Health Care Overhaul Depends on States’ Insurance ExchangesNew York Times 10-23-10
WASHINGTON — In Massachusetts, which has had a government-run health insurance marketplace for four years, people typically file paper applications for subsidized coverage offered by one of five state-approved insurers. In Utah, employees of small businesses can go to a state Web site and sign up for insurance over the Internet, almost as easily as they download music from iTunes.
The success of President Obama’s health care overhaul, with its promise of affordable coverage for all, depends on the creation of such retail shopping malls, known as health insurance exchanges.
Massachusetts and Utah provide a glimpse of the future, and they offer radically different models for other states. The battle over health care is shifting to the states, and the design of insurance exchanges will be one of the most pressing issues for state legislators when they convene early next year.
“Utah and Massachusetts may well serve as bookends for other states,” said Norman K. Thurston, the policy coordinator at the Utah Health Department.
The Congressional Budget Office predicts that by 2019, about 24 million people will have insurance through exchanges, with four-fifths of them getting federal subsidies that average $6,000 a year per person. People with incomes up to four times the poverty level (about $88,000 a year for a family of four) will be eligible for subsidies.
The Utah Health Exchange organizes the market, allowing consumers to compare a wide variety of health plans sold by any insurers that want to participate.
In the Massachusetts exchange, known as the Connector, the state serves as an active purchaser, soliciting bids from insurance companies and negotiating prices and benefits in an effort to secure the best value for state residents. Health plans cannot be sold through the Connector unless they receive its seal of approval.
“Massachusetts has been more selective and aggressive in contracting,” said Jon M. Kingsdale, who was executive director of the Massachusetts exchange from its creation in 2006 until June of this year.
Matthew A. Spencer, manager of the Utah exchange, said: “We are on the other end of the spectrum from Massachusetts. Our exchange is wide open for any carrier that wants to participate. We define the minimum benefits that plans need to offer. But we step back and allow carriers to compete within the exchange, setting their own prices.”
The idea of an insurance exchange has bipartisan appeal.
Liberals and conservatives alike see it as a way to concentrate the purchasing power of individuals and small businesses.
The federal law was shaped, to a large degree, by the experience of Massachusetts. But Senator Orrin G. Hatch, Republican of Utah, said: “Utah is not Massachusetts. Nor does it want to be.”
Other states will probably fall somewhere along the continuum from Boston to Salt Lake City as they try to figure out the right mix of regulation and competition.
State legislators are asking: Can we get a better deal by limiting competition in the exchange or by accepting all qualified health plans? Should states negotiate premiums or rely on market forces to set rates?
David Clark, a Republican who is speaker of the Utah House of Representatives, said: “In our exchange, the government is a market facilitator, not a contracting agent. We believe in the invisible hand of the marketplace rather than the heavy hand of government.”
Utah has no interest in putting its exchange plans out for bid, Mr. Thurston said. “Any attempt to standardize benefit designs tends to discourage competition and entry into the market, and limits choice,” he said.
In Massachusetts, State Senator Richard T. Moore, a Democrat who is president of the National Conference of State Legislatures, said: “We took a much more governmental approach. But both models make sense. Small states might find Utah is a good model. Bigger industrialized states might go the route we went.”
Massachusetts officials point to the state’s near-universal coverage as evidence that their approach is working. The Census Bureau says 95.6 percent of Massachusetts residents were covered by health insurance last year, compared with 83.3 percent for the nation as a whole and 85.2 percent for Utah.
“We have the lowest uninsured rate in the nation, and we are immensely proud of that,” said Glen Shor, executive director of the Massachusetts Connector.
The White House has provided $49 million to states to help them set up exchanges, which are envisioned as a kind of bazaar where insurers will offer their products side by side, so consumers and employers can make intelligent comparisons.
Congress assumed that insurance would also be sold outside the exchange. But federal subsidies, to help pay for insurance, will be available only to people who enroll in health plans through an exchange.
Exchanges will also play a crucial role as gateways to Medicaid and other public health programs. If people are found eligible, the exchange will help them enroll. In Massachusetts, the same application form is used for Medicaid and for subsidized private insurance purchased through the Connector.
California is another pioneer. On Sept. 30, Gov. Arnold Schwarzenegger, a Republican, signed two bills establishing the California Health Benefit Exchange, with broad powers to “negotiate on behalf of the public” and select qualified health plans.
The legislation generated intense lobbying, and the governor’s intentions were unclear until the last minute. Mr. Obama had urged him to sign the bills and was thrilled when he did, aides said.
