What’s In The Manager’s Amendment

[babylonsister]

http://news.firedoglake.com/2009/12/19/whats-in-the-managers-amendment/

What’s In The Manager’s Amendment
By: David Dayen Saturday December 19, 2009 9:38 am


So I’m frantically trying to read the manager’s amendment (turn on CSPAN-2 and you can follow along yourself) and all the supplementary information that’s out there on just what’s now in this health care bill, and here’s what I’ve got so far:

• The CBO score is out. The top line numbers? The bill costs $871 billion and would save the federal government $132 billion over the next ten years. The changes in the manager’s amendment amounted to a net $2 billion dollar savings. The bill would cover 31 million people and leave 23 million uninsured by 2019.

• On the abortion issue: states could prohibit abortion coverage in the exchange if they passed a law. This basically punts the Stupak issue to the states, and if the exchanges expand over time as expected, essentially end abortion services coverage in states that pass a law. This becomes a huge culture war battle in states for years and years to come. Good for pro- and anti-abortion groups’ fundraising coffers, bad for women.

• The CLASS Act, the federally managed, voluntary long-term care program, is still in the bill. Lieberman may have mentioned it on Face The Nation, but he didn’t kill it.

• The public option is replaced with the OPM-managed multi-state plans in the exchanges. Not all of them have to be non-profits; in fact, only one of them has to be.

• The individual mandate penalty actually looks a little higher here, although it’s phased in over time. It would be the “greater of a flat dollar amount per person or a percentage of the individual’s income,” up to 2% by 2015.

• Apparently Nebraska and maybe a few other states get more money for Medicaid funding. I can’t get entirely worked up over a legislator securing more money for poor people in their own state. It beats kickback deals for local defense contractors of developers. I think Paul Wellstone would have done no less.

• Small business tax credits to purchase insurance have been expanded by $12 billion and phase in immediately, and are eligible to companies that pay higher wages. Every bill in Congress has to include small business tax credits, it’s the law.

• The medical loss ratio, which was floated to be at 90%, had to be dropped down because of a nakedly political act by the CBO, which said that a 90% MLR would have amounted to nationalizing the insurance industry. So the MLR is now 85/80%, but that apparently does not include the money insurers get through risk adjustment, which means that in practice it’s actually higher.

• They’ve banned pre-existing conditions for children immediately, starting in 2010.

• There are new insurance regulations, including the ability to ban insurance companies from the exchange if they raise their rates above a certain amount. And if an insurer denies a claim, there will be an independent board to which customers can appeal. The design of that board is crucial.

• The nationwide plans, which could have gutted state-level insurance regulations, have been dropped. This is a good thing.

• There are $1.25 billion in new resources for community health centers in the bill, totaling $10 billion overall (there’s $14 billion in the House bill). I’ve written about community health centers before, which could provide a base of low or no-cost primary coverage for all low-income Americans in communities throughout the country. I actually think this is the best thing in the bill. Bernie Sanders is actually talking about this now on CSPAN. He says that 10,000 more communities will have access to community health centers with this legislation.

• Increased debt forgiveness for medical students to work at community health centers.

• The “doctor’s fix” was removed (probably to improve the CBO score) and will be dealt with in separate legislation.

• There’s an increase to the payroll tax for high-income Americans to pay for the bill. Before the increase was 0.5% for individuals with income above $200,000 and for families with income above $250,000; now it’s 0.9%.

• They traded the Botax for a Boehner tax; there’s now a 10% excise tax on indoor tanning.

[yurbud]

1. is MLR what they must spend on providing medical care?

[grantcart]

2. yes current industry standards are about 65% this moves to 80-85%

[slipslidingaway]

6. Link to the 65% number? According to this article it is 85.2% ...

http://journals.democraticunderground.com/slipslidingaway/187

http://www.ama-assn.org/amednews/2009/08/24/bisb0824.htm

"...After years when that ratio stayed around 80%, Aetna, Health Net, Cigna and Coventry all have seen it jump above 86%.

Part of the problem is shrinking membership. Aetna, Cigna, Coventry Health Care, Health Net, Humana, WellPoint and United covered a collective 117.7 million people during the second quarter of 2008. That number was about 2 million less for the same period this year..."

[grantcart]

8. Here is an article that describes state requirements but is not comprehensive

http://www.familiesusa.org/assets/pdfs/medical-loss-ratio.pdf


Their appears to be a huge difference between large market and individual markets

From the article

Families USA learned that insurers in the individual market sometimes maintain medical loss ratios of only 60 percent,
retaining 40 percent of premium dollars for administration, marketing, and profit.


It goes state by state but notes several states where state laws required refunds because they did not meet 72 - 75% MLR.

[slipslidingaway]

15. Thanks and more at the link below, now who will monitor these corporations...

and what penalties are in the bill if this is violated. If my memory is correct the House bill had a MLR recommended amount, but nothing conclusive and no penalties were listed.

