Larry Levitt, Co-Executive Director of the Kaiser Initiative on Health Care Reform and Private Insurance

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Mark Masselli: Welcome to Conversations on Health Care. I am Mark Masselli.

Margaret Flinter: And I am Margaret Flinter.

Mark Masselli: Well Margaret, the Obama Administration has released its
anticipated final rules for operating state-run Health Insurance Exchanges as part
of the Affordable Care Act. States are being given specific guidelines on forming
st,
these insurance markets for their uninsured before the January 1 2014
deadline.

Margaret Flinter: Well Mark, those new rules have been eagerly anticipated and
the over 600 page document outlines the requirements each state has to have in
place, very specific, everything from how to establish the exchange to guidelines
for determining eligibility for both individuals and small businesses if they want to
acquire health insurance coverage through those exchanges.

Mark Masselli: Now, a key goal of these rules is to cover upwards to 50 million
people who are insured or underinsured in this country. The rules though require
state-based insurance markets to be setup so that customers can apply for and
purchase coverage online, little like shopping at Amazon. And the states have to
have several federally approved plans to choose from as well.

Margaret Flinter: And Mark, states exchanges have to show that they will be
financially self-sufficient by 2015. And also, Medicaid has to be expanded in the
state to include more low income residents who fall within the federal guidelines
for Medicaid assistance.

Mark Masselli: There is a red line warning to states who do not comply with the
plan in place in their own state by 2014. They will be subject to the federal
government running a federal exchange in their communities.

Margaret Flinter: And we have only had a short-period of time to gauge reaction
to the final rules and I would say so far reaction is mixed and maybe a little bit
mild. Consumer organizations, insurance groups and some business groups
seem to view the rule either favorably or neutrally. But we have seen some
pushback from a number of republican governors, many of whom lead states that
have delayed setting up the Health Insurance Exchange and that quarter, they
are (01:56 inaudible) the rules.

Mark Masselli: Well, there is no doubt that there is going to be a lot of political
fire in the air very soon as the Supreme Court hears the case against the
th
Affordable Care Act on March 26 and where the centerpiece of the Affordable

Care Act, the Individual Mandate that everyone purchase insurance will be
argued.

Margaret Flinter: And speaking of these new rules for Health Care Exchanges,
the Kaiser Family Foundation is committed to providing the best information to
the public about health policy, reform, legislation and global health. They are
also committed to the disseminating good, accurate and useful information on
health care initiatives and how they affect people in communities under the
Affordable Care Act.

Mark Masselli: Now, Kaiser’s Senior Vice President, Larry Levitt, is joining us in
a moment to talk about a series of tutorials Kaiser is producing to help state
policymakers and individuals better understand how the Affordable Care Act will
impact them. But no matter what the story, Google us at www.chcradio.com , we
would love to hear from you.

Margaret Flinter: Now coming up, our conversation with Larry Levitt from the
Kaiser Family Foundation but first, here is our producer Marianne O'Hare with
this week’s Headline News.

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Marianne O'Hare: I am Marianne O'Hare with this Headline News. The Obama
Administration is responding to Texas Governor Rick Perry by announcing his
state would no longer provide Medicaid funds earmarked for women’s health to
Planned Parenthood Clinics which provide well-visit health care and cancer
screening to approximately 75,000 Medicaid patients in the Lone Star State.
Health and Human Services Director Kathleen Sebelius says the Texas stance is
illegal, and if the state refuses to fund Planned Parenthood with those federal
Medicaid dollars then the funds will be cutoff to Texas. Governor Perry is saying
he is committed to cutting funding for Planned Parenthood however he does it
and he will find the money to pay for that Medicaid care somewhere else.

Women’s health is central to a campaign move being launched by the
Democratic National Committee. A million mailers targeted to women are going
out in the mail explaining to them the benefits women can expect under the
Affordable Care Act, the message geared at women saying most preventive
health screenings are co-pay free now under the Affordable Care Act for women
and that they stand to receive other health benefits as well. President Obama’s
popularity among women has steadily grown in the wake of his recent stand on a
number of women’s health issues. GOP Presidential hopeful Mitt Romney is
celebrating a birthday and it’s a pivotal one, at 65, he is reached the age of
Medicare eligibility. He may be eligible but he is deciding not to take it. He
announced he would not be enrolling in Medicare since he can afford his own
health insurance.

