Surcharge for smokers on Medicaid

Bill seeks surcharge for Utah smokers on Medicaid

By Brian Passey, USA TODAY

ST. GEORGE, Utah – If private health insurers can add a surcharge for smokers, why not Medicaid?

  • By Victor R. Caivano, AP

    Utah Republican Rep. Paul Ray is proposing that the state impose a higher co-pay on Medicaid residents who use tobacco.

By Victor R. Caivano, AP

Utah Republican Rep. Paul Ray is proposing that the state impose a higher co-pay on Medicaid residents who use tobacco.

That’s the argument behind a bill Utah Republican Rep. Paul Ray has proposed that could become a first-in-the-nation state law imposing a higher co-payment for tobacco-using residents enrolled in Medicaid.

Although Medicaid recipients in Utah do not pay premiums, some are required to pay up to $5 co-payments for prescriptions or doctor visits.

According to the American Lung Association, smokers enrolled in Medicaid smoke at a rate 60% greater than the general population. Ray said smokers on Medicaid cost Utah $104 million annually. “If they’re paying $7 a day for a pack of cigarettes, they should be able to pay a $2 to $3 co-pay,” Ray said.

Ray said he believes his proposal is unique among state Medicaid programs. Alper Ozinal, a spokesman from the Centers for Medicare & Medicaid Programs, said his agency is not aware of other states that have considered similar legislation

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a health industry trade association, said many health insurance providers have chosen to implement surcharges on smokers because of the broad recognition that smoking increases health complications and resulting health care costs.

The American Lung Association opposes the proposed co-payment. There is no evidence that it would encourage smokers to quit, said Jennifer Singleterry, the association’s manager of cessation policy. Instead, low-income smokers on Medicaid would just have to pay more. “We feel that this is a punitive measure for smokers,” she said.

Gary Nolan, U.S. director for the Citizens Freedom Alliance, a property rights and smoker advocacy organization that also opposes the proposed law, added that legislation that affects smokers is easy to pass because smokers do not represent a large voting demographic.

The bill went before the Utah House Government Operations Committee on Thursday. It is being modified to include a wellness aspect with a smoking cessation program. Ray said he plans to bring it back before the committee next week. He said he does not expect much opposition within the heavily Republican House and Senate.

Ray said he would like to eventually extend the idea to an entire wellness program that would include obesity and alcohol use.

“I’m not trying to do this to punish people,” he said. “I’m doing this to encourage people to be healthy.”

Contributing: Passey also reports for The Spectrum in St. George, Utah

Future of healthcare (From Fox News)

Here’s what your health care future holds

by

Published January 30, 2012

| Insure.com

fox news

The first expert you ask for medical advice in 2025 may not be your doctor. Instead, perhaps you’ll consult your health avatar, a digital assistant that knows your entire health history and makes personalized recommendations.

It’s one of many possibilities for what primary care could look like in 13 years, according to “Primary Care 2025: A Scenario Exploration,” a new report by the Institute for Alternative Futures, a nonprofit think tank based in Alexandria, Va.

The institute worked with 50 health care experts to create four scenarios of the future, each one based on different assumptions. Funded by a grant from the Kresge Foundation, the project shows how a wide range of social, political and economic issues could affect health care and health insurance coverage. It also makes recommendations to achieve the best future.

“You don’t have the future air-dropped on you 10 years from now,” says Eric Meade, the institute’s vice president and senior futurist. “The future depends on actions you take along the way.”

The scenarios range from a grim prediction of desperation to hopeful outlooks for a well-functioning health care system.

“It’s when we’re able to acknowledge our fears and focus on aspirations that we’re able to create the future we would prefer,” Meade says.

Here’s a look at where things stand now and some of the best and worst possible outcomes for the future, according to the report.

Avatars provide more primary care

Now: Companies market a variety of online health and wellness programs and applications to help consumers track and improve their health.

Future best case: You still see doctors, but largely take care of yourself with the help of a digital avatar, which gives dependable advice based on your health data. You also learn by connecting with people who have similar conditions through social health networks.

