2008 Medicare Costs 

The Centers for Medicare and Medicaid Services have announced the Medicare premiums, deductibles and other costs, effective on January 1, 2008.

The basic Part B premium, currently $93.50 per month, will rise 3.1%, to $96.40, an increase of $2.90. This is the smallest increase since 2000, when the premium was unchanged from its 1999 level of $45.50. The $96.40 premium is for individuals with incomes up to $82,000 and couples with incomes up to $164,000. For the approximately 5% of Medicare beneficiaries with higher incomes, the monthly premium is higher. The increase is being phased in between 2007 and 2009: one-third in 2007, two-thirds in 2008, and full implementation in 2009. That is why the premium increase from 2007 to 2008 for beneficiaries above the basic premium level is much greater than the rate of inflation.

Annual income for                   2007 premium                    

single person*                         per person                                                          

                                                                    
*Double these amounts for a married couple filing a joint tax return.

The Part A premium, paid by those with limited employment (their own or a spouse’s) that was subject to the Medicare payroll tax, will also increase 3.1%. It will be $423 per month for those with fewer than 30 quarters of coverage, a $13 increase from the 2007 level of $410. For those with 30 to 39 quarters, it will be $233, an increase of $7 from the 2007 level of $226. Only about 1% of Medicare beneficiaries pay the Part A premium.

The Part B deductible, currently $131, will rise $4, to $135. The Part A deductible will be $1,024, an increase of $32 from the 2007 level of $992. The Part A deductible is the beneficiary’s Part A cost for up to 60 days of hospital care during a benefit period. For a longer hospitalization, the charge is $256 per day for days 61 through 90, and $512 per day thereafter in that benefit period. In the course of a year a beneficiary could incur more than one Part A deductible if admitted during different benefit periods. A benefit period lasts until the beneficiary has been home from the hospital and from any subsequent skilled nursing care for 60 days; thereafter, a new benefit period starts and a new deductible is incurred. There is no charge for up to 20 days in a skilled nursing facility following a hospitalization of at least three days. For days 21 through 100, the daily charge for skilled nursing facility care in 2008 will be $128, a $4 increase from 2007. Beyond 100 days, the beneficiary (or the supplemental insurer) pays all costs.

The CMS announcement of 2008 costs explained why the increase in the Part B premium was necessary. Rising medical costs, an increase in the volume of Part B services, the need for a higher contingency margin in the Part B trust fund, and an increase in the average risk of Medicare Advantage enrollees (i.e., their poorer health and greater need for care) all contributed to the necessity of the Part B increase. But many analysts were surprised that the increase was not greater than it was, and CMS’ chief adtuary warned that 2008’s small increase was unlikely to be  repeated. Part B payments to doctors are scheduled to be cut by 10% next year, and by an additional 5% per year for several years thereafter, which would help substantially to hold down Part B costs. But Congress has waived similar cuts for the past several years, and is widely expected to do so again this year for 2008. If so, the loss of that cost-cutting measure would increase costs in 2008. CMS noted the “strong possibility that this pattern [of postponing doctors’ payment rate cuts] will continue,” which is the principal reason that CMS wants a larger trust fund contingency reserve.

The contingency reserve would have to be even larger if CMS had not discovered an accounting error. Starting in May, 2005, some Part A hospice benefits were paid from the Part B fund, rather than the Part A fund. Correcting this error by transferring the amount in question from the A to the B fund reduces the need for a Part B premium increase for 2008.

Medicare Part D for 2008 – CMS recently announced the standalone drug plans under Part D and the Medicare Advantage plans for 2008. There will be 53 standalone prescription drug plans (PDPs) in Illinois in 2008, down from 56 this year. This includes five new plans, and the loss of eight dropouts from 2007. Of the 53, 31 will have no deductible, 18 will have the maximum of $275 (an increase from this year’s $265), and four will have deductibles between $100 and $250.

