August 2009 Archives

The nation has lost a true hero this week. I didn't think I had any heroes until I heard the news last year that Senator Kennedy had brain cancer. I cried and cried. Why? Because he was a rich white guy who could have taken his marbles and gone home a long time ago. But he didn't. He tried to make our country a more decent and humane place to live in until his dying days, and often succeeded when no one else could.

For as long as I have been working on poverty and health issues in Washington, he has been at the center of every effort I have been involved in. He has appeared at countless events to "inspire the troops"- sometimes with just twenty or thirty people in attendance. He never said no.

Perhaps because his family suffered so many tragedies, his voice always rang true when he spoke with compassion of those who are uninsured or poor. It was surprising given his own privilege. He never lost his passion despite the many obstacles and setbacks for the issues he cared about.

What strikes me as the saddest part is the loss of a man with an abiding belief in our democratic process. Kennedy was always viewed as the consummate liberal, and he never lost faith in his core beliefs. Ultimately though, he was a pragmatist, who wanted to make our legislative process work. He was able to reach across the aisle because he always spoke with respect about those he didn't agree with, a quality sadly lacking in our public discourse right now about health care reform. Let's hope that the spirit of Ted Kennedy infuses the debate about health care reform as we move forward this fall.

When my best friend from childhood graduated from college and started taking a series of actuarial exams en route to becoming an actuarial "fellow," I thought our professional lives would certainly never cross paths. (Actuarial exams are some of the toughest tests in the world according to Milton Friedman, the Noble prize-winning economist, who decided to pursue another career path after failing some of the actuarial exams.) Now, more than twenty years later, the term "actuarial values" is in vogue as Congress debates health insurance reform legislation and I wish I had paid closer attention to the career of my friend the actuary. 

So, let's start with the basics. The actuarial value of a health plan is the share of health care costs that a plan would cover if an average population were enrolled in it. For example, a plan with an actuarial value of 70%, would cover 70% of the health care expenses of an average population, and 30% would be picked up by individuals. If you are enrolled in a health plan with an actuarial value of 70%, it does not mean that you, personally, only will have to pay for 30% of your health care costs. If you happen to use lots of medical care, you could end up having to pick up a much higher share of your costs, and if you are lucky, you could end up paying for a much smaller share.

Here's my view on how actuarial value is being used in the health care debate and why it matters: It is a way to compare apples to apples when evaluating different health plans for large groups of people. My actuary friend cautions me that "actuarial values are based on averages and useful in estimating overall funding levels, however, they have less relevance for particular individuals evaluating a plan for their needs." In other words, it is more like comparing apple orchards to apple orchards.

In the health reform debate, actuarial value is being used as an objective way to put a value on how good the coverage is that will be offered through "Exchange" plans. For those of use who follow health coverage for children and families, it will be critical  to keep our eye on the minimum actuarial value established by various proposals because it will help determine whether the coverage offered as a result of reform is affordable and works for families. 

The current House bill states that health plans must have an actuarial value of at least 70%, which means the insurance covers an estimated 70% of health-care expenses for an average population. The higher the actuarial value, the more generous the benefit package and less onerous the cost-sharing while a lower actuarial value, would indicate a less generous benefit package and higher cost-sharing. It isn't clear yet where the Senate will set the minimum, but estimates range from 65% to 76%. These are both less generous than the typical employer-sponsored preferred-provider plan that the Congressional Research Service estimates to be about 80% to 84%. It is also less robust than the standard PPO plan offered to federal employees according to CRS. (It is important to note that traditional Medicaid for children has an actuarial value of 100% and close to half of states use the Medicaid benefit package in their CHIP programs as well.)

Why should we care about what appears to be such an obscure number? The actuarial value provides a quantitative way to make sure plans meet a minimum value. It takes into account elements of a health plan such as deductibles, coinsurance, copayments, out-of-pocket limits, and benefit limits. If policymakers lower the minimum actuarial value, we know families will either receive reduced benefits or face higher costs. 

As policymakers face pressure to reduce cost estimates for health reform, they very well may look to lowering that number, making plans skimpier and requiring more cost sharing from families. CCF will be keeping a close eye on minimum actuarial values and their impact on access and affordability to health coverage for children and families.

Health reform is capturing all the headlines these days. And much of the emphasis is on how to contain costs. Unfortunately, what Americans aren't hearing in the debate is a discussion about the proven ways to reduce costs while improving quality of care and health outcomes. The regrettable assumption is that containing costs means taking something away that I have or may need. This misconception is shaking the confidence of Americans who know that something has to be done to fix health care.

