Senate Health Care Reform – Act III

A bipartisan agreement has been reached in the Senate to help stabilize health care markets – from Senate Health, Education, Labor and Pensions Committee Chairman Sen. Lamar Alexander (R-TN) and ranking member Sen. Patty Murray (D-WA).

Among other things, the Alexander-Murray agreement would:

  • fund cost-sharing reduction payments, which help lower consumers’ deductibles and co-pays, for two years;
  • broaden the pool eligible for a “copper plan” (catastrophic medical) coverage option, which would help reduce the mandate implications for essential benefits;
  • include funding to help Americans navigate signing up for health insurance, which had been cut by the Trump administration; and
  • set up high-risk pools that will allow for continued coverage for these individuals.

What this is not is a “repeal and replace”. That said, the two-year funding promise is good news for insurers and would help alleviate their unease, which would also be felt by consumers. But this bill does nothing to address the core problems in the individual marketplace that threaten its sustainability.

Indiana Sen. Joe Donnelly, who has been pushing for bipartisan fixes to the Affordable Care Act (ACA), has thrown his support behind the Alexander-Murray agreement and is a co-sponsor of the legislation. He stated, “This is the product of hard work from members on both sides of the aisle, and it’s an important step in providing much needed stability to the market. I’m proud to be part of the effort, and I will continue working with Republicans and Democrats to move this much-needed legislation forward.”

President Trump has alternately met the agreement with both optimism and skepticism. Overall, he’s indicated that he would favor a short-term subsidy fix; however, he doesn’t want to help insurers either.

It would appear the bipartisan legislation would garner most, if not all, Senate Democrat votes (as Minority Leader Chuck Schumer alluded to on Thursday), so that would leave a lot of wiggle room for passage if some, or even many, Republicans vote against it. The question is what Senate Majority Leader Mitch McConnell will do and what he says to his caucus.

Meanwhile, Sens. Bill Cassidy (R-LA) and Lindsey Graham (R-SC), the authors of the Senate’s second ACA reform attempt, have been working with Alexander and Murray on ways the bill can be made palatable to the very conservative arm of the congressional Republicans – most notably in the House.

In other words, this is far from a done deal.

100+ Business Leaders Going to D.C. This Week for Chamber Fly-in

A record group of more than 100 of the state’s top business leaders and government affairs executives will be attending the Indiana Chamber’s annual D.C. Fly-in on September 27 and 28. The timing couldn’t be more perfect with a potential health care reform vote, rollout of a tax reform plan and the end of the fiscal year all taking place.

This year, legislative briefings will be conducted by congressional members, who will be highlighting key public policy areas that line up with their committee assignments and expertise:

  • Tax reform – Indiana 2nd District U.S. Rep. Jackie Walorski
  • Regulatory reform – Indiana 9th District U.S. Rep. Trey Hollingsworth
  • Health care reform – Indiana 8th District U.S. Rep. Larry Bucshon
  • Infrastructure and transportation policy – Indiana 4th District U.S. Rep. Todd Rokita
  • Education policy – Indiana 6th District U.S. Rep. Luke Messer

There is still time to register for the D.C. Fly-in; go to

Make sure to follow us on Twitter at @IndianaChamber or #ICCinDC for up-to-the-minute important information on what’s happening in Washington.

Zimmer Biomet is the Fly-in’s dinner sponsor. Allegion is the cocktail reception sponsor. Build Indiana Council is the legislative briefing sponsor.

Event sponsors are AT&T, The Boeing Company, Duke Energy, The Kroger Co., Old National Bank and Wabash Valley Power.

New Senate Health Care Bill An Improvement for Employers

The U.S. Senate appears to be gearing up for another health care vote, with a measure from Sens. Bill Cassidy (R-LA) and Lindsey Graham (R-SC) headed to the floor as soon as the middle of next week.

At its core, the Graham-Cassidy proposal creates a block grant program, taking much of the funding provided in the Affordable Care Act (ACA) and sending it to the states for them to set up their own health care systems and determine where to direct the funds.

It also does away with several pillars of the ACA, including the mandate for individuals to have insurance or pay a penalty. The true ramifications of that are uncertain, but could mean higher premiums for those in the health care exchanges (aka those who don’t have insurance through their workplace).

From the standpoint of employers, the Indiana Chamber believes Graham-Cassidy is an improvement over the ACA. This is primarily due to two changes:

  1. The removal of the employer mandate to offer coverage. If that goes away, so too does the ACA’s definition of a full-time employee as someone working an average of 30 hours per week; this has negatively impacted businesses and workers – many of whom saw their hours reduced.
  1. The permanent elimination of the medical device tax, which is detrimental to vital Hoosier employers like Cook Medical in Bloomington, Zimmer Biomet in Warsaw and many others.

Overall, those in favor of increased state control are more receptive to the Graham-Cassidy effort.

