Washington Extension

October 21, 2011

Medicare News

HHS released quality rating scores for 2012 Medicare Advantage plans. Nine out of 569 plans received the top score (five stars) and approximately 20% of plans are not rated due to lack of data. Of the nine top-rated plans, four are operated by Kaiser Permanente and all are HMOs. Other insurers—notably United Healthcare—have significantly lower average star ratings but are aggressively pursuing higher rankings. The Affordable Care Act tied significant funding, estimated at $3-4 billion in 2012, to high-quality rankings. The average plan rating is 3.56 stars, up 0.11 stars over 2011.

Just prior to the release of Medicare Advantage quality rankings, Kaiser Permanente released a survey of Medicare beneficiaries showing lack of awareness of quality rankings. The survey revealed that less than 20% of beneficiaries are aware of the rating system. Of those, less than one-third used quality rankings to choose a plan. Beginning this year, HHS’ Medicare Plan Finder highlights top-rated Medicare Advantage plan with a gold star to help seniors find high-quality plans.

ACA Updates

The Obama Administration effectively shut down the CLASS Act—the long-term care insurance scheme championed by the late Senator Kennedy and enacted in the Affordable Care Act. HHS sent a lengthy and detailed report to Congress explaining the attempt to develop an actuarially sound plan that would provide benefits required by law and ensure solvency over 75-years. Republicans assert that the failure of the CLASS Act is representative of the devastating effects the ACA would have and the House Energy & Commerce Committee has scheduled a hearing to explore the cancellation. The White House counters that CLASS is a stand-alone program with no effect on the rest of the law.

Despite his opposition to the Affordable Care Act, Wyoming Governor Matt Mead supports recommendations from a health insurance exchange steering committee to establish a state-run exchange through an executive order. The committee was skeptical that an exchange office could be established through the state legislature and wants to decide whether to run an exchange by 2013.

Arkansas’ Insurance Commissioner is concerned that it is too late to pass exchange authorizing legislation, and is advocating for a Federally-run exchange with state regulatory and oversight responsibilities. This hybrid model has been suggested by HHS as an option for states. Controversy over whether Arkansas should apply for Federal grant funding for exchange work continues within state government, leading to reversal of plans to seek funding for exchange progress.

On the Hill

The deficit reduction “Super Committee” is flooded with suggestions and protests for achieving its $1.2 trillion goal, with about a month left before recommendations are due. Most submissions are recycled policy ideas from previous debates, but aim to avoid harmful impacts from across-the-board cuts. In addition to comments from interest groups, think tanks, individual Congressman and caucuses, and industry, the Super Committee received recommendations from congressional committees both bipartisan and along partisan lines. Despite the multitude of ideas, the Super Committee’s work appears to be progressing slowly and will be discussed in public next week.

Reports/Other News

Humana has exited Utah’s health insurance exchange, citing its desire to prioritize its own solutions for the small business market. The exchange opened to all small employers in the state one year ago, and Humana was one of the largest insurers to participate.

The Kaiser Family Foundation released an analysis of the competitiveness of state health insurance markets. Analyzing the composition of state insurance markets may help state policymakers decide how to implement new insurance market rules, decide whether to operate an exchange, and conduct more effective premium rate review. In 30 states, one insurance company had more than 50% of the individual plan market share in 2010, while in the small group market the median market share of the largest insurer is 51%.

The Healthcare Leadership Council—a coalition of healthcare executives—released a survey of Part D enrollee experiences with the drug benefit. The survey found that almost 90% of enrollees are satisfied with their drug plan, and 70% report being better off than before Part D. Eighty-five percent agree that they understand how to use their plan and that it works well, and slightly fewer agree that their out-of-pocket costs are reasonable.

Visit Extend Health — the nation’s largest private Medicare exchange.

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