Insurers ‘terrified’ of Supeme Court ruling on healthcare reform law

By Julian Pecquet – 11/22/11 05:00 AM ET

 

The insurance industry is terrified that the Supreme Court will strike down the individual mandate to buy insurance next year while leaving the rest of the healthcare reform law intact.

For insurers, the death of the mandate alone — one of many plausible outcomes in the blockbuster case — is the nightmare scenario, one Republican healthcare lobbyist told The Hill. 

“They’re terrified they’re going to be left holding the bag,” the lobbyist said.

In arguing for the mandate, the insurance industry points to the experiences of eight states that tried and failed to reform their insurance markets without one in the 1990s. They say the law’s requirements are unworkable unless everyone in the country purchases insurance.

But that argument might not sway the Supreme Court, which must decide the “severability” of the mandate from the law, along with a host of other legal and constitutional issues.

In an amicus brief filed last month with the high court, the insurance industry said keeping the law’s reforms in place without a mandate would create “widespread … instability in the insurance market and, over time, would substantially reduce access to affordable coverage.”

“The difference between … a mandate-less [health law] with market reforms intact, and without some or many of those market reforms is night and day,” America’s Health Insurance Plans (AHIP) said in the brief.

Insurers’ best-case scenario, one insurance lobbyist said, would be for the court to uphold the mandate. Barring that, the industry would rather see the whole law crumble.

“I’m not sure there’s a solution there that’s acceptable other than, it’s all or nothing,” the source said.

The healthcare law imposes a number of new rules on insurers, most notably a ban on rejecting people with pre-existing conditions or charging them more. It also created a mandate for buying insurance that the architects of the law said was aimed at getting millions of young, healthy people into the system to spread costs and prevent people from waiting until they’re sick to get insurance.

But opponents of the law decry the requirement to buy insurance as a dramatic expansion of federal authority that flies in the face of the Constitution.

AHIP is expected to file a brief with the Supreme Court early next year that spells out its position on the severability of the mandate. Several lobbyists told The Hill that the group is keeping silent for now in order not to upset either party. 

On the surface, the Obama administration and the insurance industry seem to have staked out similar positions. Both have told the high court that the mandate works hand in hand with other parts of the law and said the justices need to consider the issue of severability. 

But lobbyists said it would eventually become clear that insurers are not in complete agreement with the Obama administration, which declared as far back as last November that “the vast majority of the healthcare law’s provisions are severable from those challenged by plaintiffs.”

The Republican lobbyist said insurers would “be basically declaring war on the administration” if they argued the law must either stand or fall in one piece.

It’s not clear the industry has a choice, however.

The law contains numerous market reforms — limiting how much older people can be charged, requiring family plans to cover young people up to age 26, mandating coverage of a broad package of “essential health benefits” in state-based exchanges — that the administration argues can survive without the mandate. 

But insurers say sticking to those rules without a mandate would drive up the cost of premiums while leaving insurance plans as the villain, since the law requires plans to justify rate hikes of 10 percent or more.

“It’s clear to me that from the administration’s perspective, even if the mandate goes away … you’ll still have the boogeyman of the plans, because the plans will have to react accordingly,” the insurance lobbyist said. “The law was supposed to keep premiums down, so the administration is just going to start hammering the plans.”

Democrats have already made clear they’re not going to go out on a limb for the industry.

“Worst-case scenario, the mandate falls. No Democrat is going to shed a tear for the insurance industry on that,” Sen. Sheldon Whitehouse (D-R.I.) told The Hill recently. “My view is if the mandate falls, the insurance industry has to go and get it restored state by state, where everybody concedes it’s totally legitimate.”

Lobbyists dismiss as ridiculous the notion that governors are going to push the massively unpopular mandate.

Republicans, meanwhile, are unlikely to seek to strike the law’s most popular reforms without repealing the whole law. 

That leaves the industry stuck in the middle, and hoping for a favorable outcome from Justice John Roberts and company.

