Thursday, May 14, 2009
MIRS Capitol Capsule
While Senate Republicans today fought back against the “Party of No” stereotype by unveiling a broad new health plan, it has a controversial component: It raises taxes.
The plan, which will increase access to health care for those below 300 percent of poverty, relies on a new tax on insurance carriers, including third-party, an increased tax on hospitals and an assessment on Blue Cross/Blue Shield of Michigan (BCBSM). Republicans said the plan could cover half of the uninsured in the state.
It's unusual for Republicans to propose an increase and MIRS has learned there's some rumbling in the caucus. Senate Majority Leader Mike BISHOP (R-Rochester) said at the press conference that he'll be going over the plan with members and Sen. Mark JANSEN (R-Gaines Twp.) stressed this wasn't a final product and they were still looking for feedback from stakeholders.
In fact, the first thing Rep. Marc CORRIVEAU (D-Northville) pointed to in the plan was the tax hike. He argues that businesses that self-insure will take a hit.
“We have to be real careful before we tax businesses at this point,” he said. “I'm worried about unintended consequences. When you look at what's happening to the Big Three, I think we have to do all we can to make sure employers don't lose coverage.”
The House Democrats' plan announced Monday also assesses insurers to create a catastrophic fund, but Corriveau said that was fairer because it's just on them, not businesses (See “House Dems Unveil Universal Access Health Plan,” 5/11/09). He said his plan is self-funded and questioned whether the GOP's is. He will have an organizational meeting on the 10-bill package on Tuesday and then hold workgroups after that.
Corriveau also was concerned that the Republican plan allows underwriting, which he said discriminates against those with preexisting conditions. But he saw common ground on the principles of access and affordability and described it as a “good first step.”
Senate Health Policy Chair Tom GEORGE (R-Texas Twp.), a physician who headed up a bipartisan work group, acknowledged to MIRS that the plan could be painted as a tax hike.
“The alternative, I suppose, is to wait for the federal government to fix us and they'll have to find a way to pay for it,” he said.
He also said that the goal is fairness. “We tried to spread the pain around,” he said. “Everyone has a cause for complaint.”
George acknowledged that the GOP has been saddled with the obstructionist stereotype and said they're being proactive.
“We don't want that. That's bad. We need to be helping find solutions using Republican principles,” he said.
“You can't just say no,” George added. “Michigan has problems that can't be ignored.”
George said that the plan maintains competition and choice and rewards individual behaviors, which he said are “strong Republican values and they're embedded.” He also said that tackling health care was critical to the economy, since many businesses are burdened with costs, whereas House Republicans argued when the Dems' plan came out this week that it was a distraction from creating jobs. Caucus spokesman Bill NOWLING said today that members hadn't had enough time to read the Senate plan yet and probably wouldn't comment until after it passed the floor.
SB 0579, SB 0580, SB 0581 and SB 0582 have been referred to the Health Policy Committee. George plans several hearings, starting Wednesday, and does not have a timeframe on the package. The health plan creates two new programs, but George said they will be fully paid for through the three funding streams. If money runs low, he said they could cap access, so as not to drain the state budget.
The first new program is MI Access, which would cover uninsured patients earning under 200 percent of the federal poverty level. This would be under the Medicaid umbrella. George said that Michigan would ideally get a federal waiver -- something Gov. Jennifer GRANHOLM failed to get for her Healthy Michigan plan. The hope is that the state could pull down federal dollars. Coverage would be linked to behaviors, such as smoking and Body Mass Index (BMI).
The second program is MI Coverage, which protects those earning between 200 and 300 percent of the poverty level. This is aimed at working people who can't afford insurance. This would be a subsidized plan with limited benefits and also tied to individual behaviors. Premiums would cost an estimated $50 to $60 per month.
The workgroup looked at plans from several other states, including Tennessee, before drafting the bills.
George said legislation also will reform the individual market, which was the subject of last year's failed Conference Committee negotiations. This is about 3 to 5 percent of the market. There would be stringent consumer protections, he said, and the waiting period for pre-existing conditions would be knocked down from one year to six months for commercial carriers. Under the House Democrats' plan, all pre-existing conditions would be required to be covered to avoid “cherry picking.”
The Blues would still be the carrier of last resort, but claims over $25,000 would be reimbursed at 90 percent through a fund paid for by all carriers. George said it would be small, but no percentage has been determined. Because BCBSM would be partially relieved of its mission, George said they would no longer be entitled to its full tax exemptions, which is estimated between $80 and $130 million annually. That's why the state would issue an annual assessment in lieu of taxes.
The workgroup led by George held several meetings across the state over four months and consulted with numerous stakeholders in the health field, including: BCBSM, commercial carriers, health plans, physicians, hospitals, seniors, patients and consumers, disability advocates, business owners and job providers, unions, and the Office of Financial and Insurance Regulation.
A Blues spokeswoman said officials are still in the midst of reviewing both plans and are reserving judgment.
“We're pleased to see the legislature is taking action on health care reform for Michigan,” said Helen STOJIC. “Our support of any legislation will depend on its ability to strengthen regulations to protect consumers, create a fair and balanced health insurance system and broaden access to quality, affordable coverage.”
Eric [SCHNEIDEWIND], state president of AARP, supports the GOP plan.
AARP's top priority is making health care available to all Michigan citizens. Today's announcement is a major step toward that goal,” he said.
Paul SPAUDE, president and chief executive officer of Borgess Health and Borgess Medical Center, didn't endorse the plan but said he appreciates the effort.
“While we have not analyzed the specifics of this legislative package we look forward to the opportunity to share our perspective and hearing from others. Borgess strongly supports efforts to achieve 100 percent access and 100 percent coverage for health care and will work with Sen. George and others to achieve this goal,” he said.