Pink Fire Pointer June 2010

Healthcare Reform Update - 15June2010

Health Reform’s Medical Loss Ratios Threaten Individual Insurance Market
  • State insurance officials just announced that they fear health insurance companies will cancel policies and leave the individual insurance market in some states because of a provision in the new healthcare reform law.
  • The provision in the law, effective Jan. 1, 2011, requires most insurers to spend a larger share of their premium revenue — at least 80 percent for the individual market — on medical care and quality-improvement services, rather than administrative expenses and profits.
    • Insurers must refund money to their individual consumers if they do not meet the medical-loss ratios.
  • The National Association of Insurance Commissioners (NAIC) is recommending that the federal government allow a gradual three-year transition for this requirement.
    • Their proposed draft states that federal officials should lower the threshold on a state-by-state basis if immediate enforcement of the requirement would destabilize the individual insurance market.
  • State officials, which comprise the NAIC, expect to submit their recommendations to HHS sometime during July 2010.
    • The law gives the NAIC a special role to advise the Secretary of HHS about defining and calculating medical-loss ratios.
    • The law also says the HHS Secretary can adjust the medical-loss ratio in a state if she finds that enforcement of the full 80 percent requirement would “destabilize the individual market” there.
  • The NAIC does not list specific states that may need the requirement adjusted, but they would likely include less-populous states with relatively few insurers. However, even California officials have said they are worried about the provision, as they think insurers will be compelled to drop out of the individual market under this provision of the federal law.
  • Millions of people get insurance from companies that do not currently meet the medical-loss target.
  • If an insurer does decide to exit the individual market in a state, it must give 180 days’ notice to policyholders.
  • Read more:

Healthcare Reform Update – 14June2010

Regulation Issued on Grandfathered Health Plans Under Healthcare Reform Law 

  • The Department of Health and Human Services today announced new regulations surrounding the “grandfather rule” included in the healthcare reform law.

  • Under healthcare reform, all health plans must provide new benefits to consumers; however, plans that existed on March 23, 2010 are “grandfathered,” meaning they are exempt from some new requirements.

  • Up until this point, it has been unclear what changes a plan can make without losing its grandfather status. The regulations detailed today clarify some of these points.

  • According to the regulations, health plans can make routine changes without losing their grandfather status. This includes cost adjustments to keep pace with medical inflation, adding new benefits, making small adjustments to existing benefits, voluntarily adopting new consumer protections under the new law, or making changes to comply with state/other federal laws.

  • Premium changes are not taken into account when determining whether or not a plan is grandfathered.

  • Health plans will forfeit their grandfather status if they significantly cut benefits or increase out-of-pocket spending for consumers; consumers in plans that make such changes will also gain new consumer protections (e.g., coverage of recommended prevention services with no cost sharing, access to OB-GYNs and pediatricians without a referral by a separate primary care provider, etc.)

  • Read more:

  • Read the regulation:

Healthcare Reform Update – 10June2010

This update includes the following:
  • New York Enacts Landmark Rate Review Law

  • HHS Announces $51 Million in Grants to Enhance Health Insurance Premium Rate Review

  • HHS Clashes with Medicare Insurers on Rates

  • White House Launches Campaign to Build Up Health Law

  • Republicans put health reform on primary ballot in push to turn out conservatives

New York Enacts Landmark Rate Review Law
  • On Wednesday the Governor of New York signed legislation granting the state authority to review and approve health insurance premiums before they take effect, and increasing medical loss ratio percentages, with which insurers in the state must comply.

  • The new law, which covers about three million people enrolled in small-employer or individually purchased plans, requires insurance companies to apply to the state Insurance Department before they can raise premiums. The state then has 60 days to determine whether the rates are justified.

  • In early May, Health and Human Services Secretary Kathleen Sebelius sent a letter to governors and state insurance commissioners urging them to review the authority they have under their state laws to determine whether they have all of the regulatory tools needed to approve health insurance rates before they take effect.

  • Several provisions in the healthcare reform law strengthen government oversight of insurance premiums and rate hikes, including grants for states to help create or strengthen reporting and review processes.

