Illinois Government Consultants Incorporated

One of Senator Edward M. Kennedy’s legacies in the new health care law, intended to allow the chronically ill and people with disabilities to continue living in their homes, is too costly to survive without major changes, Obama administration officials now say.

Republican lawmakers, who have vowed to repeal the health care law, cite the administration’s acknowledgment as yet another reason to do so. But the health and human services secretary, Kathleen Sebelius, says the law gives her plenty of authority to make the necessary changes to the program without Congressional action.

To make the program viable, Ms. Sebelius said, she is considering changes in the eligibility criteria, including employment and earnings requirements, to ensure that only active workers may enroll. She also said she favored adjusting premiums to rise with inflation.

Senator Tom Harkin, Democrat of Iowa and chairman of the Senate health committee, encouraged the administration to make any changes that might be required to keep the program fiscally sound, so “no one with a disability will be forced to live in an institution.”

Under the current law, the program will allow workers 18 and older to buy insurance from the government to cover the costs of long-term care. After paying premiums for at least five years, they are then eligible for benefits if they become unable to perform basic activities of daily living because of chronic illness or crippling injury. The program is meant for people with severe disabilities who want to live in the community, though benefits can also be used to help pay for nursing home care or assisted living.

An employer can arrange for workers to be enrolled automatically, with premiums paid through payroll deductions. An employee can opt out at any time and, apparently, re-enroll later.

Advocates for older Americans and for people with disabilities say the need for such help will explode as baby boomers age. President Obama’s 2012 budget seeks $93.5 million for a huge “information and education” campaign, with the goal of having 7.7 million people in the long-term care insurance program by 2015.

In debate on the health care bill in late 2009, Republicans and moderate Democrats repeatedly warned that sicker people were more likely than healthy ones to sign up for the long-term care plan. Enrollment is voluntary, but the law stipulates that premiums must be set high enough to guarantee the solvency of the program over 75 years. Higher premiums would discourage healthier people from participating, economists and actuaries say.

Administration officials, who played down such concerns 15 months ago, say they now share them. Under questioning by a Republican at a Senate hearing last week, Ms. Sebelius said the original version of the program, known as Community Living Assistance Services and Supports, or Class, was “totally unsustainable.”

She told the House Ways and Means Committee, “We very much share the concerns that have been expressed that, as written into law, the framework of the program was not sustainable.”

But Ms. Sebelius resisted Republican demands for the program’s repeal. Instead, she said, she is considering changes to make the program “significantly different than the framework that the law itself describes.” A main goal, she said, is to attract more healthy people, thus spreading the financial risk across a larger group.

For example, Ms. Sebelius said, she may alter eligibility criteria, including employment and earnings requirements, to make sure people are established workers when they enroll.

Federal officials have not specified the amount of premiums or benefits. The Congressional Budget Office estimated that nearly 10 million people might enroll in the program by 2019 and said that premiums would start at $123 a month for benefits expected to average $75 a day. Medicare actuaries estimated that 2.8 million people would participate within three years and said premiums needed to be about $240 a month to cover program costs.

Under the current law, Ms. Sebelius said, a person’s premiums will generally stay the same, but cash benefits will increase with inflation. She said she favored adjusting premiums to rise with inflation, a change that could deter some workers from participating.

Federal officials said they were also looking for ways to discourage workers from dropping out and re-enrolling.

The law governing the program specifies that “no taxpayer funds shall be used for payment of benefits,” a provision Ms. Sebelius said was “nonnegotiable.” The health secretary can, however, adjust premiums as needed to maintain the program’s solvency. Her power to revamp it in other ways is unclear.

“Secretary Sebelius seems to believe that she has more flexibility to change the program than Congress gave her,” said Senator John Thune, Republican of South Dakota.

The law also says that up to 3 percent of the program’s premiums may be used to pay administrative expenses, but since no premiums have been paid, Mr. Obama is seeking the $93.5 million to publicize the program.

“The program’s financial solvency and viability will depend on the enrollment of large numbers of participants,” the White House said in its 2012 budget request. “Employers and individuals will need to have access to information about the need for long-term services and supports and the benefits of the program. It will be crucial to educate employers about how to enroll their employees and to inform individuals about how to enroll directly.”

Public confidence in the program is essential if the government expects millions of people to enroll starting next year. But economists and actuaries have raised many questions.