“I think they don’t want to [anger] one [side] or the other right now,” the insurance lobbyist said. “We’re in a divided-government situation, and the administration still has the ability to come and sort of sit on AHIP’s head if they want to. And I wouldn’t put it past them if the opportunity arose.”

States Squirm over Health Exchanges

For state governments, the coming Supreme Court ruling on health reform isn’t an abstract argument about the U.S. Constitution.  It’s a highly practical question about whether, when and how to proceed with one of the health law’s most important and complicated pieces: setting up health insurance exchanges.  Already facing political strife over implementation of health reform, some states are wondering if they should sit tight on exchange decisions until the court rules.  However, the timetable for their decisions is tight, and could significantly complicated last-second efforts by state legislatures if they choose to wait, says Politico.

• June 2012: The Supreme Court is expected to rule on health care, yet this is also the final month during which states can petition the federal government for grant money to fund their efforts to create an exchange.
• January 2013: The federal government will assess each state’s progress towards creating an exchange and will begin creating federally-run exchanges for those states that are unlikely to have exchanges completed in time.
• January 2014: Each state must have a fully functioning exchange, whether run by the federal or state government.

Many state legislators want to ignore the timetable and continue to put off the establishment of exchanges until the Court has ruled — two Midwestern governors have already declared their states won’t set up an exchange until that time.  And that idea is growing popular among powerful state legislators vigorously opposed to health reform.

Irrespective of the outcome, the dynamic between states and the federal government in creating exchanges has espoused a new source of states’ rights tension.  Many conservative lawmakers are balking at the idea of a federally-run exchange, with Kansas going so far as to send back a $31 million grant to build one.  Regardless, it is clear that much will remain undecided until the Court rules.

Source: Jason Millman, “States Squirm over Health Exchanges,” Politico, November 28, 2011.

The Effects of the Affordable Care Act on Work and Marriage

Though the Patient Protection and Affordable Care Act (ACA) is most often discussed in terms of its effects on health insurance and medical care costs, the ACA will have numerous effects in various facets of American society.  Specifically, its financial and taxing system will create incentives that perhaps the authors of the bill did not foresee, including that the average American worker will be discouraged from marrying and working in a wide range of circumstances, says Diana Furchtgott-Roth, a senior fellow with the Manhattan Institute.

The primary difficulty with this system is that it stipulates an individual’s premium payment toward their health insurance based on household income, failing to account for the circumstances of the family structure.

• This negatively affects incentives to marry because marrying (and the shared household that customarily follows) serves to combine the spouses’ incomes.
• When this combination moves a couple into a higher bracket of income (measured as a percentage of the poverty line) than the two people were in prior to marriage, it reduces the government’s assistance in paying for their health care significantly.
• Thus, the ACA’s premium payment rate structure makes marriage financially costlier.

Additionally, the ACA’s structure furthers this problem by reducing incentives to work — especially in married couples.  Upon getting married couples will undoubtedly notice that their health insurance premium will become significantly more expensive.  The difficulty with this situation is that many will respond by attempting to make less money, thereby moving the newlywed couple back into a lower bracket.  This drive can manifest itself in several ways, whether they be that one of the spouses no longer attempts to get a promotion or leaves the workforce altogether.

Source: Diana Furchtgott-Roth, “The Effects of the Affordable Care Act on Work and Marriage,” Testimony before the Subcommittee on Health Care, District of Columbia, Census and the National Archives of the House Committee on Oversight and Government Reform, October 27, 2011.

Anti-tax advocates, deficit busters collide over repeal of health law subsidies

By Julian Pecquet – 11/08/11 07:25 PM ET

A Republican bid to cast the repeal of the health law’s insurance subsidies as a “common-sense” way to reduce the deficit risks running afoul of conservative tax foes.

Rep. Denny Rehberg (R-Mont.) last month introduced legislation to repeal the law’s insurance tax credits and its Medicaid expansion, saying it would reduce the deficit by $1.3 trillion over 10 years. The bill would allow Republicans to dismantle the healthcare reform law without inflating the deficit, but anti-tax crusader Grover Norquist is raising concerns that eliminating the insurance subsidies could violate his Americans for Tax Reform ”Taxpayer Protection Pledge.”

