Health reform implementation

Conservative Republican senator thinks repeal is "highly unlikely" but predicts a "change of heart" for some Democrats.

Republican leaders are insisting they'll make good on the party's election-season pledge to fight for full repeal of the new healthcare reform law.

But don't try to convince Rush Limbaugh. 

The conservative talk-radio host said last week that, at a recent closed-door meeting in Florida, unnamed GOP "senators" told party donors that the Republican strategy is to restructure the healthcare law, not repeal it. 

"I talked to a couple people that were there and they told me they went up to the senators and said, "Well, if this is your attitude, you can kiss 2012 goodbye,'" Limbaugh said on his show last Tuesday. "If this is the way you're looking at it, you can kiss any money from us and you can kiss 2012 goodbye.' So that's what [the lawmakers] were told by, quote-unquote, big donors and quasi-important people.  

"That's just two of them that I know who were there."

The controversy over the GOP's approach to the healthcare law took off last week after outgoing Sen. Judd Gregg (N.H.), the senior Republican on the Budget Committee, suggested that repealing the law isn't the right strategy. 

"I don't think starving or repealing is probably the best approach here," Gregg told the Fox Business Network last Tuesday. "You basically go in and restructure it."

On the same day, the Davis Intelligence Group reported that Sen. Bob Corker (R-Tenn.) recently told "high-dollar GOP donors" that most Senate Republicans — including Minority Leader Mitch McConnell (R-Ky.) — also don't support the full repeal being pushed by conservatives on the campaign trail.  

Both Corker and McConnell say that report is simply wrong, noting that Senate Republicans voted unanimously in March for full repeal of the law, just days after it was enacted. 

"While we were unable to block the Democrats from passing the health spending bill — the single worst piece of legislation that’s passed since I’ve been in the Senate — the Republican leadership in the House and Senate is committed to its repeal," McConnell said last week in an e-mail. 

"While Democrats will filibuster our efforts — and if we’re successful the President will veto — I believe we should give them that opportunity. We should vote, again, for repeal. Americans have spoken out, loud and clear, and we heard them. Repeal is part of the Pledge to America, and the Republican leadership is united in that effort."

Still, the idea that Republicans won't urge full repeal took off in the conservative blogosphere, with RedState's Erick Erickson taking shots at GOP leaders for being too moderate.

"You can be sure that Judd Gregg is not speaking out of turn and is not a lone wolf on this issue," Erickson wrote. "His view reflects that of the Senate GOP leadership despite their protestations to the contrary."

More recently, Limbaugh spokesman Kit Carson said Limbaugh's conversation with Florida donors only bolsters the credibility of reports that GOP leaders won't fight for full repeal. 

"Rush spoke to people directly who attended the fundraiser in [Florida]," Carson said in an e-mail, "and the Davis Intelligence Group seems to in essence back up the conversation he had with the couple who attended the fundraiser."

It remains unclear which "senators" attended the Florida fundraiser to which Limbaugh referred. Corker's office said he wasn't in Florida for any recent fundraisers, and Carson didn't respond when asked about the identity of the GOP lawmakers. 

The saga highlights a dilemma facing Republicans running on a platform of full repeal. Aside from the likely veto of such a measure by Obama, many of the consumer protections contained in the bill are enormously popular. On top of that, a full repeal is estimated to cost roughly $100 billion. 

Still, Limbaugh's comments highlight that conservatives aren't ready to accept anything less. 

"I had a bunch of people over for a Monday Night Football party, and I couldn't make it," he said of his invitation to the Florida fundraiser.

"But I did talk to a couple people who went. And they tell me full-force that they said after the message, 'If this is what you're thinking, that you can't repeal and that you don't have that much power, and you're not gonna really be able to effect change, then you can kiss 2012 good-bye.  

"'Obama and the Democrats are gonna be back in power if that's the way you're gonna approach this.'"

The Obama administration is weighing whether to allow companies to switch health plans without losing their coveted "grandfathered" status, reports Bloomberg.

The provision under consideration exempts health plans from some of the coverage requirements established by the healthcare law. Plans that are grandfathered in do not have to comply with all of the new rules.

In June, the Department of Health and Human Services issued regulations spelling out what would cause companies to lose their grandfathered status. Among the listed actions was changing insurance providers. 

"If an employer decides to buy insurance for its workers from a different insurance company, this new insurer will not be considered a grandfathered plan,'" the regulations state.

