Health Law and Policy Update: CCLP releases Self-Sufficiency Standard for Colorado 2011
This week's updates
- CCLP releases Self-Sufficiency Standard for Colorado 2011
- Health insurance rates to increase 9.4 percent next year
- US Health and Human Services announces rules for Accountable Care Organizations
Headlines of the week
CCLP releases Self-Sufficiency Standard for Colorado 2011
Today CCLP released a 2011 update for the Self-Sufficiency for Colorado which shows the true cost of living in Colorado and provides tools to help lift people out of poverty. The Self-Sufficiency Standard is a detailed accounting of the cost of living for different family types in each of the state's 64 counties. According to the report, the cost of meeting basic needs continues to increase in Colorado despite stagnating wages and difficult economic times. Financial hardship is much more widespread that what is suggested in the federal government's official poverty rate, which stands at 12.3 percent, according to numbers released in September.
Some key findings include:
- What families need in order to be self-sufficient in Colorado varies widely by geographic location.
- Family composition matters and costs for families vary significantly depending on the age of their children. For families with young children, the combined cost of housing and child care typically make up at least 50% of a family's budget.
- The Federal Poverty Measure is an inadequate measure of what families need to make ends meet. As an example, a three person family (one adult, one preschooler and one school age child) living at the poverty level in Logan County would be at about one-half of self-sufficiency according to the Standard. A single adult living in Denver County needs to make $19,296 a year according to the Standard, but would be at 100 percent of the Federal Poverty Level with an annual income of $10,890.
- Of the top ten most common occupations in Colorado (measured by the number of workers) only four have median wages above the Standard (for a family of three).
The Self Sufficiency Standard can be used as a tool for evaluating proposed policy changes; targeting resources towards job training for fields that pay Self-Sufficiency wages; evaluating outcomes for clients in employment programs, and, serving as a counseling tool in work training programs.
"If we want to make real progress toward reducing poverty in Colorado, we need sophisticated tools and accurate measurements of what financially hardship actually looks like," said Tracey Stewart, manager of the Colorado Center on Law and Policy's Family Economic Security Program. "Our elected leaders and policymakers can use the Self-Sufficiency Standard as a benchmark to evaluate policy changes - do they move people toward long-term economic self-sufficiency or away from it?"
Coverage of the release can be found from the Public News Service.
Health insurance rates to increase 9.4 percent next year
According to the results of an employer survey released today by Lockton Companies, LLC, Colorado's health insurance rates will increase by an average of 9.4 percent next year. This is the lowest annual increase, the report says, since 2000, although Colorado's increase is still higher than the reported national average of 9 percent.
Among the report findings:
- Nearly 92% of employers surveyed indicated that plan cost increases were a major or critical concern for them.
- More than 77% of employers plan to pass some portion of rate increase on to their employees through plan design changes and/or premium share increases.
- Respondents estimated that merit pay increases for 2012 will be approximately 2.2%, while health premium increases are expected to be 6.5% (The difference between the 9.4 percent projected average increase and health premium increase for employers is attributed to plan changes that either reduce benefits or shift costs to employers).
- The number of employers offering high deductible plans increased from 3% in 2003 to 40% in 2011.
From CCLP's perspective, while lower than previous years, a 9.4% increase in premiums is significant for employers and employees. The continuing trend of increasing out of pocket costs for employees and changing plan design raises significant questions about health care affordability, plan value and health care access for employees and their families.
US Health and Human Services announces rules for Accountable Care Organizations
Last Thursday, the Centers for Medicare and Medicaid Services (CMS) released the final regulations for Accountable Care Organizations (ACOs) in the Medicare Shared Savings Program. ACOs, a cost saving measure in the Patient Protection and Affordable Act, are designed to lower medical costs and improve quality of care through enhanced provider coordination. The final rule differs significantly from the proposed rule released in March, which was met with negative reactions by health care providers. CMS altered the regulations, making it easier and less risky for practices to participate in the program. Initial reaction from the health care industry has been positive, suggesting that the new regulations are more provider friendly and could succeed in increasing participation in the program.
CMS highlighted the changes between the sets of regulations in an appendix released with the final rule. Key differences include allowing providers to participate in the program without risk of losing money, reducing the number of quality standards measured from 65 to 33, and preliminarily assigning patients to ACOs when they form. When the proposed rule was released in March, many providers who had no previous experience with integrated models were scared away from the program by the risk of losing money if they did not succeed in lowering costs. Further, the number of reporting requirements, many of which providers viewed as redundant, was seen as too costly. Jonathan Blum, a deputy administrator at CMS, acknowledged that the regulations had been altered based on provider concerns. "We feel we have struck a better balance between creating a strong business case for providers to want to participate in the ACO framework and, in the same time, not taking away patient protections," said Blum.
Provider organizations have not guaranteed that the changes will increase participation in ACOs, but a number of groups have released positive statements about the new rule, calling it a major improvement over the proposed rule released in March. George Roman, the senior director of health policy at the American Medical Group Association, called the new rule "a serious step in the right direction." The American Medical Group Association had previously predicted that more than 90 percent of their members would choose not to participate in the program.
In Colorado, regional ACOs have been established in the Medicaid program, which will have the power to encourage programs and practices to reduce cost. Large hospital groups such as HCA, Centura and Exempla are expected to profit from involvement in the new Medicare ACOs as well. A recent article in The Denver Post described the steps Colorado hospitals are taking to compete for ACO contracts, including hiring more doctors as in-house staff.
While provider participation is key to the success of the ACO program, it is important that providers remain accountable for the quality of their patients' care, as well as reducing costs. Therefore, CMS will need to monitor the program carefully, in order to ensure that less risk to providers and less reported quality standards do not lead to a reduction in the quality of care received by Medicare patients.
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Health Care Attorney
Released Oct. 28, 2011