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HealthCare.Gov And The Coming State-Based Exchanges

Health care and tech savvy bloggers breathed a collective sigh of relief last Thursday, when the Department of Health and Human Services (HHS) unveiled a very user friendly and easy to navigate health care portal at healthcare.gov. I captured Todd Park’s very energetic presentation of the site here, and wondered how the national portal would interact with the state-based exchanges in 2014.

Will states build off the main site and sell policies from some kind of exchange section? Or, will they have to create their own websites and sell coverage that way? Will customers be able to view exchanges options from the main site or will that information only be available within each exchange? I sent these questions to a contact at HHS and received the following reply:

Under Section 1311(b)(5), the portal continues to operate. States have the option of using the portal directly or using a template the Secretary provides to set up their own portal but the portal continues to function robustly concurrently with any portal a state may set up. It is important to note that the portal is currently organized and displays information by state. In 2014, it will reflect the plan offerings in the Exchanges as well as public programs. The portal will also show plans sold outside the exchange.

During today’s Twitter chat, Park confirmed this arrangement, tweeting that “State-level portals can be a great complement to HealthCare.gov. We’ll continue to enhance HealthCare.gov as well.” All this should be seen as a good thing, since the existing site goes a long way towards accomplishing the main goal of exchanges — helping customers choose a compatible insurance plan.

In other words, in 2014, a purchaser a customer will be able to generate rate comparisons by inputting his or her date of birth, household size, and ZIP code. Many more details need to be worked out, but if states don’t have to create their own portals and can rely on the national model, it will be possible for consumers to compare products in a standardized way. That could only help increase the number of insured Americans.

How Beverage Industry Defeated New York’s Penny-Per-Ounce Soda Tax

pounds-4802On Friday, the New York Times ran a depressing account of how the beverage industry used clever marketing gimmicks and millions of dollars to defeat the the state’s penny-per-ounce tax on soda. Using the front New Yorkers Against Unfair Taxes, the industry framed the policy as a new tax on struggling middle and lower class families during an economic recession and spent at least 9.8 million on the campaign:

The tax that the governor’s allies referred to somewhat awkwardly as a “sugary beverage tax” immediately became known in the vernacular as “the fat tax,” which sounded like a rebuke to anyone who has ever stood on a bathroom scale and winced. The governor quickly threw in the towel that first year, when he still aspired to run for election in 2010. [...]

The health message resonated with public-spirited groups like the New York Academy of Medicine and editorial writers. Enter New Yorkers Against Unfair Taxes, set up by the beverage industry, grocers and the Teamsters, who work as drivers and in production. The organization’s Web site describes it as a humble coalition of “hard-working individuals, struggling families and already burdened small businesses,” like Benny’s Pizza and Kay’s Deli.

But behind the scenes, much of the strategic work came from Goddard Claussen, the public affairs company whose “Harry and Louise” commercials helped defeat President Bill Clinton’s health care overhaul efforts. The company was retained by the American Beverage Association to lobby against the New York tax.

On the whole, all of this is really bad news. Researchers say that “the link between obesity and soda is scientifically stronger than the link between obesity and any other type of food or beverage” and predict that sugar-sweeted beverages “may be the single largest driver of the obesity epidemic.” Each year, obese adults incur “an estimated $1,429 more in medical expenses than their normal-weight peers,” and overall, the nation spent up to $147 billion on obesity-related costs in 2008.

As David Leonhardt noted back in in May, “[s]omeday, we will probably look back on our gallon-a-week soda habit the way we now look back on allowing children to ride without seat belts or listening to doctors who endorsed Camel cigarettes. We will wonder what we were thinking.” Indeed, the industry’s argument may have won the day, but you can’t get away from the reality taxing a non-essential commodity that only increases health care expenditures makes a lot of sense, particularly during periods of staggering deficits. Goddard Claussen defeated health reform in 1994, only to see comprehensive legislation passed 16 years later. Here’s to hoping the soda tax won’t take half that long.

In Races For Insurance Commissioner, GOP ‘Refuse To Participate In Any Obamacare Policies’

TIME’s Kate Pickert reports that around the country, the Republican primary for insurance commissioner has turned into a competition about who opposes the new health care law the most. And while some candidates are tripping over themselves to condemn the health care law in the harshest terms possible, they are also admitting that, if elected, they’ll have to put some of that rhetoric aside and enforce the law:

John Doak, a Republican insurance commissioner candidate in Oklahoma: “I am opposed to the President’s proposed ‘universal’ health-care plan because the federal government cannot provide adequate health insurance to Oklahomans … As insurance commissioner, I will be a conservative voice opposed to federally mandated insurance.”….