Richard S. Foster, the chief actuary at the federal Centers for Medicare and Medicaid Services; Alicia H. Munnell, director of the Center for Retirement Research at Boston College; and leaders of the American Academy of Actuaries all said the program would be unstable if, as expected, it attracts disproportionate numbers of people with health problems.

Mr. Foster said his analysis showed the program faced “a significant risk of failure” because people who are or expect to be sick or disabled were more likely to sign up. In a study issued this month, Ms. Munnell, an economic adviser to President Bill Clinton, said more stringent work requirements and an effective national advertising campaign could help attract young, healthy people to the insurance pool.

Even so, she said, “premiums may never reach an affordable level for middle-class households,” so “the program faces enormous challenges.”

Mr. Obama’s debt-reduction commission, a bipartisan advisory body, said in its report late last year that Congress should “reform or repeal” the program.

“The program’s earliest beneficiaries will pay modest premiums for only a few years and receive benefits many times larger,” the panel said, “so that sustaining the system over time will require increasing premiums and reducing benefits to the point that the program is neither appealing to potential customers nor able to accomplish its stated function.”
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Source: The New York Times

The U.S. Chamber of Commerce’s main hall, where President Obama gave his I-love-business speech on Monday, displays the flags of Columbus, Cortes and Ponce de Leon. Inscribed on the beams overhead are messages such as:

Alexander the Great found India.

Xenophon crossed Asia Minor.

Peary reached the North Pole.

Now, 102 years after Cmdr. Peary’s expedition, the Chamber can carve the name of another explorer:

Obama discovered corporate America.

“I strolled over from across the street,” the president said of his trek from the White House across Lafayette Square to the Chamber’s H Street palace. “And look, maybe if we had brought over a fruitcake when I first moved in, we would have gotten off to a better start.”

When the laughter ended, Obama departed from his prepared text to add: “But I’m going to make up for it.”

He sure is - and if the list of goodies he read out Monday is any indication, he would have found it easier to deliver the fruitcake.

Obama told the business lobby about the executives who have important roles in his administration: J.P. Morgan Chase’s Bill Daley, GE’s Jeff Immelt and AOL’s Steve Case. “We need to make America the best place on Earth to do business,” the president promised.

Let’s get rid of those “outdated and unnecessary regulations,” the onetime corporate scold said, and remove that “burdensome corporate tax code with one of the highest rates in the world.”

The president boasted that his administration had slowed down environmental rulemaking and accelerated drug approvals. Rather than browbeat corporate America, as he did in his early days in office, he pleaded for more hiring with sports phrases such as “get off the sidelines” and “get in the game.”

Even health-care reform, the bete noire of the business lobby, became, in Obama’s telling, another assist to his corporate friends - funneling “$40 billion directly to small businesses” and saving “large employers anywhere from $2,000 to $3,000 per family.”

Chamber President Tom Donohue, whose organization once accused Obama of a “general attack on our free-enterprise system,” was thrilled by the president’s new friendliness. In his introduction of Obama, Donohue boasted that the speech was “one of the hottest tickets in town.”

Liberals were rather less pleased that Obama was making nice to the group that spent tens of millions of unregulated dollars to defeat lawmakers who supported his agenda. “What America needs is not olive branches to giant corporations but controls over the companies that sank the economy,” said Public Citizen.

It was already a bad day for liberals concerned about corporate power: The Huffington Post, a powerful voice on the left, had just agreed to be taken over by AOL. And here was Obama, as the liberal group Agenda Project put it, “fawning” over corporate evildoers.

“I will tell you: I will go anywhere, anytime to be a booster for American businesses, American workers and American products,” Obama offered.

One person in the part of the room where Donohue was seated began to clap, and the rest of the crowd quickly joined in the applause.

“And I don’t charge a commission,” Obama ad-libbed.

Obama did try to remind the executives of their corporate responsibilities by suggesting to them that good behavior is in their own interests. “In the financial crisis,” he said, “the absence of sound rules of the road - that wasn’t good for business.”

The president also made a gentle appeal for companies to spend some of the “nearly $2 trillion sitting on their balance sheets” to hire people.

These weren’t commands but requests, appealing to the corporate leaders’ sense of patriotism. “Ask yourselves what you can do to hire more American workers,” he said.

