State health care exchanges reflect politics as usual

Leaders of states across the land are anxious to establish their own health care exchanges, but their reasons for wanting to do so certainly vary. Many would like to get their hands on available federal funding as soon as possible, and others, conversely, want to give the appearance that they are avoiding compliance with the ACA for as long as possible.

For more information. For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.

Oklahoma governor Mary Fallin initially accepted a $54 million  federal “Early Innovator Grant” but then turned it down, perhaps bowing to pressure from fellow Republicans. Fallin has now announced that her state will establish a “Health Insurance Private Enterprise Network” in order to prevent the establishment of a federal health care exchange.  According to Fallin’s website, the state’s new exchange will be based on a concept by the conservative Heritage Foundation and legislation passed by the Oklahoma Legislature in 2009. On her website, Oklahoma Senate President Pro Tempore Brian Bingman is quoted as saying  “This private enterprise network not only offers the people of Oklahoma more options when buying insurance, it will serve as a defensive strategy that protects Oklahoma from the federal health care law. 

It remains to be seen how well Oklahoma will handle its exchange. Some other states’ recent actions on the health care front have, so far, been questionable. The Georgia legislature recently passed H.B. 47, which would permit the sale in Georgia of health insurance policies that have been approved in other sates. The reasoning of Georgia’s Republican party is that allowing the sale of health insurance across state lines will drive down costs and promote competitive pricing.

Others aren’t so sure. Georgia has a rather strict set of standards for health insurers, which includes mammogram coverage and 48-hour hospital stays for new mothers and babies. Policies sold across state lines would presumably not be subject to those standards. It would be safe to assume that Georgia employers will opt for cheaper out-of-state coverage for their employees.  You have to wonder, what were Georgia’s Republicans thinking when they enacted  this provision? Under the ACA, preventive services recommended by the United States Preventative Services Task Force, such as mammograms and colonoscopies, will be covered, free of charge. So, it's a good thing Georgians have ACA implementation to look forward to, because, if left up to Georgia state legislators, those services might not be covered.

Michigan has come up with a reasonable effort to establish an exchange, mostly to try to phase in coverage for uninsured citizens with pre-existing conditions until full coverage is available under the ACA in 2014. Its new system is called HIP Michigan, but the prices listed at http://www.hipmichigan.com/ seem quite steep. It’s hard to understand how the average low-income uninsured individual or family could afford the new coverage. For example, according to the HIP Michigan website, the State of Michigan estimates that an average 49 year-old’s total monthly medical costs can be expected to be approximately $1,056.56, so, the state reasons, the monthly premium under the HIP plan of $211.80, plus a $3,500 annual deductible is a relative bargain. It’s hard to image too many low-income households will be able to come up with that kind of money, however. And, the $211.80 figure is for the cheapest plan offered. Two other plans, for a 49-year old, run $252.06 and $350.08 per month.

Finally, Iowa was close to coming up with its own exchange, but one senator, Democrat Tom Rielly, who is also an insurance agent, reportedly managed to get a provision added that would guarantee licensed insurance agents a five percent commission on the cost of coverage. To get into an exchange, an Iowa citizen would have to utilize the services of an agent. The legality of that provision is questionable, and Iowa's attempts to establish its exchange have reportedly stalled.

Democrats finally gear up to sell ACA with Know Your Care and Protect Your Care

A group of Democratic heavyweights, including Massachusetts governor Deval Patrick (D-Mass.), announced last week the creation of two groups organized to promote the Pension Protection and Affordable Care Act (ACA). According to the website knowyourcare.org, "Know Your Care is a 501c3 organization dedicated to educating the American people about the Affordable Care Act’s life-saving consumer and patient protections that are already benefitting millions of Americans and will benefit millions more in the coming years as additional provisions are implemented." Protect Your Care will be a grassroots lobbying effort to protect health care reform from repeal.

The Know Your Care site so far has relatively little information, but connects readers to HealthCare.gov, as does protectyourcare.org, which also has a few personal interest stories.

Those to be involved in the two groups also include former Gov. Jim Doyle (D-Wis.), Neera Tanden, COO for the Center for American Progress, Paul Tewes, President Obama’s state director for the Iowa caucuses, and Jim Margolis, a well-known communications consultant.

The groups are said to already have $5 million to work with, although the source of that funding has apparently not been revealed. Considering all of the sometimes successful shots that the GOP has taken at the ACA recently, one wonders if the Democratic effort will be too little, too late, though. In fact, Congress is expected in the near future to vote to repeal HHS Secretary Kathleen Sebelius's authority to allocate  money for state insurance exchanges until 2015.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, including the full text of the law and additional information on health reform implementation and other recent developments in employee benefits, just click here.

Some House Members Would Eliminate Funds For Prevention

On April 14, the House of Representative passed, by a vote of 236-183, H.R. 1217, which would repeal the Prevention and Public Health Fund established by the Affordable Care Act (ACA).

Rep. Joseph Pits (Pa.), who introduced the bill, said during debate on the measure, “We have created a slush fund from which the Secretary can spend without any congressional oversight or approval. No one here can tell us how this funding will be used next year or five or ten or 20 or 50 years from now. We can’t predict how the money will be spent—and worse, we can’t even influence it.”

Rep. Henry Waxman (Cal.) defended the fund: “Terminating the prevention fund is not only extremely shortsighted; it will also prove to be fiscally irresponsible. The return on this kind of upfront investment—targeted resources to help keep people healthy for as long as possible—will over time save precious health care dollars.”

The Fund, included in ACA Sec. 4002, provides for expanded and sustained national investment in prevention and public health programs to improve health and help restrain the rate of growth in private and public sector health care costs.

Under ACA Sec. 4002 funds were allocated in the following ways for 2010 and 2011:

Type of Allocation 2010 2011
Community Prevention $76 million $298 million
Clinical Prevention $50 million $182 million
Public Health
Infrastructure
and Training $343 million $137 million
Research and Tracking $31 million $133 million

For the past few years, major employers have been investing in disease prevention and wellness for their employees as a health care cost reduction measure. Apparently, members of the U.S. House of Representatives don't consider prevention a sound investment for the nation.