Tuesday, January 26, 2010

Healthcare Reform

With the MA Senate seat going to a Republican, the Senate no longer has a 60 seat super majority. However, there are several other options being discussed to continue to push the health care reform legislation forward. It is uncertain at this time what the next steps will be but here are some of the options:

1) Have the House pass the Senate version of the bill

House leader Nancy Pelosi has come out and said that the Democrats do not have enough support in the House to pass the Senate version of the bill making this an extremely unlikely option.

2) Move a stripped down version of the bill through the Senate using a reconciliation vote which only requires 51 votes.

This is also know as the "two bill solution". The most contentious parts of a reform bill would be passed via the reconciliation vote (aka the nuclear option) and then the bipartisan consensus items would be passed in a separate bill. This is one of the more likely options.

3) Seek one Senate Republican to caucus with the Democrats in passing the final bill

Democrats are still attempting to try to win over Maine's Olympia Snowe to get the one additional vote in the Senate. It is unknown at this time the likelihood of this option, however Mrs. Snowe has publically stated that she is active speaking with the Democratic leadership about the bill.

4) Give up on healthcare and focus on the economy and jobs

In an election year with public support wavering and an unclear path on health care reform, the administration might use the State of the Union address to refocus priorities on jobs and the economy and give up the attempt to try to pass health care reform at this time.

State Health Care Reform - California

Last week, after the MA election results were finalized, a third attempt at a California single payer health plan made it out of the Senate Appropriations Committee. Two other versions were passed previously by the legislature only to have them vetoed by Governor Arnold Schwarzenegger.

Many states had put their attempts at their own versions of health care reform on hold while Congress debated its plan. By moving forward with this, the California state legislature is signaling its lack of confidence in the federal process.

California HMO Changes

California is implementing new limits on doctor wait times for HMO members. The new limits go in to effect in 2011 and limit wait times to: 10 business days for a primary care appointment, 15 days for specialists, 48 hours for urgent care, and 10 minutes to speak with customer service.

Legal Rulings

FSA Eligible Reimbursements

The 1st circuit ruled that expenses incurred for infertility treatment were not deductible when the expenses are not incurred primarily for the prevention or alleviation of a physical or mental illness or affect a structure or function of the individual’s body. i.e. - IVF is not considered a covered expense if there is no underlying medical condition.

Reference: Magdalin v. Comm'r, No. 09-1153 (1st Cir. Dec. 17, 2009)

Notable Research

In a recent article in Health Affairs, a Harvard research meta-analysis recently found that medical costs fall by about $3.27 for every dollar spent on wellness programs and that absenteeism costs fall by about $2.73 for every dollar spent.

Biometric screening of children which includes: BMI, blood pressure, race, family history, blood sugar, and cholesterol levels can be used to predict with a high level of accuracy, the odds of having diabetes by the age of 39.

Dr. Dana King of the Medical University of South Carolina found that between 1988 and 2006:

  • The prevalence of obesity increased from 28% to 36%.

  • The percentage of people getting minimal amounts of exercise fell from 53% to 43%.

  • Smoking remained unchanged at about 26% of the population.
    The percentage of people eating at least five or more fruits and vegetables per day fell from 46% to only 26%.

  • Moderate alcohol consumption increased from 40% to 51% of adults.

  • Only about 8% of the 15,000 research study participants met all 5 criteria for practicing a healthy lifestyle.

Tuesday, January 19, 2010

Employer Health Care News - Jan 20, 2010

Health Care Reform

Things are moving quickly in Washington. Democratic leaders began informal discussions about how to work out the differences between the Senate and House-passed health reform bills. The current strategy is to avoid a formal conference committee process. Instead, if Senate and House Democratic leaders agree on a common bill, the House could passed that compromise version, and then the Senate would do likewise, all with a goal of having a bill that the President can sign by late January or early February.

The Massachusetts Senate race may make or break health care reform legislation. There is a special election today to fill Ted Kennedy's Senate seat. The outcome of the special election could alter the Democratic majority in the Senate and end any attempts at health care reform.

The proposed 40 percent excise tax on health plans considered "high value" could limit the use of HSAs and FSAs. The tax would be levied if a health plan's "aggregate value" exceeds $8,500 for individuals and $23,000 for families. Under the language of the bill, calculation of the aggregate value includes: health, dental and vision coverage, HSAs, HRAs, and Med-FSAs. If you put in the maximum to either an HSA, HRA, or FSA, then it leaves only ~$5400-$6000 to purchase core health insurance before the excise tax kicks in.

Last week, union leaders negotiated an exemption of their plans from the "cadillac tax" until 2018 ending rumors that the limits might be raised in the final version of the bill.

Employers believe that health care costs will increase in the short term as millions of previously uninsured individuals get coverage and start going for checkups - similar to what happen in Massachusetts. According to preliminary analyses of the "cadillac tax" it is expected to impact 20% of firms by 2019 unless employers dial back coverage.

Health Care Reform and California

Part of the health care reform bills includes a tax/surcharge on fully insured plans. Unlike most other states, California is the largest consumer of fully insured HMOs. (43% vs the national average of 21%) With this portion included in the legislation, Californians can expect to see increased costs if they participate in a fully insured plan.

Genetic Information Nondiscrimination Act (GINA)

Several health plan special interest groups are urging federal agencies to change their regulatory interpretation of the Genetic Information Nondiscrimination Act (GINA). The current regulations limit the ability of employers to offer comprehensive and effective wellness and disease management programs. The final GINA regulations are due out later this year.

Health Care Trends

The 2009 Mercer National Survey of Employer-Sponsored Health Plans found that 53% of large employers (500 or more employees) offer health advocacy services as part of their benefits package, up from 47% in 2008. However, this lags behind other services such as health risk assessments (73%) and case management (82%). The survey shows that employers held cost growth to 5.5.% in 2009, the lowest annual increase in a decade. Employers predicted that medical plan cost would increase by about 9% in 2010 unadjusted for changes however most stated they wanted to achieve a 6% increase after making changes to plan design or changing vendors.

According to a recent survey of large employers by Fidelity Investments and the National Business Group on Health, most companies now offer health-improvement programs including, EAPs, flu shots, fitness, nurse hotlines, nutrition counseling, disease management, and on-site clinics. Of the 40% of companies that track ROI across all programs, about half say they see a two-to-one return on their investment. About one-quarter see greater returns, while the other quarter says they are just breaking even or even losing money.

Pharmacy Trends

More employers are starting to include over the counter drugs as part of their pharmacy plan offerings. Employers are starting to focus on encouraging employees to use the most appropriate drug with the lowest net costs. (ex - Ibuprofen vs. Oxycontin). Generics and over the counter drugs should be the first alternative based on cost and efficacy.

Another trend in "value based design" where the amount allocated to the employee is based on the average cost of drugs in that class. For example, for proton pump inhibitors, if the average cost is $100, then the employee gets up to a $100 credit. If they go under this amount, they pay nothing. If they go over it, they pay any amount over the $100.

Source: http://www.hreonline.com/HRE/story.jsp?storyId=324119213