MLHS Statement:
Supreme Court Case: Affordable Care Act must move forward for Michigan to prosper

“The Affordable Care Act is especially important in Michigan. With more than 1 million uninsured people in our state, it is critical that we expand health care coverage as outlined in the national reform legislation. Michigan had the second-highest number of people in the country losing employer-sponsored health insurance over the past decade.

Good health care is key to rebuilding our battered economy and creating the best and brightest workforce we can offer. It comes down to this: Will we continue to improve and expand coverage or will we return to the days of unaffordable insurance, rising numbers of uninsured and denials based on pre-existing conditions and lifetime limits?”

These comments may be attributed to Michigan League for Human Services Policy Director Karen Holcomb-Merrill

On Nov. 10 the Michigan Senate approved SB 693, legislation to establish the MiHealth Marketplace, the name given to Michigan’s health insurance exchange.

While the House intends to be deliberative in its approach and timeframe, there is some urgency for action if the state is to successfully develop, design, implement, and test an exchange that meets the needs of Michigan residents.

An exchange is an organized, regulated marketplace where individuals and small businesses (50 employees or fewer) can:

• shop and compare private coverage
• apply for private or public coverage through a single, simplified application, based on data matches rather than paper documents, in person, online or by phone
• receive advice from trained individuals or entities, called Navigators, on the plans/benefits that will be best for an individual family
• get federal subsidies for premiums and cost-sharing for those with incomes between 133 percent of poverty ($24,645 family of 3) and 400 percent (74,120 family of 3), or be determined eligible for Medicaid, those individuals and families with incomes below 133 percent of the federal poverty level
• have more control , quality choices, better protections when they purchase private coverage

Under the Affordable Care Act, states are required to have an operational exchange by Jan. 1, 2014. 

If states do not comply, the federal government will step in and create and operate a state’s exchange, and send the state the bill for its share. 

There is considerable latitude in the federal law in how an exchange can be created (public, private, or quasi-public entity), in the governance structure (who is or is not allowed to serve on the board of directors), and in the functions/activities the exchange performs. 

The ACA establishes the framework, and it is up to the states to complete the “structures” to meet the needs of their residents. The federal government is providing development funding through grants.

The legislation adopted by the Michigan Senate is a good first step. The bill includes components that are very consumer-friendly; however, it also includes components that are not consumer-friendly. 

Consumer-friendly provisions include:

• The governing board, composed of seven members, with a majority representing consumer interests
• Prohibition of current employees (or within the last 12 months) of the health insurance industry or health care providers from serving on the board
• Strong conflict of interest provisions
• A requirement that the board develop criteria for rating each qualified plan offered on the exchange for its value and quality

Provisions that need to be strengthened or improved for consumers include:

• Eliminating the provision that prohibits activities that could serve the best interests of consumers, including such activities as negotiating competitive rates, limiting the number/type of plans sold in the exchange, encouraging innovative products, etc.  (The legislation should be silent on these types of activities.  Don’t tie the exchange’s hands before it is even implemented.)
• Assessing fees on all insurers who sell inside and outside of the exchange to maintain a level playing field and not provide a competitive advantage to those selling outside the exchange
• Allowing all types of Navigators, not just agents, to assist with plan selection and enrollment

Due to the complexity of integrating public programs and commercial insurance as well as the major Medicaid expansion scheduled for January 2014, and the lead time required to make such significant computer changes, it makes little sense to delay action on this needed legislation. Inaction or delays also preclude the state from applying for additional, available federal funding for exchange development.

Gov. Rick Snyder has repeatedly reminded us that the ACA is the “law of the land,” and that so long as it is, the state needs to proceed with implementation. 

Wouldn’t it be too bad for our best Michigan minds to sit on the sidelines and watch as Michigan’s exchange is developed by the federal government due to inaction or late action by our Legislature?  Now is the time to encourage your House member to do his/her due diligence and craft and pass a consumer-friendly exchange bill.

