/PRNewswire-USNewswire/ -- Consumer Watchdog called on President Obama and Congress in a letter sent today to fix ten problem areas in the new federal health reform law that, if not addressed, will be exploited by health insurers and drug companies looking to charge more for less health care.
Download the letter here: http://www.consumerwatchdog.org/resources/HealthReformLoopholes.pdf
In the letter sent today, Consumer Watchdog wrote:
"The enactment of broad health reform into law is, as you know, only the start of providing health coverage to all Americans at a fair price. Not only must the White House and Congress close loopholes in the newly enacted law, but the White House must also strongly repel efforts already under way by insurers and other corporate interests to undermine Department of Health and Human Services regulations while they are being written. . . .
"Key questions left unanswered in the legislation--including the scope of health benefits that insurers must provide under the new law--will be addressed over the next months and years by federal regulators. Congress must stand ready to continuously clarify and strengthen the law against efforts to nullify its broad and progressive intent. . . .
"Consumers will brook no excuses for failure by the White House or Congress to strongly defend newly won consumer protections, fill dangerous loopholes in the new law, and ward off an onslaught of well-funded lobbyists."
The ten loopholes and problem areas are (see letter at link above for more details):
* Lack of Insurer Rate Regulation. The federal law fails to adequately limit what insurers can charge American families and business owners for coverage, even though tens of millions of Americans are required to purchase private health insurance policies. Without the strongest possible review and prior approval of health insurance rates insurers will be able to raise rates nearly without limit and use rate-setting as a vehicle for continuing to cherry-pick the healthiest customers.
* Weakening of benefits. Pre-emption of stronger state benefit requirements by so-called Nationwide and Multi-state plans will threaten the survivability of the state Exchanges and eliminate key health and consumer protections in many states. This is a "race to the bottom" provision that may allow insurers to sell highly profitable bare-bones policies under the guise of cutting costs. Consumers who fall seriously ill would suffer the consequences.
* States Rights to Innovate. Under the current law, states must wait until 2017 for waivers from the federal government to use federal Medicaid, Medicare, tax subsidies and other funds to support state alternatives to the private insurance market, whether that be by adopting a state single-payer model or a state "public option." If the federal government will require all Americans to purchase private insurance by 2014 or face tax fines, then by 2014 the federal government must also give states the right to use their share of federal funds to support alternate, state-based health reform.
* Medicare Advantage pushback. Private, for-profit Medicare Advantage systems will spend hundreds of millions of dollars on glossy marketing to attract a higher percentage of healthier seniors into such plans. The result could be a lobbying coup that prevents cuts in Medicare Advantage overpayments, cripples efforts to stabilize Medicare costs and may even push traditional Medicare into an economic death spiral.
* Pharmaceutical price spiral. Pharmaceutical companies' large and unwarranted recent price increases on heavily used drugs have already eliminated any cost savings from an industry promise to "reduce" Medicare drug prices by $8 billion a year. Further Congressional action is needed to allow direct bargaining for drugs by Medicare, which is the only way to steadily curb drug prices.
* Continued rescission. The federal law allows insurers to define the terms of future coverage rescissions when customers fall seriously ill in the fine print of their policies. The law limits rescission of health policies to instances of fraud or "intentional misrepresentation," however no new regulatory oversight of rescission is provided to ensure that omissions or errors are indeed fraudulent or intentional, rather than innocent mistakes.
* No legal accountability for insurers that deny care. Patients who have health coverage paid for in part or full by employers cannot hold insurers legally accountable for denying medically necessary treatments.
* Definition of medical expenses. Consumer Watchdog has called on the Obama Administration and the Department of Health and Human Services ("HHS") to probe insurance giant WellPoint Inc. in light of a message to its investors describing how WellPoint would simply re-label administrative costs as "medical care" in response to the new health reform law. HHS must narrowly define what constitutes medical care to block gaming of the new medical loss ratio requirement by health insurers.
