HB 178 Payments to Physicians: Medicare/Probono - DID NOT PASS
This bill was referred to as the "Doctors for Seniors Act," and proposed the creation of state incentive programs for physicians to increase the number of providers who will see new and existing Medicare patients, at no additional charge to the patient.
HB 292 Grants to Disaster Victims - PASSED
This bill establishes the conditions upon which disaster relief funds are granted to individuals throughout Alaska. Specifically, it adds that when the president does not declare a major disaster, but the governor declares a disaster emergency in Alaska, the governor is allowed to issue grants to certain individuals affected by the disaster, not exceeding $5,000.
HCR 9 Home Health Aides for Seniors - DID NOT PASS
This bill would have expanded home health services to older Alaskans and adults with disabilities, by requiring that the Department of Health and Social Services apply to the federal government for additional waivers under the home and community-based waiver program. This would have assisted the numerous individuals and families who are already giving care to seniors in their homes by providing federal reimbursement waivers for home health care.
HJR 35 Const Am: Health Care - DID NOT PASS
This resolution proposed an amendment to the constitution of the state of Alaska that would have prohibited the federal government from requiring that residents of Alaska purchase health care insurance.
SB 10 Medicaid/Ins for Cancer Clinical Trials - PASSED
This bill, which is awaiting the governor's signature, prohibits an individual's health insurance company from denying coverage for medical expenses while the individual is in a clinical cancer trial.
SB 13 Medical Assistance Eligibility - PASSED
Finally, Alaska's income eligibility requirements for Denali KidCare is to be restored to the level of 200 percent. The bill is awaiting the governor's signature, but if signed, the new law will remove Alaska from the small group of five states who funded their Children's Health Insurance Program below 200 percent of the federal poverty level. From the Alaska Primary Care Association: "SB 13 makes health insurance accessible to an estimated 1,277 more uninsured children and 225 pregnant women in Alaska. Currently, Denali KidCare provides full medical, dental and behavioral health coverage to an estimated 7,900 Alaskan children at the cost of about $1,700 per child. There are still an estimated 18,000 uninsured children in Alaska, or about 9% of the children age 18 and under."
SB 32 Medicaid: Home/Community Based Services - DID NOT PASS
Currently, hospital rates in Alaska are reviewed annually to monitor for adjustment needs. Rates for home and community based services (which often allow for an individual to remain at home and in their own community, avoiding more expensive institutionalization) have in many cases not been raised for several years. As a result, some providers have left the market, others have had to reduce services and serve fewer clients. Potential providers have been discouraged from entering the market when it looked like reimbursement would not keep up with costs. This bill would have required a rate review for home and community-based services every four years, and was supported by those in the aging network and industry.
SB 163 Maximum Benefit from the Fishermen's Fund - PASSED
The title of this bill was changed to "Fishermen's Fund" late in the session, and the passing of the bill addresses the previously limited health care coverage for this group of workers. From the sponsor of the companion bill, HB 207: "The Alaska Fisherman's Fund was established 1951 to provide for the treatment and care of Alaska licensed commercial fishermen and crew who have been injured while fishing on shore or off shore in Alaska. The upper limit on claims in the fund has been $2,500 since 1959. If $2,500 in 1959 dollars was adjusted for the Consumer Price Index, it would be worth approximately $18,229.64 today. While the limitation in state law has remained unchanged, health care costs have steadily risen. HB 207 updates the Alaska Fishermen's Fund limit to $10,000. This is intended to help ensure that Alaska's fishermen have better access to health care when injured while fishing. Updating the claim limit to $10,000 will bring this very worthwhile program back to providing a meaningful level of assistance as the payer of last resort for commercial fishermen and crew that sustain injuries or illness while fishing."
SB 199 Medicaid Coverage for Dentures - PASSED
This bill, which awaits the governor's signature, addresses the previous statute that Medicaid coverage for dentures be spaced out over the course of two fiscal years, allowing for a full set of dentures to be received in one fiscal year.