From the medical realms, kids are apparently not getting the message of the
deadly effects of cigarette smoking. In the first report released since 1994 on
tobacco use among teens, the statistics are disturbing. One in four American
teens is smoking in 2012 and it’s a good bet they will become adult smokers as a
result. The Surgeon General is calling it a pediatric medical crisis and more
needs to be done to initiate prevention programs, which is the most effective way
to bring down smoking rates. She says they have an uphill battle against
tobacco company advertising. I am Marianne O'Hare with this Headline News.

Mark Masselli: Today, Margaret and I are speaking with Larry Levitt, Senior Vice
President for Special Incentives at the Kaiser Family Foundation. Mr. Levitt is
also Co-Executive Director of the Kaiser Initiative on Health Care Reform and
Private Insurance and former senior health policy advisor to the Clinton White
House. Mr. Levitt, welcome to Conversations on Health Care.

Larry Levitt: Thanks, thanks for having me.

Mark Masselli: Larry, you just completed a study for the Kaiser Family
Foundation that analyzes the impact the Affordable Care Act will have on getting
uninsured Americans fully covered by 2014. This report is accompanied by an
interactive map that clearly demonstrates where the Affordable Care Act is
expected to have its most impact. And I should say by the way for our listeners,
you can find a link to that map at our website at www.chcradio.com . Your map
looks to be accessible and yet full of really important information. Tell us why you
decided to present your data in this manner and how does the map work.

Larry Levitt: We have tried to introduce more accessible materials to explain how
the health reform law works and this was really motivated by some of our polling.
I mean we do monthly tracking polls about people’s experiences in health system
and their views on health issues including the Affordable Care Act. And people
are frankly still confused about what's in the law. I mean they have been from the
start. In fact, people seem to be getting a little more confused than
understanding things better. So we have done a number of things. We actually
did an animated cartoon as well called Health Reform Hits Main Street narrated
by Cokie Roberts to try and explain some of the elements of the law. And then
this map was an effort to go a little bit beyond that and look at who would really
benefit from the expansions in insurance coverage in the reform law and where
do those people live. And a couple things have come out of it. One is that on
average across the country, about 17%, about one in six people will benefit from
the expanded coverage in the law. That’s expanded Medicaid and tax credits for
private insurance. So a lot of people nationwide will benefit but it varies
tremendously from area to area. From a low of 2% to 4% of the population in
parts from Massachusetts where they have already moved ahead with reform up
to 36% to 40% in parts of Texas, Louisiana, New Mexico, Florida, and California
where a lot of the population is uninsured.

Margaret Flinter: Well Larry, I think you have done an incredible service of giving
people a different way of understanding it. And you have another tool that you
have put out there, the Interactive Calculator on the Kaiser’s site which I thought
was very fascinating to give people in very specific terms a sense of what they
can expect to find, what kind of help there might be. You take their age and their
income, tie it to federal poverty level standards, give them a high, medium, or low
cost in the country and pretty much tell them what they can expect to pay and
what they might get in terms of premium subsidy. Tell us a little bit more about
this education and outreach message when somebody gets to the point where
they say, “I am a 59 year old woman; my income is $55,000; here is the premium,
oops, I am not going to get any support”. What's the education outreach that’s
going to get that person to be motivated to go and buy health insurance? What
do we tell them about what they will get?

Larry Levitt: Yeah. Well I think first of all it’s important to make all of this tangible
for people. The debate about the Health Reform Law from the very start has
been just very political, very ideological and there really haven’t been good
opportunities for people to understand in very specific terms how it will actually
affect me. And it’s also frankly been a bit hypothetical because the big elements
of the law don’t go into effect until 2014 which is getting closer but it’s still a ways
away so it’s hard for people to really kind of understand what it will mean in their
everyday lives. And I think when you start to look at it, you realize that, as I
mentioned, a lot of people will benefit and this is not just low income people, it
obviously is important to provide coverage to low income people who are much
more likely to be uninsured, but this law represents a real middle class benefit as
well, people who are working in a job that may not have health insurance, they
have family income up to potentially $90,000 a year for a family of four and they
are still able to get some help with affording health insurance.

