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--> GOOD AFTERNOON AND WELCOME TO OUR FIRST MEDIA BRIEFING ON
IMPLEMENTING AFFORDABLE CARE ACT.
WE PLAN TO DO REGULAR UPDATES AND I'M PLEASED TODAY TO BE
JOINED BY 3 OF OUR DEPARTMENT LEADERS IN IMPLEMENTATION WHO
ARE CARING OUT THIS NEW LAW; MARILYN TAVENNER AND JAY ANGOFF
AND JEANNE LAMBREW. JUST ABOUT TWO MONTHS AGO,
PRESIDENT OBAMA SIGNED THE AFFORDABLE CARE ACT AND WE HAVE
BEEN ACTING QUICKLY TO FILL THE GAPS IN THE HEALTH INSURANCE
SYSTEM AND PROVIDE IMMEDIATE RELIEF FROM RISING HEALTH CARE
COSTS FOR FAMILIES AND SMALL-BUSINESS OWNERS.
AND AMERICANS WHO WAITED YEARS FOR HEALTH REFORM TO PASS ARE
ALREADY REAPING THE BENEFITS. THERE IS AN ADMINISTRATION-WIDE
BENEFIT. WHILE OUR DEPARTMENT IS TAKING
THE LEAD OF AFFORDABLE CARE ACT, THERE ARE OTHER DEPARTMENTS
INVOLVED, TREASURY, LABOR, JUSTICE, SMALL BUSINESS
ADMINISTRATION, AND MANY OTHERS HAVE PLAYED IMPORTANT ROLES AS
WE HAVE TAKEN THE INITIAL STEPS TO DELIVER THE PROMISE OF THE
LAW. CONGRESS HAS BEEN A GREAT
PARTNER. AND WE HAVE WORKED CLOSELY WITH
STATES ALSO, HOSTING A WEEKLY CALL TO GET REPORTS ON THE
GROUND AND ANSWER QUESTIONS AND PLAN FOR THE NEXT STEP.
WE HAVE HAD AN AGGRESSIVE OUTREACH WITH A VARIETY OF
STAKEHOLDERS, PROVIDER GROUPS, CONSUMER GROUPS AND WORKING WITH
INSURANCE COMPANIES. FIRST TO ENSURE THAT PROVISIONS
OF THE NEW LAW THAT WERE SUPPOSED TO GO INTO AFFECT IN
SEPTEMBER, THE BAN ON RECISIONS AND THE EXPANDED COVERAGE FOR
YOUNG ADULTS, KICK IN RIGHT AWAY FOR MANY AMERICANS.
EARLIER TODAY, I ACTUALLY MET WITH SEVERAL LEADING INSURANCE
CEOS TO DISCUSS NOT ONLY THE PROGRESS WE HAVE MADE BUT HOW TO
MOVE FORWARD TOGETHER. WE NEED TO WORK STEADILY TO
IMPROVE THE INSURANCE MARKS THAT HAVE ACTUALLY BEEN FAILING THE
AMERICAN PEOPLE FOR SO MANY YEARS.
I GAVE THEM AN UPDATE ON WHAT WE ARE PLANNING IN THE PATIENT'S
BILL OF RIGHTS THAT WILL BE PUT IN PLACE NEXT MONTH, GIVING
HEALTH CARE CONSUMERS SIMPLE AND CLEAR INFORMATION ABOUT THEIR
RIGHTS AND THEIR CHOICES, AND THAT THERE WILL BE A
STRAIGHTFORWARD APPEALS PROCESS TO PROTECT THOSE RIGHTS.
I PREVIOUSLY CALLED UPON MY FORMER COLLEAGUES AT THE STATE
LEVEL TO USE THE POWERS I HAVE TO REJECT UNREASONABLE RATE
INCREASES, AND TODAY WE TALKED TO INSURERS ABOUT DOING THEIR
PART TOO. REMINDING THEM THAT THE
AFFORDABLE CARE ACT GIVES HHS A VARIETY OF NEW TOOLS TO LIMIT
HIKES FROM THE RIGHT TO REVIEW INCREASES TO A NEW REQUIREMENT,
THE MEDICAL LOSS RATIO, THAT REQUIRES INSURERS SPEND AT LEAST
80% OF THEIR PREMIUMS ON HEALTH CARE.
AS WE PROCEED, WE'LL CONTINUE TO LOOK FOR OPPORTUNITIES TO WORK
WITH INSURANCE COMPANIES, BUT ALSO KEEP A CLOSE WATCH TO MAKE
SURE THAT THEY ARE TREATING THEIR CUSTOMERS FAIRLY.