 – Jan Hudson

Mother’s Day is a great time to celebrate the Affordable Care Act’s gifts to mothers — keeping them healthy to care for their children. The Act provides more affordable and comprehensive coverage for women as well as peace of mind that both they and their children will have access to health care coverage throughout their lives.

Benefits are already available to women under the ACA that make their health care more comprehensive and secure. They can receive continued coverage if they become sick, see doctors they choose without prior authorization requirements, receive proven preventive health care services —  including immunizations and mammograms — without cost sharing, and they no longer need to worry about exceeding limits set by the insurance company because lifetime coverage limits are now banned.

For women with medical conditions, such as cancer, diabetes, or heart disease, who have been uninsured for six months, federally subsidized coverage is available through the Health Insurance Program for Michigan. This program has comprehensive coverage for monthly premiums, established by age, ranging from $104 to $687.

Medicare beneficiaries can receive a free yearly check-up, and the Act lowers prescription drug costs by closing the Medicare Part D “donut hole.”   In 2007, 64 percent of those entering the “donut hole” were women.

When fully implemented in 2014, the ACA will stop the common insurance practice of charging higher rates to a woman simply because she is a female “of child bearing age.” The Act also prohibits higher premiums or denials due to pre-existing conditions, and bans annual benefit limits. Access to critical health care services, particularly maternity benefits will be assured. The Commonwealth Fund reports that nationally, only 13 percent of individual private plans currently include maternity benefits.

The most significant coverage increases will occur in 2014 with the expansion of Medicaid coverage to families and individuals with incomes up to 133 percent of the federal poverty level ($24,600 for a family of  three) and implementation of the health insurance exchange. For those with incomes between 133 percent and 400 percent of the federal povety level, who do not have employer-sponsored coverage, they will be able to purchase coverage through the state health insurance exchange and receive federal subsidies for premiums and cost sharing.

These are just a few of the benefits available now and to come for women under the Affordable Care Act. 

There are also many benefits already available for children and young adults. The ACA prohibits the denial of coverage for pre-existing conditions or the exclusion of conditions, such as asthma, from coverage, and it bans lifetime limits on benefits, ensuring children will have access to needed medical care now and in the future. These provisions are particularly vital for children born with serious health conditions who might otherwise have lost coverage due to reaching a lifetime limit or have been denied coverage due to the pre-existing condition.

Young adults, up to age 26, are allowed to remain on their parents’ employer-sponsored insurance without being a student, an IRS dependent, or even living with their parents, allowing them to maintain healthcare coverage, insuring access to regular medical attention and needed care. This provision is critical to America’s young adults, who have the highest rate of being uninsured of any age group and the lowest rate of access to employer-sponsored coverage.

What better gifts can a mother receive on Mother’s Day than health security for herself and her children?  More reasons to celebrate the Affordable Care Act!

– Jan Hudson

This week marks the first anniversary of the signing of the landmark legislation known as the Affordable Care Act. This law was nearly a century in the making and, when fully implemented, will provide millions of Americans access to health care coverage that was not previously available to them.

In its first year, the Affordable Care Act has made a difference in the lives of thousands of Michiganians. To celebrate, the Michigan Consumers for Healthcare Advancement Coalition is hosting celebrations around the state to highlight the benefits gained by residents during the first year. The “birthday celebrations”  began in Grand Rapids on Monday, move to Kalamazoo on Tuesday, the State Capitol on Wednesday, Saginaw on Thursday, and culminate in Dearborn on Friday, with the attendance of U.S. Rep. John Dingell, a long-time advocate for health care for all Americans.  