Although his overtures were friendly, the audience was skeptical. Obama at times paused after what should have been applause lines, but the room was so quiet that the air could be heard coming out of the vents, as when he vowed to take “domestic discretionary spending down to the lowest share of our economy since Eisenhower was president.” No applause. “That’s a long time ago,” he added. Again, nothing.

Still, there was much for the audience to like in his words: “reforming our patent system . . . bigger, permanent tax credit . . . knock down barriers that make it harder for you to compete . . . run the government a little bit more like you run your businesses . . . consolidate and reorganize the federal government . . . dramatically cutting down on the paperwork.”

At the end, Obama put his own fight with corporate America into historical perspective. He recalled the “fractured” relationship Franklin Roosevelt had with business because of the New Deal, but said that they ultimately had “one of the most productive collaborations between the public and private sectors in American history.”

True, but that took a world war. Now there is no such war - only a surrender.
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Source: The Washington Post

A new federally funded health insurance program for people with pre-existing conditions will begin accepting applicants today.

Enrollment in the Illinois Pre-Existing Condition Insurance Plan starts at 10 a.m. The program, part of federal health-care reform, is open to Illinois residents with chronic conditions who have been uninsured for at least six months. Illinois will receive $196 million from the federal government to provide coverage until Jan. 1, 2014, the date insurers will no longer be allowed to deny coverage based on a pre-existing condition.

State officials estimate that 4,000 to 6,000 people will receive insurance through the temporary high-risk pool.

Coverage starts Sept. 1. The plan will be administered by Urbana-based Health Alliance Medical Plans. To apply, call (877) 210-9167 or visit Insurance.Illinois.gov/IPXP.
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Source: The Chicago Sun-Times

Eighteen days into President Obama’s term, White House press secretary Robert Gibbs fielded questions about a campaign-style swing Obama was about to make through Indiana and Florida on behalf of the American Recovery and Reinvestment Act, then pending in Congress.

“Sounds like the good old days, doesn’t it?” Gibbs told a roomful of reporters, many — like the press secretary himself — still fresh off the 2008 campaign trail.

On that Friday, Gibbs was upbeat, expressing confidence in Obama’s ability to make his case for what eventually became an $850 billion stimulus plan.

“I think this is another chance for the president to talk directly to the American people about what he thinks is at stake . . . a plan to save or create millions more jobs and get people back to work,” Gibbs said then.

Nearly 17 months later, Gibbs is once again talking about the president’s travels around the country to pitch his economic policies. But this time, it probably doesn’t feel so much like the good old days.

In a series of polls, the public has expressed deep skepticism about the economic direction Obama began taking in early 2009. A clear majority now say they disapprove of his handling of the issue.

That has put the White House on the defensive as the midterm elections approach this fall. For two straight days, Gibbs has been repeatedly asked versions of the same question: What happened between then and now?

“I think there is, rightly so, a great frustration in this country with where we are economically, and understanding the depths of the numbers of jobs that were lost, the length of this recession, what it has meant for people on Main Street,” Gibbs explained to reporters Tuesday.

That sense of frustration among voters has developed despite what White House officials see as a series of successes in the past year and a half: health-care reform, Wall Street reform (perhaps to be passed Thursday) and an economic turnaround that has turned staggering monthly job losses into modest monthly job gains.

Republicans, who are hoping to seize control of Congress, point to unemployment numbers that remain near 10 percent, not the 8 percent that White House officials predicted. And they say the public is fed up with the nation’s soaring debt, which the GOP blames on Obama and the Democrats in Congress.

Either way, West Wing officials like Gibbs are trapped now. The more they talk about their economic and legislative successes, the more danger there is that they seem out of touch with the public’s sense of frustration.

And yet, without touting the president’s victories, they leave their allies in Congress at the mercy of an increasingly sour public mood.

On Tuesday, Gibbs sought to walk that line carefully, offering charts that showed the depth of the recession and the progress Obama’s administration has made toward recovery — but also acknowledging how unsatisfying the chart must be to many people.

“If you call up somebody who has lost their job, or you call up somebody whose neighbor has lost their job, or whose brother or sister has lost their job, and ask them how the economy is going, or how they view the president, they’re likely to be negative,” Gibbs said. “That’s quite rational and understandable.”