Mark Masselli: Larry, the Kaiser Initiative on Health Care Reform and Private
Insurance was formed to help examine the implications of change in the
insurance market due to the Affordable Care Act. And your intent is to help
inform state and federal policy makers to better understand the new
requirements for everything from creating state-based insurance purchase
exchange to what constitutes the minimal level of coverage an individual must
carry. Last week, a group of GOP governors stated that they were adopting a
sort of wait-and-see attitude on creating insurance exchanges. What portion of
the ACA looks to be most challenging to implement based on your data and
experience?

Larry Levitt: Well I would say, I mean the exchanges are certainly difficult and
these are kind of online marketplaces for health insurance. One of the things
that changes dramatically in 2014 is that insurance companies can no longer do
what's called medical underwriting. This is where an insurance company will look
at someone’s health care status whether they are sick or even have some
modest health conditions. And in most states now, they can exclude them from

coverage entirely or charge them more. That’s prohibited starting in 2014. So it
gives people an opportunity to really shop around for insurance for the first time
because that’s very difficult to do now and these exchanges can facilitate that.
So you could go to a website similar to Travelocity if you are taking a trip
somewhere or Amazon and be able to compare different insurance plans, what
benefits they provide, what the deductible is, what the premium is, and then be
able to enroll in any plan you want to in your state. And then there is the difficult
process of getting people enrolled in the right plan and letting people apply for
these tax credits or for Medicaid that will make coverage more affordable. So the
mere logistics of making all that work is frankly challenging and some states are
starting to fall a bit behind.

Margaret Flinter: Larry, I think it was noted perhaps on your website that really
mandating a different kind of coverage particularly around preventive services
but also some of the other expenses. How do you describe to people the
difference in what insurance had to look like pre-Affordable Care Act and what it's
going to look like afterwards as a way of explaining some of those premium
differences?

Larry Levitt: Yeah. I mean one of the ways in which insurance varies now is the
cost sharing. In fact, that’s the biggest way insurance varies. It's the deductible,
the co-insurance you pay, the co-pay you pay when you go to the pharmacy. And
there will still be quite a bit of variation that people will have a lot of choice of
whether they want a high-deductible plan or more comprehensive low-deductible
plan. What won't vary so much are the actual benefits or the services that that
plan provides. Now it's something of a black hole. It's actually hard to find out
information about what an insurance policy covers before you buy it and even
after you buy it. Here, you look at this massive policy document and figuring it
out for most people, even people who are experts in this field is pretty tough.
And there are holes in those policies that you don’t know in advance may be
there until you are sick. And that really changes. I mean the benefits will be
largely standardized across plans. You will know that when you get sick, those
benefits will be there, and that’s a good thing. It also costs money. I mean none
of this is free. So that’s going to raise premiums a bit but people will get a real
benefit in exchange for those higher premiums.

Mark Masselli: We are speaking today with Larry Levitt, Senior Vice President
for the Kaiser Family Foundation. His team is responsible for a series of tutorials
you can find on the Kaiser website that help explain the Affordable Care Act to
help all Americans gain health insurance. You have been working with states,
businesses and individuals to figure out what their insurance liability is going to
be by I guess 2014. But the fact remains there will be a lot more money spent on
insurance premiums across the board because there will be millions of new
citizens who will be added to the insurance roles . The CBO though estimates
that the cost of these tax credits will be about $75 billion by 2016. On the other
hand you have all the states who are complaining and are trying to cut their

budgets to meet sort of growing deficits. So where is the money coming from for
the financing?

Larry Levitt: I think it's one of the most poorly understood parts of this law is that
that certainly does spend money in some areas to expand Medicaid coverage to
provide these tax credits but money unfortunately still doesn’t grow on trees so it
has to come from somewhere. And it comes from a few places. There are
efforts to reduce costs in the Medicare program in particular and then there are
some revenues as well. I mean there are some modest taxes on drugs and
medical devices and health insurers and when you add it all up, the
Congressional Budget Office, you mentioned their number, I find that overtime
the law is expected to reduce the deficit modestly, not add to the federal budget.