Here’s what we’re celebrating during this week:

• Children cannot be denied coverage because of pre-existing conditions, such as asthma.
• Adults with pre-existing conditions who have been uninsured for six months can purchase federally subsidized, comprehensive coverage for conditions such as cancer or diabetes. Individuals with cancer diagnoses have been able to access life-saving treatments.  Information is available at http://www.HIPMichigan.org
• Young adults, up to age 26, can remain on or re-enroll in their parents’ employer-sponsored insurance without being a student or an IRS-defined dependent. This provision allows comprehensive coverage for young adults who might otherwise be uninsured as they work to establish themselves in their careers, or begin working in jobs that do not offer health care coverage.
• Senior citizens are enjoying several new provisions under the law. In 2010, those who entered the Medicare Part D “donut hole” received a cash payment of $250 to help with their drug costs. In 2011, seniors who enter the “donut hole,” will receive a 50 percent discount on their brand name drugs. In addition, all seniors on Medicare can now receive recommended preventive service screenings at no cost.
• Health insurance companies for the first time have required percentages (80 percent to 85 percent) of the premiums they collect that must be spent on medical care and quality improvements. If the requirement is not met, companies must provide rebates to their customers.
• Lifetime limits on benefits cannot be imposed, and coverage cannot be cancelled just because a person gets sick.

These are just of few of the benefits available now because of the Affordable Care Act.  There are many others with more to be implemented over the next three years. One of the key future benefits of the law is the expansion of Medicaid to individuals with incomes up to 133 percent of poverty ($14,500 per year for an individual). This future benefit will provide new coverage to an estimated 400,000 – 500,000 individuals.

Another future benefit is the creation of a health insurance exchange, sometimes called an “Expedia of health insurance,” in which individuals will be able to compare and purchase affordable coverage with possible subsidies (depending on family income), limits on out-of-pocket costs, as well as guaranteed coverage regardless of pre-existing conditions for adults. There is much to look forward to.

Please join us in celebrating this historic law.

– Jan Hudson

Just when people thought they could catch a break and feel some health care security, policymakers are threatening to take away recently gained coverage and protections under Medicaid.

At the federal level, members of the U.S. House have begun discussions and will vote on full repeal of the health care reform law, the Affordable Care Act.  Implementation of this law has already provided many coverage expansions and protections. Those include:

• Eliminating pre-existing condition denials for children.
• Extending young adult coverage to age 26 on their parents’ employer-sponsored plans.
• Creating a new subsidized insurance plan for those adults who have chronic conditions and have been uninsured for 6 months or more.
• Requiring certain preventive services available to seniors without cost sharing.
• Holding insurance companies accountable for the premiums they collect by requiring 80 percent to 85 percent be spent on medical care. 

Members of the U. S. House, who enjoy comprehensive benefits and health care coverage security, are threatening to take these new benefits away. Repeal of the Affordable Care Act would be catastrophic to the hundreds of thousands of individuals who have already benefited and the estimated 32 million uninsured who will gain coverage when the law is fully implemented in 2014.

Last week, the League sent letters to Michigan’s House members urging them to vote against the repeal and today issued a statement in opposition to the repeal of this historic law.

Please call your U.S representative at 1-888-876-6242 and tell him/her to vote NO on H.R. 2, and that you value its protections and coverage provisions. 

At the state level, Michigan Gov. Rick Snyder, along with other Republican governors, has signed a letter to the president and leadership in the U. S. House and Senate seeking relief from the requirement that Medicaid eligibility must be maintained for the eligibility groups that were in place when the Affordable Care Act was signed in March 2009. Relaxing or eliminating this requirement could be devastating to Medicaid groups defined by the federal government as “optional,” and whose coverage has been recommended for elimination by the state Senate several times in recent years.

Medicaid coverage is critical for Michigan’s low-income residents and should be maintained. Michigan’s budget should not be balanced on the backs of Michigan’s low-income residents.

More health care dollars directed to medical care  — and fewer to advertising, administration and profits — is a new health care reform development that offers great news for consumers.

On Nov. 22, the Department of Health and Human Services (DHHS) released its regulation on the definitions and reporting that must be followed by insurers to comply with the Affordable Care Act (ACA) requirement that 80 to 85 percent of consumers’ premiums be used for medical care and quality improvements, not administrative and other non-medical costs (advertising, profits, etc.). 

Insurers that do not meet this requirement must provide rebates to their policyholders.  The DHHS estimates that up to 75 million people are in health plans that will be impacted by this provision and that up to 9 million people could be eligible for rebates starting in 2012.

