Managed Healthcare Executive - January 2009 - (Page 17)

Newly insured under Obama’s proposal Coverage Medicaid/SCHIP Non-group subsidized Non-group non-subsidized Employer-sponsored Reform Expand to 300% poverty level Credits for low-income individuals Mandate to insure all children Mandate on large and medium-size employers Millions 5.0 8.1 5.7 11.6 Percent 16% 27% 19% 38% Total 30.4 Source: PricewaterhouseCoopers’ Health Research Institute, based on estimates of Massachusetts’ reforms and coverage changes coordinate care across the workplace, home and company boundaries.” INDEPENDENT PANELS While there is loud applause for health reform in principle, there also is considerable trepidation about how how policy makers will de ne “a ordable,” and what constitutes “basic” bene ts and “adequate” coverage. Similarly, the impact of an individual coverage mandate will be shaped by enforcement policies. Reformers propose to leave some of these tricky issues to independent, expert panels. AHIP suggests that a federal board would de ne the components of a minimum bene ts package and its relationship to state coverage mandates. An expert group also could recommend ways to cut healthcare costs. Insurers recommend setting targets for reducing the projected growth in health expenditures by 30%—from a 6.6% annual increase to a 4.7% rise. That would save more than $500 billion annually and make coverage more a ordable. Senator Baucus proposes establishing an independent health coverage council with considerable author- ity to protect consumers. It would set coverage requirements, annual outof-pocket spending limits, standards for chronic care and quality reporting requirements. This council also would oversee the public plan option available to individuals and small companies through a health insurance exchange. Baucus says that his private plan would be similar to Medicare, which raises questions about how it would compete in the commercial market. If the public option is able to reimburse providers at Medicare rates—which can be much lower than payments negotiated by private plans—the government plan then would be able to o er lower premiums and gain a competitive advantage. Analysis by the Lewin Group shows that if the public plan enjoys even moderately lower rates, it could o er premiums about 25% below those offered by private insurers. That change could prompt some 32 million people to join the public plan, while commercial insurers could lose almost 22 million enrollees. If the public plan pays providers at current Medicare rates, premiums would be 40% below those at commercial plans, and 43 million individuals would sign up. Democrats believe that a public plan will prompt private insurers to hold down costs and improve quality. Republicans fear such a move will create an uneven playing eld and will only compound the ine ciencies of existing government health programs. Over time, says Mark Hayes, Republican sta er on the Senate Finance Committee, such migration to the public plan would erode the private insurance market. Reform advocates recognize that the public plan option already is creating a sharp rift in health policy circles, and they are looking for ways to provide low-cost coverage alternatives in an equitable manner. Insurers will be watching closely to see if these proposals prompt a shift to a governmentrun, single-payer system that pushes commercial plans out of the market. SummaCare’s Hauser believes the government is not in a position to run the nation’s healthcare delivery system. “Long term, the role of government is a purchaser and regulator,” says Hauser. “It does not perform as well as a provider or a payer.” MHE JANUARY 2009 17

Table of Contents Feed for the Digital Edition of Managed Healthcare Executive - January 2009

Managed Healthcare Executive - January 2009 Contents Editorial Advisors For Your Benefit News Analysis Politics & Policy Letter of the Law Managed Care Outlook New Day 5 New Realities of Disease Management Pharmacy Best Practices Health Management Technology State Report: Hawaii MHE Resource Ad/Edit Index

Managed Healthcare Executive - January 2009

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