KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Reform Issues In Play: Selling Insurance Across State Lines, Medicare’s Doughnut Hole

News outlets report on some of the major health policy issues being considered by the Senate, including a proposal to let insurers sell plans across state lines and an effort to close the Medicare "doughnut hole."

The Washington Post: "The Senate health-care bill could enable insurers to avoid some of the strongest consumer protections and benefit requirements adopted by state governments, Democratic lawmakers from Maine and California say. The bill would allow insurers to sell policies across state lines, subject to the laws and regulations in a state of the insurers' choosing, 31 Democratic House members said in a letter Tuesday to House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry M. Reid (D-Nev.). … The arrangement 'will lead to a race to the bottom in insurance regulation and severely threaten the important and often lifesaving protections the residents of our states enjoy,' the House members wrote. The lawmakers were referring to a provision allowing states to enter so-called interstate compacts for the sale of insurance." The Senate bill, however, "would put some hurdles in the way of any 'race to the bottom,'" including requiring states to enact a state law before joining the interstate compacts and requiring insurers to meet federal requirements (Hilzenrath, 12/17).

Los Angeles Times: Twenty-nine of the 31 signatories are from California. "Proponents of the change argue that interstate sales could provide consumers with a wider range of policies to buy, engender more competition among insurers and drive down the cost of premiums." But critics "contend that consumers in many states could lose protections that go beyond what the bills would establish.Consumers in California and some other states, for instance, could lose the ability to appeal treatment denials by insurers to panels of outside expert physicians, critics said. They also warned that policyholders could risk losing the protection of state laws that require insurance companies to pay for a wide range of treatments, including HIV testing and reconstructive surgery for breast cancer patients" (Girion, 12/17).

Meanwhile, The Associated Press/The Seattle Times reports on the prospects for Medicare's doughnut hole. "If Democrats have their way on health care overhaul, the dreaded 'doughnut hole' will shrink by $500 right away and go away altogether by 2019. With the elderly worried that Medicare cuts in the health care bill will put the quality of their own care in jeopardy, Democrats belatedly are scrambling to convince them otherwise. Lawmakers are eager to make amends with a pivotal political constituency ahead of next year's midterm elections. Senate Democratic leaders this week joined their House counterparts in vowing to close the coverage gap if President Barack Obama's health care remake passes. … Lawmakers say they expect the pharmaceutical industry to pick up the cost, adding at least $20 billion more to the $80 billion the companies have pledged toward the overhaul" (Alonso-Zaldivar, 12/17).

The Washington Independent: The decision to put off work in the Senate on the doughnut hole and deal with it during conference committee negotiations "could lead to a clash between Democratic leaders in each chamber over whether the government should be empowered to use its bulk-buying advantage to secure lower prices for both the government and the nation's lowest-income seniors - something House leaders support, but Democrats in the Senate and White House oppose because of the pharmaceutical deal. Senate Democrat leaders have already shown zero willingness this year to break the agreement with Big Pharma. … That means that Democrats, if they intend to keep that deal intact, will be forced to find additional money to close the doughnut hole - estimated by the Congressional Budget Office to cost the federal government more than $42 billion over the next decade" (Lillis, 12/17). 

CBS News reports that drug makers and insurance companies are likely to benefit from "the demise of the public option, drug re-importation and Medicare buy-in" (Attkisson, 12/16).

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