Maria Sheffield, the Georgia candidate: “I will refuse to participate in any Obamacare policies that come across my desk,” she says in one clip. “I will make sure the Obama Administration and other Big Government allies in Georgia will not, in any manner, be able to use the Department of Insurance as a vehicle to impose Obamacare on our state.”

But Sheffield admits an insurance commissioner can’t pick and choose which laws to enforce. (If a commissioner does this, the Federal Government has the authority to step in and take over enforcement responsibilities.) According to Sheffield, the difference between her and [and the other Republican candidate] is that she will keep pushing to overturn the Affordable Care Act, no matter how futile the effort might be. “If you’re not willing to lead on these issues, you’re just being a bureaucrat and not attempting to even offer solutions to people,” she says.

There are several things worth noting here. First, the gap between repeal rhetoric and reality is wide and even the staunchest opponents of reform recognize that ACA is the law of the land and that its most popular provisions are very difficult to oppose. When Pickert asked Doak “which new insurance regulations — many of which are universally popular — he opposed, Doak couldn’t answer. Does he favor a ban on lifetime coverage limits? Not sure. How about the 2014 provision that will require insurers to cover all pre-existing conditions?” “I am in favor of that, but there are many questions,” he replied. Those questions are something the national GOP is still trying to answer.

But since the law leaves implementation to the states, GOP insurance commissioners, along with some medical interests, will have plenty of opportunity to water down the bill. Insurers have historically showered state campaigns with contributions — four of the biggest health insurers contributed $8.7 million to candidates for state offices and state campaign committees in 42 states from 2005 through 2008 — and will continue to work in partnership with these new nominees (should they be elected) to weaken the bans against pre-existing conditions, rescissions and rate review. After all, if they’re not sure that they support the provisions, can we expect to enforce the rules aggressively? Probably not and I suspect the federal government will have to take advantage of all the “Secretary shall” parts of the law, step in, and ensure compliance.

White Castle Says Health Law Will Eat Up 55 Percent Of Net Income

white_castleWhite Castle is complaining that a single provision in the new health care law — the $3,000-per-employee penalty on companies whose workers pay more than 9.5% of household income in premiums — will “eat up roughly 55 percent of its yearly net income after 2014“:

White Castle, which currently provides insurance to all of its full-time workers and picks up 70 to 89 percent of their premium costs, believes it will likely end up paying those penalties. The financial hit will make it hard for the company to maintain its 421 restaurants, let alone create new jobs, says company spokesman Jamie Richardson. White Castle employs more than 10,000 people nationwide, and more than 1,200 in Ohio.

Though advocates of the health insurance bill say its reforms will boost employment, House Republican Leader John Boehner of Ohio, a vocal foe of the changes, says White Castle’s analysis shows how the law’s “job-crushing” impact will be most severe in lower-income areas, where jobs like those at White Castle are most needed.

“The irony is that in the name of expanding health care coverage, the administration is making it harder than ever for unskilled workers to get started in the workforce,” Boehner said in a missive on White Castle’s plight.

These kinds of wild predictions help feed the Republicans opposition machine, but they have very limited basis in reality. The new employer requirements do not go into effect for another four years and while costs will certainly increase, it’s fairly difficult for businesses to predict what workers will be spending on health insurance premiums (much less what percentage of their household income will go towards health care costs). On its merits, the provision makes sense. Businesses will face fines because the provision is designed to prevent employers from shifting costs to the employee and protect families from spending too much on health insurance. That’s particularly important for the low-paid fast food workers who receive their health insurance coverage from White Castle.

It’s also worth noting that “the costs will increase and jobs will leave” mantra has not proven true in the past. The city of San Francisco requires employers with “at least 20 workers that do not provide health care” to “give part of each employee’s wages to the city as a fee to help pay for the $200 million program.” Businesses complained that the new requirements would increase costs, but on the whole, their fears have gone unrealzied. Some restaurants have added “a four percent health care surcharge on menus” but there is no evidence that the provision is adversely affecting employment. In fact, “Neighborhood restaurants, where restaurants tend to be affordable and supported by locals, have generally received pretty good acceptance of the program,” while “restaurants in tourist and business travel areas are getting a lot more negative push-back.” Even so, they have not reported a decline in sales.

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