GOING FORWARD ON IMPLEMENTATION, I AM GOING TO BE USING MY
EXPERIENCE FROM PAST LIVES AS BOTH A GOVERNOR AND AN INSURANCE
COMMISSIONER, AS A FORMER GOVERNOR, HAVING TO BALANCE A
BUDGET EVERY YEAR, I KNOW HOW TO MAKE STRATEGIC DECISIONS ON
IMPLEMENTATION AND WE START WITH THE POLICY THAT WE NEED TO MAKE
THE MOST OF THE RESOURCES WE HAVE.
SO AS WE CARRY OUT THE AFFORDABLE CARE ACT, WE ARE
RELYING HEAVILY ON MANY OF THE TALENTED HEALTH EXPERTS THAT ARE
IN OUR DEPARTMENT. SOME OF WHOM WERE HERE DURING
THE IMPLEMENTATION OF MEDICARE PART D AND HAVE BEEN ESPECIALLY
HELPFUL IN SHARING LESSONS FROM FOUR YEARS AGO ABOUT WHAT WORKED
AND WHAT DIDN'T WORK SO WELL. ALSO, TAKING THE INSURANCE
COMMISSIONER ROLE THAT I USED TO HAVE, AND THE CONSUMER FOLK US
THAT WE HAVE IN THAT DEPARTMENT, AND PUTTING IT AT THE HEART OF
THESE EFFORTS. IF WE HAVE A GUIDING PRINCIPLE
WHEN IT COMES TO IMPLEMENTATION AND IT'S REALLY GIVING AMERICANS
MORE CONTROL OVER THEIR OWN HEALTH CARE.
FOR YEARS, IT FELT TO MANY PEOPLE LIKE THEIR HEALTH CARE
CHALLENGES WERE GROWING AND IT WAS ABSOLUTELY NOTHING THEY
COULD DO ABOUT IT. PICK UP THE MAIL AND THEY WOULD
BE LOOKING AT A WHOPPING RATE INCREASE FROM THEIR INSURANCE
COMPANY OR A NOTICE THAT THEIR COVERAGE WAS BEING CANCELED OR
THEY LOOK FOR A NEW POLICY AND TRY TO SORT THROUGH DENSE PAGES
OF FINE PRINT, OR LEARN THEY WERE DENIED BECAUSE OF A
PREEXISTING CONDITION. IN THE LAST TWO MONTHS,
AMERICANS ARE GET SOMETHING GOOD NEWS FOR A CHANGE.
SMALL-BUSINESS OWNERS HAVE BEEN ALERTED THAT THEY MAY BE
ELIGIBLE FOR THE TAX CREDITS TO HELP THEM COVER THEIR EMPLOYEES
AND AS WE TALK TO THE INSURERS TODAY, WE ARE VERY HOPEFUL THAT
THAT CAN BEGIN TO STABILIZE THE SMALL BUSINESS MARKETPLACE,
WHICH HAS BEEN LOSING CUSTOMERS FOR A NUMBER OF YEARS.
PARENTS KNOW THAT THEY CAN COVER THEIR ADULT CHILDREN UNDER
INSURANCE POLICIES AND I HAVE HEARD FROM LOADS OF FOLKS WHO
ARE TERRIFICALLY RELIEVED THAT THAT OPTION IS NOW AVAILABLE.
LARGE EMPLOYERS ARE GETTING HELP THEY NEED TO CONTINUE TO PROVIDE
COVERAGE UNTIL THEY ARE RETIRED. A MARKET THAT WAS BEGINNING TO
BE VERY SHAKEY AS EMPLOYERS WERE LOOKING TO CANCEL RETIREE
COVERAGE BECAUSE OF THE RISING COSTS.
THEY NOW HAVE FEDERAL HELP. AND SENIORS HAVE GOTTEN
INFORMATION INFORMING THEM ABOUT THE NEW BENEFITS THEY'LL GET
UNDER THE AFFORDABLE CARE ACT. TODAY, WE WANT TO SHARE SOME
NEWS WITH YOU ABOUT HOW ITS NEW LAWS HAVE TAKEN SHAPE.
ONE OF THE BIGGEST WAYS THE NEW LAW IS GOING TO HELP SENIORS IS
BY GRADUALLY PHASING OUT THE MEDICARE PRESCRIPTION DRUG DONUT
HOLE THAT MADE IT HARD FOR SENIORS TO AFFORD THEIR
MEDICATIONS. ABOUT 8 MITT YON A YEAR REACH
THAT DONUT HOLE GAP IN COVERAGE. THIS MORNING, WE HAVE A NEW
BROCHURE ON OUR WEB SITE WITH INFORMATION ABOUT SENIORS, ABOUT
THE FIRST STEP OF THE PHASE-OUT, $250 REBATE CHECK THAT WILL BE
MADE TO -- MAILED TO ANY SENIOR THAT FALLS INTO THE DONUT HOLE
THIS YEAR. WE CAN ALSO ANNOUNCE WE WILL
CONTINUE OUR STREAK OF EARLY IMPLEMENTATION BY SENDING OUT
THE FIRST REBATE CHECKS ON JUNE 10 RATHER THAN LATER AS HAD
EARLIER BEEN SUGGESTED. AS WE MOVE FORWARD, WE HAVE TWO
VERY IMPORTANT JOBS. CONTINUING TO IMPLEMENT THE LAW
CAREFULLY AND RESPONSIBLY AND KEEP AMERICA INFORMED ABOUT WHAT
IS CHANGING AND WHAT IS NOT CHANGING.