The ACA required state insurance commissioners, through the National Association of Insurance Commissioners (NAIC), to develop a set of recommendations that specified definitions, methodologies, and reporting for the calculation of the percentage of premiums spent on medical care, known as the Medical Loss Ratio, as well as quality improvements. 

Those recommendations were submitted to the DHHS Oct. 27.  The regulation issued by DHHS certifies and adopts the recommendations of the insurance commissioners, as well as incorporating recommendations from a follow-up letter sent on Oct. 13.

This regulation is a very important consumer protection and will be the subject of much debate as insurance companies will be constrained in the use of premium dollars.

According to HealthCare.gov: Over 20 percent of consumers who purchase coverage in the individual market today are in plans that spend more than 30 cents of every premium dollar on administrative costs.  An additional 25 percent of consumers in this market are in plans that spend between 25 and 30 cents of every premium dollar on administrative costs.  And in some extreme cases, insurance plans spend more than 50 percent of every premium dollar on administrative costs.

This regulation will assure more health care value for each premium dollar spent.

December 2nd, 2010 Posted to Blog: Factually Speaking,Health Care | Comments (1)

Federal health care reform is starting a new chapter in Michigan. Beginning tomorrow, enrollment will open for the new high risk pool  for those with pre-existing conditions who have been uninsured six months. Coverage will be effective Oct.  1.

This component of the health care reform law got off to a rocky start when the Michigan Legislature failed to approve the expenditure of the federal funds for the high risk pool.  The federal government had to step in and make alternate arrangements.

Health care reform implementation merits ongoing and careful thought and planning by policymakers, with input and monitoring by consumers, to ensure the best possible outcome for all of us.

The Michigan League for Human Services developed a set of health reform principles in 1994 that are still relevant today and can serve as a good resource.

They provide a good road map for navigating many upcoming implementation issues including:

• The critical importance of a comprehensive package of benefits for those newly eligible for Medicaid (there is an option to provide a lesser package of benefits) as well as for those who purchase coverage through the Health Insurance Exchange (the “Expedia” of private insurance options).  A comprehensive package would include the full range of mental and physical health services, as well as dental and substance abuse services.
• Adequate state regulatory and monitoring resources to ensure mandates are implemented timely and effectively, and that there are strong enforceable consumer protections.
• Availability of access to quality care both geographically and culturally.  There are many opportunities in the law to expand or promote primary care.
• Reasonable and adequate provider payment rates in public programs to ensure that current and newly eligible persons have access to care and not just a card.
• An increase in the meaningful and cost-effective use of health information technology.
• Promotion of quality, not quantity, of care through incentives or payments for outcomes, or other payment reforms for providers; and quality consumer education to help guide treatment decisions.
• A priority for funding prevention and wellness options included, but not funded, in the law.
• Development of effective cost containment strategies that maintain or improve quality care and are not simply code words for cuts in programs or services.

Additional food for thought is provided by the State Consortium on Health Care Reform Implementation in a State Health Policy Briefing. This brief describes 10 aspects of federal health reform that states must get right if they are to be successful in implementation.

The group’s top priorities include:

1. Be strategic with insurance exchange

2. Regulate the commercial health insurance market effectively

3. Simplify and integrate eligibility systems

4. Expand provider and health system capacity

5. Attend to benefit design

6. Focus on the dually eligible

7. Use your data

8. Pursue population health goals

9. Engage the public in policy development and implementation

10. Demand quality and efficiency from the health care system.

(The State Consortium on Health Care Reform Implementation is a collaboration among the National Governors Association, the National Academy for State Health Policy, the National Association of Insurance Commissioners, and the National Association of State Medicaid Directors.)

There have been and will continue to be numerous opportunities for comment as federal regulations are developed and finalized.  The federal government has established a website where you can readily view the regulations for which comments are being accepted.  You are encouraged to take advantage of these opportunities and let your voice be heard in this historic process.

It will take ongoing vigilance to ensure the best implemenation for all.

–  Jan Hudson

A Path Toward Health Equity, a recently released report from Community Catalyst, contains recommendations on how to strengthen community-based work to reduce health disparities.  The report focused on six states, one of which was Michigan.