Future worst case: Avatars vary widely in quality. Some companies market products to patients using free, low-quality avatars. This eventually leads to tragedy. In 2020, some 3,000 people die after taking their avatars’ advice and using an herbal product that causes a lethal interaction with their prescription medications. Regulators and industry associations promise safety of give-away avatars will improve, but many people continue to distrust virtual doctors. 

 Upscale practices charge yearly fees

Now: Concierge medicine includes upscale primary care practices that charge a yearly fee, or retainer, for enhanced care, such as cell phone access to your doctor, access to a suite of comprehensive tests and screening (including tests your insurance company wouldn’t cover), and personalized health coaching.

Future best case: Concierge medicine continues to provide cutting-edge care to the very rich. Innovations that are developed in these practices are adopted everywhere, so eventually all patients benefit.

Future worst case: The gap in the quality of care between rich and poor widens. The rich get great care. Most low-income Americans lucky enough to have coverage have high-deductible catastrophic health insurance plans and have to pay out of pocket for most of their care. Medicare and Medicaid patients face long lines.

Medical records go electronic

Now: Despite predictions in the 1980s that all medical records would be electronic by now, many health care providers are still converting from paper.

Future best case: Sophisticated electronic medical record systems reduce costs and improve care. Your record includes health data and information about your genetics, stress level, injury history, and social and economic circumstances to help doctors tailor treatment. Smartphone apps monitor your diet, physical activity and sleep patterns, which produces data you can enter into your record.

Future worst case: Poor people are stuck with an early version of electronic medical records, which includes limited billing and administrative information but doesn’t improve care.

Primary care doctor shortage impacts care

Now: Medical experts have been warning for years about a shortage of primary care doctors because too few medical students have been choosing the field and instead going into more lucrative specialties.

Future best case: Technology that helps patients care for themselves, along with a team approach to care — including nurses, social workers and community health workers — mitigates the shortage of primary care doctors.

Future worst case: Many doctors, nurses and pharmacists work into their 70s, and there are not enough of them to go around. A black market thrives with unlicensed caregivers diagnosing and doing minor surgeries on patients desperate for care.

Health insurance exchanges emerge

Now: States are developing health insurance exchanges — markets for individuals and small groups to buy health insurance. Exchanges will play a major role in health care starting in 2014, when virtually everyone is required to have health insurance under the Patient Protection and Affordable Care Act, the federal health care reform law.

The Kaiser Family Foundation keeps track of the status of health insurance exchanges.

Future best case: The health insurance exchanges expand the range of health insurance options, and almost everyone has health insurance.

Future worst case: The health insurance exchanges are unsuccessful in most states, prompting Congress to delay the mandate requiring everyone to have health insurance.

The original article can be found at Insure.com:
Here’s what your health care future holds

Humana’s McCa…

Aside

Humana’s McCallister Says He’s Open to Billion-Dollar Deals

January 27, 2012, 2:58 AM EST

By Jeffrey McCracken and Sarah Frier

(Updates with closing share price in the fifth paragraph. See DAVOS <GO> for more on the World Economic Forum.)

Jan. 26 (Bloomberg) — Humana Inc., the second-largest Medicare provider, is willing to spend $1 billion for deals that would enable the company to expand in the U.S. government program, Chief Executive Officer Michael McCallister said.

“We could do $1 billion-plus deals if we wanted to,” McCallister said in an interview at the World Economic Forum’s conference in Davos, Switzerland. “We have a lot of capacity for something of that size. We’ve acquired a number of small plans but we are open to something that expands us in Medicare.”

The U.S. health-care law puts pressure on how much insurers can be reimbursed for care and is expected to hurt profit margins, said Chris Rigg, an analyst with Susquehanna Financial Group in New York. Increasing the size of Humana’s Medicare business, which already brings in more than $20 billion each year, would help with costs, McCallister said.