WE BELIEVE THAT THE SECOND JOB IS JUST AS IMPORTANT AS THE
FIRST. OVER THE LAST TWO MONTHS,
AMERICANS HAVE BEEN GETTING CONTINUED MISLEADING INFORMATION
ABOUT THE NEW LAW. INCREASINGLY, WE ARE
UNFORTUNATELY ALSO HEARING REPORTS OF CRIMINALS USING THE
LAW AS AN OPPORTUNITY TO COMMIT FRAUD.
WHETHER IT'S BY SELLING FAKE INSURANCE POLICIES OR TRICKING
SENIORS INTO GIVING AWAY THEIR MEDICARE NUMBERS.
WE ARE COMMITTED TO CONTINUING TO PROVIDE AMERICANS WITH
ACCURATE, UP-TO-DATE INFORMATION ABOUT THE AFFORDABLE CARE ACT.
SO THE SCARE TACTICS AND SCAM ARTISTS DON'T TAKE AWAY FROM
THIS HISTORIC LEGISLATION. AND ANOTHER OF OUR OUTREACH
GROUPS IS TO STATE ATTORNEYS GENERAL TO IS ASK THEM TO BE
INVOLVED IN THIS EFFORT TO CRACKDOWN ON POTENTIAL SCAMS AND
FRAUD. SO OVER THE MONTHS TO COME,
WE'LL CONTINUE TO REACH OUT TO AMERICANS ACROSS THE COUNTRY TO
EDUCATE THEM ABOUT THE LAW AND TO ANSWER THEIR QUESTIONS AND
LISTEN TO THEIR CONCERNS. AS WE PROCEED WITH
IMPLEMENTATION, WE KNOW THERE WILL BE TWISTS AND TURNS AND
BUMPS ALONG THE WAY BUT IN TWO MONTHS, IT IS CLEAR WE ARE
HEADED IN THE RIGHT DIRECTION. I APPRECIATE AGAIN YOU BEING
HERE TODAY AND HAPPY TO TAKE YOUR QUESTIONS.
-- I'M MARRY WITH KAISER HEALTH NEWS BRITAIN PROVISIONS FOR
YOUNG ADULTS UNDER 26. FOR SELF-INSURED PLANS, THEY
DON'T HAVE TO ADD PEOPLE? THEY CAN WAIT UNTIL THE
BEGINNING OF THE PLAN YEAR? AND 2/3 OF 160 MILLION AMERICANS
WHO GET THEIR COVERAGE THROUGH WORK ARE IN SELF-INSURED PLANS.
ARE YOU PLANNING TO TAKE ACTION WITH THESE EMPLOYERS TO CONVINCE
THEM TO PUT CHILDREN ON EARLIER? -- WE ALREADY ARE TAKING THAT
ACTION. WITH OUR PARTNERS AT THE
DEPARTMENT OF LABOR, WE ARE REACHING OUT TO LARGE EMPLOYER
GROUPS ASKING THEY'LL TO -- ASKING THEM TO LOOK AT THE
OPPORTUNITY TO OPEN THE PLAN EARLIER THAN MANDATED AND MAKE
THIS COVERAGE AVAILABLE. AND IN FACT, WE BELIEVE THAT IT
IS POTENTIALLY COST EFFECTIVE TO DO JUST THAT RATHER THAN
DISENROLLING YOUNG ADULTS AND THEN HAVING TO OUTREACH AND
REENROLL THEM. THIS MAY BE A COST SAVER OVER
ALL. THERE IS A STRATEGY GOING ON TO
ACTUALLY REACH OUT TO STATE GOVERNMENT GROUPS, TO
UNIVERSITIES, TO LARGE EMPLOYERS, TO OTHERS, TO ASK
THEM TO FOLLOW THE LEAD OF WE NOW HAVE 65 OR SO, COMPANIES,
WHO ARE OPENING THE PLAN YEAR EARLIER THAN ANTICIPATED.
-- CARA WITH B&A HEALTH CARE. CAN YOU OR MR. JAY ANGOFF
ADDRESS CONCERNS PEOPLE HAVE BEEN EXPRESSING THAT SOME
EMPLOYERS, IT MAY BE COST EFFECTIVE TO DROP INSURANCE
RATHER THAN -- AND PAY THE FINE RATHER THAN PAY FOR INSURANCE?
