Bi-Weekly Update | June 8, 2010
In this issue…
Implementation Road Show
- New dates and events!
Update on Health Reform Implementation
- First Medicare Prescription Drug “Donut Hole” Cost Reductions Start
- New KFF Report Provides State-Level Data on Coverage Gains and Costs of the Medicaid Expansion in Health Reform
- New Texas Comptroller’s Report on Health Reform Economic Implications
- Rate Review Grants Announced
- No, you will not be taxed for your employer’s contribution to your health plan (TVHR Blog)
- Help for Americans with Pre-Existing Conditions (Families U.S.A.)
- Impact of programs like The Daily Show and the Colbert Report on health reform debate (Drew Altman’s Pulling It Together)
- Health Reform Implementation Resources from the Democratic Policy Committee
IMPLEMENTATION ROAD SHOW
Texas Voice for Health Reform is hitting the road to educate Texans about health reform implementation. As we confirm events we will update our online calendar with all the details. Look for the events in blue! If you don’t see an event in your area and would like to host one, please contact Dunkelberg@cppp.org!
- June 8th: Nacogdoches
- June 9th: Tyler
- June 10th: Longview
- June 14th: Dallas
- June 28th: San Antonio
- June 30th: Austin, hosted by One Voice of Central Texas, 8:30am to 11:30am at Goodwill Industries, 1015 Norwood Park Boulevard, Austin, Texas 78753 (General presentation 8:45-10:15am; more detailed conversation on the impact on nonprofits and their clients 10:30-11:30am).
- July 8th: Fort Worth, First United Methodist Church, 7-9pm; additional details TBA.
- July 12th: Houston
- August 2nd: New Braunfels/Universal City
UPDATE ON HEALTH REFORM IMPLEMENTATION
First Medicare Prescription Drug “Donut Hole” Cost Reductions Start
Starting next week, Medicare enrollees with high drug costs will get some relief as health reform starts to close the Medicare prescription drug “doughnut hole.” This year, seniors who hit the doughnut hole will receive a $250 check. Next year, they will get a 50% discount on brand names drugs in the doughnut hole. Further reductions are phased in each year until the doughnut hole is fully closed in 2020.
The first round of checks will be mailed on June 10. Checks will be mailed monthly after that. About 4 million Medicare enrollees are expected to get the $250 rebate this year. Seniors do not have to apply to get this benefit. Eligibility is determined automatically by Medicare. The federal government has warned of scams in which seniors get “applications” for the benefit that ask for personal information.
The doughnut hole was created when Congress created the Medicare prescription drug benefit (Medicare Part D) in 2003. Under the typical Part D plan in 2010, enrollees must pay premiums averaging about $39 a month and a $310 deductible. After meeting the deductible, enrollees pay 25% of drug costs and Medicare picks up the remainder until total drug costs reach $2,830. At that point, enrollees enter the doughnut hole where they must pay 100% of drug costs until they’ve spent another $3,610 out of pocket. Catastrophic coverage kicks in for enrollees who reach this point (total enrollee out-of-pocket costs of $4,550), in which enrollees must pay 5% of drug costs and Medicare picks up the remainder for the rest of the year.
New KFF Report Provides State-Level Data on Coverage Gains and Costs of the Medicaid Expansion in Health Reform
The Kaiser Family Foundation’s Commission on Medicaid and the Uninsured (KCMU) released a state-by-state analysis on the level impact of the expansion of Medicaid under the new health reform law. The analysis, performed by John Holahan and Irene Headen of the Urban Institute for KFF, is among the first to estimate for all 50 states and the District of Columbia the distribution of new Medicaid enrollees and costs, as well as the impact on the uninsured.
CPPP has received questions regarding the reason for the large difference between the Kaiser/Urban projections and numbers released by the Texas HHSC. Here are several of the top reasons the numbers differ—and why they really can’t be compared:
- KFF/UI looks only at costs of the mandated Medicaid expansion in 2014 to 133% of the FPL; whereas HHSC looks at all potential costs to HHSC budget, including provider reimbursement effects and higher take-up rates by kids, whose eligibility is NOT affected by the new reform law.
- KFF/UI’s report models both the Congressional Budget Office-like assumption of about 57% take-up rate by uninsured, plus the researchers’ higher 75% take-up assumption; whereas HHSC assumes 91-94% take-up rates by all Medicaid populations.
- KFF/UI’s report models costs for the CBO’s official bill scoring period of ten years from enactment (2010-2019); whereas HHSC models 2014 (when the Medicaid expansion begins) to 2023 Medicaid costs.
- Essentially, HHSC uses many (though not every possible) highest-cost assumption throughout its projection, so it yields a sort of “worst-COST” estimate.
New Texas Comptroller’s Report on Health Reform Economic Implications
The state Comptroller’s office released a report late Friday June 4 with the CPA’s preliminary estimates of health reform effects on the state’s budget, citizens, businesses, and economy. The CPA notes that “many factors are still unknown as the supporting rules have not been written by the federal government,” and identified 78 major provisions, of which there were 50 for which the fiscal impact could not be determined at this time. This new report breaks down cost by year for 2010-2019. Some notable estimates include (bold/italics indicate gains for Texas):
Penalties on individuals for no insurance: ($2.2B)
- Penalties on employers ($9.3B)
- Subsidies (premiums and cost sharing help) in exchange: $43.5B
- Small biz tax credits $1.9B
- New Medicare tax on high income earners ($15.8B)
- Medicaid new GR costs: ($5.8B)
- Medicaid federal funds to TX: $76.3B
- Reduction in Medicare Rate Increases: ($13.2B)
- Medicare Advantage payment reductions: ($6.5B)
We look forward to reviewing the CPA’s report in greater detail and will share any special kudos or concerns soon.
The new health reform law establishes a process for the federal and state government to annually review health insurance premiums to help protect consumers from unreasonable increases. The federal government is still developing regulations that will define the threshold for an unreasonable increase, but is releasing the first round of grants now to help states begin or enhance their rate review process this year.
Under health reform, insurers must report all unreasonable rate increases to federal and state regulators and must submit justifications for unreasonable rate increases before they take effect.
All states are eligible to apply for the grants. Each successful state will be awarded $1 million to enhance their rate review process this year. A second round of grants will be available at the end of 2001, after federal regulations on rate review have been released.
No, you will not be taxed for your employer’s contribution to your health plan, Stacey Pogue, TVHR Blog
In their new report, Health Reform: Help for Americans with Pre-Existing Conditions , Families USA examines the number of Americans diagnosed with pre-existing conditions, who—absent reform—would be at risk of being denied coverage in the individual insurance market.
What is the impact of television programs like Jon Stewart’s The Daily Show and Stephen Colbert’s The Colbert Report on the health reform debate. The Kaiser Family Foundation’s President and CEO Drew Altman explores this question in his latest Pulling it Together column REPOR(t)
The Democratic Policy Committee has released a special report entitled Health Reform Implementation Resources intended to provide a centralized, organized listing of resources regarding health insurance reform implementation, and will be updated as necessary.