Americans for Tax Reform tax policy director Ryan Ellis met with Rehberg staffers Tuesday, The Hill has learned, and told them the group is waiting to see what the nonpartisan Congressional Budget Office has to say.

“ATR does not pre-judge legislation without a score, which we don’t have,” Ellis said via e-mail.

ATR favors repeal of the entire health law, even though it would add about $124 billion to the deficit over the next 10 years, because full repeal is a net tax cut.

Rehberg has been making the case to his colleagues that the law’s $777 billion in insurance subsidies over the next 10 years shouldn’t qualify as tax credits because they don’t start until 2014. He has corralled 15 cosponsors so far.

“Eliminating these new entitlements would be the quickest, simplest, and most common-sense way to meet [the goal of reducing the deficit] because these are new entitlement programs,” Rehberg writes in a Dear Colleague letter inviting lawmakers to sign on to his bill. “Not one dime in benefits has yet been paid to any person under any one of these new government programs. If these are removed now, not one person will give up a current benefit.”

In an emailed statement, Rehberg accuses Democrats of being disingenuous for labeling the insurance subsidies tax credits in the first place.

“Only in Washington, DC can new spending programs be passed off as tax credits,” Rehberg told The Hill. “President Obama’s health care bill isn’t about providing tax relief, and anyone who says otherwise simply isn’t being intellectually honest. Providing tax relief means putting more money in the pockets of the hardworking taxpayer. Under President Obama’s massive new entitlement program, the Treasury gives this money directly to the insurance company that is providing the insurance.”

TAHU Global Positions

 

• Broker Involvement –

Brokers and agents arethebest and most efficient distribution, outreach and educational component of health insurance for consumers.  Accordingly,they should be fairly compensated and should be included in every health care and health insurance program and distribution channel.

 

• Free Market System –

Texans have prospered because of free enterprise, market driven competition, especially compared to government run systems. Therefore, TAHU supports philosophies that further a competitive, market-driven environment.

 

• Protection of Consumers –

TAHU supportstheprotection of consumers throughthehighest standards of ethical behavior, marketing and business practices which fairly balance consumer and broker interests.

 

• Education –

Knowledge and understanding arethefoundation for all human progress.  Therefore, TAHU supports all efforts to promote education and information for consumers in general sothey may understandthepractical application of how insurance works.

 

• Professional Development –

For members of theinsurance industry in order to increasetheir knowledge and ability to keep consumers accurately and timely informed.   TAHU supports the requirement of all brokers and agents engaging in continual learning.

 

• Transparency –

Consumers deserve to knowthetrue cost oftheir medical care.  TAHU supports legislation that empowers consumers’ ability to learntheir cost of care.

 

• Health and Wellness –

The value of good health and wellness cannot be overstated.  TAHU supports legislation that promotes good health for all Texans.

 

• Government programs –

TAHU recognizes some citizens simply do not havetheresources for adequate healthcare.  TAHU supports efficient “safety net” programs to assistthese people.

 

• Mandates –

TAHU supports thorough review of every mandate, present and prospective, to determine its impact in terms of cost and efficacy. 

 

• TexasHealth Insurance Pool –

TAHU supports efforts to more equitably fundtheTexas Health Insurance Pool while recognizing it istheinsurer of last resort. 

 

• Keep politics local –

State regulation has servedtheconsumer well for decades.  We continue to support regulation atthelocal, state level.

TAHU November Postcards From the Lege – Carolyn Goodwin

 

TDI Rules

– Here is where we stand on the rule-making process for several legislative subjects which passed the Legislature this past spring.

 

 



60 Day Notice of Rate Increase – Rules are unlikely because TDI believes the legislation is explicit enough to tell carriers and health plans what must be done and when.



Single Employer/Single Employee access to coop – The bill is fairly clear on that particular subject but it has been a few years since any rules were adopted which relate to coops generally. TDI may update all the rules that deal with coops and coalitions now.