Instead of focusing on the politics, we should be promoting the models of health care delivery that are the "win-wins" we need for health care reform to work.

A few weeks ago, I blogged about the success of Medicaid and pointed to the Community Care of North Carolina, a primary care medical home model which has shown outstanding results in improving access while reducing costs.

There is plenty more proof out there that the medical home model works. Take for example a recent article in Pediatrics that reports on a study by the Center for Medical Home Improvement (CMHI) in my home state of New Hampshire. The study shows improved outcomes for children with special health care needs when care is coordinated through a pediatric medical home model.

Parents who were surveyed in the study reported fewer hospitalizations, fewer absent schools days, less worry about their child's health, and increased likelihood of having a written health care plan. Jeanne McAllister, Director of CMHI, points out that while a low percentage of children have complex needs that require extensive coordination among multiple agencies and providers, these children do account for about half of national expenses on pediatric healthcare.

The concept of "medical home" is a community-based primary care setting that provides and coordinates high quality, planned, family-centered health promotion, acute illness care and chronic condition management. Without a medical home as a centralized point of coordination, care can become fragmented, duplicative and overly specialized, particularly for those with chronic health conditions.

Instead of instilling fear in Americans that health reform will reduce their access to care, we need to highlight these very effective models that provide a much higher level of satisfaction with care, better health and enhanced quality of life. And, oh, by the way, they also save money. Money we can use to provide health coverage to everyone.

Julia Kaye, Health Policy Associate, National Women's Law Center

There is a common misconception that all low-income people--or, at least, all poor parents--are eligible for Medicaid.  It may derive from a mistaken comparison with Medicare; an assumption that just as Medicare covers all people above a certain age, Medicaid must cover all people below a certain income level.  In fact, only certain, limited categories of low-income people--children and pregnant women are two examples--are currently eligible for Medicaid, and the income threshold for each of these eligible populations varies by state. 

While most states do not provide Medicaid coverage to childless adults at all--even those without any income--parents with dependent children are categorically eligible for Medicaid.  In other words, states must cover some parents.  However, because states are given great flexibility in setting the income eligibility threshold for parents, even very low-income parents often do not qualify for coverage.  In Arkansas, a parent is only eligible for Medicaid if her income is below 17% of the federal poverty level (FPL)--$3,112 a year for a family of three.  In Alabama, Idaho, Indiana, Louisiana, Missouri, and Texas, a parent of two making more than $5,310/year is ineligible for Medicaid.  It's no wonder that, as Martha Heberlein previously noted, 41% of parents with incomes below 150% FPL are uninsured. 

It is important to note that when we talk about "parents" and Medicaid, we're mostly talking about women.  Over 20 million women are covered under Medicaid, comprising the majority (69%) of the program's adult beneficiaries. Women are more likely than men to qualify for Medicaid because they tend to be poorer and are more likely to meet the program's stringent eligibility criteria. Women are also more likely to hold low-wage or part-time jobs that do not offer employer-sponsored health benefits, so Medicaid may be their only possible source of coverage.
 
Health reform must provide coverage to the low-income mothers who are falling through the gaps. 

New research conducted by the National Women's Law Center begins to quantify health reform's potential impact on low-income women with children--and the findings are dramatic.  If Medicaid is expanded to all people with incomes at or below 133% of the federal poverty level (FPL), nearly 4.5 million uninsured women would be newly eligible for coverage--including over 1.6 million uninsured mothers.

Health reform would bring financial relief to moderate-income families as well.  If premium subsidies are made available to people with incomes between 133% and 400% FPL, approximately 5 million uninsured women with children stand to benefit (including 4 million uninsured mothers and 1 million mothers currently purchasing health coverage in the individual health insurance market).

The list goes on.  Health reform that sets essential benefit standards will help ensure that all women have access to the basic health care services that many plans currently exclude, such as maternity care.  Currently, it is very difficult--and sometimes impossible--for women to find coverage for maternity care in the individual health insurance market.  In fact, a National Women's Law Center study found that the majority (59%) of individual health plans did not cover maternity care at all.  Health reform recognizes that women don't just need health insurance in name; they need meaningful coverage. 

Health care reform also holds the promise of long-overdue insurance market reforms, many of which are critical for parents.  Today, insurers in every state can exclude coverage for certain "pre-existing" conditions.  If a woman has previously had a Cesarean section, for instance, insurers may refuse to pay for future C-sections or reject her application altogether.  Given that nearly one in three births were by C-section in 2006, hundreds of thousands of women could face coverage exclusions or rejections because of this discriminatory practice.  Health care reform will prohibit this unconscionable practice.

