Looking at health care reform after Supreme Court ruling - Finance ...

Posted: 3:07 pm Fri, April 6, 2012
By Frank?Jossi
Tags: AHIP, Jim Abeler, Karen Ignagni, Lucinda Jesson, Steve Overholser

Karen Ignagni is the president and CEO of America's Health Insurance Plans, a trade group. (AP photo)

Health care reform could continue at the state and federal level even if the U.S. Supreme Court rules that part of the landmark Patient Protection and Affordable Care Act of 2010 is unconstitutional, according to the leader of the nation?s largest health plan trade group.

But America?s Health Insurance Plans CEO and President Karen Ignagni said that if the individual mandate does not survive it could pose some significant problems for states. Under the mandate, individuals who can afford it are required to buy health insurance by Jan. 1, 2014.

Ignagni, who spoke Thursday at a University of Minnesota forum, said New Jersey, Kentucky and Washington tried health insurance reform without a mandate and saw premium rates skyrocket and insurance enrollment decline. Those states suffered a ?death spiral,? which occurs when only aging and unhealthy residents buy insurance and healthier people drop coverage, she said.

Ignagni said the AHIP filed briefs in support of the act before the Supreme Court hearing in late March but stayed relatively silent in the run-up to the case because it did want to wade into issues of the law?s constitutionality. In 2008, however, the organization?s membership and board made the decision to work with Congress on health care reform. President Barack Obama signed the legislation in 2010.

?We got in early so we could play a constructive role in health care reform,? she said.

While the organization?s members stand to gain as many as 15 million new members, Ignagni worries that the subsidies the government offers individuals and businesses will not be enough to cover everyone. The AHIP also does not endorse all of the Affordable Care Act, she said, pointing to the group?s campaign against a 2 percent to 3 percent sales tax on health insurance. That tax would be passed on to businesses and consumers, she said.

Much of health care reform has focused largely on insurance, but that represents only 6 percent of the cost, she said. The rest of the cost comes from specialty care, pharmaceuticals, information technology, the consolidation of providers by large hospital groups and other cost centers.

Highlighting one trend that has occurred since the law was enacted, Ignagni pointed to greater collaboration between plans and providers and greater emphasis on outcomes. Innovations such as medical homes offer patients coordinated care. Accountable care organizations (ACO), a relatively new approach to care, allows for greater coordination of treatment and bundled payments rather than traditional ?fee for service? arrangements.

Several Minnesotans involved in health care reform also spoke at the event. Human Services Commissioner Lucinda Jesson said the state has several demonstration ACOs under way to ?incentivize efficiency? and worked out an agreement last year with managed care providers to impose a 1 percent cap on profits from Medicaid and MinnesotaCare, the latter of which is designed to cover low-income workers.

The governor?s office also announced this week that the state?s four health plans would pay back $73 million, about half of which will be shared with the federal government.

Steve Overholser, chief financial officer and treasurer of Great Clips, said at the panel that his members are alarmed over health insurance costs that have escalated since the law was enacted. Some franchises, he said, are probably too big to avoid having to offer a benefit plan but ?too small to get an effective plan in place,? he said.

The subsidies to help businesses pay for insurance are seen as a ?temporary carrot? that will go away a few years after the law goes into effect, Overholser said. The subsidies probably will not be enough to pay for the increase in the cost of health insurance, he added.

State Rep. Jim Abeler, R-Anoka, said he sees the act as ?hampering and hindering what we?re trying to do? in Minnesota. Some of the state?s health plans and medical homes don?t comply with the federal law even though Minnesota is considered a model for health insurance and high-quality care, he said.

Abeler doubted any health care reform bills would pass this session in Minnesota. In general, Republicans ?just want this thing (the Affordable Care Act) to go away,? he said. With that, he left for the Capitol to attend a legislative meeting to discuss what the state should do with its portion of the $73 million rebate from state health plans.

This entry was posted on Friday, April 6th, 2012 at 3:07 pm and is filed under Business & Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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