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Republican leaders target reform shortcomings


Uncertainty is the theme for 2011. Insurers have to implement a multitude of new requirements for providing coverage, often with scant information.

Uncertainty is the theme for 2011. Insurers have to implement a multitude of new requirements for providing coverage, often with scant information.

But House leaders will not be so gentle in the coming months.


Critics of "Obamacare" also have their eye on the $10 billion authorized for the new Center for Medicare and Medicaid Innovation. It has readied several new demonstrations on methods to improve Medicare services and rationalize spending, but its budget may be slashed by money-crunchers.

Republicans, traditionally strong supporters of private Medicare plans, might seek to lessen the $145 billion cut in payments to Medicare Advantage plans (over 10 years), authorized by PPACA, but will have a hard time finding offsetting revenues. So far, insurers have not abandoned the MA program, largely because rates are frozen for 2011.

Furthermore, CMS gave insurers a surprise in November by extending bonus payments to more plans than expected. Most dropouts for 2011 were attributed to provider network requirements enacted two years ago, plus pressure from CMS to limit duplicative plans. Nearly 1 million seniors, of some 11 million in the MA program, had to look for new plans for this year, but that number is expected to rise in 2012 when rate cuts kick in and the market reshuffles.

At the same time, more states might turn to private plans to serve Medicaid patients as they struggle to extend coverage to millions of the uninsured. Even so, many states are cutting coverage of prescription drugs, vision, dental and other optional benefits in order to fill budget shortfalls.

State insurance regulators also are watching closely to see if disruptions emerge from the new medical loss ratio (MLR) requirements. Among the concerns is that the policy will force insurance brokers out of business. Four states applied for exemptions to allow local insurers more time to meet the MLR standard, and the feds appear willing to be flexible for the sake of stability in the individual market.

HHS also is giving a temporary pass to mini-med plans while the agency collects data on costs and outlays for these low-cost policies commonly provided to part-time and low-salary workers.

State concerns about their authority, moreover, are prompting more governors to enter the legal battle against the individual mandate. Last month, a federal judge in Virginia ruled, as expected, that the individual coverage mandate is unconstitutional, an issue that eventually will be decided by the Supreme Court. The judge did not freeze implementation pending appeal.

Jill Wechsler, a veteran reporter, has been covering Capitol Hill since 1994.

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