            CMS announced that drug plan premiums will increase an average of 8.7% nationwide for 2008, to about $40 a month. In Illinois the changes will vary widely, and include some reductions, as shown on the accompanying table. The average for “basic” plans (with a $275 deductible and no coverage during the doughnut hole) will be about $25.

            The table also shows which plans are available to people receiving full federal extra help (LIS, the low income subsidy) without any additional premium paid by those enrollees. UnitedHealth has the largest market share nationwide, and because of its premium increases, some of its plans that are currently open to LIS recipients will not be available to them in 2008 in many states. About 650,000 people in UnitedHealth and almost one million in other plans who currently receive LIS and pay no premium will have to be reassigned to other plans for 2008, unless they are willing to pay the difference between the limit set by CMS and the total premium. CMS says that it will work with the insurance plans, the Social Security Administration, and the states to “ensure that the (LIS) beneficiaries are placed in a plan that is right for them.” However, with about 1.6 million people in this situation, the network will be pressed to give each of them the individual attention they need to make an informed selection. At least some fraction of LIS recipients are likely to find themselves either in a new plan that does not cover all their drugs or unexpectedly facing a premium bill if they elected to remain in their current plan without understanding the ramifications of that choice.

            The monthly premiums for Illinois PDPs will range from $17.70 to $97.50, compared to this year’s range of $17.10 to $106. Eleven plans will have lower premiums in 2008 than in 2007: three with reductions of less than 5%, six between 10% and 20%, and one each at 9.0% and 48.0% less than in 2007. One plan’s premium is unchanged, and the other 36 have higher premiums. The increases vary considerably: five less than 5%, six in the 5% to 10% range, four between 10% and 15%, three between 15% and 20%, four with increases of 20% to 30%, six increasing 30% to 40%, five in the 40% to 50% range, and three with increases of more than 50%.

            The change in the premium can be misleading unless any changes in the deductible, formulary, drug prices, and coverage in the gap (the doughnut hole) are also considered. The deductible and gap coverage are noted in the accompanying table, but changes in each plan’s formulary and drug prices have not yet been announced.

            Several plans, for example, cover all generics during the doughnut hole this year, but will cover only “some generics” or “preferred generics” in 2008. One plan, Silver Script Plus, does not cover generics during the doughnut hole this year, but will do so in 2008. The premium for Sterling Rx will go down $1.40 (4.5%), from $31.00 to $29.60, but its deductible will increase from $100 in 2007 to $275 in 2008. For anyone who uses more than $117 worth of drugs in the course of a year, this will be an increase in premium-plus-deductible, possibly of as much as $158 over the course of the year. Similarly, United Health Rx Extended/Value plan reduced its premium $20.20 (48%), from $42.10 to $21.90, but will have a $275 deductible in 2008, compared to none this year. For some people this may mean a slight increase.

            But other plans with lower premiums in 2008, such as Advantra Rx Value and HealthSpring PDP, will have little or no change in their deductibles. If there are no substantial changes in their formularies or drug pricing, this could make these plans more attractive and economical.

            This year only one plan in Illinois, Sierra Rx Plus, covers all drugs throughout the coverage gap. In effect, it has no doughnut hole. This plan’s $106 premium is the highest of all plans in Illinois this year, but for those with drug costs high enough to take them well into or even beyond the doughnut hole, the savings from complete coverage throughout the gap more than offsets the high premium. But this plan is being discontinued in 2008, and there will be no plan in Illinois that covers all drugs throughout the gap.

            The substantial changes in many plans’ premiums indicate that most Part D enrollees should review their drug needs and costs for the coming year. Many enrollees are likely to find that their current plan will not have the lowest total annual cost (the sum of premiums, deductible [if any], and copayments) in 2008. Less than 10% of enrollees switched plans at the start of 2007, and many plans may be hoping for a similarly low rate for 2008.