* Inadequate Federal Fallback. Consumer Watchdog advocates for frontline state enforcement with strong federal fallback if states fail to act. States are the local cops on the beat and can respond faster to local threats and with greater knowledge of the local market. But there should be pathways for federal regulators to become fully aware of the failure of state fraud enforcement through public intervenor groups and reporting requirements that tip federal regulators to local inaction.
* Sick kids. The ink was hardly dry on the health reform law when the insurance industry started saying that no matter what Congress thought it passed and no matter what President Obama said, they did not have provide coverage to sick children right away. The main private insurer lobbying group, Americans Health Insurance Plans, has since said it will not fight the new coverage of previously excluded children and conditions, but the provision must also be clearly stated in regulations implementing the law.
Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at: http://www.consumerwatchdog.org/
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Showing posts with label fix. Show all posts
Showing posts with label fix. Show all posts
Thursday, April 8, 2010
Tuesday, December 15, 2009
The 'Big 3' Fixes for the Weakened Senate Health Reform Bill to Block Full Insurance Co. Take-Over of Health System
/PRNewswire/ -- Consumer Watchdog condemned the removal of the Medicare buy-in provision for those over 55 and the public option from the U.S. Senate health reform bill. But the group said that the Senate must still make three essential fixes to the greatly weakened bill to prevent ceding the entire health care system to the insurance industry.
Without the changes, said the consumer advocacy group, the legislation will fail even to provide basic consumer protections of cost containment, access to necessary care, and protection against bankruptcy when patients get sick and need coverage the most.
Consumer Watchdog said that it is essential that the bill be fixed now because there is a growing belief that a conference committee will be bypassed altogether, and instead the House of Representatives will be pushed to approve the Senate bill with no amendments. The three key fixes, detailed below, are:
1. Remove Provisions that Would Pre-empt More Protective State Laws
2. Bar Insurers From Placing Annual Limits on Medical Payments
3. Make Health Insurance Rate Regulation Real
"If health care reform is really about consumers and patients, then Senators must make these fixes before they pass the bill," said Jerry Flanagan, health policy director of Consumer Watchdog. "Current provisions of the Senate bill requiring Americans to buy insurance policies, while gutting state laws and ineffectively capping what insurers can charge for bare bones coverage, add up to a dream bill for insurance companies."
"Eliminating the public option, pre-empting state health benefit laws and avoiding tough rate oversight is an insurance company hat trick - the top three legislative goals of the insurance industry of the last twenty years," said Flanagan. "If health reform is going to be worth anything to consumers, Senators must fight back on these three points. Without them, health reform is little more than a scheme for health insurers to increase profits at the expense of patients and taxpayers."
The three changes that the U.S. Senate must make to HR 3590 are:
1. Remove Provisions that Would Pre-empt More Protective State Laws
For 60 years, states have been responsible for the oversight of health insurance. States have traditionally been the laboratories of innovation in health care and insurance reform. States also have a greater ability to respond quickly to local needs.
However, provisions in the current bill could replace hard-fought "Patients Bill of Rights" laws with new, weaker federal protections.
For example, section 1333 on page 219 of the Senate bill allow health insurers to avoid strong state patient protection laws under so-called "nationwide plans" and multistate "compacts." Under these provisions, health insurers that sell policies in more than one state would only be regulated by the state where the policy was "written or issued." Therefore, if an insurer "issues" all of its policies from Wyoming, then the laws of Wyoming would control policies sold to consumers in states with more protective laws like California, New York, Texas or Virginia.
Insurers would certainly elect to issue their policies from the states with the weakest laws. As a result, new federal minimum coverage requirements would become the norm. Coverage of AIDS/HIV testing, reconstructive surgery, home health care services, and child delivery and mastectomy minimum hospital stays, for instance, would likely be lost.