Margaret Flinter: Larry, I want to talk about one of your past experiences and
that was the role you played in helping the State of Massachusetts adopt their
health care reform package that has led to Near Universal Coverage in the state
and we are looking forward to having Governor Deval Patrick join us on the show
soon to talk about that experience. But we will be curious in hearing your
thoughts having witnessed the transition and Massachusetts certainly had some
speed bumps so ran into some issues around primary care access. And I would
imagine that people like yourself in the institute are looking back, learning from
that experience and thinking about how as a nation we can smoothly transition
poseful implementation. What are your thoughts on that?

Larry Levitt: Yeah. I mean we are fortunate in some ways to have a state like
Massachusetts that’s gone ahead with many of the reforms that are very similar
to what led to the Affordable Care Act. And one thing you find is that any law like
that is going to be controversial, it was little less controversial in Massachusetts
than it has been nationally. But once you get beyond the controversy, once
people actually start getting help from the law, then the focus turns to okay, so
how is this working, what can we do to tweak it and improve it. So I think there
are a couple lessons out of Massachusetts, one is that this can work. I mean
insurance coverage has increased dramatically in Massachusetts. But
Massachusetts is struggling with issues of health care cost increases and I think
we are going to struggle with that nationally as well. I mean even if the Supreme
Court lets the law go ahead, even if it's not repealed by a future Congress or
President, health reform is not over. We are going to keep returning to these
issues, particularly health care costs because we certainly haven't liked that.

Mark Masselli: Larry, I want to turn the clock back one more time because not
only were you involved in Massachusetts but you were part of the Clinton
Administration’s attempted passing Universal Health Coverage in the ‘90s. On
one hand, what's changed in terms of the structure of the plan from that time
when you were senior health policy advisor at the Whitehouse, Massachusetts
has gone relatively well but the opposition to the ACA seems to be running pretty
deep and clearly along party lines on a national level with the GOP largely

opposed to the act. And you have done quite a bit of political analysis over the
years and you recently wrote about red state, blue state health care reform divide
in politico. So how do you see this playing out?

Larry Levitt: I mean it's remarkable if you look back a couple of decades to the
first really big health reform debate we had during the Clinton Presidency where
frankly the proposal that President Clinton put forward was in many ways much
more far reaching than what was passed in the Affordable Care Act. For
example, these exchanges, which have proved so controversial now, they were
called health alliances back then and they were much more expansive. I mean
most of the population was actually going to be required to join these health
alliances and in the current Affordable Care Act, they are voluntary and much
more modest. In the Clinton plan there was what were called premium caps so it
was caps on the amount that health insurers could raise their premiums from
year to year; in the current law, there is review of premium increases and the
government will 17:20 _____ if they don’t think the premiums are justified, but
insurers are free to go ahead with premium increases. And so one thing that
both plans have in common is they both move towards universal coverage. But I
think what we find is when -- I mean health care is so important to people it's now
a substantial share of the economy, one in every $6 we spend in this country is
spent on health care. So it's difficult to do anything in health care without it being
controversial and in many ways very partisan.

Margaret Flinter: What’s your best guess on what is most vulnerable to being
taken out? We hear a lot about the individual mandate but what are the pieces
that are most vulnerable to being extracted and from an economist’s point of view
can the Affordable Care Act accomplish its objective and its mission if we remove
pieces like the individual mandate?

Larry Levitt: Now I think the so-called individual mandate, the requirement that
most people have coverage does seem like the most vulnerable part of the law.
And there is a key question as to whether the Supreme Court decides, they do
decide to validate the individual mandate, which by no means is certain, and I
think frankly unlikely. I mean there are definitely some other ways to do it not
quite as straightforward as the individual mandate but there are ways to make it
work.

Mark Masselli: As you look at the act, there are a lot of gems that are sort of
hidden in there. What excites you that’s buried below a couple of levels of the
discussion that might play itself out over the next decade?