:shrug:

As you said it varies by the type of market and the location.


http://www.nytimes.com/2009/11/03/business/03insure.html

[slipslidingaway]

16. From PBS Sick Around America ...

http://www.pbs.org/wgbh/pages/frontline/sickaroundamerica/consumer/industry.html

"Do you have a feel for what the average medical loss ratio is? How much are administrative costs?

That also varies by type of coverage. In group coverage, I think a loss ratio of around 85 to 90 percent is pretty common. And that makes sense, because there are economies of scale to selling one policy that covers a lot of people.

Individual health insurance is kind of like buying toothpaste one squeeze at a time, so it's less efficient, just for starters. Each policy has to be marketed and taken care of and billed and invoiced every month. It's much more likely to see loss ratios on the order of 70 percent in the individual market.

So that's administrative costs of 30 cents on the dollar.

Administrative costs and profit. There's a lot of guarded information about the profitability of the individual health insurance industry. But carriers have been entering it at a pretty remarkable clip over the last few years ... so I think there's some money to be made there.

You said administrative costs in the health insurance industry range from 10 to 30 percent, depending on the plan, etc. How does Medicare do on the issue of administrative cost?

Medicare is very efficient. About 98 to 99 percent of their revenue goes out in paying claims..."

[yurbud]

7. that is encouraging!

[grantcart]

3. requires more study but there are a lot of big improvements here

also almost at every point it offers states the opportunity to move key numbers up (but not down).

[slipslidingaway]

4. The Class Act could not be removed, it is a major component of saving...

the government 132 billion over 10 years.

Collect revenues now for a program that people will not need until some future date.


http://journals.democraticunderground.com/slipslidingaway/199

Both bills reduce the deficit because they collect money for a new long term care....
Posted by slipslidingaway in General Discussion: Presidency
Fri Nov 20th 2009, 12:24 AM
plan that will not have any cash outlays in the beginning years.


http://www.cbo.gov/ftpdocs/107xx/doc10731/Reid_letter_11_18_09.pdf

"The legislation includes a number of other provisions with a significant budgetary effect.

They include the following:

 Community Living Assistance Services and Supports (CLASS) provisions, which
would establish a voluntary federal program for long-term care insurance. Active
workers could purchase coverage, usually through their employer. Premiums
would be set to cover the full cost of the program as measured on an actuarial
basis. However, the program’s cash flows would show net receipts for a number of
years, followed by net outlays in subsequent decades. In particular, the program
would pay out far less in benefits than it would receive in premiums over the
10-year budget window, reducing deficits by about $72 billion over that period,
including about $2 billion in savings to Medicaid..."

[angee_is_mad]

5. Thanks sister

Some goodnews in there. Hope people on DU will absorb it.

[amborin]

9. lots of BAD stuff, such as:

Mr. Reid’s amendment includes tighter restrictions on insurance coverage for abortions sought by Mr. Nelson. Health insurance plans would not be required or forbidden to cover abortions, but states could prohibit the coverage of abortions by plans that are offered for sale through new government-regulated marketplaces.

The amendment also includes a special extension solely for Nebraska: increased federal contributions to the cost of an expansion

The previous language about segregating private vs public funds within the exchanges is reportedly tougher on women. We’re still reading the details, but from what we’ve seen, this is the general framework:

So . . .

1. The Feds will require you to purchase insurance

2. Feds say this is fair because we’ve got these nifty exchanges that will magically transform the currently concentrated insurance markets and make them competitive, affordable .

3. Only these exchange plans will have any significant federal enforcement for even the weak insurance regulations and price oversight.

4. States may ban abortions for all plans in the exchange, so women are not only stripped of current rights but left completely unprotected.

My first reaction is that this vastly exceeds even the hideous Hyde prohibitions and can’t possibly be Constitutional, except in today’s Court.


from firedog lake

[amborin]

13. Small, sparsely populated states Get to decide policy for Large, Urban States: Anti-democratic! n/t

[Beetwasher]

10. Bottom Line; This Bill Will Be An Improvement Over Status Quo

And it will hopefully improve in conference.

[freddie mertz]

11. This is an informative OP, with informative comments.

Compliments to all.

[treestar]

12. Kicking them out the exchange if they raise rates

Could not be a bad thing. It limits their profits. Why isn't the left very happy with this? It's what they want.

If the MLR is close to nationalizing the insurance companies, 85 is close, why does the left not like that?

[slipslidingaway]

19. At the moment the exchange is very limited, other penalties are needed. n/t

[Undercurrent]

14. Thanks for the information!

:)

[amborin]

17. $50 billion a year eliminated from Medicare

[slipslidingaway]

18. For months I've been trying to understand how this could possibly be good. n/t

[SpartanDem]

20. Thanks

I've been looking for a summary