Universal American Corp., Coventry Health Care Inc. and Health Net Inc. are among companies focused on Medicare, the government’s health plan for the elderly and disabled, said Michael Manns, a Bloomberg Industries analyst. The companies, with market values more than $1 billion, are the size Humana would need to make an effect on earnings, Rigg said. Humana probably will look at closely held companies, he said.

Humana fell 2.7 percent to $87.11 at the close in New York. In 2010 and 2011, Humana was the best performer of the six companies in the S&P 500 Managed Health Index.

Stock Prices

Universal, based in Rye Brook, New York, fell 3.6 percent to $10.87. Coventry, based in Bethesda, Maryland, fell 2.7 percent to $29.54. Health Net, based in Woodland Hills, California, gained less than 1 percent to $35.81. None of the companies returned calls requesting comment.

Humana has acquired several smaller health insurers to expand in Medicare.

Aetna Inc.’s Chief Executive Officer Mark Bertolini said earlier this month that he is looking for deals in government programs. Cigna is buying HealthSpring Inc., which had more than $1.3 billion in revenue from Medicare in the third quarter. UnitedHealth Group Inc., the largest insurer and Medicare provider by revenue, will continue to get bigger, Rigg said.

“The market thinks there needs to be more consolidation in the managed-care area and it might be right,” McCallister said. “There are a lot of small players with 20,000 to 150,000 members and they will continue to be bought up.”

–Editors: Angela Zimm, Andrew Pollack

To contact the reporters on this story: Jeffrey McCracken in Davos, Switzerland at jmccracken3@bloomberg.net; Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

House panel backs adult abuse registry bill

FRANKFORT, KY.— The House Health and Welfare Committee passed a bill Thursday to create an adult abuse registry, something long sought by advocates as a way to better protect elderly and vulnerable adults.

House Bill 259, sponsored by Rep. Ruth Ann Palumbo, D-Lexington, won unanimous approval and now goes to the full House, which passed a similar measure last year. It failed to pass the Senate.

HB 259 would create a registry similar to the existing child abuse registry, where adults found to have abused or neglected children are listed. People on that registry are barred from working in positions around children, such as at day care centers.

An adult abuse registry could be used by prospective employers, such as home health or personal care agencies, that hire people to care for adults. Employers could check the registry to determine whether an individual had been found to have abused, neglect or exploited an elderly or vulnerable adult.

Gov. Steve Beshear made the creation of such a registry a priority in his budget address earlier this month and proposes including $2.2 million over the next two years to develop and operate the registry within the Cabinet for Health and Family Services.

Also on Thursday, the committee heard from a Lexington-based home health care agency that reported significant problems under the state’s new managed care system for Medicaid that took effect Nov. 1.

Representatives of Nurses Registry and Home Health, which provides Medicaid-funded home-health services for elderly people and disabled children, said they have been confronted by major problems in filing claims, getting services authorized and getting payment under the new system in which the state relies on three private companies to handle Medicaid services.

Pat Hagan, who manages children’s services for the nursing agency that serves patients in 16 counties, said many claims aren’t getting paid and she’s concerned about how long the agency can keep serving severely disabled children.

“A lot of children depend on what we do,” she said.

The agency is one of several providers that have approached lawmakers during the session to report problems with the new managed care system, which serves about 560,000 Medicaid members outside the Louisville region. Passport Health Plan, a separate non-profit manages care company, serves about 170,000 Medicaid members in Jefferson and 15 surrounding counties.

No representatives of the three managed care companies spoke at Thursday’s hearing.

Committee chairman Tom Burch, D-Louisville, said the committee may take the matter up next week if the problems aren’t resolved.

SOURCE:
To view this article by Deborah Yetter for The Courier-Journal please visit http://www.courier-journal.com/article/20120126/NEWS01/301260053/1001/rsslink

Dentist uses paper clips in Medicaid Root Canals

Dentist pleaded guilty, paper clip used in root canals
Updated 1d 1h ago
NEW BEDFORD, Mass. (AP) – A former dentist in Massachusetts has pleaded guilty to Medicaid fraud for using paper clips instead of stainless steel posts in root canals.