            Although enrollees in the state’s pharmaceutical program, Illinois Cares Rx, pay no premiums or deductibles in coordinating drug plans, and have only a standard copayment for generics, preferred name brands, and non-preferred drugs, they still would be wise to review their current plan’s formulary for 2008. If plans have reclassified drugs from preferred to non-preferred or vice versa, added or dropped drugs from the formulary, imposed new restrictions (quantity limits, step therapy, or prior authorization), or significantly increased the drug’s total price, it could make a substantial difference in Illinois Cares Rx enrollees’ total out-of-pocket costs for the year. This is especially true if their total annual drug cost is over $2,400, after which they pay 20% of the total cost plus the standard copayment. With these possible changes and the possible addition of new coordinating plans in 2008, Illinois Cares Rx enrollees should review their situation.

            Another variable in the cost equation is that generic versions of several widely used name brand drugs came on the market in 2008, and several more are expected in 2008.

Children’s Health and Medicare Protection Act (CHAMP)– As the Legislative Committee discussed at the last meeting, both the House and Senate passed bill reauthorizing the State Children’s Health Insurance Program (SCHIP, also known as CHIP). The Senate bill dealt only with CHIP, but the House bill, HR 3162, also included many amendments to Medicare, including the drug benefit (Part D), Part B payments to doctors, Medicare Advantage, and the 45% trigger. When the conference committee worked out an acceptable version of the SCHIP bill to be submitted to the House and Senate, they omitted all the Medicare provisions. Many advocates for those amendments re-affirmed their support for the changes, but acknowledged the necessity of concentrating on the SCHIP reauthorization, which faced a September 30 deadline.

President Bush vetoed the SCHIP bill, as he had said he would. Senate support for the bill is thought to be veto-proof, but the House vote (265 to 159) was well short of the two-thirds vote needed to override a veto. House leaders postponed the override attempt until October 18. Regardless of the outcome of the SCHIP bill, the Medicare amendments are unlikely to resurface in the immediate future, but their supporters promise to revive them before next year’s election. 

Medicare and hospital errors -- The Centers for Medicare & Medicaid Services (CMS) recently announced a new policy: refusing to pay the extra costs of treating errors, injuries, and infections “that could reasonably have been prevented” in hospitalized Medicare patients. Among the eight kinds of problems covered by the policy are bedsores, injuries caused by falls, and infections resulting from prolonged use of catheters. Medicare also will not pay for extra care needed due to “serious preventable events,” such as leaving a sponge in a patient during surgery, transfusing the wrong blood type, or surgical site infections after coronary artery bypass surgery. The new policy will take effect on October 1, 2008.

            The Centers for Disease Control & Prevention estimates that hospitalized patients develop 1.7 million infections a year, which cause or contribute to the death of 99,000 people.

CMS estimates that the new policy will save Medicare $20 million a year, but some experts predict greater savings, especially once hospitals begin changes needed to reduce such problems.

            The policy could increase costs if hospitals try to determine and document whether patients had conditions such as bedsores or urinary tract infections at the time of admission. This might lead to expensive and sometimes unnecessary testing. Hospital advocates also note that infections can occur even when all staff follow the recommended procedures and precautions. Similarly, some patients, particularly terminally ill patients, may develop bedsores in spite of appropriate preventive care.

            Hospitals will not be allowed to charge patients for costs that Medicare refuses to cover. The policy does not apply to doctors, who will continue to be allowed to bill for additional care even if they are wholly or partially at fault.

Medicare Advantage plan audits – The Centers for Medicare & Medicaid Services (CMS) is required to audit the financial records of one-third of Medicare Advantage plans each year, so that each plan is audited at least once every three years. The Government Accountability Office (GAO), which monitors the audits, recently reported that CMS has not met this requirement for several years and has not tried to recover money paid in error.

            The GAO found that CMS’ audit rate had declined steadily, from 24% of MA plans in 2001 to 14% in 2006, even though Medicare spending on MA plans has grown considerably. Medicare Advantage now totals $75 billion, about one-fifth of total Medicare spending.