Reform that makes health care more accessible and affordable for women, important on its own merits, will also improve health care access for their children.  Women make approximately 80% of health care decisions for their families.  As Martha pointed out, children's health and well-being can be significantly affected by their parents' health and financial stability, and research has shown that providing coverage to parents promotes coverage and access to care for their children as well.  Furthermore, it is self-evident why comprehensive maternity coverage (and a prohibition of pre-existing conditions exclusions) is important for children's health.

Our health care system is failing women and their families.  Fortunately, we're closer to achieving significant reform than ever before.  At this critical hour, it is all the more important that we advocate for health care reform that meets women's needs--it is their health, and the health of their families, that hangs in the balance.

The views expressed by guest bloggers do not necessarily reflect the views of the Center for Children and Families.

Last week, I attended a briefing at the Kaiser Family Foundation that sought to highlight the impact of the current economic crisis on the ongoing struggle to find affordable health coverage.  There was hardly a dry eye in the room after the Foundation screened this video, profiling people in three communities hard hit by the recession: St. Petersburg, Florida, Beloit, Wisconsin, and Long Island, New York.

I cried an extra tear because these heart-wrenching stories are being overlooked in the absurd din over completely fabricated claims about things like 'death panels' of government bureaucrats allegedly coming to Granny's house to decide if she is going to live or die. (Fact check: The House bill includes a provision to provide Medicare reimbursement for advance care planning so that patients have the option of consulting with their physicians about their wishes for end-of-life care.)
 

It is becoming increasingly clear that Congress may well dismantle the popular Children's Health Insurance Program (CHIP) as part of broader health reform. Children and their families have much to gain in health reform, as my colleagues and I have written about elsewhere, but this is a change worthy of its own discussion. It is a big deal. CHIP is widely viewed, and rightfully so, as one of the most resoundingly successful health reform initiatives adopted in recent years. Along with its larger companion program, Medicaid, CHIP has helped to drive down the uninsured rate among low-income children by a third over the past decade.  Right now, 14.1 million children are expected to be on the program in 2013, the year when key elements of health reform would go into effect.
 
It is fair to say that not everyone is happy about this.  Senator Rockefeller (D-WV) expressed displeasure over the prospect in a New York Times article a few weeks ago, and, just yesterday turned the heat up even further on the issue, calling it a "crime" and "sneaky" according to Roll Call's CongressNow.

Here is how it would happen (and, note, it would be a very different outcome in the House than in the Senate).

House.  The House's Tri-Committee bill would allow CHIP to expire on September 30, 2013 (its next reauthorization date) and, instead, move these children into alternative coverage, mostly new "Exchange" plans. Right before it left town for recess, the House added a provision to its bill at the behest of Representative Diana DeGette (D-CO) saying that these children will be moved out of CHIP and into the Exchange only if it is clear that they'll secure coverage that is as good in terms of benefits and cost-sharing protections.

Senate.  The Senate HELP committee has no jurisdiction over CHIP and so barely mentions it.  The Senate Finance Committee hasn't coughed up much concrete information yet, but an options paper released earlier this year suggests that it is considering eliminating CHIP's role as the primary source of coverage for millions of low-income children. Under its proposal, states might still be able to use CHIP to supplement the coverage that kids get through Exchange plans, but CHIP as we've known it would effectively disappear.   I haven't seen the paper, but Senator Rockefeller's strong reaction suggests that they, indeed, are heading in this direction.  (Based on the options it has publicly issued, the Finance committee proposal might allow states to drop Medicaid coverage for people, including lots of kids, with income slightly above the federal poverty level, but that is a matter for another day.)

Now, I realize this isn't a time for nuanced debate about health care reform issues - I've watched the YouTube videos of town hall meetings. Even so, I'm going to give it a shot with respect to this issue.

It is surprising to me that Congress is looking at allowing CHIP to expire, especially with so little public discussion and dialogue.  From a policy and political perspective, there are enormous risks to dismantling a successful program that delivers affordable, high-quality care to millions of low-income children.  It was just six months ago that President Obama signed the renewal of the program into law with much celebration and joy.  It took $35 billion and an election of a new President to get the bill passed (President Bush vetoed it twice); it would be a shame to allow all that effort go to waste unless we're sure that children and their families will be at least as well served under reform.  Most importantly, CHIP has provided a lifeline to millions of families since its inception in 1997, including some who joined President Obama at the White House for the signing ceremony.

