1

Federal and Washington State Healthcare Legislation

Jack C. McRae, Senior Vice PresidentMarch 4, 2009

2

‘Stealth’ Care?

3

Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA)

• Signed into law February 4, 2009

• Costs $32 billion over 4.5 years

• Funded by increased tobacco product taxes

• Allows states to increase eligibility to children with family incomes of 300% of federal poverty level

• Simplifies state premium assistance option for employer sponsored coverage

• Provides states with option to enroll legal immigrant children and pregnant women without waiting period

4

• Signed into law on February 17th

• Provides $787 billion of economic ‘stimulus’ in the form of project funding and tax cuts

• Total estimated healthcare funding is $140 billion

American Recovery and Reinvestment Act

5

AppropriationsDepartment of Health and Human Services

• $3 billion appropriated for construction grants and projects– Renovation and equipment, acquisition of health IT

systems, and health professions workforce shortages

• $1.3 billion appropriated for research resources– Grants to construct, renovate, or repair existing research

facilities and for shared instrumentation

• $2 billion to supplement state general funds for child care assistance for low income families

6

Appropriations

Department of Health and Human Services (con’t)

• $1.1 billion for comparative effectiveness research– Funding for existing and new programs through the

National Institutes of Health

• $1 billion for Prevention and Wellness Fund– Funding to CDC immunization program and infection

reduction strategies– Funding to carry out evidence based clinical and

community prevention and wellness strategies

• $2 billion for Health IT

7

Health Information Technology

Grants and Loans Funding

– Funding could be as much as $19 billion over the next 4 years

– Secretary of HHS to invest in infrastructure as necessary to promote the electronic exchange of HIT

– State grants made available to promote HIT in states

– Required match from states• FY 2011 $1 for every $10 fed, FY2012 $1 for every $7 fed, FY

2013 $1 for every $3

8

Health Information Technology

Promotion of Health IT

– Creation of the Office of the National Coordinator for Health Information Technology• Works to promote the electronic use and exchange of Electronic

Health Records (EHR)

– Strategic Plan• Utilize EHR for each person in the United States by 2014 • Develop website to increase public education• Requires reports on a number of funding, implementation, and

assessment of impacts of HIT

9

Health Information Technology

• HIT Policy Committee will make recommendations on infrastructure and development– 20 Member Committee

•3 members appointed by Secretary of HHS•4 appointed from Legislative Branch -1 from each chamber caucus

•13 members appointed by Executive Branch

• HIT Standards and Implementation Committee will make specific recommendations on implementation procedures

10

Premium Assistance for COBRA

• 65% subsidy for COBRA coverage

• Subsidy available for 9 months

• Assistance eligible for individuals who are involuntarily terminated between 9/1/08 and 12/31/09

• Reduced or no subsidy for high income individuals– No subsidy for individuals with Adjusted Gross Income exceeding

$145K ($290K joint filing)– Phase in subsidy for individuals between $125K and $145K ($250K

and $290K joint)

• Entity that fronts subsidy will be reimbursed via a reduction in payroll taxes

11

Medicare and Medicaid Health IT & Miscellaneous Medicare Provisions

• Medicare & Medicaid HIT Incentives– Physicians

• Incentives for adoption of electronic health record technology- Payments based at $15,000-1st year ($18,000 for 2011 or 2012), $12,000-2nd year, $8,000-3rd year, $4,000-4th year, $2,000-5th year

- If in a ‘shortage area’ incentives jump up 10%

– Hospitals-$2 million per hospital incentive (plus additional incentives)

•$200 for every discharge between the 1,150th and 23,000th discharge

• Includes $87 billion to states to cover Medicaid funding shortages

12

Trade Adjusted Assistance Program

Trade Adjusted Assistance (TAA) Program– Law passed in 1962 to provide government assistance

for workers that lose their job due to outsourcing as a result of trade agreements

Rule changes in the TAA Program– 80% (up from 65%) of healthcare premiums paid– Expanded to include workers in the service sector

• Previously was limited only to firms that ‘produce an article’

13

President Barack Obama’s Budget

Released February 26, 2009

• Includes 10 year, $634 billion “reserve fund” to pay for expansion of healthcare system– Large pot of money is intentionally short on details– Hopes to signal willingness to negotiate on eventual plan– Funding to be covered by decreasing tax breaks for

individuals making more than $250,000– Also include cuts to Medicare including Medicare

Advantage

14

Recent Quotes“So let there be no doubt: health care reform cannot

wait, it must not wait, and it will not wait another year.”

– President Barack ObamaAddress to Joint Session of CongressFebruary 24, 2009

“We cannot afford to delay health care reform…If we delay, millions more Americans will lose coverage. If we delay, premiums will grow even farther out of reach. And if we delay, federal health spending will absorb an even greater share of the nation's economy."

– Senate Finance Chairman Max BaucusOpening Remarks at Senate Finance Committee MeetingFebruary 25, 2009

15

Washington State

16

• Would require carriers to submit information on associations annually to the insurance commissioner

Association Health Plans (SHB 1714)

School District Benefit Plans (HB 1940 and SB 5491 / HB 2177)

• Requires school districts and educational service districts to purchase healthcare benefits through the Health Care Authority by September 1, 2011

17

• Requires group plans and the state employee plan to cover neurodevelopmental therapies for children under age 18

• Allows Department of Health to review and determine regulation of certain providers and identify therapies

Neurodevelopmental Therapy Mandate (SHB 1412)

18

Organ Transplants

Crediting the Waiting Period (SHB 1308)

• Credits prior group or individual creditable coverage towards the organ transplant benefit waiting period

• Current transplant waiting periods:

– Individual: 12 months

– Group coverage: 6 months

Lifetime Limits (SSB 5725)

• No separate lifetime limits less than $350,000 for organ transplants

19

Young Adult Plan (SB 5052)

• Permits carriers to offer an individual health plan for young adults, age 19-34

• Plan may exclude mandated benefits and some requirements

Wellness Programs (SHB 2160)

• Permits carriers to offer wellness programs for individual and group plans that meet federal HIPAA nondiscrimination requirements

20

Healthcare Reform Bills

• Exchange/Connector – Sen. Pflug

• Washington Health Partnership – Sen. Keiser

• Guaranteed Health Benefit Program- Commissioner Kreidler

• Washington Health Security Trust – Rep. Appleton

• Delay of Health Insurance Partnership (HIP) – Rep. Cody

21

Questions?