I had the opportunity to share my perspective on health equity work in Michigan, as the report was being developed.  Although it focuses primarily on specific recommendations about how to more effectively address health disparities, the report also contains some important information about the status of health disparities in our state.

The numbers serve as yet another reminder of the disparities that do exist.  Overall, 13 percent of those in Michigan are uninsured.  Among Hispanics, 24 percent are uninsured and among African Americans, 20 percent are without insurance.

Across the board, African Americans in Michigan die from preventable diseases at a much higher rate than whites.  African Americans and Hispanics have significantly higher infant mortality rates than whites in our state.  You can find more detail about these and other disparities in a League report on health disparities.

The Community Catalyst report proposes five strategies that could strengthen efforts at the local and state level to reduce health disparities.  They include:

• Building and strengthening community-based organizations
• Encouraging statewide health access groups to prioritize equity work
• Building coalitions of community, state and national organizations
• Connecting various stakeholders
• Developing a disparities reduction/health equity policy agenda

We are already doing some of these things here in Michigan.  But the numbers tell us that we need to do better.  The League will continue to look for opportunities to play a role in reducing health disparities in our state.

– Karen Holcomb-Merrill

Every time I participate in a discussion on the aspects of health care reform, my head hurts more.  I continue to be awed by the intricacy, complexity, and breadth of this new legislation. But at the same time, I am inspired by the great opportunity to make positive changes to public programs, insurance products, and the health care delivery system, to name just a few.

There was a dizzying array of information provided at the Public Policy Forum co-sponsored by the Michigan League for Human Services and the Michigan Health Insurance Access Advisory Council on April 23, followed by a forum sponsored by the Detroit Regional Chamber and the Federal Reserve Bank of Chicago – Detroit Branch on April 26 and 27.

Public Sector Consultants brought a diverse group together May 12 to hear presentations by Department of Community Health Director Janet Olszewski and Insurance Commissioner Ken Ross, and to provide feedback on what next steps make sense. State staff are working diligently to identify all the facets that must be addressed to develop a strong foundation for ongoing implementation efforts.

The complexity of the federal health reform legislation will make it an ongoing challenge to implement. Thank goodness every component is not scheduled to be implemented immediately, and hopefully there is enough time to get it right.

The health care reform legislation will touch all of us. A few of the benefits follow:

• 32 million people are expected to gain health care coverage by 2019.
• Medicaid will be expanded (2014) to all families or individuals with incomes below 133 percent of the federal poverty level (about $14,400 for an individual).  A federally designated category or group will no longer be required to be eligible; the federal government will cover the cost of the new enrollees for the first three years.
• Young adults can remain on their parents’ health care plans up to age 26, without being an IRS-defined dependent or being in school.
• When the Insurance Exchange is implemented in 2014, subsidies will be available to assist families with incomes up to 400 percent of the poverty level (about $88,000 for family of four) be able to afford coverage. In addition, cost-sharing caps, on a sliding income scale, will also be implemented.
• Insurers will be prohibited from denying coverage for pre-existing conditions or cancelling coverage when an insured person gets sick. Insurers will also have to use a high percentage (80 percent to 85 percent) of  premiums for patient care, and will no longer be able to establish annual or lifetime limits on benefits.
• Small businesses will receive subsidies (up to 35 percent) to help them afford coverage for their employees.
• The Medicare Part D “donut hole” (the period when costs have reached a high level, but no assistance with drug costs is available) will gradually be reduced.
• Programs to promote wellness and prevent chronic disease will become a major focus.

These are only a small sampling of the extensive provisions included in this historic legislation. Many organizations are putting information on their websites. The key thing to remember in reviewing these documents is that they are works in progress, and may be updated frequently as more clarification or regulations are issued by the various federal offices involved in implementation.

Families USA, the Kaiser Family Foundation, The Commonwealth Fund, and the Robert Wood Johnson Foundation include extensive materials on the health care reform legislation and its implementation.

