California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Republicans Divided on Replacement Legislation for Health Reform Law

Although most Republicans agree that the federal health reform law should be repealed, widespread disagreement over replacement legislation could make it difficult for the party to unite behind a single plan if the overhaul is overturned, Politico reports.

According to Politico, Republicans appear to agree on only a few basic health reform concepts -- such as reforming medical malpractice, expanding the use of health savings accounts, allowing interstate insurance sales, and letting small businesses and individuals pool resources to buy health insurance.

Four health reform plans by various House Republicans include some of those ideas, but largely diverge. For example, a health reform law replacement plan by Rep. Tom Price (R-Ga.) does not include a provision -- supported by some Republicans -- that would require health insurance companies to accept all applicants. A bill (HR 4242) by Rep. Joe Heck (R-Nev.) includes such a provision.

Rep. Henry Waxman (D-Calif.) said he is "skeptical" that Republicans can unite behind a single alternative. He notes that when the health reform legislation was pending, Republicans "didn't seem to want to do anything to regulate the insurance companies to prohibit discrimination based on pre-existing conditions." He added, "They didn't want to come up with any idea to make sure everybody had health insurance" (Haberkorn, Politico, 4/30).

House Republicans Attack Health Insurance Cooperatives

In related news, House Republicans are targeting the Consumer Operated and Oriented Plan Program authorized by the health reform law by investigating the program's loans and attempting to defund it entirely, Politico reports.

Last week, the House Energy and Commerce Committee voted to remove remaining unobligated funds from the $3.4 billion initiative, marking the second time the program's funding has been cut during budget negotiations.

Committee members also announced an investigation into about $845 million in low-interest loans the federal government has made to 10 organizations to launch CO-OPs in 10 states, noting a potential default rate of almost 50% (Norman, Politico, 4/30).

Minn. Fight Over Insurance Exchange Reflects Nationwide Struggle

Efforts by Minnesota Gov. Mark Dayton (D) to establish the state's health insurance exchange have been hindered by opposition from Republicans, who control both chambers of the state Legislature. Republicans have declined to participate in a Dayton administrative task force that would guide the exchange's development.

Sen. David Hann (R), chair of the Senate Health and Human Services Committee, argued that Dayton "has shown a propensity to act by executive order, as if he could establish an exchange by some kind of fiat or diktat."

The situation is reflective of what is occurring in several state capitols across the country -- including New Hampshire and New York -- as officials try to implement provisions of the health reform law over objections from Republican lawmakers (Pear, New York Times, 4/30).

Federal Officials Investigate Small Firms' Stop-Loss Coverage

In other related news, federal officials are requesting information on whether small self-insured employers are purchasing "stop loss coverage with low attachment points" to avoid the health reform law's requirements, according to a notice published Tuesday in the Federal Register by the departments of Labor, Treasury and HHS.

Under the health reform law, self-insured employers are exempt from state laws mandating certain health insurance benefits and some patient protection provisions, according to CQ HealthBeat. Typically, employers that self-insure purchase stop-loss coverage to protect themselves from catastrophic losses. Stop-loss coverage with a "low attachment point" is a relatively low amount above which an employer must start paying an employee's medical bills.

The notice warns that some small employers with generally healthy employees might be purchasing stop loss coverage to self-insure. "This practice, if widespread, could worsen the risk pool and increase premiums in the fully insured small group market," the notice says. Experts say that federal officials intend to use the information they receive to create regulations to counteract the practice (Reichard, CQ HealthBeat, 4/30).

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