Below is the full White House Health Reform Compromise, as well as the ITUP Summary for your reference:

President's Key Improvements

ITUP Summary of the President's Health Reform Compromise

Also, here are two interesting takes on the state of the public option:

ONE

TWO

...won't actually be a bill but rather a collection of compromises to bridge the House and Senate versions in anticipation of the February 25th Summit. The following ideas are expected to be included, using the not-officially-confirmed reconciliation process:

-Closing the Medicare doughnut hole
-A fix to the Cadillac tax (looking something like the version agreed upon with labor)
-Exchange structure (state or national?) and subsidy level (more generous in House version)
-Removal of Ben Nelson's special deal

Hot button issues like immigrant coverage, abortion, and the phoenix-like public option are not likely to be in Obama's 'bill,' though it may include additional conservative-supported provisions such as tort reform and interstate sale of insurance.

In other news, 2009 saw the largest single-year increase in Medicaid enrollment with 3.3 million people added to the ranks (7.5% increase, totaling nearly 47 million Americans), largely as a result of the economic downturn. Is this a good thing? For individuals and families who lose their job and employment-based insurance, absolutely. The program is extremely useful in acting as a counter-cyclic safety net when the economy goes south. For states (who partially fund the program), this is a not so good thing as revenue dips during such times and states do not have the luxury to deficit-spend leaving them cash-strapped. Additionally, millions who lose their job but do not qualify for Medicaid go uninsured adding unneeded costs to the system. Read the full KFF report here.

As with the Anthem example, this occurrence is tangible proof of the benefits of reform; states will receive many financial incentives through expansion of the Medicaid program, and the combination of the mandate/premium subsidies/consumer protections will provide a stable market where individuals have the security of health coverage no matter the state of the economy.

AHIP President Karen Ignagni released a statement regarding the rampant individual market premium increases, though declined to comment on the industry's profit earnings. Nevertheless, her comments reinforce the need for reform of the deteriorating system:

It’s time to stop the politics of vilification and focus on what Americans need most: real health care reform that addresses the serious and urgent problems facing our nation.

Increases in the cost of coverage in the individual market shine a spotlight on the urgent need to reduce the growth of underlying medical costs and to bring everyone into the system. If reform doesn’t address these pieces, it will not solve the serious problems that individuals, families, and employers face. That is why health plans have proposed fundamental reform of health insurance markets and a long-term strategy to reduce rising health care costs.

I explained the issue further in a recent television interview, and read today's HHS report that investigates the trend occurring in many other states while explaining how reform improves the status quo.

Senate whip count update: 34 Senators are now on record in support of reconciliation and 20 support inclusion of a public option.

The People
A recent Zogby poll finds there is still widespread support for core aspects of health reform, though the take away is that reform must be better explained to the public. For example, almost 85% of the respondents claimed they were at least somewhat familiar with key components of current legislation in the House and Senate. The poll then indicates that about 68% of respondents support protections against pre-existing condition exclusion/rescission, but only 18.5% support an individual mandate. As we know, these provisions can not be separated at the risk of breaking down the health system into a death spiral. The Administration, lawmakers, and advocates must continue to explain these complex relationships. Also interesting, 46% of respondents would be willing to pay extra taxes every year so that everyone could have health insurance.

The Counties'
An extremely useful tool showing county-by-county ranking of health outcomes for every state in the nation, with poverty being a top indicator of whether an area has poor health. In California, the unhealthiest counties were Del Norte, Siskiyou, Lake, Trinity, Yuba, Kern, Inyo, Tulare, Madera and Modoc counties. The healthiest counties were Marin, San Benito, Colusa, Santa Clara, San Mateo, Placer, Orange, Santa Cruz, Sonoma and El Dorado.

The Congress
A recent whip count indicates that 24 Senators are on record supporting reconciliation to finish health reform, with 11 signing on to the Bennet Letter to include the public option into the compromise (which includes Senator Feinstein).

No doubt our well-versed readers have heard about the Anthem Blue Cross development this week and the timely opportunity it creates. Amidst harsh criticism from the White House, Congress, HHS, state legislators, and local advocates, Anthem has decided to delay the scheduled 40% premium rate increase for individual policies until May. California's insurance commissioner will pursue an investigation, and hearings on both the state and federal level will bring the process further into the limelight.

Most importantly, the issue creates a tangible case study of the cause and effect choice between reform and no reform. Anthony Wright explains all the reasons why health reform would prevent insurers from both wanting and needing to do this. I'll break this down breifly:

Insurers need to raise premiums
The response from Wellpoint indicates that premium rate increases were necessary due to the ever-increasing growth in medical costs. Though the argument has its obvious holes (like the company's record profits), it does pay homage to the pending 'death spiral' of adverse selection coupled with rising ranks of the uninsured due to the recession. Healthier populations face higher premiums and remove themselves from the risk pool, thus increasing costs for those who actually need coverage. Health reform reverses this trend by a) mandating coverage, b) providing subsidies and security to those facing financial hardship, and c) provides risk adjustment funding for plans that enroll high-risk individuals disproportionately.

Insurers want to raise premiums
Increasing profit margin is a logical business model for any organization, and insurers have many unique tools at their disposal to do just that. They do it simply because they can. Anthem's rate increases are not a new phenomenon, and this development has revealed similar increases in Maine, Oregon, and Kansas. Reform removes this incentive by providing the 'carrot' of the aforementioned risk-adjustment payments, and also the 'stick' of disqualification of the plan from access to the consumer-protected Exchange and its millions of individuals seeking coverage. The consumer protections force plans to compete on efficiency and cost, as opposed to how best to carve out the healthiest market.

Examples like this bring the policy of health reform out from under the politics of the debate. The staleness of the federal effort received a much-needed 'how does this effect me' boost, and clarifies the real world consequences of reform's absence.

-The Congressional Roster of Participants, in addition to the Vice President, Secretary Sebelius, Office of Health Reform's Nancy-Ann DeParle, and representatives from the OMB and CBO.

-The Formal Invite, which interestingly implies that the President will unveil the final compromise between the current House and Senate bills before the event and asks the GOP to bring their own comprehensive bill (the invite also notably mentions the recent Anthem premium hikes here in California).

Discussion on the four essential goals of legislation, to be moderated by the President:

Insurance reforms
Cost containment
Expanding coverage
Impact on deficit reduction

I have written in the past here and here on the state's landmark 2006 reform passage and current developments. The state is very important to follow as many of the elements in the federal efforts are already in play in Massachusetts. To sum up, the 2006 reform includes an individual mandate, an exchange with consumer protections, and low-income subsidies. The state has successfully achieved near-universal coverage without crowding out employer based markets or other private insurance, and is wildly popular among the citizenry. With 'Phase I' accomplished, efforts are now centered on effective cost-containment that naysayers claim are "bankrupting the state." True, the current growth rate is unsustainable, but this sense of urgency allows lawmakers to aggressively pursue effective strategies to cut costs.

The Governor of Massachusetts unveiled legislation yesterday that would help to address the rapid growth of health care costs by giving the state power to review and reject payment rate increases beyond 3.2% (the current medical inflation rate) by doctors, hospitals, insurers, and medical imaging centers. The law would also prevent health-insurance plans sold to small businesses from raising premiums by more than 1.5 times the rate of medical inflation, and impose a two-year moratorium on lawmakers mandating new health benefits that plans must cover. Watch Governor Patrick's explanation here.

The idea is commonly known as 'all-payer rate setting,' and was used in the 70s and 80s to level varying payments for common services in order to lower health care costs. Nearly 30 states enacted the practice then, but the rise of managed competition caused all but Maryland to drop the law and today, countries such as France, Germany, and the Netherlands have similar all-payer rate setting regulation. Read more about the potential for savings here, where a recent Health Affairs article finds that the law has saved Maryland more than $40 billion since 1976 and a similar system across all states could have saved over $1.8 trillion.

We would like to thank all those who made this year's 14th Annual ITUP Conference a success, including conference attendees, speakers, volunteers, and our generous funders. The gathering was a fascinating mix of the past year's successes, concern over the fate of federal health reform, and inspiration for going forward. Read more about the event here, which gathered over 450 health advocates from around the state.

Most importantly, we would like to thank all of you for your efforts in covering the uninsured. Despite the doom and gloom of daily soundbytes and media coverage over the past few weeks, the resolve of California's advocates have never seemed stronger. Thanks again, as your voices will continue to be necessary over the coming weeks to make 2010 the year of real comprehensive reform.

"Imagine starting a health care system from scratch, and deciding whether to put a for-profit middle man between you and medical care, where less care would mean more profit for them. Would that sound like a good idea?"

"We asked the CEO of Blue Cross to come to a hearing later this month, and we hope to ask her how the organization thinks that Californians can afford a 39% increase in premiums during a recession with nearly 13% unemployment."

"Earlier this year we were able to end insurance pricing discrimination based on gender in California, and we are glad this provision has translated into the federal bills as well."

"The most astounding provision I've heard of late is the 'savings' realized by delaying July Medi-Cal payments into August. Not only is this a mere accounting gimmick, but it also imposes a fine of $40 million on the state that goes to the federal governmet as part of the ARRA 'timely payment' clause. Lawmakers could probably go to a Pay Day Loan Shop and get a better interest rate than that!"

-Jean Ross, California Budget Project

"Incremental reform can not work...much of the coalition built today in DC reflects the past efforts here in CA with such a diverse group of stakeholders that believe this."

"Where should we focus our efforts? States will continue to play a central role, and some issues need attention now regardless of federal efforts. We need to do a better job in program eligibility determination and how to improve the value of state dollars."

"Coverage tugs at our hearts, but cost-containment tugs at our wallets. A recent CMS report shows public health care expenditure will surpass private spending for th first time ever next year. This cost growth is not matched by revenue growth. People are concerned that reform is a government takeover of health care, but I am worried that without reform health care will take over government."

"With the waiver, we need to begin again with high cost seniors and the disabled in order to make the case to Washington that we can maximize the investment, agressively but responsibly. The coverage initiatives must build on that, too."

"If issues can be resolved in the market or elsewhere they will be, but the hardest issue like health care can only be done in policy. Change is impossible, but necessary."

"We need to connect the dots between the budget, the waiver, and state/federal reform. Governance is an essential part of that discussion."

"Emotion is as high as the snow, but people have not given up."

"Somewhere along the way we have lost the trust in democracy...we need to restore that trust."

"When Kennedy and Hatch could no longer talk, Hatch was hurt and hurt turned to anger in the Finance Committee. Grassley worked closely with Baucus, though, and remained involved until the August rhetoric began. There were direct quotes from Iowa saying that if Grassley voted for the bill, he would be challenged directly on this platform in the next primary election. That is when bipartisanship died."

"The likelihood of Republicans contributing positively is near zero, I'm sad to say"

"The Democrats can now either lead or follow. To follow is the path of least resistance, but is unacceptable."

"Progressives are angry the end game is so senate-heavy, and centrists are worried about their district seats especially where Obama lost by up to 20 points."

"The policy community is certain that the Senate bill plus a 'sidecar' bill is clearly better than doing nothing, but the calculus of the voting members includes the personal views of the constituents' distrust."

"Do we want to go to the people with nothing?"

"You know, after the Mass. election I felt pretty disgruntled and uninspired in the federal reform effort...until I received a letter from Anthem saying my individual coverage premiums were going to increase by 50%."
-Joel Diringer

Click below to watch some of the clearest language from the almost-Surgeon General, explaining the effects of reform for the average American.

Be sure to stay tuned over then next two days for live blogging from the 14th Annual ITUP Conference in Sacto! Also, follow us on Twitter for more live conference happenings.

Kent Conrad revealed a possible timeline for health reform, as Obama today called for a bipartisan discussion before moving forward on a vote:

According to budgetary rules, any reconciliation instructions expire once a budget resolution is passed, traditionally an April action. This means Democrats could aim to decide how best to proceed on health reform by the February recess (beginning on Feb. 11), pass a jobs bill shortly after the break, and complete the necessary action for health reform (i.e. a reconciliation bill) by the Easter break. Next week should reveal the process in greater detail.

In the meantime, Anthem Blue Cross has reported that it will raise premium rates for Californians in their individual market (nearly 800,000 lives) by as much as 39% starting March 1, as a result of higher health costs. From the LA Times:

Individual policies are often the only option for those who are uninsured, self-employed or do not receive health coverage through employers. Insurers are free to cherry-pick the healthiest customers in the lightly regulated individual market. They can raise rates at any time as long as they notify the state Department of Insurance and prove that they are spending at least 70% of premiums on medical care. The size of the individual rate increases prompted state Insurance Commissioner Steve Poizner recently to call for a review of Anthem's charges.

To avoid a similar fate, Aetna is planning to force up to 650,000 individuals to drop their coverage next year in an effort to improve on a less-than-anticipated profit margin in 2009. Rest assured, the insurer still managed a 13% profit while spending more than $2 million on lobbying last year.

