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Tax On Health Insurers Would Pay For Effectiveness Studies

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The federal government might start taxing health insurers in fiscal year 2011 to pay for a program to compare the effectiveness of various health care products and procedures.

The provision has support in principle from health care insurers and providers, but the devil is in the details, and the language in the House bill is drawing fire from both America’s Health Insurance Plans and the Blue Cross Blue Shield Association.

H.R. 3162, the Children’s Health and Medicare Protection Act, includes a provision that would provide funding for a new health care effectiveness research agency. The legislation passed the House on August 1 (see story above).

The agency would be part of the Agency for Healthcare Research and Quality, a unit of the U.S. Department of Health and Human Services, which already backs some health care quality and efficiency research.

The H.R. 3162 provision would draw $300 million in funding for the agency from the beleaguered Medicare Trust Fund for the first three fiscal years. The government then would collect $375 million from the Medicare Trust Fund, employer-sponsored health plans and other private insurance plans to pay for the effectiveness comparison program.

Rep. Jim McCrery, R-La., the senior Republican on the House Ways and Means Committee, called the health care effectiveness agency tax provision a “stealth tax increase that will drain money from the Medicare trust fund and increase taxes on every American with a health insurance plan.”

Mohit Ghose, a spokesman for America’s Health Insurance Plans, Washington, says AHIP has supported the idea of creating an independent health care effectiveness comparison entity.

AHIP also supports the idea of government agencies working with private organizations to undertake the effectiveness analysis, Ghose says. “But we believe the funding should come from all parts of the health care sector and not be limited to health insurance plans,” he adds.

AHIP believes the entity “should be truly independent” and not housed in an existing government agency, Ghose says.

Alissa Fox, Blue Cross Blue Shield Association vice president of legislative and regulatory policy, said the group has the same concerns. “BCBSA opposes an all-payer assessment to fund a government-run comparative effectiveness initiative.”

The trade group does support creation of an independent comparative effectiveness institute funded by assessments on all private coverage–insured and self-funded–and public health care coverage such as Medicare, Medicaid and other government programs.

“An independent entity will help ensure research findings remain apolitical and are based on sound science,” Fox says.

Sen. Hillary Clinton, D-N.Y., put the effectiveness comparison entity idea in an amendment to the Medicare Modernization Act of 2003, according to Ira Loss, a health care analyst at Washington Analysis, Washington. Although the MMA was signed into law, the comparison entity provision was never funded, Loss says.


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