Washington update

July 8, 2011

We have a great summer intern here at Extend Health this year, and she’s started creating a “Washington News Update” that rounds up the relevant stories from the past week or so around Medicare, health care reform, and related topics. Here’s the latest:

Medicare News

Medicare spending cuts are reportedly on the table in the debt limit negotiations. Extending Medicaid’s discounted prescription drug prices to Medicare for those individuals eligible for both programs has received significant attention, but faces longstanding opposition from PhRMA.

ACA Updates

An NAIC task force voted to endorse a Federal bill which would remove agent and broker fees from the administrative costs used to calculate an insurer’s minimum medical loss ratio (MLR). The recommendation still needs approval from the full executive committee of the NAIC. Congressional action would be necessary to change the MLR definition in the ACA.

Rhode Island’s exchange bill died in the state legislature after lawmakers couldn’t compromise on abortion language. The state is now exploring an executive order to create an exchange. Connecticut’s governor signed that state’s exchange establishment bill into law, creating a quasi-public agency with a 14-member governing board. Colorado’s exchange board is meeting for the first time to determine staffing needs, a legislative strategy, and work through governance issues.

HHS will conduct reviews of proposed premium increases in seven states and four US territories, and partner with three other states for rate review as required by the ACA. These are states that HHS has deemed to lack effective rate review systems before the September 1, 2011 deadline for review of insurers seeking premium increases of 10% of more.

On the Hill

Next week the House Budget Committee and the House Energy & Commerce Health Subcommittee hold hearings on the Independent Payment Advisory Board, established in the ACA to control growth in Medicare spending. Among those testifying will be HHS Secretary Sebelius, Members of Congress, health care researchers, think-tank leaders and representatives of disease organizations. 

Reports/Other News

Results from the first randomized, controlled trial of Medicaid coverage show that enrollees were more likely to see a doctor or be admitted to the hospital. Compared to non-Medicaid enrollees with similar income, Medicaid enrollees are more likely to use prescription drugs and receive preventive care, and more likely to report good physical and financial health. These findings rebut the argument that poor people don’t need insurance because a sufficient health care safety net exists.

 The Center for American Progress (CAP) released a report suggesting principles for creation of Small Business Health Options Program (SHOP) Exchanges, established in the ACA to cater to employers seeking coverage for employees through an exchange. CAP suggests that successful SHOP Exchanges will know the small business market, maximize participation, and focus primarily on costs. SHOP Exchanges will need to demonstrate value-add as they compete with employers’ other health insurance options.

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