The Top Ten Health Policy Stories of 2010, Part 2

Last week, I reviewed five of my top ten health policy stories of the year.  Here are the other five, all of which involved matters that will have a major impact on our day-to-day lives in the coming years.

5.  The Enactment of CLASS.  Private long term care insurance has been on the policy agenda since the 1980s.  Seniors realized that the cost of long term care could bankrupt them, so they began protecting their assets by transferring them to their children.  The state and federal governments were left to pay the tab, and went looking for help.

Private long term care insurance products were developed as a solution.  However, not enough people bought them.  When they were young, people didn’t think they would need the insurance, but once they got into their 60s and 70s, the premiums were too high.  This year, the federal government took action. 

Tucked into the pages of the health reform legislation is a new government-sponsored long term care insurance program starting in 2012, called CLASS, aimed at making long term care insurance more common and more affordable.  It will probably take a generation or more before its benefits are fully realized, meaning that this was a vote for our children and grandchildren.  Passing it knowing they won’t be around to get the credit for it was a class act on the part of the members of Congress.

4. The Closing of the Medicare Donut Hole.  The Medicare Donut Hole was more like a black hole for the seniors who fell into it each year.  As of 2010, consumers paid the first $310 in drug costs, and were reimbursed for 75% of their drug costs between $310 and $2,830.  Then they entered the donut hole, where they were completely responsible for approximately the next $3,600 in costs.  Finally, once their out-of-pocket drug costs in a year hit $4,550, their prescription benefits kicked in again and paid 95% of whatever remained. 

This was confusing and expensive, and it came to embody the worst of our confusing system of insurance reimbursements for over two million people trapped in the donut hole each year.

Reform legislation is closing the Donut Hole over the next ten years.  When the first $250 rebate checks arrived this year, Medicare beneficiaries could see the light again. 

3.  The Enactment of Consumer Protections in Health Reform.  By now, we’re all familiar with the new consumer protections we have.  Insurers can’t deny coverage for pre-existing conditions, they can’t drop people who become sick, and they can’t cap annual and lifetime benefits.    Several are already in effect.  Others are on their way.

Some states are arguing that they don’t have the authority to enforce them, and that could present a problem for consumers in the short term.  However, these provisions are so popular that it is likely that if states don’t enforce them, Congress will probably take further steps to ensure they do.

2.  The Comeback of Government Regulation in the Private Health Insurance Market.  For the past thirty years, the mantras of government have been “protect the free marketplace” and “less regulation, not more.” 

First, opponents of health reform argued for a freer marketplace to bring down insurance costs.  Then proponents argued that if the federal government could provide insurance at a lower cost than the private sector, it should be allowed to compete in that market. 

When the public option died, however, the alternative was to establish a more regulated, less-free market.

When Congress set minimum loss ratios (of 80 for individual policies and 85 for most group policies, meaning that insurers must pay out 80 to 85 cents in benefits for every dollar they collect in premiums), this was a very traditional, back to the 1970s, regulatory response to a problem.  Private insurers won’t have to compete directly with the government, but they will have to meet standards the government sets.

And number 1, the Passage of Any Health Reform at All.  We forget how much in doubt this was after the election of Senator Scott Brown in Massachusetts.   When Brown won in an upset, it looked for several weeks like there would be no bill at all.  Finally, President Obama and Congressional Democratic leaders hammered out a compromise that could pass with simple majority votes using the budget reconciliation process, and the most significant health care legislation since Medicare and Medicaid was signed into law in late March.  In the true spirit of representative government, the final compromises left no one completely happy, setting the stage for more health policy debate in the future.

Happy New Year!  Thank you for helping me launch Our Health Policy Matters over the past two months.  I’ll kick off 2011 next week by making some predictions about some upcoming health policy debates.

The Top Ten Health Policy Stories of 2010, Part 1

2010 was the most significant year in health policy since the 1960s.  It dominated the policy agenda for the first few months of the year, and it stayed in the news throughout the election season.  As the year drew to a close, conflicting lower court decisions about the constitutionality of the individual mandate foreshadowed a continued policy debate into the foreseeable future. 

What makes a health policy story big in a time of change?  It’s not just the attention it commands in the media.  It’s the impact it has on our lives. 

This week and next, I’ll countdown ten.   Using the impact criterion, there were actually some that weren’t part of health reform!   

Here are my choices for numbers ten through six.

10. The Election of Senator Scott Brown.  It is hard to remember that as we entered 2010, the Democrats seemed to be putting the finishing touches on a bill that could pick up 60 votes in the Senate.  Lincoln, Lieberman, and Nelson were among the ones to whom everyone was paying attention.  Then, Scott Brown was elected in Massachusetts, and everything changed.  The Democrats lost control of the issue and public opinion.  That one special election almost derailed the entire effort and ultimately changed the look of the final legislation.

