Friday, July 22, 2011

For your information, a copy of the letter sent today from the U.S. Center for Medicare and Medicaid Services to the Iowa Insurance Commissioner is attached.

As described in the letter, the federal government has approved Iowa's request for a waiver from the medical loss ratio requirements of the Affordable Care Act of 2010.

The new health care law basically requires states to change the requirement of plans in their states to spend more money on care and less on administration and reserves.  As a practical matter, it could run small carriers out of the state.  The potential market disruption has led a number of states to seek waivers of the medical loss ratio requirement until 2014.  Maine and New Hampshire already have waivers.  Today North Dakota was turned down.  Kentucky was effectively turned down, as well.  Iowa was partially approved.

Here is a comment from Sen. Grassley:

"The purpose of this waiver is to allow Iowa to have different medical loss ratios for insurers than would have been required under the health care overhaul enacted last year.  Without this waiver, because of the mandates in the new law, insurers likely would have left the state, leaving Iowans with fewer health coverage options.  The need for this kind of waiver emphasizes that it should be up to states to regulate their insurance markets.  The 2010 health care needs to be repealed and replaced with policies that allow coverage that fits the needs of different marketplaces."

Here is a fact sheet from the Centers for Medicare and Medicaid Services:

Medical loss ratios apply to all health insurance plans, including job-based coverage and coverage sold in the individual market. However, insurance plans in the individual market often spend a larger percent of premiums on administrative expenses and non-health related costs than job-based health plans do.

Recognizing the variation in local insurance markets, the Affordable Care Act allows States to request a temporary adjustment in the MLR ratio for up to three years, to avoid disruptions to coverage in the individual market. This flexibility allows consumers to maintain the choices currently available to them in their State while transitioning to a new marketplace where they will have more options for coverage and more affordable health insurance through State-based Health Insurance Exchanges. This is one of many ways the Affordable Care Act is building a bridge from today's often disjointed and dysfunctional markets to a better health care system.

HHS has set up a transparent process for how States can apply for an MLR adjustment and what criteria will be used to determine whether to grant those requests. States must provide information to the Department of Health and Human Services (HHS) showing that requiring insurers in their individual market to spend at least 80 percent of their premiums on medical care and quality improvement may cause one or more insurers to leave the market, reducing access to coverage for consumers. States must also show the number of consumers likely to be affected if an adjustment is not granted and the potential impact on premiums charged, benefits provided, and enrollee cost-sharing. All State application materials are posted on the HHS website.

Iowa's Department of Insurance requested an adjustment of the 80 percent MLR to a 60% MLR standard for 2011, 70% for 2012, and 75% for 2013. 

Three of Iowa's dominant issuers, Wellmark, Time and American Family -with 88% of Iowa's individual market share- are not expected to be impacted by the 80% MLR standard.  Wellmark and American Family both had a 2010 MLR of well above 80% and while Time had a 2010 MLR below 80%, it does not expect to owe rebates in 2011 or beyond.  Enrollees in these plans will not be affected by the new 80% MLR standard.

However, the remaining three smaller issuers that would owe rebates in 2011, Golden Rule, Coventry, and American Republic - comprising 5.4% of the market share - have MLRs of 48% to 68%.  These three smaller issuers also reported relatively high commissions, validating Iowa's concern that they may have difficulty adjusting their business models to meet an 80% standard as a result of being locked into binding multi-year agent commission and provider contracts.  Some or all of these three issuers could be impacted by meeting an 80% standard and could withdraw from the market, potentially leaving roughly 15,000 enrollees without coverage.

At the same time, the information provided in Iowa's application makes it clear that issuers can meet a higher MLR than it requested for 2011, 2012 and 2013.

Of the six issuers expected to owe rebates in 2011, five have MLRs above Iowa's requested 2011 adjustment to 60%, and three of those 5 have MLRs above 67%.

For these reasons, Iowa is granted an alternative adjustment of 67% for 2011, 75% for 2012, and 80% thereafter.  This approach creates a glide path for compliance with the 80 percent standard and balances the interests of consumers, the State and the issuers in accordance with the principles underlying the MLR provision

Group Will Develop Strategies to Improve the Health of Illinois Residents

CHICAGO - July 21, 2011. Governor Pat Quinn today announced 25 appointments to the State Health Improvement Plan (SHIP) Implementation Coordination Council. Today's action is the latest in a series of appointments the Governor is making as he continues to fulfill his commitment to improving the health of all Illinois residents. The interdisciplinary council is tasked with developing implementation strategies for the state's SHIP. The SHIP council will work collaboratively with the Governor's Health Care Reform Implementation Council to promote statewide improvements in public health.

Effective immediately, Governor Quinn named Joseph Antolin, Patricia Canessa, Jenifer Cartland, Greg Chance, Edwin Chandrasekar, Margaret Gadon, Cathy Grossi, Martin Hatlie, Roger Holloway, Kevin Hutchinson, Ahlam Jbara, Robert Kieckhefer, Tammy Lemke, Janine Lewis, Hong Liu, David McCurdy, Maureen McHugh, James Nelson, Sharon Post, Jose Sanchez, Clarita Santos, Patricia Schou, Terry Solomon, Janna Stansell and Christina R. Welter to the SHIP Implementation Coordination Council.

"This council brings together a diverse group of health care professionals that are leaders in their respective fields," said Governor Quinn. "We want a comprehensive approach to make sure the people of Illinois are healthy, and that means bringing everyone to the table. I look forward to the council's work, and the results they will help us achieve in public health."

