SAMHSA222s Weekly Financing News Pulse: National Edition
July
22
, 2011 7/22
/11
1
SAMHSA222s Weekly Financing News Pulse: National Edition
National News
21 Attorneys General File Brief Backing Missouri Health Reform Challenge; HHS Awards 39 Annual
Benefit Limit Waivers
HHS to Conduct Premium Rate Reviews for 10 States
House Approves Debt Measure with Potential Effects on
Health Spending
HHS Proposes Health CO
-
OP Rules, Offers Loans to Begin Plans
Sen. Brown Introduces Legislation Offering Incentives for Increased Generic Drug Utilization in Medicaid
Senators Enzi and Nelson Introduce Bills to Adjust Income Calculation for Federal Health Benefits
Studies Released
RWJF Projects Health Reform Will Yield
State Health Savings,
Reduce
the
Cost of Uncompensated Care
KFF Estimates Reforming Medigap OOP Spending Requi
rements
Will Save up to $4.6 Billion
AAF
Suggests Medicare Drug Rebate Changes Could Increase Part D Premiums
KFF
Offers Strategies to Leverage
Existing Data
to
Streamline Health Program Eligibility Verification
Around the Hill: Hearings on Health Financing
To Subscribe to SAMHSA222s Weekly Financing News Pulse, please go to the following link and choose 223Health Care
Financing224: https://service.govdelivery.com/service/multi_subscribe.html?code=USSAMHSA&
origin=http://www.samhsa.go v/enetwork/success.aspx
For questions or comments, please contact
Rasheda Parks
( Rasheda.Parks@samhsa.hhs.gov ).
SAMHSA222s Financing News Pulse is a news consolidation service, designed to provide readers with streamlined
access to information published by local, regional, and national media.
While the News Pulse attempts to verify
our content, the editors of each publication cited in the summaries are ultimately responsible for the accuracy of
the information they publish. We encourage readers to inform the News Pulse of any errors so we can note them
in future editions; however, we also suggest that they contact the media source directly.
SAMHSA222s Weekly Financing News
Pulse: National Edition
July
22
, 2011 7/22
/11
2
National News
21 Attorneys General File Brief Backing Missouri Health Reform Challenge; HHS Awards 39
Annual Benefit Limit Waivers
:
O
n July
19, attorneys general in 21 states filed a brief backing
Missouri Lieutenant Governor Peter Kinder222s
(R) challenge of the national health care reform law. Filed
last July
in
U.S. District Court
, Lieutenant Governor Kinders222 suit contends that the law222s i
ndividual
insurance mandate is unconstitutional, the law222s expansion of Medicaid could force Missouri to raise
state taxes, and the law improperly alters state officials222 compensation by changing their health care
plan ( Kaiser Health News, 7/20 ). In other health care reform news
,
in June, U.S. Department of Health
and Human Services
(HHS)
officials
awarded 39 waivers exempting health plans from the
law222s ann
ual
benefit limit requirement, bringing the total
number of waivers
to 1,471. September 22 is the last day
that HHS will accept applications for waivers
. Waivers
granted or renewed by September 22 will run
through 2013 ( Kaiser Health News, 7/18 ).
HHS to Conduct Premium Rate Reviews for 10 States:
U.S. Department of Health and Human
Services
(HHS) officials have determined that 10 states lack adequate systems for health insurance
premium rate review and have announced plans to conduct reviews on their behalf, as required under
the national health care reform law. Beginning September 1, individual and small group premium
increases of 10 percent of more will be subject to publicized review. HHS will review rates increases in
Alabama, Arizona, Idaho, Iowa, Louisiana, Missouri, Montana, Pennsylvania, Virginia, and Wyoming,
while all other states
will conduct their own reviews ( The Birmingham News, 7/15 ; Kaise
r Health News, 7/15 ).
House Approves Debt Measure with Potential
Effects on
Health Spending:
On July 19, the U.S.
