Health reform implementation

Health insurance industry efforts to lobby for weaker federal regulations should be strongly resisted, a consumer advocacy group warned this week.

In a letter to Health and Human Services (HHS) Secretary Kathleen Sebelius, California-based Consumer Watchdog asks that she reject insurers' attempts to weaken regulations on how much insurers can raise premiums and how much they have to spend on care. The letter points to a recent story in The Hill outlining the insurance industry's plans to lobby federal regulators as cause for concern.

"Two provisions of the law to at least curb the premiums consumers pay are now in your court," research director Judy Dugan and Washington director Carmen Balber wrote. "The insurance industry, in the wake of the midterm election, is refocusing its efforts against these provisions on your agency."

One such provision is the medical loss ratio (MLR), which requires plans to spend at least 80 or 85 percent of premiums on medical care and quality improvement rather than administration and profits. The National Association of Insurance Commissioners (NAIC) last month adopted MLR regulations, but they await HHS certification, which is expected any day now.

The letter asks that HHS reject insurers' proposed changes to the NAIC regulations, including:

- Aggregation, which would allow insurance companies to measure their medical loss ratio at the national instead of state level (large insurers support this, but smaller ones do not); 

- Deduction of insurance broker fees from premiums before measuring the ratios; and

- A larger "credit" of MLR points for plans that have too little sales volume to be statistically credible (NAIC has proposed a 14 percentage point credit).

The letter also asks HHS to reject certain aspects of the NAIC recommendation. Consumer Watchdog objects to provisions that: allow public health marketing campaigns to be counted as "health quality improvements"; deduct a large share of federal and state taxes when calculating the ratio; and allow insurers to justify in regulatory filings closed to the public why questionable expenses should be counted as quality improvements.

The letter also takes HHS to task for its delay in determining when proposed rate hikes will be considered "unreasonable," which under the new law requires insurers to file a public disclosure form justifying their rates.

"Your department's delay in releasing this definition," the authors write, "undermines consumers' trust in health reform and encourages insurers to continue bullying consumers with unfair premium hikes."

Consumer Watchdog has proposed that an "unreasonable" premium increase be defined as one that is: more than 10 percent greater than 150 percent of the rate of medical care inflation (as calculated by the Bureau of Labor Statistics); or is proposed by an insurer that failed to meet its medical loss ratio target in the previous year.

That definition is also expected shortly.

An employer-backed group is pressing the new leaders in Congress to alleviate restrictions placed on flexible spending accounts by the health reform law.

The law limits contributions to FSAs and imposes restrictions on how they can be used to help pay for health reform. Liberals argue FSAs, which are designed to allow employees to pay out-of-pocket healthcare costs with pre-tax dollars, encourage the overuse of healthcare because they can be spent on many healthcare services or items regardless of their value or effectiveness.

"It was never a good idea to fund health reform on the backs of hard-working Americans who use flexible spending accounts to manage and contain health costs," Joe Jackson, chairman of Save Flexible Spending Plans, said in a statement. 

Jackson's group wants Congress to: 

• repeal — or at least delay — a new requirement that forces participants starting Jan. 1, 2011, to get a doctor's prescription before they can buy over-the-counter medications. Jackson called the provision "an utter waste of consumers' and physicians' limited time" that will only increase healthcare costs;

• increase the new $2,500 annual contribution limit that starts Jan. 1, 2013, to $5,000; and

• allow participants to roll over $500 or cash out unused funds at the end of the year. Even before health reform FSAs provided a "use it or lose it" benefit but Jackson says the new law's contribution cap makes the forfeiture rule unnecessary.

GOP Sen. Charles Grassley admitted Wednesday that a full repeal of Obama's healthcare law will die in the Senate.

Popular radio personality Don Imus told Rep. Anthony Weiner (D-N.Y.) this week that he's "delusional" for defending the new health reform law in the face of so much controversy.

"The majority of the American people don't like it, and all of the people I talk to think that it's not workable," Imus told Weiner on "Imus in the Morning" Wednesday. "But it's good to see that you're passionate about it, though delusional."

Weiner, one of the most vocal supporters of the reform bill passed by the Democrats in March, conceded that Republicans were politically successful this year "making demons" out of proposals whose individual provisions were popular with voters. 

A large chunk of the economic stimulus bill, for instance, was dedicated to tax cuts, Weiner noted, while the central insurance reforms contained in the healthcare bill have also polled well.

"[Republicans] did a very skillful job, though, of taking these things that people like, packaging them, and make them into bogeymen," Weiner said.

Asked about some hospitals' claims that the health law will put them out of business, Weiner said the reforms might save those facilities instead.

"Right now, so many people are coming into hospital emergency rooms without insurance that you and I are paying the bill. And hospitals are closing," he said, adding that New York has seen 17 hospitals close in the last decade — before the new law was in place. 

"It's much cheaper for us to provide subsidies for people to get insurance than keep providing them with healthcare and it not being reimbursed in any way," he said. 

"Hospitals, perhaps, have the most to gain if we get this right."

