I used to respect Rush Limbaugh, but he’s turned into a babbling shock jock that will say anything for ratings.

Tags: Limbaugh on health care, Rush Limbaugh and Ted Kennedy, Rush Limbaugh health care

The Department of Labor says it is working on guidance regarding the newly created subsidy for COBRA premiums.

The American Recovery and Reinvestment Act of 2009 (ARRA) provides for a 65 percent subsidy for COBRA continuation premiums for up to 9 months for workers who have been involuntarily terminated, and for their families.

The subsidy terminates when the covered individual is offered any new employer-sponsored healthcare coverage or becomes eligible for Medicare. Workers who were involuntarily terminated on or after September 1, 2008, and before February 17, 2009, but failed to initially elect federal COBRA continuation coverage, have an additional 60 days to elect federal COBRA and receive the subsidy.

To qualify for the subsidy, individuals must meet all of the following requirements:

• Is eligible for COBRA continuation coverage at any time during the period beginning September 1, 2008 and ending December 31, 2009;
• Elects COBRA coverage (when first offered or during the additional election period), and
• Has a qualifying event for COBRA coverage that is the employee’s involuntary termination during the period beginning September 1, 2008 and ending December 31, 2009.

The ARRA provides that an assistance-eligible individual (AEI) is treated as having paid the full premium required for COBRA continuation coverage for a coverage period if the individual pays 35 percent of the premium. The subsidy program is effective for the first coverage period beginning on or after February 17, 2009. In most cases (plans with calendar month coverage periods), this will be March 1, 2009.

The legislation requires that information on the COBRA subsidy be included in COBRA notices. Under the legislation, the Department of Labor must create a model notice within 30 days of February 17, 2009.

Tags: COBRA Recovery and Reinvestment Act laws, COBRA subsidy

The American Recovery and Reinvestment Act of 2009 signed into law February 17 expands COBRA in ways that will certainly impact employers. Most significantly, the act offers assistance-eligible individuals a 65 percent subsidy of their required COBRA premiums and an additional enrollment period within which to elect COBRA coverage.

Under the provision, the federal government will provide the subsidy for up to nine months for workers who lose health coverage as a result of being involuntarily terminated between September 1, 2008 and December 31, 2009 and who are eligible for COBRA coverage benefits, and their dependents.

The COBRA subsidy becomes applicable March 1. Assistance-eligible workers will receive a notice within 60 days of enactment that will outline the steps and requirements necessary to get the subsidy. We are awaiting government requirements for the forms and notices. These requirements are expected by mid-March. COBRA participants should pay their March premium as invoiced, and an adjustment will be made and the adjusted premium will be invoiced for future payments. The 65 percent subsidy will be applied retroactively, if applicable, from March 1.

Plan sponsors of all group health plans, multi-employer plans (and federal plans subject to comparable) COBRA laws will bear the brunt of administering the new provisions and will need to work closely with their COBRA administrators to ensure compliance. In addition, groups under 20 employees will also have responsibilities because the new subsidy is applicable to small groups and church plans covered by comparable state continuation laws.

On February 20, 2009, the Internal Revenue Service released a revised Form 941, the form for employers’ quarterly tax return on which employers report payroll taxes. Instructions for Form 941 were also revised. See lines 12, 12a, and 13 of Form 941 and pages 1, 2, and 6 of the instructions for directions for reporting credits to recover COBRA premium subsidies.

The Employee Benefit Security Administration (EBSA), the part of the Department of Labor (DOL) that administers federal labor laws regulating employee retirement and health plans, recently unveiled a Web site dedicated to the COBRA premium subsidy. No guidance is posted on the site yet, but it is anticipated that DOL guidance will be posted to the site as it is released.

The Department of Labor is required by H.R. 1 to conduct expedited reviews of denials of premium assistance (§ 3001(a)(5)). The Web site states that “The Department is currently developing a process and an official application form that will be required to be completed for appeals.”

The Web site also says that “EBSA is actively working to issue additional guidance regarding the COBRA premium reductions.” The Department of Labor is also responsible for developing a model notice for use by employers (§ 3001(a)(7)(D)) and outreach consisting of public education and enrollment assistance (§ 3001(a)(9)).