The fight in Sacramento offers a preview of what other states can expect. In a letter to California lawmakers in August, Natalie Cárdenas, regional director of government relations for Anthem Blue Cross, a unit of WellPoint, complained that the exchange would have the power to pick winners and losers in the insurance market.
“Federal law will already limit the types of products that carriers can offer,” Ms. Cárdenas said. “Beyond that, the marketplace should determine what products consumers and small employers can purchase, not a government bureaucracy.”
The California Chamber of Commerce urged a veto of the bills, saying they “could lead to unnecessary cost increases and limited choice for employers.”
But Betsy M. Imholz, a lobbyist for Consumers Union, said the California laws struck the right balance.
“At first,” Ms. Imholz said, “the exchange may want to have a large number of health plans participating. But then the state needs to winnow down the number so consumers can see where they will get the best value.”
The California law says the exchange should choose health plans that “offer the optimal combination of choice, value, quality and service.”
Massachusetts requires people to have insurance. Utah does not.
Massachusetts provides more generous subsidies. But, Mr. Kingsdale said, the biggest difference is the magnitude of the two state programs.
In Massachusetts, more than 154,000 people receive subsidized coverage through the exchange, and 40,000 receive unsubsidized coverage, which can be bought on the Web. The Utah exchange, created under a 2008 state law, began enrollment this year. About 1,200 people have coverage through the Utah exchange, and the number is expected to grow to 10,000 by July 2011.
“We anticipate exponential growth,” Mr. Spencer said.
Under the new federal law, the exchanges must be in operation by January 2014. Federal officials will assess states’ progress as of Jan. 1, 2013, and will run the exchange in any state that is unable or unwilling to do so.
The exchanges will have a huge number of duties. They must evaluate health insurance plans and publish “standardized comparative information.” They must set up telephone call centers to answer consumers’ questions. They must determine who is eligible for subsidies and who will be exempt from the penalties imposed on people who go without insurance. They must build new computer systems to exchange data with state Medicaid agencies, insurance companies, employers and federal agencies.
While the exchange cannot explicitly control prices, it can exclude health plans that show a pattern of “excessive or unjustified premium increases.”
State officials worry that sick people will gravitate to the exchange, while healthier people who do not need subsidies will buy insurance outside it. However, insurers must agree to charge the same prices inside or outside the exchange.
Moreover, the law stipulates that members of Congress must get their health insurance through an exchange. So lawmakers will presumably be alert to problems.
Trauma centers in critical condition
Fuding measure on ballot would add $10 to car tags
The Atlanta Journal-Constitution October 24, 2010
Plenty of Atlanta drivers speed through the South Georgia segment of I-75 on the way to Florida’s beaches.
But they might slow down if they knew what some health care workers call that portion of the interstate: “the corridor of death.” The stretch of road earned the name because people who get in car crashes in much of South Georgia are at least 50 miles from a trauma center — a hospital equipped to handle serious injuries.
Georgia voters will decide on Nov. 2 whether they want to add $10 to the cost of annual vehicle registrations to improve trauma services statewide. Hospitals, emergency services workers and public health officials say the $80 million that would be raised every year by passage of Amendment 2 is needed to save lives.
Georgia has 17 hospitals designated as trauma centers, short of the 25 to 30 centers that public health officials say the state needs.
Trauma-related injuries — usually the result of car crashes, falls and work accidents — are the leading cause of death among Georgians between the ages of 1 and 44, said William T. Moore, a member of the Georgia Trauma Care Network Commission and president of Atlanta Medical Center.
“Georgia’s trauma death rate is 20 percent higher than the national average — or about 700 deaths greater than what you would expect at the national average,” Moore said.
Atlanta Medical Center is one of the state’s 17 trauma centers.
Everyone wants a fast response when they dial 911 for help, but selling the new $10 fee may be difficult. Some metro Atlanta voters believe they are close to well-staffed trauma centers and don’t want to pay more to staff up services in rural Georgia.
The Libertarian Party of Georgia opposes the amendment, saying it would be just the latest tax on Georgians already struggling in a tough economy. The party also said the plan for spending the $80 million is too vague.
“There are a lot of details that we’re curious about that we don’t have the answer to, but we’re expected to amend the state constitution for a $10 fee in perpetuity without knowing the details of what is planned with the money,” said Brett Bittner, operations director for the Libertarian Party of Georgia.