Now, Bloomberg reports, the American Benefits Council, which represents employers that sponsor health plans, is in discussions about the grandfathering rules with the Health and Human Services Department's (HHS) Office of Consumer Information and Insurance Oversight. The report cites an unnamed White House official as saying that the administration is "weighing whether to allow employers to avoid the requirements, even with a new insurer, as long as benefit levels stay the same."

The Chamber of Commerce has made replacing the provision with less stringent requirements a priority. On Sept. 29, senators rejected 59-40 a resolution of disapproval by Sen. Mike Enzi (R-Wyo.) that would have required HHS to withdraw and re-issue the rule.

According to HHS estimates:

• 40 percent to 67 percent of individual policies will lose grandfathered status by 2011;

• 34 percent to 64 percent of large employer group plans (100 or more employees) will lose their grandfathered status by 2013; and

• 49 percent to 80 percent of small-employer group plans (three to 99 employees) will lose their grandfathered status by 2013.

That doesn't mean those plans would no longer be offered — only that they would have to comply with new mandates of the healthcare reform law. 

The debate comes as HHS is struggling to put in place the law's costly new consumer protections without causing employers to drop coverage ahead of the midterm elections. Earlier this month, HHS granted waivers to 30 companies from the requirement that the annual limit on their coverage be at least $750,000 next year, sparking criticism from both liberals and conservatives.

The latest news is also fueling speculation that the administration could show flexibility in applying the reform law's medical-loss ratio, which requires health plans to spend a certain percentage of premiums on medical care.

GOP letter follows HHS announcement that 30 companies won't have to meet benefit requirement under new law.

The National Association of Insurance Commissioners (NAIC) voted unanimously Thursday to finalize new rules requiring insurance companies to dedicate more revenues directly to healthcare costs. 

A few technicalities aside, the NAIC kept their "medical-loss ratio" guidelines largely identical to the draft proposal the group approved in September. 

The insurance lobby had fought hard to convince commissioners that the draft would harm consumers' access to coverage, but NAIC members disagreed.

Kansas Insurance Commissioner Sandy Praeger told reporters Thursday that, while there were many amendments on the table, it "wasn't clear" that any one of them would have improved the initial proposal.

HHS likes what it sees

Health and Human Services (HHS) Secretary Kathleen Sebelius was quick to issue a statement saying the rules are "reasonable, achievable for insurers and will help to ensure insurance premiums are, for the most part, supporting health benefits for consumers." 

The recommendations now move to HHS, which still has to certify them. The agency plans to draft their MLR guidelines "in the coming weeks," Sebelius said.

The insurance lobby doesn't like what it sees

Karen Ignagni, head of America’s Health Insurance Plans, issued a one-sentence statement saying the current rules, if allowed to stand, "will reduce competition, disrupt coverage, and threaten patients’ access to health plans’ quality improvement services."

Consumer groups cautiously optimistic

Carmen Balber, Washington director for the advocacy group Consumer Watchdog, said the NAIC deserves a great deal of credit for resisting the pressure from insurers to alter the guidelines. Still, Balber said the final language allows plenty of opportunities for the industry to evade the consumer protections.

“Making these rules work will require tough scrutiny of insurance companies’ spending to make sure they don’t use loopholes in the law to pass off overhead costs as health care,” she said in a statement. 

Brokers weigh in as well

The insurance brokers lobby had pushed NAIC to consider brokers' fees a healthcare expense for the purpose of calculating medical-loss ratios. It didn't happen, but the National Association of Insurance and Financial Advisors (NAIFA) is hoping that could change down the line.

"While disappointed the NAIC did not believe it has the authority to modify the MLR definition to accommodate agent commissions," the group's president, Terry Headley, said in a statement, "NAIFA is hopeful that the NAIC and HHS will side with consumers by recognizing that agents need to be compensated for the vital assistance they provide consumers in managing day-to-day healthcare issues." http://bit.ly/9y7Njw

Liberal group launches effort to combat misleading healthcare reform ads

A coalition of liberal health and labor advocates launched a phone campaign this week designed to combat conservative claims that the healthcare law will steal benefits from seniors — claims Health Care for America Now (HCAN) says are false.

State insurance officials on Thursday finalized new rules requiring insurance companies to dedicate more revenues directly to healthcare costs.

While Thursday morning's final vote on the medical loss ratio is getting all the attention, state insurance commissioners meeting in Orlando, Fla., have been making progress on other important issues.

On Wednesday, they gave preliminary approval to the disclosure form that health insurance plans will soon have to fill out to let their customers know how they're spending their premiums. The form was approved by a subpanel of the National Association of Insurance Commissioners with only minor technical changes.