Tags: American Recovery And Reinvestment Act Of 2009, Employer COBRA Stimulus, Employers and American Recovery and Reinvestment Act of 2009

The U.S. House and Senate will vote on a compromise $790 billion stimulus package that includes subsidies for 65% of the COBRA health insurance premiums paid by laid-off workers, under a hard-fought conference report unveiled late Feb. 12.

The final version of the American Recovery and Reinvestment Act, which followed intense negotiations between leaders of the two chambers, is smaller than either the $819 billion stimulus passed by the House or the $838 billion package cleared by the Senate. Completion of the conference report for H.R. 1 sets up a planned Feb. 13 House vote, with the Senate to move the package either later in the day or over the President’s Day weekend. Following the vote, Congress will stand in recess until Feb. 23.

The final COBRA provisions, which were welcomed by the health insurance industry, are more generous than the 50% subsidy in the Senate version, but do not last as long as the 12-month subsidy included in both prior versions of the bill. Estimated to cost $24.7 billion, the provision would provide aid to an estimated 7 million involuntarily terminated between Sept. 1, 2008 and Dec. 31, 2009 to pay continue paying health insurance premiums through the 23-year-old Consolidated Omnibus Budget Reconciliation Act program.

COBRA allows employees who are terminated or leave their jobs voluntarily to remain in their former employer’s group health plan for up to 18 months, which can be extended to 36 months for those with extenuating life circumstances. Employers are permitted to charge COBRA enrollees up to 102% of the true cost of group health premiums, which average more than $1,000 per month.

According to the final report, the aid would be available for up to nine months, or until the terminated worker receives an offer of any new employer-sponsored health care coverage or becomes eligible for Medicare. Subsidies would not be available to those who earn more than $125,000 a year, or $250,000 per household.

The final version also strips out a provision opposed by the National Business Group on Health, which represents large employers, that would have allowed beneficiaries older than age 55 and those who have worked for the same employer for a decade to retain COBRA coverage until they become eligible for Medicare.

The measure also includes $17.2 billion in funding for health information technology infrastructure and an additional $2 billion in affiliated grants and loans. The bill sets a goal of seeing 90% of doctors and 70% of hospitals adopt electronic health records within the next decade, but it couples that with more stringent regulations on the transmission of identifiable health information. Insurers have protested that the bill’s notification requirements for security breaches were broadly worded, that it authorizing state attorneys general to enforce federal privacy standards and that new regulations could restrict health promotion, disease management and care coordination programs.

However, groups such as the Blue Cross Blue Shield Association and America’s Health Insurance Plans welcomed $1.1 billion in new funding for comparative effectiveness research. The BCBSA has proposed creation of an industry-funded institute to offer recommendations on the most effective and cost-efficient medical treatments.

“With comparative effectiveness, patients and providers will be able to assess drugs, technologies, and treatment options and make decisions that best reflect the patients’ needs and preferences,” AHIP President Karen Ignagni said in a statement. “We applaud efforts to address this important priority in the current economic recovery bills.”

The final package mostly eliminates a $54 billion provision, seen as potentially beneficial particularly to financial guaranty and mortgage guaranty insurers, that would have allowed corporations to carry back net operating losses for 2008 and 2009 against taxes paid in the prior five years. The final version offers a much more limited, $947 million carryback open only to businesses with gross receipts of less than $15 million, which could potentially be helpful to some agencies and small carriers.

Other small business tax provisions of potential benefit to agencies include $41 million to allow a one-time write-off of up to $125,000 in capital expenses; $829 million for raising the small business stock sale capital gains exclusion to 75% from 50%; and $415 million to temporarily reduce the built-in gains holding period for S corporations from 10 years to seven years.

Tags: COBRA, COBRA laws, COBRA legislation, COBRA stimulus package, COBRA subsidy

U.S. President Barack Obama reversed controversial Bush administration orders limiting states from expanding a low-income children’s health insurance program.

Obama issued a memo reversing his predecessor’s orders on the same day he signed an extension of the State Children’s Health Insurance Program to include more participants in the state-run, federally funded insurance program for low-income children, The Hill reported Thursday.