A former dentist in Massachusetts has pleaded guilty to Medicaid fraud for using paper clips instead of stainless steel posts in root canals.
ext Monday after pleading guilty last week in New Bedford Superior Court to a variety of charges, including defrauding Medicaid of $130,000 assault and battery, illegally prescribing prescription drugs and witness intimidation.
Prosecutors say the 53-year-old Clair was suspended by Medicaid in 2002, but continued to file claims from August 2003 to June 2005 by using the names of other dentists in his Fall River practice.
Authorities say instead of stainless steel posts for root canals, he used sections of paper clips — which can cause pain and even infection — in an effort to save money.

Consumer Groups Ask Obama To Not Weaken Provisions For Insurance Labels

By Susan Jaffe

January 24th, 2012, 6:03 PM

Leaders from some of the nation’s top consumer and seniors advocacy groups today urged President Barack Obama not to weaken a key consumer provision of his signature health care overhaul law.

The provision requires health insurers and employers to use standardized, easy-to-understand information documents to describe health plan benefits and costs.   These forms would explain how much each plan pays on average for three common medical conditions and include a glossary of insurance terms.

“The summary of benefits and coverage [document] is a vital first step in making consumers better informed and able to make the proper decisions for themselves,” said Stephen Finan, senior director for policy for the American Cancer Society Cancer Action Network, one of the signers of the letter to the president.  In some states, information about providers and other policy details are not disclosed until after a consumer applies for coverage, he said.  Shoppers today, he explained, can get better information about buying a new washing machine than they can about a health insurance policy.

“You pay first and learn later,” he said.

The letter was signed by the chief executive officers of the American Cancer Society, American Heart Association, American Diabetes Association, Consumers Union and AARP, which has 37 million members age 55 and older.

According to the law, the forms are supposed to be distributed starting March 23, but the groups are worried about the administration’s long delay in setting final regulations that spell out how to use the forms. The draft regulations that include the proposed forms were issued in the summer and the administration has been reviewing comments on those. “As the Administration approaches its final decisions on the [summary of benefits and coverage] rule, we strongly encourage you to adhere to the letter of and intent of the Affordable Care Act,” the CEOs wrote.

Although they concede that there’s probably not enough time to meet the March deadline, they would like the forms available for the fall open enrollment season for group insurance plans.   They also urged that the forms be used in both group and individual insurance plan markets, , as the law and proposed rules require, and that they include premium price information as well as several coverage examples.

In comments on the proposed rules, insurance and business trade associations explained how some of these features would be difficult to implement now and asked for further delays.

The new forms were written by a working group of the National Association of Insurance Commissioners, which included industry and consumer representatives along with state insurance regulators and were later incorporated into the administration’s proposed rules.

Erin Shields, a spokeswoman for the U. S. Department Health and Human Services declined to say whether the final rules will favor the positions taken by industry or consumer groups.

“As always, we appreciate this and all feedback and value a constructive dialogue on this important, new consumer protection,” she said.

This entry was posted on Tuesday, January 24th, 2012 at 6:03 pm.

Source:

To view this article by Susan Jaffe for Kaiser Health News in its original context, please visit http://capsules.kaiserhealthnews.org/index.php/2012/01/consumer-groups-ask-obama-to-not-weaken-provisions-for-insurance-labels/

Report says Affordable Care Act will significantly change Kentucky’s spending on uninsured

  • The Urban Institute has released a report (PDF) on how states are progressing toward adopting the federal Affordable Care Act. Kentucky is among the states that “have not yet established exchanges, but have demonstrated significant interest in doing so. Most notably, 17 of the 21 states have received level 1 federal establishment grants, which represent a second round of funding for state exchange development work beyond the initial state planning grants.” When Kentucky enacts ACA, the state will experience the largest percentage drop in the nation (87 percent) for uncompensated spending on care for the uninsured.

  • Source:
    To view this article by Lu-Ann Farrar for Kentucky.com in its original context, please visit http://www.kentucky.com/2012/01/24/2040769/kentucky-news-review-report-says.html#storylink=cpy

American Medical News story about Ohio Medicaid Plan

Ohio governor proposes Medicaid shared savings

Gov. John Kasich also wants a single care manager and benefits access point for people eligible for both Medicare and Medicaid.

