Tuesday's Tidbits

Ezra Klein of the Washington Post is predicting that tomorrow the President will support the health care changes proposed by his deficit reduction commission last December which include accelerating implementation of the so-called Cadillac tax on high cost health plans from 2018 to 2014 and converting the FEHBP to a premium support plan. And the FEHBlog thought that putting off the Cadillac tax would facilitate its ultimate repeal.

The FEHBP already takes defined contribution approach to the Government contribution; the Government pays 72% of the enrollment weighted average premium capped at 75% of the selected plan's premium (5 U.S.C. § 8906). In other words, the minimum employee contribution toward FEHBP coverage is 25% and the Government's share of the premiums rises with the tide. In contrast, under a premium support approach, the Government would contribute a flat amount and that amount would be adjusted by general inflation. In other words, the Government contribution likely would cover a low cost plan's premium in full. This could encourage lower income employees to join the FEHB Program, but it likely would be very disruptive, in the FEHBlog's view. Of course, we don't know what the President will propose and it's a long way from a Presidential proposal to law, particularly in this Congress.

The FEHBlog is gratified that, according to Business Insurance. other experts took the same dim view of the free choice voucher provision of the Affordable Care Act that will be repealed under the FY 2011 budget deal.

According to an HHS press release, "Health and Human Services Secretary Kathleen Sebelius, joined by leaders of major hospitals, employers, health plans, physicians, nurses, and patient advocates, today announced the Partnership for Patients, a new national partnership that will help save 60,000 lives by stopping millions of preventable injuries and complications in patient care over the next three years.  The Partnership for Patients also has the potential to save up to $35 billion in health care costs, including up to $10 billion for Medicare.  Over the next ten years, the Partnership for Patients could reduce costs to Medicare by about $50 billion and result in billions more in Medicaid savings.  Already, more than 500 hospitals, as well as physicians and nurses groups, consumer groups, and employers have pledged their commitment to the new initiative."  Here's a link to a fact sheet on the new initiative. The pledge for health plans and other health care payors reads as follows:

As those who purchase health care on behalf of American consumers and provide information to help support them in their efforts to get better care we pledge to:

• Use market-based incentives, that may include payments, to promote improvements in safety and other dimensions of quality and value;

• Work with other private payers, states and the federal government to align our efforts to measure performance on quality and safety – so that patients and clinicians have the best possible information and the burden on hospitals and other providers is minimized; and

• Share information with our employees, members or beneficiaries so they can engage as active partners in getting better, safer care.

Health plans can take the pledge here.