As Vice President Mike Pence put it on Fox News yesterday: “…The question that people ought to ask is, who do you think will be more responsive to the health care needs in your community? Your Governor and your state legislator, or a congressman and a President far off in the nation’s capital?…”

 What has opponents worked up is two-fold: affordable coverage for pre-existing conditions isn’t specifically guaranteed; and population size will determine the amount of the block grant, which will reduce funding for a number of states – including some in the Rust Belt and more rural states in general.

Republican Sen. Jeff Flake of Arizona told MSNBC on Thursday he has absolute faith that governors will keep pre-existing condition protections, because of the severe political cost if they don’t. Opponents are less convinced.

At this point, Kentucky Sen. Rand Paul is the lone Republican who has sworn opposition to the Graham-Cassidy bill publicly – in part because his state appears to be set to lose funds in this model.

Likewise, Indiana is expected to see less federal dollars, but the Hoosier state has been preparing for what it saw as an eventuality for several years – setting aside hundreds of millions of dollars to subsidize its Healthy Indiana Plan (HIP) 2.0.

The HIP model is unique in the country; it requires participants to have “skin in the game” with their health care decisions and allows for capping the number of participants. Both of these make it an inherently more nimble program. And ultimately, the state Legislature can also determine to put more funds into HIP 2.0, if it’s deemed necessary.

These facts and the lure of more state control were likely factors in Gov. Eric Holcomb’s decision to sign a letter supporting Graham-Cassidy; he was one of 15 state executives to do so. The reality is other states may not be as fiscally prepared for a possible funding reduction as Indiana is.

That leads us to who may end up being the pivotal figure in the floor vote: Sen. Lisa Murkowski of Alaska. She joined Sen. Susan Collins (Maine) and Sen. John McCain (Arizona) in voting no on the last health care reform measure. Collins is seen as a likely “no” again, joining Paul, while McCain is a predicted (or at least hoped for) “yes.”

As a result, the bill authors are pulling out all the stops and making special accommodations for Alaska in the bill to woo Murkowski’s vote – because they can’t lose her and have the bill survive for Vice President Pence to break the tie. If no specific provisions for Alaska are made, the state would be a big loser in the bill in funding because of its size vs. population and geography.

The Indiana Chamber plans to talk about health care reform with Sen. Joe Donnelly, who has announced his opposition to Graham-Cassidy, and Republican Sen. Todd Young during Wednesday’s D.C. Fly-in event.

UPDATE: This afternoon, McCain announced he would oppose the Graham-Cassidy bill, making passage of the bill seemingly very difficult.

Don’t be Unprepared Because of Health Care Reform Myths

Tracey Gavin of Apex Benefits Group wrote a notable column for Inside INdiana Business recently, pointing out the dangers for employers of not being prepared for fallout of the Affordable Care Act. She lists eight common myths that you need to be aware of:

Those answers could help implement solutions that go beyond compliance, but help minimize the financial impact and even capitalize on strategic opportunities through proper planning and preparation.

Myth No. 1: I don't need to worry about Health Care Reform or make any decisions until January 1, 2014.

Truth: Employers need to plan now. Some need to determine their status as "large employer" under the federal statute. Others need to begin the process of determining full-time status for certain classes or types of employees. Failure to do so can trigger maximum penalties – or worse, fines for non-compliance.

Myth No. 2: It is less expensive to terminate our medical coverage plan and just pay the penalty.

Truth: Aside from the impact on employees, many employers will find that once the penalties and tax consequences are accounted for, there may be little to no savings to terminate their coverage. In fact, some will actually pay more by terminating their plan.

Myth No. 3: An employer may ignore the law the first year or two – since they believe the worst that can happen is they end up paying some sort of penalty around $2000 per employee –minus 30.

Truth: No! A dangerous myth. An employer that is subject to the federal law – and willfully avoids compliance – is subject to a fine of $100 per day, per affected person. An employer with 50 equivalent full-time employees that ignored the law (versus an honest mistakes while trying to comply) could be fined $5000 (or more if dependents are included) per day — until the employer corrects the noncompliance. It is clearly noted in the regulations this fine can be levied at up to $500,000 per employer.

Myth No. 4: After health care reform is implemented, most employers will stop offering medical benefits.

Truth: There may be changes to plan offerings and contribution strategies, but few employers plan to drop coverage, according to a Towers Watson and National Business Coalition on Health survey. The reasons to offer coverage to employees have not changed just because health care reform was passed. For example, attracting and retaining employees remains important part of the business operating efficiently.

Myth No. 5: My carrier and broker will take care of everything.

Truth: Some will. Others may not be able to. An advisor's inability to help employers maintain compliance and quantify the financial risks leaves employers vulnerable to serious fines, penalties, excess costs and tax implications. Employers must be proactive and understand the financial viability of their employee benefits programs and impact to their organization.

Myth No. 6: A simple calculation for "pay or play" will provide our company with an accurate projection of financial risk under PPACA.

Truth: Unfortunately, this myth is perpetuated by the many online – or – "black box" calculators in the marketplace. The truth is employers need to do an analysis that captures all the inter-related and moving parts of PPACA that can impact the financial sustainability of their plan. Cost drivers such as plan design, contributions, migration, and many other factors. To complicate this, scenarios need to be modeled precisely and include projecting how changing one factor can in turn impact all the others.

Myth No. 7: Employers that offer a self-funded plan will have very little compliance costs or issues.

Truth: Self-funded plans do in some ways have more plan design flexibility under health care reform and potentially avoid some tax assessments. However, the majority of regulatory requirements apply to groups irrespective of their plan funding. Regardless of funding status, all employers will need to understand the financial ramifications of health care reform to their business and employees.

Myth No. 8: Employees would be financially advantaged by obtaining coverage through Medicaid or the Exchange.

Truth: Maybe. Certainly most individuals qualifying for Medicaid would be advantaged. Individuals who could qualify for tax subsidy may or may not be financially advantaged when premiums and out-of-pocket expenses are compared to employer-sponsored health coverage. Those whose household income is greater than 400 percent Federal Poverty Level (FPL) would be faced with much greater premiums and out-of-pocket expenses compared to employer-sponsored coverage.

Seminar to Provide Answers to Your Health Care Questions

We don’t utilize this space very often to simply "sell" you on Chamber events. But in the wake of last month’s Supreme Court ruling upholding the Patient Protection and Affordable Care Act, it’s time to move forward.

A half-day seminar, appropriately titled Health Care Reform: What Happens Now, takes place on July 24 at the Indiana Chamber Conference Center. While Ice Miller attorneys will analyze the opinion, the focus will be on what this means for your organization going forward.

The investment you make in this event will certainly pay off as companies, providers, health plan administrators and others prepare to take the next steps down the health care path.

Poll Time: Health Care Vote; Lugar-Mourdock Race

We’re not sure whether participants in our recent poll voted with their heads or their hearts. But it is not ours to judge, only to report the results.

We asked your opinion on how the Supreme Court would rule on the federal health care reform. (Arguments were heard in late March; a decision is expected by June).

The results:

  • 59% say the law will be struck down entirely
  • 27% believe the individual mandate provision will be ruled unconstitutional
  • Less than 5% chose the other two options — law will be upheld or Medicaid expansion negated

Thanks for those who took part. At right, for the next few days at least, is the opportunity to cast your vote on the U.S. Senate primary between Richard Lugar and Richard Mourdock. Who will win and by what margin? Let us know what you think.

There’s Always News Coming Out of D.C.

A few Washington-related items that came across my radar screen in recent reading:

  • Presidential candidate Jon Huntsman says he never considered running for president while in his service as U.S. ambassador to China. I’ll give him the benefit of the doubt on that. But Huntsman notes that he never intended to stay in the previous role for more than two years — and admits that he failed to tell that to President Obama. Oops!
  • While many are criticizing the federal health care reform effort for what it tries to do, a former administration official is blasting it for its failure to address a related subject. Former OMB Director Peter Orszag says that as long as doctors follow evidence-based protocols, they should be exempted from medical malpractice suits. "His quote: "Unfortunately, in the health act, this was one of the largest missed opportunities." Anything to help curb the lawsuit mania that grips our country would be a good thing. Can we start over on that reform thing?
  • News flash! The U.S. Postal Service is a broken system — and Congress wants to fix it. Ending Saturday delivery and closing more branches are part of the plan, as well as renegotiating collective bargaining agreements. I don’t know the answer, but something must be done sooner rather than later to fix an uncompetitive, costly government-run program.

Judge: Supreme Court Voice Needed on Health Care Reform

The Florida judge who declared the federal health care reform law unconstitutional "updated" his own ruling yesterday and urged that "the sooner this issue is decided by the Supreme Court, the better off the entire nation will be."

On January 31, 2011, U.S. District Judge Roger Vinson (Pensacola, Florida) determined that the “individual mandate” provision of the Patient Protection and Affordable Care Act (PPACA) is unconstitutional and declared the remainder of the Act void because it was not severable.  The defendants (the Obama administration) filed a motion to clarify with the court, suggesting that there would be adverse consequences from an immediate halt of implementing the Act given that many provisions are now in effect and that several other district court judges have upheld the law.

Yesterday, the judge stated that while his original order “was as clear and unambiguous as it could be, it is possible that the defendants may have perhaps been confused or misunderstood its import.”  He did however, treat the clarification as a stay from his original order and as such granted it.  He conditioned the stay upon the defendants filing their anticipated appeal within seven days of his order, either in the Court of Appeals or with the Supreme Court. He chastised the administration that it had been more than a month since his order and the defendants had not filed their notice of appeal.