Senate Minority Leader Mitch McConnell (R-Ky.) will file a brief in a Florida court in support of a lawsuit challenging the constitutionality of the new health-reform law.

The top Senate Republican will file an "amicus curiae" ("friend of the court") brief in the Florida case and has urged GOP colleagues in the Senate to sign onto the filing, too.

"While I strongly believe that we should repeal the law and replace it with the types of commonsense reforms Americans support, I also strongly support the efforts of over twenty States that have challenged this law in the courts," McConnell wrote in a dear colleague letter.

The effort is meant to build support by Senate Republicans for one of the highest-profile legal challenges to health reform, President Obama and congressional Democrats' signature legislative accomplishment in the past two years. It can be seen within the context of Republicans' vow to repeal the president's new health plan, a cornerstone of the case they made to voters in last week's election.

The suit challenges the constitutionality of a key part of the legislation, the so-called "individual mandate," or the requirement for all individuals to have health insurance. A judge ruled in October that the Florida suit, brought by 20 state attorneys general and the National Federation of Independent Business (NFIB), could proceed.

McConnell wrote that the healthcare law would "remove an important bulwark" against government intrusion.

"I hope you will join me in arguing to the court in the attached brief why that should not happen," the Republican leader wrote.

Senate leaders filing amicus briefs are not entirely without precedent. Senate Majority Leader Harry Reid (D-Nev.) filed one earlier this year in support of military families who were challenging a church's First Amendment right to protest soldiers' funerals.

Rep. John Shimkus (R-Ill.) is highlighting the fundraising and mentoring help he has given colleagues and touting his conservative credentials as he launches a campaign to chair the powerful Energy and Commerce Committee. 

A letter Monday from Shimkus to House Republicans shows he’s using a different strategy than Energy and Commerce ranking member Joe Barton (R-Texas), who is seeking another two years as top Republican on the panel. 

The Illinois Republican, like Barton, is selling himself as a reliable conservative voice in the caucus. But Shimkus sent his letter announcing the campaign to the whole caucus, while Barton's initial pitch was aimed at incoming freshmen.

The Food and Drug Administration allowed Chinese heparin to be imported into the United States from firms that refused to grant inspectors full access to records and labs, according to a Government Accountability Office report released Tuesday.

The GAO report, requested by House Energy and Commerce ranking member Joe Barton (R-Texas), also faulted FDA's reliance on outside experts with links to heparin companies. FDA boosted its inspections of Chinese heparin plants in 2008 after the deaths of more than 80 people were linked to contaminated heparin, an anticoagulant made of pigs' intestines.

"It’s now obvious that FDA has a fundamental weakness in how it deals with the surge of Chinese medical and food imports," Barton said in a statement. "The FDA allowed importation of heparin from Chinese processors who refused to permit full inspections of their labs and plants. This was a mistake.

"FDA already has the leverage to do in-country inspections in China because Chinese companies want access to U.S. markets," Barton added, "and FDA should use its leverage to insist on full inspections. To protect public health, there must be traceable and accountable supply chains in China — not just FDA keeping its fingers crossed."

The Colorado senator barely won his reelection race last week after being targeted for supporting the healthcare bill.

A leading House Democrat said this week that the party's signature healthcare reform law was largely the reason the Democrats were trounced in the midterms.

But, Rep. James Clyburn (D-S.C.) added, the law was worth the political costs because it "was the right thing to do."

"We got in the place that we're in because of healthcare reform," Clyburn told MSNBC's "Morning Joe" on Monday. "But you know what? … A lot of people lost their seats over Social Security, but that was the right thing to do.

"A lot of people, in fact — Democrats in the South — we lost the South because of civil rights back in the 1960s, but that was the right thing to do.

"And so I do believe that healthcare was the right thing to do."

Clyburn, the majority whip, is making headlines this month for his contest with Majority Leader Steny Hoyer (D-Md.) for minority whip in the next Congress. 

Speaker Nancy Pelosi (D-Calif.), who's running unchallenged to lead the party next year, will sit down Monday with Hoyer and Clyburn, Politico is reporting.

House Ways and Means Chairman-to-be Dave Camp (R-Mich.) is making his case for repealing and replacing the healthcare overhaul, touting his own version of a bill that he says would reduce premiums. 

In a USA Today editorial, Camp said the House Republican alternative was the only bill certified by the Congressional Budget Office "as reducing premiums across the board by up to 10 percent."

"By putting an end to junk lawsuits, encouraging small businesses to band together to provide health plans, forcing insurance companies to compete by allowing Americans to shop across state lines, and giving states the flexibility to make changes that best meet the needs of their residents, we can reduce premiums and still provide important patient protections," Camp said in the editorial. 

The Republican plan also would guarantee that those with pre-existing conditions can obtain affordable coverage, prohibit insurers from "unjustly canceling policies" and allow dependents to remain on their parents' policies through age 25, he said.

"We can reform health care, provide better patient protections and lower costs. It doesn't take $1 trillion in new government spending, $500 billion in new taxes and $500 billion in cuts to Medicare over the next decade," he said.