-- I'LL TAKE A CRACK AT IT AND MAYBE JAY CAN FOLLOW-UP.
FIRST OF ALL, THERE IS NO MANDATE THAT SMALL EMPLOYERS
COVER EMPLOYEES AT ALL. IF YOU HAVE LESS THAN 50
EMPLOYEES -- AND THAT DOES INCLUDE PART-TIME WORKERS, YOU
DON'T EVEN FALL UNDER THE UMBRELLA OF EMPLOYER
RESPONSIBILITY. WE HOPE THAT SMALL BUSINESS TAX
CREDIT THAT IS IMPLEMENTED THIS YEAR, WILL ACTUALLY STEM THE
TIED OF SMALL EMPLOYERS LEAVING THE MARKETPLACE WHICH HAS
ACCELERATED OVER THE PAST COUPLE OF YEARS, GIVEN RATE HIKES AND
NOT ONLY ENCOURAGE SMALL EMPLOYERS TO STAY IN THE MARKET
BUT MAY ENCOURAGE SMALL EMPLOYERS TO COME BACK INTO THE
MARKET. IT ISN'T UNTIL 2014, FOUR YEARS
FROM NOW, THAT THERE IS A EMPLOYER RESPONSIBILITY THAT
HITS AND IT'S DESIGNED IN A WAY TO MAKE SURE THAT TAXPAYERS, WHO
WILL BE PAYING FOR THE ASSISTANCE FOR LOWER INCOME
WORKERS TO GET HEALTH INSURANCE THROUGH THE EXCHANGES, THAT THEY
DON'T BEAR THE BRUNT OF EMPLOYERS NOT COVERING THEIR
EMPLOYEES SO THERE ARE A SERIES OF PROVISIONS THAT HITS IN 2014
TO REALLY COMPENSATE THE TAXPAYERS FOR THE SUBSIDY HELP
THAT EMPLOYEES WOULD GET. AND I AGAIN, WE ARE HOPEFUL THAT
IT REALLY OPERATES TO ENCOURAGE EMPLOYERS TO CONTINUE TO OFFER
COVERAGE AND OFFER CREDIBLE COVERAGE THAT REALLY PROVIDES
FOR THE RANGE OF SERVICES THAT FAMILIES ARE LOOKING FOR.
-- JANET FROM THE WALL STREET JOURNAL.
I HAVE TWO QUESTIONS. ONE, YOU MENTIONED THAT YOU
SPOKE WITH THE INSURANCE COMPANY EXECUTIVES TODAY ABOUT THE NEED
TO KEEP THEM FROM UNREASONABLY RAISING THEIR INSURANCE RATES.
CAN YOU TELL ME WHAT SPECIFICALLY YOU ASKED OF THEM
WHEN YOU SPOKE TO THEM ABOUT THIS TODAY?
MY SECOND REQUEST IS ON THE DONUT HOLE, ABOUT HOW MANY
AMERICANS WILL GET THAT CHECK ON JUNE 10?
THANK YOU. -- IN RESPONSE TO THE FIRST
QUESTION, WE HAD A LOT OF DISCUSSIONS THAT I THINK WAS
VERY GOOD ABOUT THE FACT THAT -- AND IT WAS A TERM THAT
SEVERAL OF THE INSURERS USED THAT I DIDN'T USE, THAT RATES
ARE NOW AT A CRISIS POINT. THAT THEY ARE LOOKING AT A
MARKET WHERE MORE AND MORE PEOPLE ARE DROPPING COVERAGE
BECAUSE OF THE INCREASE IN PRICE AND SO LOOKING FORWARD, WHAT WE
TALKED ABOUT IS THE CORRIDOR BETWEEN NOW AND 2014 WHEN WE
HAVE A NEW AND -- NEW ONES FOR A NUMBER OF PEOPLE, PARTICULARLY
IN SMALL GROUP AND INDIVIDUAL MARKETS.
AND STRATEGIES ABOUT HOW MUCH OVERSIGHT THERE WILL BE ABOUT
PROJECTIONS OF TRENDS GOING FORWARD, WHAT KINDS OF BALANCES
THERE NEEDS TO BE ABOUT COSTS. BUT I THINK THE INSURERS SEEM
VERY AWARE OF THE FACT THAT COST CONTROL, ALL OF US WORKING
TOGETHER ON IT, IS SOMETHING THAT WILL BE VERY IMPORTANT IN
THESE YEARS. AND FRANKLY, WE ARE EAGER TO
LEARN FROM THE PRIVATE MARKET STRATEGY, OF WHAT ACTUALLY HAS
WORKED IN TERMS OF BETTER HEALTH OUTCOMES AT MORE AFFORDABLE
RATES, BECAUSE A NUMBER OF THE LARGE EMPLOYERS AND PRIVATE
MARKET HAVE IMPLEMENTED STRATEGIES THAT WE THINK CAN BE
VERY EFFECTIVE TO LEARN FROM. SO I THINK THERE IS AN
UNDERSTANDING THAT WE WILL LOOK VERY CAREFULLY.