The Senate health reform bill should be modeled on existing federal health care laws, which provide for a federal-state partnership rather than federal pre-emption of more protective state standards. Minimum federal standards should set a floor, not a ceiling, on state health care protections. Read Consumer Watchdog's analyses of the pre-emption provisions and the group's letter to Senate Majority Leader Harry Reid at:
http://www.consumerwatchdog.org/patients/articles/?storyId=31197
Read the Los Angeles Times coverage of the pre-emption provisions:
http://www.consumerwatchdog.org/patients/articles/?storyId=31200
2. Bar Insurers From Placing Annual Limits on Medical Payments
A cornerstone of national health reform is to ensure that patients get the care their doctor prescribes when they are sick and need treatment the most. An essential element to reach that objective is to bar insurance companies from placing annual limits on how much health care a patient can receive.
Current caps mean that patients with serious illnesses, including many cancers, can be left without coverage in the midst of treatment. As a result, patients face bankruptcy even though they have insurance. In fact, a Harvard Medical School study released this year found that 62% of U.S. bankruptcies were caused by big medical bills, while 78% of those declaring bankruptcy had insurance.
A loophole in the Senate bill would allow health insurers to impose unspecified "reasonable" annual limits on the annual dollar value of benefits that patient can receive this year. This is a major departure from previous version of the Senate bill, and the House legislation, which bar any annual caps.
The Senate bill cites section 223 of the Internal Revenue Code, which regulates Health Savings Accounts. That section does not define "reasonable" annual limits. As a result, health insurers will be left to define "reasonable" as they see fit. However, for an insurance company, a "reasonable" limit on annual health care costs is one that increases shareholder profits by cutting off access to necessary care.
3. Make Health Insurance Rate Regulation Real
Requiring insurance companies to justify rate increases and seek "prior approval" for those increases are essential components to controlling skyrocketing health insurance premiums, deductibles, and other out-of-pocket costs.
Page 37, section 2794 of HR 3590 provides some additional transparency on insurance premiums and takes some first steps toward limits on insurance company gouging, but does not provide real protections for Americans by, for instance, requiring insurers to seek approval before imposing premium and rate increases.
Consumer Watchdog, which pioneered the most successful insurance premium regulation law in the nation, Proposition 103, calls on the Senate to adopt amendments reflecting key provisions of California's landmark insurance reform law, including:
-- Mandatory justification of any rate increase (including premiums,
deductibles, co-pays), not merely justifications of "unreasonable"
premium increases.
-- Mandatory prior approval, which means requiring insurers to seek
permission from government regulators, in addition to justifying rate
increases, before imposing rate increases. Since 1988, California's
Proposition 103 has saved drivers $62 billion while fostering a
competitive and profitable insurance market.
-- An intervenor system that provides consumers a forum to challenge
unnecessary or excessive rate increases. Since 2003, Consumer Watchdog
has saved the state's consumers $1.7 billion by challenging
unnecessary premium increases using the public intervention process.
-----
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Without the changes, said the consumer advocacy group, the legislation will fail even to provide basic consumer protections of cost containment, access to necessary care, and protection against bankruptcy when patients get sick and need coverage the most.
Consumer Watchdog said that it is essential that the bill be fixed now because there is a growing belief that a conference committee will be bypassed altogether, and instead the House of Representatives will be pushed to approve the Senate bill with no amendments. The three key fixes, detailed below, are:
1. Remove Provisions that Would Pre-empt More Protective State Laws
2. Bar Insurers From Placing Annual Limits on Medical Payments
3. Make Health Insurance Rate Regulation Real
"If health care reform is really about consumers and patients, then Senators must make these fixes before they pass the bill," said Jerry Flanagan, health policy director of Consumer Watchdog. "Current provisions of the Senate bill requiring Americans to buy insurance policies, while gutting state laws and ineffectively capping what insurers can charge for bare bones coverage, add up to a dream bill for insurance companies."
"Eliminating the public option, pre-empting state health benefit laws and avoiding tough rate oversight is an insurance company hat trick - the top three legislative goals of the insurance industry of the last twenty years," said Flanagan. "If health reform is going to be worth anything to consumers, Senators must fight back on these three points. Without them, health reform is little more than a scheme for health insurers to increase profits at the expense of patients and taxpayers."