  • Read more:

HHS Announces $51 Million in Grants to Enhance Health Insurance Premium Rate Review

  • Health and Human Services Secretary Kathleen Sebelius announced the availability of $51 million in Health Insurance Premium Review Grants funded by the new healthcare reform law.

  • This is the first round of grants available to states through a new $250 million grant program to create and strengthen insurance rate review processes.

  • All 50 states and the District of Columbia are eligible for the grants. To receive a grant, a state must submit a plan for how it will use the funds to develop or enhance its process of reviewing and approving, disapproving, or modifying health insurance premium requests. States with successful applications will receive a $1 million grant during the first round.

  • Several provisions in the healthcare reform law strengthen HHS’ and states’ oversight of insurance premiums and rate hikes. For example, the law requires that insurers in the individual and small group markets spend at least 80 percent of their premiums on healthcare, and insurers in the large group market spend at least 85 percent of their premiums on healthcare. The law also requires insurers to justify unreasonable premium increases to state regulators and the Secretary of Health and Human Services.

  • The grants that will be available in 2010 are only the first in a five-year grant program. HHS will take applications for a second round of state grants beginning in 2011, after new regulations regarding rate review take effect.

  • Read the press release:

HHS Clashes with Medicare Insurers on Rates

  • Insurance companies and the Obama administration are currently battling over how much seniors should pay for their privately-run Medicare plans next year.

  • In a letter to WellPoint Inc., Cigna Corp., BlueCross BlueShield Association and Health Care Service Corp., HHS Secretary Kathleen Sebelius warned the companies not to increase premiums and co-payments for seniors.

  • On Monday, insurers that sell Medicare Advantage plans had to submit their 2011 bids to the government.

  • Many insurers are planning to increase costs for a range of services for seniors next year. Dozens of Medicare Advantage providers plan to cut back vision, dental and prescription benefits. Some plans are eliminating free teeth cleanings and gym memberships, and raising fees for hearing aids, eye glasses and emergency-room visits.

  • According to the insurers, the cuts are necessary because the rate the government will pay private insurers to run the plans is frozen for 2011 at 2010 levels, while medical costs are expected to increase an average of at least 6 percent. The price increases and benefit reductions will help them recoup that difference.

  • Read more:

White House Launches Campaign to Build Up Health Law

  • President Obama and his allies are launching an elaborate campaign to sell the public on the healthcare reform law, including a new tax-exempt group that will spend millions of dollars on advertising to counter attacks on the measure and Democrats who voted for it.

  • The first evidence of the public relations offensive came Tuesday, when Obama traveled to Wheaton, Md. to conduct a nationally-televised question-and-answer session.

  • In Wheaton, Obama touted the distribution of $250 rebate checks for senior citizens who reached the “doughnut hole” in Medicare's drug coverage during 2010, one of the law's first benefits.

  • At the same time, he announced a new initiative to cut in half the amount of waste, fraud and abuse in the Medicare program by the end of 2012. This ambitious goal would require the federal government to recover as much as $18 billion.

  • Read more:,0,6844577.story

Republicans put health reform on primary ballots in push to turn out conservatives

  • South Carolina and Missouri added health reform questions to their primary ballots.

  • Arizona, Florida and Oklahoma will give voters a chance in November to amend their state constitutions to say residents of those states can’t be forced to pay a penalty if they don’t buy health insurance.

  • The amendment seeks to nullify the individual mandate, which consistently polls as one of the law’s most unpopular provisions.

  • Proponents of the law are launching a five-year, $125 million campaign to defend health reform.

  • Read more:

Other related articles that may be of interest:

According to a USA Today article, a growing number of US doctors are attempting to bring in extra profits by charging patients new fees for services they say insurance doesn't cover.

The New York Times ran an article highlighting dependent eligibility audits and the increasing number of employers using them to drop non-qualified dependents from the company plan.

A CNN story discusses a rising trend in hiring – employers are beginning to add more temporary or contract-based positions, rather than traditional full-time jobs with benefits. With unemployment remaining close to 10 percent, employers have their pick of workers willing to accept less secure positions.