9.  The Change in Tax Treatment of Dependent Health Insurance.  Until the IRS changed the rule in March, when you kept your child on your health insurance up to age 26, you paid taxes on the benefit.  Had this not been changed, then the health reform provision allowing parents to keep adult children on their insurance would have been a mixed blessing at best.  Many might have refused or been unable to do so when they factored what could have been hundreds of dollars of increased taxes.

8. The Death of the Public Option.  Even though it had majority support in both chambers, Congress put the public option to rest early in the year when leaders realized that they could not muster the 60 votes necessary to overcome a Senate filibuster against it.  Once it was gone, public sentiment tilted slightly against health reform.  Reform-minded Democrats were upset with their Congressional leadership, and a portion of the Democratic base disappeared along with it.  Proponents and opponents of reform seemed to agree on one thing – if a public option had been offered to people, many would have chosen it because it likely would have been less expensive than some or all of the private alternatives. 

7.  The Rebirth of the Public Option.   No one called it this, but when the final health reform bill included an expansion of Medicaid reaching 17 million new people in 2014, including nearly every family with income under $30,000, the public option was alive again – at least for people at lower income levels.  With Medicare also a public program, the only people left in the private insurance market were those under age 65 earning $30,000 and up.  And the reform law provided for subsidies for most of them.  We may not yet have the single payer system that progressives wanted, but we might still be headed in that direction. 

Public options are not going anywhere soon.  Mike Huckabee, who will likely be a significant early player in the Presidential campaign, favors repeal of the new law.  This fall he argued for a further expansion of the Medicaid program as an alternative to the mandate that insurers cover people with pre-existing conditions.  It’s pretty clear.  In the light of the day and out of the heat of the moment, so long as public options are called something else, they often generate support across the ideological spectrum.

6.  Mental Health Parity.  Mental health parity this year was an under-the-radar policy story with sweeping consequences. New mental health parity provisions, enacted in 2008, finally became law in 2010.  For the first time ever, mental illness must be given the same treatment in insurance as other chronic conditions. 

It became harder than ever for public officials not to do this as increasing numbers of people with mental illness advocated for fairness, and as other chronic conditions, like diabetes and hypertension, became more common and more costly.  Parity is a big deal, especially to the millions of people with serious mental illness, but when it happened at the beginning of the year it got little attention in media consumed by the fiery health reform debate.

Ironically, the mental health parity law also attracted little news attention when it was passed in late 2008.  Why was this?  It was tacked onto the first major financial bailout bill signed into law by former President Bush!

Next Wednesday, I’ll give you my top five health policy stories of the year. 

Healthy Reforms

In the 1990s, the Department of Health and Human Services looked at health spending versus the improvements in the health of our population in the 20^th century.  The results were startling.

97 percent of our spending was in health care, versus 3 percent in wellness and prevention – the activities of public health.  Despite the meager investment in public health, however, 50% of the improvement in our health status could be attributed to it.

Managing our health and preventing disease means a longer life. 

I admit that this lesson wasn’t lost on me. 

I run or take long walks at least three times a week, eat five portions of fruits or vegetables a day and no red meat, enjoy a glass of wine with dinner, and do my best to manage my stress.  My weight today is just a little higher than it was when I was in high school forty years ago.

Those are the things I can do by myself, but they’re not enough.

Without statins my cholesterol numbers would be a nightmare.  So I also go for my annual physical.  I review my blood work and have an EKG. I discuss with my physician the vitamins and medications I may need for the coming year.

Not everyone puts that much effort into being healthy.  This is because we expect to be healthy and take it for granted until we get sick.  Then we hope modern medicine can fix us.

In a nutshell, this probably explains why we spend so much for health care, and so little for prevention.  We literally leave well-enough alone. If there’s no crisis, we’re not motivated to act.

Fifty or a hundred years ago,  when doing nothing about our wellness meant that our drinking water was polluted, communicable diseases crippled or killed our children, and our air was thick with haze, our grandparents understood the consequences of doing nothing.  So they cleaned up our environment and invested in our health, and that’s why we live longer lives than they did. 

But spending on prevention for the past few decades has been more like rowing against the current.  It has been overwhelmed by the tide of spending on health care.

That’s about to change, however.  This is because our crisis meter is ticking upward along with our weight, the number of chronic conditions from which we suffer, and the huge amount of money we’re spending to try to get well again. 

Congress noticed this year, and took some major steps this year to get our minds off of sickness and back on wellness and health.  Note that none of these provisions are affected by any of the court battles over reform.

