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The latest on health reform for Humana brokers
April 19, 2010

Now available: Health reform high-level overviews
Humana has developed high-level overviews of the new health reform law, with three versions tailored to specific audiences: brokers, small employers and large employers. Below are links to those summaries so you can download them and use them with your clients.

Humana remains committed to keeping you informed about health reform. Keep in mind that a great deal of uncertainty still surrounds the new health reform law. Over the next few months and years, federal and state governments must develop rules, regulations and guidance on how the law is to be interpreted and implemented. As we learn more, we’ll share it with you.

Broker summary PDF | Small employer summary PDF | Large employer summary PDF

Starting where they left off
Members of Congress returned to Washington last week. The Senate started in right where it had left off before leaving for spring break: dealing with health care and health insurance issues. This time, they were issues that had been kept separate from the health reform bills: extensions of both the temporary Medicare physician payment fix, and premium assistance for unemployed workers with COBRA and state continuation coverage.

The last round of extensions expired on March 31. Members of the House passed another one-month extension before they left for spring break, in order to continue the fixes through April. So the Senate’s plan last week was to quickly pass the House bill and make it apply retroactively – then work with the House later on a permanent fix.

But while Senate Democrats and Republicans agreed that these extensions must be made, they didn’t agree on how to pay for them. Democrats wanted to add the $9 billion cost of the one-month fix to the deficit. Republicans said they didn’t. As Sen. John Kyl of Arizona put it, “It’s a question of whether we pay for it or we simply say, put it on the tab for our kids and grandkids to pay for it.” But on Thursday, the temporary fix passed. Deficit spending promises to be a major theme in the elections this fall.

Of course, the other big issue heading into fall continues to be health care reform. Rep. Bart Stupak, a conservative Democrat from Michigan, announced two weeks ago that he would be retiring. Although he says his decision had nothing to do with his “yes” vote on health reform, it’s hard to imagine that the realization he will have a tough campaign didn’t have something to do with his late decision.

The phrase “Repeal and replace” was repeated by Republicans frequently during the break, and last week House Minority Leader John Boehner picked up right where he had left off, talking about the unpopularity of health reform. “I’ve never seen a bill pass the House of Representatives that the American people knew about, that the American people had discussed, debated, and had decided ‘no,'” Boehner said during a radio interview. “This is why the anger that’s out there, frustration that’s out there, and frankly, I think, a lot of this is now turning to resolve – resolving that the American people are going to do something about this.”

Democratic Congressional Campaign Committee chairman Chris Van Hollen of Maryland quickly released a response: “It is stunning that House Republicans will make their No. 1 priority repealing benefits and rights for Americans, raising taxes, and turning our health care system back over to insurance companies…The House Republican leadership should start saying no to the special interests of the health insurance industry, and starting saying yes to American families…”

Meanwhile, a new Associated Press/ GfK poll said that opposition to reform has jumped since President Obama signed the bill: 50 percent oppose it, with only 39 percent favoring it and 10 percent feeling neutral. Opposition to how the President handled the issue also jumped from 46 percent in early March to 52 percent currently.

A USA Today/Gallup poll shows that there’s also a great difference in intensity of feelings between those who oppose and those who favor the reforms that passed. Most supporters said they are “pleased” rather than “enthusiastic” (66 percent vs. 29 percent). But reform opponents are nearly as likely to be “angry” as “disappointed” (46 percent vs. 52 percent).

Meanwhile, in the states…
Five more states have joined the lawsuit challenging the constitutionality of the health reform law. Indiana, North Dakota, Mississippi, Nevada and Arizona have joined Florida, South Carolina, Nebraska, Texas, Utah, Alabama, Colorado, Michigan, Pennsylvania, Washington, Idaho, South Dakota and Louisiana. Virginia has filed a separate suit.

Florida Attorney General Bill McCollum, a Republican running for governor, filed the initial suit. He said he welcomes the additional support “as we continue fighting to protect the constitutional rights of American citizens and the sovereignty of our states.”