On the other hand, if health care reform is done right and works as intended, families will be much better off and CHIP no longer will be needed.  For this to happen, health reform will need to incorporate the key elements of CHIP and its larger companion program, Medicaid, that have made them a resoundingly successful tool for covering many of our country's low-income children:  

These include:

• A strong benefit package that is designed to address the unique developmental health care needs of low-income children;

• Robust affordability protections for families, especially low and moderate-income families, and
  

• Simple, family-friendly ways for people to sign up for and keep coverage - no endless paperwork and bureaucracy.  
  

If a health reform system includes these elements, and also extends affordable coverage options to parents, it will be a major step forward for all children and their families.  As my colleague, Martha Heberlein has written at Say Ahhh!, "A large body of research indicates that "providing coverage to parents promotes coverage and access to care for their children as well."  The gains would be greatest among families where parents currently lack insurance, but also in those states that are prone to cutting back their funding for CHIP during difficult economic times.  While most states are remarkably consistent in maintaining their commitment to children's health care, California just recently reminded us that a select handful of political leaders will slash it when they aren't up for tackling harder options.

Are we likely to see these critical elements in health reform?  The House Tri-Committee Bill is a strong bill, and it specifically assures that children won't moved out of CHIP until we're sure they'll get comparable coverage. On the other hand, the rumors out of the Senate Finance Committee are a different matter, raising serious concerns about whether the benefits and cost-sharing protections available to low-income families will be adequate.

At the end of the day, I'm not attached to any one solution or program as the right way to get kids health care coverage.  The success of CHIP arises because it has offered good benefits and affordable coverage to millions of families. It is these two elements - decent benefit and affordable coverage - that matter at the end of the day.

This entry was originally posted on The User's Guide to the Health Reform Galaxy.

Friday evening the Energy and Commerce Committee approved H.R. 3200, America's Affordable Health Choices Act. The bill included the amendments and changes I described in my Friday post, including those designed to secure the votes of some of the "Blue Dog" Democrats on the committee without alienating progressive members.

The House will now merge this bill with the versions passed by the other House Committees, and it will be brought to the floor for a vote in September.  Here are some highlights on where we are in the House bill in regard to children and families:

• The Medicaid expansion up to 133% FPL is still in place but the Committee scaled back the federal government's financing of the cost of covering newly-eligible beneficiaries. States will receive 100% federal funding for the first two years (2013-2014), but this will decrease to 90% beginning in 2015, leaving states to pick up 10% of the cost of covering these people. States that have expanded Medicaid above 133% FPL must still maintain that coverage at the regular federal matching rate.
  

• Maintains the creation of a national Exchange with a public plan option. In deference to Blue Dog concerns, reimbursement rates under the public plan will be negotiated with providers instead of tying them to Medicare. Other Blue Dog changes include allowing nonprofit member-driven cooperatives to offer coverage through the Exchange and exempting more small businesses from the employer mandate.

• Continues to provide subsidies to people up to 400% FPL. The new bill modestly trims the subsidies available to help people purchase coverage (e.g., families at 400% FPL would contribute up to 12% or their income, rather than 11%) and links the share of income caps to premium growth over time. Under the agreement made with the Committee's progressive members, the subsidies may be readjusted in later years if savings are realized from a series of reforms, including allowing Medicare to negotiate drug prices and establishing Accountability Care Organization pilot programs in Medicaid. In addition, the Exchange must approve any substantial premium increases by insurers.
  

• Continues to require coverage of pediatric services in Exchange and employer plans, including oral, mental health, and equipment for children. An amendment approved in the Education and Labor Committee also requires coverage of EPSDT; it is unclear what will happen to this amendment given that it was not included in the Energy and Commerce version. 

• Still allows CHIP to expire in 2013. An amendment by Rep. DeGette (D-CO) passed in Committee now precludes the movement of children from CHIP to Exchange plans if the coverage provided by plans participating in Exchange is not comparable to that provided by the average CHIP plan.

• Maintains phase-in of higher Medicaid reimbursement rates for primary care services (states will be required to increase to 100% of Medicare rates by 2012). The new costs associated with the rate increases will initially be borne by the federal government, but under a change in the Committee, in 2015 the federal funding for the increases will decrease to 90%.
  

Need a scorecard? To help you keep track on what is in the bills we have developed a side-by-side of the key provisions affecting children and families in the House Tri-Committee and Senate HELP Committee proposals. We will update the chart as things progress.