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Transcript: Health On The Hill

The Senate Health, Education, Labor and Pensions Committee will hold a hearing this week to discuss how to protect consumers from unreasonable health insurance premium increases. Separately, President Obama has signed into law a measure that would extend COBRA premium subsidies for unemployed workers and prevent a scheduled 21 percent cut in Medicare payments to physicians through the end of May. 

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JACKIE JUDD: Good day. I am Jackie Judd with Health on the Hill. Congress may have passed its Health Care Overhaul Bill, but that is not the end of the discussion by any means. This week a key senate committee takes up cost issues related to the health insurance industry. Mary Agnes Carey, senior correspondent with Kaiser Health News, is here to walk us through it. As always, welcome Mary Agnes.

MARY AGNES CAREY: Thanks for having me.

JACKIE JUDD: The HELP Committee on the Senate side, Health, Education, Labor and Pension Committee, will be taking up this question this week, whether to require insurers to pay a certain amount for health care, that is claims, as opposed to advertising, executive compensation, etc. Fill us in.

MARY AGNES CAREY: Well, they will be looking at provisions in the bill that require large group insurers to spend 85 percent of their revenues on health insurance claims, and if you are in a small group and individual market to have it at 80 percent. There has been a lot of concern about what insurers will count towards this threshold; how you will enforce it if you believe they are not actually following it, and how to protect consumers from rate increases for their health insurance premiums.

JACKIE JUDD: This was stipulated in the law that has been enacted, right?

MARY AGNES CAREY: That is right. It is going to kick in January 1st of next year, but of course there is passing the law and then there is the regulatory process to put those requirements in place. That is kind of the new game now. It is looking at how well the Department of Health and Human Services and other federal agencies write these regulations to attain the goal that Congress wanted to achieve with this.

JACKIE JUDD: Does the insurance industry have any hope at this point of trying to change what was already enacted through the regulatory process?

MARY AGNES CAREY: Well, they certainly could not change those thresholds, but they are going to try to influence what they can count, what exact expenditures they can count towards those caps. Now, they are going to be pushing back against efforts from Senator Dianne Feinstein who is going to testify at this hearing and other Democrats who want even tougher federal regulation of the health insurance premiums and what they can count in their hikes and so on.

JACKIE JUDD: Senator Feinstein is trying to resurrect something that President Obama floated briefly that never really caught on and that was the creation of a federal board to have some control over premium increases.

MARY AGNES CAREY: Exactly. This board, and Senator Feinstein mirrors it in her proposal, would either be able to modify or deny these premium increases. Right now, the bill can require monitoring, reporting, but it can’t stop some of these rate hikes, so she would like to take it farther and make sure they can actually do that.

JACKIE JUDD: Why does she think she might be successful now when the Democrats were not successful two months ago with the idea?

MARY AGNES CAREY: Well, I think that most people feel that the time now is over for major health legislation on Capitol Hill, so much political capital was invested in passing the big bill. But this keeps the pressure on; more public attention, especially as we go into the regulatory process, all the focus, all the pressure you can put on to shape those regulations, to attain her goals and the goals of Congress in the bill, they are very important even if you cannot pass the bill.

JACKIE JUDD: Okay and one final question that involves something that happened last week. That is the President signed into law an extension of some unemployment benefits including federal subsidies for COBRA, but there was also something in there for doctors who see Medicare patients.

MARY AGNES CAREY: Right. They were facing a 21 percent pay cut in their Medicare reimbursements and no one really wants to cut Medicare physician fees, but they have had this longstanding formula, the sustainable growth rate that has had these cuts come up and Congress has stopped them over and over again. That is what happened last week.

They were blocked again until the end of May. They want to give members in the House and the Senate time to work out a longer term extension to stop it for the end of the year. This was also part of a larger package which included extension of unemployment benefits, which some members on both sides of the aisle want to continue to extend in this bad economy, so that was where the Medicare physician payment fix fit in.

JACKIE JUDD: And, what is the plan for the longer term fix so that they do not have to keep coming back time after time?

MARY AGNES CAREY: That is a great question. Democrats would sort of like to scrap the current system and start over, but the cost of that bill is in the hundreds of billions of dollars, it is extremely expensive, and so that has been a key point of contention between Democrats and Republicans. Republicans have said to the Democrats, you are not funding a Medicare physician payment fix long-term.

Democrats have said, this is kind of a lousy formula we have all been stuck with, let’s just scrap it and start again. But until they get consensus on this, I think you are just going to see a lot of these shorter term extensions for the immediate future.

JACKIE JUDD: Okay. Thank you as always, Mary Agnes Carey of Kaiser Health News. Thank you for watching. I am Jackie Judd and this has been Health on the Hill.

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