            The audits are intended to determine whether MA plans correctly calculated their costs and premiums and whether they provided the promised services to enrollees. CMS pays MA plans a fixed monthly amount per enrollee. If the plans are able to hold down costs, they are supposed to give enrollees a share of the savings, in the form of lower premiums or increased benefits, and also give CMS a share.

            For 2003 CMS found significant errors at 41 of the 49 MA plans audited (out of a total of 220), but CMS took no action on its findings. As a result, said the auditors, the MA plans “kept $59 million that beneficiaries could have received in additional benefits, lower copayments, or lower premiums.” 

New CMS Acting Director – Health & Human Services Secretary Michael Leavitt has named Kerry Weems the acting administrator of the Centers for Medicare & Medicaid Services, and he had already been nominated for the permanent position. Mr. Weems has been deputy chief of staff to Secretary Leavitt since February, 2005, and has worked primarily as a budget analyst in programs to curtail health care spending. He is a 24-year veteran of HHS. It is somewhat unusual for a career federal employee to be nominated for a top political position.

            The Senate Finance Committee held a confirmation hearing on July 25, and Mr. Weems’ nomination is not expected to face any serious opposition. In his statement at the hearing, Mr. Weems noted that he had worked in both Republican and Democratic administrations, and that the CMS administrator needs “a broad, nonpartisan understanding of health care delivery in this country, and where we need to go.”

            Among the projects currently under way at CMS, Mr. Weems specifically mentioned the Physicians Quality Reporting Initiative, to reward doctors for reporting on quality care; the plan for value-based purchasing for hospitals; and standards and certification for electronic health records. He also identified several broad goals:

• My vision for the prescription drug program is that every beneficiary and their caregivers have the information they need to choose the best plan and get the best care they need.
• My vision for our health system is that every patient has the right information to choose care that is accessible, coordinated, and effective, and in the most appropriate setting.
• My vision for Medicare and Medicaid is one in which beneficiaries are protected – whether from unsafe nursing homes, unscrupulous insurance salespeople, fraudulent equipment providers, or bad medicine. If confirmed, I will intensify CMS oversight, and I expect you to hold me responsible for acting on abuses or inefficiencies in the course of program oversight.

Social Security reform – The Treasury Department recently released the first of a series of six issue briefs on Social Security to be issued over the next three months. The briefs will “focus on areas of common ground and provide straightforward analysis of the challenges facing Social Security and the implications of potential reforms.” The first brief, “Social Security Reform: The Nature of the Problem,” released on September 24, is available on the Treasury Department’s website, www.ustreas.gov.

            The fourteen-page brief makes four major points:

• Social Security faces a shortfall over the indefinite future of $13.6 trillion in present-value terms, an amount equal to 3.5% of future taxable payrolls. Looking at the gap over a shorter horizon provides only limited information on the financial status of the program.

• Social Security can be made permanently solvent only by reducing the present value of scheduled benefits and/or increasing the present value of scheduled tax revenues. Other changes to the program might be desirable, but only these changes can restore solvency permanently.

• Delaying changes to Social Security reduces the number of cohorts over which the burden of reform can be spread. Not taking action is thus unfair to future generations. This is a significant cost of delay.

• By itself, faster economic growth will not solve Social Security’s financial imbalance – realistically, there is no way to ‘grow out of the problem.’”

“Behind the counter” drugs – The Food & Drug Administration is considering a proposal to create a new category of drugs, which customers could buy from a pharmacist without a prescription but with some restrictions that do not apply to over-the-counter (OTC) products. The FDA is formally seeking public comment on the proposal through November 28, and will hold a public hearing on the proposal in Washington on November 14. The FDA is particularly interested in the implications of behind the counter (BTC) drugs on patient access and use, drug prices, the continued safety and effectiveness of drugs, and patient compliance with drug therapy.

            BTC drugs would be an intermediate step between prescription and OTC drugs such as aspirin. The Plan B emergency contraceptive is one such product already being sold in this way to women aged 18 and older. The pharmacy must check a woman’s ID to verify her age, since minors require a prescription. Cold remedies containing pseudophedrine are also sold BTC because this ingredient could be used to produce methamphetamine. Quantities are limited, buyers must show ID, and their purchases are logged.

            In its request for comments on the proposal, the FDA noted that “Some groups have asserted that pharmacist interaction with the consumer could ensure safe and effective use of a drug product that otherwise might require a prescription. Because pharmacists have the training and knowledge to provide certain interventions, they may be able to ensure that patients meet the conditions for use and educate patients on appropriate use of the drug product. These groups have suggested, moreover, that the availability of certain drugs BTC could increase patient access to medications that may be underutilized, particularly by patients without health insurance, because these medications otherwise would be available only with a prescription.”

Nasal steroids for allergies and statins for reducing cholesterol are currently prescription drugs that are considered possibilities for reclassification as BTC drugs.

            Canada, New Zealand, and many European countries have some version of BTC drugs. The United Kingdom has prescription, BTC, and OTC products, while the other countries have more than three categories. In general, a drug is placed in a BTC or other intermediate category if it has a low potential for side effects or overdose, which intervention by a pharmacist could minimize, and if it is otherwise suitable for self-medication, including self-diagnosis, with the intervention of a pharmacist. A drug’s potential for abuse, patient choice and accessibility, and public health issues are also considered. For BTC and similarly classified drugs, the pharmacist is usually required to ensure that the patient meets certain criteria before dispensing the drug, and to provide information on the drug’s proper use and monitoring.

            The American Pharmacists Association supports the BTC concept, and believes that pharmacists are qualified and willing to expand their role in selecting and dispensing drugs. The National Association of Chain Drug Stores is also inclined to favor BTC drugs.

The American Medical Association opposes BTC drugs, and the Pharmaceutical Research and Manufacturers of America, the drug companies’ trade group, is still studying the issue. The Consumer Healthcare Products association, a trade group representing companies whose products do not require prescriptions, opposes BTC drugs. They are concerned that a BTC policy would mean that some drugs currently sold OTC would be reclassified as BTC drugs. The change could limit the number of stores where they are sold, which would curb competition and tend to raise prices.

Prices could also rise if health insurance policies’ prescription drug plans no longer cover former prescription drugs that are reclassified as BTC. Medicare Part D plans and Illinois Cares Rx do not cover OTC drugs, and currently have no policy about BTC drugs. If insurance does not cover BTC drugs, consumers would have to pay the full price.

FY08 Section 8 funding – The Section 8 Housing Choice Voucher program enables low-income recipients to rent privately owned housing. The voucher makes up the difference between the unit’s fair market rent and what the tenant can afford. The voucher program serves about 2 million households, including seniors, people with disabilities, and families with children Approximately 16% of these vouchers go to seniors.

Congress is now working on its thirteen FY08 appropriation bills, including the Housing & Urban Development/Transportation (HR 3074). Two of the remaining issues to be decided in the HUD appropriation are the funding level for renewing existing Section 8 vouchers and the distribution of those funds among state and local housing agencies.

            President Bush’s FY08 budget proposal included $16.0 billion for the voucher program, including $14.4 billion for voucher renewal funding and $1.35 billion for administration. This would fund 1.941 million vouchers, so 80,000 households currently receiving vouchers would have to be cut.

            The House bill would fund the voucher program at $16.3 billion, and the Senate bill at $16.6 billion. Under the House bill there would be a cut of 55,000 vouchers, compared to FY07, and the Senate bill would maintain the FY07 service level. Under the president’s proposal, the cuts would be distributed among 1,600 housing agencies (out of approximately 2,400 in the country), and under the House bill it would be among 1,300 agencies.

            The White House, Senate, and House, budgets for Section 8 all include $1.35 billion for administration, and the House and Senate bills also include some reforms proposed by President Bush, such as tying housing agencies’ administrative funding to the number of vouchers they use. This gives them an additional incentive to serve more households.