Between 2004 and 2006, a committee closely studied trauma care in Georgia and concluded the state was significantly underserved, according to Lisa Marie Shekell, a spokeswoman for the Georgia Department of Community Health. That committee estimated the need for up to 30 trauma centers statewide.
The number of Georgia trauma centers rose to 17 last week, when Taylor Regional Hospital in Hawkinsville became a Level IV trauma center.
The state’s trauma centers are rated as Level I through IV, depending on their capabilities. The state’s four Level I centers are the most advanced and must operate 24 hours a day with a full-service surgical suite, an intensive care unit and diagnostic imaging services. Level I facilities must also run a residency program and conduct research. Atlanta’s only Level I trauma center is Grady Memorial Hospital.
Level IV facilities provide initial assessment of trauma patients, but transfer most of the patients to hospitals with more capabilities.
In 2007, the General Assembly created the Georgia Trauma Care Network Commission to help improve Georgia’s trauma services, and the state authorized $58.9 million in 2008 for the commission to distribute to trauma care providers.
The new fee would offer a long-term stream of money that the commission could dole out to create a more organized approach to trauma care, increase the number of trauma centers and help hospitals cover the cost of providing the care, since many trauma patients do not have insurance.
The commission also would help pay for more ambulances, equipment and training for first responders. The commission is made up of doctors, hospital officials and others who work in the trauma field.
Moore said Atlanta Medical Center treats about 2,200 trauma patients a year. Last year, about 300 of its trauma patients were uninsured. The cost of providing care to those patients was about $4.3 million, he said.
Moore said he understands that many voters will be hesitant to approve a new tax. “I’m fiscally conservative,” he said, “but I’m going to support it because I’m familiar with the situation in Georgia and I believe this $10 is going to help save lives.”
The amendment provides that the money can only be used for trauma care, he said.
About one in seven fatal car crashes in Georgia took place at least 50 miles away from the closest trauma center in 2008, according to the Governor’s Office of Highway Safety.
Many South Georgians, as well as people traveling through that area of the state, are outside the 50-mile radius.
“If you’re in a major accident on I-75 and you need immediate care, that’s a problem,” said Kevin Bloye, a spokesman for the Georgia Hospital Association. “You’re in trouble.”
“Our data is very clear — when you’re in excess of 25 miles from a trauma center your chances of surviving that crash go down,” said Bob Dallas, director of the Governor’s Office of Highway Safety.
Dallas said an improved trauma network would save lives, improve the outcome of those who are injured, and make Georgia a more attractive place for retirees and companies.
“It’s less than 3 cents a day,” Dallas said. “That’s a great investment.”
Ga. governor candidates' views on jobs show contrastsMorris News Service 10-25-10
ATLANTA --- Democrat Roy Barnes and Republican Nathan Deal say their final campaign tours in the race for governor are focused on jobs. What they are saying on those tours shows how different their approaches to the issue are.
Barnes is traveling by school bus. It's his way of emphasizing that education is the foundation of a productive work force and that public school funding would strengthen Georgia's long-term economic welfare.
He plans to pay for the schools by boosting taxes on businesses, such as insurance companies and industries that use coal and diesel fuel.
Deal talks instead about tax cuts.
He takes pride in reminding audiences that he unveiled a jobs plan in May after winning the seal of approval from the Tax Foundation, which predicted that it would catapult Georgia's rank of competitiveness from 29th nationally to second in the South.
The plan calls for cutting corporate income taxes by one-third, exempting start-up businesses from corporate income taxes entirely and eliminating the corporate "net worth" tax.
He would also allow local governments to waive the business-inventory tax.
Barnes has his own tax-cut plan.
It includes a two-year suspension of capital-gains taxes and payroll taxes for new hires. Those capital-gains proceeds would have to be reinvested in the business.
He would also give tax incentives to companies that expand broadband Internet in the state.
A $25 million biomedical research park would spur high-tech industry, he says.
One ad shows him telling workers that he will prohibit the state from doing business with vendors that transfer jobs to other countries.
"You outsource jobs away from the United States, then you shouldn't be eligible to bid on state contracts," he said.
Both candidates have pledged to deepen the Savannah River to accommodate bigger ships and preserve the jobs of the warehouse and shipping industry near the Port of Savannah.
Economists are skeptical about all the proposals.
"Quite frankly, Georgia's tax structure is already not that bad," said Jeff Humphreys, of the University of Georgia's Selig Center for Economic Growth. "The marginal benefits of tax reform may not change the economy dramatically."
