Wednesday, October 31, 2012

How The Health Law Might Be Changed By The Next President

KHN Staff Writer
Oct 31, 2012
On the presidential campaign trail, Republican Mitt Romney has repeatedly called for repeal of the 2010 health law and President Barack Obama has vowed to implement it. Yet both men could face obstacles: Romney may be stymied by the lack of a majority in Congress to do his will and Obama could be forced by fiscal concerns or public opinion to revamp parts of the law.
Here is a look at how Obama and Romney might change the health law in the years ahead based on interviews with health policy experts.

President Barack Obama has urged voters to re-elect him so that he can put the law fully into effect. But some analysts predict the mounting pressures to reduce federal spending will complicate that plan.  And others note that in a second term, Obama may be more open to working with Congress to tweak provisions of the law that have raised concerns. Leading up to this tight election, Obama and Democrats have been reluctant to make modifications to the law, known as the Affordable Care Act (ACA).
"Right now (Democrats) can’t criticize the ACA. It’s just not politically smart," said Dan Mendelson, chief executive of the consulting firm Avalere Health who oversaw health programs at the Clinton administration’s Office of Management and Budget. But should Obama win a second term and Democrats retain control of the Senate, "I think that adjustments are on the table" as part of a larger deal to reduce the federal deficit, he said.
Scale Back Subsidies: As part of that effort to reduce federal spending, there could be pressure to scale back the health law’s subsidies that help low-income residents afford coverage. People who earn up to 400 percent of poverty – currently about $92,000 for a family of four – are eligible to get financial help in purchasing coverage.  Another big-ticket item is the expansion of Medicaid coverage to anyone up to 133 percent of the poverty level, or about $30,656 for a family of four.
The ACA is "so vast that by default it has to be impacted if there is a bipartisan, grand bargain debt deal," said Mike Tuffin, managing director of the consulting firm APCO Worldwide’s Washington, D.C., office and formerly executive vice president of America’s Health Insurance Plans, an insurance industry trade group. "You can imagine the subsidies being impacted, the Medicaid expansion being impacted."
Changing the law’s implementation schedule is wishful thinking among Republicans, Mendelson said. Any delay in full implementation could risk political backlash from consumers, who have waited years for the major provisions of the ACA to kick in. Delays may also open the law to other changes that Obama and Democrats don’t want.
"My feeling is that it would be a major political liability for the president to encourage delay," he said, "and that if this is going to be his legacy, I see no indication from the policy makers that they either want or expect there to be a delay."
The president "is willing to work with anyone with good ideas to improve the Affordable Care Act.  What he is not willing to do is reopen old partisan battles over the central guarantees of Obamacare," said Adam Fetcher, a spokesman for the Obama campaign.
Change in Age Rating Bands: The ACA prohibits insurers from charging more than three times as much for a policy sold to an older person than to a younger person. (This does not affect people over 65 who are covered by Medicare.)  This is a change from current law in most states where there are no limits on how much more insurers can charge older people. America’s Health Insurance Plans is advocating that the law’s rating bands be changed to 5:1 to prevent what the group describes as “rate shock” for younger people and families.
The issue that arises is that the law “makes coverage more affordable for the elderly but more expensive for the young people they want to buy coverage,” said Paul Heldman, senior health policy analyst with Potomac Research Group, a Washington research firm.
Medical Device Tax Cut: Of the many taxes in the health law, one has come under especially withering criticism: a 2.3 percent tax on the sale of any taxable medical device. Medical device manufacturers have loudly opposed the tax and won some key congressional support.
"For some, it could truly be the difference between surviving and having to close their doors," Michael R. Minogue, CEO and chairman of the board of Abiomed, Inc., which makes cardiac medical devices, told Congress this summer. But other analysts contend that the industry will do better under the law because more people will have coverage for treatments that use medical devices.
Legislation to repeal the tax passed the House in June with 37 Democrats joining Republicans to support the measure, although it is unlikely to receive Senate consideration this year. 
The problem with this – or any change – in the law’s taxes is finding another area to make up the loss of revenue. "It’s easy to hate a tax. It’s harder to find a pay for," says Mendelson.
Nonetheless, Tuffin says that this and other taxes could raise concerns if the public sees them as making health insurance or medical care more expensive.
"All of those hit simultaneously and overnight in 2014 and they are going to drive up the cost of coverage," he says. "Consumers are going to feel that, small businesses are going to feel that."
IPAB: One of the most contentious provisions of the health law is the creation of a 15-member panel charged with making recommendations to reduce Medicare spending if the amount the government spends grows beyond a target rate.  Congress must pass alternative cuts of the same size, or the recommendations from the panel, known as the Independent Payment Advisory Board (IPAB), become law. IPAB members are prohibited from making recommendations that would increase revenues or change benefits, eligibility or Medicare beneficiary cost-sharing. 
The board is disliked by many lawmakers. Some Republicans charge it amounts to health care rationing while members from both parties hate the idea of surrendering the power of the purse.
"IPAB is not a political must-have for the president," Mendelson said. "It is the kind of thing that could be treated in the context of other legislative adjustments…."

Gov. Mitt Romney has promised a full-scale repeal of the ACA. "He will repeal it in its entirety and replace it with reforms of his own," Romney spokeswoman Andrea Saul said in an e-mail.
But short of Republicans controlling both chambers of Congress, he would have to rely on the federal regulatory process to choke off funding and give states wide latitude to implement – or ignore -- the law. If Republicans took control of the Senate but had fewer than the 60 votes needed to pass most legislation, Romney could be forced to use a difficult legislative process known as "reconciliation" to try to dismantle the measure.
Still, some of the law’s supporters believe such a Republican effort could be successful. "I would say the bulk of it can be dismantled," said former Senate Majority Leader Tom Daschle, D-S.D. "[Romney] can use reconciliation for certain amounts affecting the budget of the federal government….He could have a profound effect on the outcome of the ACA in a very short period of time."
Slowing Down Implementation: The health law gives tremendous power to the secretary of Health and Human Services to implement the health law, and a Romney administration could use that power to slow the rulemaking process to a crawl.
"[Romney] can really do a lot to change the course of the legislation because – especially with the Affordable Care Act – the secretary and the president were given wide latitude," Daschle said.
If Republicans win control of the Senate, they could also use the reconciliation process—which requires only a majority instead of the 60 votes usually needed to pass a measure -- to strip out sections of the law that relate to the federal budget. That would include some of the law’s biggest provisions – such as the health insurance exchanges, subsidies to purchase coverage and the Medicaid expansion. Removing those sections would gut the law’s goal of covering 30 million more Americans.
But reconciliation can be a cumbersome and difficult process. In addition, it only applies to budget measures so large chunks of the law would be unaffected. And changes made under the process can’t increase the deficit.
"I think as people get into the details, it doesn’t work quite the way they thought," Senate Budget Committee Chairman Kent Conrad said when Senate Democrats were debating using reconciliation to pass the health law. Reconciliation, he said, "is anything but a slam dunk."
Waivers: Romney has said he would allow states to opt-out of the health law by using a waiver process. He could also use the process to give states wide latitude to implement provisions, like health insurance exchanges, that differ from requirements in the ACA. But there are many rules that govern the waiver process; ignoring those might not be so easy, analysts say.
An article in the Journal of the American Medical Association this week examines the power an administration would have to block the law. It points out that under the Constitution, the president is required to "take care that the laws be faithfully executed" and can’t "refuse to execute laws passed by Congress with which he disagrees," unless Congress grants that discretion.
Authors John Kraemer and Lawrence Gostin note that because the ACA "provides no such blanket waiver authority, granting states authority to disregard the ACA's key provisions would likely violate the ‘take care’ clause." The ACA, however, does allow states to seek waivers starting in 2017 if they can demonstrate an alternative approach that could increase coverage and reduce cost without raising the federal deficit.
If Romney opted not to move forward on the law, the administration could also be sued by individuals and groups. That litigation could take months – maybe years – to be resolved.
What Might Stay: Romney has said that he expects insurers to keep coverage that allows adult children to stay on a parent’s health insurance policy until age 26, although it’s unclear if he would support legislation or regulations to make that happen. He also has expressed support for states to set up health insurance exchanges and high-risk pools to cover the uninsured. 
Avik Roy, a senior fellow at the conservative Manhattan Institute and an outside adviser to the Romney campaign, says Romney wants most people to own their own health insurance rather than rely on their employers for coverage. "There are still other things you can do to expand [existing federal] protections to people who have credible coverage," he said. "And then for people who still have those gaps, do more with high-risk pools and do other things to make sure that the people who can’t get insurance today have the ability to get it through subsidized high-risk pools at the state level."

Today's Datapoint

39% … of seniors show some inclination to switch Medicare Advantage prescription drug plans for 2013, according to a recent survey of 2,509 seniors by Deft Research, LLC.

Monday, October 29, 2012

Today's Datapoint

1% … of the population in the U.S. represents 20% of the nation’s total drug spending, according to Atheer Kaddis, Pharm.D., senior VP for sales and marketing at Diplomat Specialty Pharmacy, who spoke at a recent AIS webinar.

Quote of the Day

“The class continues to get smarter. And we’re starting to see some real separation between the front-of-the-room and the back-of-the-room kids.”

— Nathan Goldstein, CEO of Gorman Health Group, LLC, commenting to AIS’s Medicare Advantage News on CMS’s new star ratings for Medicare Advantage plans and the gap between top-performing and lower-rated plans.

Rep. Darrell Issa

Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, on Oct. 22 issued a subpoena to HHS to turn over additional documents related to a department demonstration program that rewards Medicare Advantage (MA) plans based on star quality ratings, POLITICO reported. Issa has argued that the program, known as the Medicare Advantage Quality Bonus Payment Demonstration, is just a ruse to hide MA plan payment cuts that are part of the health reform law and a is political ploy.

Although HHS delivered more than 1,300 pages of documents on Oct. 18 to the congressman, Issa contends that the information was not responsive to his request, the newspaper said. In March, a Government Accountability Office (GAO) report recommended that HHS Sec. Kathleen Sebelius cancel the demonstration, which is estimated to cost $8.3 billion over 10 years.

“We are concerned that the only plausible explanation for the Demonstration is that you decided to utilize a loophole…to temporarily cover up ObamaCare’s large cuts to the 13 million seniors enrolled in Medicare Advantage until after this year’s election,”

Issa and Rep. James Lankford (R-Okla.) wrote in an Oct. 17 letter to Sebelius. The committee’s majority staff says that the price tag for the project is more than the 85 previous Medicare demonstration projects combined.

(Reprinted from AIS’s Health Reform Week's e-News Alert)

Friday, October 26, 2012

Today's Datapoint

$12.7 billion … in reductions in annual overpayments to Medicare Advantage plans should be realized as a result of health reform changes, such as rewarding plans that have higher star ratings and lowering payments to others, according to a new report from the Commonwealth Fund.

Thursday, October 25, 2012

Today's Datapoint

60% … of Medicare beneficiaries could expect higher premiums under the premium support plan for the program envisioned by Republican presidential nominee Mitt Romney, according to a recent Kaiser Family Foundation study.

Quote of the Day

If Obama wins, “it will be pretty obvious that a lot of things are going to happen that [Republican state governors] didn’t want to happen and will have to concede. So either red states work with the administration on at least a limited partnership [or let the federal government take control]. I think there’s going to be a sea change if Romney loses.”
— Robert Laszewski, president of Health Policy and Strategy Associates, told AIS’s Health Reform Week.

Friday, October 19, 2012

Today's Datapoint

300,000 … of Cigna Corp.’s 12 million covered lives receive a specialty drug and these customers represent 25% of the insurer’s total medical costs on a per-member per-year basis.

Wednesday, October 17, 2012

Social Security Announces 1.7 Percent Benefit Increase for 2013

Press Release

Tuesday, October 16, 2012Press Office
For Immediate Release410-965-8904

Social Security Announces 1.7 Percent Benefit Increase for 2013

Monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 62 million Americans will increase 1.7 percent in 2013, the Social Security Administration announced today.

The 1.7 percent cost-of-living adjustment (COLA) will begin with benefits that more than 56 million Social Security beneficiaries receive in January 2013.  Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2012.

Some other changes that take effect in January of each year are based on the increase in average wages. 

Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $113,700 from $110,100.  Of the estimated 163 million workers who will pay Social Security taxes in 2013, nearly 10 million will pay higher taxes as a result of the increase in the taxable maximum.

Information about Medicare changes for 2013, when announced, will be available at

For some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums.  

The Social Security Act provides for how the COLA is calculated.  To read more, please visit

# # #

NOTE TO CORRESPONDENTS: A fact sheet showing the effect of the various automatic adjustments is attached.

SSA Press Office  440 Altmeyer Building  6401 Security Blvd.  Baltimore, MD 21235
410-965-8904  FAX 410-966-9973

UnitedHealth: 2013 rates to include PPACA tax

October 16, 2012

UnitedHealth Group Inc. (NYSE:UNH) did well in the third quarter, but company executives said they are reluctant to try to give many details about how they think the company will do in 2013.

Stephen Hemsley, the president of UnitedHealth, emphasized the headwinds that could be facing the company in the coming year today during a conference call with securities analysts.

"Given the weak business climate and employment outlook in the United States, and the mounting pressures on federal and state budgets, to mention just a few of the challenges, we continue to be cautious about 2013 earnings performance," Hemsley said.
The current year has been a great year for the company, and the company is in as good or better position than it was a year ago, Hemsley said.
But "we are being cautious, and we think the market should be cautious as well," Hemsley said.
UnitedHealth is reporting $1.6 billion in net income for the third quarter on $27 billion in revenue, up from $1.3 billion in net income on $26 billion in revenue for the third quarter of 2011.
The company ended the quarter providing or administering health coverage for 36.5 million people, up 6.1 percent from the number it was covering a year earlier.
The growth came from increases in Medicaid and Medicare program enrollment, and in expansion in the large, self-funded employer health plans administered by UnitedHealth.

Enrollment in traditional, "risk-based" commercial health insurance programs fell 2.1 percent, to 9.3 million.

Hemsley said UnitedHealth expects to continue to lose "moderate levels of risk-based membership in the near term" as it sticks to "disciplined" pricing levels.

Hemsley and other executives said 2013 rates will reflect changes related to the Patient Protection and Affordable Care Act of 2010 (PPACA) as well as a general interest in maintaining profit margins.
The PPACA exchanges -- Web-based insurance supermarkets that are supposed to begin selling coverage to individuals and small groups in 2014 -- will likely "just be another distribution channel," executives said.

Executives expressed much more concern about the PPACA health insurance tax (HIT) provision, which is supposed to raise $8 billion from health insurers in 2014 alone.

PPACA drafters said they included the tax because a provision in PPACA requiring many individuals to own a minimum level of health coverage or else pay a penalty should send private health insurers a flood of new businesses. Health insurers should contribute a share of that new revenue to help fund PPACA coverage expansion efforts, provision supporters argued.

Provision critics have argued that, ultimately, the tax will simply increase commercial health coverage prices, and also increase what government agencies spend on providing Medicare and Medicaid coverage.

Even though UnitedHealth will not have to pay the tax until 2014, many customers have annual policies that will start in February 2013 or later, and that coverage will continue to be in effect until 2014, executives said.

The company will have to price the 2013-2014 policies to reflect the cost of the PPACA HIT tax, executives said.

The company also is getting ready to have conversations about the PPACA HIT tax will affect the Medicare and Medicaid bidding processes, executives said.

Hemsley talked briefly about the possibility that PPACA could be repealed or changed.

Whatever happens to the law, "we don't think the underlying issue has changed," Hemsley said. "The fact of the matter is that coverage needs to be better considered. The cost needs to be addressed more effectively. The system needs to operate more efficiently.... All of those elements are things that basically work to our competencies and the strengths of our businesses. So we will just adapt, if you will, to those kinds of changes."

Tuesday, October 16, 2012

UHC Maintains Medicare Supplement Growth

By Doug Feekin on October 16, 2012
October 16, 2012
Medicare Supplement market leader UnitedHealthcare (UHC) released 3rd quarter 2012 financials today, adding 60,000 more lives in 3rd quarter.
The UHC report features Standardized and Modernized policy in-force counts of 3,135,000 as of 3rd quarter 2012, a 240,000 increase over 3rd quarter 2011. The 240,000 policy count growth over the last 12 months is an 8.3% increase over the policy counts at 3rd quarter 2011.
CSG Actuarial projects this policy count growth will generate $7.4 billion in Medicare Supplement premiums for UnitedHealthcare in 2012.
UnitedHealthcare’s Medicare Supplement policy in-force counts continue to grow at a faster rate than previous years.

Star News Is Mostly Good for MA, but Is It Good Enough?

By James Gutman - October 12, 2012
There are lots of encouraging signs for Medicare Advantage plans in the 2013 star ratings that CMS released today, but reaching the top five-star rating seems almost as tough as ever. Only 11 of what CMS calls Medicare Advantage prescription drug (MA-PD) plans got five stars for 2013, and they include three Medicare cost plans, while another four of what CMS calls MA-only plans got that rating. The comparable figures for 2012 were nine and 12, respectively. The number of 4.5-star MA plans climbed to 54 for 2013 from 46 in 2012, according to CMS, and the number of four-star plans advanced to 62 from 51. The average star rating weighted by enrollment for MA-PDs in 2013 is 3.66, up from 3.44 in 2012, the agency added.
This is the good news. The less good news is that there still are 62 MA plans with ratings below three stars, and that 10 MA contracts have had those ratings for three or more consecutive years and are getting the low-performer icon on CMS's website. And MA contracts with four or more stars in the South and Southeast remain a rarity, albeit less so than in 2012. Moreover, some star-rating measures are relative nightmares for MA plans, led by osteoporosis management, in which the average score was 1.4 stars, lower than any average score in the continuing 2012 measures. In addition, while two of the MA-PDs earning five stars this time are for-profit, not-for-profit plans continue to dominate the top-scorer list.
What do you think about the new ratings? Are the ratings reflective of what is happening in MA plan quality? Is the path toward ratings of four stars and above something most plans now can attain? And will it be feasible for three-star plans to keep operating after the CMS star bonus demonstration program ends in 2014? Is the glass half full or half empty?

Today's Datapoint

50% … fewer inpatient days resulted for 750 Medicare Advantage patients in Aetna’s ACO partnership with NovaHealth, an independent physician association founded by Portland, Maine-based InterMed. There were also 45% fewer admissions and 56% fewer readmissions, according to study results published in the September issue of Health Affairs.

Quote of the Day

“Anytime the government can pass on costs — virtually hidden except to those paying them — you can be assured that the same government will have no incentive to reduce costs or take the well-documented waste, risk and harm out of the health system….”
— Helen Darling, president of the National Business Group on Health, told AIS’s Health Plan Week, referring to the assessment large self-insured employers will pay to fund the transitional reinsurance program under reform.

Voucher shift could hit Florida hard

October 15, 2012

Shifting to a "defined contribution" approach to funding Medicare could be especially expensive for residents of Florida, New Jersey and Nevada.
If the shift had taken place in 2010, and Medicare enrollees had tried to stay in the same plans, the percentage of enrollees who would have had to pay $100 or more in additional premiums per month could have been 50 percent in Nevada, 57 percent in New Jersey and 77 percent in Florida.
Gretchen Jacobson and other analysts at the Henry J. Kaiser Family Foundation have published data supporting those predictions in a defined contribution Medicare plan report released by the foundation.
Today, the analysts said, the Medicare program pays monthly amounts ranging from $500 to $900 to provide traditional Medicare coverage in different parts of the country. 
Medicare uses a combination of a bidding process and county-by-county or region-by-region formulas to set the amounts it pays private Medicare Advantage plans for each enrollee served.
Defined contribution Medicare funding proposals -- often called "voucher" proposals, or "premium support" proposals -- would have Medicare managers replace the current funding mechanisms with a simpler formula.
The government would base payments either on the cost of traditional Medicare in an area or on the cost of the second-cheapest private plan in the area, whichever was lower.
Enrollees who signed up for "benchmark plan" coverage could pay what they pay today, or less. An enrollee who wanted to use a more expensive plan would have to pay the difference between the benchmark plan premium and the premium for the plan actually selected.
Rep. Paul Ryan, R-Wis., the Republican nominee for vice president, has been a supporter of defined contribution Medicare funding proposals, the analysts said.

The analysts noted that they had to make many decisions to simplify their work. They looked only at enrollees' premium payments and not at the enrollees' other out-of-pocket costs, for example. The analysts also made assumptions about technical matters such as what definition of "service area" Medicare managers would use and what the minimum level of benefits provided would have to be.

The analysts also assumed that the country would introduce the "premium support" program immediately, instead of in phases.

The analysts found that, in their base case, Medicare premiums would have risen for 59 percent of all Medicare enrollees. Forty percent would have had to pay the same amount or less, and 1 percent would have gotten cash back.

The average increase for an enrollee subject to an increase would have been $109, the analysts estimated.

The impact of the shift would have varied widely from state to state.

The percentage of enrollees seeing big increases could have been as low as 0 percent in Alaska and Vermont.
In addition to Florida, New Jersey and Nevada, states in which the percentage could have been 45 percent or higher might have included California and Connecticut, the analysts said.

Many residents in Texas, Tennesse, and a belt of states stretching from Missouri to Massachusetts could have experienced monthly increases of $50 or higher.

The analysts also looked at cities and found that about 96 percent of the Medicare enrollees in Miami who tried to stay in the same plans could have ended up paying more. For those enrollees, the average increase could have been $326, the analysts estimated.

If, in the real world, enrollees turned out to be highly likely to switch to benchmark plans to save money, that could reduce the percentage paying an extra $100 or more per month to 8 percent, from 27 percent, the analysts said.

One obstacle to doing more analyses of plan switching is a lack of readily available county-level information about enrollee characteristics, the analysts said.

Monday, October 15, 2012

Today's Datapoint

62% … of pharmacists surveyed recently by CVS Caremark Corp indicated that cost is the biggest barrier to medication adherence.

Sunday, October 14, 2012


September 19, 2012

RE: Medicare Marketing Guidelines and Agent Licensing Requirements Related to Certain Medicare Plans and Prescription Drug Plans
Texas Department of Insurance (TDI) issues this bulletin to remind companies, agents, subcontractors, and consumers that the marketing of Medicare Advantage (MA), Medicare Advantage Prescription Drug Plans (MA-PDPs), Prescription Drug Plans (PDPs), and 1876 Cost Plans, is subject to the Medicare Marketing Guidelines (Guidelines) established by the Centers for Medicare & Medicaid Services (CMS).  Any company marketing these products must ensure that its agents and subcontractors are in full compliance with the rules, the Guidelines, transmittals, and other CMS requirements.  An electronic copy of the current Guidelines is available online at the following location:
TDI also reminds carriers, agents, and all regulated entities to comply with agent licensing requirements for the marketing of Medicare-related products.  Medicare Advantage organizations may only use agents licensed under state law to sell Medicare plans in accordance with 42 USC §1395w–21(h)(7)(A).  An agent may not sell, solicit, negotiate, or receive an application or contract for a Medicare-related product in this state, or represent an insurer in relation to a Medicare-related product in this state, unless the agent has completed a TDI-certified professional training program related to a Medicare-related product in accordance with Insurance Code §4004.252(a) and 28 Texas Administrative Code (TAC) §19.1024(a) (relating to Medicare-Related Product Certification Course).  This requirement applies to licensees that may otherwise qualify for the exemptions provided under 28 TAC §19.1004(b) or (c) (relating to Licensee Exemption from and Extension of Time for Continuing Education) in accordance with Insurance Code §4004.255 and 28 TAC §19.1024(g) and to nonresident agent licensees who do not hold an insurance agent’s license in the person’s state of residence in accordance with Insurance Code §4056.057(b). 
To continue their authorization to sell or solicit Medicare-related products in Texas, licensees must also complete at least four hours of TDI-certified Medicare-related products continuing education in accordance with Insurance Code §4004.253 and 28 TAC §19.1025 (relating to Medicare-Related Product Continuing Education), during each subsequent continuing education reporting period.  This requirement also applies to licensees that may otherwise qualify for the exemptions provided under 28 TAC §19.1004(b) or (c) in accordance with Insurance Code §4004.255 and 28 TAC §19.1025(c) and to nonresident agent licensees who do not hold an insurance agent’s license in the person’s state of residence in accordance with Insurance Code §4056.057(b). 
Nonresident agent licensees who hold a license in their state of residence and are authorized to sell or solicit Medicare-related products in their state of residence, may sell or solicit Medicare-related products in Texas without completing the Texas-specific training requirements, as provided in Insurance Code §4056.055 and §4056.056, and 28 TAC §19.1004(d).  However under those sections and 28 TAC §19.1024 and §19.1025, a nonresident agent licensee who is not authorized to sell or solicit Medicare-related products in the agent’s state of residence must complete the required Texas training courses prior to selling or soliciting Medicare-related products in this state.
A nonresident licensee that becomes a Texas resident between renewals of the Texas license must comply with the continuing education requirements under 28 TAC §19.1004(d)(1)-(3).
Plan sponsors must ensure that all agents selling Medicare-related products are trained and tested annually on Medicare rules and regulations and on details specific to the plan products that they sell in accordance with 42 USC §1395w-21(j)(2)(E); 42 CFR §422.2274(b) and (c); 42 CFR §423.2274(b) and (c); and the Guidelines, No. 120.3, page 88.  Under those provisions, plan sponsors must provide information about their training and testing to CMS when CMS requests the information. 
For information on certification courses required of currently licensed agents to market Medicare-related products, please see the TDI website,  Information on the required related continuing education is also available at this site.
If you have any specific questions regarding this bulletin, please contact Christopher Bean at (512) 463-8917 or at  For general information, please contact
Eleanor Kitzman
Commissioner of Insurance
For more information contact:

Raising Medicare Age: Supreme Court Decision Makes the Proposal More Problematic

October 3, 2012 at 3:09 pm
Posted by: Paul N. Van de Water
Posted in:   Congressional Action, Deficits and Projections, Federal Budget, Federal-State Issues, Health Policy, Health Reform, Insurance Coverage, Medicare, State Budget and Tax
The case for raising the Medicare eligibility age, which Maya MacGuineas of the Committee for a Responsible Federal Budget made recently in the Wall Street Journal, was weak even before the Supreme Court’s health reform ruling, and it’s even weaker now.
Raising the Medicare age from 65 to 67 would save the federal government money only by shifting costs to the private sector, as we have previously written.  Total health care costs would rise, not fall.  The Kaiser Family Foundation, in the leading study of this issue, finds that:
§  65- and 66-year-olds, who would no longer be eligible for Medicare, would face higher out-of-pocket health care costs, on average.  Two-thirds of this group — 3.3 million people — would face an average of $2,200 more each year in premiums and cost-sharing charges.
§  Employers that provide health coverage to their retirees would face higher costs, as more 65- and 66-year-olds received primary coverage through their employer, rather than through Medicare.
§  Medicare beneficiaries age 67 and over — as well as people under age 65 who buy insurance through the new health insurance exchanges that health reform will establish — would face higher premiums.  Shifting many 65- and 66-year-olds from Medicare to the insurance exchanges would make the beneficiary pools in both Medicare and the exchanges older, less healthy, and more costly to cover.
§  State Medicaid costs would rise, as some of the people who lost Medicare coverage would shift to Medicaid.
The Kaiser study estimates that these increased costs would be twice as large as the net federal savings, so overall health care costs would go up.
MacGuineas contends that this fact “isn’t an argument for abandoning the [increase in the Medicare age], but instead for doing everything we can to control overall health-care cost growth.”  To be sure, reducing system-wide health care costs is essential.  But why should we start by taking a step that would actually raise costs?
Furthermore, by shrinking Medicare’s share of the health insurance market, increasing the eligibility age would weaken its ability to serve as a leader in controlling health care costs.  And with a smaller pool of beneficiaries, doctors would have less incentive to see Medicare patients, as former White House Budget Director Peter Orszag has recently explained.
MacGuineas and other proponents assert that health reform would assure that all 65- and 66-year-olds who lost Medicare would have access to affordable health coverage, either through Medicaid or the new exchanges.  But, since the Supreme Court decision, that’s no longer the case.  Many poor 65- and 66-year-olds would likely end up uninsured.
Here’s why: When President Obama and House Speaker John Boehner considered raising the Medicare age to 67 during last year’s budget negotiations, the proposal under discussion assumed that policymakers would also require states to extend Medicaid coverage to everyone with incomes below 133 percent of the poverty line up to age 67; currently, health reform’s Medicaid expansion applies up to age 65.  Low-income 65- and 66-year olds losing Medicare would have qualified for Medicaid.
But the Supreme Court’s June decision changes the situation.  Now states can choose whether or not to expand Medicaid to cover all low-income adults.  And even though the federal government will pick up nearly all of the costs of the expansion, many governors and state legislative leaders have expressed reluctance or outright opposition.
In states that decline the Medicaid expansion, raising the Medicare age would leave many low-income 65- and 66-year-olds without health coverage.  That outcome is surely unacceptable.
Moreover, if adopting the Medicaid expansion meant that a state would have to bear a share of the costs for many 65- and 66-year-olds — who have substantially higher health care costs than younger adults — more states would likely decline the Medicaid expansion.  That, in turn, would also leave more poor working-age adults uninsured.
It would be extremely difficult to design a proposal that raises the Medicare age and produces substantial federal budget savings without discouraging states from taking up the Medicaid expansion and without leaving significant numbers of poor 65- and 66-year-olds uninsured.  Insurance for millions of vulnerable low-income people is at stake.

Friday, October 12, 2012

Issa Threatens To Subpoena HHS Medicare Advantage Documents

Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, alleges that the Department of Health and Human Services is using an $8 billion Medicare bonus payment demonstration project to mask the health law's cuts to Medicare Advantage plans in advance of the election.
The Hill: Rep. Issa Threatens To Subpoena HHS Over Medicare Bonuses
Rep. Darrell Issa (R-Calif.) said Thursday that he's willing to subpoena documents from the Health and Human Services Department (HHS), alleging a conspiracy to hide the impact of President Obama's health care law. Issa, as chairman of the House Oversight and Government Reform Committee, is investigating an $8 billion demonstration project in which Medicare pays bonuses to certain private Medicare Advantage plans based on quality. The congressman has suggested that HHS is using the bonus payments to mask the health care law's cuts to Medicare Advantage plans ahead of the election. Issa and Rep. James Lankford (R-Okla.) requested documents about the bonus payments in August. They said Thursday that they haven't gotten a response and said they "will consider the use of compulsory process" if HHS doesn't turn over the documents by Oct. 5 (Baker, 9/27).
CQ HealthBeat: Issa Threatens To Force CMS To Turn Over Medicare Advantage Documents
The chairman of the House Oversight and Government Reform Committee is threatening to force Centers for Medicare and Medicaid Services officials to turn over documents relating to their authority to issue bonus payments to Medicare Advantage plans under a CMS demonstration program. Rep. Darrell Issa, R-Calif., said in a letter to Health and Human Services Secretary Kathleen Sebelius that he wants the documents by Oct. 5. "If the Department continues to ignore the Committee's request, we will consider the use of a compulsory process," Issa wrote (9/27).

Obama Administration Touts Private Medicare Plan Growth, Lower Premiums

9/19/2012 @ 11:00AM

The Obama administration this morning said enrollment in the so-called Medicare Advantage program is projected to increase by 11 percent “in the next year and premiums will remain steady,” U.S. Secretary of Health and Human Services Kathleen Sebelius said.
Sebelius added that Medicare Advantage premiums have dropped by 10 percent since President Obama signed the Affordable Care Act law two years ago. Meanwhile, enrollment has risen 28 percent during that time.
The administration credits the Affordable Care Act as well as increased enrollment. The Obama administration has also made quality measurement a focus, rating the private health plans that operate in the program.
Move up t Move down
The major insurance companies that contract with the Medicare program to offer seniors’ benefits include Aetna (AET), Humana (HUM) and UnitedHealth Group as well as Blue Cross and Blue Shield plans and other players.
“Thanks to the Affordable Care Act, the Medicare Advantage and Prescription Drug programs have been strengthened and continue to improve for beneficiaries,” Sebelius said in a statement.  ”Since the law was enacted in 2010, average premiums have gone down, enrollment has gone up, and new benefits and lower drug costs continue to help millions of seniors and people with disabilities.”
The Centers for Medicare & Medicaid Services said the average Medicare Advantage premium next year will rise just $1.47 compared to this year to $32.59, according to the government’s projections.
The Obama administration has been criticized for slashing more than $140 billion in payments to Medicare Advantage plans over the next decade by Republicans and other supporters of Medicare Advantage, but such plans that achieve certain quality ratings will be able to attract bonus payments ranging from 3 to 5 percentage points, according to stipulations of the Affordable Care Act, which increases payments based on a “5 star” rating system.

Medicare quality program grows teeth

October 12, 2012

The Centers for Medicare & Medicaid Services (CMS) today added quality ratings to the 2013 Medicare plan selection system.

CMS rates Medicare Advantage plans and Medicare Part D prescription drug program plans using a 5-star system.

CMS is trying to get Medicare Advantage plan managers more interested in the rating program this year by tying about $8.3 billion in Medicare Advantage funding to "quality bonus program" linked to the star rating system. 

Some Republicans in Congress have argued that CMS has no clear authority under the Patient Protection and Affordable Care Act of 2010 (PPACA) to run the program, that the program will lead to CMS making bonus payments to too many health plans, and that CMS created the program simply to buffer health plans against PPACA-related cuts in funding.
In addition to adding star ratings to the database that consumers use, CMS has posted spreadsheets and other documents that give the data used to produce the star ratings

The databases are aimed at health care providers, researchers, Medicare agents and brokers, and others with the ability to handle spreadsheets.
The Medicare Advantage plan database, for example, includes 42 columns of information for 578 plans.
Users can sort the data using variables such as success at controlling the blood pressure of plan enrollees, how quickly enrollees report being able to get an appointment, and how well the plan did at seeing that enrollees received appropriate likely a provider was to have assessed an enrollee's ability to function.
The Medicare Advantage plan database, for example, includes 42 columns of information for 578 plans.
Users can sort the data using variables such as success at controlling the blood pressure of plan enrollees, how quickly enrollees report being able to get an appointment, and how well the plan did at seeing that enrollees received appropriate likely a provider was to have assessed an enrollee's ability to function.
In connection with measure C25, or consumers' reports on how quickly they get appointments and care, plans tended to cluster fairly close together.
About 86 percent of the enrollees at the plans that performed best on that indicator said they could get appointments and care quickly. Even at the lowest-performing plans, 62 percent of the enrollees said they could get appointments quickly.
For measure C25, the cut-off for a 1-star rating was 72 percent, and the cut-off for a 5-star rating was just a little higher -- 79 percent.
In the column for measure C12, which deals with efforts to assess the ability of enrollees in Medicare Advantage "special needs plans" (SNPs) to function, the two plans with the lowest rating measures had no evidence that any of their SNP enrollees had received the recommended annual functional assessments in 2011. The highest-performing plans reported that 100 percent of their SNP enrollees had received functional status assessments.
To get a 2-star rating on the indicator, a plan had to show that 55 percent to 75 percent of its SNP enrollees had received functional status assessments. To get a 5-star rating, a plan would have had to earn a score over 89 percent on that indicator.
Performance on indicator that could have a direct effect on the likelihood that a patient will suffer from a stroke or other catastrophic condition -- C19, which measures the "percent of plan members with high blood pressure who got treatment and were able to maintain a healthy pressure" -- also varied widely. 
The 1-star cut-off was just 43 percent for that measure, and the 5-star cut-off was 70 percent.