Healthcare Reform Update - 04June2010

HHS Announces Availability of $60 Million in Healthcare Reform Grants
  • The U.S. Department of Health and Human Services (HHS) announced today the availability of $60 million in grants to states and communities to help seniors, disabled Americans and their caregivers better understand and navigate their health and long-term care options.
  • The purpose of this new grant program is to create streamlined, coordinated statewide systems of information, counseling and access that will help people find consumer-friendly answers to questions about their health and long-term care needs.
  • HHS’ Administration on Aging and the Centers for Medicare & Medicaid Services will work collaboratively to award the funds, which were authorized by the new healthcare reform law.
  • Some specific areas of focus will include assisting individuals who are under-served and hard to reach with information about their Medicare and Medicaid benefits, helping older adults and individuals with disabilities maintain their independent living status, assisting people transition from hospital or nursing home stays back into the community, and strengthening ties between the medical and social service systems.
  • Funds will be available to states, area agencies on aging, State Health Insurance Assistance Programs, and Aging and Disability Resource Centers.
  • The deadline for applications is July 30, 2010; grants will be awarded in September 2010.
  • For more information, visit
  • Read more:

HHS Awards Additional Grants to Expand Use of Health Information Technology*
  • The Secretary of HHS today announced $83.9 million in grants to help networks of health centers adopt electronic health records (EHR) and other health information technology (HIT) systems.
  • The money was divided into 45 grants that will support new and enhanced EHR implementation projects, as well as HIT innovation projects. 
  • Grantees will use the funds to improve healthcare quality, efficiency and patient safety. 
  • The funds are part of the $2 billion allocated to HHS under the American Recovery and Reinvestment Act of 2009 to expand healthcare services to low-income and uninsured individuals through its health center program. 
  • Read more:

*Note: There are two different types of exchanges: Health Information Exchanges and State-based Health Insurance Exchanges.
  • Health Information Exchanges are about communicating health information between providers and patients. The providers include doctors, hospitals, community health programs, federal programs and patients. 
  • Regional and state-based Health Insurance Exchanges are designed to manage health plan shopping with payers, brokers and individuals.
  •  Health Information Exchanges were included as part of the American Recovery and Reinvestment Act, also known as the the February 2009 “Stimulus bill”. The Act appropriated $20 billion for promoting the “meaningful use of health IT.” The Department of HHS was given most of the authority to decide how this money is spent. 
  • In February 2010, HHS announced that over $750 million of this would be used for grant awards at the state and regional level to help healthcare providers adopt and use electronic health records. Part of this money went to 15 selected communities across the country to serve as pilots for eventual wide-scale use of health information technology.

HHS Announces Community Health Data Initiative
  • On Wednesday, HHS Secretary Kathleen Sebelius launched a national initiative to share a wealth of new community health data, intended to drive innovation and lead to the creation of new applications and tools to improve the health of Americans. 
  • Through the Community Health Data Initiative (CHDI), increasing amounts of federally-generated community health data will be made publicly available in easily-accessible and useful formats. 
  • The Initiative calls for Web application developers, mobile phone applications, social media and other cutting-edge information technologies to “put our public health data to work.” 
  • The ultimate goal of the Initiative is to have an expanding array of applications built using HHS’ data, as well as data supplied by other sources. 
  • The Initiative was announced at a Community Health Data Forum on June 2. At the meeting, developers and technology pioneers demonstrated 16 innovative applications that make use of publicly-available health data. 
  • As part of the Initiative, by the end of 2010, a new HHS Health Indicators Warehouse will be deployed online, providing currently available and new HHS data on national, state, regional and county health performance in an easy-to-use “one stop data shop.” 
  • The Warehouse will also include information on proven ways to improve performance on particular indicators, such as rates of smoking, obesity, diabetes, access to healthy food, utilization of healthcare services, etc. 
  • Users will be able to explore all of this data on the Warehouse website, download it for free, and easily integrate it into their own websites and applications. 
  • To learn more about the Community Health Data Initiative, visit 
  • Read the press release:

Other related articles that may be of interest:

  • The New York Times published an article that highlights the collaboration between the federal government and insurance companies as they implement the healthcare reform law:

  • The Washington Post’s Ezra Klein speculates what might happen if the Supreme Court rules the individual mandate unconstitutional:

  • BNET Healthcare recently posted an article highlighting the strain of healthcare reform on employers: