News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Congress Eyes Tennessee Group’s Plan for Reforming Healthcare In United States

Health reform plan preserves patient choice and requires no new government funding

As Congress gets down to the nitty gritty details of healthcare reform, a unique bipartisan proposal presented by the Rolling Hills Group, a group of Tennessee healthcare experts and community leaders, is gaining support on both sides of the aisle.

This healthcare reform proposal, initially developed for a statewide program in Tennessee, has captured Congress’ attention because it meets top health care reform priorities—universal coverage, lower costs, improved care and safety, but doesn’t require any new funding sources.


Good News/Bad News with Massachusetts’ Universal Coverage Health Reform

Now in its second year, the closely-watched mandate for universal health coverage in Massachusetts is a mix of good news/bad news. Because this is a potential model for national healthcare reform, the Massachusetts universal health insurance program is also viewed as an opportunity to work out the bugs in finance and care delivery before rolling out a national program. First, the good news. From a public policy standpoint, the universal healthcare mandate is successful. Roughly half the state’s estimated uninsured residents, or 440,000 people, are now enrolled in either a state, an employer-sponsored, or a private insurance plan.

Second, the bad news. The financial costs of the program exceed the original budget estimates upon which caused Massachusetts Democrats and Republicans to come together and pass this unprecedented legislation. For year two, the Massachusetts’ program mandates that all adults enroll in a health plan or pay a state income tax penalty. For 2008, that penalty was increased to $912, a jump of 416% from the $219 penalty that was assessed in 2007.

Additionally, businesses with more than 10 full-time employees must either provide their employees with health insurance, or pay the state $295 per employee per year. Critics claim this per-employee payment falls far short of covering the true costs of the mandate. Employer contributions only generated $6 million last year, even as the “play or pay” mandate expanded employer-sponsored health coverage to 85,000 workers.

Cost overruns plague the universal healthcare program. For 2007, the cost exceeded the budget by $100 million, due, in part, to a failure to enroll young, healthy members who can pay their own way. It is also now clear that lawmakers originally underestimated the program’s actual costs. Costs estimates were based on a low estimate of uninsured residents who require premium subsidies and did not figure on double-digit increases in the price of health insurance.

Over the last three years, the state-sponsored plans created by the universal coverage mandate offered enrollees an exclusive network of four insurers. These insurers raised premiums at near double-digit rates during the first two years. Rates increased by 9% in 2008, according to Jon Kingsdale, executive director of the state’s health insurance Connector Authority, who notes that while the increase was well above the 2% cap the Connector staff had proposed, costs should not exceed this year’s budget of $869 million.

In a report, Striving for Universal, Affordable Health Care: Lessons From Massachusetts,  State Attorney General Martha Coakley, who oversees the Connector Authority, notes that rising healthcare costs must be addressed to achieve universal health coverage. In an effort to cut costs, stabilize premiums and pay carriers fair rates, the Massachusetts Healthcare Connector will open the state health insurance program to competitive bidding for the next budget year, which begins in July 2009. However, new rules will apply to the upcoming bidding process: carriers will be limited to offering plans with a maximum monthly premium of $404, which represents a 2% percent increase over this fiscal year and includes $35 for administrative fees.

Because the Massachusetts’ mandate for universal coverage is only now completing its second year, it is too early to determine whether clinical laboratory services in the Commonwealth have been negatively affected. However, pathologists and laboratory administrators will want to keep an eye on unfolding events in the Bay State. Universal health coverage may be one of the first priorities for the new President and Congress, and the Massachusetts experience may be used as a guide in crafting federal legislation to tackle this issue.

Related Information:
Massachusetts Reform Has the Blues

Striving for Universal, Affordable Health Care: Lessons From Massachusetts