By AL LEWIS

Brokers who enroll senior citizens in Medicare Advantage (MA) plan often make more on those members than the health plans themselves.  Up to $500 can be spent on a broker fee by the health plan, contributing to a total member acquisition cost which can exceed 10% of the premium dollar.  Even if Medicare Advantage plans can deliver the actual health benefit at a considerably lower cost than Medicare Fee For Service (FFS), it is possible that the entire savings could be consumed by member acquisition costs.

These costs are a tax on Medicare as a whole, a tax whose existence becomes simply unsupportable when the dire forecasts of Medicare solvency are considered.  And an unnecessary burden on health plans as we enter an era in which cutbacks are likely.

The solution is easy enough.  Where MA is available, make Fee For Service an Opt-Out rather than something which has to be “sold.”  When the benefits of both FFS and the various MA plans are laid side by side and people are told that they can simply select a plan from the chart or else complete a lot of paperwork to go FFS, more people will select the MA plans without a broker than would select those plans with an expensive broker if they are put in FFS originally and need to be “sold” to get into an MA plan.

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Sponsored by the Integrated Healthcare Association. Co sponsored by Bridges to Excellence, Leapfrog Group, the National Business Coalition on Health, the National Committee of Quality Assurance and the National Quality Forum. March 9 – 11, 2009 San Francisco, CA.www.PFPSummit.com 

By Michael L. Millenson

Several well-informed sources independently told me that Institute for Healthcare Improvement founder Dr. Donald Berwick had been chosen by the Obama administration to run the Centers for Medicare & Medicaid Services — a fascinating selection. (This article, though, reminds us of Don’s background in public health and in government commissions that deal with a broad swath of the policy elite.)

But would Berwick continue to agree to serve under an HHS secretary with less prestige, Congressional clout, presidential access and deep understanding of health care than Tom Daschle? I’m presuming here that Berwick already had a personal relationship with Daschle and his senior advisers. Still, Berwick has spoken in recent months of reform from “the inside out,” and there are few “insider” positions with more influence over health care than being in charge of the Medicare program.

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By Sarah Arnquist

After a nearly two-year ordeal that divided Democrats and Republicans and involved two presidential vetoes, President Obama signed a bill on Wednesday to reauthorize the State Children's Health Insurance Program.

 SCHIP provides health insurance coverage to about 7 million children. This expanded bill will extend coverage to an additional 4 million children.

The WSJ Health Blog reports that doctor-owned hospitals were winners in the bill and big tobacco was a loser.

The bill will increase the national tobacco tax by 60 cents to about $1 per pack to fund the $33 billion expansion. This will please the tobacco control folks, who say the best way to reduce smoking is by increasing the price of cigarettes through taxes. It does mean, however, the expansion is funded through a declining revenue source.

By Sarah Arnquist

President Obama remains committed to comprehensive health care reform in 2009 and believes the declining economy emphasizes its urgency, a top White House official told hundreds of health policy experts Monday in Washington D.C.

“The current economic crisis has really highlighted the problems and put them under fluorescent lights," said Jeanne Lambrew, deputy director of the newly created White House Office of Health Reform.

The Academy Health conference is probably the wonkiest of meetings on the increasingly crowded health reform conference circuit. University PhDs and private sector policy analysts are here to discuss and assess the impacts of reform.

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