            Between 2004 and 2006, Congress and the administration changed the voucher funding formula substantially, reducing the correlation between agencies’ funding allocations and the number of vouchers they issued. This reduced agencies’ incentives to serve as many households as their funding would allow, and approximately 150,000 vouchers were lost nationwide. Some agencies accumulated sizable balances of unspent federal funds, while eligible households went unserved or faced higher rent burdens.

            Congress reversed this direction in 2007, and directed HUD to distribute funds to renew the voucher program in proportion to an agency’s leasing rates and costs in the most recent 12-month period. This change, along with an increase of nearly $500 million (3.5%), allowed housing agencies to renew all vouchers that had been used in the previous year. In July of 2007, the House passed HR 1851, which made this change permanent by adding it to the U.S. Housing Act. Rep. Judy Biggert (R, IL) sponsored this bill, which passed with strong bipartisan support. The Senate appropriation bill for FY08 contains a similar provision. But the House appropriation bill for FY08 reverses the change the House itself had made so recently. It directs HUD to distribute voucher funding on the basis of housing agencies’ dollar allocation for renewal funding in FY07.

This difference between the House and Senate bills, plus the additional $300 million in the Senate bill, accounts for the difference between them in the number of FY07 vouchers that would not be renewed in FY08 – no loss under the Senate bill, compared to 55,000 under the House version. About a quarter of housing agencies would face absolute funding cuts under the House bill, and funding for most of the others would not keep up with inflation.

SEC investigates marketers to seniors – The U.S. Securities & Exchange Commission (SEC) and state regulators are investigating investment firms and marketers that target seniors, often for misleading or fraudulent pitches. One particular focus of the effort, the “free lunch” seminar, has been the subject of a year-long study by the SEC, the Financial Industry Regulatory Authority (FINRA), and state securities regulators who are members of the North American Securities Administrators Association (NASAA). Their report, “Protecting Senior Investors: Report of Examinations of Securities Firms Providing ‘Free Lunch’ Sales Seminars,” is available on the SEC website at www.sec.gov/spotlight/seniors/sec2007seniorsmediakit.htm.

The report was presented at a “Senior Summit” on September 10 in Washington. Officials of the SEC, FINRA, NASAA, and AARP were among the speakers, but no representative of the Administration on Aging, state units on aging such as IDOA, or AAAs were on the agenda.

            Among the key findings of the study:

•  All of the seminars, although advertised as educational workshops where “nothing will be sold,” were actually intended to result in the attendees’ opening new accounts and the sale of investment products, either on the spot or in follow-up contacts.

• Weak supervisory practices by the firms were evident in 59% of the sales seminars. These included failure to review seminar presentations and materials as required.

• Half of the seminars featured exaggerated or misleading advertising claims; e.g., “How to receive a 13.3% return” and “How $100K can pay $1 million to your heirs.”

• Possibly unsuitable recommendations were made in 23% of the seminars studied; e.g., risky investments recommended to an investor with a conservative objective, or illiquid investments recommended to someone with a short-term need for cash.

• Of all the seminars studied, 13% appeared to be fraudulent and were referred to the appropriate regulator for possible enforcement or disciplinary action. These included serious misrepresentation of risk and return, possible liquidation of accounts without the customer’s knowledge or consent, and possible sales of fictitious investments.

 
The SEC/FINRA/NASAA report recommended that financial services firms review their supervisory practices and take steps to supervise sales seminars more closely, and redouble their efforts to ensure that the investment recommendations made to seniors are suitable in light of the customer’s investment objectives. It also recommended that ongoing investor education efforts for seniors should provide education about “free lunch” sales seminars. Senior investors should understand that these sales seminars are intended to result in the sales of financial products, and that they may be sponsored by an undisclosed company with a financial interest in product sales.