...is what we spent on health care in the United States in 2009 ($2.5 trillion in total) says the Office of the Actuary, Center for Medicare and Medicaid Services (CMS) in a Health Affairs paper released today. The short piece is required reading for anyone interested in where current/future health care dollars come from and go to. You can read some of the major findings below:

-In 2009 the health share of gross domestic product (GDP) is expected to have increased 1.1% to 17.3%—the largest single-year increase since 1960.

-Slow growth in private market spending (3.0%, $1.5 trillion total) reflects the toll of the recession, while public spending increased markedly (8.7%, 1.2 trillion total) as a result of higher unemployment (9.9% increase in Cobra spending) and Medicaid enrollment (6.5% increase). See below:

-The share of health care dollars paid by government will increase to the 50% milestone by 2012, and 52% by 2019. See below:

-The effects of population growth and the changing age-sex mix are expected to be minor, contributing 0.9% and 0.4%, respectively, to annual growth for 2009–2019.

-By 2020 over 19% of the GDP will be dedicated to health care, about one in five dollars spent in the U.S. totaling $4.5 trillion annually at an annual growth rate of 6.1% (almost 2% faster than inflation).

This trajectory is clearly unsustainable, unless we choose to spend an increasingly larger portion of our economy on health care (without any apparent benefit to actual health outcomes) while also cutting public benefits/raising taxes to keep up....or Congress can pass the health reform bill that begins to address these problems while also providing health security to millions.

The President attended the Senate Democratic Caucus retreat today, and explicitly urged the body to move on health reform while also fielding questions from the group. Below are excerpts from his commentary, and go here to see to the meeting in full (HCR at 11:, 18:, and 37:, and Barbara Boxer at 49: ).

“I’m reminded that when it came to the health insurance reform in particular, I sought out and supported Republican ideas from the start. So did Max Baucus...I think he can testify to spending a little time listening to Republican ideas, you considered hundreds of Republican amendments and incorporated many of their ideas into the legislation that passed the Senate. So when I start hearing that we should accept Republican ideas, let’s be clear: we have. What hasn’t happened is the other side accepting our ideas. And I told them I want to work together when we can, and I meant it. And I believe that’s the best way to get things done for the American people. But I — I also made it clear that we’ll call them out when — when they say they want to work with us and we extend a hand and get a fist in return...I would just suggest to this caucus, if anybody’s searching for a lesson from Massachusetts, I promise you the answer is not to do nothing.

So many of us campaigned on the idea that we were going to change this health care system. So many of us looked people in the eye, who had been denied because of a pre-existing condition or just didn’t have health insurance at all or small-business owners in our communities, who told us that their premiums had gone up 25 percent or 30 percent. And we said we were going to change it.

Well, here we are with a chance to change it. And all of you put extraordinary work last year into making serious changes that would not only reform the insurance industry, not only cover 30 million Americans, but would also bend the cost curve and save a trillion dollars on our deficits, according to the Congressional Budget Office.

There’s a direct link between the work that you guys did on that and the reason that you got into public office in the first place. And so as we think about moving forward, I hope we don’t lose sight of why we’re here. We’ve got to finish the job on health care."

I also wanted to mention another addition to the FY2011 federal budget, which will extend Cobra coverage for workers who lose their job through the end of 2010. The budget would subsidize 65% of the premiums and could continue for up to 12 months. The program has become increasingly popular since the its inception in the stimulus bill, improving enrollment of eligible employees from 19% to 39%.

Below is a letter that we recently developed and distributed to our California Congressional leadership, representing a unified voice of diverse groups from around the state. We urge our readers to continue to express your support and concerns with the health reform legislation to your local representatives, for sustained advocacy is a necessity now more than ever.

You can also have the chance to sign on to the letter below at our 14th annual Conference in Sacramento next Wednesday, February 10th. If you haven't yet registered please do so NOW as the deadline for online registration is today!

February 1, 2010

Congresswoman Nancy Pelosi
235 Cannon House Office Building
Washington, DC 20515

Congressman Henry Waxman
2204 Rayburn House Office Building
Washington, DC 20515

Congressman George Miller
2205 Rayburn House Office Building
Washington, DC 20515

Congressman Pete Stark
239 Cannon House Office Building
Washington, D.C. 20515

Senator Barbara Boxer
112 Hart Senate Office Building
Washington, DC 20510

Senator Dianne Feinstein
331 Hart Office Building
Washington, DC 20510

Dear Speaker Pelosi, Senators Boxer and Feinstein, and Congressmen Miller, Stark, and Waxman:


You have brought us so close to comprehensive federal reform of our fractured health care system. We urge your continued support of the original legislative goal to create a system built on the pluralistic strengths of our existing system while assuring quality, affordable care for all Americans.