Larry Levitt: Yeah I mean there have been some surprises. I mean for example,
the provision I mentioned, letting kids stay on their parents’ policies up to age 26,
I mean that’s the thing I hear about the most from people at dinner parties and on
the street. We got a very big debate recently about contraceptive coverage and
the requirement that health insurers provide that with no patient cost sharing and

I don’t think that’s a benefit that people really anticipated. But I mean the Health
Insurance Exchanges that we talked about are important but I think even more
important are these changes in the insurance market, the idea that insurers will
have to sell coverage to anyone regardless of their health status, it really has the
potential to transform how health insurance is bought and really for the first time
introduces competition into the health insurance system. I mean now the fact
that you have to go through medical underwriting, fill out a questionnaire, in some
cases take a physical in order to apply for health insurance makes it really
difficult to shop around. Once you can just go to a website, compare plans, pick
any plan you want to enroll in, puts a lot more pressure on insurers to offer
competitive premiums.

Margaret Flinter: Of course, the removal of preexisting conditions is such an
enormous, enormous benefit. But I have to say when I was on that, I am going to
go back to that interactive tool that you have on your website, I had to conclude
after playing around a little bit, the age might be the last remaining pre-existing
condition that drove you into higher premiums and certainly if you plug in 39 or
49 or 59, you get some pretty big sticker shocks there at how much more
expensive care is as people move up in age. Is that something we can expect to
see any change on down the road or is that just so fundamental to insurance that
it's going to be there for people?

Larry Levitt: I mean what the law allows is for premiums to vary by a factor of
three to one. So people who are older up to 65 can be charged three times an
adult who is in their late teens or 20s. And that’s really frankly a political balance
between how much you want to help older people who may face very high
premiums versus how much you want to disrupt and raise the cost of coverage
for younger people. And assuming the law goes into effect smoothly and the
individual mandate stays into effect and works, it really becomes a kind of value
judgment and it's a question that states can take up individually. For example, in
New York, there is no age rating, people do pay the same premium regardless of
how old or young they are and different states could choose to implement that as
well. But it's absolutely true when you start looking at what people in their 50s
and early 60s would face, the cost is really high.

Mark Masselli: Larry, we like to ask all of our guests this final question. When
you look around the country and the world, what else do you see in terms of
innovations and who should our listeners at Conversations be keeping an eye
on?

Larry Levitt: There is a lot of interest now in how providers are organizing
themselves to deliver care, I mean things like accountable care organizations.
And I don’t think there is anyone who disagrees that that’s the right way to go,
that we should make health care organization responsible and accountable for
keeping people healthy and doing so at a reasonable cost. But getting from
where we are now, where for the most part the health care delivery system is not

very organized at all to a place where doctors and hospitals and other providers
are working together and are health accountable, we have a long way to go. But
I think that’s probably one of the more interesting things to watch over the next
few years.

Margaret Flinter: Today, we have been speaking with Larry Levitt, Senior Vice
President for Special Incentives at the Kaiser Family Foundation. Larry, thank
you so much for joining us today on Conversations.

Larry Levitt: Thank you, it was a pleasure.

Margaret Flinter: Each week Conversations highlight a bright idea about how to
make wellness a part of our communities and everyday lives.

Mark Masselli: The West Wireless Institute which explores ways telemedicine is
being used to improve public health is undergoing a joint campaign with Carlos
Slim Health Institute of Mexico to bring extra services to women in underserved
communities. In an effort to improve maternal health, they are launching a new
telemedicine platform for caregivers and expected mothers in the State of
Yucatan. Clinicians working in clinics in remote areas will be equipped with
wireless pregnancy remote monitoring kits, which include 3G phones,
glucometers, blood pressure meters, urine strips and wireless laptops. All of the
data will be collected from high risk expectant mothers for better monitoring of
any change in their condition. The information will be sent to community-based
providers. The expectant mothers will also be given Sense4Babies, a handheld
portable cellular monitoring device for tracking expectant mothers in the home.
Typically, women in these populations experience higher infant mortality and
other maternal complications. They require expense of hospitalizations, often
with significant hardship for them and their families. The West Wireless Institute
is hoping to rollout similar programs in rural parts of the United States. A
relatively simple technology could cheaply and effectively keep clinicians aware
of patient’s health while yielding better outcomes for high risk pregnancies in
underserved communities. Now that’s a bright idea.

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Margaret Flinter: This is Conversations on Health Care. I am Margaret Flinter.

Mark Masselli: And I am Mark Masselli, peace and health.

Conversations on Health Care, broadcast from the campus of Wesleyan
University at WESU, streaming live at www.wesufm.org and brought to you by
the Community Health Center.