The three changes that the U.S. Senate must make to HR 3590 are:
1. Remove Provisions that Would Pre-empt More Protective State Laws
For 60 years, states have been responsible for the oversight of health insurance. States have traditionally been the laboratories of innovation in health care and insurance reform. States also have a greater ability to respond quickly to local needs.
However, provisions in the current bill could replace hard-fought "Patients Bill of Rights" laws with new, weaker federal protections.
For example, section 1333 on page 219 of the Senate bill allow health insurers to avoid strong state patient protection laws under so-called "nationwide plans" and multistate "compacts." Under these provisions, health insurers that sell policies in more than one state would only be regulated by the state where the policy was "written or issued." Therefore, if an insurer "issues" all of its policies from Wyoming, then the laws of Wyoming would control policies sold to consumers in states with more protective laws like California, New York, Texas or Virginia.
Insurers would certainly elect to issue their policies from the states with the weakest laws. As a result, new federal minimum coverage requirements would become the norm. Coverage of AIDS/HIV testing, reconstructive surgery, home health care services, and child delivery and mastectomy minimum hospital stays, for instance, would likely be lost.
The Senate health reform bill should be modeled on existing federal health care laws, which provide for a federal-state partnership rather than federal pre-emption of more protective state standards. Minimum federal standards should set a floor, not a ceiling, on state health care protections. Read Consumer Watchdog's analyses of the pre-emption provisions and the group's letter to Senate Majority Leader Harry Reid at:
http://www.consumerwatchdog.org/patients/articles/?storyId=31197
Read the Los Angeles Times coverage of the pre-emption provisions:
http://www.consumerwatchdog.org/patients/articles/?storyId=31200
2. Bar Insurers From Placing Annual Limits on Medical Payments
A cornerstone of national health reform is to ensure that patients get the care their doctor prescribes when they are sick and need treatment the most. An essential element to reach that objective is to bar insurance companies from placing annual limits on how much health care a patient can receive.
Current caps mean that patients with serious illnesses, including many cancers, can be left without coverage in the midst of treatment. As a result, patients face bankruptcy even though they have insurance. In fact, a Harvard Medical School study released this year found that 62% of U.S. bankruptcies were caused by big medical bills, while 78% of those declaring bankruptcy had insurance.
A loophole in the Senate bill would allow health insurers to impose unspecified "reasonable" annual limits on the annual dollar value of benefits that patient can receive this year. This is a major departure from previous version of the Senate bill, and the House legislation, which bar any annual caps.
The Senate bill cites section 223 of the Internal Revenue Code, which regulates Health Savings Accounts. That section does not define "reasonable" annual limits. As a result, health insurers will be left to define "reasonable" as they see fit. However, for an insurance company, a "reasonable" limit on annual health care costs is one that increases shareholder profits by cutting off access to necessary care.
3. Make Health Insurance Rate Regulation Real
Requiring insurance companies to justify rate increases and seek "prior approval" for those increases are essential components to controlling skyrocketing health insurance premiums, deductibles, and other out-of-pocket costs.
Page 37, section 2794 of HR 3590 provides some additional transparency on insurance premiums and takes some first steps toward limits on insurance company gouging, but does not provide real protections for Americans by, for instance, requiring insurers to seek approval before imposing premium and rate increases.
Consumer Watchdog, which pioneered the most successful insurance premium regulation law in the nation, Proposition 103, calls on the Senate to adopt amendments reflecting key provisions of California's landmark insurance reform law, including:
-- Mandatory justification of any rate increase (including premiums,
deductibles, co-pays), not merely justifications of "unreasonable"
premium increases.
-- Mandatory prior approval, which means requiring insurers to seek
permission from government regulators, in addition to justifying rate
increases, before imposing rate increases. Since 1988, California's
Proposition 103 has saved drivers $62 billion while fostering a
competitive and profitable insurance market.
-- An intervenor system that provides consumers a forum to challenge
unnecessary or excessive rate increases. Since 2003, Consumer Watchdog
has saved the state's consumers $1.7 billion by challenging
unnecessary premium increases using the public intervention process.
-----
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www.georgiafrontpage.com
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