Cath Lab Digest

Insurers
Prepare for Major Market Reforms

After last-minute negotiations lasting until late on a
Saturday night, the US House of Representatives narrowly passed HR 3962, the
Affordable Health Care for America Act, by a vote of 220 to 215 on November 8.
Industry groups that have consistently supported the concept of healthcare reform
as well as their specific policy preferences responded with mixed reviews of
the 1990-page House bill, and the process of getting the Senate to agree on
reform legislation still faced serious challenges. While debate over the
creation of a government-run health plan continues, health insurers are
preparing for market reforms contained in both House and Senate proposals while
pushing for a strong individual mandate.

Although there are potentially substantial differences
between the healthcare reforms that passed the House and what will be supported
in the Senate, there are some proposals that seem to have universal support. In
an interview with Managed Care – First
Report (MC-FR), Greg Scandlen,
senior fellow and director, Consumers for Health Care Choices, said that
underwriting and rating restrictions, such as guaranteed issue and community
rating, as well as requirements for participation in insurance exchanges are
things insurance providers need to plan for. “They are going to have to spend a
lot of time figuring out how to cope with that,” Mr. Scandlen said.

If enacted as passed by the House, HR 3962 would establish a
mandate for most legal residents of the United States to obtain health
insurance and set up insurance exchanges through which certain individuals and
families could receive federal subsidies to purchase that coverage. The House
bill includes creation of a public, government-run health plan that would be
administered by the Secretary of the Department of Health and Human Services
(HHS). Eligibility for Medicaid would be expanded, and growth of Medicare
payment rates for most services would be reduced. The bill would impose an
income tax surcharge on individuals with high income, and both the House and
Senate have voted on drafts that would reduce funding for Medicare by more than
$400 billion.

Following the House passage of HR 3962, Karen Ignagni,
president and CEO of America’s Health Insurance Plans (AHIP), criticized the
lack of provisions that promote coverage choice and savings. “The current House
legislation fails to bend the healthcare cost curve and breaks the promise that
those who like their current coverage can keep it. A new government-run plan
will cause millions to lose their existing coverage and draconian Medicare
Advantage cuts will force millions of seniors out of the program entirely,” Ms.
Ignagni said.

“Many of these reforms begin in 2010 after employees have
already chosen their plans and contracts have been negotiated,” she continued.
“The result will be increased costs and massive disruptions in the quality
coverage individuals and families rely on today.”