The challenge for the White House and Democrats in the next four months is to find a way to break through that “understandable” negativity and convince voters that they should continue to bet on the president’s party.

Back in February 2009, Gibbs said the trips to Elkhart, Ind., and Fort Myers, Fla., were designed so the president could “demonstrate what he’s fighting for and why it’s so important for the American people.”

Asked back then whether “that message [had] not gotten through up until this point,” Gibbs said it had.

Now that he’s had a chance to enact many of the policies he promised, Obama must make sure the message gets through again. He will know for sure in a few months, when voters cast ballots in the midterm elections.

“Whether it’s small-business lending, unemployment or financial reform, all of that . . . will be important accomplishments for the American people and something that you’ll hear the president talk a lot about in the next couple of weeks,” Gibbs said.
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Source: The Washington Post

New health care reform legislation is national in scope, but the task of implementing it will fall heavily on the states.

In Illinois, Michael McRaith, director of the state’s Department of Insurance, will be at the center of activity, overseeing broad changes in the health insurance market.

The Tribune asked McRaith about the new law, signed Tuesday by President Barack Obama. He promised to challenge insurers that charge sky-high rates and vigorously enforce new consumer protections. An edited version of the conversation follows.

Q: What are the first changes Illinoisans will see?

A: Effective immediately, the secretary of (the U.S. Department of) Health and Human Services, in conjunction with the states, has authority to review and challenge unreasonable health insurance rate increases.

Right now, insurance companies report premium increases in the individual market, but we (in Illinois) do not have the authority to approve or deny rate changes. In the small-employer market, we don’t even get informed of rate increases or premiums charged.

We will establish a protocol (for reporting data) as soon as possible. … It is absolutely certain that if there is an unreasonable rate increase, we will examine that and we will challenge that.

Q: What about people with pre-existing conditions who haven’t been able to get insurance?

A: Another big challenge for our state is the expansion of high-risk pools, or what we in Illinois know as ICHIP (Illinois Comprehensive Health Insurance Program).

(These pools provide coverage to people with chronic illnesses or disabilities who can’t get insurance elsewhere.)

Right now, ICHIP is prohibitively expensive, with premiums of $12,000 to $16,000 annually. It’s funded two-thirds by premiums and one-third by general revenue funds. The federal law shifts that burden so enrollees pay no more than 35 percent of the cost of the program. That’s about a 30 percent reduction in costs.

Our expectation is that we’ll get clear guidance from Washington (about who can get insurance through the pools) within 90 days. We expect an implementation time of 15 to 45 days following that.

Since individuals in Illinois can be denied health insurance for any reason other than race, religion, color or national origin, we expect a large number of people will sign up.

Q: What about people who don’t have pre-existing medical conditions but who don’t have insurance?

A: On Jan. 1, 2014, health insurance exchanges will be established in all states, including Illinois. (These exchanges will offer a menu of standardized insurance plans to the uninsured and small businesses. No one will be turned away because of a medical condition.)

(Until then) we are concerned that some of the less responsible companies may try to increase premiums and eliminate people who need health care from their lists. … They might say, “Because we have to accept everyone starting in 2014, let’s try to start 2014 only with healthy people who are profitable.”

We’re going to be there to help consumers every step of the way. If people have concerns, they should contact us.

Q: What about rescissions of insurance coverage?

A: Six months from the law’s enactment, rescissions will only be allowed in cases of fraud.

Regrettably, Illinois has more rescissions than any other state, including California and Texas. Rescissions can occur up to two years after a policy is first issued. The company looks into the medical history of the patient and if it sees any reason that would have justified the denial of the application or a pre-existing condition exclusion or that would have justified charging the patient more, the policy can be rescinded.

The change in the rescission law is a significant improvement for Illinois families.

Q: Will the federal government take over regulation of insurance?

A: There are people throwing around statements about this being a government takeover of health insurance. The truth is, it’s far from it.

Now we’ll have national standards, but the health insurance market will continue to be regulated at the state level.

Q: What kinds of standards?

A: For instance, a requirement that insurers (pay 100 percent) for certain preventive treatments, such as childhood inoculations, … a requirement that insurers spend a certain amount of revenues on medical care (80 percent for individual and small group policyholders, 85 percent for members of large groups), and a standard benefit package to be developed by state regulators in collaboration with Health and Human Services.
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Source: The Chicago Tribune