WE TALKED ABOUT THE FACT THAT RATE REGULATION WILL BE AT THE
STATE LEVEL, BUT ABSENT STATE OVERSIGHT, ABSENT STATE
INTERVENTION, WE ARE THE BACKUP WORKING WITH STATE REGULATORS TO
HELP THEM ENHANCE THE TOOLS THAT THEY HAVE, IMPLEMENT A BROADER
ARRAY OF STATUTORY RESPONSIBILITIES, BUT THAT WE
WILL LOOK VERY CAREFULLY AT WHAT IS HAPPENING IN THOSE
MARKETPLACES GOING FORWARD, BECAUSE THE WORST OF ALL IS TO
HAVE MORE AMERICANS DRIVEN OUT OF THE MARKET IN THE NEXT COUPLE
OF YEARS AND END UP WITH A SICKER POPULATION, IF YOU WILL,
BECAUSE THEY DON'T HAVE ONGOING HEALTH CARE.
THEY DON'T HAVE PREVENTIVE CARE. THEY DON'T HAVE COVERAGE.
WHEN WE HIT 2014. -- JULIE FROM NATIONAL PUBLIC
RADIO. THE PRESIDENT'S NOMINEE HAS
CENTER FOR MEDICARE AND MEDICAID SERVICES HAS COME UNDER HARSH
CRITICISM FROM CAPITOL HILL AND THE SENATE.
WHAT IS THE ADMINISTRATION DOING TO DEFEND THAT NOMINEE AND HOW
DIRE IS IT TO NEED SOMEONE WITH SENATE CONFIRMED AT THAT AGENCY
GIVEN HOW IMPORTANT MEDICARE IS TO THE IMPLEMENTATION OF THIS
NEW LAW? -- WELL, I DON'T THINK THERE IS
ANY QUESTION THAT DR. DON IS A HIGHLY QUALIFIED NOMINEE AND ONE
OF THE NATION'S MOST RECOGNIZED LEADERS ON IMPROVING HEALTH CARE
FOR ALL AMERICANS FIGURING OUT STRATEGIES WORKING WITH HOSPITAL
SYSTEMS AND PROVIDERS SOME SAVING LIVES.
FRANKLY I'M REALLY PLEASED THAT HE IS WILLING TO LEAVE THE
PRIVATE SECTOR AND CONSIDER TAKING ON THIS RESPONSIBILITY AT
THIS CRITICAL TIME. I THINK IT'S UNFORTUNATE THAT
SOME OF THE CRITICISMS DIRECTED AGAINST HIM HAS LITTLE TO DO
WITH HIM. IT'S A RE-LITIGATION OF THE
HEALTH REFORM LEGISLATION THAT NOW IS THE LAW OF THE LAND, AND
WE ARE HOPEFUL THAT ENDORSEMENT OF EVERYBODY FROM THE HOSPITAL
ASSOCIATION, DOCTORS GROUPS, A VARIETY OF FORMER CMS OFFICIALS,
BOTH REPUBLICANS AND DEMOCRATS, CAN BE HELPFUL IN THIS
CATASTROPHE. BUT I THINK IF YOU LOOK AT SOME
OF THE CRITICISM, IT HAS LESS TO DO WITH HE AND HIS
QUALIFICATIONS AND HIS LEADERSHIP ABILITIES AND MORE TO
DO WITH REHASHING SOME OF THE ARGUMENTS THAT THOSE SAME
MEMBERS MADE AGAINST THE PASSAGE OF LEGISLATION IN THE FIRST
PLACE. -- FOLLOWING UP ON A QUESTION
EARLIER ABOUT EMPLOYERS EXTENDING COVERAGE TO ADULT
CHILDREN. WOULD YOU THINK OR HOPE THAT
THAT WOULD BE DONE AT LITTLE OR NO ADDITIONAL COST TO THE
EMPLOYEES? -- YES.
AGAIN, I DON'T HAVE THE SOLID PROJECTIONS HERE, BUT WHAT I
HAVE BEEN TOLD A NUMBER OF INDIVIDUALS IS THAT THIS IS
LIKELY TO BE AN OVERWHELMINGLY HEALTHY GROUP OF INDIVIDUALS
THAT WHATEVER HEALTH CONCERNS, THIS POPULATION MAY HAVE AT 25
AS WELL AS 26 OR AT 19 AS WELL AS 21.