Exclusive Provider Organizations – TDI is now reviewing comments to its informal draft rules on EPOs and anticipate issuing formal rules in a month or two.



Authority to Issue a Rule relating to Age 19 guarantee issue – The amendment to HB 1951 on this was confined to giving TDI the authority to issue rules. The amendment did not require it, though. At this time, TDI continues to study the matter.

TDI Commissioner Kitzman visits TAHU

 

– At its last meeting, the TAHU Board was privileged to have TDI Commissioner Eleanor Kitzman visit us for a short time. Board members had the opportunity to hear from her and to ask questions. This was my first meeting, and brief it was. It’s obvious that TAHU has the chance to provide a plethora of education about just what health insurance agents do, and how we do it.

 

 

The New PCIP Primer is here

– TAHU has prepared and distributed to all Capitol offices our Primer on Using the New Pre-Existing Conditions Insurance Plan. TAHU Board members got to review the publication at the last board meeting. Why would it be distributed to Capitol offices, you ask? For the very reason that we promote our Public Outreach projects to the Legislators. It helps them understand the value of the agent. With the Primer, constituent liaison staff has a tool with which to respond to constituents who don’t have, haven’t had and can’t get individual health insurance; and they know where it came from.

Do you want your own supply so you can distribute to the LOCAL offices of your representatives? Absolutely you can get it. And, we ask that you deliver those copies in the district offices because most constituent work goes on locally. You can even order copies for your office staff or your clients. We ask that you do it this way. Report the number of copies desired to your local chapter president. Chapter presidents will place the order on behalf of the chapter and its members, and we’ll print and ship. Help underwrite the cost of printing by paying $1.00 per copy.

 

Speaking of Public Outreach

– Yes we’re at it again. In addition to continuing our CHIP outreach, we’ve been invited to work once more with the state Health and Human Services Commission to advance the Long Term Care Partnership Program. Plans are just beginning for how it might work, but stay tuned for more news from the TAHU Outreach Chair, Tonya Booth.

SAVE the DATE

– TAHU’s annual Day at the Capitol will be held in Austin on February 2. Mark your calendars and plan to be there.

As always, if you have questions about this information, please email

 

legecouncil@tahu.org

.

 

Policymakers Should Prepare For Major Uncertainties under Health Reform

The Affordable Care Act of 2010 will expand Medicaid to millions of Americans by 2014.  How many enroll will greatly affect health care access, demand for clinicians and the federal budget, yet the precision and validity of enrollment estimates made to date is unknown.  Benjamin Sommers, Katherine Swartz and Arnold Epstein of Harvard University created a simulation model using two nationally representative data sets to determine the range of reasonable projections, estimating eligibility, participation, and population growth using prior research and their own data.

• The model predicts that the number of additional people enrolling in Medicaid under health reform may vary by more than 10 million, with a base-case estimate of 13.4 million and a possible range of 8.5 million to 22.4 million.

• Estimated federal spending for new Medicaid enrollees ranged from $34 billion to $98 billion annually, and they project that 4,500-12,100 new physicians will be needed to care for new enrollees.

In the end, Medicaid enrollment will be determined largely by the extent to which federal and state efforts encourage or discourage eligible people from enrolling.  Yet the results from Sommers, Swartz and Epstein indicate that policymakers should prepare to handle a broad range of contingencies and uncertainty in Medicaid expansion under health reform.

Source: Benjamin Sommers, Katherine Swartz and Arnold Epstein, “Policy Makers Should Prepare For Major Uncertainties in Medicaid Enrollment, Costs, and Needs for Physicians under Health Reform,” Health Affairs, October 2011.

November 2011 Luncheon & CE Speaker

Speaker
Honey Leveen

Based in Houston, TX, Honey Leveen has had her insurance license since 1988 and has specialized in Long-Term Care Insurance (LTCi) since 1990. She has earned many sales and achievement awards, been quoted in the media, sits on the Board of Advisors of the American Association for LTCi, is an expert panelist for the Corp for Long-Term Care Certification, and writes a monthly column for Agents Sales Journal. Honey has spoken widely to trade, civic and professional organizations. She is passionate about long-term care insurance, and conveys this when she speaks. She enjoys the opportunity to inspire and educate her colleagues and the public about the necessity for responsible long-term care planning.