Atty. Gen. candidates agree on littleMorris News Service 10-25-10
ATLANTA - The three candidates for attorney general only agreed on one issue during Sunday-night's half-hour debate, that the records of the governor's office need be more open to the public.
The trio bickered on seemingly every other issue during the forum sponsored by the Atlanta Press Club and aired statewide by Georgia Public Broadcasting.
A recurring theme was whether the post requires someone who has been a prosecutor. Democrat Ken Hodges, district attorney for 12 years in Albany, described Republican Sam Olens as unprepared for never having been a prosecutor. Hodges dwelt on it so much, that at one point, he misspoke.
"I'm running to be district attorney. Excuse me, I mean, I'm running to be attorney general of the state of Georgia," he said, as he criticized Olens for seeking the attorney general's office as a stepping stone for governor.
Later, Olens turned it around.
"I want to be your attorney general, not your district attorney," he said.
Olens, the former chairman of the Cobb County Commission, said he's tried 150 jury trials in his legal career, giving him the wide background needed to oversee the state's Law Department that deals mostly with civil matters anyway.
But he defended charges his salary rose from $58,000 to $129,000 during his tenure as chairman, saying it was set by the legislative delegation, not him. And he brushed off Hodges' claims that the county's budget and payroll ballooned during that time by noting that the county has been described by others as one of the state's most conservatively managed as he cut tax rates.
Olens attacked Hodges for trying three times to indict two doctors at the local hospital who were questioning the accounting there. Hodges corrected him because it was a special prosecutor who sought the indictments after Hodges removed himself from the case to avoid a conflict of interest.
Libertarian Don Smart, a Savannah attorney, also participated in the debate, but not in the mud slinging. However, he did get Olens to agree that state law should be changed to allow more Libertarians and other political parties greater access on the ballot.
Insurance candidates spar over ethics, lobbyists, health reformMorris News Service 10-25-10
ATLANTA - Ethics, lobbying and federal health reform provided the most clashes Sunday night during a debate between the three candidates for insurance commissioner.
The half-hour forum sponsored by the Atlanta Press Club and aired statewide by Georgia Public Broadcasting didn't provide outgoing Commissioner John Oxendine time for rebuttal since he's not on the ballot, but his name kept coming up.
Democrat Mary Squires said he "has been one of the most corrupt that we've had in a long time in Georgia." She said he wouldn't need the oversight of an independent office of consumer advocacy the way he did when she voted for it as a legislator.
And Republican Ralph Hudgens said just because Oxendine is chairing a fundraiser for him next week doesn't mean the two see eye-to-eye.
He also said he saw nothing wrong with letting insurance lobbyists pick up the tab for meals or in accepting campaign contributions from individuals in the insurance.
"These are the people who have an interest in the insurance-commissioner race. ... I don't have any problem taking any individual's money," he said, noting that the lobbyists encouraged him to run because they viewed him as fair as chairman of the Senate Insurance Committee.
Squires, who is a lobbyist, denied she is trading on her six years as a legislator. She was a lobbyist before her election, she said.
Hudgens asked why she doesn't mention her lobbying in her campaign materials.
"I'm not hiding it," she said, noting her name appears on the public registry.
She blasted Hudgens, however, for accepting $20,000 in gifts, meals and event tickets from insurance lobbyists even though he has an $8 million net worth and could pay his own way.
"I've done well in building up my net worth, but that doesn't have anything to do with whether or not I would be a good insurance commissioner," he said, adding that his experience as a business owner while earning wealth means more because it gives him an understanding of commerce.
But Squires shot back.
"No one begrudges Sen. Hudgens his net worth, but you just have to ask when you take those kinds of gifts, trips and sporting-events tickets and vacations at lobbyists' expense when you don't have to, are you going to work for consumers?" she said.
Both candidates vowed to stand up for Georgia's authority during the implementation of federal health reform. Hudgens admitted he's said the "insurance commissioner can't do squat about health reform," but that he had sponsored legislation that passed, making it optional for Georgians to buy coverage despite the federal requirement.
Squires said his law won't have an impact.
Libertarian Shane Bruce also participated but stayed out of the squabbles.
Wearing a colorful Hawaiian shirt and no tie, Bruce closed by saying, "I can out run, out ride, out shoot, out hunt, out fish anybody standing on this stage. I am a true Son of Liberty."
Then he urged voters to cast a ballot for John Monds, the Libertarian nominee for governor.
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