Although the legislation Obama signed into law Wednesday provides more than $30 billion in additional SCHIP funding to permit states to enroll 4 million more children in addition to the 7 million already receiving benefits, it didn’t specifically address Bush administration letters sent outlining its SCHIP policies in 2007 and 2008.

“These requirements have limited coverage under several state plans that otherwise would have covered additional uninsured children. As a result, tens of thousands of children have been denied healthcare coverage,” Obama wrote.

Tags: Obama SCHIp news, SCHIP

With Michigan’s governor looking on, President Barack Obama reauthorized an expanded health insurance program for children this afternoon, calling it a “down payment on my commitment” to ensure coverage for every American.

The $74-billion reauthorization of the state Childrens’ Health Insurance Program — representing an increase of about $33 billion over the next five years — represented what Obama called “one of the highest responsibilities we have.”

SCHIP already covers about 7 million kids; congressional estimates are that the additional money should allow the states to cover about 4 million more, including legal immigrant children in some cases. The House approved the legislation on a vote of 290-135 earlier today.

President George W. Bush had vetoed the expansion twice in the last Congress.

Obama said parents without insurance for their children are often forced into decisions they should never have to make — “how long to put off that doctor’s appointment, whether to fill that prescription, whether to let a child play outside, knowing that all it takes is one accident, one injury, to send your family into financial ruin.”

“This is not who we are,” added Obama. “We are not a nation that leaves struggling families to fend for themselves.”

Also attending the bill signing at the White House this afternoon from Michigan were Rep. John Dingell, a Dearborn Democrat, and U.S. Sen. Debbie Stabenow.

In Michigan, the additional funding could result in more than 71,000 additional kids receiving basic health care coverage, according to the Families USA, a health care advocacy group based in Washington, D.C. Right now, about 114,000 children in Michigan receive health care through Michigan’s SCHIP program, known as MiChild.

“Enactment of this bill represents a clear example of the change voters demanded last fall,” said Rep. Gary Peters, a Bloomfield Township Democrat who last fall defeated Republican Joe Knollenberg, who was criticized in some quarters for voting against the legislation last year. “Thousands of Michigan kids went without health care for years while Washington bickered.”

But there remained concerns that waivers to the states could result in them authorizing funding for children whose families would otherwise qualify for private health insurance. Midland Republican Dave Camp — the ranking Republican on the House Ways and Means Committee — said in some cases families making up to $88,000 a year could be eligible for free healthcare and that private coverage could be eliminated for some 2.4 million people. But while waivers could be granted to allow states to offer coverage to families making more, there is nothing in the legislation that requires it.

Among Michigan’s delegation, all the Democrats voted for the legislation, as did four Republicans — Candice Miller of Harrison Township, Thad McCotter of Livonia, Vern Ehlers of Grand Rapids and Fred Upton of St. Joseph. Voting against were Republicans Camp, Mike Rogers of Brighton and Pete Hoekstra of Holland.

In all Democrats voted 250-2 in favor of the bill; among Republicans, 40 were supportive and 133 against.

In Michigan, the program covers kids ineligible for Medicaid whose families have incomes less than twice the national poverty level — $44,100 for a family of four. And while Michigan’s program has provided coverage to childless adults with incomes of less than 35% of the poverty level — $3,790.50 — the legislation phases out that coverage (though it includes a provision to provide SCHIP coverage to pregnant women).

The legislation would be paid for through a 62-cent-a-pack increase in the federal excise tax on cigarettes, which would hike that tax from 39 cents a pack to $1.01. It also raises taxes on other tobacco products. The congressional Joint Committee on Taxation estimates that will increase federal revenues by $71.4 billion — covering most of the cost — during the next five years.

Tags: Child health insurance legistlation, children's health insurance program, kids health insurance program, SCHIP

WASHINGTON (Reuters) – When Shirley Hunter reviewed her finances to make sure she could afford to retire in 1999, she never banked on health care costs more than doubling in less than a decade.

Now the 74-year-old former California kindergarten teacher finds herself under financial pressure. Despite taking lodgers to help pay the bills, she worries about losing her home or having to choose between mortgage, food and health insurance.