November Luncheon CE
LONG TERM CARE 101 – BE AN LTCi CRUSADER

The course will teach what long-term care insurance is, and what the odds of needing care are. It will teach the advisor about the different ways to fund long-term care needs. It will teach where Medicare and health insurance end and where long-term care insurance begins. It will teach why people need LTCi, the fundamentals of LTCi structure, and the LTCi claims process. The course will be taught live, with PowerPoint assistance.

· TDI Course #14757
· TDI Provider #32408
· CE Hours – 1

Public Service Update November 2011

by Veronica Wingo
OCTOBER DRIVES:

Fighting Hunger One Houstonian at a Time

During the HAHU Symposium last month, HAHU held our annual Food and Funds Drive for the Houston Food Bank.

Due to your kindness, as of today our association donated several pounds of non-perishable food items and $335.00 in financial contributions. The Houston Food Bank was very appreciative for HAHU’s ongoing support. THANK YOU for your assistance in HAHU’s fight against local hunger.

Holiday Cards From Home To The Troops

Last month, HAHU held our second annual drive to send Holiday Cards From Home to US troops currently deployed. The cards were to show our gratitude for the incredible work our brave servicemen and servicewomen do daily for our country. Due to Dental Select underwriting this drive and due to your kindness, 109 Holiday Cards From Home will be in the hands of soldiers by the holidays. I hope this event not only showed collective community support for our troops but also served as a reminder to each of us that we are very blessed to be Americans.

Should you have any questions, please feel free to contact me at (832) 492-4303 or veronicaw@dentalselect.com.

NOVEMBER DRIVES:

Holiday Toy Drive

Sharing with those in need has become a very special part of our association’s holidays. Each year HAHU assists Houston Children’s Charity by contributing toys and financial donations for less fortunate children within our community. Please bring unwrapped, new toys for children of all ages to our November luncheon. You may also make an online donation to the charity when you register for the luncheon. We are hoping for 100% member participation in the toy drive which will result in Houston’s disadvantaged children smiling as they experience holiday joy!

Thank you in advance for your willingness to lend a helping hand during the holidays! Please feel free to reach
me at (832) 492-4303 or veronicaw@dentalselect.com if you have any questions or if you would like to volunteer some of your holiday time at Houston Children’s Charity.

From the President’s Desk

by Terrell Rogers
The HAHU Annual Symposium was a great success!!!

And we could not have done it without you!

Thank you to all of our Exhibitors, Sponsors, Valued Agents, Brokers, Insurance Professionals and all who took time out of your busy Open Enrollment season to share information and ideas with each other. We would like to extend our sincere gratitude to the Exhibitors and Sponsors, without whose underwriting this event would not be possible. Special Thanks to the Symposium Committee, which was comprised of, but not limited to: Dirk Blankenship, Craig Splawn, Crystal Hoffman, Tom Cottar, Don Jones and Jeff Bacot.

As we enter the Holiday Season, let’s keep in mind those who are less fortunate. Thank you to those who contributed to our annual Houston Food Bank Drive at the Symposium—and to those who shared holiday wishes in “Letters from Home” campaign to bring a bit of homegrown thanks to US troops stationed abroad. This is the time of year to spend time with family, remember the value of friendship and set something aside for others.

The fourth quarter can be challenging in itself. Everyone has a hectic schedule trying to renew their block of business, move clients to a new carrier or win new clients with the most compelling proposal. Let’s celebrate each victory and look to those lost opportunities as stepping stones for next year. This can be an exciting time for all of us. I encourage you to feel confident that we will continue in this wonderful industry of ours as we watch health care reform play out.

In closing, let’s keep the leaders of our country and state in our prayers. Let’s prepare to bring home our troops and give them the hero’s welcome they deserve. Continue to stay positive and optimistic! Thank you for your membership and participation in the best organization in the world.