By Doug Trapp, amednews staff. Posted Jan. 20, 2012.

Ohio Gov. John Kasich has begun a dual effort to transform the state’s Medicaid program to pay based on the quality and coordination of care provided to enrollees.

In early January, the Ohio Governor’s Office of Health Transformation announced that it was seeking public and stakeholder input on a proposal to create a single point of benefits administration for Ohioans who are eligible for both Medicare and Medicaid. The state also is rebidding its Medicaid managed care contracts to emphasize quality beginning in 2013. The Ohio Legislature endorsed these and other goals in a budget bill adopted in 2011.

“In Ohio and across the country, we must do a better job of meeting the health needs of individuals and creating a healthy and productive work force at a price that is affordable for businesses, governments, individuals, and other payers,” said Greg Moody, director of the governor’s health transformation office.

Kasich proposed creating a single point for benefits administration for the 190,000 Ohioans eligible for Medicare and Medicaid. Typically, Medicare pays for doctor and hospital visits and prescription drugs for these dual-eligible beneficiaries. Medicaid mostly pays for their long-term care, including nursing home stays.

The Kasich administration’s draft dual-eligible proposal — called an Integrated Care Delivery System — would assign each beneficiary to a care manager to ensure seamless care transitions. The program also would include periodic home visits with enrollees, aggressive reviews of hospital admissions and nursing home placements, and a centralized record for each beneficiary.

Ohio’s proposal is based on its application for one of 15 federal grants of up to $1 million to design dual-eligible care programs. In April 2011, the federal Centers for Medicare & Medicaid Services awarded the grants, which were made available through the national health system reform law. Ohio was not an awardee.

The Ohio dual-eligible proposal would solicit bids from outside organizations to provide care to the beneficiaries. It requires federal approval, but CMS has outlined two paths states can take regarding such programs, according to Ohio Medicaid director John McCarthy A dual-eligible managed care program — Ohio’s choice — would allow state and federal health officials to set program capitation rates in advance to achieve a savings target. A fee-for-service program would not include a maximum budget but would share savings generated in the previous year through care coordination and other efforts, he said.

McCarthy said physician- or hospital-directed accountable care organizations could bid to care for dual eligibles, but that the work will not be easy. “Setting capitation rates and measuring risk isn’t going to be straightforward in this population,” he said.

McCarthy said the state does not want to achieve savings by reducing Medicaid physician fees, but wants physicians to benefit from gains in quality and efficiency by sharing in the savings.

The governor’s office has listened to physicians while crafting the proposals, said Tim Maglione, senior director for government relations for the Ohio State Medical Assn. “We feel that we have the opportunity for meaningful input on the development of this program.” The state began two months of public input meetings on Jan. 12, McCarthy said.

Nationwide, 9 million people are eligible for both Medicare and Medicaid, according to CMS. These beneficiaries account for a disproportionate share of the $300 billion in annual Medicare and Medicaid spending. More than 2.1 million people are enrolled in Ohio’s Medicaid program. Seven managed care plans serve more than 1.6 million Medicaid enrollees, including 125,000 aged, blind and disabled people, and 37,000 children with special needs, according to Kasich’s office.

The Ohio State Medical Assn. has not adopted formal positions on either proposal, but the state’s emphasis on quality and administrative simplification are good goals, Maglione said, adding, “I do think they’re on the right track.” Maglione also said he believes the state will hold managed care plans accountable for their quality performance.

Many Ohio physicians continue to see Medicaid patients even though state fees sometimes do not cover physicians’ costs, Maglione said. Ohio Medicaid physician fees are between 65% and 70% of Medicare rates, although some Medicaid managed care plans pay more to ensure adequate networks.

More information about the Ohio reform plans are available online from the governor’s Office of Health Transformation (healthtransformation.ohio.gov/). Information also is available from the Catalyst for Payment Reform website (www.catalyzepaymentreform.org/).