House
approved legislation (
H.R. 2560
) to increase the federal debt ceiling and limit future spending.
The U.S. risks defaulting on its de
bts if Congress does not raise the debt ceiling by August 2
to allow the
federal government
to borrow
additional funding.
The
House
bill would increase the debt ceiling, enact
$111 billion in immediate budget cuts, implement
an annual spending cap, and require Congress to
approve
a
bill mandating
passage of a balanced budget. The bill would exempt Medicare and veterans222
benefits from the
immediate
reductions
; however,
legislators opposed to the measure say
that
the
annual spending limits would ultimately affect such spending.
The measure now goes before the U.S.
Senate
, which is not expected to approve it.
Congress
ional leaders and President Obama are also
negotiating a
comprehensive
measure to increase the debt ceiling and reduce the deficit, includin
g
proposals that would reduce federal health spending and restructure federal health care programs
( Los Angeles Times, 7/19 ; THOMAS ; Politico, 7/20 ; Kaiser He
alth News, 7/21 ).
HHS Proposes Health CO
-OP Rules, Offers Loans to Begin Plans
: On July
18, the
U.S. Department
of Health and Human Services
(HHS) issued proposed rules
governing
a new type of
health
plan
,
established under the national health care reform law
. T
he
Consumer
-O
riented and O
perated
P
lan (CO
-
OP are non
-
profit insurance carriers governed by consumers. The rules provide $600 million in
planning
loans
to develop
CO
-
OP bu
siness models and $3.2 billion in
solvency
loans to provide CO
-
OPs with
funding to cover unexpected health claims. The rules anticipate
loan default rates of 40 percent and 35
percent
, respectively. HHS will accept comments on the rules until September 1
6 ( The Hill, 7/18 ; Kaiser Health News, 7/18 ).
Sen. Brown Introduces Legislation Offering Incentives for Increased Generic Drug Utilization
in Medicaid
:
On July 13,
Sen. Scott Brown
(R-
MA) introduced legislation (
S. 1356) that would offer
SAMHSA222s Weekly Financing News
Pulse: National Edition
July
22
, 2011 7/22
/11
3
states incentives for
increasing generic drug utilization in
their
Medicaid
programs
. Designed to reduce
Medicaid costs, the bill would provide rebates to states whose Medicaid programs demonstrate an
increase in the proportion of generic drugs purchased
.
Beginning in FY2012,
the bill would allow states
to keep 50 percent of the savings achieved under the program.
The bill now goes before the Senate
Finance Committee ( Pharmaceutical Care Management Association via PR Newswire, 7/15 ; WAMC, 7/19 )
.
Senators Enzi and Nelson Introduce Bills to Adjust Income Calculation for Federal Health
Benefits
:
On July 18,
Sens. Mike Enzi
(R-
WY) and Ben Nelson
(D
-
NE) introduced bills (
S. 1376
and
S.
1378) that would amend the
income calculations used to determine federal health benefit eligibility
under the national health care reform law
.
Under current law, h
ealth reform does not include Social
Security benef
its as
income
when determining eligibility for Medicaid or subsidized coverage through
the law222s health exchanges
. L
egislators
say that the current calculation method
could
make
up to 3
million middle
-
income individuals Medicaid eligible
in 2014.
The new
bills
would count Social Security as
income,
reducing eligibility
. The
Congressional Budget Office
(CBO) estimates the change would
sav
e
an
estimated $13 billion between 2014 and 2021
. The bills now go
before the Senate Finance Committee
( The Hill, 7/18 ; AP, 7/18 ; Kaiser Health News, 7/19 ).