While the lawsuit contains many complaints, the main one is the constitutionality of the mandate for everyone to buy health insurance. “The individual mandate in the health care law is unprecedented,” said North Dakota Attorney General Wayne Stenehjem – “a direct federal requirement for an individual to purchase insurance from a private company…Never before has Congress, under the commerce clause, required Americans to purchase any good or service.”

To read a debate on the issue, go to the New York Times Roomfordebate feature by clicking here.

Meanwhile, at the recent National Conference of State Legislatures meeting in Washington, state officials talked about health reform. They expressed surprise at the lack of clarity in the new law’s requirements.
The law still exists in three pieces – the Senate bill, the Manager’s Amendment to the Senate bill, and the House’s Reconciliation bill. Each version modifies the one before it, and all of them modify underlying laws, so it’s difficult to decipher what’s there.

Learning from Massachusetts
Massachusetts is of special interest to those involved in health reform: Three years ago, Massachusetts enacted insurance reforms similar to those now being enacted nationally. As expected, access to insurance has increased – almost every state resident now has coverage. But the expense has been much higher than anticipated. Premium costs have continued to soar, and now, as a result, there’s a battle between state regulators and insurers over controlling costs for small businesses and consumers.

On April 1, regulators rejected 235 proposed rate increases, which ranged from 8 to 32 percent. Gov. Deval Patrick said rate increases should link to the medical consumer price index, which is rising at about 4.8 percent. “Unless insurers can give us a good reason why, when everything else is flat, they deserve 20 percent, 30 percent, and in some cases 40 percent increases, they’re going to be denied,” Patrick told the Boston Globe. Health insurers took the case to court, calling the rejection of rate increases “arbitrary and capricious” and calling the medical consumer price index “a meaningless standard” that has no actuarial value in predicting the future cost of medical care.

Last week, the judge announced his decision to let the state’s rejection of the rate increases stand. He agreed with the state attorney general, who had argued that the insurance companies needed to appeal administratively through the state Insurance Division before taking their case to court.

State regulators directed health plans to remove higher rates that had been posted on the Health Connector Web site and post new ones based on 2009 base rates. Consequently, no companies had rates posted for a few days, which meant Massachusetts residents couldn’t buy insurance or change their plans. That led to the state insurance commissioner sending six major insurance companies, including Harvard Pilgrim, Blue Cross and Blue Shield of Massachusetts, and Tufts Health Plan, letters telling them to post their rates by 3 p.m. Thursday or face fines of up to $5,000 per day plus $1,000 per person who is unable to buy insurance. The commissioner wrote, “Refusing to offer or issue policies to eligible individuals and eligible small businesses is disruptive to the small group market and a violation of applicable laws and regulations.” Two of the companies submitted rates that didn’t comply with what the state had ordered. The insurance commissioner said they would be penalized.

Earlier in the week, the Massachusetts Association of Health Plans issued a statement about the situation. “Making health care affordable needs to start with addressing the market clout of certain hospitals and physician groups,” the group said. The case is seen as a test of the role of government in controlling costs.

New Medicare numbers

  • Number of Medicare Advantage members after 2010 enrollment: 11.5 million (up 621,000 from last year), according from data from the Centers for Medicare and Medicaid Services
  • 2011 federal payment rates for Medicare Advantage will be the same as 2010 rates, as a result of health reform provisions requiring a freeze on Medicare Advantage rates
  • Significant cuts in Medicare Advantage payment rates are expected to start in 2012, because of the health reform law’s requirement to bring them more in line with original Medicare
  • The two companies with the most Medicare Advantage members are UnitedHealth and Humana

Humana’s view: Humana’s strategy for continuing to offer attractive, competitive products even with lower federal payment rates involves a combination of effective claims cost management, smart use of clinical integration, prevention and wellness programs, and efficient provider contracting.
Get involved. Contact Congress about health reform at

Learn more. Explore Humana’s position on health reform and other issues.
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