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Copyright 2012 American Medical Association. All rights reserved.

This Is The Year Obamacare Takes On Out-Of-Control Health Care Costs

1/19/2012 @ 12:32PM |

By: Rick Ungar

Write down the date. 2012 is the year that some of the more ‘behind the camera’ aspects of the Affordable Care Act will begin to take effect—measures that are designed to primarily impact on the high cost of medicine. Thus, while the measures may not score big headlines, 2012 could well prove to be the most important time frame in the effort to get control of the out-of-control costs that are destroying the American health care system.

Accountable Care Organizations – On January 1, the financial incentives designed to inspire health care providers to form Accountable Care Organizations (ACOs) took effect.

The idea behind an ACO is to bring a number of health care providers, providing different services and specialties, together to better coordinate the care a Medicare beneficiary receives for a variety of conditions. By doing this, the hope is that duplication can be avoided and the improved communication among these providers will increase quality of care and outcomes.

The result is expected to represent just under $1 billion in savings over the next three years.

The reward to providers who form ACOs—and can show improvements in outcomes and cost savings— is a share of the savings they deliver to Medicare. Note that this is not simply a matter of producing cost savings. If the improvements in outcomes are not there, an ACO is not going to profit. Thus, the success of the ACO program would produce a win-win for all involved. Patients will receive better care, providers will earn financial bonuses in success and Medicare will benefit from the savings.


Collection of Data Revealing Treatment Disparities
– It is no secret to anyone that the quality of care received in the United States can be directly tied to one’s race, income and ethnicity. In many cases, it can even be tied to gender.

The ACA intends to do something about this, beginning with the requirement—come March, 2012— that will require increased data collection to highlight this disparity in care and allowing the holes to be plugged in response to what is learned.

“It’s a huge issue,” says Anna Lambertson, executive director of the Kansas Health Consumer Coalition, a statewide advocacy group in Topeka, Kan. “Health disparities include women’s access to health insurance and being charged higher premiums because of gender. If we can find a way to help people navigate the health care system so they are not going to the ER to receive routine care, we can actually lower costs.”

Via Fox Business

As the old saying goes, “knowledge is power”. Having the data to back up the serious problem of disparities in care in America— based on factors that should never be factors— is the first step towards fixing the problem.


Payback:The Insurance Rebates
– With the exception of the Supreme Court decision that will determine whether or not key aspects of the ACA have a future, June will bring this year’s change that is most likely to make headlines – the obligation that health insurance companies who fail to meet the medical loss ratio (MLR) requirements of Obamacare issue rebates to customers. Insurance companies who have failed to spend 80 percent of premium dollars received from individual and small business policy holders (85 percent from large group policies), will be required to send rebate checks to their customers. It is estimated that had the insurance companies been obligated to make such rebates in 2010, the rebates would have totaled about $2 billion dollars.

This requirement will not only put some unexpected cash in the pockets of long-suffering premium payers, it will shine a light on which insurance companies are failing to spend the money you send them on your actual health care.

Value Based Purchasing – Beginning October 1, the Medicare Value-Based Purchasing Program (VBP) will link payments made by Medicare to health care providers to the quality of the outcome they achieve. The program also includes the ‘bundled payments’ you’ve heard so much about.

VBP is more important than you might initially realize. Currently, we have far too many people –about 30 percent of all patients– checking out of hospitals only to check back in a month later. Let that sink in for a moment. Almost one of every three patients who leave a hospital will be back in a month. And we wonder why we spend so much on health care!

And when that patient comes back to the hospital, the hospital once again begins to run up the tab.

Pursuant the rules taking effect in October, this will no longer be the case. If a Medicare participant checks into the hospital for triple-bypass heart surgery, the hospital is going to be paid a set fee for the procedure. If the patient is sent home with insufficient directions to properly care for themselves during the post-surgery period, and is thus required to return to the hospital when things go wrong, the hospital is not going to be paid again. Accordingly, the hospital now has every incentive to do the job right the first time and make sure that the patient has the information necessary to continue improving upon release—including making sure the patient is going to follow-up visits with his or her doctor. The result is a healthier patient and much less spent in recidivist returns to the hospital.