IT'S UNLIKELY TO BE THE AGE DIFFERENTIAL THAT WOULD CAUSE A
DIFFERENT PROJECTION. IT'S A VERY DIFFERENT THING THAT
PICKING UP A GROUP OF 60-YEAR-OLD WHO HAVE BEEN
UNINSURED. SO CONTINUING THE COVERAGE
SHOULD HAVE ALREADY -- THEIR HEALTH STATUS, THEIR HEALTH
CONDITIONS, THEIR HEALTH EXPERIENCE, WOULD HAVE ALREADY
BEEN CALCULATED INTO A BENEFIT PACKAGE.
AND I THINK IT'S A -- IF YOU LOOK AT THE INDIVIDUAL MARKET,
TYPICALLY, YOUNGER HEALTHY ADULTS ARE THE -- BY FAR THE
CHEAPEST PEOPLE TO COVER IN THE MARKET.
THEY GET THE BEST POSSIBLE QUOTES AND MOST HEALTH PLANS ARE
DYING TO GET THESE FOLKS INVOLVED IN A POOL.
SO ARGUABLY, IT COULD EVEN MAKE THE POOL HEALTH EXPERIENCE LOOK
A BIT BETTER OVER ALL BY INCLUDING THESE FOLKS FOR A
LONGER PERIOD OF TIME. -- GRETCHEN, FOX NEWS.
FORMER CBO DIRECTOR HAS DONE AN ANALYSIS ON THE NEW LAW AND HE
HAS CONCLUDED THAT A CENSUS IN THE LAW WILL MEAN AS MANY AS
THREE TIMES MORE THAN ORIGINALLY ESTIMATED WILL SEEK SUBSIDIES
AND WILL INCREASE THE COST OF HEALTH CARE FROM 900 BILLION TO
POSSIBLY 1.85 TRILLION. WHAT IS YOUR RESPONSE AND DO YOU
BELIEVE THAT THE ORIGINAL CBO ESTIMATE OF 900 BILLION WILL
STAY TRUE? -- WELL, I HAVEN'T SEEN THE
ANALYSIS THAT YOU TALK ABOUT. I HAVE NO IDEA THE ASSUMPTIONS
THAT HE HAS MADE. I HAVE HAD THE OPPORTUNITY TO
LOOK AT THE CBO INFORMATION OVER THE COURSE OF TIME.
AND I THINK THAT THEIR CALCULATION, WHICH IS BASED ON
THEIR ANALYSIS AND AN OPPORTUNITY TO LOOK AT THE WHOLE
EXPERIENCE SITUATION, IS ACCURATE.
I CAN'T REALLY COMMENT ON WHAT YOU JUST READ TO ME BECAUSE I
HAVE ABSOLUTELY NO IDEA WHAT IT IS THAT HE HAS LOOKED AT TO
CHANGE THOSE ASSUMPTIONS. -- I'M WITH THE L.A. TIMES.
TWO QUICK QUESTIONS. FOLLOWING UP ON JANET'S
QUESTION. HOW MANY SENIORS WILL BE GETTING
REBATE CHECKS? -- 80,000 AT THE FIRST MAILING.
WE THINK OVER THE COURSE OF JUNE UNTIL THE END OF THE YEAR, THERE
WILL BE ABOUT -- I'M GETTING MY HELP HERE.
A LITTLE OVER 4 MILLION SENIORS WILL GET THE CHECKS.
AND WE ARE GOING TO -- MARILYN, I'M GOING TO ASK MARILYN, RATHER
THAN CONTINUING TO BE THE PASS-THROUGH TO MAYBE TELL YOU
ALSO OVER WHAT KIND OF INCREMENTAL PERIOD THOSE CHECKS
WILL BE GOING OUT. -- THESE CHECKS WILL BEGIN IN
EARLY JUNE AS THE SECRETARY SAID.
AND THEN WILL OCCUR BASICALLY EVERY 30 DAYS UNTIL THE END OF
THE YEAR. OBVIOUSLY, DEPENDING ON A
SENIOR'S EXPENSES, THEY WILL HIT THE DONUT HOLE AT A DIFFERENT
TIME THROUGHOUT THE YEAR. SO WE WILL FOLLOW THAT WITHIN A
30-DAY PERIOD AND GET THE CHECK OUT AFTER THAT.
-- I SHOULD ADD A FOOTNOTE, AND WE LOVE ALL OF YOUR HELP IN
GETTING THIS WORD OUT. SENIORS DO NOT HAVE TO DO
ANYTHING TO GET THIS CHECK. THEY DON'T HAVE TO SIGN
ANYTHING. THEY DON'T HAVE TO APPLY FOR IT.