Studies Released
RWJF Projects Health Reform Will Yield
State Health Savings,
Reduce the
Cost of
Uncompensated Care
:
On July 11, the Robert Wood Johnson Foundation
(RWJF) published a brief
examining state costs under the national health care reform law. Citing health reform222s health coverage
expansion and increased federal financing for
formerly state
-
funded functions, the authors estimate
that
,
between 2014 and 2019, states will spend up to $129 billion less than they would
have
without
reform
. Over the same
period, t
he brief estimates that the law will reduce overall spending on
uncompensated care by 12.5 to 25 percent, saving the federal govern
ment $39 billion to $78 billion,
while
saving states $26 to $52 billion. T
he
authors
estimate that states will be responsible for $14 billion
in new Medicaid spending to cover the costs of newly eligible Medicaid enrollees
. The report also
projects that expanding Medicaid coverage for
individuals with mental illnesses will save states up to
$22 billion
through
2019
.
RWJF, 7/11 ; Kaiser Health News, 7/15 ).
KFF Estimates Reforming Medigap OOP Spending Requirements
Will Save up to $4.6 Billion
:
On July 20, the Kaiser Family Foundation
(KFF) released a report
examining three proposals to prohibit
Medicare supplemental insurance policies, known as 223
Medigap224
policies
, from covering
100 percent of
beneficiaries
222
out
-
of
-
pocket
(OOP)
costs. Several recent proposals to reform Medicare and reduce
federal spending have included such measures on the grounds that allowing Medigap plans to cover
all
OOP costs
increases
service utilization and Medicare spending. Based on the numerous
OOP spending
requirements that
the proposals would impose on Medigap
beneficiaries, the authors estimate that
implementing the policy change
in FY2011 would save Medicare between $1.5 and $4.6 billion.
However, t
he report cautions that it does not account for the negative effects
of
the
reduced
utilization
of
needed care, which could negatively affect
future spending in addition t
o
adversely affecting
outcomes
( KFF, 7/20 ).
AAF
Suggests Medicare Drug Rebate Changes Could Increase Part D Premiums
:
On July 21, the
American Action Forum
(AAF) released a report ,
examining the effect of
providing
drug rebates similar
to those employed in Medicaid
to
dual eligibles and beneficiaries of the Medicare Prescription Drug
SAMHSA222s Weekly Financing News
Pulse: National Edition
July
22
, 2011 7/22
/11
4
Benefit Program (Part D) Low
-
Income Subsidy (LIS). Legislation (
S. 1206)
to enact such a change is
currently before the Senate Finance Committee
,
with
supportive
legislators arguing
that it would save
$112 billion over 10 years. However, the
AAF
report
contends that
the change
w
ould result in Part D
premium increases of up to 40 percent
and argues that drug manufacturers may shift drug costs to the
private health coverage market
in response to the rebates
( Kaiser Health News, 7/21 ).
KFF
Offers Strategies to Leverage
Existing Data
to
Streamline Health Program Eligibility
Verification
:
KFF
has released a brief ,
offering strategies for states to streamline eligibility verification
systems
for Medicaid, the Children222s Health Insurance Program (CHIP), and subsidies through health
reform222s exchanges. Noting that health reform will dramatically expand health coverag
e through these
programs, the authors suggest employing 223express lane224 principles that use existing data already held by
other government agencies. The brief recommends establishing electronic links
between health
programs
and
other
public programs
,
inclu
ding the
Supplemental Nutrition Assistance Program (SNAP)
,
Temporary Assistance for Needy Families (TANF), and other
federal databases ( KFF ).
Around the Hill: Hearings on Health Financing
Senate Judiciary Subcommittee on Crime and Terrorism: Drug and Veterans Treatment Courts
July 19, 10:30 a.m. 226 Dirksen
Senate Special Aging Committee: Reducing Medicare Drug Costs
July 21, 2:00 p.m. 106 Dirksen
House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies:
Fiscal 2012 Appropriations: Labor, HHS, Education
July 26, Time TBA. 2358-C Rayburn
House Appropriations Committee: Fiscal 2012 Appropriations: Labor, HHS, Education
August 2, Time TBA. 2359 Rayburn