The SHIP is a framework to address public health issues through an interdisciplinary approach that utilizes the strengths of the entire public health system. Under law, the state of Illinois must complete a SHIP every four years with the goal of creating a system that ensures optimal physical, mental and social well-being for all people in Illinois through a high-functioning public health system. The most recent SHIP was updated in August 2010 to reflect federal health care reform and other state health policies.

In July 2010, the Governor signed into law legislation creating a Governor-appointed council to implement the SHIP, which was one of the one of the recommendations of the SHIP planning team. The group will provide further definition of priorities and action steps, engage stakeholders to enact SHIP objectives, and promote the plan as a common agenda across the public health system.

The SHIP calls for the state to improve access to comprehensive health-related services, enhance data and information technology in the health care sectors, address the social factors affecting health and health disparities, manage and improve the public health system, and ensure sufficient workforce in the health care and public health fields. The SHIP is prevention-focused and centered on the following priority health concerns: alcohol/tobacco, use of illicit drugs/misuse of legal drugs, mental health, environment, obesity (including nutrition and physical activity), oral health, patient safety and quality, unintentional injury and violence.

In addition to the appointed council members, representatives of 12 state agencies and the chair of the State Board of Health, Dr. Javette Orgain, will participate in the SHIP Implementation Coordination Council.  These agencies all play a critical role in the implementation of the SHIP recommendations and will be working with the council to ensure that the goals of the SHIP are achieved. The council co-chairs will be appointed by the Governor.

Information regarding the new council members is attached.

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New Law Updates Legal Protections for Citizens Helping in Emergencies

CHICAGO - July 18, 2011. Governor Pat Quinn today signed legislation to help protect good Samaritans who provide cardiopulmonary resuscitation (CPR) to a person having a heart attack or suffering cardiac arrest. Governor Quinn signed House Bill 1549, which amends the Good Samaritan Act in order to provide liability protection to individuals who are trained in CPR in accordance with either American Red Cross or American Heart Association standards.

More than 300,000 people suffer sudden cardiac arrest in the U.S. every year. According to the American Heart Association, less than 8 percent of people who suffer cardiac arrest outside the hospital survive. CPR provided immediately after sudden cardiac arrest by a trained bystander can double or triple a victim's chance of survival.

"Citizens who have been trained in CPR should not be reluctant to use their training to help another person in an emergency," said Governor Quinn. "CPR saves lives, and we want those who are able, to step up and help their fellow citizens in a crisis without fear of a lawsuit. This law protects good Samaritans and will protect lives." 

Previously, legal protections covered 'certified' rescuers; the updated law amends language so that all 'trained' rescuers are protected from lawsuits. Public confusion about who would be protected from civil liability under the Good Samaritan Act decreased the number of people willing to provide CPR to someone in emergency situations.

Updated training methods from the American Red Cross and American Heart Association focus on hands-only CPR, in which chest compressions are delivered to a victim of sudden cardiac arrest. Hands-only CPR has been shown to be as effective as traditional CPR, and is easier to master and perform than mouth-to-mouth ventilation.

House Bill 1549, sponsored by Rep. Jil Tracy (R-Quincy) and Sen. A.J. Wilhelmi (D-Joilet), was an initiative of the American Red Cross and supported by the American Heart Association. The law takes effect immediately.

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New national television ad, grassroots activities, and Capitol Hill blitz tell lawmakers, "Seniors are not pushovers."

Washington, DC–Today, AARP launched its latest wave of efforts, centered around a new direct-message television ad, urging Congress and the President to make responsible decisions during the deficit reduction debate by cutting waste and closing loopholes instead of cutting critical Medicare and Social Security benefits that millions of Americans have earned through a lifetime of hard work.

The new, multi-million dollar advertisement is AARP's third focusing specifically on the deficit debate, and begins airing today nationally and in local markets.  In addition to the TV ads, AARP leaders are hitting Capitol Hill to urge their Members of Congress to oppose cuts to Social Security and Medicare benefits as part of a deal to pay the nation's bills.  AARP is keeping up the pressure on Congress and the President by engaging its millions of members to make their voices heard through direct mail, phone calls, email alerts, publications, and tele-townhall meetings.

"We're taking the voice of older Americans to the airwaves, to Capitol Hill and across the country," said Nancy LeaMond, AARP Executive Vice President. "Don't cut the Social Security and Medicare benefits seniors have earned."

AARP will air the television spot beginning July 13.  The television ad script follows here:

"I'm a grandfather.  A retired teacher.  And I count on Social Security.

"Here's what I'm not...

"A pushover.

"Right now, some in Washington want to make a deal cutting the Social Security and Medicare benefits we worked for.

"With billions in waste and loopholes, how could they look at us?

"Maybe we seem like an easy target...

"Until you realize...

"...there are 50 million of us.

"Tell the politicians to cut waste and loopholes, not our benefits."

To date, nearly 4.5 million petitions have been signed and will be delivered to Congress, and over 500,000 calls and emails have gone into congressional offices and to the White House over the past several weeks urging elected leaders to protect Medicare and Social Security from harmful cuts as part of a deal to raise the debt ceiling.

LeaMond added: "We know Washington needs to make tough decisions to reduce the deficit, but they should make responsible decisions instead of cutting the Social Security and Medicare benefits that seniors have worked for their entire lives."

To view the new television ad and learn about AARP's campaign, visit www.aarp.org/protectseniors. 

About AARP

AARP is a nonprofit, nonpartisan organization with a membership that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with nearly 35 million readers; AARP Bulletin, the go-to news source for AARP's millions of members and Americans 50+; AARP VIVA, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

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