Alzheimer’s disease – Sen. Barbara Mikulski (D, MD) has introduced two bills related to this disease. The Alzheimer’s Breakthrough Act, S 898/HR 1560, would extend through 2012 the authorization for funding to the National Institutes of Health for conducting or supporting research on Alzheimer’s. The bill would also direct the National Institute on Aging (NIA) to give priority to Alzheimer’s research; to increase the emphasis on Alzheimer’s prevention trials within NIH; to maintain Alzheimer’s priority for the existing neuroscience initiative; to conduct and support cooperative clinical research on Alzheimer’s; and to grant funds for research on the early detection, diagnosis, and prevention of Alzheimer’s, the relationship of Alzheimer’s to vascular disease, and Alzheimer’s disease services and caregiving.

The Congressional Budget Office estimates that the program would cost $14 million in BY08, and $2.5 billion between FY08 and FY12. Alzheimer’s is already an NIA priority, accounting for about $502 million this year, about half of its total research budget. Another $141 million from other instiututes at NIH are also devoted to Alzheimer’s.

            Twenty-two senators of both parties, including Illinois’ Richard Durbin, are co-sponsors of the Breakthrough Act. The Senate Health, Education, Labor, & Pensions bill has approved the bill. In the House, Rep. Edward Markey (D, MA) introduced the corresponding bill, which now has 49 co-sponsors (none from NEIL’s region). It was referred to the Health Subcommittee of the Energy & Commerce Committee.

            The Alzheimer’s Family Assistance Act, S 897/HR 1807, would create a federal income tax credit for family caregivers of spouses and other dependents with long-term care needs, allow a tax deduction for long-term care insurance premiums, and establish consumer protection standards for long-term care insurance contracts. The tax credit would start at $1,000 in 2007, and rise by $500 each year until it reached $3,000 in 2011.

            The Senate bill has nineteen co-sponsors (thirteen Democrats, six Republicans), including Richard Durbin of Illinois. It was referred to the Finance Committee. Rep. Eddie Bernice Johnson (D, TX) introduced the corresponding House bill, with two co-sponsors. It was referred to the Ways & Means Committee.

Mental health parity – One of the CHAMP bill’s discarded Medicare provisions would have reduced the Medicare Part B copayment for outpatient mental health care to 20%, from its present 50% of a Medicare-approved amount. The Mental Health Parity Act, S 558, would apply this principle to most health insurance. The bill would extend and expand the Mental Health Parity Act of 1996, which will expire on December 31. The current law prohibits group health insurance issuers from limiting annual and lifetime expenditures for mental health coverage more strictly than for medical and surgical coverage. The new bill, S 558, would maintain this prohibition and also would require plans to have the same deductibles, copayments, and length of treatment for mental and physical illnesses if the policies cover both. The bill would not apply to insurance purchased by employers with fewer than 50 employees.

            The Senate unanimously passed the bill on September 18, and sent the bill to the House, where it was referred to the Energy & Commerce and the Education & Labor Committees. A similar bill but not identical House bill, HR 1424, the Paul Wellstone Mental Health and Addiction Act, has over 270 co-sponsors, more than half the House membership, including Illinoisans Melissa Bean (D), Jesse Jackson, Jr. (D), and Mark Kirk (R). That bill was also referred to Energy & Commerce and Education & Labor, and to Ways & Means as well.

Update on genetic testing bill – The Legislative Committee discussed this at its May meeting, and informally supported the Genetic Information Nondiscrimination Act (GINA), HR 493. This bill would prohibit discrimination by group health plans and issuers of health insurance on the basis of genetic information or services. They could not discriminate in enrollment or premiums based on genetic information or a client’s or potential client’s request for such information, nor could insurers require genetic testing. The same prohibition would apply to Medicare supplemental insurers. Employers would be similarly forbidden to discriminate because of an employee’s or job applicant’s genetic information. The bill would also extend medical privacy and confidentiality rules to genetic information.