“I’m on a fixed income. Nothing else is fixed,” Hunter said. “I can’t afford to travel right now or anything. It’s very disappointing to work like I did and then have this happen.”

Hunter, who told her story to a community healthcare discussion in Costa Mesa, California, is one of millions of Americans looking for President-elect Barack Obama to make good on his campaign promise to tackle the U.S. healthcare crisis.

Obama’s choice to lead the reform effort, former Senate Majority Leader Tom Daschle, testifies at his Senate confirmation hearing on Thursday — beginning a process to change the nation’s healthcare that could be one of the most ambitious and expensive undertakings of the Obama presidency.

The United States spent $7,421 per person on health care in 2007, some 16 percent of Gross Domestic Product, but does worse in many areas of care than other developed countries.

Employers complain that rising healthcare costs put them at a competitive disadvantage in the global economy, driving up the price of everything from a car to a cup of coffee. This has become more acute during the current economic turmoil.

“We can’t afford to put domestic priorities like health care on the back burner,” said Obama spokeswoman Jen Psaki. “This will certainly be a priority for him and for the new administration once he’s sworn in.”

Daschle and his team have helped organize thousands of grass-roots meetings across the country to try to understand the health problems people face and the changes they want.

Some 8,500 people signed up to host the sessions like the one Hunter attended in Costa Mesa. Daschle himself attended two — one in an Indiana firehouse and the other at a Washington, D.C., senior center.

Feedback from people contacted by telephone after the meetings shows the scope of the problem.

“As a nation we’re spending way too much money and we’re not getting much value for it,” said Dr. Allan Wilke, a family practitioner who attended a discussion with other doctors at a medical center in Huntsville, Alabama. “I think we all know the system has got to be fixed.”

COVERING THE UNINSURED

The doctors’ biggest worry was the 46 million uninsured who put off going to the doctor until they visit a hospital emergency room, a costly form of care for conditions that are often preventable.

“I think that was probably the major concern — the number of people that don’t have insurance, that end up getting sick and using the emergency rooms for their primary care,” Wilke said.

Expanding health insurance coverage was a frequent topic. Teenagers who participated in a discussion sponsored by Planned Parenthood in Utica, New York, worried about workers who earn too much to receive government-sponsored health care but cannot afford health insurance.

Preventive care came up at the session in Alabama, where obesity is a problem, and again in Frankfort, Kentucky, where a group of health professionals and public health officials met.

“Prevention was the big topic for us,” said Anne Donworth, a hospice executive at the Frankfort discussion. “As a society we need to focus more on emphasizing taking good care of yourself and … early diagnosis and prevention measures.”

The industry’s economic structure also was seen as flawed.

Attorney Kenneth Zwick, who attended the session in Costa Mesa, said he thought the profit motive warps how the healthcare system works.

“As long as insurance companies, who I sometimes litigate against, are as concerned with their bottom line as they are with the health of their people … we will never have, I don’t think, an effective or appropriate healthcare system,” he said.

The Alabama doctors discussed placing more emphasis on paying for preventive care.

“If you incentivize the system so that the quality measure is lower blood pressure, better control of diabetes, etcetera, etcetera, if you pay me to do that, you’ll get what you pay for,” Wilke said.

Tags: Obama healthcare

HEALTH care drained the federal budget of more than $1 trillion this year. That includes direct health care programs like Medicare, plus insurance for federal employees and the cost of excluding employer health-care contributions from workers’ taxable incomes. If present trends continue, in 10 years the number will almost double.

President-elect Barack Obama has proposed some good ideas for cutting health care costs, but his proposals will not create the savings we need.

He has suggested, for example, that electronic medical records could save Americans nearly $80 billion per year. But information technology cannot bring meaningful savings if it is used in a health care system that regularly rewards waste and punishes efficiency, as ours does.

Similarly, Mr. Obama proposes to save more than $80 billion per year by better management of chronic conditions like high blood pressure, heart disease, diabetes and asthma, and by preventing more diseases in the first place. It is true that most American doctors are weak on prevention and chronic disease management. But they will not improve until they are given economic incentives to buy the equipment and hire the personnel they need to actually deliver these services.