Here are several of the most significant, cutting across populations and strategies: 

·         Beginning in 2011, all Medicare recipients will have access to a free, annual check-up, other free preventive services, and free colorectal and cancer screening.

·         Private health insurance plans established after September, 2010, must cover preventive services, including immunizations, without charging deductibles, co-pays, or co-insurance.  These provisions also apply to Medicaid as of January 1, 2011.   “Grandfathered” private plans will not be required to do this immediately, but some may anyway.  Most others will be adding this coverage over the next three years. 

·         Employers will be allowed to offer employees a health insurance discount of up to 30% if they participate in wellness programs.

·         Employers with fewer than 100 employees will be eligible for grants totaling $200 million nationwide from 2011 through 2015 to create comprehensive workplace wellness programs for employees.  If successful, these could in turn lower the premiums these employers have to pay for health insurance.

·         Up to $1.5 billion from 2010 through 2014 are being granted to states and nonprofits for maternal, infant, and early childhood home visitation programs to improve infant health, child development, and school readiness.

·         A Public Health and Prevention Fund has been established with $6 billion through 2015, and $2 billion a year thereafter, to support investments in public health and prevention programs authorized under the Public Health Services Act. 

·         Community transformation grants will allow communities to attack and mitigate environmental factors, such as a lack of playgrounds and unsafe neighborhoods, which lead to poorer health among residents.

·         Restaurants with 20 or more locations must provide nutrition labeling on standard menu items.  Vending machine operators with twenty or more machines must provide calorie counts for all machine items.   The regulations implementing these programs will be issued in 2011.

These gifts to our health will go a long way toward improving both the length and quality of our lives.  Of course, we’ll have to work just as hard to keep our bodies running well.  It’s good to know that our elected representatives are alongside us in the effort.   

Extra: Read my Guest Blog in Health Affairs Grantwatch Blog on how foundations can invest to improve access to care.

The Brick Walls in the Battle Against Health Reform

States battling to repeal new health reform mandates have settled on two issues that may well turn out to be political brick walls. 

One issue is the requirement beginning in 2014 that individuals purchase insurance or pay an income tax surcharge, the so-called “individual mandate.”  The other is the federal expansion of the Medicaid program. 

The battle is being joined in the courts, the Congress, and state legislatures.

Most of the action so far has been in the courts. 

Florida has filed a suit challenging both the individual mandate and Medicaid expansion.  CNN calls it the “highest profile” lawsuit of many, and 19 other states have joined it.

Florida argues that the individual mandate is unconstitutional, contending that it’s unconstitutional for the federal government to require individuals to purchase health insurance by taxing them if they don’t.  As of last week, federal judges in both Michigan and Virginia have ruled against this position in other cases, but these decisions will be appealed. 

Florida’s argument against expanding the Medicaid program is more about public policy than the constitution. The Medicaid expansion will add 17 million uninsured people nationwide to Medicaid beginning in 2014.  This will cost a lot of money, and that’s the basis of the objection. 

However, for the first few years the federal government will pick up the entire cost of the expansion.  This means that states and localities initially will actually save millions of dollars they’ve been using to pay for care for the uninsured.

Also, the federal government doesn’t require states to participate in the Medicaid program.  Medicaid is not administered as one big federal program, but as fifty different state programs.

Why don’t states simply opt out?  When Governor Rick Perry of Texas floated the idea earlier this year, his own Health Commissioner quickly shot it down.  It’s because the Medicaid program draws down billions of federal dollars.  These pay not only for health care for poor people, but also for nursing home and home health care for seniors and intermediate care for people with disabilities.

A state opting out of Medicaid would be between a rock and a hard place.  It would bankrupt and alienate seniors and people with disabilities, while killing off some hospitals, nursing homes, and home health agencies that rely on these payments.  Or it could pay the whole bill itself, and its political leaders would have to preside over the biggest tax increase in state history.

Still, today’s court cases are only the opening volleys in this battle.  Even though they raise issues that seem today to create losing scenarios for the states, at least one case – perhaps Florida’s – will eventually reach the Supreme Court.  Health reforms will have been in place for years by then, and no one can say what the Court will focus on, what it will decide, or what the political landscape will be.

How will the other two battlefronts play out for states this coming year?  They’ll be noisy at times, but little ground will be gained or lost.

First, some members of Congress will try to choke off some funding to slow down reform implementation while introducing bills aimed at paving the way for more state challenges to reform.

Senator Roger Wicker (R-Mississippi) is introducing one of these this week.  They’ll argue “states’ rights,” noting that states – not the federal government – should determine how best to protect the health and well-being of their citizens.  None of these measures will pass, but they will give some cover to politicians trying to appease angry voters.

