Managed Healthcare Executive - December 2008 - (Page 9)

{ POLITICS AND POLICY } Healthcare reform campaign faces big hurdles To expand health coverage during this economic crisis, Obama will rst seek out ways to cut costs BY JILL WECHSLER Jill Wechsler, a veteran reporter, has been covering Capitol Hill since 1994. resident-elect Barack Obama stated loudly and clearly during the election campaign that all Americans have a right to a ordable healthcare. Now he faces signi cant challenges in boosting coverage for the uninsured. His basic strategy is to expand federal and local government programs and to require employers to “play or pay” to support insurance for workers. Obama stopped short of backing a mandate for universal coverage as advocated by many Democrats, but his proposals raise the prospect of increased government involvement in the nation’s healthcare system. That said, the need to address rising unemployment and slow economic growth may force Obama to seek more limited health policy changes in the short term. The soaring federal budget de cit also will intensify the hunt for ways to cut healthcare spending, an exercise likely to squeeze insurance operations. CHILDREN FIRST P will be more di cult. Obama has proposed to mandate that large and medium employers support “meaningful” insurance for workers or pay into a fund. Those without work-based coverage and small employers would gain subsidies and access to private insurance options or a government-sponsored National Health Plan through a National Insurance Exchange. To o er plans through the Exchange, insurers will have to provide comprehensive bene ts and meet standards for quality and e ciency. Plans also will have to issue coverage to all applicants and to set premiums without regard to health status, a policy predicted to raise the cost of insurance for young and healthy individuals. CUTTING COSTS An early initiative will be to expand the State Children’s Health Insurance Program (SCHIP) along with federal support for state Medicaid programs. President Bush twice vetoed legislative proposals to make SCHIP more generous, prompting Congressional leaders to hold o on further action. Now SCHIP has to be reauthorized by April, putting it at the top of the political agenda. Expanding SCHIP and Medicaid would be a rst step in ful lling Obama’s promise to provide healthcare for every child. Moving some 25 million people o the uninsured rolls Achieving these changes will be challenging— and expensive. The Obama reform proposal was pegged to cost between $1.2 trillion and $1.6 trillion over 10 years (2010 to 2019). Paying the bill without adding to a soaring federal budget de cit will require serious cost-cutting. Like his opponents, Obama has a list of savings options. Expanding health information technology would net $60 billion over 10 years. There are potential savings from expanded DM programs, coordinated care models and P4P initiatives. And the presidentelect has jumped on the comparative e ectiveness bandwagon, predicting that research on the relative e ectiveness of alternate treatments would cut costs by reducing unnecessary care. Because these strategies yield little in the way of near-term savings, a more popular tactic will be to cut government outlays to insurers and drug makers. Democrats want to eliminate “excess” payments to Medicare Advantage plans, a change Obama says would save $135 billion. And the reformers propose to revoke the Medicare “non-interference clause.” Direct negotiation of payments for drugs covered by Medicare plans is predicted to save about $20 billion, but it also could raise plan costs and limit insurer exibility in o ering drug plans with di erences in formulary coverage, copayments and premiums. MHE DECEMBER 2008 9

Table of Contents Feed for the Digital Edition of Managed Healthcare Executive - December 2008

Managed Healthcare Executive - December 2008 For Your Benefit Editorial Advisors Contents News Analysis Politics & Policy Letter of the Law Puerto Rico’s PLAN State Report Bundled Payment Technology Drug Class Overview Managed Care Outlook Desktop Resource Ad/Edit Index

Managed Healthcare Executive - December 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.