The only truly promising way to save money is to change the way health care is organized and delivered. In the United States, 85 percent of doctors work in small, fee-for-service practices. Many of these doctors are very good and hard-working. But they are autonomous, not members of teams. They do not systematically share information with one another. They are unable and unwilling to be held accountable for the quality and cost of the care they deliver.

The employment-based health insurance system has created this situation by not encouraging people to consider the value for their money when they choose doctors.

Some American medical practices do emphasize economy. They are very large, multispecialty group practices in which doctors work together to improve quality and keep costs low. Their doctors share values and cultures of teamwork. They keep comprehensive electronic medical records, they share information, and they emphasize disease prevention and chronic disease management as a matter of course.

These doctors are usually paid salaries, not fees for services. Research and experience suggests that these practices — which exist in all regions of the country, including both rural and urban communities — can reduce costs by 30 percent.

And a few employers — some universities and companies, the federal government, the state governments in Wisconsin and California — allow their workers to choose such practices, and then keep the money saved by that choice. At least 70 percent of employees offered this option choose it, even when it involves restrictions on doctor selection.

Unless all Americans are given this choice — along with the right to keep the savings — we will not be able to get health care costs under control. But making this change won’t be easy. Employers and insurance companies are likely to resist it. Doctors and consumers will have to change. It will take time.

Right now, most employers offer workers no choice of insurance companies. They say it would be too expensive to administer more than one. And insurance companies offer employers better deals when they can be the sole supplier.

Even at companies where employees have choices, many employers pay 80 percent to 100 percent of the premiums of an employee’s chosen plan, so there is little opportunity for the employee to realize savings. This market does not reward cost-conscious behavior. The tax code makes this problem worse by exempting employer contributions to health insurance from taxes, no matter how large they are.

Efficient, organized medical systems need to be able to compete with — and ultimately replace — the fee-for-service model. Working with Congress, the next president should establish a national health-insurance exchange, through which people can choose among several competing health plans, including those affiliated with organized systems of care. Individuals could then select which plan they judge best to meet their needs, and save money by choosing less expensive options. The insurers in the exchange would agree to accept all who want to enroll, and to charge their same price to all individuals, no matter the state of their health.

Then, to ensure that enough people participate in the health-insurance exchange, Mr. Obama and Congress should phase in a requirement that the tax-free status of employer contributions to health care be dependent on employers buying health care for their workers through the exchange — and making fixed-dollar contributions, so workers can reap the savings when they choose less expensive plans. All employees would have a wide range of choices, with an incentive to be cost-conscious. (Eventually, the government should help everyone buy insurance through the exchange, regardless of employment.)

Right now, Mr. Obama’s plan is to create an exchange through which people who have difficulty buying affordable health insurance could buy coverage. Unfortunately, participation in exchanges cannot be voluntary. Voluntary exchanges have been tried and failed. The first people to join are the sickest, which drives up the premiums.

To make exchanges work, a broad sample of people, healthy and sick, must be included so that health risks can be spread widely. Large exchanges would also lower the administrative costs for insurers.

By combining organized systems of medical care with the competition created by a health insurance exchange, Mr. Obama could achieve large savings. In 10 years, costs could be reduced by 30 percent, saving more than $700 billion a year — all driven by incentives and voluntary actions.

By ALAIN ENTHOVEN
Published: December 27, 2008

By choosing former Senate Majority Leader Tom Daschle to head his healthcare reform effort, President-elect Barack Obama got more than an old congressional hand with a policy book on his resume.

Obama has also picked up a hardheaded political strategy for his push to overhaul the nation’s healthcare system. Guided by lessons from President Clinton’s healthcare debacle 15 years ago, Daschle has put a premium on cooperation between the White House, Congress and major healthcare interest groups, many of whom agree that major action on healthcare is vital.

Daschle, who will lead both the Department of Health and Human Services and a new White House Office of Health Reform, favors moving decisively to seize political momentum and, if necessary, cut off opposition, something he said Clinton failed to do in 1993.

He thinks delays by the Clinton administration and soft support from the left in the early 1990s allowed Republicans and industry groups such as insurers to kill the Clinton plan with a well-organized political campaign that made voters afraid of reform.

