New Orleans Association of Health Underwriters

In This Issue…

• 2006 Health Care Expo
• New Progress Report Shows Millions Of Beneficiaries Are Saving Money And Choosing Plans With Enhanced Coverage Options
• LAHU Capital Day
• Over 80,000 Uninsured Arkansans To Get Benefits Under New HHS Approved Plan
• HSAs – A Remarkable Success Story

New Progress Report Shows Millions Of Beneficiaries Are Saving Money And Choosing Plans With Enhanced Coverage Options

HHS Secretary Mike Leavitt today released the third in a series of progress updates on the new Medicare Prescription Drug Benefit. The report details substantial increases in enrollment in the past month, as well as new data showing that the vast majority of seniors are choosing alternatives to the standard government-designed plan.

"Enrollment has been accelerating because beneficiaries know that the savings are real and so are the benefits," Secretary Leavitt said. "We expect to see a substantial surge before May 15 - that's why we're encouraging seniors to sign up now so they do not pass up an average savings of $1,100 per person."

The Medicare Part D Prescription Drug plan is now three months old, and more than 27 million beneficiaries are receiving prescription drug coverage. Around 90 percent of Medicare beneficiaries have enrolled in a different plan from the standard plan designed by the government. Many are choosing plans that offer lower deductibles, or no deductibles; fixed co-payments for most drugs; and extra coverage in the coverage gap.

Beneficiaries are not the only ones seeing savings. The overall cost of the program to taxpayers for 2006 has dropped 20 percent since last July's estimate. States will save $700 million in 2006 compared to what they thought they would spend.

In addition, the report addresses efforts being made by the Centers for Medicare & Medicaid Services (CMS) to improve and strengthen the program including:

• Enrollment reconciliation - A relatively small number of beneficiaries were carried on the books of more than one Medicare plan. CMS is working with plans to ensure each beneficiary is enrolled in the plan of their choice.
• Customer service -- CMS has increased its monitoring of plan call centers to ensure beneficiaries are receiving timely and accurate information.
• Transition -- Working with plans, pharmacists and physicians, CMS has provided guidance to ensure smooth transitions to drugs that are covered and, when necessary, to provide timely exceptions.

The report concludes with action steps for the next six weeks, including frequent data exchanges and accuracy checks with drug plans to assure beneficiary information is as up-to-date as possible; monitoring of plan care center wait times; and continued aggressive outreach and education to plans, providers and pharmacists so that beneficiaries have appropriate medications during any transition period.

The “Secretary’s Progress Report III on the Medicare Prescription Drug Benefit” is available at http://www.hhs.gov/secretaryspage.html.

Over 80,000 Uninsured Arkansans To Get Benefits Under New HHS Approved Plan

Over 80,000 uninsured, low-income workers in Arkansas will have new access to health coverage under a plan approved today by HHS Secretary Mike Leavitt.

The newly-approved Arkansas Safety Net Benefit Program is a public/private partnership that enlists small-to-midsize employers who will enroll up to 80,000 of their workers in a plan financed with a combination of employer, state and federal funds. The median household income in Arkansas is approximately $35,000 and currently only 26 percent of small businesses offer health insurance.

"I am pleased to have worked together with Governor Mike Huckabee in making possible this innovative approach to health coverage for thousands of hard working, yet uninsured Arkansas residents," Secretary Leavitt said. "Employers that have not been able to offer group health insurance in the past will play a critical role in making this partnership successful for them and their workers."

Employers with 500 or fewer workers that have not offered an employee health plan for at least one year will be eligible to participate in the program. Participation for employers is voluntary. Employers who choose to participate must provide the new coverage to all of their uninsured employees. The state, however, will require all uninsured employees of participating businesses to sign up for the new benefit.

Health care costs for workers with incomes of less than 200 percent of the federal poverty level will be paid with state funds and federal Medicaid funds for childless adults and State Children's Health Insurance Program dollars for parents. The federal poverty level for a family of four for 2006 is $20,000. Workers with higher incomes must also participate, without public funding, but they will benefit from the lower negotiated premiums in the health insurance pool. Workers must be uninsured and not have access to any other source of health care benefits to participate.

"We're pleased to work with Arkansas on this innovative program to leverage Medicaid and employer purchasing to provide the biggest expansion of affordable health insurance in Arkansas in many years -- and it helps people afford coverage even if they earn more or get a new job," said Mark B. McClellan, M.D., Ph.D., administrator of the Centers for Medicare & Medicaid Services (CMS), the agency that oversees the Medicaid and SCHIP programs. "We are working closely with states to implement effective ways to expand access to coverage, and this partnership to make affordable private insurance more widely available could be a model for coverage expansions around the country."

The program will offer a basic benefit package designed to meet the needs of the target population. Enrollees will pay a $15 per month premium and 15 percent co-payments with a maximum out-of-pocket cost of $1,000 per year.

The state expects to enroll around 50,000 workers with incomes below 200 percent of poverty and another 30,000 whose salaries are higher. The five-year demonstration is authorized by the administration's Health Insurance Flexibility and Accountability (HIFA) Initiative. HIFA encourages states to coordinate the Medicaid and SCHIP programs to expand mainstream coverage to broader populations. It creates a streamlined demonstration process for states that commit to reducing the number of people without health insurance.

Arkansas is the 13th state to use the HIFA waiver initiative to expand access to health care coverage to the uninsured. More information about the HIFA initiative, including an online template that states can use to submit applications, is available at www.cms.hhs.gov/HIFA/.

NAHU Press Release:

The National Association of Health Underwriters (NAHU) commends President Bush for making the health care of the American people an important part of his domestic agenda as mentioned in the State of the Union Address last night.

"Access to affordable health insurance is our highest health care priority," stated NAHU EVP and CEO Janet Trautwein. "President Bush proposes a sensible solution that would implement market-driven initiatives to restore competition to the health care market through health savings accounts (HSAs). HSAs are a low-cost health insurance option that allow Americans to contribute money, tax-free, to health savings accounts to help pay for health insurance costs not covered by their insurance and to save for future medical expenses.

The President’s emphasis on making HSAs more appealing to a broader number of individuals and employers is a vital part of reducing the number of uninsured Americans. So far, more than a million people are covered by HSA-compatible insurance policies and recent survey data found that HSAs are being adopted by all income levels; people with incomes of $50,000 or below purchased 40 percent of HSA plans, and more than two-thirds of HSA plan purchasers were previously uninsured.

"Not only are HSAs helping more Americans afford health insurance, they are also addressing the issue of rising health care costs. HSAs give consumers a reason to be value-conscience shoppers in the health care marketplace. When patients are paying more attention to the cost of health care and demanding value for their dollars, total health care spending will decline.

"One of the primary objectives of health insurance reform in America is to provide access to high quality coverage for all Americans that is affordable. Many policymakers believe insurance is not available to a majority of the uninsured due to barriers to access health care. In fact, the main barrier is the cost of health insurance. Rather than exploring affordability solutions, however, many reformers propose schemes that change the foundation of our current health care system which will actually make it more expensive and, therefore, less accessible for millions of Americans.

"We believe a better system can be realized through Americans having choices and control over their health care decisions – with patients working with doctors to make those decisions. The best way to do this is through choice and competition. Choice and competition can work in the health care arena as it has in most sectors of our economy by encouraging innovation, new ideas for controlling costs and delivering health care in a more effective way."