Tag Archives: insurance reform

Understanding the administrative side of implementation

Coverage of health care reform implementation has generally focused on the issues and effects of the roll-out, rather than the arcane governmental mechanisms involved. It makes sense, of course, as “here’s how you can now get coverage despite your pre-existing condition” is significantly more relevant to most readers than “23 states miss federal 90-day deadline for creation of high-risk pools, partly because already established pools don’t always conform to reform requirements, and partly because it’s too much hassle and they’d rather let the feds do it for them.”

Service-oriented as it may be, this focus has led to a few gaps in my understanding of the administrative moving parts involved in implementation. Which is why the Robert Wood Johnson Foundation’s guide to state and federal roles in the implementation of health care reform is such a handy document. It’s worth a quick scan, if only to give all those implementation stories a little context. It’s got everything from “how informal rulemaking becomes law” (hint: it involves both “notice” and “comment”), to the aforementioned business about why some states ceded control of their high-risk pools to the federal government. And it’s only four pages long.

New rules affect patients’ insurance appeals

Kaiser Health News’ Phil Galewitz and Michelle Andrews have an update on health care reform implementation, pointing out that new rules will give consumers the right to appeal insurance denials, first directly to the insurer and then to review boards. The rule doesn’t break new ground in most states – only five lack such regulations, and existing plans are “grandfathered in” under the old rules – but it may bring order to a chaotic national patchwork on insurance appeals. The White House estimates that, by next year, the rules will benefit about 41 million Americans insured either through employers or through individual plans. The administration is pushing states to implement the new standards by next July.

The new regulations take effect for plan years starting Sept. 23. But they won’t automatically apply to residents in states that have existing external review laws until next July. That’s to give states time to adjust to the new standards.

If states fail to change their rules by next July, their residents will then be able to rely on the federal standards. But federal officials are still working out the details of how that would be done.

Read the HHS press release here.

AHCJ resources

  • Reporting on health reform between now and 2014: Some top Washington, D.C.-based journalists discussed implementation deadlines, how to tie local issues to reform, Medicare reimbursement rates, what reporters should look for in their states and more. A recording and transcript of this briefing and a resource list are available.
  • Covering high-risk insurance pools: The federal government and states are scrambling to create temporary high-risk pools for the medically uninsurable, as one of the first provisions of the Patient Protection and Affordable Care Act to go into effect. Apart from being a policy story, it’s of great interest to all your readers, viewers or listeners who have pre-existing conditions and are struggling to find coverage. Four reporters covering the topic have shared their story tips, suggestions and resources for AHCJ members.
  • Health care reform has passed: What’s next? Four journalists on the front lines offer their advice and suggestions on what needs to be covered next, how it might affect local communities and how to approach this complex topic.

Why insurers care about the medical-loss ratio

The Wall Street Journal‘s Avery Johnson explains the significance of the “medical-loss ratio,” a single metric within the reform bill that holds great significance for the insurance industry.

The ratio, known to wonks as the MLR, signifies the percentage of premiums insurers use for medical costs versus the amount that goes to paying administrative overhead. For individual and small-business plans, it’s set at 85 percent medical to 15 percent administrative. For larger businesses, the magic medical number is 80. Those who don’t meet the threshold would be forced to pay rebates to customers.medical-loss-ratio

At present, the key issue seems to be subsidiaries. Major insurers have hundreds of them each, and while the insurer could meet the requirements if all subsidiaries were averaged together, they won’t be able to hit the numbers at every single subsidiary. Current draft documents, Johnson reports, seem to imply that each subsidiary would be judged separately, a practice which insurers say might force them to stop providing insurance in certain high-risk areas.

Applying uniform numbers to the segmented, fragmented insurance industry could prove tricky. Johnson looked at the numbers.

UnitedHealth, for instance, has about 392 subsidiaries, according to Goldman Sachs health-care analyst Matthew Borsch. Its average MLR for individual policies is 69%, dragged down by a 63% ratio at its dominant Golden Rule subsidiary, according to a report by Goldman Sachs that examined state insurance filings. The Minnetonka, Minn., insurer could owe about $280 million in rebates in 2012, Mr. Borsch estimates, based on his reading of the methodology in the health care law.

The rules will be set by the National Association of Insurance Commissioners, a coalition of state insurance regulators. They’re hoping to have recommendations ready for HHS by the end of this month.

Decoding Obama’s message; highlighting coverage

AHCJ president Trudy Lieberman writes at CJR.org that, in his speech last week, President Barack Obama didn’t put anything new on the table, he just arranged the existing place settings to make them look more palatable to three key groups of constituents: the insured, the uninsured and those on Medicare.

In other words, the public option, should it exist, will be very limited, there will be an individual coverage mandate and Medicare won’t be footing any of the reform bill. Lieberman ends her column with the polite request that the media not allow itself to be sidetracked by South Carolina congressman Joe Wilson’s “You lie!” outburst and instead focus on how the president’s proposals would affect their readers.

In a related piece, Lieberman took the time to praise two outlets which managed to squeeze past all the political posturing and report on the real issues surrounding health care reform. The Kansas City Star‘s Diane Stafford looked for answers to hard questions about the enforcement of an individual insurance mandate, while Kaiser News Service’s Jordan Rau explained just how expensive the individually mandated coverage could be.

As part of her ongoing Who will be at the Table series, Lieberman points out that Gun Owners of America, the NRA’s smaller rival, is opposing current reform proposals because they’re afraid gun-related medical information would end up in a national health database, and because they’re wary of an individual insurance mandate.

In another report, Lieberman posted the results of her interviews with another group, small business owners and employees in a Midwest college town, who sounded unsure about whether they were even at the table or not.

Doctor’s offices consumed by insurance hassles

Tamara Keith of the public radio program “Marketplace” went into a doctor’s office to find out where the money’s being spent at the point where the rubber meets the road.

Keith found a whole lot of wrangling with insurance companies, wrangling that consumed the time of assistants, physicians and patients alike. The practice Keith looked at was far from unique, she reports: “A recent Cornell study found nationwide it costs doctors $31 billion a year to deal with insurance companies. That’s about 7 percent of all spending on physician and clinical services.”

The story is the first of an occasional series called “The Cure: Remaking Health Care in America.”