 The House passed this bill overwhelmingly, 420 to 3. The identical Senate bill, S 358, has bipartisan support, with 35 co-sponsors, Sens. Richard Durbin and Barack Obama of Illinois among them. The Health, Education, Labor, and Pensions Committee approved the bill in April, but it has made no progress since then.

 The U.S. Chamber of Commerce opposes GINA, which it says would “radically alter employer use and processing of health care information.”

Tidbits

The Census Bureau recently reported that 23.2% of Americans aged 65 to 74 and 5.5% of those aged 75+ were in the labor force in 2006. Those actually working were 22.3% of the group aged 65-74 and 5.3% of those aged 75+. These figures included both full- and part-time workers. Among those aged 65-74, this is a significant increase from the 19.6% who were working in 2000. This is probably partially due to the increase in the age of full retirement benefits under Social Security, which rose from 65 for those born before 1938 to 65 and eight months for those born in 1941, who reached 65 in 2006.

Also from the Census Bureau: among those aged 65+ whose primary language is not English, the ability to speak English “very well” varies considerably: 35.7% of Spanish-speakers, 55.9% of those who speak other Indo-European languages, 26.5% of those who speak Asian or Pacific Island languages, and 50.8% of those who speak other languages.

In a poll conducted for the nonpartisan Kaiser Family Foundation between August 2 and 8, adults rated health care the most important domestic issue for the federal government to address. Iraq was rated first by all groups (38% of Republicans, 53% of Democrats, and 41% of independents), and 22% of Republicans rated terrorism as the top issue. Health care was second overall, with 27% of those polled (19% of Republicans, 35% of Democrats, and 25% of independents) rating it the top issue. The other issues among the top ten were the economy, immigration, frustration with government, education, gasoline prices, and taxes. (Global warming and other environmental issues, Social Security, crime and violence, civil rights, gay rights, and abortion were not among the top ten issues for members of either party or for independents.) For both parties and for independents, 30% of those polled identified health care as the issue they most wanted presidential candidates to discuss, second only to Iraq (38%). On the broad issue of health care, there were four primary issues: reducing the cost of health care and health insurance (the top issue for 39% overall); expanding health insurance coverage for the uninsured (tops with 34%); improving the quality of care and reducing medical errors (the top issue for 13% overall); and reducing spending on government programs such as Medicare and Medicaid (the top issue for 8%). There were strong partisan differences for some of these issues: reducing costs was most important to 50% of Republicans and 36% of Democrats, while 40% of Democrats and 16% of Republicans considered expanding coverage for the uninsured the most important health-related issue. The full report is available at www.kff.org, along with the results of similar polls conducted in March and June, 2007.

The White House Office of Management & Budget recently reported the results of its Program Assessment Rating Tool (PART) evaluation of the Administration on Aging. OMB rated the AOA’s programs as “Effective,” which only 18% of programs evaluated by OMB received. (The other possible ratings are Moderately Effective, Adequate, Ineffective, and Results Not Demonstrated.) An Effective rating means that the program sets ambitious goals, achieves results, is well managed, and improves efficiency. OMB also noted that the AOA has a clear purpose and that its programs provide high quality home- and community-based services and promote the well-being and independence of the elderly. To improve the performance of the AOA’s programs further, OMB is planning to enhance program evaluation activity through a comprehensive evaluation plan that includes process, impact, and cost-benefit analysis, and a restructuring of the FY09 Congressional Justification to provide a more integrated budget and performance presentation.

The Social Security Administration has warned that it would suffer “significant harm” and that its ability to carry out its core functions would be impaired if there is any further delay in a mailing to employers about discrepancies between their workers’ Social Security information and SSA records. The letters are intended to help identify illegal aliens working in the U.S. Legal objections to the letters, negotiations about employment and immigration rules, and the wait while Congress was debating an immigration bill all delayed the mailings. SSA fears that additional delay or changes in the letter and follow-up processes would interfere with its ability to process routine retirement and disability claims.

CP  LegOct07.LC.