Electronic Health Records
– Also coming on-line in October are the requirements that will force medical providers to get serious about using electronic medical records that will ‘hook up’ physicians to better track the health care their patients have been receiving.

Anyone who has ever been subjected to multiple blood tests as a result of seeing two different physicians within a short time understands how often duplicate tests are performed for no good reason and at great expense.

Now, when a patient goes for an annual physical in May and then is required to see a cardiologist in June, the cardiologist, via an electronic health care records system, will have access to the recent blood test results taken just two months earlier,  allowing the doctor to avoid re-testing.

The potential for savings is huge.

What we see is that 2012 is the year where the ACA begins to seriously take on the high cost of medicine in America – an effort that even the most ardent critic of Obamacare should be supporting.

Whether or not these measures will achieve the desired results remains to be seen. However, the next time someone tries to convince you that health care reform does not tackle our costs problem, I hope you’ll refer them to this data and suggest that their own self-interest requires that they root for these measures to work.

Our health care system really does depend upon it.

SOURCE:
To view this article by Rick Ungar for Forbes, please visit http://www.forbes.com/sites/rickungar/2012/01/19/this-is-the-year-obamacare-takes-on-out-of-control-health-care-costs/

Aetna CEO says inidividual Mandate Doesn’t Matter

Healthcare Individual Mandate Too Weak to Matter, Aetna CEO Says

from Insurance Journal

Wall Street’s concern about the U.S. Supreme Court’s looming decision on President Obama’s healthcare overhaul is overblown because the provision at the heart of the law already has little teeth, the top executive at Aetna Inc. said.

The court in March will hear arguments on the part of the law that requires Americans buy insurance or pay a penalty, known as the individual mandate. A ruling is expected by the end of June.

Some insurers have argued that a strong individual mandate is critical for the stability of the insurance pool by ensuring that healthy people buy insurance in addition to sick patients.

Investors are concerned that a ruling that eliminates the individual mandate but continues to require insurers to enroll people with pre-existing health conditions would hurt profits.

“Even as it exists today, the individual mandate is weak and still presents problems because the penalty is so low,” Aetna Chief Executive Mark Bertolini said in an interview on Wednesday. “If you get rid of it, I don’t know that it makes all that much of a difference.”

The Supreme Court decision, Bertolini said, “presents more of an opportunity for us to revisit how healthcare reform is structured than actually undoing the underlying dynamics or fundamentals of what they put in the bill.”

Bertolini said that the parts of the overhaul law that have already been implemented are “not going anywhere.”

“What we should be thinking about is if we do get an opportunity to change the bill, which we think we will, then what would we suggest?” he said.

As part of its authority under the new law, the U.S. Health and Human Services Department last week rebuked a privately held insurer, Trustmark Life Insurance Co,. for what the agency called unreasonable premium increases. The law requires insurers to disclose and justify health premium increases of more than 10 percent.

Bertolini said Aetna has not yet begun to see the impact of rate review because market trends have led the company to requests for lower increases.

“The 10 percent threshold has not caused us to ask for rates lower than 10 percent,” he said. “The market has, because the trend has been so low.”

Health insurers have reported very low levels of healthcare claims over the past year as patients delay doctor visits and procedures during the weak economy.

Bertolini spoke as Aetna, the No. 3 U.S. health insurer, launched a new branding campaign, designed to underscore its change from an insurance carrier to a “health solutions” company.

The branding campaign reflects changes the company has been making for the past several years, Bertolini said.

With consumers bearing an increasing amount of healthcare costs, he said, “we’re going to have to position ourselves in the eyes of the consumer as being somebody who, one, is helpful and, two, gives them a lot of ways of accessing the system and understanding the system better.”

(Reporting By Lewis Krauskopf; Editing by Tim Dobbyn)

    Copyright 2012 Reuters. Click for restrictions.