Twenty six states, including Indiana, are party to the lawsuit. On Wednesday at the Indiana Statehouse, a joint meeting took place with the House and Senate Insurance and Health Committees. Attorney General Greg Zoeller commented on PPACA and offered his view that in those states that were party to the suit the Act was unenforceable. Those comments do not apply a day later as Judge Vinson’s stay to his original order was granted. 

Luntz and Words: Winning Combo to Return to Indiana

The mission of Columbia Journalism Review is to encourage and stimulate excellence in journalism in the service of a free society. But, like quite a few individual members of the media today, there appears to be a strong — make that overwhelming — liberal lean.

CJR takes pollster and communicator Frank Luntz to task for his role in advising health care reform opponents. Luntz apparently coined "government option," which was less popular than the "public option" terminology preferred by reform supporters. CJR notes that Luntz "has had a long career fashioning language that helps his Republican clients."

Sure, Luntz has been more closely associated with GOP interests, but he’s also angered Republicans with some of his work on environmental language. The bottom line: don’t take shots at Luntz; just credit him for what he brings to the table. An excerpt of the CJR article is below.

We interviewed Luntz for BizVoice magazine in 2008; he was the special guest at the Indiana Chamber’s Legislative Reception/Dinner in 2010 and will return with new information and insights on March 16, 2011. Whether you agree or disagree with his take, you won’t want to miss what he has to say.

Back to the CJR and its unbalanced report:

Word came that Fox News Washington managing editor Bill Sammon had directed his staff to avoid using the phrase “public option” to describe a proposal hotly debated during the health reform debate. That option, proposed by Yale political science professor Jacob Hacker and embraced by some—but not all—of the progressive advocates, would have injected a real element of competition into the insurance industry. 

The public option was not to be. After months of equivocation, the president threw it under the bus in his efforts to placate the insurance industry, the hospitals, and the doctors, who were hardly fans of something that could lower their profits and incomes.

Now we learn that Frank Luntz, the Republican wordsmith extraordinaire, was at work behind the scenes to craft the language that public plan opponents could exploit.

Last year, Campaign Desk pointed out that Luntz was busy selecting the “right” language months before it looked like the public option had legs. In a twenty-eight page document called “The Language of Healthcare 2009” that became public in the spring of that year, Luntz advised making government the bogeyman. He told Republicans to use words like “politicians,” "bureaucrats,” and “Washington” to fight health reform. He suggested that they use the phrase “government takeover” rather than “government run” or “government controlled.” … We advised journalists to describe what the public option would do, rather than just pass along Luntz-tested terminology.

It’s hard to say whether Luntz’s focus group-tested language succeeded in fomenting the dislike for health reform now registered by the pollsters. For months, polls showed that large segments of the public liked the idea of a public option, and still do. 

Time Equals Results for Students

Reforms come in various shapes and sizes. For example:

  • Health care reform dominated the headlines in 2009 and early this year. No one is quite sure what we ended up with, although many in business are convinced it’s going to cost a lot of money and more and more John/Jane Q. Publics are not happy with what they’re learning about the government intrusion into their medical doings.
  • Local government reform in Indiana has stalled the last few years because a:) some Hoosiers like the way the system was set up in 1851; b:) politics is taking precedence over policy (imagine that!); c:) the people who prefer the status quo have spoken louder, or at least more effectively, than the proponents for change; or d:) some combination of all of the above.

Today. however, we’re talking education reform and it’s an area in which the overall results are sometimes mixed. (But then almost any reform is an improvement over a status quo that fails far too many young people). But the focus is spending more time on task; in Massachusetts, the official name is a rather straightforward Expanded Learning Time. And ELT is working.

The U.S. trails most other industrialized nations in school days. So Massachusetts has added 300 hours per year in select schools. Included among the results:

  • ELT schools gaining in test results at double the state average in English language arts and math; and at five times the state average in science
  • Broadened opportunities for students, including enrichment programming in a variety of subjects
  • Increased student demand. One Boston middle school went from underenrolled to a waiting list in three years
  • Higher teacher satisfaction
  • Stronger community partnerships

No, you can’t just keep the doors open longer. No one said it is easy. But it does seem to be one of the more common sense reforms that could yield positive results for students of all abilities. Yet, in the Indiana General Assembly, time is spent each session fighting off legislation that would actually shorten the school year.

Maybe it’s no coincidence that Indiana’s local government structure and school day calendar (to meet the needs of students who had to help out on the family farm) were set up around the same time. Both are in need of a serious update. We’ve got to start somewhere — for schools, that might be with more, not less, learning opportunities.

Read Massachusetts’ More Time for Learning: Promising Practices and Lessons Learned.