THEIR BILLING HISTORY WILL BE MONITORED BY CMS AND THEY WILL
AUTOMATICALLY GET THE CHECK. IF ANYBODY SHOWS UP AT A DOOR
ASKING FOR MEDICARE INFORMATION, ASKING FOR SIGNATURE, ASKING FOR
PERSONAL INFORMATION, NOT ONLY DON'T GIVE IT, BUT REPORT THAT
IMMEDIATELY, BECAUSE WE ARE VERY WORRIED ABOUT THE FACT THAT WE
ALREADY HAVE REPORTS IN SOME JURISDICTIONS AROUND THE COUNTRY
THAT SCAM ARTISTS ARE DOING JUST THAT, THEY ARE SHOWING UP AT
SENIOR'S DOORS ASKING FOR THEIR MEDICARE ID NUMBER OR TO SIGN
INFORMATION AND TURN OVER PERSONAL DATA.
AND IT'S VERY DANGEROUS. BUT NOTHING IS REQUIRED IN ORDER
TO GET THE CHECK. IF A SENIOR REACHES THE DONUT
HOLE THIS YEAR, THAT CHECK WILL AUTOMATICALLY BE MAILED.
-- HI, DAVID WITH THE WASHINGTON POST.
REGARDING THE MEDICAL LOSS RATIO REQUIREMENT YOU MENTIONED, IT'S
BEEN ARGUED THAT THE NEW REQUIREMENT COULD CREATE
PERVERSE INCENTIVES FOR INSURERS THAT REQUIRING INSURERS TO
DEVOTE 80-85% OF THEIR PREMIUMS TO THE PAYMENT OF MEDICAL CLAIMS
AND THE LIKE, COULD GIVE THEM INCENTIVE TO ALLOW REIMBURSEMENT
RATES FOR PROVIDE TOURS RISE OR TO RAISE THEIR PREMIUMS.
EITHER OF WHICH WOULD ALLOW THEM TO RECOUP IN ABSOLUTE TERMS THE
SAME PROFITS OR TO DEVOTE THE SAME AMOUNT TO ADMINISTRATIVE
OVERHEAD. WHAT DO YOU SEE AS THE RISK OF
THOSE THINGS HAPPENING AND WHAT WOULD PREVENT THEM FROM
HAPPENING? -- WELL, I THINK THAT THE
DEFINITION OF WHAT IS CONSIDERED AS A MEDICAL EXPENSE, WHAT CAN
ACTUALLY BE ABSORBED IN THE MEDICAL LOSS RATIO AS 80% AND
WHAT IS OUTSIDE THAT, IS AN ONGOING CONVERSATION.
AS YOU KNOW, THE LAW PROVIDES FOR THE NATIONAL ASSOCIATION OF
INSURANCE COMMISSIONERS TO RECOMMEND A DEFINITION OF WHAT
ARE THE FACTORS THAT SHOULD BE ON THE MEDICAL SIDE OF THE
MEDICAL LOSS RATIO AND WHAT SHOULD BE OUTSIDE OF IT.
AND IN THE LAW AS FOR THAT DEFINITION BY THE END OF THE
YEAR, THEY VOLUNTARILY AGREED TO ACCELERATE THAT PROCESS AND GIVE
US SOME RECOMMENDATIONS BY THE END OF JUNE, WHICH I THINK WILL
BE VERY HELPFUL. THIS WAS PART OF THE
CONVERSATION THAT WE HAD WITH INSURERS TODAY OF NOT ONLY HOW
THE ASSESSMENT WILL BE MADE ABOUT WHAT IS MEDICAL COST, BUT
I THINK ANOTHER FACTOR IS THE FACT THAT WE DON'T WANT TO LOSE
SOME OF THE STRATEGIC INITIATIVES THAT HAVE WIELDED A
LOT BETTER HEALTH OUTCOMES THAT MAY NOT BE DIRECTLY RELATED TO A
PROVIDER-PATIENT VISIT, BUT HAVE ACTUALLY PRODUCED HEALTHIER
RESULTS. THERE WAS SOME CONVERSATION
TODAY ABOUT ONE OF THE COMPANIES WHO HAD A MAJOR EFFORT TO LOWER
HOSPITAL-BASED INFECTIONS AND NATIONALLY HAD A SIGNIFICANT
SUCCESS ABOUT A 30% DECREASE, WHICH NOT ONLY SAVES DOLLARS BUT
SAVES LIVES. SO, SHOULD THAT EXPENSE BE PART
OF THE MEDICAL LOSS RATIO. BUT I WOULD SUGGEST THAT THE
FACTORS THAT WILL HELP US CONTINUE TO MONITOR IF WE HAVE
BASELINE DATA, WE WILL WORK WITH OUR PARTNERS AT THE STATE LEVEL
TO WATCH VERY CAREFULLY WHAT IS HAPPENING BOTH WITH PROVIDER
RATES, WITH OVERHEAD COSTS, WITH DATA MOVING FORWARD, AND HAVE
THE ABILITY, FRANKLY, TO -- ONE OF THE FEATURES THE LAW GIVES
HHS THAT HAS NEVER BEEN PART OF OUR JURISDICTION BEFORE IS TO
LOOK AT WHAT ARE UNREASONABLE RATES?