Second, state legislators will introduce and pass legislation that will be carefully crafted not to do too much too soon. 

Florida’s legislature is already working on its plan.  As Jim Saunders reported in Health News Florida on November 23^rd, Florida legislators are reviving a proposed constitutional amendment giving Florida residents the right to opt out of purchasing health insurance.  Voters may eventually get the chance to air their frustration by voting for the amendment, but even if it passes, it won’t affect anyone until 2014. 

By then, many of the crusading legislators will be out of office, and the Courts will all have ruled.  If they find the individual mandate constitutional, will anyone refusing to buy insurance want be the first one who refuses to pay the federal income tax surcharge?   That fight will be a lonely battle against the IRS, and not one the individual is likely to win.

The Mental Illness Epidemic

There is an epidemic of mental illness in America.  It’s time policy leaders did something about it.

They could start by acknowledging just how widespread this epidemic is.  According to the National Institute on Mental Health, it affects one-fourth of our population – over 57 million adults and over 15 million children. 

Why are the numbers so staggering?

No one knows for sure, but the bad economy, wars, and abuse are all probable factors.

According to a Gallup Poll released last year, the bad economy led to an increase in emotional illness among all adults.  Especially hard hit were those between the ages of 30 and 55, the family breadwinners.

CNN reported in 2007 that one-third of all veterans returning from Iraq or Afghanistan were treated for mental illnesses.  Their children were also affected.  According to a survey of health records released this past month and reported in the New York Times, children between the ages of 3 and 8 with parents in the military had 10% more visits to mental health providers than their peers.

Also in 2007, 5.8 million child neglect or abuse allegations were reported to state child protection agencies.  Almost 800,000 of these were confirmed.

Simply blaming economic and environmental factors isn’t enough, however. 

Researchers have achieved some breakthroughs, but they still don’t know why 17 million adults have serious mental illnesses like schizophrenia, bipolar disorder, and major depression.  These are not caused by economic or environmental factors, and they have devastating consequences.

Homelessness and incarceration are two of them.  According to the National Coalition for the Homeless, 25% of homeless people have severe mental illness, and mental illness is a leading cause of homelessness in our country. 

County jails, where inmates usually stay for under six months either awaiting trial or serving time for minor offenses, are teeming with people affected by mental illness.  Some officials report that up to 85% of jail inmates have mental illness.  They are also three times more likely to have serious mental illness than someone not in jail, and a 2009 study found that nearly one in three female jail inmates had serious mental illness – five times the prevalence in the population as a whole. 

This isn’t acceptable.

Policy leaders need to take this epidemic seriously.

First, they need to do more to identify and treat serious mental illness in children.  The Mental Health Association of Palm Beach County (FL) has offered a creative idea.  It suggests adding periodic mental health screening to pediatric care for all children, to identify and treat mental illness in children at the earliest possible age.  All state legislatures, not just Florida’s, should look closely at this.

Second, they need to decriminalize mental illness.  Simply exhibiting symptoms of mental illness in public can sometimes be cause for arrest, wasting precious resources.  A few years ago, a schizophrenic homeless person was arrested for “sitting or lying on a public sidewalk.”  He missed his court hearing because he was in jail for violating his probation on an earlier offense by being arrested again.  When he finally got to court, no one except the homeless person could keep track of what time he was actually serving for which offense, so he was released. 

People with mental illness don’t belong in jail.  If policy leaders changed the laws that send them there, as a side benefit jail overcrowding would end overnight.

Third, they need to create an emergency mental health response system that looks more like the rest of our emergency response system.  In a health emergency, an ambulance responds.  In a mental health emergency, a law enforcement officer responds.

They should be sainted for taking on this role.  They have diverted many people in crisis away from jails.  But it is no more reasonable to ask law enforcement professionals to evaluate mental illnesses than it would be to ask them to evaluate diabetes, heart disease, or cancer emergencies.

Local and county emergency mental health services systems should be staffed by mental health professionals.  Policy makers should use the new federal insurance parity laws to assure that insurance covers the cost.

Fourth, they need to rebuild our safety net system of care for people with mental illness.  When we emptied our large state institutions beginning in the 1970s, we were supposed to replace them with community mental health centers. But we stopped building these new centers before we were finished. 

It’s time to start building them again, and to pass laws giving them preferred Medicare and Medicaid rates, discounted drug pricing, and access to ongoing federal grants like the ones supporting community health centers.  Then policy leaders should integrate safety net health and mental health care.

These are just four ways policy leaders could start dealing with the epidemic of mental illness.  There are more.  75 million Americans in crisis are waiting patiently.