I think Atul Gawande in The New Yorker in December articulately summed up where we are and what we need to do to make this work:

“At this point, we can’t afford any illusions: the system won’t fix itself, and there’s no piece of legislation that will have all the answers, either… But if we’re willing to accept an arduous, messy, and continuous process we can come to grips with a problem even of this immensity. We’ve done it before.”

– Jan Hudson

May 19th, 2010 Posted to Blog: Factually Speaking,Events,Health Care | Comments (4)

In June 1994, the Michigan League for Human Services’ Board of Directors adopted a set of health care reform principles.

Last night’s historic House vote brought us one step closer to realizing the implementation of many of the policies and principles included in that document, which by health care reform standards, (see a brief history of health reform) is relatively new.

The Senate bill passed by the House is Senate Bill H.R. 3590 and the ensuing reconciliation bill is Reconciliation Act H.R. 4872.  Several components of the League’s health reform principles are included below with a brief explanation of how they are addressed in health reform legislation:

• Coverage for nearly all Americans. By 2019, it is projected that 95 percent of non-elderly legal residents would have insurance. The legislation expands Medicaid to all adults and children under 133 percent of the federal poverty level (FPL) and provides subsidies to families with incomes up to 400 percent FPL to purchase insurance.  In addition, caps, based on a sliding income scale, will protect low-income persons from excessive out-of-pocket costs.
• Mandated enrollment in health care coverage to spread the costs as broadly as possible.  The legislation requires most people to obtain coverage or pay a penalty, which is necessary to provide an incentive for people to secure coverage before they become ill. With nearly everyone enrolled in coverage, over time, premiums should become more affordable as they will no longer include the “extra cost” of providing care for those who are uninsured.
• Focus on disease prevention and chronic disease management.  There are numerous prevention and wellness initiatives included in the legislation.  For example, all co-payments, co-insurance and deductibles for preventive services will be eliminated for Medicare beneficiaries.
• Coverage of the full range of mental and physical health needs.  The new state-based exchanges would have to provide minimum standards for coverage and cost-sharing protections for enrollees, making sure coverage is comprehensive and affordable. Four levels of coverage will be required. Medicaid would continue to provide comprehensive coverage to all who qualify with enhanced federal subsidies for the newly eligible.
• Implement effective cost containment. The legislation takes a number of steps, particularly within Medicare, to institute efficiencies to lower cost and improve quality of care, through changes in the delivery system, and through the establishment of an independent Payment Advisory Board charged with developing proposals to slow the growth of both Medicare and private insurance spending and improving quality of care.
• Comprehensive quality management and health care outcomes.  The legislation creates a research institute to conduct comparative effectiveness research, create a value-based system for hospitals and physicians, and encourages the development of new patient-care models, to name a few.

Of key importance are the provisions in the legislation that will reform the health insurance marketplace by prohibiting lifetime limits on benefits and terminations of coverage when people become ill.  In addition, the reforms will prohibit insurers from denying coverage or charging higher premiums to persons with pre-existing conditions, or higher premiums based on gender.

The reform package gradually eliminates the Medicare Part D “doughnut hole,” the coverage gap in which beneficiaries continue to pay Part D premiums, but have no pharmacy coverage, and must fully pay for their medications.  An immediate 50 percent reduction in the cost of brand-name drugs will be available to those who reach the “doughnut hole.”

The reform package passed by the House last night will also provide subsidies to small businesses to enable them to provide coverage at a reasonable cost to their employees. They will also be able to purchase comprehensive, affordable coverage through the state-based exchanges.  Many small businesses have been unable to provide, or have been forced to drop insurance coverage due to the escalating cost of premiums.  The exchanges will provide opportunities for small business to purchase coverage with more affordable and predictable premiums.

The above information is only a small sample of the benefits included in the health care reform legislation passed by the House.  The reconciliation bill, which must now be taken up by the Senate, can be passed with a simple majority (51 votes).  Action by the Senate is expected this week.

The League and the Michigan Health Insurance Access Advisory Council are sponsoring a forum on April 23, Federal Health Care Reform: Challenges for the States.  For more information and to register, click here.

– Jan Hudson