FIRST OF ALL TO DEFINE THAT AND SECONDLY TO HAVE AN OPPORTUNITY
TO ACTUALLY CALL OUT COMPANIES WHO ARE MOVING IN THAT
DIRECTION. SO TO CLEARLY ACCELERATE
PAYMENTS THAT ARE OUTSIDE ANY COST TREND OUTSIDE, ANY
JUSTIFICATION LOADING THINGS UP IN THE MOR OR SOMETHING THAT WE
WILL LOOK AT VERY CAREFULLY. BECAUSE WHAT THE LAW SAYS IS,
YOU NEED TO SPEND 80-85% OF YOUR PREMIUM DOLLAR TAKING CARE OF
MEDICAL COSTS, AND IF YOU DON'T, THAT IS REBATED TO CONSUMERS.
SO THAT'S A PROTECTION THAT CONSUMERS HAVE A RIGHT TO EXPECT
AND THAT WE ARE GOING TO WORK WITH OUR STATE REGULATORY
PARTNERS TO MAKE SURE HAPPENS. -- I HAVE TWO SMALL QUESTIONS.
FIRST, DURING YOUR CONVERSATION -- I'M AMY FROM
INSIDE HEALTH POLICY. TODAY IN YOUR DISCUSSION WITH
INSURANCE, DID YOU TALK ABOUT FRAUD AND ABUSE AS PART OF THE
MOR BY ANY CHANCE? -- WE DID NOT.
-- AND MY SECOND QUESTION IS FOR MR. JAY ANGOFF, DO YOU KNOW WHEN
YOU'RE PLANNING ON ANNOUNCING WHO WILL BE YOUR FOUR DEPUTIES
AND A MEETING OF THOSE FOUR OFFICES?
-- WE HAVE TWO NOW, STEVE LARSEN IS THE HEAD OF OUR OFFICE OF
OVERSIGHT. STEVE IS IN JUST A FEW ROWS
SITTING BEHIND YOU A FEW ROWS. STEVE, DO YOU WANT TO STAND UP?
SO WE ARE VERY PLEASED TO HAVE STEVE LARSEN AS THE HEAD OF OUR
OFFICE OF OVERSIGHT. HE WAS THE INSURANCE
COMMISSIONER OF MARYLAND, CHAIRMAN OF THE MARYLAND PUBLIC
SERVICE COMMISSION. RAN AN HMO.
SO WE ARE VERY PLEASED TO HAVE HIM.
AND THEN THE HEAD OF OUR OFFICE -- CONSUMER OFFICE
SYSTEMS KAREN, WHO HAS BEEN AN INSURANCE CONSUMER ADVOCATE FOR
AT LEAST 20 YEARS. VERY PLEASED TO HAVE HER.
AND THEN WE'LL HAVE ON MONDAY WE WILL BE ANNOUNCING THE HEAD OF
OUR OFFICE OF INSURANCE PROGRAMS.
CAN'T ANNOUNCE THAT TODAY BUT WE WILL ON MONDAY OR TUESDAY.
-- MARY AGNES FROM KAISER HILL. ON THE GRANDFATHER PLANS, WHAT
SORT OF FLEXIBILITY WILL THEY HAVE TO CHANGE THE DEDUCTIBLE OR
COPAYMENT OR BENEFIT AND RETAIN THAT STATUS?
-- CLEARLY THAT REGULATION IS NOT FINALIZED BUT THE GOAL IS TO
LIVE UP TO THE PRESIDENT'S COMMITMENT THAT IF YOU HAVE A
PLAN THAT YOU LIKE, YOU'LL GET TO KEEP IT.
AND HOW THAT BALANCES WITH SOME OF THE NEW CONSUMER PROTECTIONS
AND HOW BROADLY TO DRAW THAT REGULATION CURRENTLY BEING
DEBATED. WE SHOULD HAVE A FINAL REG IN
THE NOT TOO DISTANT FUTURE. BUT THAT DEBATE IS VERY MUCH
UNDERWAY. BUT THE GOAL IS NOT TO HAVE THE
MARKET DISRUPTED BECAUSE OF THE NEW LAW BUT TO ACTUALLY HAVE THE
GRADUAL IMPLEMENTATION UNTIL WE GET TO THE NEW MARKETPLACE.
THANK YOU ALL VERY MUCH.