Daschle is urging a far more aggressive push by those advocating systemic change.

“This means going on the offensive,” he wrote in “Critical,” his recent book about healthcare, in which he singled out drug makers and insurers as potential obstacles to a successful overhaul.

“We cannot assume that the public recognizes the distortions and fallacies peddled by the reform opponents; we have to educate people on the emptiness of the anti-reform rhetoric,” he said.

Daschle has even suggested using the Senate’s rules to prevent opponents from filibustering healthcare legislation, a move that one senior Republican staff member warned would make it “extremely difficult” to get any GOP support for major reform.

Daschle, who declined to be interviewed, has specific — and potentially controversial — ideas about how to reshape the healthcare system.

Among other things, he envisions a new federal agency, which he calls a Federal Health Board, with the authority to set guidelines for what treatments and procedures are most cost-effective.

Daschle argues that the board, which would have authority over federally funded healthcare programs such as Medicare, would insulate medical decisions from political meddling by Congress and could help design a system for achieving universal coverage.

He also has called for a mandate to require all Americans to get health insurance and for the creation of a public insurance program to cover people who don’t get private insurance.

But more importantly, Daschle has provided a virtual road map for the kind of campaign the Obama White House and its allies will probably pursue in their effort to avoid the pitfalls that doomed Clinton’s effort.

“Most of the compelling lessons from 1993 and 1994 are political lessons,” said John McDonough, a senior health advisor to Sen. Edward M. Kennedy (D-Mass.) who helped develop Massachusetts’ groundbreaking overhaul and is drafting healthcare legislation that Kennedy plans to introduce next year.

Obama absorbed one of those lessons during the presidential campaign, carefully emphasizing that any reform effort would allow voters to keep their health coverage if they were satisfied with it.

Many in Washington, including Daschle, think Clinton made a crucial error by allowing his opponents to portray his plan as a threat to the healthcare Americans had.

The insurance industry famously exploited that perception with its “Harry and Louise” ads, featuring a couple fretting that the federal government would take away their ability to choose coverage.
Since election day, Daschle has been working hard to avoid another misstep he and others think helped sink Clinton.

In 1993, the White House wrote a massive healthcare bill after then-First Lady Hillary Rodham Clinton led a months-long task force that was widely perceived as shutting out key players in the debate, including congressional leaders.

“Relying so heavily on the task force certainly contributed to the eventual defeat of the president’s plan,” Daschle wrote in his book, noting that the process “only bred resentment among the people who weren’t invited to participate, and produced a ‘compromise’ without the input of key stakeholders.”

Today, Daschle talks frequently with interest groups and senior lawmakers, who in turn have taken pains to reciprocate with supportive comments about the new administration’s early moves. “There clearly is an openness to listen,” American Medical Assn. President Nancy Nielsen said Friday. “Fifteen years ago, physicians felt excluded.”

On Capitol Hill, Kennedy and Senate Finance Committee Chairman Max Baucus (D-Mont.) have received the new administration’s explicit blessing to develop healthcare legislation.

And Baucus, who had a rocky relationship with Daschle when the two were in the Senate together, recently praised the South Dakota Democrat for recognizing the need for congressional involvement. For his part, Obama has signaled his intent to tackle healthcare reform soon after he takes office — another difference from 1993, when Clinton waited nearly a year before his healthcare legislation was introduced in Congress.

By then, the administration had expended significant political capital balancing the federal budget and trying to pass the controversial North American Free Trade Agreement, a move that alienated many Democrats and liberal interest groups.

On Thursday, Obama said he wanted swift action. “It’s hard to overstate the urgency of this work,” he said. Taking another page from Daschle’s political playbook, the president-elect carefully framed a healthcare overhaul as an economic necessity and a moral imperative.

“Day after day,” he said, “we witness the disgrace of parents unable to take a sick child to the doctor, seniors unable to afford their medicines, people who wind up in emergency rooms because they have nowhere else to turn.”

Original excerpt from Los Angeles Times

Tags: healthcare reform, Obama healthcare, Tom Daschle, universal health care