The NAIC is not expected to adopt the disclosure forms until later in the year, probably after the Department of Health and Human Services issues regulations on what constitutes "unreasonable" rate increases. Until then, liberal activists will be stepping up the pressure to expand the form to cover more issues.

California-based Consumer Watchdog is pressing for commissioners to include the following as they move forward with the disclosure forms:

• Lobbying expenditures and campaign contributions;

• Advertising and marketing expenditures; and

• Transactions and transfers of funds to affiliates.

"The whole point of the rate justification is to give consumers an explanation of why their premiums are increasing," said Carmen Balber, Consumer Watchdog's director in Washington, D.C. 

Meanwhile, the industry group America's Health Insurance Plans has been arguing against including items not directly related to the rate filing, including lobbying and marketing.

A conservative anti-abortion group has teamed with a liberal civil-rights organization to attack a law against "false statements."

Two liberal groups on Wednesday called on state insurance commissioners to stiffen their spines and not cave in to industry pressure ahead of a major vote Thursday on health-reform regulations.

The National Association of Insurance Commissioners is scheduled to vote Thursday on regulations governing the law's medical-loss ratio, which requires insurers to spend 80 percent to 85 percent of premiums on medical spending or activities that improve care. Liberals by and large approve of the regulations that have been adopted by several NAIC subcommittees so far but worry about intense last-minute lobbying to water them down.

"Insurance commissioners have a choice," said Carmen Balber, the Washington, D.C., director of California-based Consumer Watchdog. "Send the current modest version of medical spending regulations to (the Department of Health and Human Services for certification), or give insurers free rein to continue spending too much money on bloated profits and paper-pushers and not enough on actual healthcare."

Consumer Watchdog in particular objects to insurers' request that they be allowed to:

• Aggregate medical spending across state lines, which would allow them to spend less than the minimal ratio in some areas as long as it's made up elsewhere;
• Adjust for annual fluctuations in healthcare spending; and
• Count expenses such as broker commissions, fraud prevention and claims handling as medical rather than administrative costs.

Consumer Watchdog wants President Obama to issue an executive order freezing premium increases until new rules on medical loss and public disclosure kick in.

Health Care for America Now is also calling on the NAIC to "resist intense lobbying" by the health insurance industry. In a press statement Wednesday, HCAN Executive Director Ethan Rome points to Tuesday's announcement by UnitedHealth of a 23 percent surge in third-quarter profits (to $1.28 billion) over last year as proof that tougher regulations are needed.

"UnitedHealth's stunning profit report yesterday," Rome said in a statement, "reminds us that insurance companies have billions of reasons to try to gut rules that end their practice of spending too few premium dollars on actual medical services while denying people the health care they need and charging us more."

The Democrats' push to overhaul the nation's healthcare system was commendable but poorly timed, a leading House Republican charged this week.

"The American people are happy to have healthcare reform, but not when the economy is tanking," Rep. John Shadegg (R-Ariz.) said Wednesday on MSNBC's "Morning Joe."

Shadegg said that Democrats, faced with the worst economic crisis since the Great Depression, should have prioritized job creation instead of spending months debating the healthcare bill.

"They should have said, 'Look, hold it. We'd like to do healthcare reform, but now is not the time. We've got to get America back to work. We've got to solve this economic crisis,'" he said.

"Instead, they said, 'We've made up our mind, we're doing cap-and- trade' — the American people weren't focused on that. 

"Then [they said], 'We made up our mind, we're doing healthcare reform' — the American people were opposed to it. And they just forged ahead. You cannot ignore the American people, and you cannot break your promises."

The decision to pursue healthcare reform, he added, "was simply a dogmatic, ideological agenda, pushed largely … by Nancy Pelosi and Barack Obama."

Not that Congress has been idle on the economy during the downturn. Faced with the potential collapse of the banking system, the Bush administration bailed out Wall Street to the tune of $900 billion — a move widely credited with stabilizing the nation's finance system. 

Four months later, as unemployment rates were still skyrocketing, the Obama White House passed its $787 billion economic stimulus bill. In August, the Congressional Budget Office estimated that the bill created between 1.4 and 3.3 million jobs in the second quarter of 2010. 

Shadegg voted in favor of the Wall Street bailout, but opposed the stimulus bill. On Wednesday, he said the latter should have focused more heavily on infrastructure spending. 

"Infrastructure was 2 percent to 3 percent of the bill," he said. "And the reason for that is Obama didn't come in and say, 'Look, we need to write a stimulus bill with a lot of infrastructure in it.' "