Volume I, Issue 13 - November 13th

UnitedHealth Group is pleased to bring you this issue of the Health Care Modernization News Flash to update you on health care issues under discussion in Washington, D.C. and in the states, and to share our perspectives on modernization of the health care system.

Our Perspective

National Spotlight

House Passes Health Reform Bill

With a vote of 220 to 215, the House of Representatives passed the “Affordable Health Care for America Act” after several hours of debate on November 7th. One Republican, Representative Cao (R-LA), voted for the bill and 39 Democrats voted against the bill. Three amendments were considered on the House floor during consideration of the legislation and two were adopted. A manager’s amendment was incorporated that made technical changes to various parts of the bill, added a biofuel producer credit, and set up a regulatory process to review and approve health plan premiums. An amendment prohibiting the use of federal funds and Exchange subsidies for abortion was adopted by a vote of 240 to 194. A third amendment failed on a party line vote that would have replaced the language in the bill with a Republican health reform proposal including provisions for high risk pools, association health plans, interstate purchase of insurance, and medical liability reform. The CBO estimates that the modified bill that passed will cost $1.052 trillion over ten years (down from the $1.055 trillion gross cost estimated on October 29th) and will cover 36 million of the 54 million uninsured.

Senate Still Working to Merge Committee Bills, Considering Public Plan Options and Other Changes

Senate leaders are working to merge the health reform bills passed by the Health, Education, Labor, and Pensions (HELP) Committee in July and the Finance Committee in October into one bill for consideration on the Senate floor. The major issues under discussion are the financing provisions, coverage expansion mechanisms, insurance market reforms, and the inclusion and structure of a public plan; the HELP Committee bill included a public plan, however, the Finance Committee bill included CO-OPs. Majority Leader Harry Reid (D-NV) is awaiting cost estimates from the CBO on various reform proposals including different public plan options (such as state public plans and state opt out provisions) and is working to resolve additional disagreements including abortion and immigration provisions, before releasing a merged bill that can garner support from 60 Senators. To bring a bill to the Senate floor and defeat a filibuster to delay or prevent a vote, the bill must be able to secure 60 votes. Senator Reid has stated his desire to pass health reform legislation this year, but has not committed to a firm timeline for action.

A chart summarizing components of the bills that have passed the House and the Senate Finance and HELP Committees is attached to the end of this Health Care Modernization News Flash.

State Spotlight

Florida: State Estimates Impact of Federal Health Reform Legislation

The Florida Agency for Health Care Administration (AHCA) has released a report estimating the impact of federal health reform legislation on the state Medicaid program. Expansion of Medicaid eligibility to all individuals under 133% of the federal poverty level, as passed by the Senate Finance Committee, is estimated to increase Medicaid enrollment by 1.4 million people at a state cost of over $700 million in 2016. The bill passed by the House that increases Medicaid eligibility to all individuals under 150% of the federal poverty level is estimated to increase Medicaid enrollment by 1.7 million people and increase state spending for Medicaid by over $1 billion in 2016.

Brief Comparison of Federal Health Reform Bills

Issues	Senate Finance Committee	Senate HELP Commettee	House
10 Year Cost	$829 Billion	$615 Billion	$1.052 Trillion
Coverage by 2019	29 of 54 Million Uninsured Covered	20 of 54 Million Uninsured Covered	36 of 54 Million Uninsured Covered
Financing	40% tax on “high value” plans Medicare provider payment cuts Medicare Advantage cuts Medicaid and Part D rebates Annual fees on insurers and druge and medical device makers	No jurisdiction over taxtion or Medicare and Medicaid	5,4% income surcharge Medicare provider payment cuts Medicare Advantage Cuts Medicare and Part D rebates and discounts from drug makers 2.5% medical device tax
Insurance Market Rules	Effective 2013 Required guarantee issue NO health status rating or pre-ex Rating only for tobacco, age (4:1), family size, and geography 30-50% wellness incentives No annual or lifetime limits Applies to invividuals and small groups (size 1 to 50, up to 100 by 2015, and possibly all by 2017) Purchase across state lines State waiver to adopt own rules	Effective within 4 years Required guarantee issue No health status rating or pre-ex Rating only for tobacco, age (2:1), family size, and geography 30-50% wellness incentives No annual or lifetime limits Applies to commercial market	Effective 2010: rate review and approval, 85% MLR, no lifetime limits, ineterim pre-ex limitations, interim COBRA eligibility extension, interim high risk pool Effective 2013: required guarantee issue, no health status rating or pre-ex, rating only for age (2:1), family size, and geography, no annual limits Applies to commercial market Purchase across state lines
Public Plan/CO-OPs	State private non-profit CO-OPs	National public plan with provider rates negotiated within a corridor and provider opt out	National public plan with provider rates negotiated within a corridor and provider opt out; State CO-OP
Exchange	State-based Individuals, CHIP, Medicaid adults, and small groups (size 1 to 50, up to 100 by 2015, and possibly all by 2017) eligible Facilitator of plan comparisons, enrollment, and subsidies	State-based Individuals, CHIP, and small groups less than 50 eligible Facilitator of plan comparisons, enrollment, and subsidies Regulator of Exchange rules	National with state option Individuals, CHIP, and groups to size 100 by 2015 (possibly all groups starting 2015) eligible Facilitator of plan comparisons, enrollment, and subsidies Regulator of Exchange rules Negotiator of plan premiums
Benefit Plans	65% minimum actuarial value “Young Invincible” (50% value) State “Basic Plan” option for 133%-200% FPL Applies to individual and small group (size 1 to 50, up to 100 by 2015, and possibly all by 2017) Can “grandfather” plan	76% minimum actuarial value Applies to commercial market Can “grandfather” plan	70% minimum actuarial value Applies to commercial market Individuals may “grandfather” plan; Employers must offer at least minimum plan by 2018
Mandates, Subsidies, and Penalties	Individual mandate in 2013, penalty phased in over 5 years to $750 starting 2014 Waiver from penalty for Native Americans, religious objection, and hardship (8% of income) Subsidies up to 400% FPL No employer mandate, but employers size 50+ must pay for employees getting subsidies 2 year subsidy for low wage small employers	Individual mandate within 4 years, penalty is $750 Waiver from penalty for religious objection and hardship (12.5% of income) Subsidies up to 400% FPL Employer mandate, penalty is $750 per employee for employers size 26+ 3 year subsidy for low wage small employers	Individual mandate in 2013, penalty is 2.5% of income Waiver from penalty for Native Americans, religious objection, and hardship (12% of income) Subsidies up to 400% FPL Employer mandate to pay 72.5% of individual and 65% of family, penalty is 8% of wages 2 year subsidy for low wage small employers
Medicaid	Eligibility expanded to 133% States must maintain eligibility until 2013	No jurisdiction	Eligibility expanded to 150% States must maintain eligibility ARRA funding to June 2011
Medicare and Medicare Advantage (MA)	Competitive bidding for MA; quality and coordination bonus Employer Part D income subsidy exclusion eliminated Payment “Innovation Center” New “Medicare Commission” to limit spending growth Care coordination pilots Hospital payment tied to quality Payment penalties to reduce hospital readmissions	No jurisdiction	MA payments cut to 100% FFS; quality bonus in some markets Employer Part D income subsidy exclusion eliminated Payment “Innovation Center” Care coordination pilots Payment penalties to reduce hospital readmissions Government negotiation of drug prices for Part D

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