The social and economic toll of failure to enact reform cannot be understated. Employer-sponsored insurance will continue to degrade, paralleling the increases in health care costs and premiums. The number of uninsured will continue to rise, and the amount of uncompensated care and medical bankruptcies will multiply. These effects will disproportionately burden California, the epicenter of the nation's uninsured population. Small business, the driver of our state's job creation, will continue to face unaffordable growth in premiums and hundreds of thousands of individuals will continue to suffer exclusions from coverage in the medically underwritten individual market. The failure to enact federal reform will have adverse consequences on our state's public coverage programs that are already threatened by proposed budget cuts to millions of beneficiaries including low-income children, their working parents, the elderly, the disabled.

The bills are not perfect, additional compromises will be necessary to draw more unified support. However, we encourage you to bring the first stage of reform to fruition. We thank you for your continuing efforts to cover the uninsured, and urge you to finish the job.



Sincerely,

Lucien Wulsin
Insure the Uninsured Project

John Arensmeyer
Small Business Majority

E. Richard Brown
UCLA School of Public Health

Leona Butler
Retired CEO, Santa Clara Family Health Plan

Carmela Castellano
California Primary Care Association

Michael Cousineau
USC Center for Community Health Studies

Joel Diringer
Diringer & Associates

Hector Flores
Family Care Specialists Medical Corps

Peter Harbage
Harbage Consulting

Scott Hauge
Small Business California

Howard Kahn
LA Care Health Plan

Wendy Lazarus
The Children’s Partnership

John Ramey
Local Health Plans of California

Gloria Rodriguez
Community Clinic Association of Los Angeles County

Sergio Sanchez
SEIU

Walter Zelman
CSU Los Angeles


*Affiliations listed for identification and do not necessarily
represent that of the accompanying organizations*

The President's budget proposal was released today, which includes a combination of spending increases/decreases, tax cuts for the lower and middle class, and allows some high-income tax cuts to expire. In all, the 2011 budget totals $3.8 trillion and would reduce deficits by $1.25 trillion over 10 years compared to current policies.

As for the health related provisions, the budget includes some notable increases in spending in order to help cash-strapped states preserve vital programs, improve infrastructure investments, and initiate other projects. These increases are a testament to the necessity for comprehensive health reform (and may actually substitute for some of the larger bills' anticipated spending) in order to provide security and stability for Americans who are paying more and more for less and less high quality health care. The budget also properly frames health reform as the only path to long-term deficit reduction, and actually assumes $150B in deficit reduction in anticipation of the pending health reform bill passing.

Below are the health-related highlights from a useful OMB Fact Sheet, and you can find an informative HHS budget overview here.

-$25.5 billion for an additional 6 months of Federal Medicaid assistance to help states maintain their Medicaid programs and ensure access to health care for millions of Americans. (CA could receive $2-3B of the total)

-$2.5 billion for health centers to provide affordable high quality primary and preventive care to underserved populations, including the uninsured. This will allow health centers to continue to provide care to the 2 million additional patients they served under Recovery Act and support approximately 25 new health center sites. In 2008, health centers provided direct health care services to 17 million people.

-$110 million for continuing efforts to strengthen health IT policy, coordination, and research activities.

-$286 million for research that compares the effectiveness of different medical options, building on the expansion of this research begun under Recovery Act.

-New Medicare demonstration projects that evaluate reforms to provide higher quality care at lower costs, improve beneficiary education and understanding of benefits offered, and better align provider payments with costs and outcomes.

-$169 million in the National Health Service Corps (NHSC) to place providers in medically underserved areas to improve access to needed health care services. Under the NHSC, primary health professionals such as physicians, nurse practitioners, and dentists serve in a medically underserved community in exchange for having a portion of their student loans paid off.

-Add 400 NHSC clinicians to the more than 8,100 who will provide essential primary and preventative care services in health care facilities across the country.

-$20 million to fund a new effort in up to 10 of the largest U.S. cities to reduce the rates of morbidity and disability due to chronic disease.

-$10 million to improve workforce capacity of state and local health departments.

-$10 million for the federal employee workplace wellness initiative.

-Increase enrollment in the Children’s Health Insurance Program by 7 percent (more than 500,000 children) from 2008 to 2011.