Health Care Reform Update from Easy To Insure ME

May 12, 2010

Read this week about what is happening on the federal legislative front of Health Care Reform.

House Hearing on Health Care Pricing Transparency Proposals
The House Energy and Commerce Subcommittee on Health held a hearing on May 6, 2010 regarding legislative proposals aimed at improving transparency for health insurance consumers. Three separate transparency bills were listed on the hearing agenda, although the discussion among subcommittee members and witnesses focused broadly on the merits of transparency and the possibility of unintended consequences.

Representative Steve Kagen (D-WI) testified in support of the H.R. 4700 bill he has introduced, which would require health care providers and insurers to publicly disclose, on a continuous basis, all prices for health care-related items, products, services and procedures. Kagen said that this bill would “establish a very competitive medical marketplace” and allow families to “make their health care decisions based upon quality, and the price and the service of available caregivers.”

Michael Cowie, an antitrust attorney with Howrey LLP and a former official with the Federal Trade Commission (FTC), expressed concern that the Kagen bill would conflict with existing antitrust provisions that are intended to prevent collusion that could contribute to higher costs. Cowie also cited economic studies showing that mandatory publication of pricing terms often leads to higher pricing.

Steven Summer, a Colorado Hospital Association representative, suggested a four-prong approach to improving transparency: expanding existing transparency efforts through collaborations between states and state hospital associations; requiring insurers to make estimated out-of-pocket costs available on a pre-care basis; conducting more research on the pricing information that consumers want and need; and making pricing information consumer-friendly.

The other transparency bills discussed at the hearing were:

* H.R. 2249, introduced by Representative Michael Burgess (R-TX), would require states, as a condition of participating in Medicaid, to establish laws for the disclosure of information on hospital charges, to make such information available to the public, and to provide individuals with information about estimated out-of-pocket costs for health care services.
* H.R. 4803, introduced by Representative Joe Barton (R-TX), would require health insurance plans to make available to enrollees and potential enrollees specified information, including covered items and services, a list of limitations and restrictions, the number of participating providers according to specialty type, information on cost-sharing, a description of the claims appeal process, and other information.


Although both Democrats and Republicans voiced support for stronger measures to improve transparency, it is not clear at this time whether the subcommittee will be marking up any of the legislative proposals discussed at the hearing.

House Republicans Urge Democrats to Hold Hearings on Health Care Reform Law
Republican Members of the House Energy and Commerce Health Subcommittee repeatedly urged Energy and Commerce Committee Chairman Henry Waxman (D-CA) to hold a series of hearings on the new health insurance reform law during the recent Subcommittee hearing on health care pricing transparency (see above information). Chairman Waxman gave no indication that he intends to hold hearings on the reform legislation.

Republicans have specifically requested to hear the testimony of Centers for Medicare and Medicaid Services Chief Actuary Rick Foster regarding a report his office prepared on the impacts of the health insurance reform legislation. The report estimates that the law will increase health care costs by approximately 1 percent over the next ten years, and will cause approximately 14 million Americans to lose their current employer-sponsored coverage.

In an April 28 letter to Chairman Waxman, Ranking Member Joe Barton (R-TX) wrote, “We believe that inviting Mr. Foster’s testimony is invaluable to our efforts to rein in health care costs and government spending. We therefore ask that you invite him to testify as soon as possible.”

Senator Feinstein Continues Seeking Support for Federal Review of Insurance Rates
Senator Dianne Feinstein (D-CA) continues to seek support for legislation she has introduced, which would give the federal government the authority to review and block health insurance rate increases.

The Health Insurance Rate Authority Act of 2010 (S. 3078) would authorize the HHS Secretary to conduct health insurance rate reviews in states where the state insurance commissioner does not have the authority or capability to do so. The legislation would also give the HHS Secretary the authority to block “unreasonable” rate increases. The bill currently has six cosponsors.

On April 28, Senate Health, Education, Labor, and Pensions Committee Chairman Tom Harkin (D-IA) held a hearing on the legislation in which he stated that “it’s my intention to move toward a markup or at least do something to get the bill moving” this year. Also, Senator Feinstein has indicated that she may seek to move the legislation by offering it as an amendment to an unrelated bill.

Representative Jan Schakowsky (D-IL) has introduced companion legislation (H.R. 4757) in the House, which currently has 27 cosponsors.

Possible McCarran-Ferguson Amendment
Senator Patrick Leahy (D-VT), chairman of the Senate Judiciary Committee, filed an amendment on May 6 that proposes to repeal portions of the McCarran-Ferguson Act as they apply to health insurance plans. Chairman Leahy filed this amendment with respect to the financial regulatory reform bill currently being debated on the Senate floor. Senate leaders are hoping to complete action on this bill by May 14.

The Leahy amendment is based on legislation, Health Insurance Industry Fair Competition Act (H.R. 4626), that the House approved in February. The health insurance industry has repeatedly stated that the McCarran-Ferguson Act is extremely limited in scope and has nothing to do with competition in the health insurance industry, which is the issue the House bill purports to address. However, opponents of repeal say this move could have unintended consequences and could disrupt initiatives to enhance efficiency, reduce costs and improve the quality and safety of patient care. Currently, the federal government intensely examines, and takes action on every merger involving health insurance plans. Also, all insurers are subject to state antitrust laws, as well as state rate regulation and other state laws enforced by State Attorneys General and insurance regulators.

Karen Ignagni, president of America’s Health Insurance Plans (AHIP), said that such legislation “attempts to remedy a problem that does not exist” and that repeal efforts are “based on a misperception of the scope and impact” of the exemption.

As of this writing, Chairman Leahy has not yet offered the amendment for consideration. Among the approximately 130 amendments that have been filed for the financial regulatory reform bill, only a small portion will likely be considered by the Senate. As noted above, Senator Dianne Feinstein (D-CA) has not yet filed an amendment for a federal rate review process.

New HELP Committee Staff
Jenelle Krishnamoorthy has been named health policy director for the Senate Health, Education, Labor and Pensions (HELP) Committee. Krishnamoorthy served as the lead health staff member for HELP Chairman Tom Harkin (D-IA). She succeeds David Bowen, who worked for the HELP Committee for 10 years.

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