Senators Burr and Coburn Release New Medicare Reform Proposal
Last week, Senators from North Carolina and Oklahoma released a Medicare reform proposal, the Seniors’ Choice Act, that will certainly advance the conversation about making real change in our nation’s Medicare program and health care for seniors.
For the first time in many years, it seems that Americans and those that represent them are serious about reforming the program that uses about 15 percent of the federal budget and cares for an estimated 45+ million Americans (or about one in seven). Although other proposals and the Patient Protection and Affordable Care Act (ACA) have all been released in the last three years, this new plan is assured to change the conversation leading up to the 2012 election.
The key to this plan is that it uses broadly supported ideas such as competitive bidding and premium support, but implements them sooner than other proposals. I agree with Senator Burr in his assessment that "The numbers require us to do something now, not in 2022," which is when the recently published Wyden-Ryan plan would implement similar measures. I further agree with this plan because it assumes that the highly contentious IPAB will be repealed, but that the entire ACA will not.
Other key takeaways from the proposal are that the plan would gradually increase the age of eligibility for Medicare to 67, rely on competition to keep costs down instead of a Medicare growth cap, raise premiums for upper-income seniors and freeze the sustainable growth rate (SGR) that determines how much Medicare physicians are paid.
For more information on the Seniors’ Choice Act, you can read the Question and Answer publication released by Senators Burr and Coburn.
North Carolina Partially Approved For MLR Waiver
The Department of the Health and Human Services (HHS) has been reviewing waiver applications submitted by 17 states asking to be excused from the Affordable Care Act’s (ACA) Medical Loss Ratio (MLR). The MLR requires that insurance plans spend at least 80 percent of their premiums on medical care for consumers.
Thus far, HHS has rejected 10 waiver applications and approved applications for seven states… well, sort of. In actuality, HHS has just slightly modified the MLR requirement for the seven states. North Carolina requested that its MLR be lower to 72 percent, 74 percent and 76 percent for years 2011, 2012 and 2013, respectively. Given how concentrated the insurance market is in North Carolina, as Blue Cross Blue Shield has an 81 percent market share, it would be almost impossible for small insurers to survive under the HHS requirements.
Although HHS did not give North Carolina its requested MLR rates, the agency did partially approve the waiver by granting NC a MLR of 75 percent for the last year (2011), but will require the 80 percent MLR for 2012 and 2013. This has many in the insurance world scared about sustainability, and may mean that by the time ACA is fully implemented or overturned by the Supreme Court, we will see a decrease in the number of small health insurance companies in North Carolina.
Q&A on Essential Health Benefits Leads to More Q’s than A’s
Ben Domenech Talking about Burr-Coburn
SCOTUS: Extra half hour for debate
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