SB 238 Medicaid for Medical and Intermediate Care - PASSED
This bill and its companion HB 286, amend the eligibility threshold for individuals in long-term care facilities, which had been frozen at the 2003 level, leaving many without assistance for long-term care services. The bill restores the level to the inflation index of 300 percent of the Supplemental Security Income level, and will increase the number of seniors eligible for Medicaid assistance for long-term care services.
SB 258 Dental Care Insurance - PASSED
This bill, if signed by the governor, will prohibit health care insurers that provide dental care coverage from setting a minimum age for receiving dental care coverage. The insurers would be allowed to set a maximum age for receiving dental care coverage as a dependent, but would be prohibited from setting fees that a dentist may charge for dental services not covered under the insurer's policy.
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Bill Watch: Mental Health
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HB 52 Post-Trial Juror Counseling - PASSED
This bill, which is awaiting the governor's signature, will make available up to 10 hours of psychological counseling for any juror serving in a criminal trial where graphic images or content are presented.
SB 21 Mental Health Care Insurance Benefit - DID NOT PASS
This bill, which was proposed at the start of the 2009 session, would have made Alaska one of the many states with mental health parity laws. It would have prohibited health care insurance policies from denying coverage or discriminating health care services related to mental health, alcoholism or substance abuse. Health care services related to mental health would have been covered at the same level as physical health care services.
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Bill Watch: State Boards and Issues
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Bills extending the Board of Marital and Family Therapy, Board of Pharmacy, and the Board of Psychologists and Psychological Association were all passed. The biggest success in this area of health policy was the passing of SB 172, which creates the Alaska Health Care Commission as a permanent entity.
SB 172 Alaska Health Care Commission - PASSED with a seat for Community Health Centers
This bill, if signed by the governor, will create the Alaska Health Care Commission as a permanent entity in statute. During the last few weeks of the session, a seat for Community Health Centers was added and included in the final version of the bill. The Alaska Primary Care Association stated the following on SB 172:
The Alaska Primary Care Association appreciates the work and testimony of a number of advocates who faithfully carried the message to Juneau the last two years regarding the importance of this bill and the importance of a seat for CHCs. The APCA thanks the Alaska Legislature for reauthorizing the Alaska Health Care Commission and for adding CHC representation to the Commission.
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Bill Watch: General Health Policy
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HB 168 Trauma Care Centers/Fund - PASSED
This bill, if signed by the governor, would give state certification and designation for trauma centers and create an uncompensated trauma care fund to offset uncompensated trauma care provided at certified and designated trauma centers.
HB 354 AK Capstone Avionics Revolving Loan Fund - PASSED This bill will allow for both owners and leasers of aircraft to apply for avionics loan funding, including medevac carriers who lease their aircraft. Representative Keller proposed the bill to increase air traffic safety, stating on his website, "The program was developed to provide low-interest loans to in-state private and commercial aircraft owners to upgrade their avionics, or on-board navigational aids and computer systems." HB 361 CPR Training for 911 Dispatchers - DID NOT PASS This bill proposed that all 911 dispatchers be required to have certification in cardiopulmonary resuscitation (CPR) prior to their employment. HJR 46 Supporting Denali Commission - ALASKA STATE LAW
This law ensures state support for the 5-year reauthorization of the Denali Commission.
HR 14 Oppose Federal Health Reform Bills - DID NOT PASS
This resolution, which listed a number of negative consequences to Alaska of national health reform legislation, requested that Governor Parnell and the administration review the constitutionality of federal health care reform bills. Although it did not pass, Alaska is now one of the states pursuing legal action against the federal government.
SCR 13 Supporting Senior Caregivers - PASSED
This bill is awaiting the governor's signature. It addresses the need for support for both formal and informal caregivers of seniors. If signed, it would require that the Department of Health and Social Service provide additional education on the effects of aging and the importance of senior caregivers.
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Notes and Acknowledgements |
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AHPR Staff and Contributors
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Lawrence D. Weiss, PhD, MS, Editor
Kelby Murphy, Senior Policy Analyst
Jacqueline Yeagle, Newsletter design and editing
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