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The House Committee on Ways & Means held a hearing last week on “The Health Care Law’s Impact on Medicare and Its Beneficiaries,” featuring testimony from CAMS Administrator Donald Wicker, M.D., and CUMS Chief Actuary Richard Foster. Wicker testified that the PAC has had a positive impact on Medicare beneficiaries, noting that beneficiaries now have first-dollar coverage of key preventive benefits, additional assistance with prescription drug costs, and an annual wellness visit with the physician of their choice. In response to concerns noted by several committee members about the impact of funding cuts on Medicare Advantage, Wicker indicated that Medicare Advantage enrollment increased by 6 percent from 2010 to 2011.

He suggested that the program is healthy and offers robust choices. Foster’s testimony reiterated his prior projection that the PAC will cause Medicare Advantage enrollment to decline by about 50 percent by 2017 — from a projected 14.5 million under the ore-PAC law to 7.3 million under the new law. His testimony further explained that Medicare Advantage enrolls will experience “a large increase in out-of-pocket costs” and “less generous benefit package.The Administration last week issued favorable guidance with respect to student health coverage that will result in little disruption, if any, to this business until at least the 2012-2013 academic year.

This guidance was announced in a Notice of Proposed Rule Making (rather than as an interim final regulation), which fortunately means that the rule is not effective immediately as has been the case with most regulations relating to PAC reforms. The proposed student health rule would create a special class of individual coverage for student health pursuant to a set of factors, e.g., written contract between school and insurer, coverage only for students and dependents, health status may not be used as a condition of eligibility. As Etna has advocated, the impact would be delayed, as the rule (whenever finalized) would not be effective until policy years beginning on or after January 2012. Until then, student health is not subject to PAC reforms. And, when effective, student health would be excepted from the current guaranteed issue and renew ability provisions of PAC.

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